--- ticker: HPE company: HPE filing_type: 10-K year_current: 2025 year_prior: 2024 risks_added: 6 risks_removed: 7 risks_modified: 22 risks_unchanged: 12 source: SEC EDGAR url: https://riskdiff.com/hpe/2025-vs-2024/ markdown_url: https://riskdiff.com/hpe/2025-vs-2024/index.md generated: 2026-06-01 --- # HPE: 10-K Risk Factor Changes 2025 vs 2024 > Source: U.S. Securities and Exchange Commission (EDGAR) > Generated: 2026-06-01 > All data extracted directly from official filings. No hallucinated content. ## Summary | Status | Count | |--------|-------| | New risks added | 6 | | Risks removed | 7 | | Risks modified | 22 | | Unchanged | 12 | --- ## New in Current Filing: Risks Related to Our Technology and Business Operations •Issues in the development and use of artificial intelligence may result in reputational harm, liability, or impact to our results of operations. •Our financial performance may suffer if we cannot continue to develop, license, or enforce the intellectual property rights on which our businesses depend. 17 17 17 Table of Content Table of Content •Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, financial condition, and results of operations. •We may not achieve some or all of the expected benefits of our cost reduction actions, some or all of which may be disruptive to our business. •Our products and services depend in part on intellectual property and technology licensed from third parties. •We rely on the performance of our business systems and processes, as well as those of third-parties with whom we do business. •If we cannot continue to produce quality products and services, our reputation, business, and financial performance may suffer. •Our sustainable and responsible business expectations and actions towards achieving our Living Progress objectives may expose us to operational, legal, or reputational risks and could adversely affect our business, results of operations, financial condition, or stock price. --- ## New in Current Filing: Uncertainty and fluctuations in geopolitical and macroeconomic conditions may adversely impact our business, financial condition, and operating results. Our business, financial condition, and operating results depend significantly on general macroeconomic conditions and the demand for our solutions and offerings. Economic weakness or uncertainty has contributed, and may contribute, to customer financial difficulties, thereby constraining customer spending on IT projects or upgrades, including through reduced, postponed, or cancelled orders. Such dynamics have resulted in, and may result in, decreased revenue and earnings. These factors could 25 25 25 Table of Content Table of Content make it difficult to accurately forecast revenues and operating results, effectively plan business actions and allocate resources, and manage our contract manufacturer relationships and other expenses and to make decisions about future investments. In addition, economic and/or geopolitical instability or uncertainty resulting from inflationary pressures, recessionary risks, tariffs and other trade restrictions in the U.S. and internationally, trade conflicts, the effects of global health emergencies, the ongoing conflict between Russia and Ukraine, the continuous geopolitical instability in the Middle East, and efforts of governments to stimulate or stabilize the economy have, and may continue to, put pressure on economic conditions, including volatility in global and regional financial markets, which has led and could lead to reduced income or asset values, reduced demand for our offerings, delays or reductions in spending on and implementation of IT investments, and/or higher costs of production which could have an adverse effect on our business, financial condition, and results of operations. Such geopolitical and macroeconomic changes can happen rapidly, and we may not be able to react quickly to prevent or limit our losses or exposures. Additionally, any of the above dynamics could result in price concessions in certain markets, with certain customer groups, and/or for certain offerings. These events have at times impacted, and may in the future impact our business in an adverse manner, whether directly or indirectly, such as through their impacts on the financial positions and operations of our customers, suppliers, and other third parties with whom we do business or on whom we rely, and as a consequence, their ability to perform their obligations under their agreements with us. In addition, we may not be able to react quickly enough to prevent or limit our losses or exposures from such geopolitical or macroeconomic events or changes, and any mitigation plans or response we do employ may not mitigate the adverse impacts on our business completely, or at all. Any such failure could have an adverse effect on our reputation, demand for our products, and consequently, our financial condition. --- ## New in Current Filing: Long sales and implementation cycles for our offerings and dynamics related to large orders may cause our revenues and operating results to vary significantly from quarter-to-quarter. We have experienced, and may continue experiencing, lengthy sales cycles because our customers' decisions to purchase certain of our products, particularly new products, involve a significant commitment of their resources and a lengthy evaluation and product qualification process. Customers design and implement large IT deployments following lengthy procurement processes, which may impact expected future orders. Following a purchase, customers may also deploy our products and offerings slowly and deliberately. Furthermore, larger orders, including some orders for our AI systems, have typically required, and may continue to require, greater commitments of working capital, such as for purchases of key components, which could introduce variability in our quarterly cash flow and results of operations more generally. While we have seen the customer base for our AI systems offerings expand and expect it to continue expanding, our AI solutions have historically been purchased primarily by a small number of larger customers and cloud service providers. Sales of AI systems to such customers have caused, and may continue to cause, fluctuations in our results of operations, as such large orders may occur in some periods and not others and are generally subject to intense competition and pricing pressure, which can have an impact on our margins and results of operations. If we are not successful in continuing to expand sales to a broader base of customers, our financial results may be adversely affected. These sales and similar implementation cycle-related factors, including our expectation that customers may place large orders with the potential for widely varying implementation timelines, may cause our revenues and operating results to vary significantly from quarter-to-quarter. --- ## New in Current Filing: We may not achieve some or all of the expected benefits of our cost reduction actions, some or all of which may be disruptive to our business. We have announced a cost reduction program and a series of other cost-saving initiatives as part of our ongoing efforts to reduce structural operating costs, streamline how we operate and do business, and continue advancing the Company's ongoing commitment to profitable growth (which we are calling Catalyst). We may not be able to obtain the cost savings and benefits that are initially anticipated in connection with such actions. Additionally, as a result of these initiatives and the actions contemplated thereby, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods. Implementing and overseeing such actions can require a significant amount of management and other employees' time and focus, which may divert attention from operating and growing our business. If we fail to achieve some or all of the expected benefits of these measures, it could have a material adverse effect on our competitive position, business, financial condition, results of operations, and cash flows. --- ## New in Current Filing: We rely on the performance of our business systems and processes, as well as those of third-parties with whom we do business. Some of our business processes depend upon our IT systems. Portions of our IT infrastructure have experienced, and may experience, interruptions, delays, or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. As our IT environment continues to evolve, we have, at times, been unsuccessful, and may in the future be unsuccessful, in adopting or implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time-consuming, disruptive, and resource intensive. Such disruptions could adversely impact our ability to fulfill orders and respond to customer requests and interrupt other processes. Delayed sales, lower margins, or lost customers resulting from these events could reduce our revenue, increase our expenses, and adversely affect our reputation and stock price. Additionally, some of our business processes depend upon the IT systems and processes of third parties, and the interfaces between those and our IT systems, as well as hosted SaaS applications from third parties. For example, we receive a broad range of information technology services, such as applications, including support, development and maintenance; infrastructure management and support, including for server storage and network devices; and end user support. Some of these services are provided to us through cloud providers, third party providers, and off-site facilities that may be vulnerable to damage or interruption, including performance problems from earthquakes, hurricanes, floods, fires, power loss, telecommunications failures, equipment failures, adverse events caused by operator error, cybersecurity attacks, pandemics, and similar events. In addition, because we lease certain off-site data center facilities, we cannot be assured that we will be able to 32 32 32 Table of Content Table of Content expand our data center infrastructure to meet user demand in a timely manner, or on favorable financial terms. If we have issues receiving and processing data, this may delay our ability to provide products and services to our customers and business partners and damage our business. We also rely upon the performance of the systems and processes of our contract manufacturers to build and ship our products. If those systems and processes experience interruption or delay, the manufacture and shipment of our products in a timely manner may be impaired. Since IT is critical to our operations, in addition to the risks outlined above, problems with any of the third parties we rely on for our IT systems and services could result in liabilities to our customers and business partners, lower revenue and unexecuted efficiencies, and impact our results of operations and our stock price. We could also face significant additional costs or business disruption if our arrangements with these third parties are terminated or impaired and we cannot find alternative services or support on commercially reasonable terms or on a timely basis or if we are unable to hire new employees in order to provide these services in-house. --- ## New in Current Filing: Unfavorable results of legal proceedings, investigations, and other disputes could harm our business and result in substantial costs. We are involved in various claims, suits, investigations, and legal proceedings that arise from time to time in the ordinary course of business or otherwise. Additional legal claims or regulatory matters affecting us and our subsidiaries may arise in the future and could involve stockholder, consumer, regulatory, compliance, intellectual property, antitrust, tax, trade, privacy, employment, warranty or product claims, and other issues on a global basis. In addition, we have received inquiries, and may be subject to demands, claims, lawsuits, regulatory investigations, and additional inquiries (including those from U.S. or foreign governmental authorities). Litigation is inherently unpredictable. Regardless of the merits of a claim, the expense of initiating and defending, and in some cases entering into settlements of claims, such litigation and investigations may be costly, and may cause us to suffer reputational harm, divert management's attention from day-to-day operations of our business, and may require us to implement certain remedial measures that could disrupt our business, operations, results of operations, financial condition, or cash flows. In addition, if we fail to comply with the terms of any settlement agreement, we could face more substantial penalties. An unfavorable resolution of one or more of these matters could adversely affect our business, results of operations, financial condition, or cash flows. Even if we are not named a party to a particular suit, we may be subject to indemnification obligations to the named parties, including our directors and executive officers as well as other third parties, that could subject us to liability for damages or other amounts payable as a result of such judgments or settlements. --- ## No Match in Current: Industry Risks *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* •We operate in an intensely competitive industry, and competitive pressures could harm our business and financial performance. --- ## No Match in Current: International Risks *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* •Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, and financial condition. •We are exposed to fluctuations in foreign currency exchange rates. --- ## No Match in Current: Intellectual Property Risks *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* 16 16 16 Table of Content Table of Content •Our financial performance may suffer if we cannot continue to develop, license, or enforce the intellectual property rights on which our businesses depend. •Our products and services depend in part on intellectual property and technology licensed from third parties. •Third-party claims of intellectual property infringement, including patent infringement, are commonplace in our industry and successful third-party claims may limit or disrupt our ability to sell our products and services. --- ## No Match in Current: Failure to complete the Merger with Juniper Networks may adversely affect our business and our stock price. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* In January 2024, we entered into a definitive agreement to acquire Juniper Networks, Inc., a leader in AI-native networks. Consummation of the Merger is subject to the satisfaction or waiver of certain conditions, including but not limited to (i) the adoption of the Agreement and Plan of Merger (the "Merger Agreement"), by and among Juniper Networks, HPE and Jasmine Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of HPE ("Merger Sub"), by Juniper Networks' stockholders (which was completed on April 2, 2024); (ii) the absence of any injunction, order or law preventing, prohibiting or making illegal the consummation of the Merger; (iii) the expiration or termination of the waiting period (or extension thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the receipt of all other required approvals, consents or clearances under specified foreign antitrust laws and foreign investment laws without imposition of a Burdensome Condition (as defined in the Merger Agreement); and (iv) in the case of the obligations of HPE and Merger Sub to effect the Merger, the absence of a material adverse effect with respect to Juniper Networks that is continuing as of the closing. There can be no assurance that these or other closing conditions will be satisfied in a timely manner or at all. Any delay in completing the Merger could cause us not to realize some or all of the anticipated benefits when expected, if at all. 21 21 21 Table of Content Table of Content If the Merger is not completed, our stock price could be impacted to the extent it reflects an assumption that we will complete the Merger, and additionally, we may suffer other consequences that could adversely affect our business, results of operations, and stock price, including incurring significant acquisition costs that we would be unable to recover, negative publicity, and a negative impression of us in the investment community. Furthermore, under certain specified circumstances, including the termination of the Merger Agreement by either us or Juniper Networks because certain required regulatory clearances are not obtained or the terms of the Merger Agreement are materially breached by us, upon termination we would be required to pay Juniper Networks a termination fee of $815 million. --- ## No Match in Current: Failure to realize the benefits expected from the Merger with Juniper Networks could adversely affect our business or our stock price. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* There can be no assurance that we will realize any of the significant benefits that we expect to result from the Merger, or realize them within the anticipated timeframe. Achieving these benefits will depend, in part, on our ability to integrate Juniper Networks' business successfully and efficiently. The challenges involved in this integration, which will be complex and time-consuming, include the following: •preserving customer and other important relationships of Juniper Networks and attracting new business and operational relationships; •integrating financial forecasting and controls, procedures and reporting cycles; •consolidating and integrating corporate, information technology, finance and administrative infrastructures; •coordinating sales and marketing efforts to effectively position our capabilities; •coordinating and integrating operations, including in countries in which we have not previously operated; and •integrating employees and related human capital management systems and benefits, maintaining employee morale and retaining key employees. If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business, then we may not achieve the anticipated benefits of the Merger on our anticipated timeframe or at all, and our revenue, expenses, operating results, financial condition and stock price could be materially adversely affected. The successful integration of Juniper Networks will require significant management attention both before and after the completion of the Merger with Juniper Networks, and may divert the attention of management from our business and operational issues. --- ## No Match in Current: Changes in the macroeconomic environment have, at times, impacted and may in the future negatively impact our results of operations. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* Changes in macroeconomic conditions have, at times, affected and may in the future affect consumer and enterprise spending, and as a result, our customers have postponed or cancelled, and may also in the future postpone or cancel, spending in response to numerous reasons, including but not limited to volatility in credit and equity markets, negative financial news and/or declines in income or asset values, all of which may have an adverse effect on the demand for our products and/or result in changes in our product prices. Other factors that have had, and could again in the future have, an adverse effect on demand for our products, financial condition and results of operations include inflation, slower economic growth or economic recession, conditions in the labor market, healthcare costs, access to credit, consumer confidence, and other macroeconomic factors affecting consumer and business spending behavior. These changes could happen rapidly and we may not be able to react quickly to prevent or limit our losses or exposures. Additionally, other macroeconomic developments, such as efforts of governments to stimulate or stabilize the economy, international conflicts, trade disputes, sanctions, increased tariffs internationally, including between the United States and China and on imports into the United States from various countries, have at times impacted, and may in the future impact our business in an adverse manner, whether directly or indirectly, such as through their impacts on the financial positions and operations of our customers, suppliers, and other third parties with whom we do business or on whom we rely, and as a consequence, their ability to perform their obligations under their agreements with us. Persistent inflation has negatively affected our business in recent quarters and could do so again in the future, as well. A general weakening of, and related declining corporate confidence in, the global economy or the curtailment in government or corporate spending have at times caused current or potential customers to reduce their IT budgets or be unable to fund data storage products, which have led them to delay, decrease or cancel purchases of our products or to not pay us or to delay paying us for previously purchased products and services, all of which may occur again in the future. --- ## No Match in Current: The stock distribution in either or both of the completed separations of our former Enterprise Services business and our former Software segment could result in significant tax liability, and DXC Technology Company or Micro Focus International plc (as applicable) may in certain cases be obligated to indemnify us for any such tax liability imposed on us. *This section from the 2024 filing does not have a high-confidence textual match in 2025. It may have been removed, merged, or substantially reworded.* The completed separations and mergers of our former Enterprise Services business with DXC Technology Company ("DXC") (the "Everett Transaction" or "Everett") and our Software Segment with Micro Focus International plc ("Micro Focus") (the "Seattle Transaction" or "Seattle") were conditioned upon the receipt of an opinion from outside counsel regarding the qualification of (i) the relevant distribution and related transactions as a "reorganization" within the meaning of Sections 368(a), 361 and 355 of the Internal Revenue Code of 1986 (the "Code") and (ii) the relevant merger as a "reorganization" within the meaning of Section 368(a) of the Code. While the Seattle Transaction generally qualified for tax-free treatment for us, Seattle SpinCo and Micro Focus, the acquisition of Seattle SpinCo by Micro Focus resulted in the recognition of gain (but not loss) for U.S. persons who received Micro Focus American Depositary Shares in the Software separation. Each opinion of outside counsel was based upon and relied on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of us, Everett SpinCo and CSC, or us, Seattle SpinCo and Micro Focus, as applicable. If any of these representations, statements or undertakings are, or become, inaccurate or incomplete, or if any party breaches any of its covenants in the relevant separation documents, the relevant opinion of counsel may be invalid and the conclusions reached therein could be jeopardized. Notwithstanding the opinions of counsel, the Internal Revenue Service (the "IRS") could determine that either or both of the distributions should be treated as a taxable transaction if it determines that any of the facts, assumptions, representations, statements or undertakings upon which the relevant opinion of counsel was based are false or have been violated, or if it disagrees with the conclusions in the opinion of counsel. An opinion of counsel is not binding on the IRS and there can be no assurance that the IRS will not assert a contrary position. If the distribution of Everett SpinCo or Seattle SpinCo, as applicable, together with certain related transactions, failed to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code, in general, we would recognize taxable gain as if we had sold the stock of Everett SpinCo or Seattle SpinCo, as applicable, in a taxable sale for its fair market value, and our stockholders who receive Everett SpinCo shares or Seattle SpinCo shares in the relevant distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares. 34 34 34 Table of Content Table of Content We obtained private letter rulings from the IRS regarding certain U.S. federal income tax matters relating to the separation of our Enterprise Services business and Software Segment. Those rulings concluded that certain transactions in those separations are generally tax-free for U.S. federal income tax purposes. The conclusions of the IRS private letter rulings were based, among other things, on various factual assumptions we have authorized and representations we have made to the IRS. If any of these assumptions or representations are, or become, inaccurate or incomplete, the validity of the IRS private letter rulings may be affected. Notwithstanding the foregoing, we incurred certain tax costs in connection with the completed separation of our former Enterprise Services business and Software Segment, including non-U.S. tax expenses resulting from the completed separation of our former Enterprise Services business and Software Segment in multiple non-U.S. jurisdictions that do not legally provide for tax-free separations, which may be material. If the completed separation of our former Enterprise Services business or Software Segment (including certain internal transactions undertaken in anticipation of those separations) are determined to be taxable for U.S. federal income tax purposes, we, our stockholders that are subject to U.S. federal income tax and/or DXC and/or Micro Focus could incur significant U.S. federal income tax liabilities. --- ## Modified: Risks arising from climate change and the transition to a lower-carbon economy may impact our business. **Key changes:** - Reworded sentence: "Our corporate headquarters is located in Spring, Texas, which suffers from floods, hurricanes, and other extreme weather, and a portion of our research and development activities are located in California, which suffers from drought conditions and catastrophic wildfires, each potentially affecting the health and safety of our employees and our business in these locations." - Reworded sentence: "The increasing concerns over climate change could also result in transition risks, such as efforts and expenditures related to carbon abatement, shifting customer preferences, or compliance risks from changing regulatory and legal requirements." - Reworded sentence: "We may also confront higher electricity prices, and higher costs for supplies or components that comply with certain environmental regulatory thresholds, potentially impacting our margins or the pricing of our offerings." **Prior (2024):** Climate change serves as a risk multiplier that could increase both the frequency and severity of natural disasters that may affect our worldwide business operations and those of suppliers and customers. Our corporate headquarters is located in Spring, Texas, which suffers from floods, hurricanes, and other extreme weather, and a portion of our research and development activities are located in California, which suffers from drought conditions and catastrophic wildfires, each affecting the health and safety of our employees. In California, to mitigate wildfire risk, electric utilities have, at times periodically deployed, and may in the future, periodically deploy public safety power shutoffs, which affect electricity reliability to our facilities and our communities. Certain sites located in the United States, Middle East, China, and India experience exposure to extreme heat and water stress, which could potentially jeopardize the health and well-being of our employees, consequently impacting our operations. While we seek to mitigate business risks, including those associated with climate change, through site selection, infrastructure technological investments, business continuity planning, and robust environmental programs, this may require us to incur substantial costs, and we may be unsuccessful in doing so as there are inherent climate-related risks wherever business is conducted. Furthermore, climate change may reduce the availability or increase the cost of insurance for these negative impacts of natural disasters by contributing to an increase in the incidence and severity of such natural disasters. The increasing concern over climate change could also result in transition risks, such as efforts and expenditures related to carbon abatement, shifting customer preferences, or compliance risks from changing regulatory and legal requirements. We have already observed changing customer preferences resulting in increased demands for sustainable solutions, products, and services. While we have been integrating such trends into our business and sales strategies thus far, we may not be able to successfully do so in the future. Further, continually changing customer preferences may cause us to incur additional costs, invest more in R&D, or make other changes to other operations to respond to such demands, which may not be carried out successfully, and if so, could adversely affect our financial results. We may also confront higher electricity prices as the grid decarbonizes, and higher costs for supplies or components that comply with certain environmental regulatory thresholds, potentially impacting our margins or the pricing of our offerings. If we fail to manage these and other transition risks in an effective manner, customer demand for our solutions, products, and services could diminish, and our profitability could suffer. **Current (2025):** Climate change serves as a risk multiplier that could increase both the frequency and severity of natural disasters that may affect our worldwide business operations and those of suppliers and customers. Our corporate headquarters is located in Spring, Texas, which suffers from floods, hurricanes, and other extreme weather, and a portion of our research and development activities are located in California, which suffers from drought conditions and catastrophic wildfires, each potentially affecting the health and safety of our employees and our business in these locations. In California, to mitigate wildfire risk, electric utilities have periodically deployed, and may in the future, periodically deploy public safety power shutoffs, which affect electricity reliability to our facilities and our communities. Certain sites located in the United States, Middle East, China, and India experience exposure to extreme heat and water stress, which could potentially strain our operational continuity and also jeopardize the health and well-being of our employees, both of which may consequently impact our operations. Furthermore, our data centers depend on predictable and reliable energy and networking capabilities, the cost or availability of which could be adversely affected or disrupted by a variety of factors, including, but not limited to, the effects of climate change. Increased energy consumption, including as a result of AI-related growth, climate-related events, energy market volatility, and power grid disruptions, may increase the operational costs related to inputs across our value chain. While we seek to mitigate business risks, through site selection, infrastructure technological investments, business continuity planning, and robust environmental programs, this may require us to incur substantial costs, and we may be unsuccessful in doing so as there are inherent climate-related risks wherever business is conducted. Furthermore, climate change may reduce the availability or increase the cost of insurance for these negative impacts of natural disasters by contributing to an increase in the incidence and severity of such natural disasters. The increasing concerns over climate change could also result in transition risks, such as efforts and expenditures related to carbon abatement, shifting customer preferences, or compliance risks from changing regulatory and legal requirements. We continue to observe increased customer demand for more sustainable and energy-efficient solutions, products, and services. While we have been integrating such trends into our business and sales strategies thus far, we may not be able to successfully do so in the future. Further, continually changing customer preferences may cause us to incur additional costs, invest more in R&D, or make other changes to other operations to respond to such demands, which may not be carried out successfully, and if so, could adversely affect our financial results. We may also confront higher electricity prices, and higher costs for supplies or components that comply with certain environmental regulatory thresholds, potentially impacting our margins or the pricing of our offerings. If we fail to manage these and other transition risks in an effective manner, customer demand for our solutions, products, and services could diminish, and our profitability could suffer. --- ## Modified: Our business is subject to various federal, state, local, and foreign laws and regulations that could result in costs or other sanctions that adversely affect our business and results of operations. **Key changes:** - Reworded sentence: "We are subject to various US (federal, state, and local), and foreign laws, regulations, executive orders and policies affecting the sale of our products and services in a number of areas." - Reworded sentence: "For example, as a result of laws and regulations concerning responsible and sustainable business practices, we face increasing complexity related to product design, safety and compliance; the use of regulated, hazardous, and scarce materials; the management, movement and disposal of hazardous substances and waste; the associated energy consumption and efficiency related to operations and the use of products, services, and solutions; the transportation and shipping of products and other materials; supply chain due diligence; climate change adaptation and mitigation; greenhouse gas emissions; sustainability-related regulations and reporting requirements; and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life and associated operational or financial responsibility." - Reworded sentence: "In addition, a wide variety of provincial, state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data." **Prior (2024):** We are subject to various US (federal, state, and local), and foreign laws and regulations. Laws and regulations may change in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. For example, as a result of laws and regulations concerning responsible and sustainable business practices, we face increasing complexity related to product design, safety and compliance; the use of regulated, hazardous, and scarce materials; the management, movement and disposal of hazardous substances and waste; the associated energy consumption and efficiency related to operations and the 32 32 32 Table of Content Table of Content use of products, services, and solutions; the transportation and shipping of products and other materials; supply chain due diligence; climate change adaptation and mitigation; greenhouse gas emissions; sustainability-related regulations and reporting requirements; and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life and associated operational or financial responsibility. A significant portion of our hardware revenues come from international sales. Any changes to current environmental legal requirements may increase our cost of doing business internationally and impact our hardware revenues from the EU, U.S., China, India and/or other countries proposing or adopting similar environmental legal requirements. In addition, other sustainability reporting-related laws, regulations, treaties, and similar initiatives and programs are being proposed, adopted, and implemented throughout the world If we were to violate or become liable under environmental or certain sustainability-related laws or if our products become non-compliant with such laws or market access requirements, it could result in loss of market access or limit offerings in those markets or our customers may refuse to purchase our products, and we could incur costs or face other sanctions, such as restrictions on our products entering certain jurisdictions, fines, and/or civil or criminal sanctions. Environmental regulations may also impact the availability and cost of energy or emissions related to energy consumption which may increase our cost of manufacturing and/or the cost of powering and cooling owned IT infrastructures. In addition, our business is subject to an ever-growing number of laws and regulations addressing privacy and information security, including the use of AI. In particular, we face an increasingly complex global regulatory environment and patchwork of state laws in the U.S., increasing the risks addressing these regulatory requirements and in responding to potential security and data incidents. The increase in aaS offerings may also be impacted by data localization and international data transfer requirements under various privacy laws, including the European Union's General Data Protection Regulation. Given our significant employee and operational presence in India, the Digital Personal Data Protection Act (which was approved in August 2023) has imposed, and may continue to impose, additional restrictions and compliance costs on us. Furthermore, the rapid development and deployment of tools that leverage AI is also causing governments to consider and implement regulation of AI, even for AI that does not pertain to personal data, which is impacting and may further impact the use and incorporation of AI capabilities in our offerings and in our customer's demand for such offerings. We have received inquiries, and may be subject to demands, claims, lawsuits, regulatory investigations, and additional inquiries (including those from U.S. or foreign governmental authorities), relating to AI use cybersecurity and data incidents that we have experienced or may in the future experience. If we were to violate or become liable under laws or regulations associated with privacy or security or the use of AI, we could incur substantial costs or be exposed to potential regulatory fines, civil or criminal sanctions, third-party claims, and reputational damage. Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to these topics could subject us to liability to our customers, data subjects, suppliers, business partners, employees, and others, give rise to legal and/or regulatory action, could damage our reputation or could otherwise materially harm our business, any of which could have an adverse effect on our business, operating results, and financial condition. Jurisdictions in which we have significant operations and assets, such as the U.S., China, India, and the E.U., each have exercised and continue to exercise significant influence over many aspects of their domestic economies including, but not limited to fair competition, tax practices, anti-corruption, anti-trust, responsible sourcing and human rights (including the use of conflict minerals), price controls and international trade, which have had and may continue to have an adverse effect on our business operations and financial condition. **Current (2025):** We are subject to various US (federal, state, and local), and foreign laws, regulations, executive orders and policies affecting the sale of our products and services in a number of areas. Laws and regulations may change in ways that will require us to modify our business model and objectives or affect our returns on investments by restricting existing activities and products, subjecting them to escalating costs or prohibiting them outright. For example, as a result of laws and regulations concerning responsible and sustainable business practices, we face increasing complexity related to product design, safety and compliance; the use of regulated, hazardous, and scarce materials; the management, movement and disposal of hazardous substances and waste; the associated energy consumption and efficiency related to operations and the use of products, services, and solutions; the transportation and shipping of products and other materials; supply chain due diligence; climate change adaptation and mitigation; greenhouse gas emissions; sustainability-related regulations and reporting requirements; and the reuse, recycling and/or disposal of products and their components at end-of-use or useful life and associated operational or financial responsibility. Since a significant portion of our hardware revenues come from international sales, any changes to current environmental legal requirements may increase our cost of doing business internationally and impact our hardware revenues from the EU, U.S., China, India and/or other countries proposing or adopting similar environmental legal requirements. In addition, other sustainability reporting-related laws, regulations, treaties, and similar initiatives and programs are being proposed, adopted, and implemented in U.S. states, including California, and throughout the world. If we were to violate or become liable under environmental or certain 37 37 37 Table of Content Table of Content sustainability-related laws or if our products become non-compliant with such laws or market access requirements, it could result in loss of market access or limit offerings in those markets or our customers may refuse to purchase our products, and we could incur costs or face other sanctions, such as restrictions on our products entering certain jurisdictions, fines, and/or civil or criminal sanctions. Environmental regulations may also impact the availability and cost of energy or emissions related to energy consumption which may increase our cost of manufacturing and/or the cost of powering and cooling owned IT infrastructures. In addition, a wide variety of provincial, state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. Furthermore, our business is also subject to an ever-growing number of laws and regulations addressing privacy and information security, including the use of AI. In particular, we face an increasingly complex global regulatory environment and patchwork of state laws in the U.S., increasing the risks associated with addressing these regulatory requirements and in responding to potential security and data incidents. The increase in aaS offerings may also be impacted by data localization and international data transfer requirements under various global data protection laws that may continue to impose additional restrictions and compliance costs on us. Furthermore, the rapid development and deployment of tools that leverage AI are also causing governments to accelerate efforts to regulate AI and restrict purchases that include AI, even for AI that does not pertain to personal data, which is impacting and may further impact the use and incorporation of AI capabilities in our offerings and in our customers' demand for such offerings. In addition, the interpretation and application of privacy and data protection-related laws in some cases is uncertain, and our legal and regulatory obligations are subject to frequent changes, including the potential for various regulators or other governmental bodies to enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations, or to increase penalties. Further, evolving and changing definitions of personal data and personal information, within the EU, the U.S., the U.K., and elsewhere, to include IP addresses, machine identification information, location data, and other information, may limit or inhibit our ability to operate or expand our business, including limiting business relationships and partnerships that may involve the sharing or uses of data. All of these dynamics create a legal landscape where compliance with these laws and regulations can be costly, distract management and technical personnel, and can delay or impede the development and offering of new products and services, which may ultimately negative impact our business and operating results. If we were to violate or become liable or subject to enforcement action under laws or regulations associated with any of the above laws or regulations, we could incur substantial costs or be exposed to potential regulatory fines, civil or criminal sanctions, third-party claims, and reputational damage. Our actual or perceived failure to comply with applicable laws and regulations or other obligations relating to these topics could subject us to liability to our customers, data subjects, suppliers, business partners, employees, and others; give rise to legal and/or regulatory action; could damage our reputation; could limit or restrict our ability to sell to government customers in the U.S. and abroad; or could otherwise materially harm our business, any of which could have an adverse effect on our business, operating results, and financial condition. Jurisdictions in which we have significant operations and assets, such as the U.S., China, India, and the E.U., each have exercised and continue to exercise significant influence over many aspects of their domestic economies including, but not limited to fair competition, tax practices, anti-corruption, anti-trust, responsible sourcing and human rights (including the use of conflict minerals), price controls and international trade, which have had and may continue to have an adverse effect on our business operations and financial condition. --- ## Modified: Any failure by us to identify, manage, and complete acquisitions and subsequent integrations (including the integration of Juniper Networks following the Merger), divestitures, and other significant transactions successfully could harm our financial results, business, prospects, and stock price. **Key changes:** - Reworded sentence: "As part of our strategy, we may acquire businesses, divest businesses or assets, enter into strategic alliances and joint ventures, and make investments to further our business (collectively, "business combination and investment transactions")." - Reworded sentence: "•In order to complete a business combination and investment transaction, we may (1) issue common stock, potentially creating dilution for our existing stockholders, (2) enter into financing arrangements, which could affect our liquidity and financial condition, or (3) incur early retirement costs, employee benefit costs, charges from the elimination of duplicative facilities and contracts, inventory adjustments, assumed litigation and other liabilities, legal, accounting and financial advisory fees, and required payments to executive officers and key employees under retention plans." - Reworded sentence: "Management's attention or other resources may be diverted during business combination and investment transactions and may be further impacted if we fail to successfully complete or integrate such transactions that further our strategic objectives." **Prior (2024):** As part of our strategy, we may acquire businesses, divest businesses or assets, enter into strategic alliances and joint ventures, and make investments to further our business (collectively, "business combination and investment transactions"), and also handle any post-closing issues, such as integration. Risks associated with business combination and investment transactions include the following, any of which could adversely affect our financial results, including our effective tax rate: •We may not successfully combine product or service offerings or realize all of the anticipated benefits of any particular business combination and investment transaction, which may result in (1) failure to execute on our business strategy; (2) failure to coordinate sales and marketing efforts to effectively position our capabilities; (3) failure to retain employees, customers, distributors, and suppliers or attract new business and operational relationships; (4) increase in unanticipated delays or failure to meet contractual obligations which may cause financial results to differ from expectations; and (5) pay, early retirement costs, employee benefit costs, charges from the elimination of duplicative facilities and contracts, inventory adjustments, assumed litigation and other liabilities, legal, accounting and financial advisory fees, and required payments to executive officers and key employees under retention plans. •We may fail to successfully and efficiently (1) integrate financial forecasting and controls, procedures and reporting cycles; (2) consolidate and integrate corporate, information technology, finance and administrative infrastructures; (3) coordinate and integrate operations, including in countries in which we have not previously operated; (4) integrate employees and related human capital management systems and benefits; or (5) address redundant processes and functions in an adequate manner (thereby impacting our ability to achieve all or any of the anticipated synergies) •Our ability to conduct due diligence with respect to business combination and investment transactions, and our ability to evaluate the results of such due diligence, is dependent upon the veracity and completeness of statements and disclosures made or actions taken by third parties or their representatives. We may fail to identify significant issues with the acquired company's product quality, financial disclosures, workplace culture, accounting practices or internal control deficiencies or all of the factors necessary to estimate reasonably accurate costs, timing and other matters. •In order to complete a business combination and investment transaction, we may issue common stock, potentially creating dilution for our existing stockholders or we may enter into financing arrangements, which could affect our liquidity and financial condition. 22 22 22 Table of Content Table of Content •For an acquisition or other combination, the acquisition partner may have differing or inadequate cybersecurity and data protection controls, which could impact our exposure to data security incidents and potentially increase anticipated costs or time to integrate the business. •Business combination and investment transactions may lead to litigation, which could impact our financial condition and results of operations. •We have incurred and will incur additional depreciation and amortization expense over the useful lives of certain assets acquired in connection with business combination and investment transactions and, to the extent that the value of goodwill or intangible assets acquired in connection with a business combination and investment transaction becomes impaired, we may be required to incur additional material charges relating to the impairment of those assets. •For a divestiture, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, or we may dispose of a business at a price or on terms that are less desirable than we had anticipated. •The impact of divestitures on our revenue growth may be larger than projected, as we may experience greater dis-synergies than expected. If we do not satisfy pre-closing conditions and necessary regulatory and governmental approvals on acceptable terms, it may prevent us from completing the transaction. Dispositions may also involve continued financial involvement in the divested business, such as through continuing equity ownership, guarantees, indemnities or other financial obligations. Under these arrangements, performance by the divested businesses or other conditions outside of our control could affect our future financial results. •Our certificate of incorporation and bylaws could make it difficult or discourage an acquisition of Hewlett Packard Enterprise if our Board of Directors deems it to be undesirable. Provisions such as indemnification, meeting requirements, and blank check stock authorizations could deter or delay hostile takeovers, proxy contests, or changes in control or management of Hewlett Packard Enterprise. Management's attention or other resources may be diverted during business combination and investment transactions and may be further impacted if we fail to successfully complete or integrate business combination and investment transactions that further our strategic objectives. See also the risk factors below under the heading "Risks Related to Prior Separations." **Current (2025):** As part of our strategy, we may acquire businesses, divest businesses or assets, enter into strategic alliances and joint ventures, and make investments to further our business (collectively, "business combination and investment transactions"). Risks associated with business combination and investment transactions include the following, any of which could adversely affect our financial results, including our effective tax rate: Any of these risks could be more significant due to the size and complexity of the business combination and investment transactions. Further, there can be no assurance that we will realize all or any of the anticipated benefits that we expect from any acquisition or other significant transaction (including the Merger) or realize them within the anticipated timeframe. Achieving these benefits will depend, in part, on our ability to integrate such acquired company or asset successfully and efficiently with our existing business and portfolio of offerings. •We may not successfully combine product or service offerings or realize all of the anticipated benefits of any particular business combination and investment transaction, which may result in (1) failure to execute on our business strategy; (2) failure to integrate disparate technological offerings into a coherent portfolio of solutions; (3) failure to coordinate sales and marketing efforts to effectively position our capabilities; (4) failure to retain employees, customers, distributors, suppliers, and other important relationships, or attract new business and operational relationships; and (5) unanticipated delays or failure to meet contractual obligations which may cause financial results to differ from expectations. •We may fail to successfully and efficiently (1) integrate financial forecasting and controls, procedures and reporting cycles; (2) consolidate and integrate corporate, information technology, finance and administrative infrastructures; (3) coordinate and integrate operations, including in countries in which we have not previously operated; (4) integrate employees and related human capital management systems and benefits; or (5) address redundant processes and functions in an adequate manner (thereby impacting our ability to achieve all or any of the anticipated synergies). •Our ability to conduct due diligence with respect to business combination and investment transactions, and our ability to evaluate the results of such due diligence, is dependent upon the veracity and completeness of statements and 24 24 24 Table of Content Table of Content disclosures made or actions taken by third parties or their representatives. We may fail to identify significant issues with the acquired company's product quality, financial disclosures, workplace culture, accounting practices or internal control deficiencies or all of the factors necessary to estimate reasonably accurate costs, timing and other matters. •In order to complete a business combination and investment transaction, we may (1) issue common stock, potentially creating dilution for our existing stockholders, (2) enter into financing arrangements, which could affect our liquidity and financial condition, or (3) incur early retirement costs, employee benefit costs, charges from the elimination of duplicative facilities and contracts, inventory adjustments, assumed litigation and other liabilities, legal, accounting and financial advisory fees, and required payments to executive officers and key employees under retention plans. •For an acquisition or other combination, the acquisition partner may have differing or inadequate cybersecurity and data protection controls or vulnerabilities, which could expose us to cybersecurity, operational, and financial risk; increase the likelihood of data security incidents; and potentially increase anticipated costs or time to integrate the business. In addition, sophisticated hardware, operating system software, and applications that we integrate from acquired companies may contain defects that could interfere with the operations of our systems. We may also face other risks if acquired companies use technology that is managed outside the scope of our information technology organization, resulting in incomplete coverage by our cybersecurity threat risk management tools. •Business combination and investment transactions may lead to litigation, which could impact our financial condition and results of operations. •We have incurred and will incur additional depreciation and amortization expense over the useful lives of certain assets acquired in connection with business combination and investment transactions and, to the extent that the value of goodwill or intangible assets acquired in connection with a business combination and investment transaction becomes impaired, we may be required to incur additional material charges relating to the impairment of those assets. •For a divestiture, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, or we may dispose of a business at a price or on terms that are less desirable than we had anticipated. •The impact of divestitures on our revenue growth may be larger than projected, as we may experience greater dis-synergies than expected. If we do not satisfy pre-closing conditions and necessary regulatory and governmental approvals on acceptable terms, it may prevent us from completing the transaction. Dispositions may also involve continued financial involvement in the divested business, such as through continuing equity ownership, guarantees, indemnities or other financial obligations. Under these arrangements, performance by the divested businesses or other conditions outside of our control could affect our future financial results. •Our certificate of incorporation and bylaws could make it difficult or discourage an acquisition of Hewlett Packard Enterprise if our Board of Directors deems it to be undesirable. Provisions such as indemnification, meeting requirements, and blank check stock authorizations could deter or delay hostile takeovers, proxy contests, or changes in control or management of Hewlett Packard Enterprise. Management's attention or other resources may be diverted during business combination and investment transactions and may be further impacted if we fail to successfully complete or integrate such transactions that further our strategic objectives. In particular, the integration of Juniper Networks has required significant management attention both before and after the completion of the Merger and will continue to require sustained management attention, diverting the attention of management from other areas of our business and operational issues. Furthermore, recent procedural developments in the court's Tunney Act review of the settlement reached by HPE and the United States Department of Justice in the litigation relating to the Merger may disrupt or delay our ongoing integration efforts and our ability to realize some or all of the anticipated benefits or synergies from the Merger. Such disruptions or delays to the integration may also damage our reputation in the market and result in uncertainty from customers, partners, and other third parties with whom we do business regarding our offerings and go-to-market strategy. See also the risk factors below under the heading "Risks Related to Prior Separations." --- ## Modified: Due to the international nature of our business, political or economic changes and the laws and regulatory regimes applying to international transactions or other factors could harm our future revenue, costs and expenses, financial condition, and results of operations. **Key changes:** - Reworded sentence: "We derive a substantial portion of our revenues from our international operations, and we plan to continue our business in international markets." - Reworded sentence: "Such actions have impacted, and may further impact our ability, desire, or the timing of funding decisions for various investment opportunities." - Reworded sentence: "30 30 30 Table of Content Table of Content Sales outside the United States constituted approximately 61% of our net revenue in fiscal year 2025." - Reworded sentence: "We implement policies, procedures, and training designed to facilitate compliance with anti-corruption laws around the world, including the U.S." - Reworded sentence: "Bribery Act, as well as U.S." **Prior (2024):** Our business and financial performance depend significantly on worldwide economic conditions and the demand for technology hardware, software, and services in, and continued access to, the markets in which we compete. Economic weakness and uncertainty and the volatile inflationary environment have constrained spending on network and enterprise infrastructure. This has in the past adversely affected the demand for our products, services, and solutions, which has impacted our financial condition and results of operations, all of which we may experience again in the future. These have, at times in the past, resulted in increased expenses due to higher allowances for doubtful accounts and potential goodwill and asset impairment charges (among other financial impacts), and made it more difficult for us to manage inventory and make accurate forecasts of revenue, gross margin, cash flows, and expenses, and may have such effects again in the future. Such factors, including how long such conditions may persist, among others, may negatively impact the evenness or volume of demand for our products and services, potentially resulting in impacts similar to those mentioned above, though the precise extent of such impacts cannot be accurately predicted. Economic weakness and uncertainty could cause our expenses to vary materially from our expectations. Any financial turmoil affecting the banking system and financial markets, or any significant financial services institution failures could negatively impact our treasury operations, as the financial condition of such parties may deteriorate rapidly and without notice in times of market volatility and disruption. Interest and other expenses have varied, and could continue to vary, materially from expectations depending on changes in interest rates, borrowing costs, currency exchange rates, costs of hedging activities, and the fair value of derivative instruments. It is difficult to predict the impact of such events on us, our third-party partners, our customers, or economic markets more broadly, which have been and will continue to be highly dependent upon the actions of governments and businesses in response to macroeconomic events, and the effectiveness of those actions. Such actions have impacted, and may further impact our ability, desire, or the timing of seeking funding for various investment opportunities. Economic downturns also may lead to restructuring actions and associated expenses. Further, reduced U.S. federal government spending may limit demand for our products, services, and solutions from organizations that receive funding from the U.S. government, and could negatively affect macroeconomic conditions in the United States, which could further reduce demand for our products, services, and solutions. Our business and financial performance also could be adversely affected by changes in U.S. trade policy, U.S. export controls and sanctions, and U.S. regulations concerning imports, as well as international laws and regulations relating to global trade. Current U.S. government trade policy includes the imposition of tariffs on certain foreign goods, including information and communication technology products. These measures have materially increased costs for certain goods imported into the United States. As a result, our business has in the past been impacted by forced material price increases, which in turn resulted 27 27 27 Table of Content Table of Content in price increases for our offerings, which subsequently limited demand or reduced margins for our offerings, all of which may impact us again from time to time in the future. Additionally, U.S. trading partners may adopt their own trade policies making it more difficult or costly for us to export our products to those countries. Similarly, changes in regulations relating to certain exports, including economic sanctions, have led to export delays and prevented us, and could in the future prevent us, from exporting products to certain locations or customers entirely, which have in some instances impacted, and could in the future impact, our financial performance. In addition, changes in requirements relating to making foreign direct investments could increase our cost of doing business in certain jurisdictions, prevent us from shipping products to particular countries or markets, affect our ability to obtain favorable terms for components, increase our operating costs, or lead to penalties or restrictions. While we have policies and procedures designed to facilitate compliance with global trade laws and regimes around the world, such measures may not guarantee compliance. Sales outside the United States constituted approximately 64% of our net revenue in fiscal 2024. As such, our future business and financial performance could suffer due to a variety of international factors in addition to those otherwise already disclosed, including: •ongoing uncertainties as a result of instability or changes in geopolitical conditions, including military or political conflicts, such as those caused by the ongoing conflicts between Russia and Ukraine or in the Middle East (the potential escalation or geographic expansion of which could heighten other risks identified in this report), or the relationship between China and the U.S. (which could, among other things, impact the enforceability of certain contracts or the timing and form of certain payments); •inflationary pressures, which have in the past increased, and may in the future increase costs for materials, supplies, and services, including those of third parties with whom we do business; •adverse or uncertain macroeconomic conditions, including a changing interest rate environment and fears of a potential global economic downturn or recession, which have at times in the past slowed customer demand for our products and services, and may do so again in the future; •network security, privacy, and data sovereignty concerns, which could make foreign customers reluctant to purchase products and services from U.S.-based technology companies; •longer collection cycles and financial instability among customers, which could impact our ability to collect on accounts receivable and consequently recognize revenue; •local labor conditions and regulations, including local labor issues faced by specific suppliers and OEMs, or changes to immigration and labor law policies which may adversely impact our access to technical and professional talent; •managing our geographically dispersed workforce, which has necessitated, and may in the future require, incurring costs to promote seamless workforce connectivity and to comply with changing laws, regulations and workers' rights councils across multiple jurisdictions; •differing technology standards or customer requirements, which have required us to incur additional development and production costs to modify or adapt our offerings, and may do so again in the future; •local content and manufacturing requirements, which have impacted, and could further impact, our ability to sell into those markets; •difficulties associated with repatriating earnings in restricted countries, and changes in tax laws, which introduces uncertainty to our results of operations and financial performance; and •fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments, which have from time to time adversely impacted, and any of which could in the future adversely impact, our results of operations and ability to meet customer demand. Certain of the factors described above have, in the past, disrupted the operations of, and adversely impacted our product and component manufacturing and key suppliers, customers, or vendors located outside of the United States, and could do so again in the future. For example, we rely on suppliers in Asia for product assembly and manufacture, the operations of whom are subject to local labor laws and other requirements. Any loss of or limitations on their output or their inability to operate could have an adverse effect on our ability to timely deliver our products and services, which would in turn negatively impact our financial performance. Further, the ongoing conflict between Russia and Ukraine and the trade sanctions imposed by the U.S., the European Union (the "EU"), and other countries in response have negatively impacted business and financial performance in that region. HPE is continuing to execute on the exit of our remaining business in Russia and Belarus as planned; however, we cannot provide any assurance that such exit will be efficient or uninterrupted, which may negatively impact our operational expenses. 28 28 28 Table of Content Table of Content We implement policies, procedures, and training designed to facilitate compliance with anti-corruption laws around the world, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. However, such measures may not guarantee compliance, and our employees and third parties with whom we work may take actions in violation of such policies or such anti-corruption laws. Furthermore, in many foreign countries, particularly in those with developing economies, people may engage in business practices prohibited by anti-corruption laws. Violations of such laws may result in severe criminal or civil sanctions and penalties, and we may be subject to those and other liabilities that could have an adverse effect on our business, results of operations, and financial condition. **Current (2025):** We derive a substantial portion of our revenues from our international operations, and we plan to continue our business in international markets. As a result, our business and financial performance depend significantly on worldwide economic conditions and the demand for technology hardware, software, and services in, and continued access to, the markets in which we compete. Economic weakness and uncertainty and the volatile inflationary and geopolitical environment have constrained spending on enterprise infrastructure. This has in the past adversely affected the demand for our products, services, and solutions, which has impacted our financial condition and results of operations. We may experience similarly adverse impacts in the future. These have, at times in the past, resulted in increased expenses due to higher allowances for doubtful accounts and potential goodwill and asset impairment charges (among other financial impacts), and made it more difficult for us to manage inventory and accurately forecast financial performance and/or expenses, and may have such effects again in the future. In addition, economic weakness, tariffs, and geopolitical uncertainty have, at times caused, and could, in the future cause our financial performance to vary materially from our expectations. Turmoil affecting the financial markets or any significant financial services institution failures could negatively impact our treasury operations. Interest and other expenses have varied, and could continue to vary, materially from expectations depending on changes in borrowing costs, currency exchange rates, costs of hedging activities, and the fair value of derivative instruments. It is difficult to predict the impact of such events on us, our third-party partners, our customers, or economic markets more broadly, which have been and will continue to be highly dependent upon the actions of governments and businesses in response to macroeconomic events, and the effectiveness of those actions. Such actions have impacted, and may further impact our ability, desire, or the timing of funding decisions for various investment opportunities. Further, reduced spending by governments and their agencies may limit demand for our products, services, and solutions from such entities, as well as organizations that receive funding from such governments, around the world, and could negatively affect macroeconomic conditions in the countries which we operate, which could further reduce demand for our products, services, and solutions. Our business and financial performance have been adversely affected by changes in U.S. and international trade policies, export controls, and sanctions, U.S. regulations concerning imports, tariffs, and resultant retaliatory countermeasures from other countries, as well as international laws and regulations relating to global trade and access to global markets. As a result, our business has, from time to time, been impacted by forced price increases of materials and higher barriers and costs to import and export certain components and/or our products to and from particular countries, which in turn has resulted in price increases to customers, and consequently has softened demand for our offerings and/or reduced our margins. We may experience all of these impacts in the future, especially in light of the current international tariff environment. While we have been evaluating, and continue to evaluate, supply chain diversification and resilience strategies to mitigate the adverse impacts of such measures, the actions we've taken or may take in the future may not be effective or able to be effectuated in a timely manner, or at all. Trade policy remains fluid and has changed rapidly at times. As such, changes in U.S. and international trade policy and any countermeasures, to any existing trade agreements, and to the scope and timing of any such actions and the ultimate impact of these measures are difficult to predict and may adversely affect our operations and financial condition. In addition, changes in requirements relating to making foreign direct investments could increase our cost of doing business in certain jurisdictions, prevent us from shipping products to particular countries or markets, affect our ability to obtain favorable terms for components, increase our operating costs, or lead to penalties or restrictions. While we have policies and procedures designed to facilitate compliance with global trade laws and regimes around the world, such measures may not guarantee compliance. 30 30 30 Table of Content Table of Content Sales outside the United States constituted approximately 61% of our net revenue in fiscal year 2025. As such, our future business and financial performance could suffer due to a variety of international factors in addition to those otherwise already disclosed, including: •the imposition of government controls (including for critical infrastructure protection) and any related licensing requirements (particularly for certain AI enabling products) that could affect the timing of shipments of our products and/or our ability to sell certain products in other countries; •impact of ongoing uncertainties as a result of instability or changes in geopolitical tensions, including trade protection measures, such as import tariffs or import or export restrictions (which may limit our access to raw material and/or components for our products); the revocation or material modification of trade agreements; and political and armed conflicts, such as those caused by the ongoing conflict between Russia and Ukraine or the continuous geopolitical instability in the Middle East (the potential escalation or geographic expansion of which could heighten other risks identified in this report), or the relationship between China and the U.S. (which could, among other things, impact trade dynamics and the enforceability of certain contracts or the timing and form of certain payments); •inflationary pressures, which have in the past increased, and may in the future increase costs for materials, supplies, and services, including those of third parties with whom we do business; •adverse or uncertain macroeconomic conditions, including a changing interest rate environment and fears of a potential global economic downturn or recession, which have at times in the past slowed customer demand for our products and services, and may do so again; •network security, privacy, geopolitical, and data sovereignty concerns, which could make foreign customers reluctant to purchase products and services from U.S.-based technology companies; •longer collection cycles and financial instability among customers, which could impact our ability to collect on accounts receivable and consequently recognize revenue; •local labor conditions and regulations, including local labor issues faced by specific suppliers, vendors, and manufacturers, or changes to immigration and labor law policies which may adversely impact our access to technical and professional talent; •managing our geographically dispersed workforce, which has necessitated, and may in the future require, incurring costs to promote seamless workforce connectivity and to comply with changing laws, regulations, and our obligations to engage with works councils or other employee representation bodies across multiple jurisdictions; •differing technology regulations, standards, or customer requirements, which have required us to incur additional development and production costs to modify or adapt our offerings, and may do so again in the future; •local content and manufacturing requirements and trade protection measures such as import tariffs or import or export restrictions, which have impacted, and could further impact, our ability to sell into those markets; •difficulties associated with repatriating earnings in restricted countries, and changes in tax policies, treaties, or laws that could have an unfavorable business impact, or which introduces uncertainty to our results of operations and financial performance; and •fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points of exit and entry for our products and shipments, which have from time to time adversely impacted, and any of which could in the future adversely impact, our results of operations and ability to meet customer demand. Any or all of these factors has or could have an adverse impact on our business, financial condition, and results of operations. Certain of the factors have disrupted the operations of, and adversely impacted our product and component manufacturing and key suppliers, customers, or vendors located outside of the United States, and could do so again. For example, we rely on suppliers in Asia for product assembly and manufacture, the operations of whom are subject to local labor laws and other requirements. Any loss of or limitations on their output or their inability to operate could have an adverse effect on our ability to timely deliver our products and services, which would in turn negatively impact our financial performance. Further, the ongoing conflict between Russia and Ukraine and the trade sanctions imposed by the U.S., the European Union (the "EU"), and other countries in response have negatively impacted business and financial performance in that region. HPE is continuing to execute on the exit of our remaining business in Russia and Belarus as planned; however, we cannot provide any assurance that such exit will be efficient or uninterrupted, which may negatively impact our operational expenses. We implement policies, procedures, and training designed to facilitate compliance with anti-corruption laws around the world, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, as well as U.S. and foreign export controls and trade sanctions. However, such measures do not guarantee compliance, and our employees and third parties with whom we work may take actions in violation of such policies or such laws. Furthermore, in many foreign countries, particularly in those with developing economies, people may engage in business practices prohibited by anti-corruption laws or our policies and procedures. Violations or alleged violations of such laws or key control policies by our employees, contractors, channel 31 31 31 Table of Content Table of Content partners, or agents could result in termination of our relationship, financial reporting problems, fines, and/or penalties for us, or prohibition on the importation or exportation of our products, may result in investigations or severe criminal or civil sanctions and penalties, and we may be subject to those and other liabilities that could have an adverse effect on our business, results of operations, and financial condition. --- ## Modified: Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable. **Key changes:** - Reworded sentence: "If predicted demand is substantially greater than orders, there may be excess inventory and greater risk of inventory write downs, which we have experienced from time to time." - Reworded sentence: "We experience some seasonal trends in the sale of our solutions that also have produced, and may in the future produce, variations in our quarterly results and financial condition." - Reworded sentence: "For a further discussion of such risks, see also the risk factor titled "We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffer if we fail to manage these third party relationships effectively."" **Prior (2024):** In some of our businesses, our quarterly sales have periodically reflected a pattern in which a disproportionate percentage of each quarter's total sales occurs towards the end of the quarter. This uneven sales pattern makes predicting revenue, earnings, cash flow from operations, and working capital for each financial period difficult, increases the risk of unanticipated variations in our quarterly results and financial condition, and places pressure on our inventory management and logistics systems. If predicted demand is substantially greater than orders, there may be excess inventory; and alternatively, if 31 31 31 Table of Content Table of Content orders substantially exceed predicted demand, we may not be able to fulfill all of the orders received in each quarter and such orders may be canceled, all of which we experienced from time to time in the past and may do so again in the future. Depending on when they occur in a quarter, developments such as a systems failure, component pricing movements, component shortages, or global logistics disruptions, have in the past adversely impacted, and could in the future adversely impact, our inventory levels and results of operations in a manner that is disproportionate to the number of days in the quarter affected. We experience some seasonal trends in the sale of our products that also have produced, and may in the future produce, variations in our quarterly results and financial condition. Many of the factors that create and affect seasonal trends are beyond our control. Separately, periodic supply chain shortages and constraints have, in some instances, resulted in, and may result in, increases to the costs of production of our hardware products that we have, at times, not been able to, and may, in the future, not be able to pass on to our customers. We have, in some instances, responded to such constraints by committing to higher inventory purchases and balances relative to our historical positions in order to secure manufacturing capacity, components to fulfill orders, or both. While these measures have been taken to shorten lead times to deliver products to customers, they may also result in excess or obsolete components in the future if the demand for our products is less than we anticipate or orders are cancelled, which could adversely affect our business and financial performance. **Current (2025):** In some of our businesses, our quarterly sales have periodically reflected a pattern in which a disproportionate percentage of each quarter's total sales occurs towards the end of the quarter. This uneven sales pattern makes predicting revenue, earnings, cash flow from operations, and working capital for each financial period difficult, increases the risk of unanticipated variations in our quarterly results and financial condition, and places pressure on our inventory management and logistics systems. If predicted demand is substantially greater than orders, there may be excess inventory and greater risk of inventory write downs, which we have experienced from time to time. Larger orders, including some orders for our AI systems, may be particularly susceptible to this risk. Alternatively, if orders substantially exceed predicted demand, we may not be able to fulfill all of the orders received in each quarter and such orders may be canceled. As a result of such variations in predicted demand, we have experienced these impacts from time to time and may do so again in the future. Depending on when they occur in a quarter, developments such as a systems failure, component pricing movements, component shortages, or global logistics disruptions, have in the past adversely impacted, and could in the future adversely impact, our inventory levels and results of operations in a manner that is disproportionate to the number of days in the quarter affected. We experience some seasonal trends in the sale of our solutions that also have produced, and may in the future produce, variations in our quarterly results and financial condition. Many of the factors that create and affect seasonal trends are beyond our control. Separately, periodic supply chain shortages and constraints have, in some instances, resulted in, and may result in, increases to the costs of production of our hardware products that we have, at times, not been able to, and may, in the future, not be able to pass on to our customers. For a further discussion of such risks, see also the risk factor titled "We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffer if we fail to manage these third party relationships effectively." --- ## Modified: General Risks **Key changes:** - Added sentence: "18 18 18 Table of Content Table of Content" **Prior (2024):** •Our stock price has fluctuated and may continue to fluctuate, which may make future prices of our stock difficult to predict. For a more complete discussion of the material risks facing our business, see below. **Current (2025):** •Our stock price has fluctuated and may continue to fluctuate, which may make future prices of our stock difficult to predict. For a more complete discussion of the material risks facing our business, see below. 18 18 18 Table of Content Table of Content --- ## Modified: Unanticipated changes in our tax provisions, the adoption of new tax legislation, or exposure to additional tax liabilities could affect our financial performance. **Key changes:** - Reworded sentence: "Proposals to reform U.S." - Reworded sentence: "There was not a material impact to our fiscal 2025 results from Pillar Two legislation." **Prior (2024):** We are subject to income and other taxes in the United States and numerous foreign jurisdictions. Our tax liabilities are affected by the amounts we charge in intercompany transactions for inventory, services, licenses, funding, and other items. We are subject to ongoing tax audits in various jurisdictions. Tax authorities may disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters, and may assess additional taxes as a result. There can be no assurance that we will accurately predict the outcomes of these audits, and the amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our income tax expense and therefore could have a material impact on our tax provision, net income and cash flows. In addition, our effective tax rate in the future could be adversely affected by acquisitions, changes to our operating structure, changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, and the discovery of new information in the course of our tax return preparation process. The carrying value of our deferred tax assets is dependent on our ability to generate future taxable income. The Organization for Economic Co-operation and Development ("OECD"), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. To date, 43 countries have enacted portions, or all, of the OECD proposal and a further 22 countries have drafted, or have announced an intent to draft, legislation enacting the proposed rules. Where enacted, the rules begin to be effective for us in fiscal 2025. Under US GAAP, the OECD Pillar Two rules are considered an alternative minimum tax, and therefore deferred taxes would not be recognized or adjusted for the estimated effects of the future minimum tax. As a result, there was no impact to our fiscal 2024 results. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. We currently do not expect a material impact to our fiscal 2025 results. During fiscal 2019, we executed a Termination and Mutual Release Agreement which terminated our Tax Matters Agreement with HP Inc. Because we now have limited indemnity rights from HP Inc., we potentially bear more economic risk for certain potential unfavorable tax assessments. **Current (2025):** We are subject to income and other taxes in the United States and numerous foreign jurisdictions. Our tax liabilities are affected by the amounts we charge in intercompany transactions for inventory, services, licenses, funding, and other items. We are subject to ongoing tax audits in various jurisdictions. Tax authorities may disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters, and may assess additional taxes as a result. There can be no assurance that we will accurately predict the outcomes of these audits, and the amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in our income tax expense and therefore could have a material impact on our tax provision, net income and cash flows. In addition, our effective tax rate in the future could be adversely affected by acquisitions, changes to our operating structure, changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws, and the discovery of new information in the course of our tax return preparation process. The carrying value of our deferred tax assets is dependent on our ability to generate future taxable income. Proposals to reform U.S. and foreign tax laws could significantly impact how U.S. multinational corporations are taxed on foreign earnings and could increase the U.S. corporate tax rate. Several of the proposals currently being considered, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows. Our future effective tax rate may also be impacted by judicial decisions, changes in interpretation of regulations, as well as additional legislation and guidance. Further, the Organisation for Economic Co-operation and Development ("OECD"), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, namely, its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%. To date, 60 countries have enacted portions, or all, of the OECD proposal. Where enacted, the rules are effective for us in fiscal 2025. The adoption and effective dates of these rules may vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes. There was not a material impact to our fiscal 2025 results from Pillar Two legislation. While we do not anticipate a material adverse impact to our financial position in fiscal 2026, additional changes to global tax laws are likely to occur. For instance, some countries have enacted, and others have proposed, taxes based on gross receipts applicable to digital services, regardless of profitability. Such changes may adversely affect our tax liability. 39 39 39 Table of Content Table of Content --- ## Modified: We operate in an intensely competitive industry, and competitive pressures could harm our business and financial performance. **Key changes:** - Reworded sentence: "The markets that we serve are rapidly evolving and highly competitive and include well-established companies." - Reworded sentence: "We have a large portfolio of products and services and must allocate our financial, personnel, and other resources, including R&D efforts, across all of our products and services while competing with companies that have smaller portfolios or specialize in one or more of our product or service lines." - Reworded sentence: "We face aggressive price competition." **Prior (2024):** Our ability to implement solutions for our customers, anticipate and respond to rapid and continuing changes in technology (such as cloud-, AI-, and security-related offerings, which are continually evolving), and develop new service offerings or incorporate technological improvements into our offerings that meet current and prospective customers' needs, as well as evolving industry standards, is critical to our competitiveness and success. We encounter aggressive competition from numerous and varied competitors in all areas of our business, and our competitors have targeted and are expected to continue targeting our key market segments. We compete primarily on the basis of technology, innovation, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, and the availability of our IT infrastructure offerings. If our products, services, support, and cost structure do not enable us to compete successfully based on any of those criteria, our results of operations and business prospects could be harmed. We have a large portfolio of products and services and must allocate our financial, personnel, and other resources across all of our products and services while competing with companies that have smaller portfolios or specialize in one or more of our product or service lines. As a result, we may invest less in certain areas of our business than our competitors do, and our competitors may have greater financial, technical, and marketing resources available to them compared to the resources allocated to our products and services that compete against theirs. If we do not sufficiently invest in new technologies, successfully adapt to industry developments and changing demand, and evolve and expand our business at sufficient speed and scale to keep pace with the demands of the markets we serve, we may be unable to develop and maintain a competitive advantage and execute on our growth strategy, which would adversely affect our business, results of operations, and financial condition. Industry consolidation may also affect competition by creating larger, more homogeneous, and potentially stronger 26 26 26 Table of Content Table of Content competitors in the markets in which we operate. Additionally, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers or suppliers. Companies with whom we have vertical relationships in certain areas may be or become our competitors in other areas. In addition, companies with whom we have vertical relationships also may acquire or form relationships with our competitors, which could reduce their business with us. If we are unable to effectively manage these complicated relationships with vertical partners, our business and results of operations could be adversely affected. We face aggressive price competition and may continue to do so. As a consequence of inflation and higher supply chain and manufacturing costs, we have in the past increased the prices of many of our products and services to maintain or improve our revenue and gross margin, and may do so again in the future. In addition, competitors who have a greater presence in some of the lower-cost markets in which we compete, or who can obtain better pricing, more favorable contractual terms and conditions, or more favorable allocations of products and components during periods of limited supply may be able to offer lower prices than we are able to offer. Our cash flows, results of operations, and financial condition may be adversely affected by these and other industry-wide pricing pressures. Because our business model is based on providing innovative and high-quality products and services, we may spend a proportionately greater amount of our revenues on R&D than some of our competitors. If we cannot proportionately decrease our cost structure (apart from R&D expenses) on a timely basis in response to competitive price pressures, our profitability could be adversely affected. In addition, if our pricing and other facets of our offerings are not sufficiently competitive, or if there is an adverse reaction to our product decisions, we may lose market share in certain areas, which could adversely affect our financial performance and business prospects. Even if we are able to maintain or increase market share for a particular product, its financial performance could decline because the product is in a maturing industry or market segment or contains technology that is becoming obsolete. Financial performance could decline due to increased competition from other types of products that perform similar functions as our offerings. **Current (2025):** The markets that we serve are rapidly evolving and highly competitive and include well-established companies. We also compete with other companies that are developing technologies that compete with our products. Our ability to implement solutions for our customers, anticipate and respond to rapid and continuing changes in technology (such as cloud-, AI-, networking- and security-related offerings), and develop new service offerings or incorporate technological improvements into our existing offerings that meet our customers' needs and evolving industry standards, is critical to our competitiveness and success. We encounter aggressive competition from numerous competitors in all areas of our business (which we expect will continue across a wider array of networking offerings due to the Merger), and our competitors have targeted and are expected to continue targeting our key market segments. We compete primarily on the basis of technology, innovation, performance, price, quality, reliability, brand, reputation, distribution, range of products and services, ease of use of our products, account relationships, customer training, service and support, security, and the availability of our IT infrastructure offerings. If our products, services, support, and cost structure do not enable us to compete successfully based on any of those criteria, our results of operations and business prospects could be harmed. We have a large portfolio of products and services and must allocate our financial, personnel, and other resources, including R&D efforts, across all of our products and services while competing with companies that have smaller portfolios or specialize in one or more of our product or service lines. As a result, we may invest less in certain areas of our business than our 23 23 23 Table of Content Table of Content competitors do, and our competitors may have greater financial, technical, and marketing resources available to them compared to the resources allocated to our products and services that compete against theirs. We may also spend a proportionately greater amount of our revenues on R&D than some of our competitors. If we do not sufficiently manage our cost structure and R&D priorities while investing in new technologies, successfully adapt to industry developments and changing demand, and evolve and expand our business at sufficient speed and scale to keep pace with the demands of the markets we serve, we may be unable to develop and maintain a competitive advantage and execute on our growth strategy, which would adversely affect our business, results of operations, and financial condition. Industry consolidation may also affect competition by creating larger, more homogeneous, and potentially stronger competitors in the markets in which we operate. Additionally, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers or suppliers. Companies with whom we have vertical relationships in certain areas may be or become our competitors in other areas. In addition, companies with whom we have vertical relationships also may acquire or form relationships with our competitors, which could reduce their business with us. If we are unable to effectively manage these complicated relationships with vertical partners, our business and results of operations could be adversely affected. We face aggressive price competition. As a consequence of inflation and higher supply chain and manufacturing costs, from time-to-time we take pricing actions to increase the prices of many of our products and services to maintain or improve our revenue and gross margin. In addition, competitors who have a greater presence in some of the lower-cost markets in which we compete, or who can obtain better pricing, more favorable contractual terms and conditions, or more favorable allocations of products and components during periods of limited supply, may be able to offer lower prices than we are able to offer. As a consequence, and to maintain our competitive position, from time-to-time we take pricing actions to offer heavier than normal discounts or elect not to pass on cost increases to customers on the sale of certain products and services, which has had and could have a negative impact on our financial results. Additionally, we have at times purchased, and may continue to purchase components strategically in advance of demand to take advantage of favorable pricing to lower costs and secure supply for future orders, which have and could in the future negatively affect our margins, especially if we don't accurately anticipate customer demand. Our results of operations (particularly revenue, margins, and cash flows) and financial condition may be adversely affected by these and other industry-wide pricing pressures and our actions in response thereto. --- ## Modified: System security risks, data protection incidents, cyberattacks and systems integration issues could disrupt our internal operations or IT services provided to customers, and any such disruption could reduce our revenue, increase our expenses, damage our reputation, and adversely affect our stock price. **Key changes:** - Reworded sentence: "In the ordinary course of business, we store sensitive data, including intellectual property, personal data, our proprietary business information and that of our employees, contractors, customers, vendors, partners, suppliers, and other third parties with whom we do business." - Reworded sentence: "Advanced persistent threats can include 22 22 22 Table of Content Table of Content highly sophisticated intrusions by threat actors aiming to establish prolonged access within our network." - Reworded sentence: "Additionally, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities, gaps or different security standards, which exposes us to related cybersecurity, operational, and financial risks." - Added sentence: "Our suppliers, vendors, partners, and other third parties with whom we do business also face similar cybersecurity threats, risks, and concerns as those set forth above, which introduces vulnerabilities to our business and operations, including our manufacturing supply chain." - Added sentence: "Although HPE requires strict cybersecurity and data controls through its contractual agreements with third parties, if these third parties do not have adequate safeguards or their safeguards fail, it may result in breaches of their systems, networks, or applications, potentially leading to breaches of our networks and systems or unauthorized access to or disclosure of our and/or our customers' confidential data, thereby compromising us and our customers." **Prior (2024):** As a leading technology firm, we are exposed to attacks from criminals, nation state actors, malicious insiders, and activist hackers (collectively, "malicious parties") who have at times been able to circumvent or bypass our cyber security measures. Although some of these attacks have caused disruptions or exposure of information, so far, these attacks have not resulted in material negative impacts to HPE, nor have any of HPE's consumers, customers, or employees informed HPE that these attacks resulted in material harm to them. While we investigate and remediate incidents, there can be no assurance that we will do so comprehensively or that the threat actor will not identify alternative means of intrusion or opportunities to otherwise utilize the information it accessed to adversely affect our business or results of operations. It is also possible that incidents may embolden other malicious actors to perpetrate future attacks that may result in material misappropriation, system disruptions or shutdowns, malicious alteration, or destruction of our confidential or personal information or that of third parties. Further, there has been an increase in the frequency and sophistication of such attacks, and we expect these activities to continue to increase, including malicious actors potentially leveraging AI to develop malicious code or sophisticated phishing attempts. Malicious parties may also be able to otherwise develop and deploy viruses, worms, ransomware, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products, including within our cloud-based environments and offerings, such that we may be unable to anticipate such malicious parties' techniques, implement adequate preventative measures, or remediate any intrusion on a timely or effective basis even if our security measures are appropriate, reasonable, and comply with applicable legal requirements. Further, cyberattacks or incidents have in the past gone, and could in the future go, undetected in our environments for a period of time, and we may discover additional impacts of earlier incidents that we believe were remediated. For example, as previously disclosed in our Form 8-K filed with the Securities and Exchange Commission on January 24, 2024, we learned in December 2023 that, beginning in May 2023, a nation-state- 19 19 19 Table of Content Table of Content associated threat actor gained unauthorized access to and exfiltrated data from HPE's cloud-based email and SharePoint environments. While this incident has been investigated and remediated with no material impact experienced by HPE to date, this may have nevertheless resulted in harm to our reputation and customer relationships (and may do so in the future, as well), and there can be no assurance that the threat actor will not utilize the information accessed to adversely affect our business or results of operations. Given our broad and diverse network environment, resource limitations, and operational constraints, we have in the past failed, and may in the future fail, to patch certain security vulnerabilities in time to prevent successful disruptions of our infrastructure or exposure of information. Malicious parties may compromise our manufacturing supply chain and the systems or networks of other third parties on whom we rely, and as such, may embed malicious software or hardware in our products, thereby compromising our customers. Geopolitical tensions or conflicts, such as the ongoing conflicts between Russia and Ukraine or in the Middle East, may heighten the risk of such cyberattacks or exacerbate system vulnerabilities, considering our continued hybrid work environment and our globally dispersed operations, employees, contractors, suppliers, developers, partners, and other third parties. In addition, sophisticated hardware and operating system software and applications that we produce, procure or integrate from third parties, including those of companies we have acquired, may contain defects in design or manufacturing, including flaws that could unexpectedly interfere with the operation of the system. The costs associated with cybersecurity tools and infrastructure and competition for cybersecurity and IT talent have at times limited, and may in the future limit, our ability and the ability of third parties on whom we rely to efficiently identify, eliminate, or remediate cyber or other security vulnerabilities or problems or enact changes to minimize the attack surface of our network. Furthermore, our efforts, and the efforts of third parties on whom we rely, to address these problems, at times, have not been, and may in the future not be successful and could result in interruptions, delays, cessation of service, compromise of sensitive information, and loss of existing or potential customers, any of which may impede our sales, manufacturing, distribution or other critical functions. Additional impacts from cybersecurity incidents could include reimbursement of remediation costs to our customers, suppliers, or distributors, such as liability for stolen assets or information, repairs of system damage, and incentives for continued business; lost revenue resulting from the unauthorized use of proprietary information or the failure to retain or attract business partners following an incident; increased insurance premiums; and damage to our competitiveness, stock price, and long-term shareholder value. Further, it may be difficult to determine the best way to investigate, mitigate, contain, and remediate any harm caused by a cybersecurity incident. Such efforts may not be successful, and we may make errors or fail to take necessary actions. It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks. These factors may inhibit our ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public. Additionally, to the extent we carry insurance coverage for such possibilities, we cannot be certain that any such coverage will be adequate or otherwise protect us with respect to claims, expenses, fines, penalties, business loss, data loss, litigation, regulatory actions, or other impacts arising from security breaches or incidents, or that such coverage will continue to be available on acceptable terms or at all. We manage and store various proprietary information, intellectual property, and sensitive or confidential data relating to our business. In addition, our business may process, store, and transmit customer data, including commercially sensitive, government-related, and/or personal data, subject to the European General Data Protection Regulation, United Kingdom General Data Protection Regulation, and various U.S. state and foreign data security and privacy laws, which give new data privacy rights to their residents and impose significant obligations related to the handling of personal data. Compliance with data security and privacy laws is complex and costly. With our business increasingly providing aaS offerings, malicious parties could target such services, potentially resulting in an increased risk of compromise of customer or employee data resulting in regulatory exposure. Incidents involving our cyber or physical security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information, intellectual property, or sensitive, confidential, or personal data about us, our clients, or our customers, including the potential loss or disclosure of such data as a result of fraud or other forms of deception, could expose us, our customers, or the individuals affected to a risk of loss or misuse of this information; result in regulatory fines, litigation, and potential liability for us; damage our brand and reputation; or otherwise harm our business. We also could lose existing or potential customers of services or other IT solutions or incur significant expenses in connection with our customers' system failures or any actual or perceived security vulnerabilities in our products and services. In addition, the cost and operational consequences of managing an incident and implementing further data protection measures could be significant. Additionally, we have at times experienced, and may experience, other security issues that are not the results of any action or attack from malicious parties, whether due to employee or insider error or malfeasance, system errors or vulnerabilities in our or other parties' systems. Portions of our IT infrastructure also have experienced, and may experience, interruptions, delays, or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. As our IT environment continues to evolve, we have, at times, been unsuccessful, and may in the future be unsuccessful, in adopting or implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time-consuming, disruptive, and resource intensive. Furthermore, our data centers depend on predictable and reliable energy and networking capabilities, the cost or availability of which could be adversely affected or 20 20 20 Table of Content Table of Content disrupted by a variety of factors, including but not limited to the effects of climate change. Such disruptions could adversely impact our ability to fulfill orders and respond to customer requests and interrupt other processes. Delayed sales, lower margins, or lost customers resulting from these events could reduce our revenue, increase our expenses, and adversely affect our reputation and stock price. While we seek to identify and remediate vulnerabilities in our products, services, IT systems, controls, and software that could be exploited by any malicious parties, we may not be aware of all such vulnerabilities, and we have at times failed, and may fail, to anticipate, detect, identify, and/or remediate such vulnerabilities before they are exploited or such vulnerabilities may persist after issuing security patches because system software updates may occur asynchronously across our customer base. Additionally, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities or different security standards, which exposes us to related cybersecurity, operational, and financial risks. Further, as our products and services in some instances are integrated with our customers' systems and processes, even if we are successful in identifying vulnerabilities, a successful attack on us could compromise customers' IT systems and sensitive data, despite active monitoring and development of tools designed to identify and remediate such vulnerabilities. There is no guarantee that a series of issues may not be determined to be material in the aggregate at a future date even if they may not be material individually at the time of their occurrence. **Current (2025):** In the ordinary course of business, we store sensitive data, including intellectual property, personal data, our proprietary business information and that of our employees, contractors, customers, vendors, partners, suppliers, and other third parties with whom we do business. In addition, we store sensitive data through cloud-based services that may be hosted by third parties and in data center infrastructure maintained by third parties. We have been, and expect to be, subject to cyberattacks and other attempted intrusions into our networks and systems by a wide range of actors, including, but not limited to, nation state actors, criminal enterprises, terrorist organizations, and other organizations or individuals, as well as errors, wrongful conduct or malfeasance by employees and third-party service providers, (collectively, "malicious parties") who have at times been able to circumvent or bypass our cyber security measures. Geopolitical tensions or conflicts may also heighten the risk of such cyberattacks or exacerbate system vulnerabilities, considering our continued hybrid work environment and our globally dispersed operations, employees, contractors, suppliers, developers, partners, and other third parties. Despite our security measures, our information systems, infrastructure, and data have experienced security incidents and breaches and may be subject to or vulnerable to security incidents and breaches in the future, including ransomware and distributed denial-of-service attacks. These attacks have not resulted in material negative impacts to HPE, nor have any of HPE's consumers, customers, or employees informed HPE that these attacks resulted in material harm to them. While we investigate and remediate incidents, there can be no assurance that we can remediate all incidents completely, that we won't make errors or fail to take necessary actions, or that the threat actor will not identify alternative means of intrusion or opportunities to otherwise utilize the information it accessed to adversely affect our business or results of operations. It may take considerable time for us to investigate and evaluate the full impact of incidents, particularly for sophisticated attacks, limiting our ability to provide prompt, full, and reliable information about the incident to our customers, partners, regulators, and the public. The costs associated with cybersecurity tools and infrastructure and competition for cybersecurity and IT talent have limited, and may in the future continue to limit, our ability to efficiently identify, eliminate, or remediate cyber or other security vulnerabilities or problems or enact changes to minimize the attack surface of our network. Furthermore, our efforts to address these problems, at times, have not been, and may in the future not be, successful and have resulted and could result in interruptions, delays, cessation of service, compromise of sensitive information, and loss of existing or potential customers, any of which may impede our sales, manufacturing, distribution or other critical functions. Additional impacts from cybersecurity incidents have included and could include reimbursement of remediation costs to our customers, suppliers, or distributors; lost revenue resulting from the unauthorized use of proprietary information or the failure to retain or attract business partners following an incident; increased insurance premiums; and damage to our competitiveness, reputation, stock price, and long-term shareholder value. To the extent we carry insurance coverage for such possibilities, we cannot be certain that any such coverage will be adequate or otherwise protect us with respect to claims, expenses, fines, penalties, business loss, data loss, litigation, regulatory actions, or other impacts arising from security breaches or incidents, or that such coverage will continue to be available on acceptable terms or at all. The cybersecurity threat landscape is rapidly evolving and becoming increasingly sophisticated, and there can be no assurance that our controls and procedures will be sufficient to address future threats or remediate future incidents. Further, there has been an increase in the frequency and sophistication of attacks, and we expect these activities to continue to increase, including malicious actors potentially leveraging AI to develop malicious code or sophisticated phishing attempts. It is possible that such incidents may embolden other malicious actors to perpetrate future attacks that may result in material misappropriation, system disruptions or shutdowns, malicious alteration, or destruction of our confidential or personal information or that of third parties. Additionally, the proliferation of generative AI models within the internal systems, processes, and tools of HPE, our suppliers, our customers, or other third parties with whom we do business may create new attack methods for threat actors. The emergence of deepfakes and advanced social engineering tactics presents new challenges in preventing deception and unauthorized access, underscoring the importance of advanced verification and detection mechanisms. Zero-day vulnerabilities may include newly discovered security flaws in software that are exploited before patches are released, requiring proactive monitoring and immediate remediation efforts. Quantum computing may in the future present a risk to our business by potentially breaking traditional cryptographic methods on which we rely, thereby necessitating the shift to quantum-resistant encryption techniques. Malicious parties may also be able to otherwise develop and deploy viruses, worms, ransomware, and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products, including within our cloud-based environments and offerings, such that we may be unable to anticipate such malicious parties' techniques, implement adequate preventative measures, or remediate any intrusion on a timely or effective basis even if our security measures are appropriate, reasonable, and comply with applicable legal requirements. Advanced persistent threats can include 22 22 22 Table of Content Table of Content highly sophisticated intrusions by threat actors aiming to establish prolonged access within our network. Such intrusions have in the past gone, and could in the future go, undetected in our environments for a period of time, and we may discover additional impacts of earlier incidents that we believe were remediated. Given resource limitations, operational constraints, and our broad and diverse network environment, when vulnerabilities are discovered, we evaluate the risk, prioritize our responses, apply patches or take other remediation actions and notify customers, business partners, and suppliers, as appropriate. Exploitation of vulnerabilities and critical security defects have occurred and may occur in the future if we fail to patch certain security vulnerabilities in time to prevent successful disruptions of our infrastructure or exposure of information, or the failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services or solutions, could, in each case, result in claims of liability against us, damage our reputation or otherwise harm our business. With our business increasingly providing aaS offerings, malicious parties could target such services, potentially resulting in an increased risk of compromise of customer or employee data resulting in regulatory exposure. Incidents involving our cyber or physical security measures or the accidental loss, inadvertent disclosure, or unapproved dissemination of proprietary information, intellectual property, or sensitive, confidential, or personal data about us, our clients, or our customers, including the potential loss or disclosure of such data as a result of fraud or other forms of deception, could expose us, our customers, or the individuals affected to a risk of loss or misuse of this information; result in regulatory fines, litigation, and potential liability for us; damage our brand and reputation; or otherwise harm our business. We also could lose existing or potential customers of services or other IT solutions or incur significant expenses in connection with our customers' system failures or any actual or perceived security vulnerabilities in our products and services. In addition, the cost and operational consequences of managing an incident and implementing further data protection measures could be significant. Additionally, we have acquired and may continue to acquire companies with cybersecurity vulnerabilities, gaps or different security standards, which exposes us to related cybersecurity, operational, and financial risks. Further, as our products and services in some instances are integrated with our customers' systems and processes, even if we are successful in identifying vulnerabilities, a successful attack on us could compromise customers' IT systems and sensitive data, despite active monitoring and development of tools designed to identify and remediate such vulnerabilities. There is no guarantee that a series of issues may not be determined to be material in the aggregate at a future date even if they may not be material individually at the time of their occurrence. Our suppliers, vendors, partners, and other third parties with whom we do business also face similar cybersecurity threats, risks, and concerns as those set forth above, which introduces vulnerabilities to our business and operations, including our manufacturing supply chain. Although HPE requires strict cybersecurity and data controls through its contractual agreements with third parties, if these third parties do not have adequate safeguards or their safeguards fail, it may result in breaches of their systems, networks, or applications, potentially leading to breaches of our networks and systems or unauthorized access to or disclosure of our and/or our customers' confidential data, thereby compromising us and our customers. While HPE relies on independent audit reports, in addition to our own security assessments and diligence of third parties with whom we do business as part of our third-party risk management practices, these efforts may not detect or identify all cybersecurity risks or vulnerabilities. --- ## Modified: If we experience or fail to properly manage disruption in the distribution of our products and services properly, our business and financial performance could suffer. **Key changes:** - Reworded sentence: "We use a variety of direct and indirect distribution methods that differ by business and region to sell our products and services to end-users around the world." - Reworded sentence: "We must manage both owned and channel inventory effectively, particularly with respect to sales to distributors, which involves forecasting demand and meeting pricing challenges." **Prior (2024):** We use a variety of distribution methods to sell our products and services around the world, including both direct and indirect sales to end-users. Successfully managing the interaction of our direct and indirect channel efforts to reach various potential customer segments for our products and services is a complex process. Moreover, since each distribution method has distinct risks and gross margins, our failure to implement the most advantageous balance in the delivery model for our products and services could adversely affect our revenue and gross margins and therefore our profitability. Our financial results could be materially adversely affected due to distribution channel conflicts or if the financial conditions of our channel partners were to weaken. Our results of operations may be adversely affected by any conflicts that might arise between our various distribution channels or the loss or deterioration of any alliance or distribution arrangement. Moreover, some of our wholesale distributors may have insufficient financial resources and may not be able to withstand changes in business conditions, including economic weakness, industry consolidation, and market trends. Considerable trade receivables that are not covered by collateral or credit insurance are outstanding with our distribution channel partners. Revenue from indirect sales could suffer, and we could experience disruptions in distribution, if our distributors' financial conditions, abilities to borrow funds in the credit markets, or operations weaken. Our inventory management is complex, as we continue to sell a significant mix of products through distributors. We must manage both owned and channel inventory effectively, particularly with respect to sales to distributors, which involves forecasting demand and pricing challenges. Distributors have in the past adjusted orders during periods of product shortages, and may do so in the future, in addition to cancelling orders if their inventory is too high or delaying orders in anticipation of new products. Distributors also may adjust their orders in response to the supply of our products and the products of our competitors and seasonal fluctuations in end-user demand. If we have excess or obsolete inventory, we may have to reduce our prices and write down inventory, and have done so from time to time in the past. Moreover, our use of indirect distribution channels may limit our willingness or ability to adjust prices quickly and otherwise to respond to pricing changes. **Current (2025):** We use a variety of direct and indirect distribution methods that differ by business and region to sell our products and services to end-users around the world. Successfully managing the interaction of our direct and indirect channel efforts to reach our customer segments is a complex process and each distribution method has distinct risks and potential impacts on our financial performance. Failure to implement the most advantageous balance in the delivery model for our products and services could adversely affect our revenue and gross margins and therefore our profitability. Our financial results could be adversely affected due to distribution channel conflicts, if the financial conditions of our channel partners were to weaken, if we experience the loss or deterioration of any alliance or distribution arrangement, or if our wholesale distributors are not able to withstand changes in business conditions, including economic weakness, industry consolidation, tariffs, and/or market trends. Considerable trade receivables that are not covered by collateral or credit insurance are outstanding with our distribution channel partners. Revenue from indirect sales could suffer, and we could experience disruptions in distribution, if our distributors' financial conditions, abilities to borrow funds in the credit markets, or operations weaken. Our inventory management is complex, as we continue to sell a significant mix of products through distributors. We must manage both owned and channel inventory effectively, particularly with respect to sales to distributors, which involves forecasting demand and meeting pricing challenges. Our distributors may adjust orders during periods of product shortages, cancel orders if their inventory is too high, or delay orders in anticipation of new products. They may also adjust their orders in response to the supply of our products and the products of our competitors and seasonal fluctuations in end-user demand. As a result of these considerations, we have experienced, and may in the future again experience, abnormally high inventory levels. When we have excess or obsolete inventory, which we have experienced from time to time, we may have to reduce our prices and/or write down inventory, either of which may adversely impact our gross margin and our results of operations. These dynamics are accentuated for larger orders, including some orders for our AI systems, and particularly so if they are delayed or cancelled. Moreover, our use of indirect distribution channels may limit our willingness or ability to adjust prices quickly and otherwise to respond to pricing changes or tariffs. --- ## Modified: We make estimates and assumptions in connection with the preparation of our Consolidated Financial Statements and any changes to those estimates and assumptions could adversely affect our results of operations. **Key changes:** - Reworded sentence: "Our most critical accounting estimates are described in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K." - Added sentence: "We periodically evaluate goodwill and intangible assets to determine whether all or a portion of their carrying values may be impaired, in which case an impairment charge may be necessary." - Added sentence: "The value of goodwill may be materially and adversely affected if businesses that we acquire perform in a manner that is inconsistent with our assumptions at the time of acquisition." - Added sentence: "In addition, from time to time, we divest businesses, and any such divestiture could result in significant asset impairment and disposition charges, including those related to goodwill and intangible assets." - Added sentence: "During fiscal 2025, we recognized an impairment charge of $1.6 billion (which includes the $1.4 billion impairment charge disclosed in our Form 10-Q for the fiscal period ended April 30, 2025) for goodwill related to the Hybrid Cloud reporting unit, which was predominantly driven by an increase in the discount rate used in the analysis, as well as a strategic shift away from Non-IP storage business." **Prior (2024):** In connection with the preparation of our Consolidated Financial Statements, we use certain estimates and assumptions based on historical experience and other factors. Our most critical accounting estimates are described in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations." In addition, as discussed in Note 1, "Overview and Summary of Significant Accounting Policies - Use of Estimates" and Note 17, "Litigation, Contingencies, and Commitments" to our Consolidated Financial Statements in Item 8 of Part II, we make certain estimates, including decisions related to provisions for legal proceedings and other contingencies. While we believe that these estimates and assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could adversely affect our results of operations. **Current (2025):** In connection with the preparation of our Consolidated Financial Statements, we use certain estimates and assumptions based on historical experience and other factors. Our most critical accounting estimates are described in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Annual Report on Form 10-K. In addition, as discussed in Note 1, "Overview and Summary of Significant Accounting Policies - Use of Estimates" and Note 17, "Litigation, Contingencies, and Commitments," to our Condensed Consolidated Financial Statements in Item 8 of Part II of this Annual Report on Form 10-K, we make certain estimates, including decisions related to purchase price and purchase price adjustments, as well as provisions for legal proceedings and other contingencies. While we believe that these estimates and assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could adversely affect our results of operations. We periodically evaluate goodwill and intangible assets to determine whether all or a portion of their carrying values may be impaired, in which case an impairment charge may be necessary. The value of goodwill may be materially and adversely affected if businesses that we acquire perform in a manner that is inconsistent with our assumptions at the time of acquisition. In addition, from time to time, we divest businesses, and any such divestiture could result in significant asset impairment and disposition charges, including those related to goodwill and intangible assets. During fiscal 2025, we recognized an impairment charge of $1.6 billion (which includes the $1.4 billion impairment charge disclosed in our Form 10-Q for the fiscal period ended April 30, 2025) for goodwill related to the Hybrid Cloud reporting unit, which was predominantly driven by an increase in the discount rate used in the analysis, as well as a strategic shift away from Non-IP storage business. Any future evaluations resulting in an impairment of goodwill or intangible assets could materially and adversely affect our results of operations and financial condition in the period in which the impairment is recognized. --- ## Modified: Our ability to achieve our strategy could be harmed if we are unable to attract, retain, train, motivate, develop, and transition key personnel. **Key changes:** - Reworded sentence: "In order to achieve our growth strategy and capture the market opportunities presented by networking, hybrid cloud, and AI, we must attract, retain, train, motivate, develop, and transition qualified executives and other key employees, including those in managerial, technical, development, sales, marketing, and IT positions." - Reworded sentence: "As competition for highly skilled employees in our industry has grown increasingly intense, we have in the past experienced, and may in the future experience, higher than anticipated levels of employee attrition, which has resulted in increased costs to hire new employees with desired skills." **Prior (2024):** In order to be successful, we must attract, retain, train, motivate, develop, and transition qualified executives and other key employees, including those in managerial, technical, development, sales, marketing, and IT positions. In order to attract and retain executives and other key employees in a competitive marketplace, we must provide a competitive compensation package, including cash and equity-based compensation. These are particularly important considering our growth strategy to capture the market opportunities presented by networking, hybrid cloud, and AI. Certain equity-based incentive awards for certain executives contain conditions relating to our stock price performance and our long-term financial performance that make the future value of those awards uncertain. If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit, if our total compensation package is not 23 23 23 Table of Content Table of Content viewed as being competitive, or if we do not obtain the stockholder approval needed to continue granting equity-based incentive awards in the amounts we believe are necessary, our ability to attract, retain, and motivate executives and key employees could be weakened. Our failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations and our ability to execute our strategy. Further, changes in our management team may be disruptive to our business, and any failure to successfully transition and assimilate key new hires or promoted employees could adversely affect our business and results of operations. As competition for highly skilled employees in our industry has grown increasingly intense, we have in the past experienced, and may in the future experience, higher than anticipated levels of employee attrition, which has resulted in increased costs to hire new employees with the desired skills and may do so again in the future. In addition, significant or prolonged turnover or revised hiring priorities may negatively impact our operations and culture, as well as our ability to successfully maintain our processes and procedures, including due to the loss of historical, technical, and other expertise. These risks to attracting and retaining the necessary talent may be exacerbated by labor constraints, such as immigration policies which may impair the ability to recruit technical and professional talent, and inflationary pressures, which impact employee wages and benefits. Further, integration of employees and businesses as a result of our acquisitions, including the Merger, may present challenges, which could negatively affect our ability to retain and recruit personnel who are essential to our future success. **Current (2025):** In order to achieve our growth strategy and capture the market opportunities presented by networking, hybrid cloud, and AI, we must attract, retain, train, motivate, develop, and transition qualified executives and other key employees, including those in managerial, technical, development, sales, marketing, and IT positions. We must provide a competitive compensation package, including cash and equity-based compensation to attract and retain executives and other key employees in a competitive marketplace. Our ability to attract, retain, and motivate highly qualified executives and key employees could be adversely affected if the anticipated value of our equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit, if our total compensation package is not viewed as being 27 27 27 Table of Content Table of Content competitive, or if we do not obtain the stockholder approval required to continue granting equity-based incentive awards in the amounts we believe are necessary. Our failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations and our ability to execute our strategy. Further, changes in our management team may be disruptive to our business, and any failure to successfully transition and assimilate key new hires or promoted employees could adversely affect our business and results of operations. As competition for highly skilled employees in our industry has grown increasingly intense, we have in the past experienced, and may in the future experience, higher than anticipated levels of employee attrition, which has resulted in increased costs to hire new employees with desired skills. In addition, significant or prolonged turnover or revised hiring priorities may negatively impact our operations and our ability to successfully maintain our processes and procedures, including due to the loss of historical, technical, and other expertise. These risks to attracting and retaining highly qualified talent may be exacerbated by labor constraints, such as immigration policies which may impair the ability to recruit technical and professional talent, and inflationary pressures, which impact employee wages and benefits. Further, integration of employees and businesses as a result of our acquisitions, including the Merger, may present additional or unanticipated challenges, which could negatively affect our ability to achieve our future success. In addition, changes to our go-to-market structure may affect employee compensation models and ultimately our ability to retain employees. A number of our team members are foreign nationals who rely on visas and entry permits in order to legally work in the U.S. and other countries. In recent years, the U.S. has increased the level of scrutiny in granting such documentation. Compliance with new and unexpected U.S. immigration and labor laws could also require us to incur additional, and unexpected labor costs and expenses, or could restrain our ability to retain and attract skilled professionals. Any of these restrictions could have an adverse effect on our business, results of operations, and financial condition. --- ## Modified: Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions. **Key changes:** - Reworded sentence: "Our long-term go-to-market strategy is focused on leveraging our portfolio composed of hardware, software, and services as we deliver global edge-to-cloud platform as-a-Service ("aaS") to help customers accelerate outcomes by unlocking value from their data, everywhere." - Reworded sentence: "Our HPE GreenLake and networking solutions generally are multiyear agreements, which result in recurring revenue streams over the term of the arrangement." - Reworded sentence: "Additionally, implementing this business model means that our historical results, especially those from before the Merger, may not be indicative of future results, which may adversely affect our ability to accurately forecast our future operating results." - Added sentence: "19 19 19 Table of Content Table of Content" **Prior (2024):** Our long-term strategy is focused on leveraging our portfolio of hardware, software, and services as we deliver global edge-to-cloud platform as-a-service to help customers accelerate outcomes by unlocking value from all of their data, everywhere. We provide our entire portfolio through a range of subscription and consumption-based, pay-per-use, and aaS offerings. We will also continue to provide our hardware and software in a capital expenditure and license-based model, giving our customers choices in consuming HPE products and services. Furthermore, subject to our anticipated consummation of the acquisition of Juniper Networks, Inc. ("Juniper Networks") (the "Merger"), we will seek to offer secure, unified cloud- and AI-native networking to enhance innovation across edge to cloud. To successfully execute on these strategic pillars, we must continue to improve cost structures, align sales coverage with strategic goals, improve channel execution, and strengthen our capabilities in our areas of strategic focus, while continuing to pursue new product innovation that builds on our strategic 17 17 17 Table of Content Table of Content capabilities in areas such as edge computing, hybrid cloud, artificial intelligence, data center networking, network security, and high-performance compute. We must make sufficient long-term investments in strategic growth areas, such as developing, obtaining, and protecting appropriate intellectual property, and commit or transition significant R&D and other resources before knowing whether our projections will reasonably reflect customer demand for our solutions. Should such efforts fail to produce actionable insights, or our offerings not perform as designed or promised, our business results and financial condition may be adversely affected. Furthermore, such incremental capital requirements may negatively impact cash flows in the near term and may require us to dedicate additional resources, including sales and marketing costs. The process of improving our HPE GreenLake cloud offerings, enhancing existing hardware, software, and cloud-based solutions, and developing and improving the systems necessary for new and evolving data-intensive artificial intelligence-based workloads are all complex, costly, and uncertain, and any failure by us to anticipate customers' changing needs and emerging technological trends accurately, to invest sufficiently in strategic growth areas, or to otherwise successfully execute this strategy could significantly harm our market share, results of operations, and financial performance. Having developed a cloud platform product in HPE GreenLake and the hardware capabilities to support artificial intelligence computing, we must be able to continue integrating new features that are relevant to our customers and to scale quickly, while also managing costs and preserving margins, which means accurately forecasting volumes, mixes of products, and configurations that meet customer requirements, which we may not succeed at doing. These offerings face competition from peer companies with their own cloud platform and artificial intelligence computing offerings, and any delay in the development, production, or marketing of a new product, service, or solution could result in our offerings being late to reach the market, which could harm our competitive position. In addition, should we successfully consummate the Merger, the process of integrating and streamlining our offerings (including integrating Juniper Networks' offerings with ours) or developing new solutions based on our respective technological portfolios may be complex, costly, time-consuming, and uncertain, and failure by us to successfully do so could adversely impact our future results of operations and financial performance. Furthermore, we anticipate needing to adapt our go-to-market structure from time to time with new sales and marketing approaches, to better align with aaS business models and to capture unique market opportunities, such as in hybrid cloud and artificial intelligence. Changing our go-to-market structure may affect employee compensation models and ultimately our ability to retain employees. There is no assurance that we will be able to implement these adjustments in a timely or cost-effective manner, or that we will be able to realize all or any of the expected benefits from them. Our HPE GreenLake solutions generally are multiyear agreements, which result in recurring revenue streams over the term of the arrangement. As customer demand for our aaS offerings increases, we have experienced, and will continue to experience, differences in the timing of revenue recognition between our traditional offerings (for which revenue is generally recognized at the time of delivery) and our aaS offerings (for which revenue is generally recognized ratably over the term of the arrangement). As such, our financial results and growth depend, in part, on customers continuing to purchase our services and solutions over the contract life on the agreed terms. Additionally, implementing this business model also means that our historical results, especially those from before the transition, may not be indicative of future results, which may adversely affect our ability to accurately forecast our future operating results. Our aaS offerings also could subject us to increased risk of liability related to the provision of services as well as operational, technical, legal, regulatory, or other costs. **Current (2025):** Our long-term go-to-market strategy is focused on leveraging our portfolio composed of hardware, software, and services as we deliver global edge-to-cloud platform as-a-Service ("aaS") to help customers accelerate outcomes by unlocking value from their data, everywhere. We offer a substantial portion of our portfolio through a range of subscription and consumption-based offerings. We will also continue to provide our hardware and software in capital expenditure and license-based models, to give our customers choices in consuming HPE products and services. Following the acquisition of Juniper Networks on July 2, 2025 (the "Merger"), we seek to enhance our networking solutions by offering secure, unified cloud and AI-native networking to enhance innovation across edge to cloud. To successfully execute our strategy in a rapidly evolving market, we must maintain effective planning, forecasting, and management processes to enable us to continue to improve cost structures, align sales coverage with strategic goals, improve channel execution, and strengthen our capabilities in our areas of strategic focus, while continuing to pursue new product innovation in areas such as edge computing, hybrid cloud, AI, high performance computing, and networking. We must also make sufficient long-term investments in strategic growth areas to develop, obtain, and protect our intellectual property, and commit to transition significant research and development ("R&D") and other resources before knowing whether our projections will align with customer demand for our solutions. We anticipate adapting our go-to-market structure from time-to-time with new approaches to sales and marketing, to better align with aaS business models and to capture unique market opportunities, such as in hybrid cloud, AI, and AI-native networking. This incremental capital investment approach may require additional sales, marketing, or other expenses that negatively impact cash flows in the near term. Further, should such efforts fail to produce actionable insights, or our offerings not perform as designed or promised, our business results and financial condition may be adversely affected. Our ongoing process of improving HPE GreenLake; expanding our offerings across all our businesses (including cloud, AI, and networking offerings); enhancing existing hardware, software, and cloud-based solutions; and developing and improving the systems necessary for new and evolving data-intensive AI-based workloads are all complex, costly, and uncertain, and any failure by us to anticipate customers' changing needs and emerging technological trends accurately, to invest sufficiently in strategic growth areas, or to otherwise successfully execute this strategy could significantly harm our market share, results of operations, and financial performance. Having developed a cloud platform product in HPE GreenLake and the hardware capabilities to support AI computing, we must be able to continue integrating new features that are relevant to our customers and to scale quickly, while also managing costs and preserving margins, which means accurately forecasting volumes, mixes of products, and configurations that meet customer requirements. In addition, through HPE Networking we now offer a full networking IP stack: from silicon, to infrastructure, to the operating system, to security, to software and services, in a cloud-native and AI-driven approach following the Merger. The process of integrating and streamlining our offerings (including integrating Juniper Networks' offerings with ours) or developing new solutions based on our respective technological portfolios may be complex, costly, time-consuming, and uncertain, and failure by us to successfully do so could adversely impact our future results of operations and financial performance. These offerings face competition from peer companies, and any delay in our development, production, or marketing of a new product, service, or solution could result in our offerings being late to reach the market, which could harm our competitive position. These offerings also depend on the continued growth of demand for secure network and internet protocol ("IP") infrastructure from customers that are able to build their network capacity, grow their IP services, and choose to deploy our products in their networks and IP infrastructures. There is no assurance that we will be able to implement these adjustments in a timely or cost-effective manner, or that we will be able to realize all or any of the expected benefits from them. Our HPE GreenLake and networking solutions generally are multiyear agreements, which result in recurring revenue streams over the term of the arrangement. As customer demand for our aaS offerings increases, we have experienced, and will continue to experience, differences in the timing of revenue recognition between our traditional offerings (for which revenue is generally recognized at the time of delivery) and our aaS offerings (for which revenue is generally recognized ratably over the term of the contract). As such, our financial results and growth depend, in part, on customers continuing to purchase our services and solutions over the contract life on the agreed terms. Additionally, implementing this business model means that our historical results, especially those from before the Merger, may not be indicative of future results, which may adversely affect our ability to accurately forecast our future operating results. Our aaS offerings also could subject us to increased risk of liability related to the provision of services as well as operational, technical, legal, regulatory, or other costs. 19 19 19 Table of Content Table of Content --- ## Modified: We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffer if we fail to manage these third party relationships effectively. **Key changes:** - Reworded sentence: "Our operations depend on our ability to anticipate our needs for components, products, and services, as well as the ability of our manufacturers (including original equipment manufacturers, original and outsourced design manufacturers, and contract manufacturers), and suppliers to deliver sufficient quantities of quality components, products, and services at reasonable prices and in time for us to meet critical schedules for the delivery of our own products and services." - Reworded sentence: "Accordingly, our business and financial performance could suffer from a loss of time-sensitive sales, additional freight costs incurred, or the inability to pass on price increases to our customers." - Reworded sentence: "In order to secure components for our products or services, at times we have made advance payments to suppliers or entered into long term agreements, non-cancellable commitments, or other inventory management arrangements with vendors." - Reworded sentence: "•Single-Source Suppliers." - Reworded sentence: "We may be subject to shortages, oversupply, or fixed contractual terms relating to contingent workers." **Prior (2024):** Our operations depend on our ability to anticipate our needs for components, products, and services, as well as our suppliers' abilities to deliver sufficient quantities of quality components, products, and services at reasonable prices and in time for us to meet critical schedules for the delivery of our own products and services. Given the wide variety of solutions that we offer, the large and diverse distribution of our suppliers and contract manufacturers, and the long lead times required to manufacture, assemble, and deliver certain solutions, problems have, from time to time in the past, arisen, and could in the future arise, in production, planning, and inventory management that could harm our business. In addition, our ongoing efforts to optimize the efficiency of our supply chain could cause supply disruptions and be more expensive, time-consuming, and resource-intensive than expected. Furthermore, certain of our suppliers have at times decided, and may in the future decide, to discontinue conducting business with us. Other supplier problems that we have faced, and could again face in the future, include component shortages, excess supply, and contractual, relational, and labor risks, each of which is described below. •Component shortages. We have in the past experienced, and may experience again in the future, delays and shortages of certain components as a result of strong demand, supplier transitions, raw material or capacity constraints, and other problems experienced by suppliers in certain geographies and markets, resulting in insufficient supply to meet total market demand. In the past, we have experienced shortages or delays, which led to higher prices of certain components and exposure to quality issues and delivery delays, which may occur again in the future. We may not be able to secure enough components at reasonable prices, of acceptable quality, or at all, to build products or provide services in a timely manner in the quantities needed or according to our specifications. Accordingly, our business and financial performance could suffer from a loss of time-sensitive sales, additional freight costs incurred, or the inability to pass 18 18 18 Table of Content Table of Content on price increases to our customers. If we cannot adequately address supply issues, we may have to reengineer some product or service offerings, which could result in further costs and delays. •Excess supply. In order to secure components for our products or services, at times we may make advance payments to suppliers or enter into long term agreements, non-cancellable commitments, or other inventory management arrangements with vendors. In addition, we may purchase components strategically in advance of demand to take advantage of favorable pricing or to address concerns about the availability of future components. If we fail to anticipate customer demand properly, a temporary oversupply can result in excess or obsolete components (which has happened at times in the past), which has at times adversely impacted and could in the future adversely impact our business and financial performance. •Contractual terms. As a result of binding long-term price or purchase commitments with vendors, we may be obligated to purchase components or services at prices that are higher than those available in the current market and be limited in our ability to respond to changing market conditions. If we commit to purchasing components or services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur charges relating to inventory obsolescence. •Contingent workers. We also rely on third-party suppliers for the provision of contingent workers, and our failure to manage our use of such workers effectively could adversely affect our results of operations. We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future. We may be subject to shortages, oversupply or fixed contractual terms relating to contingent workers. Our ability to manage the size and cost of our contingent workforce may be subject to additional constraints imposed by local laws. •Single-source suppliers. We obtain certain components from single-source suppliers due to technology, availability, price, quality, scale, or customization needs. Certain of such suppliers have, in the past decided, and may in the future decide, to discontinue manufacturing components used in our products, which may cause us to discontinue certain products, incur additional costs to redesign our products so as not to incorporate such discontinued components, or incur time and expense to find replacement suppliers. Replacing a single-source supplier has at times delayed, and could delay, production of some products as replacement suppliers may initially be unable to meet demand or be subject to other output limitations. For some components, such as customized components, alternative sources either may not exist or may be unable to produce the quantities of those components necessary to satisfy our production requirements. In addition, we sometimes purchase components from single-source suppliers under short-term agreements that contain favorable pricing and other terms but that may be unilaterally modified or terminated by the supplier with limited notice and with little or no penalty. The performance of such single-source suppliers under those agreements (and the renewal or extension of those agreements upon similar terms) may affect the quality, quantity, and price of our components. The loss of a single-source supplier, the deterioration of our relationship with a single-source supplier, or any unilateral modification to the contractual terms under which we are supplied components by a single-source supplier could adversely affect our business and financial performance. **Current (2025):** Our operations depend on our ability to anticipate our needs for components, products, and services, as well as the ability of our manufacturers (including original equipment manufacturers, original and outsourced design manufacturers, and contract manufacturers), and suppliers to deliver sufficient quantities of quality components, products, and services at reasonable prices and in time for us to meet critical schedules for the delivery of our own products and services. Given the wide variety of solutions that we offer; the large and diverse distribution of our suppliers and contract manufacturers; and the long lead times required to manufacture, assemble, and deliver certain products and solutions, problems in production, planning, and inventory management have harmed our business at times, and may do so again in the future. Any delay in our ability to produce and deliver our products could cause our customers to purchase alternative products from our competitors. Manufacturing and supply problems that we have faced, and could face in the future, are described below. •Manufacturing Issues. We may experience supply shortfalls or delays in shipping products to our customers if our manufacturers experience delays, disruptions, or quality control problems in their manufacturing operations, or if we have to change or add manufacturers or contract manufacturing locations. We have contracts with our manufacturers that include terms to protect us in the event of an early termination or breach, yet we may not have adequate time to transition all of our manufacturing needs to an alternative manufacturer under comparable commercial terms. We have experienced in the past, and may experience in the future, an increase in the expected time required to manufacture our products or ship products. Moreover, a significant portion of our manufacturing is performed in foreign countries. The manufacture of product components, the final assembly of our products and other critical operations are concentrated in certain geographic locations, including the United States, Puerto Rico, Vietnam, Thailand, Costa Rica, Brazil, Czech Republic, Malaysia, Mexico, China, Taiwan, India, South Korea, Saudi Arabia, and Singapore. We also rely on major logistics hubs, which are strategically located near manufacturing facilities in the major regions and in proximity to HPE's distribution channels and customers. These operations are therefore subject to risks associated with doing business outside of the U.S., including trade restrictions and related costs, government sanctions, disruptions to our supply chain, cyberattacks, cyberwarfare, pandemics, regional health emergencies, regional climate-related events, or regional conflicts. Other critical business operations and some of our suppliers are located in California and Asia, near major earthquake faults known for seismic activity. Our operations could be adversely affected if manufacturing, logistics, or other operations in these locations are disrupted for any reason or due to natural disasters and public health issues in the United States, Puerto Rico, and China. •Supply Chain Disruption. Any disruptions to our supply chain, significant increase in component costs or logistics costs, or shortages of critical components, could decrease our sales, earnings, and liquidity or otherwise adversely affect our business and result in increased costs. Disruptions could occur as a result of any number of events, including, but not limited to: an extended closure of, or any slowdown at our suppliers' plants or shipping delays; market shortages due to the surge in demand from other purchasers for critical components; increases in prices (including fuel prices and increases in prices due to inflation); the imposition of regulations, quotas, embargoes, or tariffs on components; labor stoppages; transportation delays, including due to labor strikes; third-party interference in the integrity of the products sourced through the supply chain; cyberattacks; the unavailability of raw materials; severe weather conditions and adverse effects of climate change, or natural disasters; geopolitical developments, war or terrorism; and disruptions in utilities and other services, some of which we have experienced. In addition, the development, licensing, or acquisition of new products in the future may increase the complexity of supply chain management. Failure to effectively manage the supply of components and products would adversely affect our business. Our ongoing efforts to geographically diversify and optimize the efficiency of our supply chain could cause supply disruptions and be more expensive, time-consuming, and resource-intensive than expected, and such impacts may be more pronounced as a result of increased tariffs between the U.S. and its trading partners. In this environment of heightened trade restrictions, we have experienced, and may continue to experience, cost increases from certain of our suppliers that result in price increases for some of our offerings and could subsequently limit demand for such offerings. If we are unable to pass on all or some of such cost increases to our customers, such increased prices may reduce our current margins and future margins. Furthermore, certain of our suppliers have discontinued conducting business with us or failed to perform under their contracts with us. •Component Supply Shortages. We provide demand forecasts for our products to our manufacturers, who order components and plan capacity based on these forecasts. We have experienced, and may experience again in the future, delays and shortages of certain components as a result of strong demand, supplier transitions, raw material or capacity constraints, and other problems experienced by suppliers in certain geographies and markets, resulting in insufficient 20 20 20 Table of Content Table of Content supply to meet total market demand. We have experienced shortages or delays, which led to higher prices of certain components and exposure to quality issues and delivery delays, and may experience such delays and associated impacts in the future. We may not be able to secure enough components at reasonable prices, of acceptable quality, or at all, to build products or provide services in a timely manner in the quantities needed or according to our specifications. Accordingly, our business and financial performance could suffer from a loss of time-sensitive sales, additional freight costs incurred, or the inability to pass on price increases to our customers. If we cannot adequately address supply issues, we may have to reengineer some product or service offerings, which could result in further costs and delays. •Excess Supply. In order to secure components for our products or services, at times we have made advance payments to suppliers or entered into long term agreements, non-cancellable commitments, or other inventory management arrangements with vendors. In addition, we have also, at times, purchased components strategically in advance of demand to take advantage of favorable pricing, to address concerns about the availability of future components, or to prepare to fulfill large orders. If our manufacturers assess charges, we have liabilities for excess inventory or raw materials (each of which could negatively affect our gross margins), we fail to adequately anticipate customer demand and overestimate our requirements, continue to take actions to make strategic purchases in advance of demand, or these dynamics are exacerbated due to order delays or cancellations, a temporary oversupply may result in excess or obsolete components, which may result in additional charges from our manufacturers, or we may have liabilities for excess inventory or raw materials, each of which could negatively affect our gross margins. We have experienced adverse impacts to our business and financial performance due to excess supply and could do so again in the future. •Contractual Terms. As a result of binding long-term price or purchase commitments with vendors, we may be obligated to purchase components or services at prices that are higher than those available in the current market and be limited in our ability to respond to changing market conditions. If we commit to purchasing components or services for prices in excess of the then-current market price, we may be at a disadvantage to competitors who have access to components or services at lower prices, our gross margin could suffer, and we could incur charges relating to inventory obsolescence. •Single-Source Suppliers. We obtain certain components from single-source suppliers due to technology, availability, price, quality, scale, or customization needs. Certain single source suppliers have discontinued, and may again in the future discontinue, manufacturing components used in our products, which may cause us to discontinue certain products, incur additional costs to redesign our products so as not to incorporate such discontinued components, or incur time and expense to find replacement suppliers. Replacing a single-source supplier has at times delayed, and could delay, production of some products as replacement suppliers may initially be unable to meet demand or be subject to other output limitations. In addition, we may purchase components from single-source suppliers under agreements that contain favorable pricing and other terms for us, but allow the supplier to modify or terminate the contract with limited notice to us and with little or no penalty. The performance of such single-source suppliers under those agreements (and the renewal or extension of those agreements upon similar terms) may affect the quality, quantity, and price of our components. The loss of a single-source supplier, the deterioration of our relationship with a single-source supplier, or any unilateral modification to the contractual terms under which we receive components from a single-source supplier could adversely affect our business and financial performance. •Alternative Sources of Supply. The development of alternate sources for components is time-consuming, complex, and costly. For some components, such as customized components, alternative sources may not exist, we may not be able to locate alternative sources in a timely manner, or we may be unable to secure quantities of those components necessary to satisfy our production requirements. As a result, if an existing source of supply is unable to provide components in quantities sufficient to meet our requirements on a timely basis, we may not be able to deliver, or be delayed in delivering, products and services to our customers, which may affect present and future sales. If we are unable to buy components in quantities sufficient to meet our requirements on a timely basis, we will not be able to deliver products and services to our customers, which would seriously affect present and future sales, and would, in turn, adversely affect our business, financial condition, and results of operations. •Contingent Workers. We also rely on third-party suppliers for the provision of contingent workers, and our failure to effectively manage our use of such workers could adversely affect our results of operations. We have been exposed to various legal claims relating to the status of contingent workers in the past and could face similar claims in the future. We may be subject to shortages, oversupply, or fixed contractual terms relating to contingent workers. Our ability to manage the size and cost of our contingent workforce may be subject to additional constraints imposed by local laws. 21 21 21 Table of Content Table of Content --- ## Modified: Financial Risks **Key changes:** - Added sentence: "•Our revenue, profitability, and margins have historically varied, and we expect them to continue to vary over time." - Added sentence: "•We are exposed to fluctuations in foreign currency exchange rates." - Removed sentence: "•The revenue and profitability of our operations have historically varied, which makes our future financial results less predictable." - Removed sentence: "•Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable." **Prior (2024):** •Adverse developments affecting our liquidity, capital position, borrowing costs, and access to capital markets could adversely impact our business, financial condition, and results of operations or those of the third parties with whom we do business. •Our debt obligations may adversely affect our business and our ability to meet our obligations and pay dividends. •The revenue and profitability of our operations have historically varied, which makes our future financial results less predictable. •Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable. •We make estimates and assumptions in connection with the preparation of our Consolidated Financial Statements and any changes to those estimates and assumptions could adversely affect our results of operations. •Declaration, payment and amounts of dividends, if any, to holders of our shares will be uncertain. **Current (2025):** •Our revenue, profitability, and margins have historically varied, and we expect them to continue to vary over time. •We are exposed to fluctuations in foreign currency exchange rates. •Adverse developments affecting our liquidity, capital position, borrowing costs, and access to capital markets could adversely impact our business, financial condition, and results of operations or those of the third parties with whom we do business. •Our debt obligations may adversely affect our business and our ability to meet our obligations and pay dividends. •We make estimates and assumptions in connection with the preparation of our Consolidated Financial Statements and any changes to those estimates and assumptions could adversely affect our results of operations. •Declaration, payment and amounts of dividends, if any, to holders of our shares will be uncertain. --- ## Modified: Contracts with federal, state, provincial, and local governments are subject to a number of challenges and risks that may adversely impact our business. **Key changes:** - Reworded sentence: "Furthermore, as a contractor and subcontractor to the U.S." - Reworded sentence: "In addition, in the U.S., we will continue to be subject to qui tam litigation brought by private individuals on behalf of the government relating to our government contracts." - Reworded sentence: "Political factors, such as election outcomes, changes in leadership in one or more branches of government, and the resulting potential changes in government policies have affected, and may in the future affect, the number and terms of government contracts entered into, the 38 38 38 Table of Content Table of Content authorizations for programs that we bid on, spending priorities, or how compliance with relevant rules or laws is assessed, and may do so again in the future." **Prior (2024):** Our contracts with federal, state, provincial, and local governmental customers are subject to various government procurement laws and regulations, required contract provisions, and other requirements relating to contract formation, administration, and performance, as well as local content, manufacturing, information security and security requirements. Any violation of government contracting laws and regulations or contract terms could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting. Additionally, changes in underlying regulatory requirements that vary across the geographies in which we operate could increase compliance costs and risks. Such failures could also cause reputational damage to our business. In addition, in the US, we will continue to be subject to qui tam litigation brought by private individuals on behalf of the government relating to our government contracts. If we are suspended or disbarred from government work or if our ability to compete for new government contracts is adversely affected, our financial performance could suffer. Government contracts impose additional challenges and risks to our sales efforts. Government demand and payment for our products and services may be impacted by public sector budgetary cycles and funding authorizations, including in connection with an extended government shutdown, with funding reductions, or delays adversely affecting public sector demand for our products and services. Such developments could result in material payment delays, payment reductions, or contract terminations by our governmental customers, which may impact our results of operations and financial condition. These may also adversely impact the results of operations and financial condition of government contractors with whom we 33 33 33 Table of Content Table of Content conduct business. This may cause those government contractors to become unable to meet their obligations under contracts with us. **Current (2025):** Our contracts with federal, state, provincial, and local governmental customers are subject to various government procurement laws and regulations, required contract provisions, and other requirements relating to contract formation, administration, and performance, as well as local content, manufacturing, information security and security requirements. Furthermore, as a contractor and subcontractor to the U.S. government, our IT systems are subject to federal regulations that require compliance with security and privacy controls. Any violation of government contracting laws and regulations or contract terms could result in the imposition of various civil and criminal penalties, termination of federal government contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting. Additionally, changes in underlying regulatory requirements that vary across the geographies in which we operate could increase compliance costs and risks. Such failures could also cause reputational damage to our business. In addition, in the U.S., we will continue to be subject to qui tam litigation brought by private individuals on behalf of the government relating to our government contracts. If we are suspended or disbarred from government work or if our ability to compete for new government contracts is adversely affected, our financial performance could suffer. Government contracts impose additional challenges and risks to our sales efforts. Political factors, such as election outcomes, changes in leadership in one or more branches of government, and the resulting potential changes in government policies have affected, and may in the future affect, the number and terms of government contracts entered into, the 38 38 38 Table of Content Table of Content authorizations for programs that we bid on, spending priorities, or how compliance with relevant rules or laws is assessed, and may do so again in the future. Government demand for our products and services has been impacted by public sector staffing and available resources, and government payments may in the future be impacted or delayed for the same reasons (including recent actions taken to reduce the size of the U.S. federal workforce), budgetary cycles and funding authorizations, including in connection with an extended government shutdown, with funding reductions, or delays adversely affecting public sector demand for our products and services. The current U.S. administration's efforts to reduce federal spending and the size of the federal workforce have resulted in and are likely to continue to result in contract terminations, delays, and cancellations of new procurements, and reductions in price and contract scope. While our contracts with government entities are often planned and executed as multi-year projects, government entities usually reserve the right to change the scope of or terminate these projects for any or some of the aforementioned reasons. As such, such developments may adversely impact the results of operations and financial condition of government contractors with whom we conduct business, which may in turn cause those government contractors to become unable to meet their obligations under contracts with us, resulting in material payment delays, payment reductions, or contract terminations by our governmental customers, among other adverse consequences. All of the above would negatively impact our results of operations and financial condition. The current U.S. administration has issued executive orders and taken actions to curtail certain policies and programs that violate federal anti-discrimination laws, including requiring U.S. federal contractors and subcontractors to certify that they do not operate any such programs. A violation of these orders or similar federal or state orders, laws or regulations or becoming subject to adverse actions could expose us to penalties and sanctions or jeopardize our ability to continue to do work for the U.S. federal government, which may adversely affect our future results of operations. An allegation of a violation could result in reputational harm and subject us to increased litigation risk. Additionally, conflicting laws and regulations between federal, state and local governments may make it increasingly difficult for us to do business in every government jurisdiction. Further, some government customers have implemented and could continue to implement procurement policies that impact our profitability. Procurement policies favoring more non-commercial purchases, different pricing, or evaluation criteria or government contract negotiation offers based upon the customer's view of what our pricing should be, could affect the margins on such contracts or make it more difficult to compete on certain types of programs. Government customers are continually evaluating their contract pricing and financing practices, and we have no assurance regarding what changes will be proposed, if any, and their impact on our financial position, cash flows, or results of operations. --- ## Modified: Risks Related to Prior Separations **Key changes:** - Removed sentence: "•The stock distribution in either or both of the completed separations of our former Enterprise Services business and our former Software segment could result in significant tax liability, and DXC Technology Company or Micro Focus International plc (as applicable) may in certain cases be obligated to indemnify us for any such tax liability imposed on us." **Prior (2024):** •The stock distribution in either or both of the completed separations of our former Enterprise Services business and our former Software segment could result in significant tax liability, and DXC Technology Company or Micro Focus International plc (as applicable) may in certain cases be obligated to indemnify us for any such tax liability imposed on us. •We continue to face a number of risks related to our separation from HP Inc., our former parent, including those associated with ongoing indemnification obligations, which could adversely affect our financial condition and results of operations, and shared use of certain intellectual property rights, which could in the future adversely impact our reputation. **Current (2025):** •We continue to face a number of risks related to our separation from HP Inc., our former parent, including those associated with ongoing indemnification obligations, which could adversely affect our financial condition and results of operations, and shared use of certain intellectual property rights, which could in the future adversely impact our reputation. --- ## Modified: Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. **Key changes:** - Reworded sentence: "Our worldwide operations and supply chain could be disrupted by natural or human-induced events including, but not limited to, earthquakes; tsunamis; floods; hurricanes, cyclones or typhoons; fires; other extreme weather conditions; power or water shortages; telecommunications failures; materials scarcity and price volatility; terrorist acts, civil unrest, conflicts or wars; trade tensions, tariffs, quotas, or import or export restrictions, and changes thereto, which are difficult to accurately predict; and health epidemics or pandemics." - Reworded sentence: "While we are predominantly self-insured to mitigate the impact of most catastrophic events, the occurrence of business disruptions could, among other impacts, harm our revenue, profitability, and financial condition; cause derivative impacts on our employees; adversely affect our competitive position; increase our costs and expenses; make it difficult or impossible to provide our offerings to our customers or to receive components from our suppliers; create delays and inefficiencies in our supply chain; or 26 26 26 Table of Content Table of Content require substantial expenditures and recovery time in order to fully resume operations." **Prior (2024):** Our worldwide operations and supply chain could be disrupted by natural or human-induced disasters including, but not limited to, earthquakes; tsunamis; floods; hurricanes, cyclones or typhoons; fires; other extreme weather conditions; power or water shortages; telecommunications failures; materials scarcity and price volatility; terrorist acts, civil unrest, conflicts or wars; and health epidemics or pandemics. The impacts and frequency of any of the above could be further exacerbated by climate change, particularly in countries where we operate that have limited infrastructure and disaster recovery resources. While we are predominantly self-insured to mitigate the impact of most catastrophic events, the occurrence of business disruptions could, among other impacts, harm our revenue, profitability, and financial condition; adversely affect our competitive position; increase our costs and expenses; make it difficult or impossible to provide our offerings to our customers or to receive components from our suppliers; create delays and inefficiencies in our supply chain; or require substantial expenditures and recovery time in order to fully resume operations. Public health crises, such as the COVID-19 pandemic, and the measures taken in response to such events have in the past negatively impacted, and may again in the future negatively impact, our operations and workforce, as well as those of our partners, customers and suppliers. Additionally, concerns over the economic impact of such events have, from time to time, caused increased volatility in financial and other capital markets, adversely impacting our stock price, our ability to access the capital markets, and our ability to fund liquidity needs, and may do so again in the future. The negative impacts of any such events on business operations and demand for our offerings will depend on future developments and actions taken in response to such events, which may be outside our control, highly uncertain, and cannot be predicted at this time. The manufacture of product components, the final assembly of our products and other critical operations are concentrated in certain geographic locations, including the United States, Puerto Rico, Costa Rica, Czech Republic, Malaysia, Mexico, China, Taiwan, South Korea, and Singapore. We also rely on major logistics hubs, which are strategically located near manufacturing facilities in the major regions and in proximity to HPE's distribution channels and customers. Other critical business operations and some of our suppliers are located in California and Asia, near major earthquake faults known for seismic activity. Our operations could be adversely affected if manufacturing, logistics, or other operations in these locations are disrupted for any reason, including those enumerated above, as they have been in the past by natural disasters and public health issues in the United States, Puerto Rico, and China. To the extent such disruptions adversely affect our business, results of operations, financial condition, and stock price, they may also have the effect of heightening many of the other risks described in this Item 1A of Part I of this Form 10-K. **Current (2025):** Our worldwide operations and supply chain could be disrupted by natural or human-induced events including, but not limited to, earthquakes; tsunamis; floods; hurricanes, cyclones or typhoons; fires; other extreme weather conditions; power or water shortages; telecommunications failures; materials scarcity and price volatility; terrorist acts, civil unrest, conflicts or wars; trade tensions, tariffs, quotas, or import or export restrictions, and changes thereto, which are difficult to accurately predict; and health epidemics or pandemics. The impacts and frequency of any of the above could be further exacerbated by climate change, particularly in countries where we operate that have limited infrastructure and disaster recovery resources. While we are predominantly self-insured to mitigate the impact of most catastrophic events, the occurrence of business disruptions could, among other impacts, harm our revenue, profitability, and financial condition; cause derivative impacts on our employees; adversely affect our competitive position; increase our costs and expenses; make it difficult or impossible to provide our offerings to our customers or to receive components from our suppliers; create delays and inefficiencies in our supply chain; or 26 26 26 Table of Content Table of Content require substantial expenditures and recovery time in order to fully resume operations. To the extent such disruptions adversely affect our business, results of operations, financial condition, and stock price, they may also have the effect of heightening many of the other risks described in this Item 1A of Part I of this Annual Report on Form 10-K. --- ## Modified: Our revenue, profitability, and margins have historically varied, and we expect them to continue to vary over time. **Key changes:** - Reworded sentence: "Our revenue, gross margin, and profitability have historically varied among our diverse products and services, customer groups, and geographic markets." - Reworded sentence: "Delays or reductions in discretionary IT spending by our customers or potential customers have had, and in the future, could have an adverse effect on demand for our products and services, which could result in a significant decline in revenue." - Reworded sentence: "Our margins and profitability in any given period are dependent on numerous factors, many of which are unpredictable or challenging to anticipate in advance, such as the product, service, customer, and geographic mix reflected in that period's revenue; variability in price competition in one or more of the markets in which we compete; modifications to our pricing strategy due to inaccurately forecasting demand; currency fluctuations that impact our costs; impacts of inflation; increases in material, labor, logistics, warranty costs, or inventory carrying costs; issues with manufacturing or component availability, including excess product component or obsolescence charges; issues relating to the distribution of our products and provision of our services; or the impact of trade policies, tariffs, or other trade restrictions." - Reworded sentence: "There could be additional 34 34 34 Table of Content Table of Content uncertainty surrounding heightened trade restrictions or the enforceability of contract obligations, as well as the timing and form of payments from China." **Prior (2024):** Our revenue, gross margin, and profit vary among our diverse products and services, customer groups, and geographic markets and therefore, will likely be different in future periods than our historical results. Our revenue depends on the overall demand for our products and services, which is difficult to accurately predict, varies from time to time, may be uneven across our portfolio of offerings, and is subject to industry-wide or broader macroeconomic market dynamics, all of which have in the past adversely impacted, and may again in the future adversely impact, our business and financial condition. Additionally, the varying sizes of customer contracts or orders, variations in customer acceptances of delivered orders, the timing thereof, and cancellations and/or de-bookings of such orders (due to various reasons, including but not limited to failure to satisfy terms and compliance matters, whether initiated by us or the customer) can be uneven across our portfolio and have at times impacted, and in the future could impact, our pipeline, bookings and our ability to recognize revenue, if at all (particularly with respect to contracts and orders involving our AI offerings). Such variables have in the past negatively impacted our financial performance, and may do so again in the future. Delays or reductions in discretionary IT spending by our customers or potential customers have had, and in the future could have a material adverse effect on demand for our products and services, which could result in a significant decline in revenue. For example, we have seen demand soften unevenly across our portfolio and geographies, which may continue, as certain customers and sectors have been taking longer than anticipated to digest prior large orders. In addition, revenue declines in some of our businesses may affect revenue in our other businesses as we may lose cross-selling opportunities. Overall gross margins and profitability in any given period are dependent partially on the product, service, customer, and geographic mix reflected in that period's net revenue. Furthermore, the relationship between China and the U.S., and any subsequent action that may be taken by either country, may significantly vary the results our operations and financial performance from that region. There could be additional uncertainty surrounding the enforceability of contract obligations, as well as the timing and form of payments from China. Competition, lawsuits, investigations, increases in component and manufacturing costs that we are unable to pass on to our customers, component supply disruptions, and other risks affecting our businesses may have a significant impact on our overall gross margin and profitability. Variations in our fixed cost structure and gross margins across business units and product portfolios, have from time to time led to, and may lead to significant operating profit volatility on a quarterly or annual basis in the future. In addition, newer geographic market opportunities may be relatively less profitable due to our investments associated with entering those markets and local pricing pressures, and we may have difficulty establishing and maintaining the operating infrastructure necessary to support the high growth rate associated with some of those markets. Market trends, industry shifts, competitive pressures, commoditization of products, increased component or shipping costs, regulatory impacts, and other factors have from time to time resulted in, and may in the future result in, reductions in revenue or pressure on gross margins of certain segments in a given period, which may lead to adjustments to our operations. Moreover, our efforts to address the challenges facing our business could increase the level of variability in our financial results because the rate at which we are able to realize the benefits from those efforts may vary from period to period. **Current (2025):** Our revenue, gross margin, and profitability have historically varied among our diverse products and services, customer groups, and geographic markets. Therefore, it is likely that these financial metrics will continue demonstrating variability in the future and may deviate from our historical results. Our revenue depends on the overall demand for our products and services, which is difficult to accurately predict, varies from time to time, may be uneven across our portfolio of offerings and our geographies, and is subject to industry-wide or broader macroeconomic market dynamics, all of which have in the past adversely impacted, and may in the future adversely impact, our business and financial condition. Additionally, the varying sizes of customer contracts or orders, variations in customer acceptances of delivered orders, the timing thereof, and cancellations and/or de-bookings of such orders (due to various reasons, including, but not limited to, failure to satisfy terms and compliance matters, whether initiated by us or the customer) can be uneven across our portfolio and have at times impacted, and in the future could impact, our pipeline, bookings, and our ability to recognize revenue, if at all (particularly with respect to contracts and orders involving our AI offerings). Further, larger orders, including some orders for our AI systems, may involve larger amounts of credit or longer payment terms than typical for our business, increasing our risk when customers do not pay in a timely fashion, or at all, particularly where payment terms with major suppliers differ from the terms with our customers. Such variables have in the past negatively impacted our financial performance, and may do so again in the future. Delays or reductions in discretionary IT spending by our customers or potential customers have had, and in the future, could have an adverse effect on demand for our products and services, which could result in a significant decline in revenue. In addition, revenue declines in some of our businesses may affect revenue in our other businesses as we may lose cross-selling opportunities. Our margins and profitability in any given period are dependent on numerous factors, many of which are unpredictable or challenging to anticipate in advance, such as the product, service, customer, and geographic mix reflected in that period's revenue; variability in price competition in one or more of the markets in which we compete; modifications to our pricing strategy due to inaccurately forecasting demand; currency fluctuations that impact our costs; impacts of inflation; increases in material, labor, logistics, warranty costs, or inventory carrying costs; issues with manufacturing or component availability, including excess product component or obsolescence charges; issues relating to the distribution of our products and provision of our services; or the impact of trade policies, tariffs, or other trade restrictions. In addition, entry into new markets may be relatively less profitable, due to high upfront investments associated with entering those markets and the need to operate within local pricing and cost structures, and we may have difficulty establishing and/or maintaining the operating infrastructure necessary to support margin-rich growth in some of those markets. Failure to sustain or improve our gross margins reduces our profitability and may have a material adverse effect on our business, results of operations, and stock price. Moreover, our efforts to address the challenges facing our business could increase the level of variability in our financial results because the rate at which we are able to realize the benefits from those efforts may vary from period to period. Furthermore, the relationship between China and the U.S., and any subsequent action that may be taken by either country, may significantly vary the results our operations and financial performance from that region. There could be additional 34 34 34 Table of Content Table of Content uncertainty surrounding heightened trade restrictions or the enforceability of contract obligations, as well as the timing and form of payments from China. --- ## Modified: Our sustainable and responsible business expectations and actions towards achieving our Living Progress objectives may expose us to operational, legal, or reputational risks and could adversely affect our business, results of operations, financial condition, or stock price. **Key changes:** - Reworded sentence: "We actively manage sustainability and corporate responsibility issues through our established and publicly announced Living Progress Strategy." - Reworded sentence: "Evolving stakeholder expectations and our efforts and ability to manage these issues present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price." **Prior (2024):** There has been an increased focus from regulators and stakeholders on sustainability and corporate responsibility matters. Given our commitment to sustainable and responsible business, we actively manage these issues through our Living Progress Strategy and have established and publicly announced certain goals, which we may refine or even expand further in the future. These goals reflect our current plans and aspirations, are based on available data and estimates, and are not guarantees that we will be able to achieve them. Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation. Initiatives to address sustainability and corporate responsibility issues may be costly and may not have the desired effect. Evolving stakeholder expectations and our efforts and ability to manage these issues and accomplish our goals present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price. Further, there is uncertainty around the accounting standards and climate-related disclosures associated with emerging laws and reporting requirements and the related costs to comply with the emerging regulations. 25 25 25 Table of Content Table of Content Our failure or perceived failure to achieve our Living Progress goals, maintain responsible and sustainable business practices, or comply with emerging sustainability regulations that meet evolving regulatory or stakeholder expectations could harm our reputation, adversely impact our ability to attract and retain customers and talent, and expose us to increased scrutiny from the investment community and enforcement authorities. Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction on certain sustainability- and corporate responsibility-related issues, or because they may disagree with our goals and initiatives, either of which may cause us to face scrutiny, lawsuits, or other market access restrictions from certain parties related to our action or inaction on such issues. Damage to our reputation and loss of brand equity may reduce demand for our products and services and thus have an adverse effect on our future financial performance, as well as require additional resources to rebuild our reputation. **Current (2025):** We actively manage sustainability and corporate responsibility issues through our established and publicly announced Living Progress Strategy. This strategy reflects our current plans and aspirations, is based on available data and estimates, and is not a guarantee that we will be able to achieve such plans and aspirations or that we will not refine or modify such plans and aspirations in the future. Our ability to meet our sustainability and/or corporate responsibility ambitions is also subject to external factors outside of our control, including the ability and willingness of our suppliers to take action and the advancement of new technologies. Moreover, actions or statements that we may take based on expectations, assumptions, or third-party information that we currently believe to be reasonable may subsequently be determined to be erroneous or be subject to misinterpretation, which may expose us to enforcement actions or legal proceedings and the reputational and financial costs associated therewith. Initiatives to address sustainability and corporate responsibility issues may be costly and may not have the desired effect. Evolving stakeholder expectations and our efforts and ability to manage these issues present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which may be outside of our control or could have adverse impacts on our business, including on our stock price. Regulators and stakeholders have evolving, varied, and sometimes conflicting expectations regarding sustainability and corporate responsibility matters, leading to heightened scrutiny of such corporate programs a. Additionally, there is an increasing number of federal, state, and local initiatives that may conflict with other regulatory requirements or priorities, such as those of the U.S. federal government, resulting in regulatory uncertainty. We may also increasingly see similar conflict between U.S. policy and the regulatory positions taken in other non-U.S. jurisdictions. Not only is there uncertainty due to the patchwork of environmental, social, and governance-related laws and regulations (especially as they may sometimes conflict), but also there remains uncertainty around the accounting standards and 33 33 33 Table of Content Table of Content required disclosures associated with such laws and regulations (including the scope of reporting requirements and the related costs to comply with the emerging regulations). Our failure or perceived failure to achieve our Living Progress objectives, maintain responsible and sustainable business practices, integrate newly acquired companies into our sustainability programs, continue monitoring or pursuing certain goals, or comply with emerging laws and regulations that meet evolving and potentially conflicting regulatory or stakeholder expectations could harm our reputation, adversely impact our ability to attract and retain customers and talent, and expose us to increased scrutiny from the investment community and enforcement authorities. Additionally, we could become the target of litigation, investigations, or other proceedings initiated by government authorities or private actors alleging that our activities or positions related to sustainability and corporate responsibility matters are anti-competitive, discriminatory or otherwise unlawful. Our reputation also may be harmed by the perceptions that our stakeholders have about our action or inaction on certain sustainability- and corporate responsibility-related issues, or because they may disagree with our strategy and initiatives, either of which may cause us to face scrutiny, legal and/or regulatory proceedings, or other market access restrictions from certain parties related to our action or inaction on such issues. Integrating acquired companies, and the time and resources devoted to such efforts, may also temporarily slow our progress toward certain goals or require us to update our targets, methodologies, or underlying practices to promote alignment across the combined company. Damage to our reputation and loss of brand equity may reduce demand for our products and services and thus have an adverse effect on our future financial performance, as well as require additional resources to rebuild our reputation. --- ## Modified: Legal, Regulatory, and Compliance Risks **Key changes:** - Reworded sentence: "•Unfavorable results of legal proceedings, investigations, and other disputes could harm our business and result in substantial costs." - Reworded sentence: "•Unanticipated changes in our tax provisions, the adoption of new tax legislation, or exposure to additional tax liabilities could affect our financial performance." **Prior (2024):** •Our business is subject to various federal, state, local and foreign laws and regulations that could result in costs or other sanctions that adversely affect our business and results of operations. •Contracts with federal, state, provincial, and local governments are subject to a number of challenges and risks that may adversely impact our business. •Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our financial performance. **Current (2025):** •Unfavorable results of legal proceedings, investigations, and other disputes could harm our business and result in substantial costs. •Third-party claims of intellectual property infringement, including patent infringement, are commonplace in our industry and successful third-party claims may limit or disrupt our ability to sell our products and services. •Our business is subject to various federal, state, local, and foreign laws and regulations that could result in costs or other sanctions that adversely affect our business and results of operations. •Contracts with federal, state, provincial, and local governments are subject to a number of challenges and risks that may adversely impact our business. •Unanticipated changes in our tax provisions, the adoption of new tax legislation, or exposure to additional tax liabilities could affect our financial performance. --- ## Modified: Risks Related to Our Business Strategy and Industry **Key changes:** - Reworded sentence: "•Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions." - Added sentence: "•We operate in an intensely competitive industry, and competitive pressures could harm our business and financial performance •Any failure by us to identify, manage, and complete acquisitions and subsequent integrations (including the integration of Juniper Networks following the Merger), divestitures, and other significant transactions successfully could harm our financial results, business, prospects, and stock price." - Added sentence: "•Uncertainty and fluctuations in geopolitical and macroeconomic conditions may adversely impact our business, financial condition, and operating results." - Added sentence: "•If we experience or fail to properly manage disruption in the distribution of our products and services properly, our business and financial performance could suffer." - Reworded sentence: "•Long sales and implementation cycles for our offerings and dynamics related to large orders may cause our revenues and operating results to vary significantly from quarter-to-quarter." **Prior (2024):** •If we cannot successfully execute our go-to-market strategy, including offering our entire portfolio as-a-Service, our business, operating results, and financial performance may suffer. •We depend on third-party suppliers, and our financial results could suffer if we fail to manage our supplier relationships properly. •System security risks, data protection incidents, cyberattacks and systems integration issues could disrupt our internal operations or IT services provided to customers, and any such disruption could reduce our revenue, increase our expenses, damage our reputation, and adversely affect our stock price. •Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. •Failure to complete the Merger with Juniper Networks may adversely affect our business and our stock price. •Failure to realize the benefits expected from the Merger with Juniper Networks could adversely affect our business or our stock price. •Any failure by us to identify, manage, and complete acquisitions and subsequent integrations, divestitures, and other significant transactions successfully could harm our financial results, business and prospects. •If we cannot continue to produce quality products and services, our reputation, business, and financial performance may suffer. •In order to be successful, we must attract, retain, train, motivate, develop, and transition key employees, and failure to do so could seriously harm us. •If we fail to manage the distribution of our products and services properly, our business and financial performance could suffer. •Issues in the development and use of artificial intelligence may result in reputational harm, liability or impact to our results of operations. •Changes in the macroeconomic environment have, at times, impacted and may in the future negatively impact our results of operations. •Failure to meet responsible and sustainable business expectations or standards or achieve our Living Progress goals could adversely affect our business, results of operations, financial condition, or stock price. •Risks arising from climate change and the transition to a lower-carbon economy may impact our business. **Current (2025):** •Our success depends on our ability to successfully execute our go-to-market strategy, including offering solutions as-a-Service, effectively planning and managing our resources, and continuing to develop and manage our offerings to integrate new features and solutions. •We depend on third-party suppliers, contract manufacturers (including original equipment and original design manufacturers), as well as single-source and limited source suppliers, and our financial results could suffer if we fail to manage these third party relationships effectively. •System security risks, data protection incidents, cyberattacks and systems integration issues could disrupt our internal operations or IT services provided to customers, and any such disruption could reduce our revenue, increase our expenses, damage our reputation, and adversely affect our stock price. •We operate in an intensely competitive industry, and competitive pressures could harm our business and financial performance •Any failure by us to identify, manage, and complete acquisitions and subsequent integrations (including the integration of Juniper Networks following the Merger), divestitures, and other significant transactions successfully could harm our financial results, business, prospects, and stock price. •Uncertainty and fluctuations in geopolitical and macroeconomic conditions may adversely impact our business, financial condition, and operating results. •If we experience or fail to properly manage disruption in the distribution of our products and services properly, our business and financial performance could suffer. •Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. •Long sales and implementation cycles for our offerings and dynamics related to large orders may cause our revenues and operating results to vary significantly from quarter-to-quarter. •Our uneven sales cycle and supply chain disruptions make planning and inventory management difficult and future financial results less predictable. •Our ability to achieve our strategy could be harmed if we are unable to attract, retain, train, motivate, develop, and transition key personnel. •Risks arising from climate change and the transition to a lower-carbon economy may impact our business. --- *Data sourced from SEC EDGAR. Last updated 2026-06-01.*