44 added · 43 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
We have undertaken and may undertake in the future restructuring and other plans in order to realign our cost structure, drive customer satisfaction, product innovation and productivity through artificial intelligence, and achieve operating efficiencies that we expect to reduce costs, including the Fiscal 2023 Plan and our Fiscal 2026 Plan.
As a result, during fiscal 2025, we experienced higher commodity and tariff costs, which were not fully mitigated by pricing and other actions enacted during the period.
For example, the accelerated rate of innovation of components from our suppliers may result in higher defects or failure of our offerings to perform, which could cause us to incur increased warranty costs, inventory provisions or impairments and could impact future sales.
For example, we observed a competitive pricing environment, variability in commodity costs, demand softness in Print and demand softness in certain geographic regions in Personal Systems, secular declines in demand for certain products or solutions, including printing products and solutions, inflationary pressures, the imposition of new or increased tariffs and other trade restrictions, and foreign currency fluctuations.
Proliferating export controls, including controls on certain rare earth elements, designed to limit the diffusion of advanced technology, can impact speed on AI innovation and capabilities by controlling hardware capable of supporting advanced AI technology.
Additionally, the costs to combat cyber or other security threats can be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.
Additionally, a failure to adequately meet regulatory expectations may result in the loss of business and reputational impacts, and we periodically are, and in the future could become the target of litigation, investigations or other proceedings initiated by government authorities or private actors alleging that our activities related to environmental and societal matters are anti-competitive, discriminatory or otherwise unlawful.
Moreover, our actions to drive demand to AI products may result in cannibalization of demand for our traditional, non-AI products, which may result in lower net revenues and/or profit margins.
Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future.
While our big tank printers typically have a higher initial margin than our traditional in cartridge printers, they do not result in follow-on sales of high margin traditional ink cartridges and, as a result, may have lower overall device lifetime profitability.
Restrictive measures have and may continue to increase the cost of our products and the components and raw materials that go into them, and can require us to take various actions, including changing suppliers, restructuring business relationships and operations, and ceasing to offer and distribute affected products and services.
Changing our business model and supply chain to comply with and seek to offset the impact of new or revised trade restrictions has been, and may continue to be, expensive, time-consuming and disruptive to our business, and may not be successful in offsetting or mitigating these impacts.
No longer disclosed
For example, we observed continued market uncertainty, cautious commercial spending on information technology hardware, lower discretionary consumer spending, secular declines in demand for certain products or solutions, including printing products and solutions, inflationary pressures, and foreign currency fluctuations.
If our ESG practices do not meet evolving government, investor or other stakeholder expectations and standards, then our reputation or our attractiveness as an investment, business partner, acquiror, product or service provider or employer could be negatively impacted and we could be subject to litigation or regulatory proceedings.
Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop additional AI-specific governance programs, which could entail significant costs or limit our ability to incorporate certain AI capabilities into our products and solutions.
There is an increasingly active litigation and regulatory environment, including but not limited to employment and patent-monetization claims in the United States, Germany and Brazil, and litigation and regulatory matters focused on consumer protection, privacy, and competition regulation globally.
As described in Note 14, “Litigation and Contingencies” to the Consolidated Financial Statements in Item 8, we are engaged in a number of litigation and regulatory matters that may have a material adverse impact on our business, financial condition, cash flows or results of operations, if decided adversely to or settled by us.
Litigation and regulatory proceedings are inherently uncertain, and adverse rulings have occurred and may occur, including awards of monetary damages, imposition of fines, issuance of injunctions or cease-and-desist orders directing us to cease engaging in certain business practices, cease
While this material weakness did not result in a material misstatement of our financial statements, this control deficiency was not remediated as of October 31, 2024 and there is a reasonable possibility that it could have resulted in a material misstatement in the Company's annual or interim consolidated financial statements that would not be detected.
We have undertaken and may undertake in the future restructuring plans in order to realign our cost structure and to achieve operating efficiencies that we expect to reduce costs, including the plan announced in November 2022.
Based on that evaluation, we have concluded that our disclosure controls and procedures were not effective as of October 31, 2024 due to a material weakness in internal control over financial reporting.
Moreover, our actions to drive demand to AI products may result in cannibalization of demand for our traditional, non-AI products.
The proliferation of social media may increase the likelihood, speed, and magnitude of negative brand and reputation events. 16 Table of Contents Third-party claims of IP infringement are commonplace in our industry and may limit or disrupt our ability to sell our products and services.
Moreover, since each distribution method has distinct risks and gross margins, we may fail to implement the most advantageous balance in the delivery model for our products and services. 17 Table of Contents Conflicts might arise between our various distribution channels, we may experience the loss or deterioration of an alliance or distribution arrangement or a reduced assortment of our products, we may not be able to limit the potential misuse of pricing programs by our channel partners and we may fail to optimize the use of our pricing programs.