What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-12-06 compared with 2024-09-06 · 113 added, 105 removed, 265 unchanged (45% of the section changed)

28 unchanged sentences

All periods presented apply this methodology consistently.

Consistent with our comparable sales policy, revenue from Best Buy Express locations rebranded as a result of our previously announced collaboration with Bell Canada is excluded from our comparable sales calculation until locations have been operating for at least 14 full months.

We believe comparable sales is a meaningful supplemental metric for investors to evaluate revenue performance resulting from growth in existing stores, websites and call centers versus the portion resulting from opening new stores or closing existing stores.

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Business Strategy Update

In the second quarter of fiscal 2025, we continued to manage our profitability through strong execution, while at the same time preparing for future growth.

We made progress on our fiscal 2025 priorities, grew our paid membership base, continued to implement previously announced restructuring actions and drove improvements in our prioritized customer experiences.

We delivered sales growth in our Domestic tablet and computing categories as our market position, expert sales associates and compelling merchandising allowed us to capitalize on demand driven by our customers’ desire to replace or upgrade their products combined with new innovation.

Our enterprise comparable sales declined 2.3% in the second quarter of fiscal 2025, compared to a comparable sales decline of 6.1% in the first quarter of fiscal 2025.

We believe the second quarter sequential improvement in comparable sales supports our belief that this will be a year of further stabilization in the consumer electronics industry.

To ensure we are in the best position possible to benefit from these industry developments, we are focused on the following four priorities:

In the third quarter of fiscal 2025, we continued to manage our profitability through strong execution despite revenue declines.

We made progress on our fiscal 2025 priorities, grew our paid membership base and drove improvements in our prioritized customer experiences.

We continued to deliver sales growth in our Domestic computing and tablet categories as our market position, expert sales associates and compelling merchandising allowed us to capitalize on demand driven by our customers’ desire to replace or upgrade their products combined with new innovation.

We also continue to focus on the following four priorities:

(1) invigorate and progress targeted customer experiences;

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and (4) explore, pilot and drive incremental revenue streams.

In the second quarter of fiscal 2025, we completed the roll-out of personalized, relevant and motivational content to our App users to drive higher engagement.

Each of our App users’ home screens now look different based on their personal preferences and a number of factors like current location, shopping history, membership status and what we know they care about the most based on their activity.

In our stores, we are making enhancements to every store in the chain in some fashion throughout the second and third quarters, improving both our merchandising and ease of shopping for customers.

This year, we have been focused on improving and refreshing our App and small view experiences – including enhanced personalization, new features like digital wallet, deal alerts and gift finders, along with a more stream-lined checkout process and faster content loading times.

We have grown both customer ratings for our App and growth in active users.

We believe this is an important way to engage our customers on their entire shopping journey, and our data shows that customers who use our App frequent us more often and thus spend more.

In our stores, we are making enhancements to every store in the chain in some fashion this year, improving both our merchandising and ease of shopping for customers.

This includes working with many of our vendors to implement new and enhanced in-store experiences across the store.

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We will continue to explore opportunities that leverage our scale and capabilities to drive incremental profitable revenue streams over time.

As we look to the rest of the year, we are excited for the holiday season in this still uncertain consumer electronics industry.

We are well positioned with compelling deals, inspirational in-store and digital merchandising and competitive fulfillment options.

We are the largest consumer electronics specialty retailer with what we believe to be a unique range of product assortment and expert services to help humanize tech, especially new innovation, for every stage of our customers’ lives.

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Three Months Ended

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Revenue % change

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For additional information regarding costs classified in cost of sales and SG&A, refer to Note 1, Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024.

In the second quarter and first six months of fiscal 2025, we generated $9.3 billion and $18.1 billion in revenue, respectively, and our comparable sales sequentially improved from the first quarter of fiscal 2025 to a decline of 2.3% and a decline of 4.2%, respectively, as we continued to operate in a challenged consumer electronics industry.

Despite comparable sales declines in the second quarter of fiscal 2025 in categories such as appliances, home theater and gaming, we delivered comparable sales growth in our tablet and computing categories, driven by customers’ desire to replace or upgrade their products combined with new product innovation.

Revenue, gross profit rate, SG&A and operating income rate changes in the second quarter and first six months of fiscal 2025 were primarily driven by our Domestic segment.

In the third quarter and first nine months of fiscal 2025, we generated $9.4 billion and $27.6 billion in revenue, respectively, and our comparable sales declined 2.9% and 3.7%, respectively, as we continued to operate in a challenged consumer electronics industry and experienced softer customer demand.

While our comparable sales declined in the third quarter of fiscal 2025 in categories such as appliances, home theater and gaming, we grew comparable sales in our computing, tablet and services categories.

Revenue, gross profit rate, SG&A and operating income rate changes in the third quarter and first nine months of fiscal 2025 were primarily driven by our Domestic segment.

For further discussion of our Domestic and International segments, see Segment Performance Summary , below.

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Stores open by reportable segment were as follows:

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

Outlet Centers

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As we approach the expiration of leases, we evaluate various options for each location, including whether a store should remain open.

We currently expect to close a total of approximately 10 to 15 Domestic Best Buy stores in fiscal 2025.

In fiscal 2025, we currently expect to reduce our Domestic Best Buy store count by approximately 10 to 12 stores.

Earlier this year, we announced our collaboration with Bell Canada to rebrand 167 of its stores to Best Buy Express.

These stores, previously part of The Source, a wholly owned subsidiary of Bell Canada, are leased by Bell Canada.

Under the arrangement, we provide the curated consumer electronics assortment and Geek Squad services, as well as supply chain, marketing and e-commerce.

Bell Canada is the exclusive telecommunications services provider and is also responsible for the store operations .

As of November 2, 2024, nearly all of the 167 stores have been rebranded.

Income Tax Expense

Income tax expense increased in the second quarter of fiscal 2025, primarily due to an increase in pre-tax earnings.

Our effective tax rate (“ETR”) decreased to 25.8% in the second quarter of fiscal 2025 compared to 26.1% in the second quarter of fiscal 2024, primarily due to increased tax benefits from green energy incentives.

Income tax expense increased in the first six months of fiscal 2025, primarily due to an increase in pre-tax earnings.

Our ETR increased to 25.3% in the first six months of fiscal 2025 compared to 24.8% in the first six months of fiscal 2024, primarily due to reduced tax benefits from the resolution of tax matters and stock-based compensation, partially offset by increased tax benefits from green energy incentives.

Income tax expense was relatively unchanged in the third quarter of fiscal 2025.

Our effective tax rate (“ETR”) decreased to 23.9% in the third quarter of fiscal 2025 compared to 24.7% in the third quarter of fiscal 2024, primarily due to increased tax benefits from green energy incentives.

Income tax expense increased in the first nine months of fiscal 2025, primarily due to an increase in pre-tax earnings.

Our ETR remained unchanged at 24.8% in the first nine months of fiscal 2025 compared to the first nine months of fiscal 2024, primarily due to increased tax benefits from green energy incentives, offset by reduced tax benefits from the resolution of tax matters and stock-based compensation.

Our tax provision for interim periods is determined using an estimate of our annual ETR, adjusted for discrete items, if any, that are taken into account in the relevant period.

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Three Months Ended

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Revenue % change

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(1) Comparable online sales are included in the comparable sales calculation.

Domestic revenue decreased in the second quarter of fiscal 2025, primarily driven by comparable sales declines in the appliances, home theater and gaming categories, partially offset by comparable sales growth in the tablets, computing and services categories.

In the first six months of fiscal 2025, Domestic revenue decreased, primarily driven by comparable sales declines in the appliances, home theater and gaming categories, partially offset by comparable sales growth in the services, tablets and computing categories.

Online revenue of $2.7 billion and $5.2 billion in the second quarter and first six months of fiscal 2025 decreased 1.6% and 3.8%, respectively, on a comparable basis.

Domestic revenue decreased in the third quarter and first nine months of fiscal 2025, primarily driven by comparable sales declines in the appliances, home theater and gaming categories, partially offset by comparable sales growth in the computing, tablets and services categories.

Online revenue of $2.7 billion and $8.0 billion in the third quarter and first nine months of fiscal 2025 decreased 1.0% and 2.9%, respectively, on a comparable basis.

Domestic segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows:

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Three Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Computing and Mobile Phones

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 Computing and Mobile Phones:

The 3.9% comparable sales growth was driven primarily by tablets and computing, partially offset by a comparable sales decline in mobile phones.

The 3.8% comparable sales growth was driven primarily by computing and tablets.

 Consumer Electronics:

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The 18.8% comparable sales decline was driven primarily by gaming.

The 8.5% comparable sales growth was driven primarily by delivery and installation services.

Domestic gross profit rate increased in the second quarter and first six months of fiscal 2025, primarily due to improved financial performance from our services category, including our membership offerings, which was partially offset by lower product margin rates and lower profit-sharing revenue from our private label and co-branded credit card arrangement.

Domestic SG&A decreased in the second quarter of fiscal 2025, primarily due to lower employee compensation expense and lower expenses across multiple other areas, including reduced vehicle rental costs and credit card processing fees .

These decreases were partially offset by higher advertising expense.

Domestic SG&A decreased in the first six months of fiscal 2025, primarily due to lower employee compensation expense, which was primarily store payroll, and lower expenses across multiple other areas, including reduced vehicle rental costs .

The 6.0% comparable sales growth was driven primarily by growth in our membership programs, as well as delivery and installation services.

Domestic gross profit rate increased in the third quarter of fiscal 2025, primarily due to improved financial performance from our services category, including our membership offerings, which was partially offset by lower profit-sharing revenue from our private label and co-branded credit card arrangement and lower product margin rates.

Domestic gross profit rate increased in the first nine months of fiscal 2025, primarily due to improved financial performance from our services category, including our membership offerings, which was partially offset by lower product margin rates and lower profit-sharing revenue from our private label and co-branded credit card arrangement.

Domestic SG&A decreased in the third quarter of fiscal 2025, primarily due to lower employee compensation expense and lower intangible asset amortization expense, partially offset by higher advertising expense.

Domestic SG&A decreased in the first nine months of fiscal 2025, primarily due to lower employee compensation expense, which was primarily store payroll, lower intangible amortization expense and reduced vehicle rental costs .

These decreases were partially offset by higher advertising and technology expense.

Domestic restructuring charges in the second quarter and first six months of fiscal 2025 were primarily related to employee termination benefits and subsequent adjustments from higher-than-expected employee retention associated with an enterprise-wide restructuring initiative that commenced in the fourth quarter of fiscal 2024.

Domestic restructuring charges in the third quarter and first nine months of fiscal 2025 were primarily related to employee termination benefits and subsequent adjustments from higher-than-expected employee retention associated with an enterprise-wide restructuring initiative that commenced in the fourth quarter of fiscal 2024.

Refer to Note 2, Restructuring , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q for additional information.

Domestic operating income rate increased in the second quarter and first six months of fiscal 2025, primarily due to favorability in the gross profit rate.

Domestic operating income rate increased in the third quarter and first nine months of fiscal 2025, primarily due to favorability in the gross profit rate, partially offset by decreased leverage from lower sales volume, which resulted in an unfavorable SG&A rate .

International Segment

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Three Months Ended

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Revenue % change

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Operating income as a % of revenue

International revenue decreased in the second quarter of fiscal 2025, primarily driven by the negative impact of foreign exchange rates and comparable sales declines in gaming and computing, partially offset by comparable sales growth in mobile phones.

International revenue decreased in the first six months of fiscal 2025, primarily driven by comparable sales declines in gaming and computing, as well as the negative impact of foreign exchange rates.

These drivers were partially offset by comparable sales growth in mobile phones.

International revenue decreased in the third quarter of fiscal 2025, primarily driven by comparable sales declines in gaming, home theater and appliances, as well as the negative impact of foreign exchange rates.

These decreases were partially offset by increased revenue from Best Buy Express locations.

International revenue decreased in the first nine months of fiscal 2025, primarily driven by comparable sales declines in gaming, computing and home theater, as well as the negative impact of foreign exchange rates.

These decreases were partially offset by increased revenue from Best Buy Express locations and comparable sales growth in mobile phones.

International segment revenue mix percentages and comparable sales percentage changes by revenue category were as follows:

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Three Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Computing and Mobile Phones

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 Computing and Mobile Phones:

The 1.7% comparable sales growth was driven primarily by mobile phones, partially offset by a comparable sales decline in computing.

The 0.1% comparable sales decline was driven primarily by computing and tablets, partially offset by comparable sales growth in mobile phones.

 Consumer Electronics:

The 2.1% comparable sales decline was driven primarily by home automation.

The 6.1% comparable sales decline was driven primarily by home theater and home automation.

 Appliances:

The 3.9% comparable sales decline was driven primarily by large appliances.

The 8.1% comparable sales decline was driven by both large and small appliances.

 Entertainment:

The 20.8% comparable sales decline was driven primarily by gaming, partially offset by comparable sales growth in virtual reality.

The 18.7% comparable sales decline was driven primarily by gaming.

The 4.0% comparable sales growth was driven primarily by growth in our membership programs.

International gross profit rate decreased in the second quarter and first six months of fiscal 2025, primarily driven by lower product margin rates and higher supply chain costs, which were partially offset by growth in the higher margin services category.

International SG&A decreased in the second quarter of fiscal 2025, primarily driven by the favorable impact of foreign exchange rates and lower advertising expense, which was partially offset by expenses associated with new Best Buy Express locations as a result of our previously announced collaboration with Bell Canada.

International SG&A decreased in the first six months of fiscal 2025, primarily driven by the favorable impact of foreign exchange rates, lower advertising expense and lower employee compensation expense, which was primarily incentive compensation.

These drivers were partially offset by expenses associated with new Best Buy Express locations and higher technology expense.

International operating income rate decreased in the second quarter of fiscal 2025, primarily due to an unfavorable gross profit rate.

International operating income rate decreased in the first six months of fiscal 2025, primarily due to an unfavorable gross profit rate and decreased leverage from lower sales volume on our fixed expenses, which resulted in an unfavorable SG&A rate.

International gross profit rate increased in the third quarter of fiscal 2025, primarily driven by growth in the higher margin services category.

International gross profit rate decreased in the first nine months of fiscal 2025, primarily driven by lower product margin rates and higher supply chain costs, which were partially offset by growth in the higher margin services category.

International SG&A increased in the third quarter of fiscal 2025, primarily driven by expenses associated with new Best Buy Express locations.

International SG&A decreased in the first nine months of fiscal 2025, primarily driven by lower advertising expense and lower employee compensation expense, which was primarily incentive compensation.

These decreases were partially offset by expenses associated with new Best Buy Express locations .

International operating income rate decreased in the third quarter of fiscal 2025, primarily due to an unfavorable SG&A rate, partially offset by a favorable gross profit rate.

International operating income rate decreased in the first nine months of fiscal 2025, primarily due to decreased leverage from lower sales volume, which resulted in an unfavorable SG&A rate, and an unfavorable gross profit rate.

Consolidated Non-GAAP Financial Measures

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Three Months Ended

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Operating income

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Restructuring charges (2)

Loss on investments

Non-GAAP effective tax rate

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(4) The non-GAAP adjustments primarily relate to the U.S.

As such, the forecasted annual income tax charge on the U.S.

As such, the forecasted annual income tax charge on a portion of the U.S.

non-GAAP adjustments is calculated using the statutory tax rate of 24.5%.

There is no forecasted annual income tax charge for Mexico non-GAAP items, as there is no forecasted annual tax expense on the income in the calculation of GAAP income tax expense.

Non-GAAP operating income rate increased in the second quarter and first six months of fiscal 2025, primarily due to a favorable gross profit rate in our Domestic segment.

Non-GAAP effective tax rate decreased in the second quarter of fiscal 2025, primarily due to increased tax benefits from green energy incentives.

Non-GAAP effective tax rate increased in the first six months of fiscal 2025, primarily due to reduced tax benefits from the resolution of tax matters and stock-based compensation, partially offset by increased tax benefits from green energy incentives.

Non-GAAP diluted EPS increased in the second quarter and first six months of fiscal 2025, primarily due to the increase in non-GAAP operating income.

There is no forecasted annual income tax for Mexico non-GAAP items and a portion of U.S.

non-GAAP items, as there is no forecasted annual tax benefit/expense on the income/expenses in the calculation of GAAP income tax expense.

Non-GAAP operating income rate decreased in the third quarter of fiscal 2025, primarily due to an unfavorable SG&A rate, partially offset by a favorable gross profit rate.

Non-GAAP operating income rate increased in the first nine months of fiscal 2025, primarily due to a favorable gross profit rate in our Domestic segment , partially offset by an unfavorable SG&A rate .

Non-GAAP effective tax rate decreased in the third quarter of fiscal 2025, primarily due to increased tax benefits from green energy incentives.

Non-GAAP effective tax rate decreased in the first nine months of fiscal 2025, primarily due to increased tax benefits from green energy incentives, partially offset by reduced tax benefits from the resolution of tax matters and stock-based compensation.

Non-GAAP diluted EPS decreased in the third quarter of fiscal 2025, primarily due to the decrease in non-GAAP earnings.

Non-GAAP diluted EPS increased in the first nine months of fiscal 2025, primarily due to the increase in non-GAAP earnings.

Liquidity and Capital Resources

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Cash and cash equivalents were as follows ($ in millions):

August 3, 2024

November 2, 2024

February 3, 2024

July 29, 2023

October 28, 2023

Cash and cash equivalents

The decrease in cash and cash equivalents from February 3, 2024, was primarily due to dividend payments and capital expenditures, partially offset by positive cash flows from operations, primarily driven by earnings.

The increase in cash and cash equivalents from July 29, 2023, was primarily due to positive cash flows from operations, primarily driven by earnings, partially offset by dividend payments, capital expenditures and share repurchases .

The decrease in cash and cash equivalents from February 3, 2024, was primarily due to dividend payments, capital expenditures and the timing and volume of inventory purchases and payments, partially offset by positive cash flows from operations, primarily driven by earnings.

The increase in cash and cash equivalents from October 28, 2023, was primarily due to positive cash flows from operations, primarily driven by earnings, partially offset by dividend payments, capital expenditures and share repurchases .

Cash flows were as follows ($ in millions):

Six Months Ended

August 3, 2024

July 29, 2023

Nine Months Ended

November 2, 2024

October 28, 2023

Total cash provided by (used in):

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Operating Activities

The increase in cash provided by operating activities in the first six months of fiscal 2025 was primarily driven by the timing and volume of inventory purchases and payments, partially offset by the timing of vendor funding receivables.

The increase in cash provided by operating activities in the first nine months of fiscal 2025 was primarily driven by the timing and volume of inventory purchases and payments, partially offset by the timing of vendor funding receivables.

Investing Activities

Cash used in investing activities in the first six months of fiscal 2025 decreased, primarily driven by lower capital spending.

Cash used in investing activities in the first nine months of fiscal 2025 decreased, primarily driven by lower capital spending.

We currently expect capital expenditures to approximate $750 million in fiscal 2025 compared to $795 million in fiscal 2024.

Financing Activities

Cash used in financing activities in the first six months of fiscal 2025 remained relatively consistent with the comparable prior-year period.

The increase in cash used in financing activities in the first nine months of fiscal 2025 was primarily driven by higher share repurchases.

Sources of Liquidity

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We have a $1.25 billion five-year senior unsecured revolving credit facility agreement (the “Five-Year Facility Agreement”) with a syndicate of banks that expires in April 2028.

There were no borrowings outstanding under the Five-Year Facility Agreement as of August 3, 2024, February 3, 2024, or July 29, 2023 .

There were no borrowings outstanding under the Five-Year Facility Agreement as of November 2, 2024, February 3, 2024, or October 28, 2023 .

Restricted Cash

Our liquidity is also affected by restricted cash balances that are primarily restricted to cover product protection plans provided under our membership offerings and self-insurance liabilities.

Restricted cash, which is included in Other current assets on our Condensed Consolidated Balance Sheets, was $311 million, $346 million and $398 million at August 3, 2024, February 3, 2024, and July 29, 2023, respectively.

The decrease in restricted cash from February 3, 2024, and July 29, 2023, was primarily due to releases of product protection reserves based on claims and purchasing behaviors of customers participating in our membership offerings.

Restricted cash, which is included in Other current assets on our Condensed Consolidated Balance Sheets, was $295 million, $346 million and $423 million at November 2, 2024, February 3, 2024, and October 28, 2023, respectively.

The decrease in restricted cash from February 3, 2024, and October 28, 2023, was primarily due to releases of product protection reserves based on claims and purchasing behaviors of customers participating in our membership offerings.

Debt and Capital

As of August 3, 2024, we had $500 million of principal amount of notes due October 1, 2028, and $650 million of principal amount of notes due October 1, 2030.

As of November 2, 2024, we had $500 million of principal amount of notes due October 1, 2028, and $650 million of principal amount of notes due October 1, 2030.

Refer to Note 6, Debt , of the Notes to Condensed Consolidated Financial Statements, included in this Quarterly Report on Form 10-Q, and Note 8, Debt , of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for additional information about our outstanding debt.

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Three Months Ended

Six Months Ended

August 3, 2024

July 29, 2023

August 3, 2024

July 29, 2023

Nine Months Ended

November 2, 2024

October 28, 2023

November 2, 2024

October 28, 2023

Total cost of shares repurchased

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Cash dividends declared and paid

The total cost of shares repurchased increased in the second quarter of fiscal 2025, primarily due to an increase in the volume of repurchases.

The total cost of shares repurchased remained consistent in the first six months of fiscal 2025, as the decrease in the volume of repurchases was offset by the increase in the average price per share.

Cash dividends declared and paid increased during the second quarter and first six months of fiscal 2025, due to the increase in the regular quarterly cash dividend per share, partially offset by fewer shares outstanding.

Between the end of the second quarter of fiscal 2025 on August 3, 2024, and September 4, 2024, we repurchased an incremental 0.4 million shares of our common stock at a cost of $39 million.

We currently expect total share repurchases of approximately $500 million in fiscal 2025.

The total cost of shares repurchased increased in the third quarter and first nine months of fiscal 2025, primarily due to an increase in the average price per share, partially offset by a decrease in the volume of repurchases.

We currently expect total share repurchases of up to $500 million in fiscal 2025.

Cash dividends declared and paid increased during the third quarter and first nine months of fiscal 2025, due to the increase in the regular quarterly cash dividend per share, partially offset by fewer shares outstanding.

Off-Balance-Sheet Arrangements and Contractual Obligations

Our liquidity is not dependent on the use of off-balance-sheet financing arrangements other than in connection with our $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of August 3, 2024, which, if drawn upon, would be included in either short-term or long-term debt on our Condensed Consolidated Balance Sheets.

Our liquidity is not dependent on the use of off-balance-sheet financing arrangements other than in connection with our $1.25 billion in undrawn capacity on our Five-Year Facility Agreement as of November 2, 2024, which, if drawn upon, would be included in either short-term or long-term debt on our Condensed Consolidated Balance Sheets.

There has been no material change in our contractual obligations other than in the ordinary course of business since the end of fiscal 2024.

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Among the factors that could cause actual results and outcomes to differ materially from those contained in such forward-looking statements are the following:

macroeconomic pressures in the markets in which we operate (including but not limited to recession, inflation rates, fluctuations in foreign currency exchange rates, limitations on a government’s ability to borrow and/or spend capital, fluctuations in housing prices, energy markets, jobless rates and effects related to the conflicts in Eastern Europe and the Middle East or other geopolitical events);

macroeconomic pressures in the markets in which we operate (including but not limited to recession, inflation rates, fluctuations in foreign currency exchange rates, limitations on a government’s ability to borrow and/or spend capital, fluctuations in housing prices, energy markets, jobless rates, the imposition of tariffs, trade wars and effects related to the conflicts in Eastern Europe and the Middle East or other geopolitical events);

catastrophic events, health crises and pandemics;

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evolving corporate governance and public disclosure regulations and expectations (including, but not limited to, cybersecurity and environmental, social and governance matters);

risks arising from our international activities (including those related to the conflicts in Eastern Europe and the Middle East or fluctuations in foreign currency exchange rates) and those of our vendors;

risks arising from our international activities (including those related to the conflicts in Eastern Europe and the Middle East, fluctuations in foreign currency exchange rates, the imposition of tariffs and trade wars) and those of our vendors;

failure to effectively manage our costs;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis