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Item 1A. Risk Factors

2026-02-17 compared with 2025-02-13 · 80 added, 77 removed, 175 unchanged (47% of the section changed)

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Business and Operational Risks

Volatility in global trade policies and practices could have direct and indirect impacts on our business.

In February 2025, the United States government issued orders increasing tariffs on imports from certain countries, including Canada, China and Mexico on certain products, including steel and aluminum, and has discussed increasing tariffs globally, which is likely to lead to reciprocal tariffs on U.S.

exports to those countries.

Implementation of orders related to Canada and Mexico was initially deferred until March 2025.

Because not all goods can be sourced in all countries, global companies like Belden will experience increased costs in their supply chains that may lead to reduced margins or increased prices.

These increased costs and the uncertainty during transition periods could lead to changes in buying behavior, such as decreased demand.

These impacts could have a negative effect on our financial results, including our revenue and profitability.

Cyber security incidents have and could in the future interfere with our business and operations.

Computer hacking, malware, phishing, and spamming attacks against online networking platforms have become more prevalent.

Computer hacking, malware, phishing, and spamming attacks against online networking platforms have become more prevalent, more recently enhanced by the use of artificial intelligence (“AI”) tools.

Though it is difficult to determine what, if any, harm may directly result from any specific attack or interruption, such events could also be expensive to remedy, harm our reputation or brands, and/or lead users to lose trust and confidence in our business.

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We may be subject to potentially costly remedial actions, fines, penalties, lawsuits, and reputational damage in the event of a future incident.

Furthermore, we rely on our information systems and those of third parties that maintain proprietary company information about our products and intellectual property, as well as for processing customer orders, manufacturing and shipping products, billing our customers, tracking inventory, supporting accounting functions and financial statement preparation, paying our employees, and otherwise running our business.

In addition, we may need to enhance our information systems to provide additional capabilities and functionality.

The implementation of new information systems and enhancements is frequently disruptive to the underlying business of an enterprise.

Any disruptions affecting our ability to accurately report our financial performance on a timely basis could adversely affect our business in a number of respects.

Volatility in global trade policies and practices could have direct and indirect impacts on our business.

Throughout 2025, the United States government issued orders increasing tariffs on imports from nearly every country in the world on certain products.

In some cases, this has led to negotiations of new trade deals and in others, it has resulted in reciprocal tariffs on U.S.

Because not all goods can be sourced in all countries, global companies like Belden will experience increased costs in their supply chains that may lead to reduced margins or increased prices.

These increased costs and the uncertainty during transition periods could lead to changes in buying behavior, such as decreased demand.

These impacts could have a negative effect on our financial results, including our revenue, gross margins, and profitability.

Supply chain issues, including scarcity of raw materials or other components necessary to produce the products we manufacture, could increase costs or cause a delay in our ability to fulfill orders, and could adversely affect our future results of operations and our overall financial performance.

The Company relies on an extended supply chain and the availability of certain raw materials, including but not limited to copper, to produce a significant amount of our products.

A reduction or interruption in supply, an inability to procure quality raw materials in a cost-effective manner and constrain volatile materials costs, a failure to monitor contract compliance to ensure and sustain sourcing savings, a failure to procure adequate inventory or raw materials from our suppliers, or regulatory changes may lead to delays in manufacturing and increases in costs.

Many components, including those that are available from multiple sources, are at times subject to industry-wide shortages that could materially adversely affect the Company’s financial condition and operating results.

While the Company has entered into agreements for the supply of many components, there can be no assurance that the Company will be able to extend or renew these agreements on similar terms, or at all.

Component suppliers may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation within a particular industry, further limiting the Company’s ability to obtain sufficient quantities of components on commercially reasonable terms.

Restrictions on the free movement of goods, like tariffs or sanctions regimes, or health crises, such as a pandemic, could impact the regular availability or cost of important components.

If the Company’s supply of components for a new or existing product were delayed or constrained, or if an outsourcing partner delayed shipments of completed products to the Company, the Company’s financial condition and operating results could be materially adversely affected.

The Company’s business and financial performance could also be materially adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source.

Similarly, if the Company’s customers experience production challenges due to the inability to obtain certain components, this may negatively impact the customers’ ordering patterns from the Company.

Our results of operations are subject to foreign and domestic political, social, economic, and other uncertainties and are affected by changes in currency exchange rates.

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Our foreign operations are subject to economic, social, and political risks inherent in maintaining operations abroad such as economic and political destabilization, land use risks, international conflicts, pandemics and other health-related crises, restrictive actions by foreign governments, and adverse foreign tax laws.

In addition to economic and political risk, a risk associated with our European manufacturing operations is the higher relative expense and length of time required to adjust manufacturing employment capacity.

We also face political risks in the U.S., including tax or regulatory risks or potential adverse impacts from legislative impasses over, or significant legislative, regulatory or executive changes in fiscal or monetary policy and other foreign and domestic government policies, including, but not limited to, trade policies and import/export policies.

In addition to economic and political risk, a risk

associated with our European manufacturing operations is the higher relative expense and length of time required to adjust manufacturing employment capacity.

We also face political risks in the U.S., including tax or regulatory risks or potential adverse impacts from legislative impasses, or significant legislative, regulatory or executive changes in fiscal or monetary policy and other foreign and domestic government policies, including, but not limited to, trade policies and import/export policies.

Approximately 42% of our sales are outside the U.S.

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operations are translated at a lower exchange rate and thus into lower reported revenues and earnings.

Our future success depends in part on our ability to develop and introduce new products and respond to changes in customer preferences.

Our markets are characterized by the introduction of products with increasing technological capabilities, most notable currently is an expectation that AI capabilities will be deployed.

Our success depends in part on our ability to anticipate and offer products that appeal to the changing needs and preferences of our customers in the various markets we serve.

Developing new products and adapting existing products to meet evolving customer expectations requires high levels of innovation, and the development process may be lengthy and costly.

If we are not able to timely anticipate, identify, develop and market products that respond to rapidly changing customer preferences, demand for our products could decline.

The relative costs and merits of our solutions could change in the future as various competing technologies address the market opportunities.

We believe that our future success will depend in part upon our ability to enhance existing products and to develop and manufacture new products that meet or anticipate technological changes, which will require continued investment in engineering, research and development, capital equipment, marketing, customer service, and technical support.

We have long been successful in introducing successive generations of more capable products, but if we were to fail to keep pace with technology or with the products of competitors, we might lose market share and harm our reputation and position as a technology leader in our markets.

See the discussion above in Part I, Item 1, under Research and Development .

Our ability to remain competitive will be determined, in part, by our ability to successfully implement AI into our product offerings and back office processes.

We are increasingly incorporating AI and machine learning technologies into our products, services, and internal operations.

While we believe AI offers significant opportunities, its development and deployment involve inherent risks that could materially impact our business.

These risks include, but are not limited to (1) operational and performance risks related to the quality of data and sophistication of the algorithms;

(2) the evolving legal and regulatory landscape;

(3) ethical and reputational risk associated with biased or inaccurate results;

(4) cybersecurity and data privacy risk;

(5) intellectual property risk;

(6) risks related to attracting and retaining AI talent;

(7) dependence on third-party AI providers;

and (8) speed and quality of adoption.

Any of these risks could materialize and have a material adverse effect on our business, financial condition, and results of operations.

Our reliance on legacy information technology systems and the challenges associated with their maintenance and upgrade could adversely affect our business, financial condition, and results of operations.

We rely on a variety of information technology (IT) systems and infrastructure to support our operations, including critical business processes, data management, and customer-facing applications.

Some of these systems are legacy technologies that have been in place for a significant period.

While we strive to maintain and update our IT infrastructure, our reliance on these legacy systems presents several risks, including performance and reliability issues, security vulnerabilities, integration challenges, increased maintenance costs, and compliance risks.

We may undertake significant IT infrastructure upgrade and modernization projects to address these challenges.

Such projects, however, involve substantial risks, including significant capital expenditure and resource allocation, disruption to operations, implementation and integration challenges, data loss or corruption, and failure to achieve anticipated benefits.

Any of these risks could materially and adversely affect our business, financial condition, and results of operations.

The global markets in which we operate are highly competitive.

We face competition from other manufacturers for each of our global business platforms and in each of our geographic regions.

These companies compete on technical features, quality, availability, price, customer support, and distribution coverage.

Some multinational competitors have greater engineering, financial, manufacturing, and marketing resources than we have.

Actions that may be taken by competitors, including pricing, business alliances, new product introductions, intellectual property advantages, market penetration, and other actions, could have a negative effect on our revenues and profitability.

Moreover, some competitors that are highly leveraged both financially and operationally could become more aggressive in their pricing of products.

A challenging global economic environment or a downturn in the markets we serve could adversely affect our operating results and stock price in a material manner.

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dollar can result in relative price increases for our products for customers outside of the U.S., which can have a negative impact on our revenues and results of operations.

Furthermore, customers’ ability to invest in capital expenditures, such as our products, can depend upon proceeds from commodities, such as oil and gas markets.

Furthermore, customers’ ability to invest in capital expenditures, such as our products, can be dependent on their realized profits from their sales of commodity products, such as occurs in the oil and gas markets.

A decline in energy prices, therefore, can have a negative impact on our revenues and results of operations.

The global markets in which we operate are highly competitive.

We face competition from other manufacturers for each of our global business platforms and in each of our geographic regions.

These companies compete on technical features, quality, availability, price, customer support, and distribution coverage.

Some multinational competitors have greater engineering, financial, manufacturing, and marketing resources than we have.

Moreover, some competitors that are highly leveraged both financially and operationally could become more aggressive in their pricing of products.

The Company relies on an extended supply chain and the availability of certain raw materials, including but not limited to copper, to produce a significant amount of our products.

A reduction or interruption in supply, an inability to procure quality raw materials in a cost effective manner and constrain volatile materials costs, a failure to monitor contract compliance to ensure and sustain sourcing savings, a failure to procure adequate inventory or raw materials from our suppliers, or regulatory changes may lead to delays in manufacturing and increases in costs.

Restrictions on the free movement of goods, like tariffs or sanctions regimes, or health crises, such as a pandemic, could impact the regular availability or cost of important components.

Our future success depends in part on our ability to develop and introduce new products and respond to changes in customer preferences.

Our markets are characterized by the introduction of products with increasing technological capabilities.

Our success depends in part on our ability to anticipate and offer products that appeal to the changing needs and preferences of our customers in the various markets we serve.

Developing new products and adapting existing products to meet evolving customer expectations requires high levels of innovation, and the development process may be lengthy and costly.

If we are not able to timely anticipate, identify, develop and market products that respond to rapidly changing customer preferences, demand for our products could decline.

The relative costs and merits of our solutions could change in the future as various competing technologies address the market opportunities.

See the discussion above in Part I, Item 1, under Research and Development .

We may have difficulty integrating the operations of acquired businesses, which could negatively affect our results of operations, profitability, and achievement of our strategic plan.

As part of our strategic plan initiatives, we periodically execute acquisitions and divestitures.

The extent to which appropriate acquisitions are made will affect our overall growth, operating results, financial condition, and cash flows.

Our ability to acquire businesses successfully will decline if we are unable to identify appropriate acquisition targets, competition among potential buyers increases, the cost of acquiring suitable businesses becomes too expensive, or we lack sufficient sources of capital.

As a result, we may be unable to make acquisitions or be forced to pay more or agree to less advantageous acquisition terms for companies we would like to acquire.

We may also have difficulty integrating acquired businesses or future acquisitions may be unable to meet our performance expectations.

Some of the integration challenges we might face include differences in corporate culture and management styles, additional or conflicting governmental regulations, compliance with the Sarbanes-Oxley Act of 2002, financial reporting that is not in compliance with U.S.

generally accepted accounting principles, disparate company policies and practices, customer relationship issues, and retention of key personnel.

Furthermore, we may be unable to integrate operations successfully or cost-effectively, which could have an adverse impact on our results of operations or our profitability.

We may be unable to achieve our goals related to revenue growth.

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We may not be able to acquire businesses that fit our strategic plan on acceptable business terms, and we may not achieve our other strategic priorities.

The presence of substitute products in the marketplace may reduce demand for our products and negatively impact our business.

Fiber optic and wireless systems are increasingly substitutable for copper-based cable systems.

Customers may shift demand to systems with greater capabilities than copper-based cable systems, leading to a reduction in demand for copper-based cable.

We may not be able to offset the effects of a reduction in demand for our copper-based cable systems.

Similarly, in our non-cable businesses, customers could rapidly shift the methods by which they capture and transmit signals in ways that could lead to decreased demand for our current or future products.

These factors, either together or in isolation, may negatively impact revenue and profitability.

We may experience significant variability in our quarterly and annual effective tax rate which would affect our reported net income.

We have a complex tax profile due to the global nature of our operations, which encompass multiple taxing jurisdictions.

Variability in the mix and profitability of domestic and international activities, identification and resolution of various tax uncertainties, changes in tax laws and rates, and the extent to which we are able to realize net operating loss and other carryforwards included in deferred tax assets and avoid potential adverse outcomes included in deferred tax liabilities, among other matters, may significantly affect our effective income tax rate in the future.

Our effective income tax rate is the result of the income tax rates in the various countries in which we do business.

Variability in the mix and profitability of domestic and international activities, identification and resolution of various tax uncertainties, changes in tax laws and rates, such as the One Big Beautiful Bill Act, and the extent to which we are able to realize net operating loss and other carryforwards included in deferred tax assets and avoid potential adverse outcomes included in deferred tax liabilities, among other matters, may significantly affect our effective income tax rate in the future.

Our effective income tax rate is the result of the income tax laws in the various countries in which we do business.

Our mix of income and losses in these jurisdictions affects our effective tax rate.

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A significant increase in our effective income tax rate could have a material adverse impact on our earnings.

The increased prevalence of cloud computing and other disruptive business models may negatively impact certain aspects of our business.

The nature in which many of our products are purchased or used is evolving with the increasing prevalence of cloud computing and other methods of off-premises computing and data storage.

This may negatively impact one or more of our businesses in a number of ways, including:

• Consolidation of procurement power leading to the commoditization of IT products;

• Reduction in the demand for infrastructure products previously used to support on-site data centers;

• Lowering barriers to entry for certain markets, leading to new market entrants and enhanced competition;

• Preferences for software as a service billing and pricing models may reduce demand for non-cloud “packaged” software.

We may have difficulty integrating the operations of acquired businesses, which could negatively affect our results of operations, profitability, and achievement of our strategic plan.

As part of our strategic plan initiatives, we periodically execute acquisitions and divestitures.

The extent to which appropriate acquisitions are made will affect our overall growth, operating results, financial condition, and cash flows.

As a result, we may be unable to make acquisitions or be forced to pay more or agree to less advantageous acquisition terms for companies we would like to acquire.

We may also have difficulty integrating acquired businesses or future acquisitions may be unable to meet our performance expectations.

generally accepted accounting principles, disparate company policies and practices, customer relationship issues, and retention of key personnel.

Furthermore, we may be unable to integrate operations successfully or cost-effectively, which could have an adverse impact on our results of operations or our profitability.

If we are unable to retain key employees, our business operations could be adversely affected.

The loss of key employees could have an adverse effect on us.

If we are unable to attract and retain key employees, our business operations could be adversely affected.

The inability to attract employees with AI and digital skills, engineers with relevant skills, or the loss of key current employees could have an adverse effect on us.

We may not be able to find qualified replacements for these individuals and the integration of potential replacements may be disruptive to our business.

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Distributors purchase the products of our competitors along with our products.

Our largest distributor accounted for app roximately 14% of our revenue in 2024 and our top eight distributors accounted for a total of 33% of o ur reven ue in 2024.

Our largest distributor accounted for approximately 14% of our revenues in 2025 and our top eight distributors accounted for a total of 35% of o ur reven ues in 2025.

If we were to lose one of these key distributors, our revenue and profits would likely decline, at least temporarily.

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In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, and joint venture partners, and cause our stock price to experience periods of volatility.

Perceived failure of our signal transmission solutions to provide expected results may result in negative publicity and harm our business and operating results.

Our customers use our signal transmission solutions in a wide variety of IT systems and application environments in order to help reduce security vulnerabilities and demonstrate compliance.

Despite our efforts to make clear in our marketing materials and customer agreements the capabilities and limitations of these products, some customers may incorrectly view the deployment of such products in their IT infrastructure as a guarantee that there will be no security incident or policy non-compliance event.

As a result, the occurrence of a high profile security incident, or a failure by one of our customers to pass a regulatory compliance IT audit, could result in public and customer perception that our solutions are not effective and harm our business and operating results, even if the occurrence is unrelated to the use of such products or if the failure is the result of actions or inactions on the part of the customer.

Perceived failure of our data solutions to provide expected results may result in negative publicity and harm our business and operating results.

Our customers use our data solutions in a wide variety of IT and OT systems and application environments in order to help reduce security vulnerabilities and demonstrate compliance.

Despite our efforts to make clear in our marketing materials and customer agreements the capabilities and limitations of these products, some customers may incorrectly view the deployment of such products in their IT or OT infrastructure as a guarantee that there will be no security incident or policy non-compliance event.

As a result, the occurrence of a high profile security incident, or a failure by one of our customers to pass a regulatory compliance IT or OT audit, could result in public and customer perception that our solutions are not effective and harm our business and operating results, even if the occurrence is unrelated to the use of such products or if the failure is the result of actions or inactions on the part of the customer.

General Industry and Economic Risks

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Generally, we have recovered much of the higher cost of raw materials through higher pricing of our finished products.

The majority of our products are sold through distribution, and we manage the pricing of these products through published price lists which we update from time to time, with new prices typically taking effect a few weeks after they are announced.

after they are announced.

Some OEM contracts have provisions for passing through raw material cost changes, generally with a lag of a few weeks to three months.

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Disruption in those structures can create significant market uncertainty.

While the impact of the U.S.

and Chinese tariff actions prior to 2025 have not been material to us, unanticipated complications in the free movement of goods in North America or Europe, an escalation of tariff activity anywhere in the world, or changes to existing free trade agreements, especially the United States-Mexico-Canada Agreement (USMCA), could materially impact our financial results.

Unanticipated complications in the free movement of goods in North America or Europe, an escalation of tariff activity anywhere in the world, or changes to existing free trade agreements, especially the United States-Mexico-Canada Agreement (USMCA), could materially impact our financial results.

In addition to the potential direct impacts of free trade restrictions, longer term macroeconomic consequences could result, including slower growth, inflation, higher interest rates and unfavorable impacts to currency exchange rates.

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In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.

Increasing expectations with respect to Environmental, Social and Governance (ESG) matters by our various stakeholders and ESG regulation could adversely affect our business and operating results.

Increasing expectations with respect to Sustainability matters by our various stakeholders and Sustainability regulation could adversely affect our business and operating results.

As a response to growing customer, investor, employee, governmental, and other stakeholder interest in our sustainability practices, we have increased reporting of our sustainability programs and performance and have established and announced our aspirational goals or targets, including those regarding greenhouse gas emissions and other factors.

Our ability to achieve such goals and aspirations is subject to numerous risks and uncertainties, many of which rely on the collective efforts of others or may be outside of our control.

Our ability to achieve such

goals and aspirations is subject to numerous risks and uncertainties, many of which rely on the collective efforts of others or may be outside of our control.

Such risks include, among others, the availability and adoption of new or additional technologies that reduce carbon or eliminate energy sources on a commercially reasonable basis, competing and evolving economic, policy and regulatory factors, the availability of qualified candidates in our labor markets and our ability to recruit and retain key talent, and customer engagement in our goals.

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As a result, we cannot offer assurances that the results reflected or implied by any such statements will be realized or achieved.

Moreover, standards and expectations for ESG matters continue to evolve and may be subject to varying interpretations, which may result in significant revisions to our goals or progress.

Moreover, standards and expectations for Sustainability matters continue to evolve and may be subject to varying interpretations, which may result in significant revisions to our goals or progress.

A failure or perceived failure to meet our aspirational goals or targets within the timelines we announce, or at all, or a failure or perceived failure to meet evolving stakeholders expectations and standards, could damage our reputation, adversely affect employee retention or engagement or support from our various stakeholders and could subject us to government enforcement actions or penalties and private litigation.

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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-K

Item 1A. Risk Factors