What changed in this filing

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Item 1A. Risk Factors

2026-05-28 compared with 2025-12-03 · 132 added, 81 removed, 740 unchanged (22% of the section changed)

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You should consider all of the risk factors described in our public filings when evaluating our business.

• risks related to our ability to design, develop and introduce new and enhanced products, in particular in the Artificial Intelligence (“AI”), Cloud and 5G markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology;

• risks related to our ability to design, develop and introduce new and enhanced products, in particular in the Data Center and Communications markets, in a timely and effective manner, as well as our ability to anticipate and adapt to changes in technology;

• risks related to our dependence on a few customers for a significant portion of our revenue, particularly as our major customers comprise an increasing percentage of our revenue, as well as risks related to a significant portion of our sales being concentrated in the data center end market, and risks related to the gain or loss of design wins with our key customers;

• risks related to changes in general macroeconomic conditions such as economic slowdowns, inflation, stagflation, high or rising interest rates, financial institution instability, and recessions;

• risks related to tariffs and trade restrictions with China, Russia and other foreign nations including risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions, vertically integrate which may reduce the need for our products, or acquire fully developed solutions from third parties;

• risks related to changes in general macroeconomic conditions such as economic slowdowns, inflation, stagflation, high or rising interest rates, financial institution instability, and recessions, as well as risks related to global economic conditions such as the current armed conflict in Israel and the Middle East;

• risks related to the potential impact of AI on our business model and products;

• risks related to our ability to scale our business;

• risks related to our ability to successfully integrate and to realize anticipated benefits or synergies, on a timely basis or at all, in connection with our past, current, or any future acquisitions, divestitures, significant investments or strategic transactions;

• risks related to tariffs and trade restrictions with China and other foreign nations including risks related to the ability of our customers, particularly in jurisdictions such as China that may be subject to trade restrictions (including the need to obtain export licenses) to develop their own solutions, vertically integrate which may reduce the need for our products, or acquire fully developed solutions from third parties;

• risks related to the extension of lead time due to supply chain disruptions, component shortages that impact the costs and production of our products and kitting process, and constrained availability from other electronic suppliers impacting our customers’ ability to ship their products, which in turn may adversely impact our sales to those customers;

• risks related to our ability to execute on changes in strategy and realize the expected benefits from restructuring activities;

• risks related to cancellations, rescheduling or deferrals of significant customer orders or shipments, as well as the ability of our customers to manage inventory;

• risks related to the highly competitive nature of the end markets we serve, particularly within the semiconductor and infrastructure industries;

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• risks related to any current and future litigation, regulatory investigations, or contractual disputes with customers that could result in substantial costs and a diversion of management’s attention and resources that are needed to successfully maintain and grow our business;

• risks related to our ability to scale our business;

• cybersecurity risks;

• risks related to our debt obligations;

• risks related to the specific conditions in the end markets we address, including seasonality and volatility in the technology sector and semiconductor industry;

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• risks related to failures to protect our intellectual property, particularly outside the United States;

• risks related to the issuance of preferred stock;

• risks related to the potential impact of significant events or natural disasters or the effects of climate change (such as drought, flooding, wildfires, increased storm severity, sea level rise, and power outages), particularly in certain regions in which we operate or own buildings, such as Santa Clara, California, and where our third-party manufacturing partners or suppliers operate, such as Taiwan and elsewhere in the Pacific Rim;

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CHANGES IN PRODUCT DEMAND CAN ADVERSELY AFFECT OUR FINANCIAL RESULTS

Unfavorable or uncertain conditions in the AI, Cloud and 5G markets may cause fluctuations in our rate of revenue growth or financial results.

World-wide markets for our AI, Cloud and 5G products may not evolve in the manner or in the time periods we anticipate.

If domestic and global economic conditions worsen, overall spending on our AI, Cloud and 5G products may be reduced, which would adversely impact demand for our products in these markets.

Unfavorable or uncertain conditions in the Data Center and Communications markets may cause fluctuations in our rate of revenue growth or financial results.

World-wide markets for our data center and communications related products may not evolve in the manner or in the time periods we anticipate.

If domestic and global economic conditions worsen, overall spending on our data center and communications products may be reduced, which would adversely impact demand for our products in these markets.

In addition, unfavorable developments with evolving laws and regulations worldwide related to these products and suppliers may limit global adoption, impede our strategy, and negatively impact our long-term expectations in this area.

Even if the AI, Cloud and 5G markets evolve in the manner or in the time periods we anticipate, if we do not have timely, competitively priced, market-accepted products available to meet our customers’ need in these markets, we may miss a significant opportunity and our business, financial condition, results of operations and cash flows could be materially and adversely affected.

In addition, as a result of the fact that the markets for AI, Cloud and 5G are still evolving, demand for these products may be unpredictable and may vary significantly from one period to another.

Even if the data center and communications markets evolve in the manner or in the time periods we anticipate, if we do not have timely, competitively priced, market-accepted products available to meet our customers’ need in these markets, we may miss a significant opportunity and our business, financial condition, results of operations and cash flows could be materially and adversely affected.

In addition, as a result of the fact that the markets for data center and communication products are still evolving, demand for these products may be unpredictable and may vary significantly from one period to another.

In addition, these markets may not develop as anticipated if AI training and inference costs drop dramatically due to customer adoption of less expensive alternative technologies.

Further, the current level of capital expenditure (capex) on AI infrastructure may not be sustainable over the long term and a significant reduction in AI-related spending will likely harm our financial results.

In addition, in the future our customers may decelerate or reallocate their capital expenditures for other uses, which could delay or reduce the demand for our products and negatively impact our revenue.

In addition, rapidly evolving technologies, including AI, could change the business needs of our customers in the data center and communications markets in ways we are not yet able to predict.

AI systems may make unforeseen or unintended discoveries that may disrupt our customers’ existing products, services, or business strategy and potentially render some of our customers current offerings and products obsolete which may have a material adverse effect on our revenue and profitability.

See also, “Our sales are concentrated in a few large customers.

If we lose or experience a significant reduction in sales to any of these key customers, if any of these key customers experience a significant decline in market share, or if any of these customers experience significant financial difficulties, our revenue may decrease substantially and our results of operations and financial condition may be harmed.” See also, “Adverse changes in the political, regulatory and economic policies of governments in connection with trade with China and Chinese customers have reduced the demand for our products and damaged our business” for additional risks related to export restrictions that may impact certain customers in the AI, Cloud and 5G markets.

Our sales are concentrated in a few large customers.

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For example, during fiscal 2026, there were two customers (one distributor and one direct customer) whose revenues represented 10% or more of total net revenue.

In addition, net revenue from our ten (10) largest customers, inclusive of our distributor and direct customers, represented 81% of our total net revenue for the fiscal year ended February 1, 2025.

In addition, net revenue from our ten (10) largest customers, inclusive of our distributor and direct customers, represented 82% of our total net revenue for fiscal 2026.

Sales to our largest customers have fluctuated significantly from period to period and year to year and will likely continue to fluctuate in the future, primarily due to the timing and number of design wins with customers, the continued diversification of our customer base as we expand into new markets, adverse changes in the political and economic policies of the U.S.

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Please see “Note 3 – Revenue” of our Notes to Unaudited Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q for a more detailed description of sales into our data center end market.

Advances in artificial intelligence could disrupt our business model and materially adversely affect our results of operations and financial condition.

Rapid advances in artificial intelligence (“AI”) and machine learning (“ML”) technologies, including generative AI, could fundamentally alter the semiconductor industry and disrupt our business model and operations.

AI-driven tools and platforms are increasingly being deployed across the integrated circuit (“IC”) development lifecycle, including in chip architecture design, electronic design automation (“EDA”), layout optimization, verification, testing, and process node development.

If AI-enabled efficiencies substantially reduce the complexity, cost, or time required to design, develop, and manufacture semiconductor products, our competitive position could be materially and adversely affected.

AI-driven design tools may lower traditional barriers to entry in the semiconductor industry by enabling new market participants, including technology companies that have not historically engaged in chip design, to develop high-performance, custom semiconductor solutions in-house with reduced reliance on third-party chip suppliers.

This trend toward internal chip development, sometimes referred to as "insourcing" or "vertical integration," could reduce demand for our products and erode our market share.

In particular, large cloud computing providers, automotive original equipment manufacturers, and other technology-focused enterprises have already begun investing in proprietary chip design capabilities, and advancements in AI may accelerate this trend.

AI and ML technologies may enable our existing competitors to achieve design and manufacturing efficiencies that we are unable to match, thereby diminishing or eliminating our current technological or cost advantages.

Competitors that more effectively integrate AI into their IC development workflows may be able to bring products to market faster, at lower cost, or with superior performance characteristics compared to our offerings.

If we fail to adopt and integrate AI technologies into our own design and development processes at a pace consistent with or faster than our competitors, our products could become less competitive, which would have a material adverse effect on our revenue and profitability.

AI-generated efficiencies may compress product development cycles across the industry, which could shorten the useful commercial life of our existing products and reduce the return on our research and development investments.

As AI tools enable more rapid iteration and optimization of chip designs, customers may expect faster product refresh cycles, placing additional pressure on our research and development resources and potentially leading to accelerated inventory obsolescence.

Our investment in AI-related capabilities may not yield the anticipated benefits.

Developing, acquiring, or integrating AI-driven tools and talent into our operations will require significant capital expenditures and operational resources, and there is no assurance that these investments will generate a return sufficient to justify their cost.

Additionally, the deployment of AI technologies in our design and manufacturing processes may introduce new and unforeseen risks, including design errors, security vulnerabilities, intellectual property concerns, and regulatory compliance challenges that could increase our costs, expose us to liability, or delay product launches.

See also, “ Costs related to defective products could have a material adverse effect on us ” and “ Cybersecurity risks could adversely affect our business and disrupt our operations ” for additional information.

AI technologies may disrupt the broader semiconductor supply chain and ecosystem in ways that are difficult to predict.

For example, AI-driven advances in chiplet-based architectures, advanced packaging, or novel materials science could render certain of our existing product lines, manufacturing processes, or intellectual property less valuable or obsolete.

Furthermore, the increasing use of AI in semiconductor design raises complex and evolving questions around intellectual property ownership, patentability, and trade secret protection, and the legal frameworks governing these issues remain uncertain and may develop in ways that are unfavorable to our business.

See also, “ We may be unable to protect our intellectual property, which would negatively affect our ability to compete ” for additional information.

We cannot predict the pace or trajectory of AI development or the extent to which AI-driven disruption will affect the semiconductor industry.

If we are unable to anticipate and adapt to these changes in a timely and effective manner, our business, financial condition, results of operations, and competitive position could be materially and adversely affected.

We face risks related to recessions, inflation, stagflation and other macroeconomic conditions.

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Supplies of these components may from time to time become restricted, or general market factors and conditions such as inflation or supply chain constraints have in the past affected, currently affect and may in the future affect pricing of such commodities.

For example, during the first few quarters of fiscal 2023 supply shortages in the semiconductor industry of multi-layer complex substrates, IC packaging capacity and fab constraints resulted in increased lead times, inability to meet demand, and increased costs.

For example, recently there has been a tight supply environment for AI related components and manufacturing resources, such as advanced wafer fabrication, advanced packaging, and large body substrates which have in the past and may continue to result in increased lead times, inability to meet demand, and increased costs.

Any increase in the price of components used in our products will adversely affect our margin.

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Any disruption to our manufacturing partners could result in a material decline in our revenue, net income and cash flow.

We have in the past including in the first few quarters of fiscal 2023, and may in the future, experience a number of industry-wide supply constraints.

These supply challenges have in the past, and may in the future, limit our ability to fully satisfy demand for some of our products.

While we attempt to create multiple sources for our products, most of our products are not manufactured at more than one foundry at any given time, and our products typically are designed to be manufactured in a specific process at only one of these foundries.

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These penalties may be expensive and could harm our financial results.

During the first few quarters of fiscal 2023, supply shortages in the semiconductor industry of multi-layer complex substrates, IC packaging capacity, and specific wafer process node constraints resulted in increased lead times, inability to meet demand, and increased costs .

Because of the geographic concentration of some of these suppliers, we are exposed to the risk that their operations may be disrupted by regional events including droughts, earthquakes (particularly in Taiwan and elsewhere in the Pacific Rim close to fault lines), tsunamis or typhoons, severe storms, power outages, or by actual or threatened public health emergencies such as the COVID-19 pandemic, or by political, social or economic instability.

We have in the past and may in the future, experienced a number of industry-wide supply constraints.

These supply challenges have in the past, and may in the future, limited our ability to fully satisfy demand for some of our products.

For example, there has and continues to be a tight supply environment for AI related components and manufacturing resources, such as advanced wafer fabrication, advanced packaging, and large body substrates which have in the past and may continue to result in increased lead times, inability to meet demand, and increased costs.

Because of the geographic concentration of some of our suppliers, we are exposed to the risk that their operations may be disrupted by regional events including droughts, earthquakes (particularly in Taiwan and elsewhere in the Pacific Rim close to fault lines), tsunamis or typhoons, severe storms, power outages, or by actual or threatened public health emergencies such as the COVID-19 pandemic, or by political, social or economic instability.

In addition, while the Russian invasion of Ukraine has not had a direct material impact on us due to our limited sales to Russia and Ukraine, we are unable to predict the indirect impact this conflict will have on us due to impacts on the supply chain, global and domestic economies, interest rates and stock markets.

Moreover, while Israel’s declaration of war on Hamas, a U.S.

designated Foreign Terrorist Organization, and current armed conflict in Israel and the Gaza Strip is not expected to have a material impact on us, we are unable to predict the full impact this conflict will have on us or our operations in Israel due to impacts on the supply chain, global and domestic economies, interest rates and stock markets.

Moreover, while the current armed conflict in Israel and the Middle East is not currently expected to have a material impact on us, we are unable to predict the full impact this conflict will have on us or our operations in Israel due to impacts on the supply chain, global and domestic economies, interest rates and stock markets.

Uncertain Yields and Quality

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Adverse changes in the political, regulatory and economic policies of governments in connection with trade with China and Chinese customers have reduced the demand for our products and damaged our business.

Regulatory activity, such as tariffs, export controls and sanctions, economic sanctions, and related laws have in the past and may continue to materially limit our ability to make sales to customers in China, which has in the past and may continue to harm our results of operations, reputation and financial condition.

Moreover, to the extent the governments of China, the United States or other countries seek to promote use of domestically produced products or to reduce the dependence upon or use of products from another (sometimes referred to as “decoupling”), they may adopt or apply regulations or policies that have the effect of reducing business opportunities for us.

Regulatory activity, such as tariffs, export controls, economic sanctions, and related laws have in the past and may continue to materially limit our ability to make sales to customers in China, which has in the past and may continue to harm our results of operations, reputation and financial condition.

Moreover, to the extent the governments of China, the United States or other countries seek to promote use of domestically produced products or to reduce the dependence upon or use of products from another country (sometimes referred to as “decoupling”), they may adopt or apply regulations or policies that have the effect of reducing business opportunities for us.

Such actions may take the form of specific restrictions on particular customers, products, technology areas, or business combinations.

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and the approval by China regulatory authorities is required for business combinations of companies that conduct business in China over specific thresholds, regardless of where those businesses are based.

In April 2026, China’s National Development and Reform Commission announced a security review decision prohibiting the foreign acquisition of Manus, a China based AI platform, and requiring the parties to unwind the transaction, which commentators described as the first reported order to unwind a consummated deal under China’s Foreign Investment Security Review Measures.

This decision demonstrates that Chinese authorities may scrutinize, condition, prohibit, or seek to unwind even completed cross-border transactions involving China-origin technology, personnel, or businesses on national security grounds, including where a target has sought to relocate outside China.

Chinese authorities may also use a range of regulatory tools, including foreign investment security review, technology export controls, cross-border data transfer rules, and merger control under the Anti-Monopoly Law, to investigate transactions involving sensitive technologies.

As a result, our investments, partnerships, acquisitions, divestitures, and other strategic transactions involving a China nexus may be subject to longer review periods, additional conditions, post-closing intervention, or other regulatory uncertainty.

Restrictions may also be imposed based on whether the supplier is considered unreliable or a security risk.

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export restrictions impacting sales of semiconductors and semiconductor technology to China or specific customers in China.

While most of our products that are shipped to China are processed and placed into larger systems, after which they are distributed to customers in global markets outside of China, a small portion of our products are shipped into China and remain there.

For example, the addition of certain companies to the Entity List, which places export restrictions on certain foreign persons or entities by the U.S.

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national security and foreign policy concerns.

The regulations published in October 2022 include new restrictions on U.S.

The regulations published in October 2022 included new restrictions on U.S.

persons with respect to activities that are not subject to the Export Administration Regulations (“EAR”), which differs from the agency’s historical approach of controlling items that are subject to the EAR, and the regulations published in October 2023, November 2024, and January 2025 expanded the October 2022 rule imposing additional licensing requirements for exports to China (and certain other countries) of integrated circuits exceeding certain performance thresholds, expanding the jurisdiction of the EAR to more foreign made items in certain cases, amending the definition of advanced node, and adding further entities to the Entity List.

In January 2025, the AI Diffusion Rule was issued.

Then in May 2025, the BIS said it intends to cancel the AI Diffusion Rule and release new rules.

While we do not currently expect these new rules to materially impact us due to the fact that we were not materially impacted by the prior AI Diffusion Rule, the BIS announcement creates uncertainty about what products, technologies, or software might be covered by future rules.

The BIS announcement creates uncertainty about what products, technologies, or software might be covered by future rules.

Export restrictions reducing our sales of products to China, have in the past and may in the future adversely impact our revenues, profits and results of operations.

government has recently reached out to certain U.S.

semiconductor companies implying that as a condition to obtaining and maintaining export licenses for certain products and technologies destined for China, they remit to the U.S.

In 2025, U.S.

government interactions with U.S.

semiconductor companies implied that as a condition to obtaining and maintaining export licenses for certain products and technologies destined for China, they remit to the U.S.

government a fee equal to fifteen percent (15%) of the gross revenue derived from such China-related sales.

In January 2026, BIS issued a new licensing policy related to chips from certain semiconductor companies, including a twenty-five percent (25%) tariff and other requirements.

Historically, restrictions on sales to China were implemented by the U.S.

government as national security measures that did not include revenue-sharing arrangements.

If such a payment requirement were to be imposed on our China-derived revenue, it could erode our gross margins, reduce our pricing flexibility, and potentially prompt us to curtail or discontinue sales in China.

government as national security measures that did not include revenue-sharing arrangements and export licensing was not tied to revenue sharing with the U.S.

While these U.S.

government actions did not impact Marvell, if such revenue sharing were to be imposed on our China-derived revenue, it could erode our gross margins, reduce our pricing flexibility, and potentially prompt us to curtail or discontinue sales in China.

In addition to direct impacts on our products there may be indirect impacts to our business that we cannot easily quantify such as the fact that export restrictions may also impact some of our other customers’ products that incorporate ours as a component, or that may cause customers to develop their own products or solutions instead of purchasing from us or to acquire products or solutions from our competitors or other third-party sources.

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or foreign international tax, social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories or countries where we currently sell our products or conduct our business have in the past and could in the future adversely affect our business.

For example, while the Russian invasion of Ukraine (including related export and other business sanctions on Russia) has not had a material impact on us due to our limited sales to Russia and Ukraine, we are unable to predict the indirect impact this conflict will have on us through impacts to the supply chain, the global and domestic economies, interest rates or stock markets .

government has in the past, and may in the future, instituted or proposed changes in trade policies that included the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S.

and other countries where we conduct our business.

For example, on May 14, 2024, the Biden administration announced new tariffs on certain goods to encourage China to eliminate unfair trade practices regarding technology transfer, intellectual property, and innovation.

The Biden administration directed increases in tariffs on a significant amount of imports from China across certain strategic sectors including semiconductors.

As a result, the tariff rate on certain types of semiconductors increased from 25% to 50% in 2024.

In addition, the Trump administration announced new tariffs on imports from many countries including Canada, China and Mexico.

These new tariffs are not expected to have a direct impact on the Company, however, any new tariffs and other changes in U.S.

trade policy could trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing trade sanctions on certain U.S.

For example, in 2025 and 2026, the current presidential administration announced new tariffs on imports from many countries including Canada, China and Mexico.

These new tariffs have not had a significant impact on the Company, however, any new tariffs and other changes in U.S.

trade policy could trigger retaliatory actions by affected countries, which may adversely impact our business.

On April 14, 2025, the BIS announced the initiation of investigations into the effects on U.S.

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See also, “Adverse changes in the political, regulatory and economic policies of governments in connection with trade with China and Chinese customers have reduced the demand for our products and damaged our business” and “Changes in existing taxation benefits, tax rules or tax practices may adversely affect our financial results.”

On May 1, 2025, we received notification that our application for government incentives in a foreign jurisdiction in which we operate had been approved by the necessary government agencies.

We benefit from agreements with governmental agencies that incentivize investment within the jurisdictions through refunds or other credits associated with the investments.

Receipt of benefits under incentive agreements may depend on several factors, including but not limited to, our ability to fulfill commitments regarding employment of personnel, investment, or performance of specified activities in the applicable jurisdictions as well as changes in foreign laws.

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In addition, many of our customers have operations located outside of the United States, primarily in Asia, which further exposes us to foreign risks.

Sales shipped to customers with operations in Asia represented approximately 77% and 74% of our net revenue in the three months ended November 1, 2025 and November 2, 2024, respectively.

Sales shipped to customers with operations in Asia represented approximately 83% and 74% of our net revenue in the three months ended May 2, 2026 and May 3, 2025, respectively.

We also have substantial operations outside of the United States.

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• trade restrictions, higher tariffs, worsening trade relationship between the United States and China (or other countries), or changes in cross border taxation, particularly in light of the tariffs imposed by the U.S.

• transportation delays such as the blockage of the Suez Canal affecting the flow of trade out of Asia, port closures and similar logistical issues;

• transportation delays due to the blockage of the Suez Canal affecting the flow of trade out of Asia, actions taken by the Houthis on vessels in the Red Sea, military blockades in the Strait of Hormuz, port closures and similar logistical issues;

• difficulties in obtaining, managing or terminating foreign distributors;

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• exposure to local banking, currency control and other financial-related risks.

For example, we are subject to risks related to Israel’s declaration of war on Hamas, a U.S.

designated Foreign Terrorist Organization and the current armed conflict in Israel and the Gaza Strip.

For example, we are subject to risks related to armed conflict in Israel and the Middle East.

We have employees in Israel.

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For example, on August 14, 2025, the Company sold its automotive ethernet business to Infineon Technologies AG for $2.5 billion in an all-cash transaction.

In addition, on December 2, 2025, the Company announced its intent to acquire Celestial AI Inc.

as discussed in more detail in “Note 13 – Subsequent Events” in the Notes to Unaudited Condensed Consolidated Financial Statements set forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.

On February 2, 2026, we completed our acquisition of Celestial AI, Inc.

and on February 10, 2026, we completed our acquisition of XConn Technologies.

This strategy, and our willingness to use cash to pay for acquisitions, may be adversely impacted by high or increasing interest rates.

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Our acquisitions may not further our business strategy as we expected, we may not integrate an acquired company or technology as successfully as we expected, we may impose our business practices that adversely impact the acquired business or we may overpay for, or otherwise not realize the expected return on our investments, each or all of which could adversely affect our business or operating results and potentially cause impairment to assets that we recorded as a part of an acquisition including intangible assets and goodwill.

In addition, the use of our stock to finance an acquisition, will result in an increase in the number of outstanding shares and will reduce the ownership percentage of each of our outstanding stockholders.

In addition, the use of our stock to finance, or partially finance, an acquisition such as in our acquisitions of Celestial AI and XConn Technologies, will result in an increase in the number of outstanding shares and will reduce the ownership percentage of each of our outstanding stockholders.

With respect to the Celestial AI transaction, we may be required to pay additional cash or to issue additional shares of our common stock through fiscal 2029 pursuant to the terms of an earnout.

This earnout structure may create risks and uncertainties that could adversely affect our business, financial condition, results of operations and stock price.

Under the acquisition agreement, we may be required to issue 24.4 million additional shares of our common stock if Celestial achieves specified cumulative revenue milestones through the end of fiscal 2029, and any such issuances would dilute existing stockholders and could create an overhang that adversely affects the market price of our common stock.

In addition, the fair value of the earnout contingent consideration liability is based on assumptions and other relevant inputs, including forecasted revenue, the probability of achieving the applicable milestones, volatility, our stock price and other relevant assumptions, and significant changes in any of these assumptions or inputs could materially affect the fair value of the earnout and result in material non-cash gains or losses and increased volatility in our reported financial results.

In addition, disputes could arise regarding the calculation of Celestial’s cumulative revenue for earnout purposes, resulting in significant costs and management distraction.

Further, in connection with offsetting certain of our earnout obligations, we entered into a cash-settled forward stock purchase transaction on our common stock that is scheduled to mature in approximately one year from March 31, 2026 and is subject to early termination under certain circumstances;

as a result, we may be exposed to additional market, liquidity, operational and counterparty risks, including the risk that we may be required to make a significant cash payment at settlement (or upon early termination) if our stock price declines relative to the forward price, that our ability to timely file and maintain an effective registration statement covering the resale of the hedge shares could affect settlement mechanics and timing, and that the forward counterparty’s hedging and resale activity could increase volatility in, or adversely affect, the market price of our common stock, any of which could exacerbate the dilution, overhang and stock-price risks associated with the earnout and could adversely affect our financial condition and results of operations.

When we decide to sell assets or a business, we may have difficulty selling on acceptable terms in a timely manner or at all.

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For example, in October 2024, the U.S.

Federal Trade Commission announced new HSR rules that greatly expand disclosure requirements and require significantly more time to prepare filings.

Federal Trade Commission announced new Hart-Scott-Rodino (“HSR”) rules that greatly expand disclosure requirements and require significantly more time to prepare filings.

While these new HSR rules may have been overturned recently, if no stay or emergency relief is granted, the October 2024 rules will again become effective.

In addition, there have been other recent changes to rules related to merger transactions such as requirements to file certain national security-related transactions with the U.S.

Department of War and the announcement of new merger control filing requirements in California that will become effective in January 2027.

If we fail to complete a transaction, we may nonetheless have incurred significant expenses in connection with such transaction.

Failure to complete a pending transaction may result in negative publicity and a negative perception of us among the investment community.

In addition, we used a significant portion of our cash and incurred substantial indebtedness in connection with the financing of our acquisition of Inphi, which was completed in fiscal 2022.

Our use of cash to fund our acquisitions has reduced our liquidity and may (i) limit our flexibility in responding to other business opportunities and (ii) increase our vulnerability to adverse economic and industry conditions.

Our use of cash to fund our acquisitions, or partially fund our acquisitions in the case of Celestial AI and XConn Technologies, has reduced our liquidity and may (i) limit our flexibility in responding to other business opportunities and (ii) increase our vulnerability to adverse economic and industry conditions.

Furthermore, the financing agreements in connection with our outstanding indebtedness contain negative covenants, limitations on indebtedness, liens, sale and leaseback transactions and mergers and other fundamental changes.

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Any failure of, or delay in, these efforts could negatively impact performance and financial results.

The rights, preferences and privileges of our preferred stock may adversely affect holders of our common stock, and our issuance of preferred stock to NVIDIA may reduce the market price of our common stock.

On March 31, 2026, we issued and sold to NVIDIA 2,000,000 shares of our Series A Convertible Preferred Stock for an aggregate purchase price of $2.0 billion in cash.

The Series A Preferred Stock is convertible into shares of our common stock at the option of the holder, subject to (if applicable) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and will automatically convert immediately prior to the closing of a sale of the Series A Preferred Stock to us or a non-affiliate of NVIDIA.

The Series A Preferred Stock is initially convertible in the aggregate into up to 21,778,000 shares of our common stock based on an initial stated value of $1,000 per share and an initial conversion price of approximately $91.8355 per share, and the conversion ratio is subject to adjustment in certain circumstances (including in connection with stock dividends and stock splits).

The Series A Preferred Stock provides NVIDIA with rights that differ from the rights of holders of our common stock.

For example, holders of the Series A Preferred Stock are entitled to receive dividends in the same manner as holders of our common stock, as determined on an as-converted basis, as if all outstanding shares of the Series A Preferred Stock had been converted immediately prior to the record date for the applicable dividend.

In addition, other than with respect to the election of directors (for which the Series A Preferred Stock does not vote), the holders of the Series A Preferred Stock generally vote together with holders of our common stock on an as-converted basis.

We may not alter or change adversely the powers, preferences or rights of the Series A Preferred Stock, or alter or amend the certificate of designations governing the Series A Preferred Stock, without the affirmative vote or consent of a majority of the outstanding shares of the Series A Preferred Stock.

The Series A Preferred Stock has no preemptive rights and no redemption rights.

The conversion features of the Series A Preferred Stock could result in significant dilution to holders of our common stock upon conversion, and the market price of our common stock could decline based on actual or perceived dilution, hedging activity, or other market dynamics related to the Series A Preferred Stock.

In addition, because conversion at the option of the holder is subject to (if applicable) the expiration or termination of any applicable Hart-Scott-Rodino waiting period, the timing of any conversion could be delayed and may be uncertain, which could increase volatility in our capital structure and our common stock price.

Further, because the Series A Preferred Stock was issued to a single significant holder, the concentration of ownership could increase NVIDIA’s influence over matters submitted to our stockholders (other than the election of directors), and any actual or perceived preferential contractual protections or consent rights associated with the Series A Preferred Stock could make our securities less attractive to other current or potential investors.

These factors could adversely affect the market price of our common stock.

WE ARE SUBJECT TO CYBERSECURITY RISKS

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however, we cannot guarantee that those risk mitigation measures will be effective across all environments, including those operated under shared-responsibility models with certain cloud and SaaS providers.

See Item 1C, “Cybersecurity” of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 for additional information about our cybersecurity processes.

See Item 1C, “Cybersecurity” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 for additional information about our cybersecurity processes.

We have not experienced a material information security breach in the last three years, and as a result, we have not incurred any net expenses from such a breach.

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Cyber-attacks have become increasingly more prevalent and much harder to detect, defend against or prevent.

The risk of state-sponsored or geopolitical-related cybersecurity incidents has also increased recently due to geopolitical tensions or incidents, such as the Russian invasion of Ukraine and the armed conflict in Israel and the Gaza Strip, and other regional tensions affecting the semiconductor supply chain.

The risk of state-sponsored or geopolitical-related cybersecurity incidents has also increased recently due to geopolitical tensions or incidents, such as the Russian invasion of Ukraine and the armed conflict in Israel and the Middle East, and other regional tensions affecting the semiconductor supply chain.

While we have historically been successful in defending against the cyber-attacks and breaches mentioned above, given the frequency of cyber-attacks and resulting breaches reported by other businesses and governments, it is likely we will experience one or more material breaches of some extent in the future.

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Our indebtedness could adversely affect our financial condition and our ability to raise additional capital to fund our operations and limit our ability to react to changes in the economy or our industry.

As of November 1, 2025, we had a total of $4.5 billion debt outstanding, which consisted of senior notes outstanding.

Our Revolving Credit Facility was amended and restated in June 2025 (the “2025 Revolving Credit Facility” or the “2025 Credit Agreement”).

We may borrow up to $1.5 billion under the 2025 Revolving Credit Facility.

As of November 1, 2025, the 2025 Revolving Credit Facility was undrawn.

As of May 2, 2026, we had a total of $5.0 billion debt outstanding, which consisted of senior notes outstanding (the “Notes”).

In addition, we may borrow up to $1.5 billion under our Revolving Credit Facility (the “2025 Revolving Credit Facility” or the “2025 Credit Agreement”).

As of May 2, 2026, the 2025 Revolving Credit Facility was undrawn.

Our indebtedness could have important consequences to us including:

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Any of the foregoing could materially and adversely affect our financial condition and results of operations.

The 2025 Credit Agreements and the Notes Indentures impose restrictions on our business.

The 2025 Credit Agreements and the Notes Indentures each contains a number of covenants imposing restrictions on our business.

The 2025 Credit Agreement and the Notes Indentures impose restrictions on our business.

The 2025 Credit Agreement and the Notes Indentures each contains a number of covenants imposing restrictions on our business.

These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise.

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tax provisions applicable to Global Intangible Low Taxed Income (“GILTI”) regime (which has been recharacterized as the Net Controlled Foreign Corporation (“CFC”) Tested Income regime, beginning in fiscal 2027).

Our tax provision for the November 1, 2025 period includes the estimated impact of the 2025 Tax Act.

This legislation could significantly affect our future financial results, including our earnings and cash flows.

Our tax provision for the May 2, 2026 period includes the estimated impact of the 2025 Tax Act.

Our estimates concerning the impact of this legislation remain subject to developing interpretations of the provisions of the 2025 Tax Act, which may require further adjustments and changes in our estimates, and could significantly affect our future financial results, including our earnings and cash flows.

President Biden signed into law the Inflation Reduction Act of 2022 (the “IRA”) on August 16, 2022 and the CHIPS and Science Act of 2022 on August 9, 2022.

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corporations after December 31, 2022.

As a result of the ASR Agreement, the Company anticipates paying additional federal taxes in fiscal 2026 due to the 1% excise tax on net share repurchases.

As a result of the accelerated share repurchase agreement (“ASR Agreement”), the Company anticipates paying $14.3 million in additional federal taxes in fiscal 2026, recorded as a reduction to stockholders’ equity, due to the 1% excise tax on net share repurchases.

While we are not generally subject to significant taxes under the IRA, it is possible that in the future they could significantly affect our financial results, including our earnings and cash flows.

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Many countries have implemented legislation and other guidance to align their international rules with the OECD’s legal framework, including enacting a minimum tax rate of at least 15% as part of the OECD’s “Pillar Two” initiative.

We are subject to legislation based on the Organization for Economic Cooperation and Development’s 15% global minimum tax regime which applies to the majority of countries in which we operate.

On June 28, 2025, the G7 released a joint statement that it had reached an understanding with the U.S.

on a side-by-side system that would exempt U.S.

parented multinational businesses from certain provisions of Pillar Two;

however, no agreement regarding implementation of the proposal has yet been reached.

We are subject to legislation based on the OECD’s 15% global minimum tax regime which applies to the majority of countries in which we operate.

On January 5, 2026, the OECD released a comprehensive package of administrative guidance, including the “side-by-side system” that exempts U.S.

parented multinational businesses from certain provisions of Pillar Two specifically the Income Inclusion Rule and the Undertaxed Profits Rule.

The OECD guidance provides that the side-by-side system will be effective for fiscal years beginning on or after January 1, 2026.

We will continue to monitor countries’ laws with respect to the OECD model rules and the Pillar Two global minimum tax.

In certain jurisdictions, local legislative action is needed to effectuate “side by side system” and cannot be considered in our accounting estimate until enactment.

The effects of any future legislation in this area are not yet reasonably estimable, but if such legislation is enacted in the future could have a significant effect on our provision for income taxes, our financial results, and our earnings and cash flows.

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In particular, the tax benefits associated with our transfer of intellectual property to Singapore are sensitive to our future profitability and taxable income in Singapore, audit assessments, and changes in applicable tax law.

Our current corporate effective tax rate fluctuates significantly from period to period, and is based on the application of currently applicable income tax laws, regulations and treaties, as well as current judicial and administrative interpretations of these income tax laws, regulations and treaties, in various jurisdictions.

Our current corporate effective tax rate may fluctuate significantly from period to period, and is based on the application of currently applicable income tax laws, regulations and treaties, as well as current judicial and administrative interpretations of these income tax laws, regulations and treaties, in various jurisdictions.

WE ARE SUBJECT TO RISKS RELATED TO OUR ASSETS

We are exposed to potential impairment charges on certain assets.

We had approximately $11.1 billion of goodwill and $2.0 billion of acquired intangible assets on our unaudited condensed consolidated balance sheets as of November 1, 2025.

We had approximately $13.9 billion of goodwill and $2.6 billion of acquired intangible assets on our unaudited condensed consolidated balance sheets as of May 2, 2026.

Under generally accepted accounting principles in the United States, we are required to review our intangible assets including goodwill for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

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Further, governments and courts are considering new issues in intellectual property law with respect to works created by AI technology, which could result in different intellectual property rights in development processes, procedures and technologies we create with AI technology, which could have a material adverse effect on our business.

We must comply with a variety of existing and future laws and regulations, as well as sustainability initiatives, that could impose substantial costs on us and may adversely affect our business.

We must comply with a variety of existing and future laws and regulations that could impose substantial costs on us and may adversely affect our business.

We are subject to laws and regulations worldwide, which may differ among jurisdictions, affecting our operations in areas including, but not limited to:

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Environmental legislation, such as the EU Directive on Restriction of Hazardous Substances (“RoHS”), the EU Waste Electrical and Electronic Equipment Directive (“WEEE Directive”) and China’s regulation on Management Methods for Controlling Pollution Caused by Electronic Information Products, may increase our cost of doing business internationally and impact our revenues from the EU, China and other countries with similar environmental legislation as we endeavor to comply with and implement these requirements.

Increasingly regulators (including the U.S.

Securities and Exchange Commission), customers, investors, employees and other stakeholders are focusing on sustainability matters.

We are, and expect to continue to be, subject to various proposed, new, and evolving sustainability laws and requirements including both voluntary and mandatory disclosure requirements that may impact how we and our business partners, suppliers and customers conduct business.

While we have certain sustainability initiatives at the Company, there can be no assurance that regulators, customers, investors, and employees will determine that these programs are sufficiently robust.

In addition, there can be no assurance that we will be able to accomplish our announced goals related to our sustainability program, as statements regarding our sustainability goals reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce or at all.

Actual or perceived shortcomings with respect to our sustainability initiatives, and reporting can impact our ability to hire and retain employees, increase our customer base, reelect our Board of Directors, or attract and retain certain types of investors.

In addition, these parties are increasingly focused on specific disclosures and frameworks related to sustainability matters.

Collecting, measuring, and reporting sustainability information and metrics can be costly, difficult and time consuming, is subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact on us, including on our reputation and stock price.

Inadequate processes to collect and review this information prior to disclosure could subject us to potential liability related to such information.

In addition, several U.S.

states and President Trump have enacted or proposed “anti-ESG” policies or legislation.

If our sustainability practices are deemed to be in contradiction of such “anti-ESG” policies we could be subjected to government investigations or lawsuits that, could negatively impact the Company and affect the price of our common stock.

In addition, social activists have recently been successful in pressuring certain public companies to eliminate or cut back on their diversity, equity and inclusion initiatives and their sustainability initiatives.

To the extent we are subject to such activism, it may require us to incur costs or may otherwise adversely impact our business.

A portion of the business we acquired in fiscal 2021 requires facility security clearances under the National Industrial Security Program.

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We expect that the legal and regulatory environment relating to emerging technologies such as AI will continue to develop and could increase the cost of doing business, and create compliance risks and potential liability, all which may have a material adverse effect on our financial condition and results of operations.

Expectations, requirements and attention to sustainability matters may have an adverse effect on our business, financial condition and results of operations, and damage our brand and reputation.

Increasingly regulators, customers, investors, employees and other stakeholders are focusing on sustainability matters.

While we have certain sustainability initiatives at the Company there can be no assurance that regulators, customers, investors, and employees will determine that these programs are sufficiently robust.

Actual or perceived shortcomings with respect to our sustainability initiatives and reporting can impact our ability to hire and retain employees, increase our customer base, reelect our Board of Directors, or attract and retain certain types of investors.

In addition, these parties are increasingly focused on specific disclosures and frameworks related to sustainability matters.

Inadequate processes to collect and review this information prior to disclosure could subject us to potential liability related to such information.

In addition, several U.S.

states and the current presidential administration have enacted or proposed “anti-ESG” policies or legislation.

If our sustainability practices are deemed to be in contradiction of such “anti-ESG” policies we could be subjected to government investigations or lawsuits that could negatively impact the Company and affect the price of our common stock.

To the extent we are subject to such activism, it may require us to incur costs or may otherwise adversely impact our business.

We have been named as a party to several legal proceedings and may be named in additional ones in the future, including litigation involving our patents and other intellectual property, which could subject us to liability, require us to indemnify our customers, require us to obtain or renew licenses, require us to stop selling our products or force us to redesign our products.

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A reduction in, a delay of, or elimination of our dividend payments or stock repurchases could have a negative effect on our stock price.

As of November 1, 2025, there was $5.7 billion remaining available for future stock repurchases under the prior authorization.

As of May 2, 2026, there was $5.3 billion remaining available for future stock repurchases under the prior authorization.

Our indemnification obligations and limitations of our director and officer liability insurance may have a material adverse effect on our financial condition, results of operations and cash flows.

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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 1A. Risk Factors