Item 1A. Risk Factors

The following summarizes factors that could have a material adverse effect on the Companys business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether current. The Company may not be able to accurately known or unknown, including those described below. When any onepredict, control or more of itigate these risks m. Staterialize from time to time, ments in this section are based on the Companys business, reputation, results ofeliefs and operatinions, financial condition and stock price can be regarding matters that could materially and addversely affected.

Because of  the Company in the following factors, as well uture and are not representations as oto whether factosuch matters affecting the Companys results of operationshave or have not occurred previously. The risks and financial condition, past financial performanceuncertainties described below are not exhaustive and should not be considered to be a reliable indicator of future performance, and investors should not use historic a complete statement of all potential trends to anticipate results or trends in future periods. This discussion of riskrisks or uncertainties that the Company factors contains forward-looking statementses or may face in the future.

This section should be read in conjunction with Part II, Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and accompanying notes in Part II, Item 8, Financial Statements and Supplementary Data of this Form 10-K.

Macroeconomic and Industry Risks

The Companys operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect the Companys business, results of operations and, financial condition and stock price.

The Company has international operations with sales outside the U.S. representing a majority of the Companys total net sales. In addition, the Companys global supply chain is large and complex and a majority of the Companys supplier facilities, including manufacturing and assembly sites, are located outside the U.S. As a result, the Companys operations and performance depend significantly on global and regional economic conditions.

Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for the Companys products and services. In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors.

In addition to an adverse impact on demand for the Companys products and services, uncertaintUncertainty about, or a decline in, global or regional economic conditions can also have a significant impact on the Companys suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.

Adverse economic conditions can also lead to increased credit and collectibility risk on the Companys trade receivables; the failure of derivative counterparties and other financial institutions; limitations on the Companys ability to issue new debt; reduced liquidity; and declines in the fair values of the Companys financial instruments. These and other impacts can materially adversely affect the Companys business, results of operations, financial condition and stock price.

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The Companys business can be impacted by political events, trade and other international disputes, geopolitical tensions, conflict, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions.

Political events, trade and other international disputes, geopolitical tensions, conflict, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions can have a material adverse effect on the Company and its customers, employees, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners.

The Company has a large, global business with sales outside the U.S. representing a majority of the Companys total net sales, and the Company believes that it generally benefits from growth in international trade. SubstA significantially all  majority of the Companys manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam., in addition to sourcing from partners and facilities located in the U.S. Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect the Companys business and supply chain. The impact can be particularly significant if these restrictive measures apply to countries and regions where the Company derives a significant portion of its revenues and/or has significant supply chain operations. Restrictive measures can increase the cost or limit the availability of the Companys products and the components and rare earths and other raw materials that go into them, and. Restrictive measures can also require the Company to take various actions, including cchanginge suppliers, restructuringe business relationships and operations, and ceasirefrain from offering and distributing or cease to offer and distribute affected products, services and third-party applications to its customersrs, and increase the prices of its products and services. Changing the Companys business and supply chain in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the Companys business and results of operations.  Trade and other international disputes can also have an adverse impact on the overall macroeconomic environment and result in shifts and reductions in consumer spending and negative consumer sentiment for the Companys products and services, all of which can further adversely affect the Companys business and results of operations. Such restrictions can be announced with little or no advance notice, which can create uncertainty, and the Company may not be able to effectively mitigate any or all adverse impacts from such measures. For example, tensiGlobal supply chains can be highly concentrated, and an escalation of geopolitical tensions or conflict could result in significant disruptions between governments, including t. Beginning in the second quarter of 2025, new tariffs were announced on imports to the U.S. and (U.S. Tariffs), including additional tariffs on imports from China, have in India, Japan, South Korea, Taiwan, Vietnam and the European Union (EU), among othe past led to rs. In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other restricetaliatory measures. Various modifications affecting  to the U.S. Tariffs have been announced and furthe Companys business. If disputes and conflicts furr changes could be made in the future, which may include additional sector-based tariffs or other escalate in the future, actmeasures. For example, the U.S. Department of Commerce has initiated an investigation under Section 232 of the Trade Expansions by governments in response could be significantly more  Act of 1962, as amended, into, among other things, imports of semiconductors, semiconductor manufacturing equipment, and their derivative products, including downstream products that contain semiconductors. The ultimate impact remains uncertain and will depend on severe and restrictive and al factors, including whether additional or incremental U.S. Tariffs or other measures are announced or imposed, to what extent other could materially adversely affect ntries implement tariffs or other retaliatory measures in response, and the overall magnitude and duration of these measures. If disputes and conflicts furthe Companys businessr escalate, actions by governments in response could be significantly more severe and restrictive.

Many of the Companys operations , retail stores and facilities, as well as critical business operations of the Companys suppliers and contract manufacturers, are in locations that are prone to earthquakes and other natural disasters. Global climate change is resulting in certain types of natural disasters and extreme weather occurring more frequently or with more intense effects. In addition, the Companys and its suppliers operations a, retail stores and facilities are subject to the risk of interruption by fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks, labor disputes, public health issues and other events beyond the Companys control. For example, global supply chains can be highly concentrated and geopolitical tensions or conflict could result in significant disruptions.

Such events can make it difficult or impossible for the Company to manufacture and deliver products to its customers, create delays and inefficiencies in the Companys supply and manufacturing chain, result in slowdowns and outages to the Companys service offerings, increase the Companys costs, and negatively impact consumer spending and demand in affected areas.

The Companys operations are also subject to the risks of industrial accidents at its suppliers and contract manufacturers. While the Companys suppliers are required to maintain safe working environments and operations, an industrial accident could occur and could result in serious injuries or loss of life, disruption to the Companys business, and harm to the Companys reputation. Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, the Company due to their impact on the global economy and demand for consumer products; the imposition of protective public safety measures, such as stringent employee travel restrictions and limitations on freight services and the movement of products between regions; and disruptions in the Companys operations, supply chain and sales and distribution channels, resulting in interruptions to the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.

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Following any interruption to its business, the Company can require substantial recovery time, experienceincur significant expenditures to resume operations, and lose significant sales. Because the Company relies on single or limited sources for the supply and manufacture of many critical components, a business interruption affecting such sources would exacerbate any negative consequences to the Company. While the Company maintains insurance coverage for certain types of losses, such insurance coverage may be insufficient to cover all losses that may arise.

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 Any of the foregoing can materially adversely affect the Companys business, results of operations, financial condition and stock price.

Global markets for the Companys products and services are highly competitive and subject to rapid technological change, and the Company may be unable to compete effectively in these markets.

The Companys products and services are offered in highly competitive global markets . These markets are characterized by aggressive price competition and resulting downwar, downward pressure on gross margins, continual improvement in product performance, and pressureice sensitivity on gross the part of consumers and businesses. These margins, kets are further defined by frequent introduction of new products and services, short product life cycles, evolving industry standards, continual improvement in product price and performance characteristics, rapiand rapid adoption of technological advancements by competitors, and price sensitivity on the part of consumers and businesses.

The Companys ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products, services and technologies to the marketplace. The Company designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services. As a result, the Company must make significant investments in RD. There can be no assurance these se investments will may not achieve expected returns, and the Company may not be able to develop and market new products and services successfully.

The Company currently holds a significant numys ability to compete successfully also depends on the effective protection and enforcement of its intellectual property rights. Regulatory requirements, government investigations and litigation can force the Company to withdraw from, or modify its products and services for, certain countries and limit its ability to derive value from, or to enjoin others from using, its intellectual property rights. Additionally, they may require the Company to share its innovations with competitors. Any of these outcomes can have a negative impact on the Companys competitive advantage and materially adversely affect its business, results of operations, financial condition and stock price.

The Company currently holds a significant number of patents, trademarks and copyrights and has registered, and applied to register, additional patents, trademarks and copyrights. In contrast, many of the Companys competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating the Companys products and infringing on its intellectual property. Effective intellectual property protection is not consistently available in every country in which the Company operates. If the Company is unable to continue to develop and sell innovative new products with attractive margins or if competitors infringe on the Companys intellectual property, the Companys ability to maintain a competitive advantage could be materially adversely affected.

The Company has a minority market share in the global smartphone, personal computers products and tablet markets. The Company services faces substantial competition in these markets from companies that have significant technical, marketing, distribution and other resources, as well as established hardware, software and digital content supplier relationships. In addition, some of the Companys competitors have broader product lines, lower-priced products and a larger installed base of active devices. Competition has been particularly intense as competitors have aggressively cut prices and lowered product margins. Certain competitors have the resources, experience or cost structures to provide products at little or no profit or even at a loss. Some of the markets in which the Company competes have from time to time experienced little to no growth or contracted overall.

Additionallyservice offerings. In addition, the Company faces significant competition as competitors imitate the Companys product features and applications within their products or collaborate tto offer solutions that are more competitive than those they currently offersolutions. The Company also expects competition to intensify as competitors imitate the Companys approach to providing components seamlessly within their offerings or work collaboratively to offer integrated solutions.

The Companys services also face substantial Some of the Companys competition, including from companies that haors have significant resources and experience and have ebroad product lines, low-priced products, large instablishlled servicebases offerings with active devices, and large customer bases. The Company competes with business models that provide content to users for free. The Company alsoetition has been particularly intense as competes with illegitimate means to obtain third-party digitalitors have aggressively cut prices and lowered product margins. Certain content and applications.

Tmpetitors have the Companys business, results of operationresources, experience or cost structures to provide products and financial condition depend substantially on tservices at little or no profit or even at a loss. The Company has abil minority to continually improve its productsmarket share in the global smartphone, personal computer, tablet and servicwearables to maintain markets, and some of their functional and design advantages. There can be  markets in which the Company competes have from time to time experienced little to no assurance growth or contracted overall.

If the Company will be is unable to continue to provide productsmpete successfully, its business, reputation, results of operations, financial condition and servtock prices that compete e can be materially adversely affectively.

ed.

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Business Risks

To remain competitive and stimulate customer demand, the Company must successfully manage frequent introductions and transitions of products and services.

Due to the highly volatile and competitive nature of the markets and industries in which the Company competes, the Company must continually introduce new products, services and technologies, enhance existing products and services, effectively stimulate customer demand for new and upgraded products and services, and snavigate global regulatory requirements and barriers to market access, and successfully manage the transition to these new and upgraded products and services. The success of new product and service introductions depends on a number of factors, including tihe Companys ability to recruit and retain highly skilled personnel to execute on its strategic initiatives, and the timely and successful development,  and market acceptance, the  of new products, services and technologies. Success also relies on the Companys ability to manage the risks associated with new technologies and production ramp-up issues, the avaieffective integration of third-party services and technologies into the Companys products and services, the availability o, delivery and performance of application software or other third-party support for the Companys products and services, the effective management of manufacturing and other purchase commitments and the management of inventory levels in line with anticipated product demand, and the availability of products in appropriate quantities and at expected costs to meet anticipated demand, and . Additionally, quality issues or othe risk that r defects or deficiencies can adversely affect the success of new products and services may have quality or other defects or deficiencies introductions and market acceptance. New products, services and technologies may replace or supersede existing offerings and may produce lower revenues and lower profit margins, which can materially adversely impact the . The Companys business, results of operations and financial condition. There can may not be no assurancable the Company will o successfully manage future introductions and transitions of products and services.

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, which can materially adversely affect the Companys business, reputation, results of operations, financial condition and stock price.

The Company depends on component and product manufacturing and logistical services provided by outsourcing partners, many of which are located outside of the U.S.

Substantially allA significant majority of the Companys manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, and a significant concentration of this manufacturing is currently performed bin addition to sourcing from partners and facilities located in the U.S. The Company relies on single-source partners in the U.S., Asia and Europe to supply a small number of outsourcingnd manufacture many components, and on partners, often primarily located in single locationsAsia, for final assembly of substantially all of the Companys hardware products. The Company has also outsourced much of its transportation and logistics management. While these arrangements can lower operating costs, they also reduce the Companys direct control over production and distribution. Such diminished control has from time to time ahad, and may in the future have, an adverse effect on the cost, quality or quantity of products manufactured or services provided, or adversely affect the Companys flexibility to respond to changing conditions. Although arrangements with these partners may contain provisions for product defect expense reimbursement, the Company generally remains responsible to the consumer for warranty and out-of-warranty service in the event of product defects and experiences unanticipated product defect liabilities from time to time. While the Company relies on its partners to adhere to its supplier code of conduct, violations of the supplier code of conduct occur from time to time and can materially adversely affect the Companys business, reputation, results of operations and financial condition.

The Company relies on single-source outsourcing partners in the U.S., Asia and Europe to supply and manufacture many components, and on outsourcing partners primarily located in Asia, for final assembly of substantially all of the Companys hardware products. Any failure of these partners to perform can have a negative impact on the Companys cost or supply of components or finished goods. In ad, financial condition, manufacturing or logistics in these locations or transit to final destinations can be disrupted for a variety of reasons, including natural and man-made disasters, information technology system failures, commercial disputes, economic, business, labor, environmental, public health or political issues, trade and other international disputes, geopolitical tensions, or conflict.

The Company has invested in manufacturing process equipment, much of which is held at certain of its outsourcing partners, and has made prepayments to certain of its suppliers associated with long-term supply agreements. While these arrangements help ensure the supply of components and finished goods, if these outsourcing partners or suppliers experience severe financial problems or other disruptions in their business, such continued supply can be disrupted or terminated, and the recoverability of manufacturing process equipment or prepayments can be negatively impacted and stock price.

Changes or additions to the Companys supply chain require considerable time and resources and involve significant risks and uncertainties, including exposure to additional regulatory and operational risks.

Future operating results depend upon the Companys ability to obtain components in sufficient quantities on commercially reasonable terms.

Because the Company currently obtains certain components from single or limited sources, the Company is subject to significant supply and pricing risks. Many components, including those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing fluctuations that can materially adversely affect the Companys business, results of operations and, financial condition and stock price. For example, the global semiconductor industry has in the past experienced high demand and shortages of supply, which adversely affected the Companys ability to obtain sufficient quantities of components and products on commercially reasonable terms, or at all. Such disruptions could occur in the future. While

Additionally, the Company has entered into agreemens new products for the supply of manyoften utilize custom components, there can be no assurance the Company will be able to extend available from only one source. When a component or reproduct uses new these agreements on similar terms, or at all. In addition, componentechnologies, initial capacity constraints may exist until the suppliers may suffer from poor financial conditions, which can lead to business failyields have mature fd or the supplier or consolidation within a particular industry, further limiting tir manufacturing capacities have increased. The Companys ability may not be able to obtain sufficient quantitiesextend or renew agreements for the supply of components on commercially reasonablesimilar terms, or at all. Therefore, the Company remains subject to significant risks of supply shortages and price increases that can materially adversely affect, and may not be successful in obtaining sufficient quantities from its business, results of operations and financial condition.

The Companys new products often utilize custom componsuppliers in a timely manner, or in idents available from only one source. When a component or product uses new technologies, initial capacity constraints may exist uifying and obtaining sufficient quantil the suppliers yields have matured or their manufacturing capacities haties from an alternative increased. The continued availability of these source. In addition, components at acceptable prices, or at al suppliers may fail, can be affsubjected for any number of reasons, including if suppliers  to consolidation within a particular industry, or decide to concentrate on the production of common components instead of components customized to meet the Companys requirements. When, further limiting the Companys supply of components for a new or existing product has been delayed or constrained, or when an outsouability to obtain sufficient quantities of components on commercing partner has delayed shipments of completed products to the Companyally reasonable terms, or at all. Therefore, the Companys business, results of operations and financial condition have been adverse remains subject to significant risks of supply affectedshortages and future delays or constraints couldprice increases that can materially adversely affect the Companyits business, results of operations and , financial condition. The Companys business and financial performance could also be materially adversely affected depending on the time required to obtain sufficient quantities from the source, or to identify and obtain sufficient quantities from an alternative source and stock price.

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The Companys products and services may be affected from time to time by design and manufacturing defects that could materially adversely affect the Companys business and result in harm to the Companys reputation.

The Company offers complex hardware and software products and services that can be affected by design and manufacturing defects. Sophisticated operating system software and applications, such as those offered by the Company, often have issues that can unexpectedly interfere with the intended operation of hardware or software products and services. Defects can also exist in components and products the Company purchases from third parties. Component defects could make the Companys products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase as the Companys products are introduced into specialized applications, including health. In addition, the Companys service offerings can have quality issues and from time to time experience outages, service slowdowns or errors. As a result, from time to time the Companys services have not performed as anticipated and may not meet customer expectations. The introduction of new and complex technologies, such as artificial intelligence features, can increase these and other safety risks, including exposing users to harmful, inaccurate or other negative content and experiences. There can be no assurance the e Company will may not be able to detect and fix all issues and defects in the hardware, software and services it offers. Failure to do so, which can result in widespread technical and performance issues affecting the Companys products and services. Errors, bugs and vulnerabilities can be exploited by third parties, compromising the safety and security of a users device. In addition, the Company can be exposed to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can adversely affect the experience for users of the Companys products and services, and result in harm to the Companys reputation, loss of competitive advantage, poor market acceptance, reduced demand for products and services, delay in new product and service introductions and lost sales.

The Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation risk.

The Company records a write-down for product and component inventories that have become obsolete or exceed anticipated demand, or for which cif cost exceeds net realizable value. The Company also accrues necessary cancellation fee reserves for orders of excess products and components. The Company reviews long-livedreviews other assets, including capital assets held at its suppliers facilities and, inventory prepayments and other long-lived assets, for impairment whenever events or circumstances indicate the assets may not be recoverable. If the Company determines that an impairment has occurred, it records a write-down equal to the amount by which the carrying value of the asset exceeds its fair value.  Although the Company believes its inventory, capital assets, inventory prepayments and other assets and purchasre commitments are currently recoverable, there can be no assurance the  Company will notmay incur write-downs, fees, impairments and other charges given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.

The Company orders components for its products and builds inventory in advance of product announcements and shipments. Manufacturing purchase obligations cover the Companys forecasted component and manufacturing requirements, typically for periods up to 150 days. Because the Companys markets are volatile, competitive and subject to rapid technology and price changes, there is a risk the Company will forecast incorrectly and order or produce excess or insufficient amounts of components or products, or not fully utilize firm purchase commitments. The Company accrues necessary cancellation fee reserves for orders of excess products and components.

The Company relies on access to third-party intellectual property, which may not be available to the Company on commercially reasonable terms, or at all.

The Companys products and services are designed to in include technology or intellectual property owned by third parties, which requiresthat must be licensesd from those third parties. In addition, because of technological changes in the industries in which the Company currently competes or in the future may compete, current extensive patentintellectual property coverage and the rapid rate of issuance of new patentsnew intellectual property rights generation, the Companys products and services can unknowinglymay be alleged to infringe existing patents or intellectual property rights of others. From time to time, This risk may be exacerbated by the Company has been notified that ituse of new and emerging technologies, including may be infrchine learninging certain patents or o and artificial intelligence, which can involve, among other intellectual property things, the acquisition and use of copyrights of third parties. Based on experience andted materials for training as well as the potential reproduction of copyrighted materials industry practic their outputs. From time to time, the Company has believes licenses to such third-partyen notified that it may be infringing certain intellectual property can generally be obtained on commercially reasonable terms. However, there can berights of third parties. The Company is no assuranct always able the no obtain all necessary licenses can be obtainedto third-party intellectual property rights on commercially reasonable terms or at all. Failure to obtain the right to use third-party intellectual property, or to use such intellectual property on commercially reasonable terms, can require the Company to modify certain products, services or features or preclude the Company from selling certain products or services, or o and expose therwise have a Company to significant licensing costs, all of which can materially adverse impaly affect on the Companys business, reputation, results of operations and, financial conditionn and stock price.

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The Companys future performance depends in part on support from third-party software developers.

The Company believes decisions by customers to purchase its hardware products depend in part on the availability of third-party software applications and services. There can be no assurance third-party developers will may discontinue tohe development and maintain enance of software applications and services for the Companys products. If third-party software applications and services cease to be developed and maintained for the Companys products, customers may choose not to buy the Companys products.

T, adversely impacting the Company believes the availabilitys business, results of third-party software applicaoperations, financial conditions and servtock prices for its products depends in part on the.

The Company believes that third-party developers perception and analysis of support depends on the relatperceived benefits of developing, maintaincreating and upgrading such ssoftware and services for the Companys products compared to competitors platforms, such as Android for smartphones and tablets, Windows for personal computers and tablets, and PlayStation, Nintendo and Xbox for gaming platforms. This analysis may be based on factors such as the market position of the Company and its products, the anticipated revenue that may be generated, expected future growth of product sales, and the costs of developing such applications and services.

The Companys minority market share in the global smartphone, personal computer a, tablet and tawearablets markets can make developers less inclined to develop or upgrade software for the Companys products and more inclined to devote their resources to developing and upgrading software for competitors products with larger market share. When developers focus their efforts on these competing platforms, the availability and quality of applications for the Companys devices can suffer.

The Company relies on the continued availability and development of compelling and innovative software applications for its products. The Companys products and operating systems are subject to rapid technological change, and when third-party developers are unable to or choose not to keep up with this pace of change, their applications can fail to take advantage of these changes to deliver improved customer experiences, can operate incorrectly, and can result in dissatisfied customers and lower customer demand for the Companys products.

The Company distributes third-party applications for its products through the App Store. For the vast majority of applications, developers keep all of the revenue they generate on the App Store. Where applicable, the Company retains a commission from sales of applications and sales of digital services or goods initiated within an application. From time to time, the Company has made changes to its products and services, including taking actions in response to litigation, competition, market conditions and legal and regulatory requirements, and expects to make further business changes in the future. For example, Failure to obtain the U.S., the Company has implemented changes to how developers communicate with consumers within apps on the U.S. storefront of the iOS and iPadOS App Store regarding alternative purchasing mechanisms. The Company has also implemented changes to iOS, iPadOS, the App Store and Safari in the European Union (EU) as it seeks to comply with the Digital Markets Act (the DMA), including new business terms and alternative fee structures for iOS and iPadOS apps, alternative methods of distribution for iOS and iPadOS apps, alternative payment processing for apps across the Companys operating systems, and additional tools and application programming interfaces (APIs) for developers. Changes to the or create digital content that appeals to the Companys products and services could materially adversely affect the Companys business, results of operations and financial condition, including if such business changes result in reduced App Store or other sales, reductions in the rate of the commission that the Company retains on such sales, or if the rate of the commission is otherwise narrowed in scope or eliminated.

Failure to obtain or create digital content that appeals to the Companys customers, or to macustomers, or to make such content available on commercially reasonable terms, could have a material adverse impact on the Companys business, results of operations and financial condition.

The Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell, or offer subscriptions to, third-party content, as well as the right to incorporate specific content into the Companys own services. The licensing or other distribution arrangements for this content can be for relatively short time periods and do not guarantee the continuation or renewal of these arrangements on commercially reasonable terms, or at all. Some third-party content providers and distributors currently or in the future may offer competing products and services, and can take actions to make it difficult or impossible for the Company to license or otherwise distribute their content. Other content owners, providers or distributors may seek to limit the Companys access to, or increase the cost of, such content. The Company may be unable to continue to offer a wide variety of content at commercially reasonable prices with acceptable usage rules.

The Company also produces its own digital content, which can be costly to produce due to intense and increasing competition for talent, content and subscribers, and may fail to appeal to the Companys customers.

Some third-party digital content providers require the Company to provide digital rights management and other security solutions. If requirements change, the Company may have to develop or license new technology to provide these solutions. There can be no assurance the The Company will be able to develop or licenses such solutions at a reasonable cost and in a timely manner.

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The Companyces successs depends largely on the talents and efforts of its team members, the continued service and availability of highly skilled employees, including key personnel, and the Companys ability to nurture its distinctive and inclusive culture.

Much of the Companys future success depends on the talents and efforts of its team members and the continued availability and service of key personnel, including its Chief Executive Officer, executive team and other highly skilled employees. Experienced personnel in the technology industry are in high demand and competition for their talents is intense, especially in Silicon Valley, where most of the Companys key personnel are located. In addition Periods of intense competition for talent in particular fields can lead to increased costs as the Company seeks to intense offer competitive compensation to recruit and retain highly skilled employees. In addition to competition for talent, workforce dynamics are constantly evolving.  and the Company must navigate changes effectively in order to achieve its strategic initiatives. Laws and regulations, including immigration, labor and employment laws and export controls, among others, can materially adversely affect the Companys ability to recruit and retain a highly skilled, global workforce. If the Company does not effectively manage changing workforce dynamics effectivelyand regulatory requirements, it could materially adversely affect the Companys culture, reputoperation aal flexibility, strategy and opercosts, all of which can materially adversely affect the Companys business, reputational flexibility, results of operations, financial condition and stock price.

The Company believes that its distinctive and inclusive culture is a significant driver of its success. If the Company is unable to nurture its culture, it could materially adversely affect the Companys ability to recruit and retain the highly skilled employees who are critical to its success, and could otherwise materially adversely affect the Companys business, reputation, results of operations and, financial condition.

n and stock price.

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The Company depends on the performance of carriers, wholesalers, retailers a and other resellers.

The Company distributes its products and certain of its services through cellular network carriers, wholesalers, retailers and  and other resellers, many of which distribute products and services from competitors. The Company also sells its products and services and resells third-party products in most of its major markets directly to consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force.

Some carriers providing cellular network service for the Companys products offer f Resellers offer financing, installment payment plans or subsidies for users purchases of the device. There can be no assurances, and such offers willplans may be discontinued at all  or in the same amountsmodified any time.

The Company has invested and will continue to invest in programs to enhance reseller sales, including staffing selected resellers stores with Company employees and contractors, and improving product placement displayss, and developing and making digital marketing assets available to resellers. These programs can require a substantial investment while not assuring return or incremental sales. TFor example, the purchasing preferences and behaviors of consumers may change, the financial condition of these resellers could weaken, these resellers could stop distributing the Companys products, or uncertainty regarding demand for some or all of the Companys products could cause resellers to reduce their ordering and marketing of the Companys products, all of which could materially adversely impact the Companys business, results of operations, financial condition and stock price.

The Companys business and reputation are impacted by information technology system failures and network disruptions.

The Company and its global supply chain are dependent on complex information technology systems and are exposed to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, physical or electronic break-ins, ransomware or other cybersecurity incidents, or other events or disruptions. System upgrades, redundancy and other continuity measures may be ineffective or inadequate, and the Companys or its vendors business continuity and disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions can adversely impact the Companys business by, among other things, preventing access to the Companys online services, interfering with customer transactions or impeding the manufacturing and shipping of the Companys products. These events could materially adversely affect the Companys business, reputation, results of operations and, financial conditionn and stock price.

Losses or unauthorized access to or releases of confidential information, including personal information, could subject the Company to significant reputational, financial, legal and operational consequences.

The Companys business requires it to use and store confidential information, including personal infand sensitive health and financial information with respect to the Companys customers and employees. The Company devotes significant resources to systems and data security, including through the use of encryption and other security measures intended to protect its systems and data. But these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential information occur and could materially adversely affect the Companys business, reputation, results of operations and, financial condition and stock price.

The Companys business also requires it to share confidential information with suppliers and other third parties. The Company relies on global suppliers that are also exposed to ransomware and other malicious attacks that can disrupt business operations. Although the Company takes steps to secure confidential information that is provided to or accessible by third parties working on the Companys behalf, such measures are not always effective and losses or unauthorized access to, or releases of, confidential information occur. Such incidents and other malicious attacks could materially adversely affect the Companys business, reputation, results of operations and, financial condition.

Apple Inc. | 2024 Form 10-K | 11

 and stock price.

The Company experiences malicious attacks and other attempts to gain unauthorized access to its systems on a regular basis. These attacks seek to compromisetarget the confidentiality, integrity or availability of confidential information orand may disrupt normal business operations, and. Attacks can, among other things, i impair the Companys ability to attract and retain customers for its products and services, impaaffect the Companyits stock price, materially damage commercial relationships, and expose the Company to litigation or government investigations, which canpotentially resulting in penalties, fines or judgments against the Company. Globally, attacks are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders the Companys ability to identify, investigate and recover from incidents. In addition, attacks against the Company and its customers can escalate during periods of geopolitical tensions or conflict.

Although malicious attacks perpetrated to gain access to confidential information, including personal information, affect many companies across various industries, the Company is at a relatively greater risk of being targeted because of its high profile and the value of the confidential information it creates, owns, manages, stores and processes.

The Company has imApplemented systems and processes intended to secure its inf Inc. | 2025 Formation technology sy 10-K | 11

Astems and prevent unauthorized access to or loss of sensitive data, and mitigate the impact of unauthorized access, including through the use of encryption and authentication technologies. As with all c with all companies, the security the Companies, these security measuresy has implemented may not be sufficient for all eventualities and are vulnerable to hacking, ransomware attacks, employee error, malfeasance, system error, faulty password management or other irregularities. For example, third parties can fraudulently induce the Companys or its suppliers and other third parties employees or customers into disclosing usernames, passwords or other sensitive information, which can, in turn, be used for unauthorized access to the Companys or such suppliers or third parties systems and services. To help protect customers and the Company, the Company deploys and makes available technologies like multifactor authentication, monitors its services and systems for unusual activity and may freeze accounts under suspicious circumstances, which, among other things, can result in the delay or loss of customer orders or impede customer access to the Companys products and services.

While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

Investment in new business strategies a, commercial relationships and acquisitions could disrupt the Companys ongoing business, present risks not originally contemplated, and materially adversely affect the Companys business, reputation, results of operations and financial condition.

The Company has invested, and in the future may invest, in new business strategies or a, commercial relationships and acquisitions. Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capital, potential impairment of tangible and intangible assets, and significant write-offs. InSome transactions, including investments and acquisition transactionss, are exposed to additional risks, including failing to obtain required regulatory approvals on a timely basis or at all, or t a counterpartys failure to perform or deliver as anticipated, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise limit the Companys ability to fully realize the anticipated benefits of a transaction. These new New business strategies and ventures are inherently risky and may not be successful. The failure of any significant investment could materially adversely affect the e Companys business, reputation, results of ope strationegies and financial condition.

The Companys retail stores are subject to numerous risks and uncertainties.

The Companys retail operations arinvestments may not be subject to many factors that pose risks and uncertainties and couldccessful, which could materially adversely impaaffect the Companys business, results of operations and financial condiputation, including macroeconomic factors that could have an adverse effect on general retail activity. Other factors include the Companys ability to: manage costs associated with retail store constructresults of operation and operation; manage relationships with existing retail partners; manage costs associated with fluctuations in the value of retail inventory; and obtain and renew leases in quality retail locations at a reasonable cost.

Apple Inc. | 2024 Form 10-K | 12

s, financial condition and stock price.

Legal and Regulatory Compliance Risks

The Companys business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.

The Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future. In addition, agreementsthe Company entereds into byagreements the Company sometimesat include indemnification provisions whichthat can subject the Company to costs and damages in the event of a claim against an indemnified third party. The number of claims, legal proceedings and government investigations involving the Company, and the alleged magnitude of such claims, proceedings and government investigations, has generally increased over time and may continue to increase.

The Company has faced and continues to face a significant number of patent claims relating to its cellularstandards-enabled products, and new claims may arise in the future, including as a result of new legal or regulatory frameworks. For example, technology a, data and other patent-intellectual property assetholding companies frequently assert their patentintellectual property rights and seek royalties and often enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. The se risks, and the risks of novel claims being attempted, may be exacerbated as new and emerging technologies, including machine learning and artificial intelligence, are further integrated into the Company is s products and services. The Company is vigorously defending infringement actions in courts in several U.S. jurisdictions, as well as internationally in various countries. The plaintiffs in these actions frequently seek broad injunctive relief and substantial damages.

Regardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming and disruptive to the Companys operations. In recognition of these considerations, the Company may enter into agreements or other arrangements to settle litigation and resolve such challenges. There can be no assuranceHowever, such agreements can may not always be obtainedavailable on acceptable terms or that, and litigation wmay still not occur. Thesearise. Such agreements can also significantly reduce the Companys revenue and increase the Companys cost of sales and operating expenses and , materially adversely affecting the Companys business, results of operations, financial condition and stock price. Additionally, such agreements may require the Company to change its business practices and limit the Companys ability to offer certain products and services.

Apple Inc. | 2025 Form 10-K | 12

The outcome of litigation or government investigations is inherently uncertain. If one or more legal matters were resolved against the Company or an indemnified third party in a reporting period for amounts above managements expectations, the Companys results of operations and, financial condition and stock price for that reporting period could be materially adversely affected. Further, such an outcome can result in significant monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against the Company, and . Adverse resolution of legal matters has from time to time required, and can in the future require, the Company to change its business practices and l. It can also limit the Companys ability to develop,  enjoin others from using, or to derive value from, its intellectual property rights, and to develop, manufacture, use, import or offer for sale certain products and services, all of which could materially adversely affect the Companys business, reputation, results of operations and, financial condition and stock price.

While the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

The Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liabilities, increased costs and other adverse effects on the Companys business.

The Companys global operations are subject to complex and changing laws and regulations worldwide on subjects, including antitrust; privacy, data security and data localization; cononline safety; age verification; consumer protection; advertising, sales, billing and e-commerce; financial services and technology; product liability; intellectual property ownership and infringement; digital platforms; machine learning and artificial intelligence; internet, telecommunications and mobile communications; media, television, film and digital content; availability of third-party software applications and services; labor and employment; anticorruption; import, export and trade; foreign exchange controls and cash repatriation restrictions; antimoney laundering; foreign ownership and investment; tanational security; tax; and environmental, health and safety, including electronic waste, recycling, product design and climate change.

Compliance with these laws and regulations is onerous and expensive. New and changing laws and regulation, regulations, executive orders, directives, and enforcement priorities can adversely affect the Companys business by increasing the Companys costs, limiting the Companys ability to offer a product, service or feature to customers, imposing changes to the design of the Companys products and services, impacting customer demand for the Companys products and services, and requiring changes to the Companys business or supply chain. New and changing laws and regulation, regulations, executive orders, directives, and enforcement priorities can also create uncertainty about how such laws and regulations will be interpreted and applied. These risksIf the Company is found to have violated such laws and regulations, it could materially adversely affect the Companys business, reputation, results of operations, financial condition and stock price.

Risks and costs may increase related to new and changing laws, regulations, executive orders, directives, and enforcement priorities increase as the Companys products and services are introduced into specialized applications, including health and financial services, or as the Company expands the use of technologies, such as machine learning and artificial intelligence features, and must navigate new legal, regulatory and ethical considerations relating to such technologies. The Company has implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance the Companys employees, contractors or agents will not violate such laws and regulations or the Companys policies and procedures. If the Company is found to have violated laws and regulations, it could materially adversely affect the Companys business, reputation, results of operations and financial condition.

Apple Inc. | 2024 Form 10-K | 13

Regulatory changes and other actions that materially adversely affect the Companys business may be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse impacts from such measures. For example, the Company is subject to changing regulations relating to the export and import of its products. Although tThe Company has programs, policies and procedures in place that are designed to satisfy regulatory requirements, there can be may no assurance that such policies and procedures will t be effective in preventing a violation or a claim of a violation. As a result, the Companys products could be banned, delayed or prohibited from importation, which could materially adversely affect the Companys business, reputation, results of operations and, financial condition.

En and stock price.

Varied stakeholder expectations relating to environmental,about social and governance considerations and related reporting obligationother issues expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Companys business.

ManyVarious stakeholders, including governments, regulators, investors, employees, customers and other stakeholders are increass, have differingly focused on environmental, social and governance cons expectations about a widerations relating to businesses, including climate change range of social and greenhouse gas emother issions, human and civil rights, and diversity, equity and inclues related to the Companys busion. In addition, tness. The Company makes statements about its goalsvalues, including the environmental and initiativessocietal impact of its business, through its various non-financial reports, information provided on itthe Companys website, and in press statements and other communications. Responding to theseThe Company also pursues environmental, social a and governance considerations and implementation of the Companys announced other goals and initiatives that involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside the Companys control. T, and the Company canmay not guarantee that it willbe able to fully achieve its announced environmental, social and governance goa all of its goals and initiatives. In addition, some stakeholders may disagree with thEfforts by the Companys goals and initiatives. Any failure to advance its business and values, or perceived failure, by the Company to aachieve its goals, and further its initiatives, adhereor to its public salign with stakeholders expectatementions, or comply with federal, stateevolving, varied and international environmentat times conflicting federal, socialtate and govinternancetional laws and, executive orders, regulations and standards, or meet evolving and varied stakeholder expectaany failure or perceived failure to do so, can result in adverse reactions by consumers and other standards could result in keholders, including the commencement of legal and regulatory proceedings against the Company, and can materially adversely affect the Companys business, reputation, results of operations, financial condition and stock price.

Apple Inc. | 2025 Form 10-K | 13

The technology industry, including, in some instances, the Company, is subject to intense media, political and regulatory scrutiny, which exposes the Company to increasing regulation, government investigations, legal actions and penalties.

From time to time, the Company has made changes to its App Storebusiness, including actions taken in response to litigation, competition, market conditions and legal and regulatory requirements. The Company expects to make further business changes in the future. For example, in the U.S., the Company has implemented changes to how developers communicate with consumers within apps on the U.S. storefront of the iOS and iPadOS App Store regarding alternative purchasing mechanisms.

T and is currently subject to a court order preventing it from imposing any commission or fee on certain purchases that consumers make.

Globally, several jurisdictions have adopted, or may in the Company hafuture adopt, competition-related laws and regulations imposing wide-ranging obligations on technology companies also implemnd significant limitations on businesses, including the Company. For example, the Company has implemented changes to iOS, iPadOS, the App Store and Safari in the EU as it seeks to comply with the DMAigital Markets Act (DMA), including new business terms and alternative fee structures for iOS and iPadOS apps, alternative methods of distribution for iOS and iPadOS apps, alternative payment processing for apps across the Companys operating systems, and additional tools and APIapplication programming interfaces for developers. The Company has also continued to make changes to its compliance plan in response to feedback and engagement with the European Commission (the Commission). Although the Companys compliance plan is intended to address the DMAs obligations, it has been challenged by the Commission and may be challenged further by private litigants. The DMA provides for significant fines and penalties for noncompliance, and other jurisdictions may seek to require the Company to make changes to its business. While the changes introduced by the Company in the EU are intended to reduce new privacy and security risks that the DMA poses to EU users, many risks will remain. Changes to the Companys business in response to the DMA or other laws and regulations could materially adversely affect the Companys business, reputation, results of operations, financial condition and stock price.

The Company is also currently subject to antitrust investigations and litigation in various jurisdictions around the world, which can result in legal proceedings and claims against the Company that could, individually or in the aggregate, have a materiallyl adverse impact on the Companys business, results of operations and, financial condition and stock price. For example, the Company is subject to civil antitrust lawsuits in the U.S. alleging monopolization or attempted monopolization in the markets for performance smartphones and smartphones generally in violation of U.S. antitrust laws. In addition, the Company is the subject of investigations in Europe and other jurisdictions relating to App Store terms and conditions. If such investigations or litigation are resolved against the Company, the Company can be exposed to significant fines and may be required to make further changes to its business practices, all of which could materially adversely affect the Companys business, reputation, results of operations and, financial conditionn and stock price.

Further, the Company has commercial relationships with other companies in the technology industry that are or may become subject to investigations and litigation that, if resolved against those other companies, could materially adversely affect the Companys commercial relationships with those business partners and materially adversely affect the Companys business, results of operations and, financial condition and stock price. For example, the Company earns revenue from licensing arrangements with Google LLC (Google) and other companies to offer their search services on the Companys platforms and applications, and certain of these arrangements are currently subject to government investigations and legal proceedings.

App On August 5, 2024, Google Inc. |was found to have violated U.S. antitrust laws. In connection with this finding, on September 2, 2024 Form 10-K | 14

5, the U.S. District Court for the District of Columbia (D.C. District Court) ordered certain remedies. There can be no assurance the  courts order is subject to further proceedings before the D.C. District Court, which may result in changes to the interpretation or application of the remedies ordered by the court, as well as new or changed remedies being ordered. The courts order is also subject to appeal by both the U.S. Department of Justice (DOJ) and Google. A reversal of the order on appeal could result in imposition of certain remedies initially proposed by the DOJ, such as those prohibiting Google from offering the Companys business will not  commercial terms for search distribution. If implemented, these remedies could materially adversely affect the Companys ability to earn revenue from such licensing arrangements.

The Companys business, results of operations, financial condition and stock price can be materially adversely affected, individually or in the aggregate, by the outcomes of such investigations, litigation or changes to laws and regulations in the future. Changes to the Companys business practices to comply with new laws and regulations or in connection with other legal proceedings can negatively impact the reputation of the Companys products for privacy and security and o. Such changes in business practices can also otherwise adversely affect the experience for users of the Companys products and services, and result in harm to the Companys reputation, loss of competitive advantage, poor market acceptance, reduced demand for products and services, alost sales, and lost sales.

wer profit margins.

Apple Inc. | 2025 Form 10-K | 14

The Companys business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding data the collection, use, protectionn and transfer of personal data.

The Company is subject to an increasing number of federal, state and international laws relating to the collection, use, retention, securityprotection and transfer of various types of personal informationdata. In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal informationdata among the Company and its international subsidiaries. Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional restrictions or have laws that are pending. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing requirements causes the Company to incur substantial costs and has required and may in the future require the Company to change its business practices. Noncompliance could result in significant penalties or legal liability.

The Company makes statements about its use and disclosure of personal informationdata through its privacy policy, information provided on its website, press statements and other privacy notices provided to customers. Any failure or perceived failure by the Company to comply with these public statements or with federal, state or international privacy or data protection laws and regulations could result in inquiries or, proceedings against the Company by and penalties from governmental entities or others. In addition tSuch a failure or perceived failure could also result in reputational impacts, penalties could include onongoing audit requirements and significant legal liability. The risks of inadvertent disclosure of personal data can increase with the introduction of new and complex technologies, such as artificial intelligence features, further exacerbating such risks.

In addition to the risks generally relating to the collection, use, retention, securityprotection and transfer of personal informationdata, the Company is also subject to specific obligations relating to inforthe collection and processing of data associated with minors, as well as information considered sensitive under applicable laws, such as health data, biometric, financial data aand biometricpayment card data. Health data and, biometric, financial data aand payment card data are subject to additional privacy, security and breach notification requirements, and the Company is subject to audit by governmental authorities regarding the Companys compliance with these obligations. If the Company fails to adequately comply with these rules and requirements, or if health data or financial data is handled in a manner not permitted by law or under the  the Companys agreements with healthcare or financial institutions, the Company can  can be subject to litigation or government investigations, and can be liable for associated investigatory expenses, and can also incur significant fees or fines.

Payment card dataThe Company is also subject to additionalnew and changing laws and requirements. Under payment card rules and obligagulations regarding online safety, including enhanced protections, if cardholder information is potentially compromised, the Company can be liable for associated for minors and mandatory age verification requirements. These laws and regulations can investigcrease regulatory expenses and can also incurrisks by requiring complex compliance measures and significant fees or fines if modifications to the Company fails to follow payment card industry datas products, security strvices andards. The Company could also ex operations, and may lead to operience a significant increase in payment card transactionational disruptions, heightened privacy and data security risks, increased costs or lose the and potential liability to process payment cards if it fails to follow paymentand fines, all of which card industry data security standards, which could n have a materially adversely affe impact on the Companys business, reputafinancial condition, results of operations and financial conditionstock price.

Financial Risks

The Company expects its quarterly s net sales and results of opergross margins are subject to volationslity and downward pressure due to fluctuatea variety of factors.

The Companys profitgross margins vary asignificantly across its products, services, geographic segments and distribution channels. For example, the gross margins on the Companys products and services vary significantly and can  and can change over time. The Companys net sales and gross margins are subject to volatility and downward pressure due to a variety of factors, including: continued industry-wide global product pricing pressures and product pricing actions that the Company may take in response to such pressures; increased competition; the Companys ability to effectively stimulate demand for certain of its products and services; compressed product life cycles; supply shortages; potential increases in the cost of components, outside manufacturing services, and developing, acquiring and delivering content for the Companys services; the Companys ability to manage product quality and warranty costs effectively; shifts in the mix of products and services, or in the geographic, currency or channel mix, including to the extent that regulatory changes require the Company to modify its product and service offerings; fluctuations in foreign exchange rates; inflation and other macroeconomic pressures; the imposition of new or increased tariffs and other trade restrictions, their overall magnitude and duration, and retaliatory actions in response; and the introduction of new products or services, including new products or services with lower profit margins. These and other factors could have a materially adverse impact on the Companys results of operations and , financial condition.

The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday demand. Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses and stock price. Further, the Company generates a significant portion of its net sales from a single product acategory and a decline in demand for that product could significantly impact quarterly net sales. The Company could also be subject to unexpected developments, such as lower-than-anticipated demand for the Companys products or services, issues with new product or service introductions, information technology system failures or network disruptions, or failure of one of the Companys logistics, supply or manufacturing partner and gross margins.

Apple Inc. | 2024 Form 10-K | 15

The Companys financial performance is subject to risks associated with changes in the value of the U.S. dollar relative to local currencies.

The Companys primary exposure to movements in foreign exchange rates relates to nonU.S. dollardenominated sales, cost of sales and operating expenses worldwide. Gross margins on the Companys products in foreign countries and on products that include components obtained from foreign suppliers have in the past been adversely affected and could in the future be materially adversely affected by foreign exchange rate fluctuations.

The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of the Companys foreign currencydenominated sales and earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Companys products. In some circumstances, for competitive or other reasons, the Company may decide not to raise international pricing to offset the U.S. dollars strengthening, which would adversely affect the U.S. dollar value of the gross margins the Company earns on foreign currencydenominated sales.

Apple Inc. | 2025 Form 10-K | 15

Conversely, a strengthening of foreign currencies relative to the U.S. dollar, while generally beneficial to the Companys foreign currencydenominated sales and earnings, could cause the Company to reduce international pricing or incur losses on its foreign currency derivative instruments, thereby limiting the benefit. Additionally, strengthening of foreign currencies may increase the Companys cost of product components denominated in those currencies, thus adversely affecting gross margins.

The Company uses derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign exchange rates. The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable movements in foreign exchange rates over the limited time the hedges are in place.

The Company is exposed to credit risk and fluctuations in the values of its investment portfolio.

The Companys investments can be negatively affected by changes in liquidity, credit deterioration, financial results, market and economic conditions, political risk, sovereign risk, interest rate fluctuations or other factors. As a result, the value and liquidity of the Companys cash, cash equivalents and marketable securities may fluctuate substantially. Although the Company has not realized significant losses on its cash, cash equivalents and marketable securities, future fluctuations in their value could result in significant losses and could have a material adverse impact on the Companys results of operations and, financial condition and stock price.

The Company is exposed to credit risk on its trade accounts receivable, vendor non-trade receivables and prepayments related to long-term supply agreements, and this risk is heightened during periods when economic conditions worsen.

The Company distributes its products and certain of its services through third-party cellular network carriers, wholesalers, retailers and  and other resellers. The Company also sells its products and services directly to small and mid-sized businesses and education, enterprise and government customers. A substantial majority of the Companys outstanding trade receivables are not covered by collateral, third-party bank support or financing arrangements, or credit insurance, and a significant portion of the Companys trade receivables can be concentrated within cellular network carriers or other resellers. The Companys exposure to credit and collectibility risk on its trade receivables is higher in certain international markets and its ability to mitigate such risks may be limiteds. The Company also has unsecured vendor non-trade receivables resulting from purchases of components by outsourcing partners and other vendors that manufacture subassemblies or assemble final products for the Company. In addition, the Company has made prepayments associated with long-term supply agreements to secure supply of inventory components. As of September 287, 20245, the Companys vendor non-trade receivables and prepayments related to long-term supply agreements  were concentrated among a few individual vendors located primarily in Asia. WhileIf the Company has proceduresis unable to monitor and limit exposure to credit risk on its trade and vendor non-trade receivables, as well as long-term prepayments, there can be no assure Companys results of operations, finance suchial condition and stock procedures will effectively limit its credit risk and avoid lossesice could be materially adversely affected.

The Company is subject to changes in tax rates, the adoption of new U.S. or international tax legislation and exposure to additional tax liabilities.

The Company is subject to taxes in the U.S. and numerous foreign jurisdictions, including Ireland and Singapore, where a number of the Companys subsidiaries are organized. Due to economic and political conditions, tax laws and tax rates for income taxes and other non-income taxes in various jurisdictions may be subject to significant change. For example, the Organisation for Economic Co-operation and Development continues to advance proposals for modernizing international tax rules, including the introduction of global minimum tax standards. The Companys effective tax rates are affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, and changes in tax laws or their interpretation. The application of tax laws may be uncertain, require significant judgment and be subject to differing interpretations.

Apple Inc. | 2024 Form 10-K | 16

The Company is also subject to the examination of its tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and governmental bodies. The Company regularly assesses the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of its provision for taxes. There can be no assurance as to the out outcome of thesesuch examinations is inherently uncertain. If the Companys effective tax rates were to increase, or if the ultimate determination of the Companys taxes owed is for an amount in excess of amounts previously accrued, the Companys business, results of operations and, financial condition cand stock price could be materially adversely affected.

Apple Inc. | 2025 Form 10-K | 16

General Risks

The price of the Companys stock is subject to volatility.

The Companys stock has experienced substantial price volatility in the past and may continue to do so in the future. Additionally, the Company, the technology industry and the stock market as a whole have, from time to time, experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to these companies operating performance. Price volatility may cause the average price at which the Company repurchases its stock in a given period to exceed the stocks price at a given point in time. The Company believes the price of its stock should reflect expectations of future growth and profitability. The Company also believes the price of its stock should reflect expectations that its cash dividend will continue at current levels or grow, and that its current share repurchase program will be fully consummated. Future dividends are subject to declaration by the Companys Board of Directors (the Board), and the Companys share repurchase program does not obligate it to acquire any specific number of shares. If the Company fails to meet expectations related to future growth, profitability, dividends, share repurchases or other market expectations, the price of the Companys stock may decline significantly, which could have a material adverse impact on investor confidence and employee retention.