Flex Ltd. · Risk factors

Prior heading: Our customers have in the past and may in the future cancel their orders, change production quantities or locations, or delay production, any of which could harm our business; the short-term nature of our customers’ commitments and rapid changes in demand have in the past caused, and may in the future cause, supply chain and other issues which could adversely affect our operating results.

Cancellations, reductions, or delays by a significant customer or by a group of customers have in the past harmed, and may could in the future harm, our results of operations by reducing the volumes of products we manufacture and deliver for those customers, by causing a delay in the repayment of our expenditures for inventory in preparation for customer orders and/or our possession of excess or obsolete inventory that we may not be able to sell to customers or third parties which may result in an impairment loss for inventory, and by lowering our asset utilization and overhead absorption resulting in lower gross margins and earnings. As a provider of design and manufacturing services and components for electronics, including power and infrastructure solutions used in data center and other applications, we must provide increasingly rapid product turnaround times for our customers. We generally do not obtain firm, long-term purchase commitments from our customers, and we often experience reduced lead times in customer orders which may be less than the lead time we require to procure necessary components and materials. materials, including higher‑value or longer‑lead‑time components used in certain of our components and data center power offerings. Many factors outside of our control impact our customers and their ordering behavior, including recession in end markets, changing technology and industry standards, commercial acceptance for products, product obsolescence, and loss of business. The short-term nature of our customers' commitments and the rapid changes in demand for their products reduces reduce our ability to accurately estimate the future requirements of our customers. This makes it difficult to schedule production and maximize utilization of our manufacturing capacity. In that regard, we must make significant decisions, including determining the levels of business that we will seek and accept, setting production schedules and locations, making component procurement commitments, and allocating personnel and other resources based on our estimates of our customers' requirements. We cannot give assurance that present or future customers will not significantly change, reduce, cancel or delay their orders. orders. In addition, certain of our customer contracts contain provisions that permit the customer to terminate the agreement for convenience upon prior written notice, which notice periods may be relatively short. If a customer exercises such termination rights, we may not be entitled to receive payment for work in process, stranded inventory, or other costs incurred in anticipation of future orders. We may not have adequate contractual protections, such as termination fees or wind-down payments, to offset the financial impact of an early termination by a significant customer. On occasion, customers require rapid increases in production or require that manufacturing of their products be transitioned from one facility to another to reduce costs or achieve other objectives. These demands may stress our resources, cause supply chain management issues, and reduce our margins. We may not have sufficient capacity at any given time to meet our customers' demands, and transfers from one facility to another can result in inefficiencies and costs due to excess capacity in one facility and corresponding capacity constraints at another. Many of our costs and operating expenses are relatively fixed, and thus customer order fluctuations, deferrals, and transfers of demand from one facility to another, as described above, have had a material adverse effect on our operating results of operations in the past and we may experience such effects in the future.

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Prior heading: A significant percentage of our sales come from a small number of customers and a decline in sales to any of our largest customers has in the past adversely affected, and may in the future adversely affect, our business.

Sales to our ten largest customers represent a significant percentage of our net sales. Our ten largest customers accounted for approximately 44%, 37% 45%, 44% and 37% of net sales in fiscal years 2025, 2024 2026, 2025 and 2023, 2024, respectively. No customer accounted for more than 10% of net sales in fiscal year 2025, 2024 2026, 2025 or 2023. 2024. Our principal customers have varied from year to year. These customers Customers have in the past experienced, and may could in the future experience, dramatic declines in their market shares or shares, competitive position, or demand for their products and services, due to economic or other forces, that may cause them to reduce their purchases from us or, in some cases, result in the termination of their relationship with us. Significant reductions in sales to any of our largest customers, or the loss of major customers, have in the past harmed, and could in the future materially harm, our business. business, results of operations, cash flows, and financial condition. If we are not able to replace expired, canceled or reduced contracts with new business in a timely manner, including due to qualification, ramp‑up or customer approval requirements, our revenues and profitability could would be harmed. Additionally, mergers, acquisitions, consolidations or other significant transactions involving our largest customers generally entail risks to our business. If a significant transaction involving any of our largest customers results resulting in the loss of or reduction in purchases by any of our largest customers, it could have a material adverse effect on our business, results of operations, cash flows, financial condition and prospects.prospects. Customer concentration is particularly pronounced in our Cloud and Power Infrastructure businesses, where a limited number of hyperscale cloud providers, colocation companies, and large enterprise data center operators represent a substantial portion of demand. Hyperscale customers typically have substantial purchasing power and negotiating leverage, which they may use to obtain favorable pricing, extended payment terms, volume flexibility, or other concessions that could reduce our margins or adversely affect our cash flows. As these customers grow larger through consolidation or organic growth, their bargaining power may increase further. In addition, certain hyperscale customers have developed, or may develop, internal design, engineering, or manufacturing capabilities that compete with our offerings. These customers may choose to reduce their reliance on third-party providers like us over time, which could result in reduced order volumes, loss of programs, or increased pricing pressure. Any decision by one or more significant hyperscale customers to vertically integrate, in-source production, or shift purchases to competitors could have a material adverse effect on our business, results of operations, and financial condition.

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Prior heading: Supply chain disruptions, logistical constraints, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, have in the past affected, and may in the future affect, our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory.

From time to time, we have experienced shortages of some of the components, including electronic components, that we use. These shortages can result from strong demand for those components or from problems experienced by suppliers, such as shortages of raw materials. In the past past, there have been industry wide conditions, pandemics, natural disasters and global events that have caused material and component shortages. Most recently, we experienced shortages disruptions in the supply of semiconductor components components, including as a result of regulatory actions, export controls, and other government-imposed restrictions affecting certain suppliers, which adversely impacted our business, including curtailed production or delays in production, and delays in making scheduled shipments to customers. Inflationary pressures have increased in recent years and may continue to increase pricing of components. Our supply chain has in the past been, and could in the future be, impacted by events outside our control, including macro-economic events, tariffs and trade restrictions, political crises, social unrest, terrorism, and geopolitical conflicts (including the conflicts in Ukraine and the Middle East, including the conflict in Israel, recent U.S. military operations in Iran, disruptions in the Strait of Hormuz, attacks on shipping vessels in the Red Sea, and other regional tensions), public health emergencies, or natural or environmental occurrences in locations where we or our customers and suppliers have manufacturing, research, engineering and other operations. Certain components that we use are sourced from a limited number of suppliers, and in some cases from a single supplier, which increases the risk that regulatory actions, geopolitical developments, trade restrictions or other events affecting those suppliers could disrupt our supply chain. In addition, certain of our customers direct or require us to purchase components, materials, or subsystems from specified suppliers. In some cases, these customer-directed suppliers may be sole sources for the required components or may be geographically concentrated. We may have limited ability to qualify alternative suppliers or pass through cost increases for customer-specified components. If a customer-directed supplier experiences supply disruptions, quality issues, financial distress, or other problems, we could be unable to meet our customer's requirements and could be exposed to warranty claims, contract penalties, or liability, even if the underlying issue was attributable to the customer-directed supplier. Our customers may not agree to share responsibility for these supply chain risks, and we may bear a disproportionate share of the exposure. Our failure or inability to accurately forecast demand and volatility in the availability and prices of materials, equipment, components, and services, including rising prices due to inflation or scarcity of availability, have in the past adversely impacted, and may could in the future, future adversely impact impact, our business and results of operations. operations. Our inability to make scheduled shipments has in the past caused, and may could in the future cause us to experience a reduction in sales, increase in inventory levels and costs, and could adversely affect relationships with existing and prospective customers. Component shortages have in the past and may could in the future also increase our cost of goods sold because we may be required to pay higher prices for components in short supply and redesign or reconfigure products to accommodate substitute components. As a result, component shortages have in the past adversely affected, and may could in the future adversely affect, our operating results. results of operations. Our customers also may could experience component shortages which may could adversely affect customer demand for our products and services. Our end markets have in the past been, and may could in the future be, adversely impacted by logistical constraints and increased freight and logistics costs around the world. In addition, if a component shortage is threatened or anticipated, we may purchase such components early to avoid a delay or interruption in our operations. Purchasing components early has in the past caused, and may could in the future, cause us to incur additional inventory carrying costs and cause us to experience inventory obsolescence, both of which may not be recoverable from our customers and adversely affect our gross profit margins and results of operations. Our supply chain has in the past been, and operations. Such purchases may in also require customer approvals, redesign efforts or the future be, impacted by other events outside use of alternative components that could further increase costs, delay production or affect product performance. Given the complexity of our control, including macro-economic events, tariffs supply chain and trade restrictions, political crises, social unrest, terrorism, our geographically dispersed operations, we depend on a variety of common carriers to transport our materials from our suppliers to us, and to transport our products from us to our customers. Problems suffered by any of these common carriers, whether due to geopolitical issues, such as conflicts (including in Ukraine and the Russian invasion of Ukraine, Middle East, disruptions in the Israel-Hamas war, Strait of Hormuz and the Red Sea, including as a result of attacks on shipping vessels vessels, natural disasters, labor problems, increased energy prices, criminal activity or other issues, have in the Red Sea past resulted, and other geopolitical conflicts), public health emergencies, or natural or environmental occurrences could in locations where we the future result, in shipping delays, increased costs, or our customers other supply chain disruptions, and suppliers therefore have manufacturing, research, engineering in the past had, and other operations.could in the future have, a material adverse effect on our operations. The effects of climate change, including extreme weather events and long-term changes in temperature levels and water availability, may exacerbate these transportation and logistics risks.

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Prior heading: A breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure and adversely affect our operations.

We rely on our information systems, some of which are managed by third parties, to process, transmit transmit, and store electronic information (including sensitive data such as confidential business information and personally identifiable information in each case relating to employees, customers, vendors, consumers, and other business partners), and to manage or support a variety of critical business processes and activities activities, including manufacturing, design and engineering services, financial reporting, recordkeeping, compliance and internal controls, human and capital asset and inventory management, procurement, invoicing, treasury activities, and electronic communications. Our ability to effectively manage our business depends on the security, reliability reliability, and adequacy of our these information systems. We may be adversely affected if our these information systems break down, fail, or are no longer supported. In addition, we continue to invest in and implement modifications and upgrades to our information systems, which may be complex and require significant management oversight, and subject us to inherent costs and associated risks risks, including disruption of operations and loss of information. We regularly face attempts by sophisticated and malicious actors to gain unauthorized access to our information systems, including those attempts using techniques that change frequently or frequently, may be disguised or difficult to detect and detect, or may remain dormant until a triggering event or that may continue undetected for an extended period of time. They event. Threat actors may attempt seek to gain access to our networks, data centers centers, or cloud resources - resources, including those managed by third parties - parties, or those of our customers, vendors vendors, or end users; steal proprietary information related to our business, products, employees, and customers; or interrupt disrupt our systems, operations operations, services, or services products (including software and firmware embedded in our products), or those of our customers, vendors or others. third-party service providers. The increasingly connected nature of our products and systems expands our potential attack surface. We believe such attempts are increasing in number and in technical sophistication, including through sophistication. AI techniques may also be utilized by threat actors to increase the use number and technical sophistication of adversarial artificial intelligence techniques, which, if we are subject to, could have material adverse effects. such attempted breaches. Due to increasing global geopolitical tensions and conflicts, including involving China, the ongoing Russia/Ukraine conflict, and the conflict conflicts in Ukraine and the Middle East, including the conflict in Israel and recent U.S. military operations in Iran, we and the third parties upon which we rely may be vulnerable to a currently heightened risk of information technology breaches, computer malware, ransomware or other cyber attacks, cyberattacks, including attacks retaliatory acts of cyberwarfare by state-sponsored actors that could materially disrupt our systems and operations, supply chain chain, and ability to provide our products and services. In some instances, we, our customers, vendors, or the users of our products and services might be unaware of an incident or its magnitude and effects. We have implemented and maintain security systems with the intent of protecting the physical security of our facilities and inventory and protecting our information systems including our customers’ and vendors’ information. We seek Our ability to prevent, detect, investigate, contain and mitigate security-related threats and unauthorized attempts and attacks against our monitor third parties' information systems, networks, products, and services, security practices is limited, supply chain attacks have increased in frequency and to prevent their recurrence where practicable through changes to our internal processes severity, and tools. There can be no assurance, however, we cannot guarantee that our security measures will be sufficient to prevent a material breach third parties, including cloud or compromise in the future. hosted solution providers, have not been compromised or that their systems are free from exploitable defects. We are subject to, and at times have suffered from, experienced, breaches or attempted breaches of our security systems systems, which have in the past resulted, and may could in the future result result, in unauthorized access to our facilities and/or unauthorized acquisition, use or theft of the facilities, systems, assets, inventory inventory, or information we are trying information. There can be no assurance that our security measures will be sufficient to protect. prevent a material breach or compromise. If unauthorized parties gain physical access to our facilities, operations, assets, inventory, or information inventory, or if they gain electronic access to our information systems systems, or if such facilities, operations, assets, inventory inventory, or information are used in an unauthorized manner, misdirected, or lost or stolen during transmission or transport, any theft or misuse of such operations, assets, inventory or information incident could result in, among other things, unfavorable publicity, loss of competitive advantage, governmental inquiry and oversight, difficulty in marketing and selling our products and services, increased security and compliance costs, significant costs related to rebuilding internal systems, higher insurance premiums, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties including our customers parties, and possible financial regulatory fines, penalties, fines or obligations for damages related to the theft or misuse of such assets, inventory or information, and damages, any of which could have a material adverse effect on our profitability and cash flows. Further, third parties, such as cloud or hosted solution providers, could be For a source discussion of risk in the event of a failure of their own systems regulatory and infrastructure or could experience their own privacy or security event which could create legal compliance risks similar to those described above. Moreover, we may be required to invest significant additional resources to comply associated with evolving cybersecurity regulations, including related to artificial intelligence, and to modify and enhance our information systems, information security and controls, and to investigate and remediate any security vulnerabilities. We are subject to laws and regulations in the U.S. and in other countries relating to privacy and the collection, use, transfer, storage and security of personal data, including the European Union General Data Protection Regulation ("GDPR"), the UK GDPR, the EU ePrivacy Directive, Singapore’s Personal Data Protection Act, China’s Personal Information Protection Law ("PIPL"), India's Digital Personal Data Protection Act, and other privacy and data security laws throughout the Asia Pacific region and across the globe. In the U.S., many states including California, Colorado, Connecticut, Minnesota, New Hampshire, Tennessee, Texas, Utah and Virginia have enacted data privacy laws. The California Consumer Privacy Act ("CCPA") became effective January 1, 2020 and was further amended by cybersecurity laws, including the California Privacy Rights Act ("CPRA"), which became effective on January 1, 2023. The CCPA and CPRA, among other requirements, require covered companies to provide new rights and disclosures to California consumers, and allow such consumers abilities to opt-out of certain sales of personal information and other activities, and creates a new regulatory enforcement body. These and potential additional regulations and avenues for enforcement could result in, among other things, government inquiries, which could result in significant penalties. Additionally, new privacy and data protection laws and regulations are being considered, under development or are pending at the U.S. Federal and state level and many international jurisdictions. These laws continue to develop enforcement actions, regulatory penalties, and may have conflicting requirements or be inconsistent civil litigation arising from jurisdiction to jurisdiction. This poses increasingly complex compliance challenges, which have resulted, and will continue to result in, increased compliance costs, and have required, and may in the future require, us to modify our data processing practices and policies and to incur substantial costs handling of personal data, see "Legal and expenses in an effort to comply. Any actual or perceived failures Regulatory Risks—Failure to comply with these laws or regulations, or related contractual or other obligations, or any perceived data privacy rights violation, whether by us, one of our third-party service providers or vendors or another third party, could lead to investigations, claims, and proceedings by governmental entities and private parties, damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position. The GDPR, the PIPL, U.S. state laws and other laws and self-regulatory codes may affect our ability to reach current and prospective customers, to understand how our solutions and services are being used, to respond to customer requests allowed under the laws, to transfer information among the Company and its international subsidiaries, and to implement our business strategy effectively. These cybersecurity laws and regulations could similarly affect our customers.expose us to government enforcement, significant penalties, civil litigation, and reputational harm."

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Prior heading: We depend on our executive officers and other key employees and skilled personnel.

Our success depends to a large extent upon on our ability to hire attract, develop, motivate and retain a workforce with the skills necessary for our business to develop and manufacture the products desired by our customers. We need highly skilled personnel in multiple areas including, among others, business, including qualified executives, management, engineering, manufacturing, information technology, cybersecurity, supply chain, and business development, development personnel. The market for such talent is highly competitive, and management including we may incur higher labor, recruiting and training costs in order to attract and retain employees with the requisite skills. If our executive officers compensation, benefits and other overall employee value proposition are not viewed as competitive, our ability to attract, motivate and retain key employees. employees could be weakened. Generally, our employees are not bound by employment or non-competition agreements, and we where such agreements exist, they may be difficult to enforce. We cannot assure you that we will retain our executive officers and other key employees. We could be seriously harmed by employees. Leadership transitions and management changes may create uncertainty, disrupt operations, and increase the risk of senior management or other employee turnover. The loss of any of our executive officers or other key employees. Future leadership transitions and management changes may cause uncertainty in, employees could harm our business. Failure to have an effective succession plan in place for our key executive officers could significantly delay or prevent us from achieving our business objectives. For a disruption to, discussion of planned leadership changes in connection with our business, planned spin-off, see "Planned Spin-off Risks—The planned spin-off of our Cloud and Power Infrastructure businesses may increase not be completed on the likelihood of senior management terms or other employee turnover. timeline currently contemplated, if at all, and there is no guarantee that the spin-off, if completed, will achieve the intended financial, strategic, and operational benefits" below. In addition, in connection with expanding our design and engineering services offerings, we must offerings requires us to attract and retain experienced design engineers. Our engineers; our failure to recruit and retain experienced design engineers do so could limit the growth of our design and engineering services offerings, which could adversely affect our business. There is substantial competition in our industry for skilled employees and we may incur higher labor, recruiting and/or training costs in order to attract and retain employees with the requisite skills. We may not be successful in hiring or retaining such employees which could adversely impact our business and results of operations. Additionally, hiring, training and retaining skilled employees may be adversely impacted by global economic uncertainty and changes to workforce trends. these offerings. From time to time, we face challenges that may impact employee retention, such as workforce reductions and reductions, facility consolidations and closures, and some of our most experienced employees are retirement-eligible which may adversely impact retention. retirements. To the extent that we lose experienced personnel through retirement or otherwise, it is critical for us personnel, our failure to develop other employees, hire new qualified employees and successfully manage the transfer of critical knowledge.knowledge could adversely affect our business.

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Prior heading: Union disputes or other labor disruptions could adversely affect our operations and financial results.

Certain of our employees are represented by labor unions or works councils. councils, and we have experienced heightened union organizing activity in certain regions. The unionization of significant employee populations could result in increased labor costs or other terms that are less favorable to us, and increased risk of strikes and work stoppages. We may also be subject to general country strikes or work stoppages unrelated to our business. A In addition, the workforces of some of our suppliers and customers are represented by labor unions. Work stoppages or strikes at the plants of our key suppliers could disrupt our manufacturing processes; similar actions at the plants of our customers could result in delayed or canceled orders for our products. Although we have not experienced any recent material work stoppages, a work stoppage or other limitations on production at our facilities, or strikes or work stoppages experienced by our customers or suppliers, could have an adverse effect on our business, results of operations and financial condition.

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Prior heading: Unforeseen or catastrophic events could have a material adverse effect on our operations and financial results.

Our operations or systems have been, and could be in the future be, disrupted by natural disasters, terrorist activity, public health issues, cybersecurity incidents, interruptions of service from utilities,or utilities, or transportation or telecommunications providers, political crises and geopolitical conflicts, conflicts (including armed conflicts such as the Russia-Ukraine conflict, which resulted in a missile strike on our Mukachevo, Ukraine facility in August 2025, as described under "International Risks-Global economic conditions and geopolitical uncertainty have in the past adversely affected, and could in the future adversely affect, our business, results of operations, financial condition, and access to capital markets." below), physical attacks on our senior leadership and/or our office locations, or other unforeseen or catastrophic events. Climate change may exacerbate the frequency and intensity of natural disasters and adverse weather conditions. Such events have made, and in the future could make make, it difficult or impossible to manufacture or deliver products to our customers, receive production materials from our suppliers, or perform critical functions, which could adversely affect our revenue and require significant recovery time and expenditures to resume operations. While we maintain business recovery plans that are intended to allow us to recover from natural disasters or other events that can be disruptive to our business, some of our systems are not fully redundant and we cannot be sure that our plans will fully protect us from all such disruptions. We maintain a program of insurance coverage for a variety of property, casualty, and other risks. We place our insurance coverage with multiple carriers in numerous jurisdictions. However, one or more of our insurance providers may be unable or unwilling to pay a claim. The types and amounts of insurance we obtain vary depending on availability, cost, and decisions with respect to risk retention. The policies have deductibles and exclusions that result in us retaining a level of self-insurance. Losses not covered by insurance may be large, which could harm our results of operations and financial condition.disruptions.

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Prior heading: We depend on industries that continually produce technologically advanced products with short product lifecycles and our business would be adversely affected if our customers' products are not successful or if our customers lose market share.

We derive our revenue from customers in a number of end markets and factors affecting any of these industries in general general, or our customers in particular, could adversely impact us. These factors include: •rapid include rapid changes in technology, including as a result of artificial intelligence, AI, evolving industry standards, and requirements for continuous improvement in products and services that result in short product lifecycles; •demand for lifecycles; the failure of our customers' products may be seasonal; •our customers may fail to successfully market their products, and products or for our customers' products may fail to gain widespread commercial acceptance; •our customers' products may have supply chain issues; acceptance; and •our customers may experience dramatic market share shifts in demand which that may cause them our customers to lose market share or exit businesses.

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Prior heading: Our industry is extremely competitive; if we are not able to continue to provide competitive products and services, we may lose business. In addition, our customers may decide to manufacture their products internally, which could harm our business.

We compete with a number of different companies, depending on the type of service we provide or the location of our operations. For example, we compete with major global EMS providers, other smaller EMS companies that have a regional or product-specific focus and Original Design Manufacturers ("ODMs") with respect to some of the services that we provide. We also compete with our current and prospective customers, who evaluate our capabilities in light of their own capabilities and capabilities, cost structures. structures and strategic priorities. In the past, some of our customers moved a portion of their manufacturing away from us in order to more fully utilize their excess internal manufacturing capacity. capacity, and customers could in the future decide to in-source, dual‑source, regionalize, or otherwise reallocate manufacturing volumes among suppliers. Any of these developments could cause a decline in our sales, loss of market acceptance of our products or services, decreases of our profits profits, or loss of our market share. Our industry is extremely competitive, many of our competitors have achieved substantial market share, and some may have lower cost structures or greater design, manufacturing, financial or other resources than we do. do, including the ability to deploy capital at greater scale to support capacity expansion, advanced manufacturing technologies, or significant upfront investments required by certain power and components programs. Our competitors may also respond more quickly to new or emerging technologies, including AI, or to evolving customer requirements, which could put us at a competitive disadvantage. We face particular competition from Asian-based competitors, including Taiwanese ODM suppliers suppliers, as well as other large, diversified manufacturing and design service providers, who compete in a variety of our end markets and and, in some cases, have a substantial share of global information technology hardware and related infrastructure production. If we are unable to provide comparable manufacturing services and improved products at lower cost than the capabilities that are comparable to, or differentiated from, those offered by other companies in our market, markets at competitive cost levels, our net sales could decline.decline. Our Cloud and Power Infrastructure businesses are particularly subject to rapid technology evolution. The data center infrastructure industry is characterized by frequent platform transitions, increasing rack power densities, adoption of liquid and hybrid cooling technologies, evolving power delivery architectures and voltage standards, and changing interconnect, security, and manageability requirements. To remain competitive, we must continually invest in engineering capabilities, validation and testing infrastructure, supply chain enablement, specialized integration capabilities, and capital equipment to support evolving customer specifications and density requirements. If we fail to anticipate or timely align with evolving specifications, standards, or power density requirements, or if our competitors adopt innovations more quickly or develop superior products, our win rates, pricing, and margins may suffer, and we may lose customers or experience decreased or delayed market acceptance of our products and solutions. The emergence of new technologies, industry standards, or customer requirements may render our existing power delivery systems, cooling solutions, integration capabilities, inventory, or manufacturing processes less competitive or obsolete. Our acquisition and implementation of new technologies and equipment, and the expansion of our product and solutions offerings, may require significant expense or capital investment, which could reduce our operating margins. If we are unable to keep pace with technological change or evolving market needs, or to develop and introduce competitive products and solutions on a timely basis, we may incur inventory write-downs, rework charges, and other costs, and our business, financial condition, and results of operations could be materially and adversely affected.

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Prior heading: Our strategic relationships with major customers create risks.

In the past, we have completed numerous strategic transactions with customers. Under these arrangements, customers under which we generally acquire acquired inventory, equipment and other assets from the customers, those customers and lease leased or acquire acquired their manufacturing facilities, while simultaneously entering into multi-year manufacturing and supply agreements for the production of their products. We may pursue these similar customer divestiture transactions in the future. These arrangements entered into with divesting customers typically involve many a number of risks, including the following: •we may need to pay a purchase price to the divesting customers customer that exceeds the value we ultimately may realize from the customer’s future business of the customer; business; •the integration of the acquired assets and facilities into our business may be time-consuming and costly, including the incurrence as a result of restructuring charges; activities; •we, rather than the divesting customer, generally bear the risk of excess capacity at the facility; •we may not achieve anticipated cost reductions and efficiencies at the facility; or operational efficiencies; •we may be unable to meet the expectations of the customer as expectations with respect to volume, product quality, timeliness and cost reductions; •our supply agreements with the customers generally do not require any minimum volumes of customers to purchase by the customers, minimum volumes, and the actual volume of purchases purchase volumes may be less lower than anticipated; and •if demand for the customers’ a customer’s products declines, the customer may reduce its volume of purchases, purchase volumes, and we may not be able to sufficiently reduce the expenses of operating the facility or use the facility to provide services to other customers. As a result of these and other risks, we have in the past been, and could in the future may be, unable to achieve anticipated levels of profitability under these arrangements. In addition, these strategic arrangements have not, and in the future may not, result in any material revenues or contribute positively to our earnings per share.

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Prior heading: We are subject to the risk of increased income taxes.

We conduct business operations in numerous countries and are subject to income and other taxes in numerous multiple jurisdictions. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory rates and rates; changes in tax laws or and regulations (or their interpretation including interpretation); changes related in the valuation of deferred tax assets and liabilities; and changes to tax holidays or tax incentives. The international tax environment continues to change evolve as a result of both governments implement coordinated efforts by governments and unilateral measures designed by individual countries, both intended to tackle concerns over address perceived international tax avoidance techniques, which could ultimately have an adverse effect on the taxation of international businesses. The Organization for Economic Co-operation and Development ("OECD") and participating countries continue to work toward avoidance, including the enactment of OECD Pillar Two framework establishing a global minimum tax rate of 15%, among other provisions, as part of its Base Erosion and Profit Shifting Project. 15%. Many countries, including certain countries in which we currently operate, have enacted or are in the process of enacting laws based on the OECD’s proposals. These rules and other tax laws and related regulations that are revised, enacted and implemented, these initiatives, which could increase tax complexity and uncertainty and adversely impact our effective tax rate and cash tax liability. The foregoing These and other changes to tax laws could have broader implications, including impacts to the economy, currency markets, inflation or competitive dynamics, which are difficult to predict, and may positively or could negatively impact the Company. us. Our taxes could also increase if certain tax holidays or incentives are not renewed upon expiration, expiration or are retracted, which could occur retracted if we are unable to satisfy the conditions on which such incentives are based, or if tax rates applicable to us in such jurisdictions are otherwise increased. Our continued ability to qualify for specific tax holiday extensions will depend on, among other things, our anticipated investment and expansion in these countries and the manner in which the local governments interpret the requirements for modifications, extensions or new incentives. Further, the global minimum tax is expected to reduce the benefits achieved from tax incentives. In addition, the Company We and its our subsidiaries are regularly subject to tax return audits and examinations by various taxing jurisdictions around the world. For example, one of the Company’s our Brazilian subsidiaries has received assessments for certain sales and import taxes which the Company is we are opposing. In determining the adequacy of our provision for income taxes, we regularly assess the likelihood of adverse outcomes resulting from tax examinations. While it is often difficult to predict the final outcome or the timing of the resolution of a tax examination, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions outcomes that are more likely than not to occur. However, we cannot assure you that the final determination of any tax examinations will not be materially different than that which is reflected in our income tax provisions and accruals. Should additional taxes be assessed as a result of a current or future examination, tax laws change adversely, there could be a material adverse effect on our tax provision, operating results, financial position condition, results of operations, and cash flows in the period or periods for which that determination is made.flows.

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Prior heading: Our debt level may create limitations.

As of March 31, 2025, 2026, our total debt was approximately $3.7 $3.8 billion. This level of indebtedness could limit our flexibility as a result of debt service requirements and restrictive covenants, and may limit our ability to access additional capital or execute our business strategy.strategy. See also note 22 "Subsequent Events" to the consolidated financial statements in Item 8, "Financial Statements and Supplementary Data" for discussion of an additional $1.45 billion of borrowings undertaken since March 31, 2026.

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Prior heading: Fluctuations in foreign currency exchange rates could increase our operating costs.

We have manufacturing operations and industrial parks that are located in various part of countries around the world, including Asia, Eastern Europe, Mexico and Brazil. A portion of our purchases and our sale transactions and operational costs are denominated in currencies other than the United States U.S. dollar. As a result, we are exposed to foreign currency exchange rate fluctuations in these currencies impacting our fixed cost overhead or that can affect our supply base relative to the currencies in which we conduct transactions. assets, liabilities, results of operations, and cash flows through both translation and transaction risk. Currency exchange rates fluctuate on a daily basis as a result of due to a number of factors, including changes in a country's political and economic policies. policies and conditions. The primary impact of currency exchange fluctuations is on the cash, receivables, payables and expenses of our operating entities. As part of our currency hedging strategy, we use financial instruments such as forward exchange, exchange contracts, swap contracts, and options to hedge our foreign currency exposure in order to reduce the short-term impact impacts of foreign currency rate fluctuations on our operating results. If However, our hedging strategy may not fully mitigate the impacts of changes to foreign exchange rates, and if our hedging activities are not successful, if counterparties to these hedging activities default on their obligations to us, obligations, or if we change or reduce these hedging activities in the future, we may experience significant unexpected expenses or fluctuations in our operating results as a result of changes in exchange rates. results. We are also exposed to risks related to the valuation of the Mexican and Chinese currencies relative to fluctuations in the U.S. dollar. The Mexican currency is the peso ("MXN") and the Chinese currency is the renminbi ("RMB"). A renminbi, and a significant increase in the value of the MXN or RMB these currencies could adversely affect our financial operating results and cash flows by increasing both our manufacturing costs and the costs of our local supply base. Volatility in the functional and non-functional currencies of our entities and the United States dollar could seriously harm our business, operating results and financial condition.base.

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Prior heading: Challenges in managing working capital could significantly impact our cash flow, profit margins, and overall business performance.

Our operations are working capital intensive intensive, and our inventories, accounts receivable, and accounts payable are significant components of our net asset base. Our ability to manage our working capital as well as efficiently manage our receivables and payables is important to the successful operation of our business and resulting cash flow, including meeting our funding needs. If we do not manage Key factors impacting our working capital adequately, include our business, operating results, and financial condition may be materially adversely affected. Numerous factors impact cash flow in a given financial period, which include: •failing ability to adequately manage our materials purchasing and payment policies; •fluctuations in the level of revenues from our operating activities; •fluctuations policies, fluctuations in collections of receivables; •timing and size of payables; •timing and size receivables, timing of capital expenditures; •the repayment schedules of our expenditures and debt service obligations; obligations, and •the our ability to optimize our terms and conditions with suppliers.suppliers. Our Cloud and Power Infrastructure businesses may require elevated working capital commitments, including customer-specific materials, specialized test equipment, and inventory for customer programs with longer lead times, which can increase our exposure to demand variability and project delays. Our ability to fund growth depends on internally generated cash and access to debt and other financing on acceptable terms. Market disruptions, interest rate volatility, bank sector instability, or adverse credit conditions could increase borrowing costs, limit available capital, or delay funding, constraining project delivery and capacity expansion. High fixed and semi-fixed costs in our manufacturing operations can magnify the impact of utilization variability on earnings and cash flows. If we fail to manage our working capital effectively, our business, financial condition, results of operations, and liquidity could be materially adversely affected.

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Prior heading: Our business could be impacted as a result of actions by activist shareholders or others.

We may be subject, from time to time, to legal and business challenges due to actions instituted by activist shareholders or others. Responding to such actions could be costly and time-consuming, may not align with our business strategies and could divert the attention of our Board of Directors and senior management from the pursuit of our business strategies. Perceived uncertainties as to our future direction as a result of shareholder activism may lead to the perception of a change in the direction of the business or other instability and may make it more difficult to attract and retain qualified personnel and business partners and may affect our relationships with vendors, customers and other third parties.parties. In addition, negative publicity concerning our company, industry, brand, personnel, or operations, regardless of accuracy, could harm our reputation and adversely affect our business, financial condition, and results of operations. Media coverage can spread rapidly through digital platforms and social media, making it difficult to remediate. Negative commentary may reduce customer trust and demand for our products and services, which could negatively impact our performance.

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Prior heading: Our goodwill and identifiable intangible assets could become impaired, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs.

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. We also ascribe value to certain have recorded goodwill and identifiable intangible assets, which consist consisting primarily of customer relationships, developed technology technology, and trade names, among others, as a result of acquisitions. We have in the past incurred and may in the future incur impairment charges on goodwill or identifiable intangible assets if we determine that the fair values of goodwill or identifiable intangible assets are less than their current carrying values. We evaluate, evaluate on a regular basis, basis whether events or circumstances have occurred that indicate all, or a portion, of that the carrying amount of goodwill or intangible assets may no longer be recoverable, in which case an impairment charge to earnings would become necessary. If the financial performance of our businesses were to decline significantly, we could incur a material non-cash charge recoverable. We have in our statement of operations for the impairment of goodwill and other intangible assets. Refer to note 2 to the consolidated financial statements and "Critical Accounting Policies past incurred, and Estimates" could in "Management's Discussion and Analysis of Financial Condition and Results of Operations" for further discussion of the future incur, impairment testing of charges on goodwill and or identifiable intangible assets. assets. A decline in general economic conditions or conditions, global equity valuations could impact the judgments and assumptions about valuations, or the fair value financial performance of our businesses and we could be required require us to record impairment charges on our goodwill or other identifiable intangible assets in the future, which charges. Any such material non-cash charge could impact our consolidated balance sheet, as well as our consolidated sheet and statement of operations. If we are required to recognize an impairment charge in the future, the charge operations, although it would not impact our consolidated cash flows, liquidity, capital resources, and covenants under our existing credit facilities, asset securitization program, and other outstanding borrowings.or debt covenants.

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Prior heading: There are risks associated with the separation of Nextracker, which could negatively impact our business, financial condition and results of operations.

On January 2, 2024, we completed the separation of the Nextracker business. We may not achieve all of the benefits expected to result from the separation, or such benefits may be delayed, for a variety series of reasons. If transactions pursuant to which we fail distributed our remaining interests in Nextracker to achieve all of the expected benefits , or if such benefits are delayed, our business, financial condition shareholders. Although we received a private letter ruling and results tax opinion supporting tax-free treatment of operations could be materially the distributions and adversely affected. In addition, claims, suits, related mergers, neither is binding on the IRS or legal proceedings may arise in connection with the separation of Nextracker courts, and if the agreements that were entered into in connection with distributions or as part of the separation. If we receive an adverse judgment in any such matter, we could related mergers were determined to be required taxable, we would generally recognize gain equal to pay damages or cease certain practices or activities. Regardless the excess of the merits fair market value of the claims, suits or other legal proceedings may be both time-consuming and disruptive to distributed shares over our business. The defense and ultimate outcome of any claims, suits or other legal proceedings tax basis in those shares, which could have a material adverse effect on our businesses, business, financial condition and results of operations. In addition, in connection with the separation, Nextracker agreed separation of Nextracker, we entered into various agreements governing our ongoing relationship, including with respect to retain indemnification obligations and indemnify us for tax matters. We have an ongoing dispute with Nextracker regarding certain liabilities and obligations. However, third tax distribution obligations under these agreements. Third parties could also seek to hold us responsible for any of the liabilities that Nextracker has agreed to retain, and there can be no assurance we cannot assure that the indemnity Nextracker's indemnification obligations will be sufficient to insure us against the full amount of such liabilities, or that Nextracker’s ability to Nextracker will satisfy its indemnification obligation will not be impaired in the future. In addition, Flex’s and/or Nextracker’s insurance coverage may not be available or sufficient to cover certain occurrences of indemnified liabilities, and in any event insurers may deny coverage for liabilities associated with certain occurrences of indemnified liabilities. Moreover, even if we ultimately succeed in recovering from Nextracker or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses. Each obligations. Any of these risks matters could have a material adverse effect on our businesses, business, financial condition and results of operations. Further, the Nextracker LLC operating agreement provides certain obligations of Nextracker and its affiliates with respect to specified tax distributions and other matters. We have an ongoing dispute with Nextracker regarding one such tax distribution obligation, and we have otherwise relied and will continue to rely on Nextracker to satisfy its performance and payment obligations in good faith under these agreements. If Nextracker is unable or unwilling to satisfy its obligations under these agreements, including its indemnification obligations, we may incur losses or not realize expected benefits.operations.

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Prior heading: We are subject to risks associated with investments.

We invest in private funds and companies for strategic reasons and may not realize a return on our investments. We make investments in private funds and companies to further our strategic objectives, support key business initiatives, objectives and develop business relationships with related portfolio companies. relationships. Many of the these instruments in which we invest are non-marketable at the time of our initial investment. If any of the funds or companies in which we invest fail, fail to perform, we could lose all or part of our investment. From time-to-time we We have identified observable price changes, or impairments in investments, and we have the past written down investments' the fair values value of investments and recognized a loss.losses, and may need to do so in the future.

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Prior heading: Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations.

We prepare our financial statements in conformity with U.S. GAAP. These principles are subject to interpretation by the Financial Accounting Standards Board ("FASB"), the American Institute of Certified Public Accountants ("AICPA"), the SEC and various bodies formed to interpret GAAP, which involves subjective assumptions, estimates, and create accounting policies. judgments. Changes to in accounting rules standards or challenges to our interpretation their interpretation, or application of the rules by regulators may changes in our underlying estimates, particularly those related to revenue recognition, asset impairment, and business combination valuations could have a material adverse effect on our reported financial results or on the way we conduct business. Refer to "Recently Adopted Accounting Pronouncements" within note 2 of Item 8, Financial Statements operations and Supplementary Data.financial condition.

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Prior heading: Global economic conditions, including inflationary pressures, currency volatility, stagflation, slower economic growth or recession, high or rising interest rates, trade conflicts, tariffs, geopolitical uncertainty and instability in financial markets have in the past adversely affected, and may in the future adversely affect, our business, results of operations, financial condition, and access to capital markets.

Our operations and the execution of our business plans and strategies are subject to the effects of global economic trends, geopolitical risks and demand or supply shocks arising from events that could may include political crises crises, regional conflicts and conflict (including the Russian invasion of Ukraine, the Israel-Hamas war, the attacks on shipping vessels in the Red Sea), war, a major wars, terrorist attack, attacks, natural disasters disasters, or actual or threatened public health emergencies. They We are also affected by local and regional economic environments, supply chain constraints environments and policies in the U.S. and other markets that we serve, including interest rates, monetary policy, inflation, inflation or stagflation, slower economic growth, growth or recession, commodity prices, currency volatility, currency controls or other limitations on the ability to expatriate repatriation of cash, sovereign debt levels levels, and actual or anticipated defaults on sovereign debt. For example, the ongoing conflict between Russia and conflicts in Ukraine and the related sanctions and other measures imposed by the European Union, Middle East, including the conflict in Israel and recent U.S. military operations in Iran, and other countries related international sanctions and organizations in response countermeasures have led, and may continue to lead, to disruption and instability in global markets, supply chains chains, and industries industries, that could negatively impact our business, financial condition condition, and results of operations. Additionally, In addition, changes in local economic conditions or outlooks, outlooks in key markets, such as lower rates of investment or economic growth in China, Europe Europe, or other key markets, affect the regions, may reduce demand for for, or profitability of of, our products and services outside the U.S., and the impact on the Company our business could be significant given the extent of our activities outside the United States. global operations. We also do business in many emerging market jurisdictions where economic, political political, and legal risks are heightened. These factors have in the past adversely affected, and may could in the future adversely affect, our business. Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies and resulting tariffs, export controls or other trade barriers, or changes to tax or other laws and policies, have been and are expected to continue to be disruptive and potentially costly to our business, and these can interfere with our global operating model, supply chain, production costs, customer relationships, customer demand and competitive position. Such measures can be imposed suddenly and unpredictably. For example, the current U.S. administration has recently imposed new tariffs on goods from China and other countries. Further escalation of specific trade tensions, including as a result of the imposition of new tariffs (including retaliatory tariffs), tariff increases or other trade restrictions between the U.S. and its major trading partners, intensified decoupling between the U.S. (as well as other major economies) and China, or in global trade conflict more broadly could materially increase our product input costs, negatively affect global economic conditions contracting customer demand, or could be harmful to our business or that of our customers, and related decreases in confidence or investment activity in the global markets would adversely affect our business performance. As a contract manufacturer, we expect to recover the costs of tariffs by passing tariff costs to our customers which would increase net sales, decrease operating income margins, and negatively affect operating cash flow timing as we recover paid tariffs from our customers. To the extent we are unsuccessful in passing tariff costs to some customers, our results of operations and cash flows would be negatively impacted. The actual impact of new tariffs on our business is subject to a number of factors including the restrictions on trade, the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs imposed by other countries. Inflationary pressures, such as what the market continues to experience, could affect our profitability and cash flows, due to higher wages, higher operating costs, higher financing costs, and/or higher supplier prices. Inflation may also adversely affect foreign exchange rates. We may be unable to pass along such higher costs to our customers. In addition, inflation may adversely affect customers’ customers' financing costs, cash flows, and profitability, which could adversely impact their operations and our ability to collect receivables. High or rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our manufacturing services and our customers’ customers' ability to repay obligations to us. These conditions may result in reduced consumer and business confidence and spending in many countries, a tightening in the credit markets, a reduced level of liquidity in many financial markets, high heightened volatility in credit, fixed income income, and equity markets, and currency exchange rate fluctuations, and global economic uncertainty. In addition, longer term disruptions fluctuations. Prolonged disruption in the capital and or credit markets could adversely affect our access to liquidity needed for our business. If financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S. and international capital markets, they may become unable to fund borrowings under their credit commitments to us, which could have an adverse impact on our financial condition and our ability to borrow additional funds, if needed, for working capital, capital expenditures, acquisitions, research and development development, and other corporate purposes. These conditions could also adversely impact Adverse impacts on our customers and suppliers, which suppliers resulting from these conditions could, in turn could turn, adversely affect us. We have manufacturing and other facilities across the globe globe, including in Israel regions affected by geopolitical conflicts and Ukraine. If these instability, such as Ukraine and Israel. Our facilities were to could be damaged, destroyed destroyed, or otherwise unable to operate, whether operate due to war, acts of hostility, or terrorist acts, such an event or related disruptions, which could jeopardize our ability to develop, manufacture manufacture, and deliver certain products and adversely affect our business operations and results of operations. Our For example, on August 21, 2025, a missile strike on our Mukachevo, Ukraine facility caused substantial physical damage and disrupted normal operations; in response, we activated contingency manufacturing plans and transitioned production to alternative facilities. In addition, our operations have been, and could continue to be, disrupted by the absence of employees called to active duty employee absences related to perform mandatory military service. The Russia-Ukraine conflict, the Israel-Hamas war, the attacks on shipping vessels in the Red Sea, and other hostilities Regional conflicts, hostilities, or armed conflicts, or the interruption interruptions or curtailment of trade or transport between the countries where our facilities are located and their respective trading partners, have in the past past, and could in the future future, adversely affect our operations and results of operations.

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Prior heading: We conduct operations in a number of countries and are subject to the risks inherent in international operations.

The geographic distances between the Americas, Asia and Europe create a number of logistical Our global manufacturing and communications challenges for us. These challenges include managing supply chain operations involve significant operational complexity, including managing activities across multiple regions, time zones, directing the manufacture regulatory regimes, and delivery of products logistical networks. Products may be manufactured or assembled across long distances, coordinating procurement of components and raw materials and their delivery to multiple locations, and coordinating the activities facilities and decisions of the core management team, countries, which is based in a number of different countries. Facilities in several different locations may be involved at different stages of the production process of a single product, leading increases exposure to additional logistical difficulties. disruptions, coordination challenges, and delays in procurement, production, and delivery. Because our manufacturing operations are located we operate in a number of countries throughout the Americas, Asia Asia, and Europe, we are subject to risks of changes in economic, social political, regulatory, and political conditions in those countries, including: •fluctuations social risks in the value of local currencies; •labor unrest, countries in which we operate, including currency fluctuations and exchange controls; labor strikes, difficulties in staffing unrest, labor shortages, and geographic rising labor shortages; •longer costs; longer payment cycles; •cultural differences; •increases cycles; inflationary pressures; changes in duties, tariffs, and taxation levied on our products including anti-dumping and countervailing duties; •trade restrictions including limitations on imports or exports of components or assembled products, unilaterally or bilaterally, as well as; •trade sanctions tax, customs, and related regulatory enforcement actions and other proceedings; •potential regimes; trade wars; •scrutiny by the media and other third parties of labor practices within our industry which may result in allegations of violations, more stringent and burdensome labor laws and regulations and inconsistency in the enforcement and interpretation of such laws restrictions and regulations, higher labor costs, and/or loss of revenues; •inflationary pressures, such as those the market has recently been experiencing, which may increase costs for materials, supplies, sanctions; supply chain disruptions; geopolitical instability and services; •imposition of restrictions on currency conversion or the transfer of funds; •environmental protection laws conflict; natural disasters; epidemics and regulations, including those related to climate change; •expropriation pandemics; expropriation of private enterprises; •ineffective legal protection of our intellectual property rights in certain countries; •natural disasters; •exposure to infectious disease, epidemics and pandemics on our business operations in geographic locations impacted by the outbreak enterprises; and limitations on the business operations of our customers and suppliers; •inability of international customers and suppliers to obtain financing resulting from tightening of credit in international financial markets; •global supply chain disruptions, infrastructure, including disruptions in international commerce as a result of attacks on shipping vessels in the Red Sea, which has in the past slowed, power, water, transportation, and may in the future slow the ability availability of our facilities to import necessary raw materials and export our products and adversely affect our business; •political or social unrest; components. Changes in U.S. and •a potential reversal of current favorable policies encouraging foreign investment or government policies, including those relating to trade, sanctions, information security, data privacy, national security, and foreign trade by our host countries. The investment, may affect the attractiveness of our services to customers and our ability to conduct business with certain customers can be affected by changes in U.S. and other countries' policies, including regarding trade. or suppliers. We have significant operations located in China, which have been in the past, been, and could in the future continue to be, adversely affected by evolving laws, regulations and policies, including with regard to import and export tariffs and restrictions, and information security and privacy, as well as changes in the political regulations, and geopolitical environment developments involving China. U.S.-China bilateral trade relations remain uncertain. The U.S.’s various trade actions, including imposing tariffs on certain goods imported from China or deemed to be of Chinese origin, as well as the potential for new tariffs, trade embargoes or sanctions by the U.S., and countermeasures imposed by China in response, have, in the past adversely affected, and could in the future, depending on their duration and implementation as well as our ability to mitigate their impact, adversely affect our business, including in the form of increased cost of goods sold, decreased margins, increased pricing for customers, and reduced sales. Moreover, we We could be subject to reputational harm if any of our customers, former customers or vendors were subject to U.S. sanctions or if our customers, former customers or vendors did business with sanctioned countries. entities or countries or otherwise violated applicable sanctions or export control laws. Furthermore, regional conflicts, including the conflicts in Ukraine and the Middle East, including the conflict in Israel and recent U.S. military operations in Iran, and tension between China and Taiwan, could result in sanctions, regional market instability, increased energy and transportation costs, supply chain disruptions, and other adverse regional and global financial and economic conditions, any of which can impact the demand for, or our ability to sell, our products and services in the impacted regions. Escalation of hostilities involving Iran, Israel, and the United States or regional proxy groups could adversely affect regional stability, threaten critical infrastructure such as data centers, impair access to ports and transportation routes including the Strait of Hormuz, and increase fuel, energy, freight, insurance, and security costs. In addition, expanded sanctions, export controls, or other governmental measures affecting the region could impair our ability to conduct business, collect receivables, or repatriate funds. In particular, geopolitical changes in China-Taiwan relations could disrupt the operations of several companies in Taiwan that are critical to the global supply of semiconductors and other electronic components on which many of our customers depend. In addition, some depend, and any escalation of tensions could materially affect our supply chain and operations. Some countries in which we operate, such as Brazil, Hungary, India, Malaysia, Mexico Mexico, and Poland, have experienced periods of slow or negative growth, economic volatility, high inflation, significant currency devaluations devaluations, or limited availability of foreign exchange. Furthermore, in countries such as the U.S., Brazil, China, India exchange, and Mexico, governmental authorities in some jurisdictions exercise significant influence over many aspects of the economy, and their actions could have a significant effect on us. We could be seriously harmed by inadequate infrastructure, including lack of adequate power and water supplies, transportation, raw materials and parts in countries in which we operate. In addition, we may encounter labor disruptions, including labor strikes or claims, and rising labor costs, including the introduction or expansion of certain social programs, in particular within the lower-cost regions in which we operate due to, among other things, demographic changes and economic development in those regions. Any increase in labor costs that we are unable to recover in our pricing to our customers activity. These conditions could adversely impact affect our operating results. Operations in foreign countries operations, financial condition, or ability to repatriate cash. Our international operations also present expose us to risks associated with related to foreign currency exchange and convertibility, inflation and repatriation of earnings. Inflation may impact the Company’s profits exchange, inflation, and cash flows as well as adversely affect foreign exchange rates. restrictions on currency conversion or fund transfers. In some certain countries, economic and monetary conditions and other factors could affect our ability to convert our cash distributions to U.S. dollars central banks or other freely convertible currencies, or to move funds from our accounts in these countries. Furthermore, the central bank of any of these countries authorities may have the authority to suspend, restrict or otherwise impose conditions on foreign exchange transactions or to approve distributions restrict the movement of capital, which could limit our ability to foreign investors.access or deploy cash across our global operations.

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Prior heading: We are subject to risks relating to litigation and regulatory investigations and proceedings, which may have a material adverse effect on our business.

From We are, from time to time, we are involved in various subject to claims, suits, investigations lawsuits, investigations, and legal or governmental proceedings. Legal claims or regulatory or administrative proceedings across the jurisdictions where we operate. These matters may arise in the future and could involve matters relating to commercial disputes, government regulations and regulatory compliance, intellectual property, antitrust, tax, employment or shareholder issues, product liability claims liability, employment and other issues on a global basis. If labor, privacy and data protection, securities laws, governance, and tax. Adverse outcomes, whether by judgment, settlement, consent decree, or otherwise, could require monetary payments, penalties, injunctive relief, operational changes, monitorships, remedial measures, or enhanced compliance controls. Even if we receive an adverse judgment in any such matter, prevail, we could be required to pay may incur substantial damages, which could be in excess of amounts accrued, if any, and cease certain practices or activities. Regardless of the merits of the claims, litigation costs, increased insurance premiums, and other proceedings may be time-consuming, result in significant expense management distraction that disrupts our operations and disrupt harms our business. The defense reputation with customers, suppliers, employees, and ultimate outcome of any lawsuits or other legal proceedings may result in higher expenses regulators. Outcomes are inherently unpredictable, and a decrease in operating margin, which could have a material adverse effect on our business, financial condition, accruals and insurance coverage may be insufficient or results of operations. unavailable. Any existing or future lawsuits or other proceedings could also divert the attention and resources of our management and other key employees, as well as harm these matters could materially adversely affect our reputation, business, financial condition or condition, results of operations.operations, and cash flows.

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Prior heading: Exports and imports of certain of our products are subject to various export control, sanctions, and import regulations and may require authorization from regulatory agencies of the U.S. or other countries.

Due to the global nature of our business, we are subject to a complex system of import- and export-related laws and regulations, including a range of regulations in the United States U.S. and other countries. Non-compliance with these laws and regulations by us, our customers, or our suppliers can result in a wide range of penalties countries, including economic sanctions administered by the denial U.S. Department of export privileges, fines, criminal penalties, and the seizure Treasury's Office of inventories. Moreover, any changes Foreign Assets Control and similar regimes in export control, sanctions, or import regulations may further restrict the export or import of our products other jurisdictions. Our products, services, and technology are regulated by these trade control and customs regimes and in some cases require licenses or services. other authorizations. Our ability to obtain required and maintain such licenses and authorizations on a timely basis, or at all, is subject to risks and uncertainties, including changing laws, regulations, or foreign policies policies, and geopolitical factors. If we are not successful Non-compliance by us, our customers, or our suppliers can result in obtaining denial of export privileges, fines, criminal penalties, administrative sanctions, seizure of inventory, import detention, and loss of business. Delays or maintaining the necessary denials of licenses or authorizations in a timely manner, our sales relating to those approvals may be prevented can prevent or delayed, defer sales, and previously recognized revenue and profit previously recognized may need to be reversed. Moreover, we could be subject to reputational harm if any of our customers, former customers, or vendors were subject to U.S. sanctions or conducted business with sanctioned countries. Any restrictions on the export or import of our products could have a material adverse effect on our competitive position, results of operations, financial condition, or liquidity.

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Prior heading: The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business.

We create develop and retain certain own, and in some cases license, intellectual property rights to some of the technologies that we develop related to used in our engineering, design, engineering, and manufacturing services and in our products. The measures Although we have taken use a range of measures to protect our intellectual property, including contractual and security controls and seeking patent and trademark protection where appropriate, these measures may not prevent infringement, misappropriation, or other unauthorized disclosure or use of our intellectual property. Protecting our proprietary technology is difficult and expensive, and we may not be successful. need to litigate with third parties to enforce or defend patents issued to us and other intellectual property rights, or to determine the enforceability and validity of our proprietary rights or those of others. If we are unable to cannot adequately protect or enforce our intellectual property rights, this we could reduce or eliminate lose the competitive advantages of our proprietary technology, which would harm our business. Our engineering, design and manufacturing services and activities may expose us, our products involve the creation suppliers, and use of intellectual property rights, which subject us our customers to the risk of claims of infringement or misuse of intellectual property from third parties and/or breach of that our agreements with third parties, as well as claims arising from the allocation of services, products, processes, designs, or components infringe, misappropriate, or otherwise violate third-party intellectual property risk among us and our customers. From time to time, rights, or that we enter into intellectual property licenses (e.g., patent and software licenses) with third parties which obligate us to report covered behavior to the licensor and pay have breached license fees to the licensor for certain activities or products, or that enable our use of third party technologies. other contractual provisions. We may also decline to enter into patent, software, and other licenses for intellectual property that we do not think are useful for or used in our operations, or for which governing our customers or suppliers have licenses or have assumed responsibility. Given the diverse and varied nature use of our business certain technologies, and the location certain of our business around the world, certain activities we perform, such as providing assembly services in China and India, may fall outside the scope of those licenses or such licenses, which may not be subject us to the applicable intellectual property rights. Our licensors may disagree and claim royalties are owed for such activities. In addition, the basis (e.g., base price) for any royalty amounts owed are audited claims by licensors licensors. Because we provide design and may be challenged. Our engineering services in addition to manufacturing, customers often require us seek to indemnify them against the allocate intellectual property risk of to us to a greater extent than in traditional contract manufacturing engagements, including requiring broad intellectual property-related claims and licensors property indemnities. Assertions against our customers may claim trigger indemnification obligations, requiring that activities we perform are covered by licenses to which we are a party. If any claims of infringement participate in their defense, or misuse of intellectual property from third parties and/or breach of result in disputes over responsibility between us and our agreements with third parties, as well as customers. Moreover, we could become subject to large indemnity payments or damages claims arising from the allocation of intellectual property risk among us and contractual breach, which could harm our customers, results of operations, cash flows, financial condition, or prospects. If infringement, misappropriation, or other similar claims are brought against us or our customers, whether or not these they have merit, we could be required to expend significant resources in defense of such claims. In the event of such a claim, on defense, and we or our customers may could be required to spend a significant amount of money to develop alternatives or non-infringing alternatives, obtain licenses licenses, or to resolve cease, delay, or modify the issue through litigation. We affected services, products, or our customers features. Suitable alternatives may not be successful in developing such alternatives unavailable or obtaining such costly, licenses may not be available on commercially reasonable terms or at all, and any such litigation might or dispute resolution could be lengthy, disruptive, and expensive and may not be resolved in our or our customers' favor, in which cases we may be required to curtail certain of our services and offerings. Additionally, litigation could be lengthy and costly, and could materially harm our financial condition regardless of outcome. favor. We also face certain heightened risks to our intellectual property rights due to our extensive operations in certain foreign jurisdictions, including the risk risks of theft theft, reverse engineering, or misuse misuse; limitations in the availability, scope, or enforceability of our intellectual property rights rights; and challenges in certain foreign jurisdictions. The laws of certain obtaining effective remedies. In some countries in which we operate may not protect operate, intellectual property rights to the same extent as the laws of and enforcement mechanisms are weaker than in the United States, and the mechanisms legal or administrative requirements may require us to enforce compromise protections or yield certain rights to technology, data, or other intellectual property rights may be inadequate to protect conduct business in such countries or access certain markets. Any inability to obtain, maintain, or enforce our rights, which intellectual property rights in jurisdictions where we operate could harm result in the loss of competitive advantage, reduced revenue, and other adverse consequences that could adversely affect our business.business, financial condition, and results of operations.

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Prior heading: If our compliance policies are breached, we may incur significant legal and financial exposure.

We have implemented local and global compliance policies conduct business in numerous jurisdictions subject to ensure compliance with our legal obligations across our operations. A significant legal risk resulting from our international operations is compliance with stringent anti-corruption and anti-bribery requirements, including the U.S. Foreign Corrupt Practices Act or similar local laws of the countries in which we do business, including Act, the UK Anti-Bribery Bribery Act, which prohibits covered companies from making payments to foreign government officials to assist in obtaining or retaining business. Our Code of Business Conduct and Ethics prohibits corrupt payments on a global basis similar laws elsewhere. We maintain policies, procedures, training, and precludes us from offering internal controls designed to promote compliance and prohibit offering, promising, authorizing, or giving providing anything of value to a government official for the purpose of obtaining officials or retaining business, other counterparties to win a business advantage obtain or to improperly influence a decision regarding Flex. Nevertheless, there can be no assurance retain business. However, we cannot assure that all of our employees and agents employees, agents, consultants, or other third parties acting on our behalf will refrain from taking actions comply with these requirements at all times, particularly in violation of this and our related anti-corruption policies and procedures. Any such violation jurisdictions where corruption is perceived to be more prevalent. Actual or alleged violations could result in investigations, significant fines, civil and criminal sanctions against us or our employees, prohibitions on the conduct fines and penalties, disgorgement, monitorships, and reputational damage. Any of our business, or have a material adverse effect on these events could adversely affect our reputation, business, financial condition, results of operations operations, and financial condition.could require substantial management time and resources to address.

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Prior heading: If our products or components contain defects, demand for our services may decline, our reputation may be damaged, and we may be exposed to product liability and product warranty liability.

Our customers’ products and the manufacturing processes and design and engineering services that we use to produce them are often highly complex. Some of the products we design complex, and manufacture, including some, particularly in the automotive and health solutions healthcare industries, must satisfy strict safety, quality quality, and regulatory standards. Defects in the products we manufacture or design, deficiencies, whether caused by a in design, engineering, manufacturing manufacturing, or component failure or error, or deficiencies in our manufacturing processes, sourcing, have occurred from time to time and, have in the past resulted, and may could in the future result in delayed shipments to customers, shipments, reduced or canceled customer orders, or product or component failures. If these defects or deficiencies are significant, our business reputation could be damaged. The failure of the products that we manufacture or of our manufacturing processes or facilities failures, and reputational damage. Such failures may also subject us to regulatory enforcement, fines or penalties and, in some cases, require us to shut down, temporarily halt operations or incur considerable expense to correct a manufacturing process fines, penalties, or facility. In addition, we operational shutdowns. We are exposed, from time to time exposed time, to product liability or product and warranty claims, which may include liability including for personal injury or injury, property damage, and liability to pay for the product recall, repair repair, or replacement replacement, as well as service-based remediation obligations and other contractual penalties, any of a product or component, in addition to significant spend to resolve the claims. which can be costly and disruptive. Even if our customers are responsible for the defects or defective specifications, they may refuse, where customers, suppliers, or may not have the resources, to satisfy claims third parties bear primary responsibility for costs or liabilities arising from these defects. While such claims are typically insured, this could expose us to additional liability claims. Any of these actions could increase our expenses, including increased insurance premiums, reduce our revenue underlying defects, indemnification may be unavailable or damage our reputation. In addition, product liability inadequate, and product recall insurance coverages are expensive and coverage may not be available for some insufficient or all of uneconomic. As we expand higher-value design and engineering offerings, our services offerings on acceptable terms, in sufficient amounts, or at all. warranty exposure may increase, and pricing may not fully cover associated costs. A successful product liability or product warranty claim in excess of our insurance coverage coverage, or any material claim for which insurance coverage is denied, limited denied or is not available unavailable, could have a material adverse effect on our business, results of operations operations, and financial condition.

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Prior heading: We may not meet regulatory quality standards applicable to our manufacturing and quality processes for medical devices, which could have an adverse effect on our business, financial condition or results of operations.

As a service provider engaged in the business of designing and manufacturing medical devices, we have are subject to compliance requirements in addition to beyond those relating applicable to other industries we serve within our business. We are required to register with other businesses. In the U.S. Food and Drug Administration ("FDA") and United States, we are subject to periodic regulatory inspection by the FDA for compliance with the FDA's Quality System Regulation ("QSR"), which requires manufacturers of medical devices to implement and adhere to design and process manufacturing controls, quality control, labeling, handling handling, and documentation procedures. Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring by the FDA. If any an FDA inspection reveals noncompliance with QSR or other applicable FDA regulations, and that we do not address to the FDA's concerns to its satisfaction, the FDA may take action against us, including issuing a letter of issue inspection observations or a warning letter, imposing letters, impose fines, bringing bring an action against the Company and its us or our officers, requiring require a recall of the products we manufactured, refusing requests for clearance or approval of new products or withdrawing clearance or approval previously granted, issuing product recall, issue an import detention on products entering the U.S. from an offshore facility, alert or temporarily halting import detention, or halt operations at or shutting down a manufacturing facility. If any The FDA has in the past issued inspection observations and warning letters to us following inspections of these our manufacturing facilities, and there can be no assurance that similar regulatory actions were to occur, it would will not occur in the future. Any such action could harm our reputation reputation, disrupt our operations, and cause our business to suffer. Beyond the FDA in the U.S., our Our medical devices business is also subject to applicable state laws and other countries’ the regulatory requirements. requirements of other countries. In the EU, European Union (“EU”), we are required to must maintain certain standardized certifications and must undergo periodic inspections inspections. Failure to obtain and maintain these certifications. Continued noncompliance comply with the EU regulations applicable regulatory requirements could restrict or stop the flow of products into the EU or out of various jurisdictions from us or from our customers. In China, the National Medical Products Administration controls and regulates the manufacture and commerce of healthcare products. We products manufacturing, and we must comply with the applicable regulatory laws applicable to medical device manufacturers, or our ability to manufacture products in China could be impacted. impaired. In Japan, the Pharmaceutical Affairs Laws regulate the manufacture and commerce of healthcare products. These related regulations also require that subcontractors manufacturing products intended for sale in Japan the Japanese market register with authorities and submit to regulatory audits. Other Similar laws apply in other countries where we operate, including elsewhere in Asia and in Latin America, have similar laws regarding the regulation of medical device manufacturing. In the event of any noncompliance America. Our failure to comply with these requirements, interruption of applicable requirements could interrupt our operations and/or and our ability to sell manufacture products for sale into these markets could occur, which in turn could cause markets, harming our reputation and business to suffer.business.

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Prior heading: Failure to comply with domestic or international employment and related laws could result in the payment of significant damages, which would reduce our net income.

We are subject to a variety of domestic U.S. and foreign employment laws, including those employment, labor, benefits, immigration, and related to laws governing wage-and-hour requirements, worker classification, workplace safety, wages and overtime, discrimination, whistleblowing, classification of employees anti-discrimination, pay equity, collective bargaining, work authorization, and independent contractors, related matters, among others. These requirements vary significantly by jurisdiction and severance payments. Enforcement activity relating are subject to these laws, particularly outside of the United States, frequent change, and compliance can increase as a result be costly and time-consuming. Government agencies and private plaintiffs, including through class or collective actions, regularly pursue audits, investigations, and enforcement. Adverse outcomes may include monetary penalties, back pay, damages, tax assessments, injunctive or equitable relief, operational restrictions, restrictions on staffing models, and immigration-related sanctions, any of increased media attention due which can be costly and disruptive to violations by other companies, changes address. We have in law, the past been, and political expect in the future to be, subject to certain of these actions, audits and other factors. investigations. Any violations of these laws could lead to the assessment of fines against us by federal, state or foreign regulatory authorities or damages payable to employees, which fines foregoing could be substantial materially and which would reduce adversely affect our net income.business, financial condition, results of operations, and reputation.

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Prior heading: Failure to meet sustainability, including environmental, social and governance expectations or standards, or to achieve our sustainability goals, may have an adverse impact on our business, impose additional costs on us, and expose us to additional risks.

Many governments, regulators, Governments, investors, customers, employees, and other stakeholders remain focused continue to focus on sustainability practices and matters, including climate change and greenhouse gas ("GHG") emissions, environmental stewardship, responsible sourcing, social responsibility, human capital management, labor practices and workplace conduct, the usage of artificial intelligence, data privacy and human rights, with some expressing opposition to certain of these practices responsible sourcing, and related matters. This attention has resulted in a variety of required These expectations have generated multiple and voluntary evolving reporting regimes that are not harmonized and continue to change, regimes, including the EU’s EU's Corporate Sustainability Reporting Directive ("CSRD") and the California Climate Corporate Data Accountability Act California's climate statutes. Meeting these expectations involves significant operational, financial, legal, regulatory, and Climate-Related Financial Risk Act, among other similar laws. A number of our customers have adopted, or may adopt, procurement policies that include sustainability provisions that their suppliers should comply with, or they reputational risks. Applicable requirements vary significantly by jurisdiction, customer, and product category, and may seek be subject to include such provisions in their procurement terms and conditions. Moreover, a number of investors have adopted, inconsistent or rapidly evolving interpretations. Compliance may adopt, sustainability policies with which they expect their portfolio companies to comply. We have established and publicly announced our sustainability strategy require additional resources and certain goals, commitments, controls, including formal risk assessments, due diligence processes, data collection, monitoring, audits, remediation, and targets, increased supplier engagement, which we may change or refine in the future. These statements reflect our current initiatives, plans and aspirations, and are not guarantees that we will always be able to achieve them. Evolving stakeholder expectations, and our ability to successfully execute these initiatives and accurately report our progress and accomplish our goals present numerous operational, financial, legal, regulatory, reputational and other risks recoverable through product pricing and uncertainties, many of which are outside could adversely affect our control, margins, competitiveness, and all results of which could have a material adverse impact operations. Sustainability‑related information often relies on our business. Standards for tracking estimates, assumptions, and reporting sustainability matters continue evolving methodologies, including data from third parties. Despite our efforts to evolve enhance systems, processes, and are controls, such information may be incomplete, inaccurate, or subject to change, differing interpretations, which could result in significant revisions to our current goals, reported progress in achieving such goals regulatory scrutiny, enforcement actions, litigation, reputational harm, or our ability to achieve such goals in the future. Additionally, the implementation loss of stakeholder confidence. At the same time, "anti-ESG/DEI" legislation and reporting on these initiatives impose additional costs on us policies in certain jurisdictions - including proposals and a diversion of resources. Our processes enactments by several U.S. states, Congress, and controls the Executive Branch - may not comply with evolving standards for identifying, measuring and reporting sustainability metrics. If our sustainability initiatives fail to satisfy investors, current or potential customers, impose additional and our other stakeholders, our reputation, our ability to manufacture potentially conflicting compliance obligations, private litigation risks, and sell products reputational harm, and services, our ability could result in us becoming subject to attract investigations or retain employees, enforcement actions. We have established and our attractiveness as an investment, business partner publicly announced sustainability strategies, goals, commitments, and targets, which we may change or acquirer could be negatively impacted. Similarly, our refine over time. Our failure or perceived failure to pursue or fulfill our stated goals, targets and objectives, maintain adequate supporting processes, adhere to our public statements, or satisfy various comply with applicable reporting laws, regulations or standards within the timelines we announce or otherwise as may be required, or at all, requirements could also have similar negative impacts adversely affect our reputation, customer relationships, talent recruitment and expose us to retention, and investment attractiveness, and could result in government enforcement actions and or private litigation. In addition, We may revise, reprioritize, or discontinue certain sustainability initiatives in recent years "anti-ESG" response to evolving regulations, market conditions, or business priorities, and "anti-DEI" sentiment has gained momentum across the U.S., balancing sustainability objectives with several states, Congress financial performance and the Executive Branch having proposed or enacted "anti-ESG" operational efficiency may involve tradeoffs. Certain customers and "anti-DEI" policies, legislation, executive orders or initiatives business partners incorporate sustainability-related requirements into procurement decisions and contractual obligations, and our inability to meet such requirements in a timely or issued related legal opinions, which cost-effective manner could result in additional compliance obligations, private litigation, becoming the subject of investigations and enforcement actions, reduced demand, lost business opportunities, or reputational harm.more restrictive contract terms.

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Prior heading: Climate change, and the legal and regulatory initiatives related to climate change, could adversely affect our business, results of operations and financial condition.

There continues to be concern that a gradual increase in global average temperatures due to increased concentration of carbon dioxide and other GHGs in the atmosphere will cause significant changes in weather patterns around the globe and an increase in the frequency and severity of natural disasters. Changes in weather patterns and an increased frequency, intensity and duration of extreme weather conditions, such as hurricanes, earthquakes, wildfires, water or other natural resource shortages, droughts, or flooding, could, among other things, pose physical risks to and could impair our production capabilities, disrupt our supply chain and infrastructure, and impact our customers and their demand for our products and services. The geographic locations of our manufacturing facilities could intensify the negative impacts resulting from any of these issues. As a result, the effects of climate change could have a long-term adverse impact on our business, results of operations and financial condition. In many of the countries in which we operate, governmental bodies continue to enact legislation and regulations in response to the potential impacts of climate change. For example, some have enacted or are contemplating considering legislation and regulations that may impact how we conduct and/or report on our business by requiring the disclosure in response to climate change, including climate-specific due diligence and tracking of certain GHG emissions, carbon pricing frameworks such as EU’s CSRD, EU Taxonomy, and the EU Corporate Sustainability Due Diligence Directive ("CSDDD") and California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act. These laws and regulations have, and will continue to have, the potential to impact our operations EU Taxonomy, that may directly or indirectly as a result of required compliance by us and affect our suppliers. In addition, we operations and supply chain. Compliance may require increased energy, production, transportation, and raw material costs, higher capital expenditures, and higher insurance costs. Inconsistent requirements across jurisdictions may further increase compliance burden. We have committed to reducing our GHG emissions as part of our long-term sustainability strategy and we may take additional voluntary steps to mitigate our impact on climate change. As a result, we may experience increases in energy, production, transportation and raw material costs, capital expenditures and insurance premiums and deductibles. Inconsistency of legislation and regulations among jurisdictions may also affect the costs of compliance with such laws and regulations. Any assessment of the impact. The potential impact of future climate change legislation, regulations regulation, or industry standards, as well as any international treaties and accords, accords is uncertain given the scope of potential regulatory change in the countries in which we operate. Given the political significance and uncertainty around the impact of climate change and how it should be addressed, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness uncertain, and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. Any of the foregoing these developments could result in have a material adverse effect on our business, results of operations operations, and financial condition.

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Prior heading: Our failure to comply with environmental, health and safety, product stewardship and producer responsibility laws or regulations could adversely affect our business.

We are subject to extensive and changing federal, state, local local, and international environmental, health and safety laws and regulations, concerning, among other things, regulations concerning the health and safety of our employees, employees and the generation, use, storage, transportation, discharge discharge, and disposal of certain materials (including chemicals and hazardous substances) substances used in or derived from our manufacturing processes. We are also subject to laws and regulations governing the recyclability of products, the materials that may be included in products, and our obligations for product end-of-life disposal, including to dispose of these products after end users have finished with them. Such environmental legislation includes Applicable regimes include the EU Waste Electrical and Electronic Equipment Directive, China’s China's regulation on Management Methods for Controlling Pollution Caused by Electronic Information Products electronic information products, and the EU carbon border adjustment mechanism, among others. Additionally, we may be exposed to liability to our customers relating to the materials that may be included in the components that we procure for our customers’ products. Any violation mechanism. Violations or alleged violation by us of these laws or regulations violations could result in our lead customers refusing to purchase our products refuse purchases and subject us to significant costs, fines or other penalties, the suspension of production, or prohibitions on sales of products we manufacture. In addition, such regulations could restrict our ability to expand our facilities or could require us to acquire costly equipment, or to incur other significant expenses, including expenses associated with the recall of any non-compliant trigger fines, penalties, production suspension, product recalls, or with costly changes in our operational, procurement to operations, procurement, and inventory management activities. In addition, we management. We are responsible for the cleanup of contamination environmental remediation at some of our certain current and former manufacturing facilities and at some third party certain third-party sites. If more stringent compliance or cleanup standards under Some environmental laws or regulations are imposed, or the results of future testing and analyses at our impose liability without regard to fault, requiring current or former operating facilities indicate that we are responsible for the release of property owners or operators to investigate, remove, or remediate hazardous substances into the air, ground and/or water, we may be subject to regardless of when such substances were released. More stringent standards or new findings of contamination could increase our liabilities and costs, and additional liability. Additional environmental matters may arise in the future at sites where no problem issue is currently known or at sites that we may acquire acquire. We have in the future. Some environmental laws impose liability without fault, leading companies past been, and expect in the future to be responsible for investigating, removing, or remediating possible hazardous substances released at properties it owns or operates, regardless be, subject to certain of when such substances were released.these liabilities and cleanup costs. Any of the foregoing could materially adversely affect our business, results of operations, cash flows and financial condition.

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