DXC Technology (DXC) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We may not succeed in our strategic objectives, which could adversely affect our business, financial condition, results of operations and cash flows
2. 02We could be held liable for damages, our reputation could suffer, and our business may be materially impacted due to service interruptions from security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data
3. 03Compliance, or failure to comply, with obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data could adversely affect our financial condition, results of operations and cash flows
4. 04Compliance with privacy and security laws, requirements and regulations may result in cost increases due to expanded compliance obligations, potential systems changes, the development of additional administrative processes and increased enforcement actions, litigation, fines and penalties
5. 05Product and service quality issues could impact our business, operating results and financial condition
6. 06potentially stronger competitors in the markets in which we operate. Additionally, competitors may affect our business by entering into exclusive arrangements with existing or potential customers or suppliers
7. 07Our ability to compete in certain markets we serve is dependent on our ability to continue to expand our capacity in certain offshore locations. However, as our presence in these locations increases, we are exposed to risks inherent to these locations which may adversely affect our revenue and profitability
8. 08Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets
9. 09If industry or equity research analysts have difficulty in understanding the changes to our business model, or we fail to meet our publicly announced financial guidance, our stock price and trading volume could decline
10. 10Public health crises, such as the COVID-19 pandemic, have caused disruptions in global economies, financial and commodities markets and rapid shifts in governmental and public health policies
11. 11We have indebtedness, which could have a material adverse effect on our business, financial condition and results of operations
12. 12In addition, we could be unable to refinance our outstanding indebtedness on reasonable terms or at all
13. 13If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected
14. 14Performance under contracts, including those on which we have partnered with third parties, may be adversely affected if we or the third parties fail to deliver on commitments or otherwise breach obligations to our customers
15. 15We are subject to a series of risks relating to climate change and natural disasters, which may affect our worldwide business operations and financial results
16. 16Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business
17. 17Our ability to provide customers with competitive services is dependent on our ability to attract and retain qualified personnel
18. 18Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows
19. 19Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, which could impact our profitability and have a material adverse effect on our business and results of operations, especially for customer contracts where we do not have adequate inflation protections
20. 20Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control
21. 21We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business
22. 22We may inadvertently infringe on the intellectual property rights of others and be exposed to claims for damages, and our intellectual property rights may be infringed by third parties
23. 23Our inability to procure third-party licenses required for the operation of our products and service offerings may result in decreased revenue or increased costs
24. 24We may be exposed to negative publicity and other potential risks if we are unable to maintain effective disclosure controls and internal control over financial reporting
25. 25We could suffer additional losses due to asset impairment charges
26. 26Our Board may authorize share repurchases from time to time. However, we are not obligated to make any purchases of our shares, and our decision to repurchase our shares, as well as the timing of such repurchases, will depend on a variety of factors as determined by our management and Board
27. 27We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity
28. 28We may be adversely affected by disruptions in the credit markets, including disruptions that reduce our customers' access to credit and increase the costs to our customers of obtaining credit
29. 29Our hedging program is subject to counterparty default risk
30. 30We derive significant revenues and profit from contracts awarded through competitive bidding processes, which can impose substantial costs on us and we may not achieve revenue and profit objectives if we fail to bid on these projects effectively
31. 31If our customers experience financial difficulties, we may not be able to collect our receivables, which would materially and adversely affect our profitability and cash flows from operations
32. 32If we are unable to maintain and grow our customer relationships over time, our operating results and cash flows will suffer. Failure to comply with customer contracts or government contracting regulations or requirements could adversely affect our business, results of operations and cash flows
33. 33Our strategic transactions may prove unsuccessful and our profitability may be materially and adversely affected
34. 34In addition, we may fail to complete transactions. Closing transactions is subject to uncertainties and risks, including the risk that we may be unable to satisfy conditions to closing, such as regulatory and financing conditions and the absence of material adverse changes to our business
35. 35Changes in U.S. tax legislation may materially affect our financial condition, results of operations and cash flows
36. 36Changes in tax rates, tax laws and the timing and outcome of tax examinations could affect our future results

Risks Related to our Completed Strategic Transactions

1. 37We could have an indemnification obligation to HPE if the stock distribution in connection with the HPES business separation (the "Distribution") were determined not to qualify for tax-free treatment, which could materially adversely affect our financial condition
2. 38If the HPES Merger does not qualify as a reorganization under Section 368(a) of the Code, CSC's former stockholders may incur significant tax liabilities
3. 39The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders
4. 40The price of our securities is subject to market and other conditions and may be volatile