What the changes say
- New tariff exposure may raise costs and reduce channel sales partner demand.
- Supply shortages and Asia-linked disruptions could delay technology deliveries and increase operating costs.
- Cybersecurity disclosure now highlights the May 2023 ransomware attack, nine-day order interruption and dark-web data exposure.
- International revenue declined to 7.0% from 7.9%, with operations substantially concentrated in Brazil.
What changed since the prior 10-K
New
- New
Our ability to successfully manage our organic growth will require continued enhancement of our operational, managerial and financial resources, controls, and models. Our failure to effectively manage our organic growth could have an adverse effect on our business, financial condition and results of operations
Managing organic growth requires stronger operational, managerial and financial resources, controls and models; failure could harm results.
- New
Index to Financial Statements
Asia-linked supplier instability, trade disruptions and technology shortages could raise costs, delay purchases and impair internal systems and operations.
- New
Increases in product costs from our suppliers may adversely affect our business if we are unable to pass those increases to our customers in a timely manner. Significant or sustained price increases could reduce customer demand, compress gross margins and negatively impact our results of operations
Shortages, limited suppliers and supplier channel shifts could constrain products, reduce sales and worsen availability, pricing and quality.
- New
In addition, competition in Brazil is increasing. If we cannot successfully increase our business, our product sales, our financial condition and results of operations could be adversely affected
New U.S. and retaliatory tariffs may disrupt supply chains, increase costs and prices, and reduce channel sales partner demand.
- New
compromise confidential information, create system disruptions or cause shutdowns. As a result, our channel sales partners’ information may be lost, disclosed, accessed or taken without our channel sales partners’ consent
Privacy violations and data breaches, including the 2023 ransomware attack, could trigger investigations, legal claims, reputational damage and operating losses.
Dropped
- Dropped
manage the personnel required to address our growth. Failure to effectively manage our acquisition opportunities could damage our reputation, limit our future growth, and adversely affect our business, financial condition and operating results
- Dropped
sufficient quantities of product to meet channel sales partner demand (including as a result of shortages of product components), among other reasons
- Dropped
investigations and actions, and may have a serious impact on our reputation and may adversely affect our businesses, operating results and financial condition
Risks of identifying, completing and integrating acquisitions, including retaining key personnel, suppliers and channel sales partners.
Reworded
- 67% rewritten
Quarterly fluctuations - Our net sales and operating results are dependent on several factors. Our net sales will fluctuate from quarter to quarter, and these fluctuations may cause volatility in our stock price
No substantive change; the quarterly sales, operating-results and stock-price volatility discussion remains materially the same.
- 57% rewritten
Disruptive technology - We may not be able to respond and adapt to rapid technological changes, evolving industry standards or changing channel sales partner needs or requirements and thus may become less competitive
No substantive risk change; the technology-change discussion only changes “crucial” to agree grammatically with company and suppliers.
- 56% rewritten
Suppliers - Changes to supply agreement terms or lack of product availability from our suppliers could adversely affect our operating margins, revenue or the level of capital required to fund our operations
Adds that suppliers may pass product-price increases to ScanSource, alongside existing concentration, discount, rebate and delivery risks.
- 49% rewritten
Acquisitions - Our growth strategy includes acquisitions of companies that complement or expand our existing business. Acquisitions involve unique risks and uncertainties, including difficulty in identifying and completing potential acquisitions
No substantive change; acquisition risks and potential strain on management, operations, resources and controls remain unchanged.
- 35% rewritten
International operations - Our international operations expose us to risks that are different from, and possibly greater than, the risks we are exposed to domestically
Updates international revenue exposure from 7.9% in fiscal 2025 to 7.0% in fiscal 2026 and identifies Brazil as the substantial source.
- 31% rewritten
Organic growth strategies - If we fail to effectively manage and implement our operating strategies, we may experience a negative effect on our business and financial results
Removes the concluding warning that organic growth requires continued enhancement of operational, managerial and financial resources, controls and models.
- 29% rewritten
IT systems - Our ability to manage our business and monitor results is highly dependent upon information and communication systems. A failure of these systems could disrupt our business
No substantive change; dependence on computer and telecommunications systems and resulting business disruption risks remain unchanged.
- 27% rewritten
Our business depends on the timely supply of products in order to meet the demands of our channel sales partners
Clarifies that supplier product constraints may result from component shortages and insufficient manufacturing to meet channel sales partner demand.
All 25 risk factors
Headings as the filing states them, in filing order.
Other
- 01People - If we cannot continue to hire and retain high quality employees, our business and financial results may be negatively affected
- 02Acquisitions - Our growth strategy includes acquisitions of companies that complement or expand our existing business. Acquisitions involve unique risks and uncertainties, including difficulty in identifying and completing potential acquisitions49% rewritten
- 03IT systems - Our ability to manage our business and monitor results is highly dependent upon information and communication systems. A failure of these systems could disrupt our business29% rewritten
- 04Organic growth strategies - If we fail to effectively manage and implement our operating strategies, we may experience a negative effect on our business and financial results31% rewritten
- 05Our ability to successfully manage our organic growth will require continued enhancement of our operational, managerial and financial resources, controls, and models. Our failure to effectively manage our organic growth could have an adverse effect on our business, financial condition and results of operationsNew
- 06Our business depends on the timely supply of products in order to meet the demands of our channel sales partners27% rewritten
- 07Index to Financial StatementsNew
- 08Suppliers - Changes to supply agreement terms or lack of product availability from our suppliers could adversely affect our operating margins, revenue or the level of capital required to fund our operations56% rewritten
- 09Increases in product costs from our suppliers may adversely affect our business if we are unable to pass those increases to our customers in a timely manner. Significant or sustained price increases could reduce customer demand, compress gross margins and negatively impact our results of operationsNew
- 10Credit exposure - We have credit exposure to our channel sales partners. Any adverse trends or significant adverse incidents in their businesses could cause us to suffer credit losses
- 11Inventory - The value of our inventory may be adversely affected by market and other factors
- 12Channel sales partners - We operate in a highly competitive environment and good channel sales partner relations are critical to our success. There can be no assurance that we will be able to retain and expand our channel sales partner relationships or acquire new channel sales partners
- 13Liquidity and capital resources - Market factors and our business performance may increase the cost or decrease the availability of capital. Additional capital may not be available to us on acceptable terms to fund our working capital needs and growth
- 14Litigation - We routinely are involved in litigation that can be costly and lead to adverse results
- 15Fair value measurement of goodwill and other intangible assets - Changes in the fair value of the assets and liabilities measured at fair value could have a significant effect on our reported earnings
- 16International operations - Our international operations expose us to risks that are different from, and possibly greater than, the risks we are exposed to domestically35% rewritten
- 17In addition, competition in Brazil is increasing. If we cannot successfully increase our business, our product sales, our financial condition and results of operations could be adversely affectedNew
- 18Centralized functions - We have centralized several functions to provide efficient support to our business. As a result, a loss or reduction of use of one of our locations could have an adverse effect on our business operations and financial results
- 19Competition - We experience intense competition in all our markets. This competition could result in reduced margins and loss of our market share
- 20Disruptive technology - We may not be able to respond and adapt to rapid technological changes, evolving industry standards or changing channel sales partner needs or requirements and thus may become less competitive57% rewritten
- 21Quarterly fluctuations - Our net sales and operating results are dependent on several factors. Our net sales will fluctuate from quarter to quarter, and these fluctuations may cause volatility in our stock price67% rewritten
- 22compromise confidential information, create system disruptions or cause shutdowns. As a result, our channel sales partners’ information may be lost, disclosed, accessed or taken without our channel sales partners’ consentNew
- 23Economic weakness - Economic weakness and uncertainty, including the possibility of recession and heightened levels of inflation, tariffs and geopolitical uncertainty could adversely affect our results and prospects
- 24Foreign currency - Our international operations expose us to fluctuations in foreign currency exchange rates that could adversely affect our results of operations
- 25Increased government regulation - We may be subject to additional costs and subject to fines and penalties because certain governmental entities are end users of products that we sell
Other Scansource 10-Ks
- FY2025 10-K risk factors23 risks
Scansource depends heavily on suppliers like Cisco and Zebra, international sourcing mainly in Asia, and key IT and warehouse infrastructure.
Filed Aug 21, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.