Fiscal period ending 2025-12-31 versus 2024-12-31
— view filing on EDGAR →
Risk exposure broadened materially across AI liability, regulatory compliance, competitive threats, and supply-chain cost pressures, with the only meaningful offset being the de-escalation of the Airwave litigation complex. The worsening side is substantive and multi-theme: new AI-specific legal and reputational risks, realized input-cost inflation with uncertain mitigation, mission-critical product failure liability in defense/public safety, escalating data-sovereignty and cybersecurity regulatory burden, and heightened IP litigation exposure from USPTO policy shifts. The Airwave removal (including the $748M contingency) is a genuine and significant easing, but it does not offset the breadth of deterioration elsewhere.
5 company-specific
· 1 eased/removed
· 3 common-mode
Company-specific changes
Revised
Added disclosure of recently experienced increased material and component costs, plus acknowledgment that mitigation efforts may fail—escalates from generic risk to realized impact.
Our future operating results depend on our ability to purchase a sufficient amount of materials, parts, and components, as well as software and services, at acceptable prices to meet the demands of…
Revised
New disclosure of government funding volatility risk and removal of Trump DEI executive order language, but addition of broader budget/spending uncertainty and technology perception risks.
A portion of our business is dependent upon U.S. government contracts and grants, which have availability of funding, spending levels and priorities that could change, are highly regulated and…
Revised
New specific competitive threats added: AI competition risk, Silvus acquisition integration competition, encryption-defeat technologies threatening MCN radios security/effectiveness.
Risks Related to Our Ability to Grow Our Business As we introduce new products and services and enhance existing products and services, we may face increased areas of risk related to the success of…
Revised
Added explicit risk of mission-critical product failures in defense, public safety, unmanned systems causing litigation for injuries/loss of life—material escalation of severity.
Risks Related to the Operation of Our Business If the quality of our products does not meet our customers' expectations or regulatory or industry standards, or our products and services suffer from…
Revised
Added specific reference to USPTO Patent Trial and Appeal Board policy changes increasing NPE litigation risk, escalating the IP litigation threat.
If we are unable to adequately protect our intellectual property, or if we, our customers and/or our suppliers are found to have infringed intellectual property rights of third-parties, our…
Eased / removed
Revised
Removal of detailed Airwave litigation and regulatory disclosures (CMA Charge Control, CAT appeal denial, High Court proceedings, $748M backlog contingency) represents material de-escalation of previously disclosed legal and financial risks.
We are exposed to risks under large, multi-year system and services contracts that may negatively impact our business. We enter into large, multi-year system and services contracts with municipal…
Also disclosed — common-mode (AI regulatory compliance, Data privacy regulation, Global tax reform pillar two)
AI regulatory compliance
New
New disclosure of material AI-related risks: legal liability, regulatory oversight, reputational harm, and product defects. Substantive operational and strategic risk.
We use AI in our products and services, and challenges related to the use of AI could subject us to legal liability or additional regulatory oversight, or adversely affect our business, financial…
Data privacy regulation
Revised
Addition of "data sovereignty" as explicit risk category and shift from NIS2 specifics to broader "increasingly stringent and prescriptive" cybersecurity legislation with certification/attestation requirements signals escalated regulatory burden and compliance complexity.
We are subject to complex and changing laws and regulations in various jurisdictions regarding cybersecurity, privacy, data protection, data sovereignty and information security, which exposes us to…
Global tax reform pillar two
Revised
Prior year cited specific negative impact from TCJA R&D capitalization through 2026. Current year replaces this with new OBBBA complexity risk, including potential noncompliance liability and uncertain guidance.
Tax matters could have a negative impact on our financial condition and results of operations. We are subject to income taxes in the U.S. and numerous foreign tax jurisdictions. Our provision for…