What changed in this filing

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Item 1A. Risk Factors

2023-07-24 compared with 2023-04-24 · 90 added, 80 removed, 415 unchanged (29% of the section changed)

8 unchanged sentences

We face risks associated with being materially dependent upon third-party vendors;

certain factors that affect our business as a result of those dependencies have in the past and could continue to disrupt our business and adversely impact our gross margin and results of operations.

certain factors that affect our business as a result of those dependencies have and could continue to disrupt our business and adversely impact our gross margin and results of operations.

We materially depend upon third-party vendors for our complex global supply-chain operations, including for services to develop, design and source components and materials, as well as manufacture, transport and deliver our products.

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Our dependence solely on third-party manufacturers makes us vulnerable to possible supply and capacity constraints and reduces our control over manufacturing disruptions due to component availability, extended lead times delivery schedules, quality, manufacturing yields and increased costs.

Some of these risks have occurred from time to time in our business, including recent increases in component costs.

Some of these risks occur from time to time in our business, including recent increases in component costs.

If these disruptions and constraints are prolonged, or if these manufacturers do not have the ability or business continuity plans to fulfill their obligations to us, our business could be disrupted.

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Our international manufacturing also creates risks and uncertainties associated with regulatory changes or government actions such as local business requirements, trade restrictions and tariffs, economic sanctions or related legislation, which may complicate our export and import activities, be disruptive to the operations of our manufacturers and logistics partners or result in higher product and shipping costs and variability of supply.

For example, in 2022, substantially all our silicon suppliers had extended their lead times to 52 weeks and increased prices.

Prices remain

however, many silicon suppliers have reduced their lead-times by 10 weeks or more.

For example, in 2022, substantially all our silicon suppliers extended their lead times and increased prices.

Prices remain high, and while many silicon suppliers have begun

reducing their lead-times, we continue to face extended lead times.

Manufacturing in Asia further heightens our risk of meeting customer delivery requirements as we rely upon third-party logistics companies to transport and import significant volumes of products to the U.S.

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Any of these suppliers could stop producing our components, raise the prices they charge us, be subject to higher product tariffs, epidemics or other conditions that disrupt their operations, cease operations or enter into exclusive arrangements with our competitors, consequently affecting our operations and results.

For example, we have experienced disruptions in our supply of certain components that we source from suppliers in China and other Asian countries, causing delays in supply of our products due to production disruptions, factory closures and longer lead times for components and from uncertainty around trade and tariff policies between the U.S.

Being dependent upon a limited number of suppliers constrains our ability to mitigate these disruptions in our supply chain and such disruptions, particularly if prolonged.

For example, we have experienced disruptions in our supply of certain components that we source from suppliers in China and other Asian countries due to production disruptions, factory closures and longer lead times for components and from uncertainty around trade and tariff policies between the U.S.

and China, which caused delays in our product supply.

Being dependent upon a limited number of suppliers constrains our ability to mitigate these disruptions in our supply chain, particularly if such disruptions are prolonged.

This may adversely affect our ability to obtain components and materials needed to manufacture our products at acceptable prices or at all.

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If any of our manufacturing partners are unable or unwilling to continue manufacturing our products in required volumes and at high quality levels, we would have to identify, qualify and select acceptable alternative manufacturers.

Having to take the time to qualify new third-party manufacturers could disrupt our ability to maintain continuous supply of product to meet customer requirements.

The time it takes to qualify new third-party manufacturers could disrupt our ability to maintain continuous supply of product to meet customer requirements.

An alternative manufacturer may not be available to us when needed or may not be in a position to satisfy our production requirements at commercially reasonable prices and quality.

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As a result, suppliers could stop selling to us and our manufacturers at commercially reasonable prices, or at all.

We have worked to mitigate the cost impact of recent price increases, but those efforts may not be successful.

While we have worked to mitigate the cost impact of recent price increases, those efforts may not be successful.

Any such interruption or delay may force us and our manufacturers to seek components or materials from alternative sources, which may not be available, or result in higher prices.

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If we overestimate our product demand, our third-party manufacturers may purchase excess components and build excess inventory, and we could be required to pay for these excess parts or products and their storage costs.

Long lead times for component supply, which have been magnified by factory closures and shortages due to the COVID-19 pandemic as well as higher demand for certain components, and demand for our products have in the past and are expected to continue to impact our ability to accurately forecast our production requirements.

For example, as of July 1, 2023, we have provided inventory deposits totaling $51.4 million.

Long lead times for component supply, which have been exacerbated by higher demand for certain components, and demand for our products has and is expected to continue to impact our ability to accurately forecast our production requirements.

We may incur liabilities for certain component inventory purchases that have been rendered excess or obsolete, which may have an adverse effect on our gross margin, financial condition and results of operations.

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Despite our on-going enhancement of security precautions, hackers are increasingly more sophisticated and aggressive, and our efforts may be inadequate to prevent all incidents of data breach or theft due, for example, to the increased use by attackers of tools and techniques that are specifically designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

We and certain of our third-party providers have in the past been subject to cyberattacks and security incidents.

We and certain of our third-party providers have been subject to cyberattacks and security incidents.

The theft, loss or misuse of proprietary or personal data collected, stored or processed by us or our service providers to run our business could result in significant security and remediation costs, regulatory fines and penalties, and/or litigation costs.

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We are subject to business and operational risks associated with our international operations, including our global supply-chain operations and our international offices located in Nanjing, China and Bangalore, India.

In addition, we are exposed to risk arising from dependence upon third-party development contractors in India and our growing Bangalore staff, and, to a lesser extent, dependence upon our international sales operations.

In addition, we are exposed to risk arising from dependence upon third-party development contractors in India and our Bangalore staff, as well as dependence upon our international sales operations.

The risks associated with our international operations also include costs of complying with differing and changing laws and regulatory requirements, tariffs, export quotas, custom duties and other trade restrictions;

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We face fierce competition for business with key channel partners.

If we are unable to engage channel partners that we believe are key to our strategy, we may fail to grow our sales as planned.

If we are unable to engage channel partners, we may fail to grow our sales or our sales may be reduced.

Furthermore, we rely on our channel partners to promote and sell our products.

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The quality of our support and services offerings is important to sustain and increase our sales to new and existing customers.

Our services to customers have increasingly broadened to help them deploy our products within their networks.

Our services to customers include services to help them deploy our products within their networks.

Once our products are deployed within our customers’ networks, they depend on our support organization to resolve any issues relating to those products.

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If we cannot evolve and scale our business and operations effectively, we may not be able to execute our business strategies in a cost-effective manner and our business, financial condition, profitability and results of operations could be adversely affected.

Our business and results of operations have been, and may continue to be, negatively affected by the COVID-19 pandemic and related impacts on the global economy and supply chain, and the demand for broadband products may not be sustained.

The COVID-19 pandemic and the resulting containment measures caused economic, financial and supply chain disruptions globally, including in most regions in which we sell our products and services and conduct our business operations.

Although COVID-19 related containment measures have generally subsided, we continue to manage through sustained shortages of components and materials, including extended lead times and higher supply chain costs, which may have a material negative impact on our ability to supply products to meet customer requirements and could materially adversely affect our business and results of operations.

Although demand for our products has been strong as subscribers sought more bandwidth and better Wi-Fi at home for work and entertainment, there are no assurances that the demand for our products will remain strong.

Our business and results of operations have been, and may continue to be, negatively affected global macroeconomic conditions and supply chain constraints, and the demand for broadband products may not be sustained.

Global macroeconomic, financial and supply chain disruptions have impacted most regions in which we sell our products and services and conduct our business operations.

We continue to manage through extended silicon lead times and higher supply chain costs, which may have a material negative impact on our ability to supply products to meet customer requirements and could materially adversely affect our business and results of operations.

For example, BSPs may not invest in our platform or delay infrastructure improvements due to the resulting uncertainty in the global economy.

To the extent we experience a renewed or worsening disruption to our business and operations and other adverse residual impacts of a pandemic or further future disruptions, it could have a material adverse effect on our business, results of operations and financial condition.

We could become subject to litigation that could harm our business or negatively impact our results of operations.

In the ordinary course of business, we are subject to legal claims and litigation, and may become involved in regulatory proceedings, related to disputes over commercial, competition, IP, labor and employment and other matters.

Litigation and regulatory proceedings could harm our business or negatively impact our results of operations.

In the ordinary course of business, we are subject to legal claims, litigation and regulatory proceedings related to disputes over commercial, competition, IP, labor and employment and other matters.

Regardless of the merits of any such claims, litigation and regulatory proceedings are inherently uncertain, and can be costly, disruptive to our business and operations, harmful to our reputation, and distracting to management.

In particular, as a technology company, we may be subject to IP claims asserting patent, copyright, trademark and/or other infringement claims that are costly to defend and could limit our ability to use some technologies in the future.

The risk of such claims is heightened as we expand our products and services and increasingly rely on more technologies, including third-party IP rights that we license and incorporate into our products and services.

In particular, as a technology company, we are subject to IP claims asserting patent, copyright, trademark and/or other infringement claims that are costly to defend and could limit our ability to use some technologies in the future.

The risk of such claims is heightened as we expand our products and services and rely on more technologies, including third-party IP rights that we license and incorporate into our products and services.

Third parties from whom we license IP may be unable or unwilling to indemnify us for such claims or offer any other remedy to us.

Increasingly, patent infringement claims are asserted by patent assertion entities and non-practicing entities, or NPEs, that do not conduct business as an operating company and hold and own patents only for the purpose of aggressively pursuing royalties through infringement assertions or patent infringement litigation.

Further, in our industry, the number of assertions by NPEs continues to increase due in part to patent sales by operating companies to NPEs and availability of litigation financing.

Further, in our industry, the number of assertions by NPEs has continued to increase due in part to patent sales by operating companies to NPEs and availability of litigation financing.

We have received and expect to continue to receive assertions from NPEs and other third parties alleging that we may be infringing their patents or other IP rights;

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We have a history of fluctuations in our quarterly and annual gross margin and operating results, including fluctuations due to factors outside of our control.

Factors that impact variability of our operating results include our ability to predict our revenue and reduce and control our costs, our ability to predict product functions and features desired by our customers, the impact of global economic conditions, our ability to effectively manage our global supply chain operations, our ability to effectively manage third parties upon whom we depend to conduct our business, our customers’ spending patterns and purchasing decisions, the impact of competition, customer adoption of our products, our ability to manage our legal, contractual and regulatory obligations and liabilities, and other risk factors identified in the lead-in to “Management’s Discussion and Analysis

of Financial Condition and Results of Operations” above and in this “Risk Factors” section.

Our gross margin is further impacted by customer, geographic and product mix, the impact of competition on our prices, our ability to manage our costs associated with components and materials, excess and obsolescence, expedite fees and logistics-related activities, contractual commitments and other product costs.

Our gross margin is further impacted by customer, geographic and product mix, the impact of competition on our prices, our ability to manage our costs

associated with components and materials, excess and obsolescence, expedite fees and logistics-related activities, contractual commitments and other product costs.

Fluctuating results make it difficult to predict our future performance and could cause the market price of our stock to decline.

We expect to continue to incur significant expenses and cash outlays in connection with our anticipated growth as we expand our business and operations and target new customer opportunities.

Given our anticipated growth and the intense competitive pressures we face, we may be unable to adequately control our operating expenses or maintain positive operating income.

We expect to continue to incur significant expenses and cash outlays as we seek to expand our business and operations and target new customer opportunities.

Given our growth objectives and the intense competitive pressures we face, we may be unable to adequately control our operating expenses or maintain positive operating income.

Comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance.

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If our systems suffer prolonged interruption, our results of operations and cash flows would be adversely affected.

As a public company we are subject to significant accounting, legal and regulatory requirements;

our failure to comply with these requirements may adversely affect our operating results and financial condition.

We are subject to significant accounting, legal and regulatory requirements, including requirements and rules under the Sarbanes-Oxley Act, or SOX, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank, among other rules and regulations implemented by the SEC, as well as listing requirements of the New York Stock Exchange, or NYSE.

We incur significant accounting, legal and other expenses and must invest substantial time and resources to comply with public company reporting and compliance requirements, including costs to ensure we have adequate internal controls over accounting and financial reporting, proper documentation and testing procedures among other requirements.

We cannot be certain that the actions we have taken to implement internal controls over financial reporting will be sufficient.

We have in the past discovered, and may in the future discover, areas of our internal financial and accounting controls and procedures that need improvement, particularly as we enhance, automate and improve functionality of our processes and internal applications.

New laws and regulations as well as changes to existing laws and regulations affecting public companies, including the provisions of SOX and Dodd-Frank and rules adopted by the SEC and the NYSE, would likely result in increased costs to us as we respond to their requirements.

We continue to invest resources to comply with evolving laws and regulations, and this investment may result in increased general and administrative expense.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which would adversely affect our operating results and our stock price.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements in accordance with U.S.

generally accepted accounting principles.

Our management does not expect that our internal control over financial reporting will prevent or detect all error and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company will have been detected.

If we are unable to produce accurate financial statements on a timely basis, investors could lose confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and make it more difficult for us to finance our operations and growth.

Risks Related to Our Products

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Our products, including our platform (cloud, software and systems) and managed services, are highly technical and, when deployed, are critical to the operation of many networks.

Our products have contained and may contain undetected defects, bugs or security vulnerabilities, which risks may be exacerbated as we continue to expand our cloud and software portfolio and include services from third-party partners.

Our products have contained and are subject to defects, bugs or security vulnerabilities, which risks may be exacerbated as we continue to expand our cloud and software portfolio and include

services from third-party partners.

Some defects in our products may only be discovered after a product has been installed and used by customers and may in some cases only be detected under certain circumstances or after extended use.

Any errors, bugs, defects or security vulnerabilities discovered in our products after commercial release could result in loss of revenue or delay in revenue recognition, loss of customers and increased service and warranty and retrofit costs, any of which could adversely affect our business, operating results and financial condition.

In addition, we could face claims for security and data breach, product liability, tort or breach of warranty.

In addition, we are subject to claims for security and data breach, product liability, tort or breach of warranty.

Our contracts with customers contain provisions relating to warranty disclaimers and liability limitations, which may not be upheld.

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The development and production of new products with high complexity often involves problems with software, components and manufacturing methods.

If significant warranty or other product obligations arise due to reliability or quality issues arising from defects in software, faulty components or improper manufacturing methods, our operating results and financial position could be negatively impacted by cost associated with fixing software or hardware defects;

Any significant warranty or other product obligations due to reliability or quality issues arising from defects in software, faulty components or improper manufacturing methods could negatively impact our operating results and financial position due to costs associated with fixing software or hardware defects;

high service and warranty expenses;

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We and our third-party providers may be unable to adequately prevent unauthorized third-party copying or use of our IP.

For example, contractual provisions protecting our IP could be breached, or our IP could be reverse engineered or unlawfully distributed.

For example, contractual provisions protecting our IP are subject to breach, and our IP is subject to reverse engineering and unlawful distribution.

It may become more difficult to adequately protect our IP as we expand our reliance on third parties for the design, development and/or manufacture of our products.

In addition, we may become subject to increased risks arising from or related to security breaches, data loss or theft of our data or our IP, and have greater difficulty protecting our IP as our work-from-anywhere workforce and work product become more distributed.

Policing the unauthorized use and distribution of our IP is difficult and costly.

Policing the unauthorized use and distribution of

our IP is difficult and costly.

Litigation, which could result in substantial costs, diversion of resources and harm to our business, may be necessary to enforce our IP rights, protect our trade secrets or determine the validity and scope of proprietary rights.

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Macroeconomic weakness and uncertainty make it more difficult for us to manage our operations and accurately forecast revenue, gross margin and operating expenses.

Further, adverse developments that affect financial institutions, transactional counterparties, or other third parties, or concerns or rumors about these events, have led to market-wide liquidity problems.

We have no borrowing or deposit exposure to directly impacted institutions and have not experienced an adverse impact to our liquidity or to our business operations, financial condition, or results of operations as a result of these recent events.

However, uncertainty may remain over liquidity concerns in the broader financial services industry, and there may be unpredictable impacts to our business and our industry.

Geopolitical issues, such as the Russian invasion of Ukraine, relations between the United States and China, tariff and trade policy changes, and increasing potential of conflict involving countries in Asia that are critical to our supply-chain operations, such as Taiwan and China, have resulted in increasing global tensions and create uncertainty for global commerce.

The on-going global impact of the COVID-19 pandemic continues to create shortages in component and supplies and otherwise disrupt and delay our global supply-chain operations.

Further, recent bank failures and other adverse developments that affect financial institutions, transactional counterparties, or other third parties, or concerns or rumors about these events, have led to market-wide liquidity problems.

While we have no borrowings with or deposit exposure to these recently failed banks and have not experienced an adverse impact to our liquidity or to our business operations, financial condition, or results of operations as a result of these recent events, uncertainty may remain over liquidity concerns in the broader financial services industry, and there may be unpredictable impacts to our business and our industry.

Geopolitical issues, such as the Russian invasion of Ukraine, relations between the U.S.

and China, tariff and trade policy changes, and increasing potential of conflict involving countries in Asia that are critical to our supply-chain operations, such as Taiwan and China, have resulted in increasing global tensions and create uncertainty for global commerce.

In addition, rising inflation in the United States has affected businesses across many industries, including ours, by increasing the costs of labor, employee healthcare, components and freight and shipping, which may further constrain our customers’ or prospective customers’ budgets.

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Potential customers may also prefer to purchase from their existing suppliers rather than a new supplier, regardless of product performance or features, because the products that we and our competitors offer require a substantial investment of time and funds to qualify and install.

The demand on network capacity due to the shift towards a remote workforce may attract new market entrants with competitive or substitutive products, which may lead to increased sales cycles, cause pricing pressure and impact adoption of our platform due to the broader availability of product offerings.

The demand on network capacity due to remote workforces may attract new market entrants with competitive or substitutive products, which may lead to increased sales cycles, cause pricing pressure and impact adoption of our platform due to the broader availability of product offerings.

Some of our competitors may offer substantial discounts or rebates to win or retain customers.

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Competitive pressures could result in increased pricing pressure, reduced profit margin, increased sales and marketing expenses and failure to increase, or the loss of, market share, any of which could reduce our revenue and adversely affect our financial results.

Our industry is characterized by rapid technological advance, and if we fail to develop new products or enhancements that meet changing BSP requirements, we could experience lower sales.

Our industry is characterized by rapid technological advancements, and if we fail to develop new products or enhancements that meet changing BSP requirements, we could experience lower sales.

Our industry is characterized by rapid technological change, changing needs of BSPs, evolving industry standards and frequent introductions of new products and platform offerings.

We invest significant amounts to pursue innovative technologies that we believe will be adopted by BSPs.

For example, we have invested and continue to invest resources in our platform offerings.

For example, we have invested and plan to continue to invest resources in our platform offerings.

In addition, on an ongoing basis, we expect to reposition our product and service offerings and introduce new offerings as we encounter rapidly changing BSP requirements and increasing competitive pressures.

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Historically, our customers may spend less or have less deployments in the first quarter due to pending annual budgets or, in certain regions, due to weather conditions that inhibit outside fiber deployment, resulting in weaker demand for our products in the first quarter.

Softness in demand in any of our customer markets, including due to macro-economic conditions beyond our control or uncertainties associated with regulatory reforms, has in the past and could in the future lead to unexpected decline or slowdown in customer capital expenditure.

Softness in demand in any of our customer markets, including due to macroeconomic conditions beyond our control or uncertainties associated with regulatory reforms, has and could in the future lead to unexpected decline or slowdown in customer capital expenditure.

Further, BSPs may pursue capital investment in network technologies other than those offered by us or may choose not to adopt our products and platform solutions in their networks.

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Although we currently do not have material operations or business in the EU or the UK, we are in the process of expanding in these jurisdictions, and we have incurred and will continue to incur substantial costs in this respect.

Furthermore, the GDPR imposes significant penalties for noncompliance of at least €20 million (for the EU GDPR) or £17.5 million (for the UK GDPR), or up to 4% of a company’s worldwide revenue;

Furthermore, the GDPR imposes significant penalties for noncompliance which can amount to €20 million (for the EU GDPR) or £17.5 million (for the UK GDPR), or in the case of an undertaking, up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher;

thus, any non-compliance with the GDPR could result in a material adverse effect on our business, financial condition and results of operations.

Twice, the Court of Justice of the European Union, or the CJEU, has invalidated regulations designed to facilitate the transfer of data from European countries to the United States, and in July 2020, the CJEU held that transfers must be assessed on a case-by-case basis and reliance on standard contractual clauses (a standard form of contract approved by the European Commission as an adequate mechanism for personal data transfers) may not be sufficient in all circumstances.

The EU GDPR and UK GDPR regulate cross-border transfers of personal data out of the European Economic Area, or the EEA, and the UK.

Twice, the Court of Justice of the European Union, or the CJEU, has invalidated legal mechanisms designed to facilitate the transfer of data from European countries to the United States and, in July 2020, the CJEU held that transfers must be assessed on a case-by-case basis and reliance on standard contractual clauses (a standard form of contract approved by the European Commission as an adequate mechanism for personal data transfers) may not be sufficient in all circumstances.

European court and regulatory decisions subsequent to the CJEU July decision have taken a restrictive approach to international data transfers.

In March 2022, the U.S.

and EU announced a new regulatory regime intended to replace the invalidated regulations;

however, this new EU-US Data Privacy Framework has not yet been implemented beyond an executive order signed by President Biden on October 7, 2022 on Enhancing Safeguards for United States Signals Intelligence Activities.

We currently rely on the standard contractual clauses and the UK International Data Transfer Agreement (or Addendum) to transfer personal data outside the European Economic Area and the UK respectively, including to the United States.

As the enforcement landscape further develops, and supervisory authorities issue further guidance on – and revised standard contractual clauses for – international data transfers.

and EU announced a new regulatory regime intended to replace the invalidated mechanisms and, on October 7, 2022, President Biden signed an Executive Order on Enhancing Safeguards for United States Intelligence Activities.

This introduced new binding safeguards to address the concerns raised by the CJEU in its July 2020 decision and formed the basis of the new EU-US Data Privacy Framework, or DPF, which was released on December 13, 2022.

The DPF outlines the practices that U.S.

organizations must meet when they self-certify their commitment to the DPF once it goes into effect.

In order to be effective as an EU GDPR transfer mechanism to self-certified U.S.

entities, the European Commission must declare the DPF adequate;

the European Commission is expected to adopt its adequacy decision on the DPF in Q3 2023.

In the meantime, the new safeguards introduced by the Executive Order and the DPF are expected to facilitate data transfers to the U.S.

on the basis of the standard contractual clauses, though the data transfers enforcement landscape and the DPF’s longer term stability remain uncertain.

We currently rely on the standard contractual clauses and the UK International Data Transfer Agreement (or Addendum) to transfer personal data outside the EEA and the UK respectively, including to the U.S.

As the enforcement landscape further develops, and supervisory authorities issue further guidance on – and revised standard contractual clauses for – international data transfers to the U.S.

and elsewhere, our business, operations and financial condition could be adversely affected.

Our current contracts may not be sufficient and we could suffer additional costs, complaints and/or regulatory investigations or fines.

we may have to stop using certain tools and vendors and make other operational changes;

we have had to and will have to implement revised standard contractual clauses for existing intragroup, customer and vendor arrangements within required time frames;

our customers may not use our services in a manner that is compliant with applicable data privacy laws and regulations;

our services may not be competitive in certain markets;

and/or it could otherwise affect the manner in which we provide our services, and could adversely affect our business, operations and financial condition.

We may also have to stop using certain tools and vendors and make other operational changes.

We have had to and will have to implement standard contractual clauses and/or the UK equivalent mechanism for intragroup, customer and vendor arrangements.

Further, our customers may not use our services in a manner that is compliant with applicable data privacy laws and regulations and our services may not be competitive in certain markets.

We and/or our customers are also subject to evolving EU and UK privacy laws on cookies, tracking technologies, e-marketing and electronic communications.

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If the trend of increasing enforcement by regulators of the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of marketing activities conducted on behalf of our customers, divert the attention of our technology personnel, adversely affect our margins, and subject us to additional liabilities.

In addition, new security regulations, such as the EU’s Network and Information Security 2 Directive (NIS2) and the UK’s Telecommunications (Security) Act 2021 together with its implementing regulations (currently in draft form) imposes further security obligations on electronic communications networks.

We may be required to implement (and contractually commit to) additional security measures to remain a competitive vendor, as customers will need to ensure its vendors are able to meet the obligations that they are themselves subject to, or customers may choose different vendors due to our security measures.

In addition, new security regulations, such as the EU’s Network and Information Security 2 Directive (NIS2) and the UK’s Telecommunications (Security) Act 2021 together with its implementing regulations impose further security obligations on electronic communications networks and services.

We may be required to implement (and contractually commit to) additional security measures to remain a competitive vendor, as customers will need to ensure their vendors are able to meet the obligations that they are themselves subject to, or customers may choose different vendors due to our security measures.

This could result in additional costs and require operational changes which could adversely affect our business, operations and financial condition.

In light of the complex and evolving nature of EU, EU Member State and UK privacy laws, there can be no assurances that we will be successful in our efforts to comply with such laws;

violations of such laws could result in regulatory investigations, fines, orders to cease/change our use of technologies, as well as lead to civil claims including class actions, and reputational damage.

violations of such laws could result in regulatory investigations, fines, orders to cease/change our use of technologies and/or our processing activities, enforcement notices and assessment notices (for a compulsory audit), as well as lead to civil claims including class actions, and reputational damage.

Since 2020, a number of U.S.

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and internationally, deter customers from adopting our cloud-based solutions or require us to redesign our platform in order to meet customer requirements related to such laws.

Regulatory actions or claims involving our practices in the collection, storage, processing, use or disclosure of consumer information or other personal data, even if unfounded, could damage our reputation and adversely affect our

operating results.

The failure or perceived failure to comply may result in government or civil proceedings or actions against us, or could cause us to lose customers, which could have an adverse effect on our business.

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Similarly, changes to regulatory tariff requirements or other regulations relating to pricing or terms of carriage on communication networks could slow the development or expansion of network infrastructures, which could adversely affect the sale of our products and services.

of our customers are subject to FCC rate regulation of interstate telecommunications services and are recipients of government stimulus payments.

Many of our customers are subject to FCC rate regulation of interstate telecommunications services and are recipients of government stimulus payments.

Limits or restrictions on access to these programs could affect the ability of IOCs to access capital, which would in turn reduce our revenue opportunities.

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and a slowdown in the communications industry or the general economy.

Recently, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

The stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.

Broad market and industry factors may seriously affect the market price and volatility of our common stock, regardless of our actual operating performance.

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If our financial position deteriorates, we may not be able to secure a similar source of financing to support our working capital needs on acceptable terms or at all.

If future financings involve the issuance of equity securities, our then-existing stockholders would suffer dilution.

If future financings involve the issuance of equity securities, our then-existing stockholders will suffer dilution.

If we raise additional debt financing, we may be subject to restrictive covenants that limit our ability to conduct our business.

If we are unable to sustain positive operating

income and cash flows from operations, our liquidity, results of operations and financial condition may be adversely affected.

If we are unable to sustain positive operating income and cash flows from operations, our liquidity, results of operations and financial condition may be adversely affected.

Furthermore, if we are unable to generate sufficient cash flows to support our operational needs, we may need to cease our repurchase program or seek additional sources of liquidity, including borrowings, to support our working capital needs, even if we believe we have generated sufficient cash flows to support our operational needs.

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Our failure to adequately address and resolve risks and uncertainties associated with acquisitions could have a material adverse impact on our financial condition and results of operations.

We may in the future acquire businesses, products or technologies to expand our product offerings and capabilities, customer base and business.

We may acquire businesses, products or technologies to expand our product offerings and capabilities, customer base and business.

We have evaluated and expect to continue to evaluate a wide array of potential strategic transactions.

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Repurchases we consummate could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance.

In July 2022, our Board of Directors authorized a one-year stock repurchase program for up to $100 million of our common stock.

In July 2022, our Board of Directors authorized a one-year stock repurchase program for up to $100 million of our common stock, and in May 2023, our Board of Directors approved an amendment of the stock repurchase program to eliminate the one-year end date.

Under the repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements.

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Even if our share repurchase program is fully implemented, it may not enhance long-term stockholder value.

General Risks

As a public company we are subject to significant accounting, legal and regulatory requirements;

our failure to comply with these requirements may adversely affect our operating results and financial condition.

We cannot be certain that the actions we have taken to implement internal controls over financial reporting will be sufficient.

New laws and regulations as well as changes to existing laws and regulations affecting public companies would likely result in increased costs to us as we respond to their requirements.

We continue to invest resources to comply with evolving laws and regulations, and this investment may result in increased general and administrative expense.

generally accepted accounting principles.

Our management does not expect that our internal control over financial reporting will prevent or detect all error and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

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What changed 10-Q

Item 1A. Risk Factors