What changed in this filing

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Item 1A. Risk Factors

2024-07-23 compared with 2024-04-23 · 16 added, 22 removed, 498 unchanged (7% of the section changed)

68 unchanged sentences

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

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.

7 unchanged sentences

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.

For example, as of March 30, 2024, we had inventory deposits totaling $76.1 million to address excess components owned by our CMs and ODMs.

For example, as of June 29, 2024, we had inventory deposits totaling $70.3 million to address excess components owned by our CMs and ODMs.

Long lead times for component supply, which may be 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.

30 unchanged sentences

Moreover, adoption of our cloud product offerings, such as our Revenue EDGE, is dependent upon the success of our customers in investing, marketing, selling and deploying broader services—including managed services—to their subscribers, and our ability to differentiate our products from competing or substitutive product and service offerings.

For example, our managed services include managed Wi-Fi, network security, parental controls and an ecosystem of services from partners, including Arlo, Bark and Servify.

For example, our managed services include managed Wi-Fi, network security, parental controls and an ecosystem of services from partners, including Arlo and Bark.

However, if subscriber demand for such services does not grow as expected or declines, or our customers are unable or unwilling to invest in our platform to deploy and market these services, demand for our products may not grow at rates as we anticipate.

42 unchanged sentences

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 and results of operations could be adversely affected.

Our business and results of operations have been, and may continue to be, negatively affected by 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.

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

There are no assurances that the demand for our products will remain strong.

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.

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

4 unchanged sentences

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.

Patent infringement claims may be 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 has continued to increase due in part to patent sales by operating companies to NPEs and availability of litigation financing.

4 unchanged sentences

Such royalty or licensing agreements, if required, may not be available to us on acceptable terms, if at all.

Furthermore, we may additionally be financially responsible for claims made against our customers, including costs of litigation and damages awarded, under indemnity obligations which could further negatively impact our results of operations.

Furthermore, we may additionally be financially responsible for claims made against our customers, including costs of litigation and damages awarded, under

indemnity obligations which could further negatively impact our results of operations.

Protracted litigation could cause us to incur significant defense costs, which would negatively impact our results of operations.

30 unchanged sentences

Any disruptions to their business or processes, or delays in their ability to provide services to us, may in turn disrupt our business operations or increase costs.

Furthermore, we receive quarterly system updates and enhancements on the cloud platform according to Oracle’s release timeline and change management processes, which if not managed properly may disrupt our business operations and delay our ability to process transactions and produce reports necessary to conduct our business.

Furthermore, we receive quarterly system updates and enhancements on the cloud platform according to Oracle’s release

timeline and change management processes, which if not managed properly may disrupt our business operations and delay our ability to process transactions and produce reports necessary to conduct our business.

We are highly dependent upon our ERP system for critical business functions, including order processing and management, supply chain and procurement operations, financial planning, accounting and reporting;

27 unchanged sentences

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

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;

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;

33 unchanged sentences

BSP spending is also affected by reductions in budgets, including as a result of a general economic downturn, delays in purchasing cycles, access to or timing of government funding programs or capital markets, and seasonality and delays in capital allocation decisions.

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 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 expenditures.

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.

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.

Reductions in capital expenditures by BSPs would have a material negative impact on our revenue and results of operations and slow our rate of revenue growth.

33 unchanged sentences

The market for our products is highly competitive, and we expect competition from both established and new companies to increase.

Our ability to compete successfully depends on a number of factors, including our ability to successfully develop new products and solutions that anticipate BSP and market requirements and changes in technology and industry standards;

Our ability to compete successfully depends on a number of factors, including our ability to successfully develop new

products and solutions that anticipate BSP and market requirements and changes in technology and industry standards;

BSP acceptance and adoption of our products and solutions;

27 unchanged sentences

If we are unable to anticipate and develop new products or enhancements to our existing products on a timely and cost-effective basis, our products may become technologically obsolete more rapidly than anticipated over time, resulting in lower sales which would harm our business.

Furthermore, the introduction of new or enhanced products also requires that we manage the transition from older products in

accordance with customer requirements.

Furthermore, the introduction of new or enhanced products also requires that we manage the transition from older products in accordance with customer requirements.

If we fail to maintain compatibility requirements in our customers’ networks, demand for our products would decline, which would reduce our revenue opportunities and market share.

31 unchanged sentences

The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.

In the event that we are subject to or affected by the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

If we are subject to or affected by the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

Furthermore, the Federal Trade Commission, or FTC, and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.

115 unchanged sentences

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.

We have a common stock repurchase program of which $109.9 million was available as of March 30, 2024.

We have a common stock repurchase program of which $109.9 million was available as of June 29, 2024.

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.

20 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors