What changed in this filing

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Item 1A. Risk Factors

2026-07-21 compared with 2026-04-22 · 120 added, 76 removed, 567 unchanged (26% of the section changed)

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• If we do not successfully execute our business strategy to increase our sales to new and existing CXPs, our operating results, financial condition, cash flows and long-term growth may be negatively impacted.

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

certain factors such as component shortages 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 face risks associated with dependence on third-party vendors;

component prices volatility and shortages have in the past, currently are, and may in the future adversely affect our gross margin and results of operations;

and our mitigation strategies may be of limited or temporary value.

• If we fail to properly develop, invest in, and manage AI Technologies used in our products and services, our business, financial condition, and results of operations could be materially adversely affected.

• The imposition of new duties, tariffs, trade barriers and retaliatory countermeasures implemented by the U.S.

• The imposition of new duties, tariffs (and uncertainty related to the enforceability thereof), trade barriers and retaliatory countermeasures implemented by the U.S.

and other governments and resulting impact on customer demand may have a material adverse effect on our business, financial condition and results of operations.

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

• We have a history of fluctuations in our gross margin and operating results, which can make it difficult to predict our future performance and could cause the market price of our stock to decline.

• We have a history of fluctuations in our gross margin and operating results, and we expect continued fluctuations as memory component costs, advance-purchased supply depletion, surcharge recovery, customer and product mix, and cloud costs evolve, which can make it difficult to predict our future performance and could cause the market price of our stock to decline.

• We are exposed to customer credit risks that could adversely affect our operating results and financial condition.

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Government and Regulatory Risks

• Actual or perceived failure to comply with applicable data privacy, security and platform and technology regulation laws, regulations and standards could impact our business, operations, and expose us to increased liability.

• Actual or perceived failure to comply with applicable data privacy, security and platform and technology laws, regulations, rules and industry standards and other requirements relating to the processing of personal information could impact our business, operations, and expose us to increased liability.

• Failure to obtain or maintain necessary regulatory approvals from the FCC or other governmental agencies, or limitations put on on-going support of certain foreign-produced products, could significantly restrict our ability to offer and maintain certain products in the U.S.

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Once our products are deployed within our customers’ networks, they depend on our customer success, customer support and research and development organizations to resolve any issues relating to those products.

If we do not effectively assist our customers in deploying our products, succeed in helping them quickly resolve post-deployment issues, effectively utilize features or enhancements or provide effective support, it could adversely affect our ability to sell our products to existing customers and harm our reputation with potential new customers.

If we do not effectively assist our customers in deploying our products, succeed in helping them quickly resolve post-deployment issues, effectively utilize features or

enhancements or provide effective support, it could adversely affect our ability to sell our products to existing customers and harm our reputation with potential new customers.

As a result, our failure to maintain high quality support and services could result in the loss of customers, which would harm our business.

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

We face risks associated with dependence on third-party vendors;

component prices volatility and shortages have in the past, currently are, and may in the future adversely affect our gross margin and results of operations;

and our mitigation strategies may be of limited or temporary value.

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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In addition, switching development firms or manufacturers could delay the manufacture and availability of products and/or require us to re-qualify our products with our customers, which would be costly and time-consuming.

Any interruption in the development, supply or distribution of our products would adversely affect our ability to meet scheduled product deliveries to our customers and could result in lost revenue or higher costs, which would negatively impact our gross margin and operating results and harm our business.

A significant portion of our cost of revenue is driven by memory component pricing, which is subject to significant volatility and has significantly increased recently.

Although we have in the past, are currently, and may in the future use advance purchasing and pricing actions, including memory surcharges, to mitigate these impacts, such measures may be only partially effective.

As component prices stay at their current level or increase, our gross margin and operating results have in the past, currently are, and may in the future be adversely affected.

Any interruption in the development, supply or distribution of our products, any continued increase in memory or other component costs or any inability to recover increased component costs through surcharges or other pricing actions, have adversely affected and may in the future adversely affect our ability to meet scheduled product deliveries to our customers and could result in lost revenue or higher costs, which have adversely impacted, and may in the future adversely impact, our gross margin and operating results and harm our business.

Particular risks associated with management of our global supply-chain operations include the following:

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Our business operations and ability to supply our products are highly dependent upon our ability to secure adequate third-party manufacturing capabilities and capacity and to effectively manage those third parties to meet our business needs.

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.

Our dependence solely on third-party manufacturers has made us in the past and continues to make us vulnerable to possible supply and capacity constraints and has reduced in the past and continues to reduce our control over manufacturing disruptions due to component availability, extended lead times, delivery schedules, quality, manufacturing yields and increased costs.

Some of these risks occur from time to time in our business.

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A substantial portion of our manufacturing is done at facilities outside of the U.S., largely in Asia, which presents increased supply risk, including the risk of supply interruptions, delays, shortages or reductions in manufacturing quality or controls.

In addition, these supply interruptions, delays and shortages could impair our ability to meet our customer requirements, require us to pay higher prices or incur expedite fees, which would harm our business and negatively impact our gross margin and results of operations.

In addition, these supply interruptions, delays and shortages could impair our ability to meet our customer requirements or require us to pay higher prices or incur expedite fees, which would harm our business and negatively impact our gross margin and results of operations.

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.

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We are dependent upon sole-source or limited-source suppliers for some key product components such as chipsets, certain of our application-specific integrated circuit processors and memory and resistor components, including certain components sourced solely through suppliers located in China and other Asian countries.

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.

into exclusive arrangements with our competitors, consequently affecting our operations and results.

For example, the technology industry is currently experiencing significant supply constraints for memory components, driven in part by the reallocation of manufacturing capacity towards the global AI infrastructure build, which constraints may continue for years until new manufacturing capacity is built.

These constraints have contributed to elevated and volatile DDR memory and other memory component prices in the past, currently are contributing to elevated and volatile DDR memory and other memory component prices and may do so in the future, as a result, the impact on our gross margin may vary based on inventory timing, supply availability, and the effectiveness of surcharges or other pricing actions.

These constraints have resulted in, and are expected to continue to result in, increased costs and extended lead times for the components used in our products.

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 in a timely fashion, or at all.

These risks would adversely affect our ability to meet scheduled product deliveries to our customers, increase costs and in turn harm our business and results of operations.

This may adversely affect our ability to obtain components and materials needed to manufacture our products at acceptable prices in a timely fashion, or at all, which would adversely affect our ability to meet scheduled product deliveries to our customers, increase costs and in turn harm our business and results of operations.

• Limitations on ability to manage third-party risks.

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Consequently, our orders may not be given adequate priority if such manufacturers have to allocate limited capacity among competing customers.

This could delay supplies of product to

us or limit our ability to ramp product volumes within desired timeframes.

This could delay supplies of product to us or limit our ability to ramp product volumes within desired timeframes.

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.

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used without sufficient oversight and governance to ensure their responsible use;

and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our products, services and business, as well as our reputation and the reputations of our customers, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.

and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats, data privacy concerns, or material performance issues, the performance of our products, services and business, as well as our reputation and the reputations of our customers, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.

With respect to our products or services that incorporate AI Technologies, including agentic AI, the market for such products and services is rapidly evolving and unproven in many industries, including our own, and important assumptions about the characteristics of targeted markets, pricing, sales cycles, cost, performance, and perceived value associated with our services or products may be inaccurate.

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In addition, market acceptance and consumer perceptions of products and services that incorporate AI Technologies is uncertain.

Our failure to successfully develop and commercialize our products or services involving AI Technologies could depress the market price of our stock and impair our ability to:

raise capital;

expand our business;

provide, improve and diversify our product offerings;

continue our operations and efficiently manage our operating expenses;

and respond effectively to competitive developments.

Additionally, the regulatory framework for AI Technologies is rapidly evolving.

Existing laws and regulations may be interpreted in ways that could affect the operation of our AI Technologies, and federal, state and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations applicable to AI Technologies.

For example, in the U.S., legislation related to AI Technologies has been introduced at the federal level and enacted or proposed by various states, including California, Colorado, Connecticut and Texas.

Some enacted or proposed frameworks include requirements focused on transparency, risk-management and accountability for AI Technologies, while others focus on high-risk uses of AI or the use of automated decision-making.

Collectively, these developments signal an emerging trend towards a patchwork of state-level governance of AI in the U.S.

Furthermore, the Trump administration’s approach to investment in and regulation of AI technologies has and is expected to continue to deviate from that of the previous administration, and we will need to adapt to any changes that may result from such approach, including as the result of new or changing executive orders.

For instance, the U.S.

federal government may seek to pre-empt state laws when they seek to govern certain topics as evidenced by the Trump administration’s “Ensuring a National Policy Framework for Artificial Intelligence” Executive Order signed on December 11, 2025.

This order calls for federal standards and legislation that would preempt conflicting state AI regulations and create a federal litigation task force focused on challenging state AI laws in court.

Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and existing laws and regulations may be enjoined in judicial proceedings, interpreted or enforced in ways that would affect the operation of our AI Technologies, or could be rescinded or amended as new administrations take differing approaches to evolving AI Technologies.

Additionally, many federal, state and foreign government bodies and agencies have enacted or are currently considering additional laws and regulations governing AI.

As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot predict the impact future laws, regulations, or standards, or the market perception of their requirements, may have on our business or how we will respond to these laws or regulations.

For example, in the U.S., the regulatory framework for AI Technologies faces significant uncertainty.

At the federal level, Congress has yet to enact meaningful AI legislation.

Instead, federal policy on AI has been shaped by a series of executive orders that have shifted priorities and requirements substantially depending on the administration in power.

In the absence of AI legislation, states have filled the void by enacting laws regulating different aspects of AI Technologies.

For example, California has enacted laws and regulations related to AI safety protocols, reporting and transparency, among other AI-related topics.

Numerous other states have enacted, passed or are considering AI-focused legislation, creating a patchwork of state-level governance of AI in the U.S.

and a complex compliance challenge.

However, the durability of these laws and the potential of additional state-level legislative activity faces uncertainty following President Trump’s December 2025 Executive Order “Ensuring a National Policy Framework for Artificial Intelligence”, which establishes a federal policy favoring a uniform national AI regulatory framework designed to promote innovation and U.S.

global competitiveness, and directs federal agencies to identify, challenge, and potentially pre-empt state and local AI laws that are viewed as inconsistent with or burdensome to this national approach.

It remains to be seen how agencies will effectuate this directive, and how states will approach AI legislation moving forward.

In Europe, the EU Artificial Intelligence Act (“EU AI Act”) establishes a comprehensive, risk-based governance framework for AI in the European Union (“EU”) market.

The majority of the substantive requirements will apply from August 2, 2026.

The majority of the substantive requirements are expected to apply from August 2, 2026, though the European Commission has proposed an extension to December 2, 2027 (such extension is not yet finalized or effective).

The EU AI Act applies to companies that develop, use and/or provide AI in the EU, with specific requirements based on the relevant AI use cases.

For example, in relation to our use of generative AI, we may be subject to certain disclosure and transparency obligations, with fines up to the greater of €15 million or 3% of global revenue.

In addition, the revised EU Product Liability Directive, to be implemented into EU member state national law by December 2026, extends the EU’s existing strict product liability regime to AI and facilitates civil claims in respect of harm caused by AI.

In addition, the revised EU Product Liability Directive, to be implemented into EU member state national law by December 2026, extends the EU’s existing strict product liability regime to AI Technologies and AI-enabled products, and facilitates civil claims in respect of harm caused by AI.

Once fully applicable, the EU AI Act and the EU Product Liability Directive, together with developing guidance and/or decisions in this area, will have a material impact on the way AI is regulated in the EU.

The cost to comply with such laws, regulations, decisions and/or guidance interpreting existing laws, or to adjust our business plans based on changes to how such laws are enforced, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies) or impact our ability to use, procure or commercialize AI Technologies.

Such an increase in operating expenses, as well as any actual or perceived failure to comply with such laws and regulations, could adversely affect our business, financial condition and results of operations.

The imposition of new duties, tariffs, trade barriers and retaliatory countermeasures implemented by the U.S.

It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S.

jurisdictions, or that existing laws and regulations, including competition, antitrust, data privacy and consumer protection laws, may be interpreted or enforced in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in

which we use AI Technologies.

We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.

Further, the cost to comply with such laws, regulations, decisions and/or guidance interpreting existing laws, or to adjust our business plans based on changes to how such laws are enforced, including adapting to loosened regulation to remain competitive, could be significant and would increase our operating expenses (such as by imposing additional reporting obligations regarding our use of AI Technologies) or impact our ability to use, procure or commercialize AI Technologies.

Such an increase in operating expenses could adversely affect our business, financial condition and results of operations.

In addition, if we fail or are perceived to fail to comply with these laws and regulations, we may face lawsuits (including class actions), investigations, enforcement actions, negative reputational impacts, and other penalties that materially impact our business.

The imposition of new duties, tariffs (and uncertainty related to the enforceability thereof), trade barriers and retaliatory countermeasures implemented by the U.S.

and other governments and resulting impact on customer demand may have a material adverse effect on our business, financial condition and results of operations.

The implementation of significant changes to U.S.

trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, significant new tariffs on goods imported into the U.S., have introduced uncertainty to our business and will increase the cost of our U.S.

trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, significant new tariffs on goods imported into the U.S.(and uncertainty related to the enforceability thereof), have introduced uncertainty to our business and will increase the cost of our U.S.

manufactured products and components sourced outside of the U.S., which will result in an increase to our cost of revenue and may cause a reduction in our gross margin.

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We expect cybersecurity attacks and security breaches to accelerate in the future, including sophisticated supply chain attacks.

As we and our third-party providers continue to increase our reliance on virtual environments and communications systems and cloud-based solutions to support our work-from-anywhere culture and overall business needs, our exposures to third-party vulnerabilities and security risks also increase.

As we and our third-party providers continue to increase

our reliance on virtual environments and communications systems and cloud-based solutions to support our work-from-anywhere culture and overall business needs, our exposures to third-party vulnerabilities and security risks also increase.

Because threat actors are increasingly sophisticated and aggressive, our efforts may be inadequate to prevent, detect or recover from future attacks due, for example, to the increased use by attackers of tools and techniques (including artificial intelligence) that are specifically designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

In addition, artificial intelligence-enabled products and technologies have enabled threat actors to perpetrate attacks at a speed, scale and complexity that was previously beyond their capabilities.

As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact on our IT Systems, Confidential Information, or business.

We may also experience security breaches that may remain undetected for an extended period.

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Any data loss or compromise of our systems that collect and process personal information (including personal information of our customers’ subscribers), or third-party data centers where that personal information is stored, could result in loss of confidence in the security of our offerings and loss of customers or customer goodwill.

Further, security incidents could subject us to obligations under privacy and data security laws and regulations around the world (including to notify governmental authorities, regulatory bodies and/or affected individuals), lead to liability given the increasing development of such strict laws and regulations, increase the risk of litigation and governmental or regulatory investigation, require us to notify our customers or other counterparties in relation to such incidents, damage our reputation and adversely affect our business, financial condition, operating results and cash flows.

Although we maintain insurance that may apply to cybersecurity risks and liabilities, there can be no guarantee that any or all costs or losses incurred will be partially or fully insured or that we will be able to procure applicable insurance in the future on reasonable terms or at all.

Any or all of the foregoing could materially and adversely affect our business, financial condition, operating results and cash flows.

Although we maintain insurance that may apply to cybersecurity risks and liabilities, there can be no guarantee that any or all costs or losses incurred in relation to a cyberattack or security incident will be partially or fully insured by our existing policies or that we will be able to procure applicable insurance in the future on economically reasonable terms or at all.

Changing market and customer requirements may adversely affect the valuation of our inventory as well as our supplier purchase commitments.

Customer demand for our products can change rapidly in response to market and technology developments.

From time to time, we adjust inventory valuations downward or end of life certain of our products in response to our assessment of our business

strategy as well as consideration of demand from our customers for specific products or product lines.

From time to time, we adjust inventory valuations downward or end of life certain of our products in response to our assessment of our business strategy as well as consideration of demand from our customers for specific products or product lines.

We also evaluate our supplier purchase commitments, which fluctuate based on lead-times, demand environment and perceived component availability.

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international trade agreements and U.S.

tax provisions that could adversely affect our international operations;

tax provisions

that could adversely affect our international operations;

complexities of managing development timelines and deliverables from abroad;

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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.

In the ordinary course of business, we are subject to legal claims, litigation and regulatory proceedings related to disputes over commercial, securities class action litigation, 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.

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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.

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;

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;

offering licenses to such IP;

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

We have a history of fluctuations in our gross margin and operating results, which can make it difficult to predict our future performance and could cause the market price of our stock to decline.

We have a history of fluctuations in our gross margin and operating results, and we expect continued fluctuations as memory component costs, advance-purchased supply depletion, surcharge recovery, customer and product mix, and cloud costs evolve, which can make it difficult to predict our future performance and could cause the market price of our stock to decline.

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 and geopolitical events and conditions, including tariffs, trade controls, inflation, government shutdowns, market instability and economic downturns, 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” 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.

The timing and magnitude of these effects are difficult to predict because component pricing, supplier availability, inventory consumption, customer demand, product mix, and pricing actions may change rapidly and interact in complex ways.

Our gross margin and operating results has in the past and may in the future fluctuate due to component costs, pricing actions, customer and product mix, cloud costs, tariffs and market conditions.

The timing and magnitude of these factors are difficult to predict, and prior period results may not be indicative of future performance.

Factors that impact variability of our operating results include our ability to predict our revenue and reduce and control our costs;

the level, timing, and effectiveness of advance purchasing of memory and other components;

the rate at which advance-purchased inventory is depleted;

the level and trajectory of memory and other component market prices, including DDR memory prices;

the timing, scope, and effectiveness of memory surcharges and other pricing actions, which have in the past, currently do, and may in the future recover only a portion of increased costs and have not in the past, currently do not and may not in the future generate incremental gross profit;

our ability to predict product functions and features desired by our customers, the impact of global economic and geopolitical events and conditions, including tariffs, trade controls, inflation, government shutdowns, market instability and economic downturns, 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in this “Risk Factors” section.

We have implemented memory surcharges with customers to partially offset elevated memory component costs;

however, our ability to maintain, expand or increase those surcharges is subject to significant constraints, including customer resistance, the competitive dynamics of our markets and the terms of existing customer contracts and purchase arrangements, any of which may limit our ability to fully recover incremental component costs through pricing actions.

Even where customers accept surcharges, the implementation of new or increased surcharges may lag the onset of component cost increases by one or more quarters, creating periods during which we bear elevated costs without corresponding pricing relief and our gross margin is disproportionately compressed relative to the rate at which costs are rising.

Further, because surcharge revenue is recognized at cost with no gross profit contribution, surcharges dilute our overall gross margin percentage by adding revenue at zero margin, and any surcharge-related revenue that causes customers to defer, reduce or cancel orders would adversely affect both our revenue and our gross margin simultaneously, further adversely affecting our results of operations.

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, including memory components;

excess and obsolescence;

expedite fees and logistics-related activities;

cloud platform migration and dual-environment cloud operating costs;

contractual commitments;

and other product costs.

Our prior gross margin performance, including any record or sequential improvements, may not be indicative of future gross margin and has been in the past and may be in the future affected by the timing of advance-purchased component inventory or other transitory factors.

Fluctuations in any single factor, or the combination of multiple factors, may cause our gross margin to decline materially from prior periods, including in periods in which revenue and operating execution otherwise meet expectations.

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

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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.

Our expectations and guidance are based on assumptions regarding component costs, supply availability, inventory consumption, and pricing actions that are inherently uncertain and subject to change.

If our revenue or operating results fall below the expectations of investors or securities analysts, or below any guidance we may provide to the market, the market price of our stock would likely decline.

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While we take measures to pursue collections on our accounts receivable, we have from time to time written down accounts receivable and written off doubtful accounts and may need to do so in future periods.

The determination of allowances for doubtful accounts involves significant judgment, and if we underestimate our allowance for doubtful accounts, we will have to make further write-downs.

The determination of allowances for doubtful accounts involves significant judgment, and if we underestimate our allowance for doubtful accounts, we will have to make further write-

Such write-downs or write-offs could negatively affect our operating results for the period in which they occur and could harm our cash flow or our financial condition.

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If we fail to maintain interoperability, we may face substantially reduced demand for our products, which would reduce our revenue opportunities and market share.

We rely upon interoperability arrangements with equipment and software vendors for the use or integration of their technology with our products.

rely upon interoperability arrangements with equipment and software vendors for the use or integration of their technology with our products.

If these relationships fail, we may have to devote substantially more resources to developing alternative products and processes and our efforts may not be as effective as the combined solutions under our current arrangements.

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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;

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The terms of many open-source software licenses have not been interpreted by the courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to sell our products.

In such event, we could be required to make our proprietary software generally available to third parties, including competitors, at no cost, to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis or at all, any of which could adversely affect our revenue and operating expenses.

In such event, we could be required to make our proprietary software generally available to third parties, including competitors, at no cost, to seek licenses from third parties in order to

continue offering our products, to re-engineer our products or to discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis or at all, any of which could adversely affect our revenue and operating expenses.

Macroeconomic and Industry Risks

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CXP 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, government shutdowns 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.

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.

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Geopolitical issues such as armed conflicts, 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.

and China, tariff and trade policy changes (and uncertainty related to the enforceability thereof) 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.

New or increased tariffs and other changes in U.S.

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To the extent dissatisfaction with U.S.

government policy results in U.S.-based suppliers being disfavored over foreign-based alternatives, it

may diminish demand for our products with such customers and cause them to find alternative sourcing or otherwise make it more difficult for us to sell more products to these customers.

government policy results in U.S.-based suppliers being disfavored over foreign-based alternatives, it may diminish demand for our products with such customers and cause them to find alternative sourcing or otherwise make it more difficult for us to sell more products to these customers.

The imposition of additional tariffs or other trade barriers by countries other than the U.S., including China and other Asian countries, will increase our costs in these markets, and to the extent these increased costs result in increased prices for our customers, we expect the demand for products in these markets to decrease as some of our customers seek alternative sources, making it more difficult for us to sell our products in these markets.

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Historically, our customer base has been concentrated, and the loss of any of our key customers may adversely impact our revenue and results of operations, and any delays in payment by a key customer could negatively impact our cash flows and working capital.

Although we have not had a greater-than-10%-of-revenue customer since 2020, a large portion of our sales has been, and in the future may be, to a limited number of customers.

Although we have not had a greater-than-10%-of-annual revenue customer since 2020, a large portion of our sales has been, and in the future may be, to a limited number of customers.

Changes in the broadband service provider market, such as financial difficulties, spending cuts or corporate consolidations that impact purchasing decisions by these customers have and may again negatively impact our revenue, and as a result, revenue from such customers may remain flat or decline.

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The timing of revenue related to sales of products and services that have installation requirements may be difficult to predict due to interdependencies that may be beyond our control, such as new customer testing and turn-up protocols or other vendors’ products, services or installations of equipment upon which our products and services rely.

Such delays may result in fluctuations in our quarterly revenue.

Such delays may result in

fluctuations in our quarterly revenue.

If sales expected from a specific customer for a particular quarter are not realized in that quarter or at all, we may not achieve our revenue forecasts, and our financial results would be adversely affected.

Government and Regulatory Risks

Actual or perceived failure to comply with applicable data privacy, security and platform and technology regulation laws, regulations and standards could impact our business, operations, and expose us to increased liability.

Actual or perceived failure to comply with applicable data privacy, security and platform and technology laws, regulations, rules, industry standards, and other requirements related to the processing of personal information could impact our business, operations, and expose us to increased liability.

Government authorities in the U.S.

and around the world have implemented and are continuing to implement broader and more stringent laws and regulations concerning data protection.

The interpretation and application of these data protection laws and regulations are often uncertain and changing, and it is possible that they may be interpreted and applied in a manner that is inconsistent with our data practices.

and around the world have implemented and are continuing to implement broader and more stringent laws, rules, regulations, industry standards and other requirements concerning data protection, privacy, security and the processing of personal information, many of which we are subject to.

The interpretation, application and amendment of these laws, regulations and other requirements are often uncertain and constantly changing, and it is possible that they may be interpreted and applied in a manner that is inconsistent with our data practices or that new laws, regulations and other requirements require us to incur significant costs, implement new processes, or change our processing of information and business operations.

For example, in the U.S., certain states have adopted or modified privacy and security laws and regulations which govern the privacy, processing and protection of personal information.

Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.

For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act (collectively, the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things:

(i) provide certain disclosures to California residents regarding the business’s collection, use

and disclosure of their personal information;

For example, the California Consumer Privacy Act (the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things:

(i) provide certain disclosures to California residents regarding the business’s collection, use and disclosure of their personal information;

(ii) receive and respond to requests from California residents to access, delete and correct their personal information or to opt out of certain disclosures of their personal information;

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Additional compliance investment and potential business process changes may also be required.

Similar laws have been passed in other states, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the U.S.

Most of the new or proposed laws include restrictions on processing consumer information for targeted advertising, which could negatively affect our marketing cloud products.

Similar laws have been passed in other states, creating a patchwork of overlapping but different state laws, and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the U.S.

Many of these laws include restrictions on processing consumer information for targeted advertising, which could negatively affect our marketing cloud products.

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

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In 2024, the National Security Division of the U.S.

Department of Justice (“DOJ”) issued a new rule—referred to as the “Data Security Program” (“DSP”) aimed at preventing access to “bulk U.S.

Department of Justice (“DOJ”) issued a new rule—referred to as the “Data Security Program” (“DSP”) to implement Executive Order 14117, aimed at preventing access to “bulk U.S.

sensitive personal data” and “government-related data” by “countries of concern” (including China, Russia, Iran, North Korea, Cuba, and Venezuela) and “covered persons” (as all such terms are defined in the DSP).

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The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

The General Data Protection Regulation (“EU GDPR”) adopted by the European Union (“EU”) and the UK General Data Protection Regulation (“UK GDPR”) adopted by the United Kingdom (“UK”) (the EU GDPR and UK GDPR hereinafter referred to as the “GDPR”) and national data protection supplementing laws in these jurisdictions impose specific duties and requirements upon companies that are subject to their provisions and collect, process or control personal data of individuals.

requirements upon companies that are subject to their provisions and collect, process or control personal data of individuals.

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.

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Failure to comply with the Data Act can result in regulatory enforcement and fines, civil claims, and reputational damage.

The Data Act, together with developing guidance in this area, may require changes to our

customer contracts, products, operations and business practices, increase our compliance costs, require adjustments to our revenue recognition practices and adversely affect our financial condition, business and operations.

The Data Act, together with developing guidance in this area, may require changes to our customer contracts, products, operations and business practices, increase our compliance costs, require adjustments to our revenue recognition practices and adversely affect our financial condition, business and operations.

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

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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.

The failure or perceived failure to comply with such laws, rules, regulations, industry standards and other requirements relating to data privacy, security or the processing of personal information may result in proceedings or actions against us, by individuals, consumer rights groups, government agencies or others, could cause us to incur significant costs in investigations and defending such claims, or could cause us to incur significant costs in investigations and defending such claims, pay significant damages or fines or be required to make changes to our business if found liable, lose customers and subject us to significant negative publicity and an erosion of trust, all of which could have an adverse effect on our business, results of operations and financial condition.

Failure to obtain or maintain necessary regulatory approvals from the FCC or other governmental agencies, or limitations put on on-going support of certain foreign-produced products, could significantly restrict our ability to offer and maintain certain products in the U.S.

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Moreover, as we expand our business and operations globally, we must increase investments to maintain compliance with evolving standards across all of our markets.

complying with evolving standards or failure to obtain timely authorizations or certification could prevent us from selling our products where these standards or regulations apply, which would result in lower revenue and lost market share.

The costs of complying with evolving standards or failure to obtain timely authorizations or certification could prevent us from selling our products where these standards or regulations apply, which would result in lower revenue and lost market share.

Our failure or the failure of our manufacturers to comply with environmental and other legal regulations could adversely impact our results of operations.

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developments with respect to IP rights;

our ability to develop and market new and enhanced products on

a timely basis;

our ability to develop and market new and enhanced products on a timely basis;

our commencement of, or involvement in, litigation and developments relating to such litigation;

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and (vii) advance notice procedures that stockholders must comply with in order to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.

We are also subject to certain anti-takeover provisions under Delaware law, which prohibits a corporation, in general, from engaging in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved the transaction.

We are also subject to certain anti-takeover

provisions under Delaware law, which prohibits a corporation, in general, from engaging in a business combination with any holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other things, the Board of Directors has approved the transaction.

We may need additional capital in the future to finance our business.

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

Such investments may involve significant risks and uncertainties, including distraction of management from current operations, unanticipated costs, and legal and regulatory challenges, all of which could have a material adverse impact on our financial

condition and results of operations.

In addition, the anticipated benefit of any acquisition may never materialize or the process of integrating acquired businesses, products or technologies may create unforeseen operating difficulties and expenditures.

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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.

We have a common stock repurchase program of which $63.4 million was available as of March 28, 2026.

Furthermore, our Board of Directors authorized a $100.0 million increase to our common stock repurchase program in April 2026.

We have a common stock repurchase program of which $94.1 million was available as of June 27, 2026.

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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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.

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.

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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