Bandwidth (BAND) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Our growth and financial health are impacted by a number of risks, including uncertain capital markets, political and economic instability in a number of regions, the imposition of widespread tariffs, unfavorable macroeconomic conditions, recessionary fears, high rates of inflation and higher interest rates48% rewritten
2. 02Nearly all of our operating cash is maintained in deposit accounts with various financial institutions and is not insured by the FDIC
3. 03Government shutdowns or delays in government agency operations, including those of the FCC, could materially and adversely affect our business, financial condition, and results of operationsNew
4. 04The market in which we participate is highly competitive, and if we do not compete effectively, our business, results of operations and financial condition could be adversely affected34% rewritten
5. 05If we are unable to attract new customers in a cost-effective manner, our business, results of operations and financial condition could be adversely affected
6. 06The market for some of our services is new and unproven, may decline or experience limited growth and is dependent in part on enterprises and developers continuing to adopt our platform and use our services30% rewritten
7. 07Our ability to achieve revenue growth, cashflow, and operating performance depends on retaining customers and increasing their use of our servicesNew
8. 08If we are unable to increase the revenue that we derive from enterprises, our business, results of operations and financial condition may be adversely affected
9. 09If we do not develop enhancements to our services and introduce new services or features that achieve marketplace acceptance and preference, our business, results of operations and financial condition could be adversely affected36% rewritten
10. 10Use of AI in our business, and its use by others, may present challenges with properly managing its use including potential reputational harm, competitive harm, and legal liability, or otherwise adversely affect our operations
11. 11As we continue to expand our services geographically and otherwise, we may experience difficulties in maintaining our corporate culture, operational infrastructure and management, and our business, results of operations and financial condition could be adversely affected
12. 12Our pricing and billing systems are complex, and errors could adversely affect our results of operations
13. 13We must continue to develop effective business support systems to implement customer orders and to provide and bill our customers for services40% rewritten
14. 14If we are not able to maintain and enhance our brand and increase market awareness of our company and services, then our business, results of operations and financial condition may be adversely affected
15. 15Any failure to deliver and maintain high-quality customer support may adversely affect our relationships with our customers and prospective customers, and could adversely affect our reputation, business, results of operations and financial condition
16. 16We operate internationally, which exposes us to risks that are incremental to those experienced by a company operating only domesticallyNew
17. 17A significant portion of our revenue is concentrated among a limited number of large customers. If we lost several of our top ten customers, or, if several of these major customers significantly decreased their usage of our services, our business would be materially and adversely affected
18. 18We are currently subject to litigation related to taxes and charges associated with our provision of 911 services, which could divert management’s attention and adversely affect our results of operations
19. 19We are also subject to litigation in the ordinary course of business, and uninsured judgments or a rise in insurance premiums may adversely affect our results of operations
20. 20The communications industry faces significant regulatory uncertainties and the resolution of these uncertainties could harm our business, results of operations and financial condition36% rewritten
21. 21The effects of either increased or decreased regulation of IP-based services are unknown42% rewritten
22. 22Our business is subject to complex and evolving laws and regulations, commercial standards, contractual obligations and other requirements related to information collection
23. 23Our business could suffer if we cannot obtain or retain numbering resources or are significantly limited with how numbers may be distributed to customers72% rewritten
24. 24assignments of particular numbering resources. If we are not able to obtain or retain adequate inventory of numbering resources, our business, results of operations and financial condition could be materially adversely affectedNew
25. 25We may be exposed to liabilities under anti-corruption, export control and economic sanction regulations, and similar laws and regulations, and any determination that we violated any of these laws or regulations could have a material adverse effect on our business
26. 26Intellectual property and proprietary rights of others could prevent us from using necessary technology to provide our services or subject us to expensive intellectual property litigation
27. 27Our use of open source software could negatively affect our ability to sell our services and subject us to possible litigation
28. 28Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses
29. 29If we fail to protect our internally developed systems, technology and software and our patents and trademarks, we may become involved in costly litigation or our business or brand may be harmed
30. 30We may be liable for the information that content owners or distributors distribute over our network
31. 31Third parties may fraudulently obtain access to customer accounts and other personal information, use our services to commit fraud or steal our services, which could damage our reputation, limit our growth or cause us to incur additional expenses
32. 32If our customers or their end users do not accept the differences between our service and traditional telephone service, they may choose to remain with their current telephone service provider or may choose to return to service provided by traditional network service providers33% rewritten
33. 33We may lose customers if we experience failures of our system or communications platform that significantly disrupt the availability and quality of the services that we provide. Such failures may also cause interruptions to service delivery and the completion of other corporate functions
34. 34Defects or errors in our services could diminish demand for our services, harm our business and results of operations and subject us to liability
35. 35If our emergency services do not function properly, we may be exposed to significant liability from our users
36. 36Any disruption to or termination of arrangements with key suppliers could cause delay and additional costs and could harm our relationships with current and prospective customers25% rewritten
37. 37Our customer churn rate may increase
38. 38The market prices for certain of our services have decreased in the past and may decrease in the future, resulting in lower revenue than we anticipate
39. 39The need to obtain additional IP circuits from other providers increases our costs. In addition, the need to interconnect our network to networks that are controlled by others could increase our costs and adversely impact our business
40. 40We depend largely on the continued services of our senior management and other key employees, the loss of any of whom could adversely affect our business, results of operations and financial condition
41. 41If we are unable to hire, retain and motivate qualified personnel, our business will suffer29% rewritten
42. 42We could be subject to additional tax liabilities for historic and future sales, use and similar taxes, which could adversely affect our results of operations46% rewritten
43. 43Our global operations and legal entity structure subject us to potentially adverse income tax consequences
44. 44Our ability to use our net operating loss and tax credit carryforwards to offset future taxable income may be subject to certain limitations
45. 45If we redeem or repurchase shares of our stock in the future, we could be subject to an excise taxNew
46. 46If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected
47. 47If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired
48. 48If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings
49. 49We face exposure to foreign currency exchange rate fluctuations, and such fluctuations could adversely affect our business, results of operations and financial condition
50. 50Earthquakes, hurricanes, fires, floods, pandemics, power outages, terrorist attacks, acts of war, civilian unrest and other significant events could disrupt our business and ability to serve our clients48% rewritten
51. 51We may acquire or invest in companies, which may divert our management’s attention and result in debt or dilution to our stockholders. We may not be able to efficiently and effectively integrate acquired operations, and thus may not fully realize the anticipated benefits from such acquisitions

Risks Related to the Convertible Notes

1. 52Servicing our debt requires a significant amount of cash, and additional indebtedness could intensify the risk associated with our indebtednessNew
2. 53The Capped Calls may affect the value of the Convertible Notes and our Class A common stock
3. 54We have been advised that, in connection with establishing their initial hedges of the Capped Calls, the option counterparties or their respective affiliates entered into various derivative transactions with respect to our Class A common stock concurrently with or shortly after the pricing of the Convertible Notes
4. 55We are subject to counterparty risk with respect to the Capped Calls

Risks Related to Ownership of Our Class A Common Stock

1. 56The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment
2. 57The market price of our Class A common stock could decline as a result of substantial sales of our Class A common stock, particularly sales by our directors, executive officers and significant stockholders, or the perception in the market that holders of a large number of shares intend to sell their shares
3. 58We cannot predict the impact our capital structure may have on our stock price
4. 59If securities or industry analysts cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our Class A common stock adversely, the trading price of our Class A common stock and trading volume could decline
5. 60Anti-takeover provisions contained in our second amended and restated certificate of incorporation and third amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt
6. 61These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
7. 62Our second amended and restated certificate of incorporation and our third amended and restated bylaws include super-majority voting provisions that will limit your ability to influence corporate matters
8. 63We may need additional capital in the future and such capital may be limited or unavailable. Failure to raise capital when needed could prevent us from growing in accordance with our plans
9. 64We do not intend to pay dividends for the foreseeable future
10. 65If a large number of shares of our Class A common stock is sold in the public market, the sales could reduce the trading price of our Class A common stock and impede our ability to raise future capital