Backblaze (BLZE) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01We have a history of cumulative losses, and we do not expect to be profitable for the foreseeable future
2. 02The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results would be harmed
3. 03Any significant disruption in our service or loss, or delay in availability of our customers’ data, could damage our reputation and harm our business and operating results
4. 04If we are unable to maintain our brand and reputation, our business, results of operations, and financial condition may be adversely affected
5. 05If our information technology systems, including the data of our customers stored in our systems, are breached or subject to cybersecurity attacks, our reputation and business may be harmed
6. 06If we are unable to attract and retain customers on a cost-effective basis, our revenue and operating results would be adversely affected
7. 07If we are unable to provide successful enhancements, new features, and modifications to our cloud services, our business could be adversely affected
8. 08Material defects or errors in our software or hardware failures could negatively impact our business, harm our reputation, result in significant costs to us, and negatively impact our ability to sell our cloud services
9. 09If we fail to effectively manage our growth, our business would be harmed
10. 10Our business could be materially harmed to the extent that we do not effectively manage our data center capacity and the costs associated with our data centers
11. 11Our business depends on our ability to retain and increase revenue from customers, and if we are unable to do so, our revenue and operating results would be adversely affected
12. 12To the extent we target different types of customers, we may face increased demands and challenges that adversely impact our business and operations
13. 13The material stored using our cloud services may subject us to negative publicity, legal liability, and harm our business
14. 14Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business
15. 15We rely on the performance of key personnel, including our management and other key employees, and the loss of one or more of such personnel, or of a significant number of our team members, could harm our business
16. 16The failure to attract and retain additional qualified personnel could prevent us from executing our business strategy
17. 17Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity, and teamwork fostered by our culture, and our business may be harmed
18. 18Our operations and those of our customers, vendors and suppliers outside the United States, are subject to increased business, regulatory and economic risks that could impact our results of operations
19. 19We store personal information and other customer data, which subjects us to various data privacy laws, governmental regulations, and other related legal obligations, and any actual or perceived failure to comply with such requirements could harm our business
20. 20Our business is substantially dependent on mid-market organizations, which may be more vulnerable to market fluctuations and other economic factors, and their vulnerability to such factors could negatively impact our business
21. 21We are dependent on a small number of service offerings, and any reduced market adoption of these offerings would result in lower revenue and harm our business
22. 22Adverse economic conditions may adversely impact our revenue and profitability
23. 23Our ability to maintain customer adoption and satisfaction depends in part on the ease of use of our cloud services, and any such failure could have an adverse effect on our business
24. 24Future acquisitions and investments could disrupt our business and harm our financial condition and operating results
25. 25We may require additional capital to support our operations or the growth of our business, and we cannot be certain that this capital will be available on reasonable terms when required, or at all
26. 26We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
27. 27We are exposed to fluctuations in currency exchange rates, which could negatively affect our results of operations
28. 28Certain of our market opportunity estimates, growth forecasts, and other metrics included in this Annual Report on Form 10-K could prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business
29. 29Any future litigation against us could be costly and time-consuming to defend

Risks Related to Reliance on Infrastructure and Third Parties

1. 30We rely on third-party vendors and suppliers, including data center and hard drive providers, which may have limited sources of supply, and this reliance exposes us to potential supply and service disruptions that could harm our business
2. 31Our business depends, in part, on the success of our strategic relationships with third parties
3. 32Our business is exposed to risks associated with online payment processing methods
4. 33We rely on third-party software for certain essential financial and operational services, and a failure or disruption in these services could materially and adversely affect our ability to manage our business effectively
5. 34We are an emerging growth company, which provides, among other things, reduced disclosure requirements, and any decision on our part to comply only with reduced reporting and disclosure requirements applicable to such companies could make our Common Stock less attractive to investors

Risks Related to Accounting and Tax Matters

1. 35The failure to maintain effective internal controls over financial reporting could harm our business and negatively impact the value of our common stock
2. 36If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, we may be unable to produce timely and accurate financial statements or comply with applicable regulations, which could negatively impact the price of our common stock
3. 37Because we recognize revenue from our subscription services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results
4. 38Our operating results may be harmed if we are required to collect sales or other related taxes for our cloud services in jurisdictions where we have not historically done so
5. 39Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
6. 40Changes in tax laws and related matters could materially affect our financial condition, results of operations and cash flows
7. 41If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected

Risks Related to Intellectual Property

1. 42Assertions by a third party that our cloud services infringe, misappropriate, or otherwise violate their intellectual property could subject us to costly and time-consuming litigation and adversely impact our business
2. 43If we are unable to adequately establish, maintain, protect, and enforce our intellectual property and proprietary rights, our reputation may be harmed, we may be subject to litigation, and our business may be adversely affected
3. 44Our use of “open-source” software could negatively affect our ability to sell our cloud services and subject us to possible litigation

Risks Related to Ownership of Our Common Stock

1. 45Anti-takeover provisions contained in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, as well as provisions of Delaware law, could impair a takeover attempt
2. 46These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
3. 47The market price of our common stock has been, and will likely continue to be, volatile, and you could lose all or part of your investment
4. 48We may fail to meet our publicly announced guidance or other expectations about our business, which could cause our stock price to decline
5. 49Sales of a substantial number of our common stock in the public market could cause our share price to fall
6. 50If securities or industry analysts do not publish or cease publishing research or reports about us, our business, our market, or our competitors, or if they adversely change their recommendations regarding our common stock, the market price of our common stock and trading volume could decline
7. 51We do not expect to declare any dividends in the foreseeable future
8. 52These exclusive forum provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act
9. 53The requirements of being a public company, particularly after we are no longer an “emerging growth company”, may strain our resources, require us to incur substantial costs and will require substantial management attention
10. 54of information in filings required of a public company, our business and financial condition has become more visible, which may result in threatened or actual litigation, including by competitors