Commvault Systems (CVLT) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Our industry is intensely competitive, and many of our competitors have greater financial, technical and sales and marketing resources and larger installed customer bases, which could enable them to compete more effectively than we do
2. 02Volatility in the global economy could adversely impact our continued growth, results of operations and our ability to forecast future business
3. 03In periods of volatile economic conditions, our exposure to credit risk and payment delinquencies on our accounts receivable significantly increases
4. 04We encounter long sales and implementation cycles, particularly for our larger customers, which could have an adverse effect on the size, timing and predictability of our revenues
5. 05potential customers about the uses and benefits of our solutions; and the timing of the expiration of our customers’ current agreements for similar solutions
6. 06We depend on growth in the data protection and cyber resiliency market, and lack of growth or contraction in this market could have a material adverse effect on our sales and financial condition
7. 07Our SaaS offerings require costly and continual infrastructure investments and if these investments do not yield the expected return, our business and financial performance might be adversely impacted
8. 08We sell a backup appliance which integrates our solution with hardware. If we fail to accurately predict manufacturing requirements and manage our supply chain, we could incur additional costs or experience manufacturing delays that could harm our business
9. 09Our complex solutions may contain undetected errors, which could adversely affect not only their performance but also our reputation and the acceptance of our solutions in the market
10. 10Incorrect or improper implementation or use of our cyber resilience solutions could result in customer dissatisfaction and harm our business, financial condition, and results of operations
11. 11We may not receive significant revenues from our current research and development efforts for several years, if at all
12. 12Our ability to sell our solutions is highly dependent on the quality of our customer support and professional services, and failure to offer high quality customer support and professional services would have a material adverse effect on our sales and results of operations
13. 13We completed a restructuring plan in fiscal 2025, which we cannot guarantee will achieve its intended results
14. 14A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks
15. 15Changes in senior management or key personnel could cause disruption in the Company and have a material effect on our business
16. 16We have engaged, and may continue to engage, in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows
17. 17We are preparing to migrate a significant amount of customers from Red Hat environments, and any disruption, delay, or failure in executing this transition effectively could have a material adverse impact on our business operations and customer relationships
18. 18Borrowing against our revolving credit facility could adversely affect our operations and financial results

Risks Related to our International Operations

1. 19If we are unable to effectively manage certain risks and challenges related to our India operations, our business could be harmed
2. 20We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations
3. 21Our international sales and operations are subject to factors that could have an adverse effect on our results of operations

Risks Related to Technology and Security

1. 22We may be subject to IT system failures, network disruptions, cybersecurity incidents and breaches in data security
2. 23We may not be successful in our initiatives that utilize AI, which could adversely affect our business, reputation, or financial results
3. 24Any of these factors could adversely affect our business, reputation, or financial results or subject us to legal liability
4. 25If we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, or to changing customer needs, requirements, or preferences, our products may become less competitive

Risks Related to Financial, Accounting, Regulatory, Tax, and Other Legal Matters

1. 26We have been, and may in the future become, involved in litigation that may have a material adverse effect on our business
2. 27We are subject to several local, state, federal and foreign laws and regulations regarding privacy and data protection, and any actual or perceived failure by us to comply with such laws and regulations could adversely affect our business
3. 28Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows
4. 29Our effective tax rate is difficult to project, and changes in such tax rate or adverse results of tax examinations could adversely affect our operating results
5. 30Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States
6. 31Goodwill represents a portion of our assets and any impairment of these assets could negatively impact our results of operations
7. 32Impairment charges of long-lived assets, including assets held for sale, could adversely affect our financial condition and results of operations
8. 33We may experience a decline in revenues or volatility in our quarterly operating results, which may adversely affect the market price of our common stock
9. 34The price of our common stock may be highly volatile and may decline regardless of our operating performance
10. 35Certain provisions of our certificate of formation and our amended and restated bylaws or Delaware law could prevent or delay a potential acquisition of control of our Company, which could decrease the trading price of our common stock

General Risks

1. 36Our business could be materially and adversely affected as a result of natural disasters, terrorism or other catastrophic events