GoPro (GPRO) risk factors, FY2024 10-K

Risks related to our business and industry

1. 01We have incurred substantial operating losses in the past year, and we may not be able to achieve revenue growth or profitability in the future, and if revenue growth or profitability is achieved, we may not be able to sustain it
2. 02We are taking a multi-pronged approach to regaining profitability with a focus on continued innovation and new product introductions while effectively managing and implementing cost-saving measures where appropriate, which may not be effective to restore profitability in our business
3. 03We may not be able to acquire and retain subscribers at all or at historical rates and may decrease which could adversely impact our results of operations and our ability to be profitable
4. 04To remain competitive and stimulate consumer demand, we must effectively manage product introductions, product transitions, and product pricing
5. 05Future growth depends on our ability to develop new products for new markets with the goal to expand our core community of customers, and we may not be successful in doing so
6. 06Due to seasonal consumer shopping patterns for our products, if sales fall short of projections, our overall financial condition and results of operations could be adversely affected
7. 07We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs
8. 08Due to the nature of our business, we are heavily reliant on third parties outside of our control both in terms of our suppliers and for our operations
9. 09We face substantial risks related to inventory, purchase commitments, and long-lived assets, and we could incur material charges related to these items that adversely affect our operating results
10. 10Adverse changes to trade agreements, trade policies, tariffs and import/export regulations may have a negative effect on our business and results of operations
11. 11cybersecurity insurance, our insurance may be insufficient for a particular incident or may not cover all liabilities incurred by any such attacks
12. 12Our gross margin can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results
13. 13Our success depends on our ability to maintain the value and reputation of our brand
14. 14Consumers may be injured while engaging in activities with our products, and we may be exposed to claims, or regulations could be imposed, which could adversely affect our brand, operating results, and financial condition
15. 15We may be subject to warranty claims that could result in significant direct or indirect costs, or we could experience greater returns from retailers and customers than expected, which could harm our business and operating results
16. 16We use artificial intelligence in our business, and its improper use or unintended consequences could adversely affect our reputation and our results of operations

Risks related to our Intellectual Property and technology licenses

1. 17Our intellectual property and proprietary rights may not adequately protect our products and services, and our business may suffer if third parties infringe our rights
2. 18value of, our trademarks. In addition, we might not be able to, or may choose not to, acquire, or maintain trademark registrations, domain names, social media handles or other related rights in certain jurisdictions
3. 19We have been, and in the future may be, subject to intellectual property and proprietary rights claims from third parties and may be sued by third parties for alleged infringement
4. 20If we are unable to maintain, license, or acquire rights to include intellectual property owned by others in the products, services or content distributed by us, our marketing, sales or future business strategy could be affected, or we could be subject to lawsuits relating to our use of this content
5. 21We use open-source software in our platform that may subject our technology to general release or require us to re-engineer our solutions, which may harm our business

Risks related to regulatory compliance

1. 22We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could adversely affect our business and operating results
2. 23We could be adversely affected by violations of the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act or similar anti-bribery laws in other jurisdictions in which we operate
3. 24We are subject to governmental export and import controls and economic sanctions laws that could subject us to liability and impair our ability to compete in international markets

Risks related to ownership of our Class A common stock

1. 25Our stock price has been and will likely continue to be volatile
2. 26Our Class A common stock may cease to be listed on The Nasdaq Global Select Market
3. 27If we do not regain compliance within the applicable compliance period(s), Nasdaq will provide written notification to us that the Class A common stock will be subject to delisting. At that time, we may appeal the delisting determination to a hearings panel
4. 28assurance that, if we were to engage in a reverse stock split, it would not create an additional deficiency with Nasdaq listing standards
5. 29The dual class structure of our common stock has the effect of concentrating voting control with our CEO, and we cannot predict the effect our dual class structure may have on our stock price or our business
6. 30Delaware law and provisions in our restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our Class A common stock

Risks related to our indebtedness and capped call transactions

1. 31We have indebtedness in the form of convertible senior notes
2. 32Our credit facility imposes restrictions on us that may adversely affect our ability to operate our business
3. 33their 2025 Notes, or may otherwise depress our stock price or may adversely affect our financial condition
4. 34The accounting method for convertible debt securities that may be settled in cash, such as the 2025 Notes, may have a material effect on our reported financial results
5. 35The Capped Call transactions may affect the value of the 2025 Notes and our Class A Common Stock and we are subject to counterparty risk with respect to Capped Call transactions
6. 36The potential effect, if any, of these transactions and activities on the trading price of our Class A common stock or the 2025 Notes will depend in part on market conditions. Any of these activities could adversely affect the trading price of our Class A common stock or the 2025 Notes
7. 37Our effective tax rate and the intended tax benefits of our corporate structure and intercompany arrangements depend on the application of the tax laws of various jurisdictions and on how we operate our business, and such tax rates and tax benefits may change in the future
8. 38We may grow our business in part through acquisitions, joint ventures, investments, and partnerships, which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results
9. 39Catastrophic events or political instability could disrupt and cause harm to our business