Garmin (GRMN) risk factors, FY2024 10-K

Business Risks

1. 01If we are not successful in the continued development, timely manufacture, and introduction of new products or product categories, overall demand for our products could decrease to the extent that lost sales and profits are not entirely offset
2. 02If we are unable to compete effectively with existing or new competitors, the associated loss of competitive position could result in price reductions, fewer customer orders, reduced margins and loss of market share
3. 03We may experience unique economic and political risks associated with companies that operate in Taiwan
4. 04We have made and expect to continue making significant investments in the auto OEM segment, the associated cost of which may negatively impact total company profits if auto OEM segment revenue significantly declines
5. 05Our business and reputation have been and are expected to continue to be impacted by information technology system failures and network disruptions
6. 06Losses or unauthorized access to or releases of proprietary or confidential information, including personal information, could result in significant reputational, financial, legal, and operational consequences
7. 07Our business would suffer if we are not able to hire and retain sufficient qualified personnel or if we lose our key personnel
8. 08If we do not correctly anticipate demand for our products, we may not be able to secure sufficient quantities or cost-effective production of our products or we could have costly excess production or inventories
9. 09Our products and services may be affected by design and manufacturing defects that could materially adversely affect our business, financial condition, and results of operations
10. 10Our products may contain undetected security vulnerabilities, which could result in damage to our reputation, lost revenue, diverted development resources, increased warranty claims, and litigation
11. 11Natural disasters, catastrophic events, or climate change and associated requirements and pressures could affect our financial results
12. 12We rely on independent dealers and distributors to sell our products, and disruption to these channels would harm our business
13. 13We may pursue strategic acquisitions, investments, strategic partnerships or other ventures, and our business could be materially harmed if we fail to successfully identify, evaluate, complete, and integrate such transactions
14. 14Many of our products rely on the Global Positioning System and other satellite systems
15. 15We are dependent on the availability and unimpaired use of allocated bands within the radio frequency spectrum; our products may be subject to harmful interference from new or modified spectrum uses

Macroeconomic and Industry Risks

1. 16Maturation or contraction of the market for wearable devices or categories of these devices could adversely affect our revenue and profits
2. 17Public health emergencies, including epidemics or pandemics, could have significant impacts on our business
3. 18Economic and political conditions and uncertainty could adversely affect our revenue and profits
4. 19Our business is subject to disruptions and uncertainties caused by geopolitical instability, war or terrorism

Legal and Regulatory Compliance Risks

1. 20Changes to trade regulations, including trade restrictions, sanctions, tariffs, or duties, could significantly harm our results of operations
2. 21Changes in applicable tax laws or resolutions of tax disputes could result in adverse tax consequences to the Company
3. 22Our intellectual property rights are important to our operations, and we could suffer loss if they infringe upon others’ rights or are infringed upon by others
4. 23We have claims and lawsuits against us that may result in adverse outcomes
5. 24As a business that operates worldwide, we are subject to complex and changing global laws and regulations, which exposes the Company to potential liabilities, increased costs and other adverse effects on our business
6. 25Our business is subject to a variety of United States and international laws, regulations and other legal obligations regarding data protection
7. 26Some of our products are subject to governmental regulation or certification. Failure to obtain required certifications of our products on a timely basis, either due to government shutdown or other delays in the certification process, could harm our business

Financial Risks

1. 27Our results of operations and financial condition are subject to fluctuations in foreign currency translation
2. 28Gross margins for our products may fluctuate or erode
3. 29Our quarterly operating results are subject to fluctuations and seasonality

Risks Relating to Ownership of Our Shares

1. 30The volatility of our share price could adversely affect investment in our common shares
2. 31other factors as discussed in the previously listed risks
3. 32Our officers and directors exert substantial influence over us
4. 33The rights of our shareholders are governed by Swiss law
5. 34We have limited capital reserves from which to make distributions without subjecting our shareholders to Switzerland withholding tax
6. 35Changes in our United States federal income tax classification, or that of our subsidiaries, could result in adverse tax consequences to our 10% or greater U.S. shareholders
7. 36There is uncertainty as to our shareholders’ ability to enforce certain foreign civil liabilities in Switzerland and Taiwan