Novanta (NOVT) risk factors, FY2025 10-K

Risks Relating to Our Business

1. 01Our results of operations could be adversely affected by economic and political conditions and the effects of these conditions on our customers’ businesses, capital expenditures and levels of business activities
2. 02Our business success depends upon our ability to respond to fluctuations in product demand, but doing so may require us to incur costs despite limited visibility into future business declines63% rewritten
3. 03existing customers or to obtain new customers. If this inability to increase production continues or worsens, it could have a material adverse effect on our businessNew
4. 04The success of our business depends on our ability to continuously innovate, to introduce new products in a timely manner, and to manage transitions to new product innovations effectively
5. 05Customer order timing and other factors may cause our operating results to fluctuate from period to period46% rewritten
6. 06Our business may be adversely affected by cyberattacks or other incidents that cause significant disruption in, or breach the security of, our information technology systems or those of our third-party providers
7. 07Our reliance on international operations subjects us to risks not typically faced by companies operating exclusively in the U.S
8. 08natural disasters, health epidemics and acts of terrorism
9. 09Increased component outsourcing to manufacturers located in different countries than our manufacturing facilities leads to additional risks that could negatively impact our business
10. 10Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our results of operations
11. 11Others may violate our intellectual property rights and cause us to incur significant costs to protect our rights
12. 12Our operating results would suffer if we are unable to successfully defend against infringement claims by third parties
13. 13We operate in highly competitive industries and, if we lose competitive advantages, our business would suffer adverse consequences
14. 14Our results of operations will be adversely affected if we fail to identify suitable acquisition candidates, complete acquisitions, successfully integrate recent and future acquisitions or grow the acquired businesses as planned
15. 15If we do not attract and retain our key personnel, our ability to execute our business strategy will be limited
16. 16We have undertaken restructuring and realignment activities in the past, and we will continue to assess our operating and cost structure in the future. These actions may not improve our financial position, and may ultimately prove detrimental to our operations and sales
17. 17Product defects or problems with integrating our products with other vendors’ products used by our customers may seriously harm our business and reputation
18. 18Disruptions in the supply of certain key components and other goods from our suppliers, including limited or single source suppliers, have adversely affected the results of our business operations, and could damage our relationships with customers35% rewritten
19. 19certain raw materials, key components or other goods is possible and could have a significant adverse effect on our business operations, damage our relationships with customers, or even lead to permanent loss of customer ordersNew
20. 20If we fail to accurately forecast component and raw material requirements for our products, we could incur additional costs and experience significant delays in shipments, which could have an adverse effect on the results of our business operations, and could damage our relationships with customers
21. 21Production difficulties and product delivery delays or disruptions could have a material adverse effect on our business86% rewritten
22. 22Our products and operations are subject to various foreign and U.S. federal and state healthcare laws and regulations, which could expose us to penalties
23. 23Our business is indirectly subject to healthcare industry cost containment and healthcare reform measures that could result in reduced sales of our products
24. 24Changes in government regulations related to our business or our products could reduce demand for our products or increase our expenses
25. 25Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards, and other requirements may adversely impact our business and financial results
26. 26If we fail to implement new information technology systems successfully, our business could be adversely affected
27. 27Changes in foreign currency rates could have a material adverse effect on our financial position, results of operations, and cash flows
28. 28Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets
29. 29Our reliance upon OEM customers subjects us to credit, inventory, and business failure risks beyond our control
30. 30The loss of sales, or significant reductions in orders from, any major customers may have a material adverse effect on us
31. 31Increasing scrutiny and changing expectations from investors, customers, governments and other stakeholders and third parties with respect to corporate sustainability and responsibility practices may cause us to incur additional costs or expose us to additional risks
32. 32The effects of climate change and related regulatory responses may adversely impact our business

Risks Relating to Taxes

1. 33Our effective tax rate is subject to fluctuation, which could impact our financial position and earnings per share

Risks Relating to Our Common Shares and Our Capital Structure

1. 34We may require additional capital to adequately respond to business challenges or opportunities and repay or refinance our existing indebtedness, but this capital may not be available on acceptable terms or at all31% rewritten
2. 35Our existing indebtedness could adversely affect our future business, financial condition and results of operations
3. 36In addition, as a global corporation, we have significant cash balances held in foreign countries. Some of these balances may not be immediately available to repay our debt
4. 37The market price for our common shares may be volatile
5. 38general market, political or economic conditions71% rewritten
6. 39We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could adversely affect our results of operations
7. 40While our management and our independent registered public accounting firm concluded that our internal control over financial reporting was effective as of December 31, 2025, it is possible that material weaknesses may be identified in the future