OneSpan (OSPN) risk factors, FY2024 10-K

Risks Related to our Business and Industry

1. 01We may experience difficulties increasing or maintaining our rate of revenue growth
2. 02If our new product offerings and product enhancements do not keep pace with the needs of our customers or do not achieve sufficient customer acceptance, our competitive position and financial results will be negatively impacted
3. 03A significant portion of our sales are to a limited number of customers. The loss of substantial sales to any one of them could have an adverse effect on revenues and profits
4. 04The market for digital solutions for security, authentication, identity, electronic signature, and digital workflow solutions is very competitive and, like most technology-driven markets, is subject to rapid change and constantly evolving solutions and services
5. 05If we are not able to enhance our brand recognition and maintain our brand reputation, our business may be adversely affected
6. 06Our Digipass authenticator business has a complex global supply chain and is dependent on a limited number of suppliers for certain components, such that supply chain disruptions could materially impact our operations. Our Digipass business may also experience inventory-related losses
7. 07The sales cycle for our products, which is the period of time between the identification of a potential customer and completion of the sale, is typically lengthy and subject to a number of significant risks over which we have little control
8. 08Security breaches or cyberattacks could expose us to significant liability, cause our business and reputation to suffer and harm our competitive position
9. 09Real or perceived malfunctions and errors in our products could result in warranty and product liability risks and economic and reputational damages
10. 10If we are unable to retain key employees and successfully hire and train qualified new employees, we may be unable to achieve our business objectives. In addition, we may experience negative effects from the significant workforce reductions we have completed over the past several years
11. 11Our financial results may fluctuate from period to period, making it difficult to project future results. If we fail to meet the expectations of securities analysts or investors, the price of our common stock could decline
12. 12We have operated at a loss for two of the past three fiscal years, and we may not be profitable in the future
13. 13addition, any changes in service levels from our third-party hosting providers or other cloud-based technology vendors may adversely affect our ability to meet our customers' requirements
14. 14Our success depends in part on establishing and maintaining relationships with other companies to distribute our technology and products or to incorporate their technology into our products and services, or vice versa
15. 15SaaS offerings, which involve various risks, constitute an important part of our business
16. 16Failure to maintain high-quality customer support could have a material adverse effect on our business
17. 17Failure to effectively manage our product and service lifecycles could harm our business
18. 18We are subject to foreign currency exchange rate fluctuations, which could adversely affect our financial condition and results of operations
19. 19Consolidations, failures and other developments in the banking and financial services industry may adversely impact our revenue
20. 20We face a number of risks associated with our international operations, any or all of which could result in a disruption in our business and a decrease in our revenue
21. 21If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings
22. 22The revenue recognition treatment of SaaS subscriptions and term subscription licenses for on-premises software may make it more challenging to accurately assess our operating results and the condition of our business
23. 23applicable accounting rules may make it more difficult for investors to accurately assess our operating results and the condition of our business
24. 24We could be subject to additional tax liabilities, and our ability to use our net operating losses may be limited
25. 25Acquisitions or other strategic transactions may not achieve the intended benefits or may disrupt our current plans and operations
26. 26Any of these risks could result in acquisitions or other strategic transactions disrupting our business and/or failing to achieve their intended objectives
27. 27Provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses
28. 28Any failure to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results
29. 29We use open-source software in our products, which could subject us to litigation or other actions
30. 30There is significant government regulation of technology imports and exports. If we cannot meet the requirements of applicable regulations, we may be prohibited from exporting some of our products, which could negatively impact our revenue
31. 31We employ cryptographic technology in our authentication products. If the codes used in our cryptographic technology are eventually broken or become subject to additional government regulation, our technology and products may become less effective, which would have a material adverse effect on our business
32. 32International and domestic privacy and data protection laws and regulations could have a material adverse impact on our results of operations
33. 33Our business in certain countries and transactions with foreign governments increase the risks associated with our international activities
34. 34evolving interpretations of DORA or additional regulatory updates could lead to unexpected compliance challenges and costs
35. 35We may require additional capital to support our business objectives, and this capital might not be available on acceptable terms, if at all

Risks Related to Ownership of Our Common Stock

1. 36Our stock price has been and will likely continue to be volatile
2. 37A small group of shareholders control a substantial amount of our common stock and could promote, delay or prevent a change of control
3. 38Certain provisions of our charter and of Delaware law make a takeover of our Company more difficult
4. 39Future issuances of blank check preferred stock may reduce voting power of common stock and may have anti-takeover effects that could prevent a change in control
5. 40Our business could be adversely affected as a result of actions of activist stockholders

General Risks

1. 41Economic uncertainties or downturns could materially adversely affect our business
2. 42Catastrophic events may disrupt our business