RingCentral (RNG) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01We have incurred significant losses and negative cash flows in the past and we may not be able to achieve or sustain profitability in the future
2. 02Our quarterly and annual results of operations have fluctuated in the past and may continue to do so in the future. As a result, we may fail to meet or to exceed the expectations of research analysts or investors, which could cause our stock price to fluctuate
3. 03If we are unable to develop, license, or acquire new services or applications on a timely and cost-effective basis, our business, financial condition, and results of operations may be materially and adversely affected
4. 04If we are unable to attract new customers to our subscriptions or upsell to those customers on a cost-effective basis, our business will be materially and adversely affected
5. 05We rely and may in the future rely significantly on our channel partners and global service providers to market and sell our subscriptions; our failure to effectively develop, manage, and maintain our indirect sales channels could materially and adversely affect our revenues
6. 06Increased customer turnover, or costs we incur to retain and upsell our customers, could materially and adversely affect our financial performance
7. 07Economic and political conditions may harm our industry, business and results of operations
8. 08We face intense competition in our markets and may lack sufficient financial or other resources to compete successfully
9. 09We face significant risks in our efforts to sell and market to medium-sized and larger businesses for sales of our subscriptions and, if we do not manage these efforts effectively, our business and results of operations could be materially and adversely affected
10. 10If we fail to continue to develop our brand or our reputation is harmed, our business may suffer
11. 11We depend largely on the continued services of our senior management and other highly-skilled employees, and if we are unable to hire, retain, manage and motivate our employees, we may not be able to grow effectively and our business, results of operations and financial condition could be adversely affected
12. 12We may expand through acquisitions of and investments in other companies, each of which may divert our management’s attention, result in additional dilution to our stockholders, increase expenses, disrupt our operations, and harm our results of operations
13. 13Interruptions or delays in service whether caused by our third-party data center hosting facilities, other third-party providers, internal process failures, human errors, internal bugs or otherwise could impair the delivery of our subscriptions, require us to issue credits or pay penalties and harm our business
14. 14A security incident, such as a cyber-attack, information security breach, or denial of service event, could delay or interrupt service to our customers, harm our reputation or business, impact our subscriptions, and subject us to significant liability
15. 15The AI technology and features incorporated into our solutions include new and evolving technologies that may present both legal and business risks
16. 16The use of AI by our workforce may present risks to our business
17. 17We rely on third-party competitors to deliver video, contact center and SMS services to customers, and changes in these relationships could have a material adverse effect on our business, results of operations and financial condition
18. 18Our international operations and customer base may expose us to significant risks
19. 19If we are unable to effectively process local number and toll-free number portability provisioning, and/or our customers are unable to register with TCR in a timely manner, our growth may be negatively affected
20. 20Our business could suffer if we cannot obtain or retain direct inward dialing numbers or are prohibited from obtaining local or toll-free numbers or if we are limited to distributing local or toll-free numbers to only certain customers
21. 21If we experience excessive fraudulent activity or cannot meet evolving credit card association merchant standards, we could incur substantial costs and lose the right to accept credit cards for payment, which could cause our customer base, new sales, and revenues to decline significantly
22. 22Failures in Internet infrastructure or interference with broadband access could cause current or potential users to believe that our systems are unreliable, possibly leading our customers to switch to our competitors or to avoid using our subscriptions
23. 23Interruptions in our services caused by undetected errors, failures, or bugs in our services and/or human error could harm our reputation, result in significant costs to us, and impair our ability to sell our subscriptions
24. 24Potential problems with our information systems could interfere with our business and operations
25. 25Growth may place significant demands on our management and our infrastructure
26. 26Support for smartphones and tablets are an integral part of our solutions. If we are unable to develop robust mobile applications that operate on the mobile platforms that our customers use, our business and results of operations could be materially and adversely affected
27. 27The occurrence of a catastrophic disaster could damage our facilities or the facilities of our contractors, which could cause us to curtail our operations

Risks Related to Our Reliance on Third Parties

1. 28We rely on third parties, including third parties in countries outside the U.S., for a significant portion of our software development and design, quality assurance, operations, and customer support
2. 29To deliver our subscriptions, we rely on third parties for our network connectivity and for certain of the features in our subscriptions
3. 30We rely on third-party software that may be difficult to replace or which could cause errors or failures of our subscriptions
4. 31We rely on third parties to fulfill various aspects of our E-911 service. If these third parties do not provide our customers with reliable, high-quality service, our reputation will be harmed, and we may lose customers
5. 32We currently depend on a limited number of phone device suppliers and fulfillment agents to configure and deliver the phones that we sell
6. 33marketplace could suffer, which could cause us to lose revenue. We expect that it could take several months to effectively transition to new third-party manufacturers or fulfillment agents

Risks Related to Intellectual Property

1. 34Accusations of infringement of third-party intellectual property rights could materially and adversely affect our business
2. 35Our limited ability to protect our intellectual property rights could materially and adversely affect our business
3. 36Our use of open source technology could impose limitations on our ability to commercialize our subscriptions

Risks Related to Our Indebtedness

1. 37We may require additional capital or need to restructure our existing debt to pursue our business objectives and to respond to business opportunities, challenges or unforeseen circumstances. If capital is not available to us, our business, results of operations, and financial condition may be adversely affected
2. 38continue to pursue our business objectives and to respond to business opportunities, challenges, or unforeseen circumstances could be significantly limited, and our business, results of operations, financial condition and prospects could be materially and adversely affected
3. 39Our Credit Agreement imposes operating and financial restrictions on us
4. 40The capped call transactions may affect the value of the 2026 Convertible Notes and our Class A Common Stock and we are subject to counterparty risk

Risks Related to Our Class A Common Stock and Our Charter Provisions

1. 41The market price of our Class A Common Stock is likely to be volatile and could decline
2. 42We have never paid cash dividends and do not anticipate paying any cash dividends on our common stock
3. 43The holders of Series A Convertible Preferred Stock are generally entitled to vote with the holders of our Class A Common Stock, which reduces the relative voting power of holders of our Class A Common Stock, and the holders of Series A Convertible Preferred Stock have certain separate consent rights
4. 44Our Series A Convertible Preferred Stock has certain rights that are preferential to the rights of our common stock, which could adversely affect our liquidity and financial condition
5. 45We cannot guarantee that our stock repurchase programs will be fully implemented or that they will enhance long-term stockholder value
6. 46Anti-takeover provisions in our certificate of incorporation and bylaws and under Delaware corporate law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A Common Stock
7. 47If research analysts do not publish research or reports about our business, or if they issue unfavorable commentary or downgrade our Class A Common Stock, our stock price and trading volume may decline

Risks Related to Taxation and Accounting Matters

1. 48Changes in effective tax rates, or adverse outcomes resulting from examination of our income or other tax returns, could adversely affect our results of operations and financial condition
2. 49Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions
3. 50We may be subject to liabilities on past sales for taxes, surcharges, and fees and our operating results may be harmed if we are required to collect such amounts in jurisdictions where we have not historically done so
4. 51We may be unable to use some or all of our net operating loss and research credit carryforwards, which could materially and adversely affect our reported financial condition and results of operations
5. 52If our internal control over financial reporting is not effective, it may adversely affect investor confidence in our company
6. 53Our estimates or judgments relating to our critical accounting policies may be based on assumptions that change or prove to be incorrect, which could cause our results of operations to fall below expectations of securities analysts and investors, resulting in a decline in the market price of our Class A common stock