ROKU (ROKU) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01If we fail to differentiate our streaming platform and compete successfully with our competitors, it will be difficult for us to attract and retain users and our business will be adversely impacted49% rewritten
2. 02Our competitors offer content and other advertising mediums that may be more attractive to advertisers than our streaming platform
3. 03If advertisers continue to devote a substantial portion of their advertising budgets to advertising in traditional media or on other digital platforms rather than on advertising on our streaming platform, the future growth of our business may be negatively impacted
4. 04If we are unable to maintain an appropriate supply of quality video advertising inventory on our streaming platform or generate sufficient demand to effectively sell our available video advertising inventory, our business may be harmed23% rewritten
5. 05If the advertising campaigns that run on our streaming platform decrease or are not relevant or not engaging to our users, our business may be harmed33% rewritten
6. 06We are subject to various risks in connection with programmatic advertising32% rewritten
7. 07We may not be successful in our efforts to further monetize our expanding user base and streaming activity as we increase the amount of content offered and streamed across our platform, which may harm our business28% rewritten
8. 08We have three owned and operated streaming servicesNew
9. 09We depend on a small number of content partners for nearly half of our Streaming Hours, and if we fail to maintain these relationships, our business could be harmed23% rewritten
10. 10If popular or new content publishers do not publish content on our streaming platform, we may fail to retain existing users and attract new users
11. 11The non-renewal or early termination of agreements with our content partners may result in the removal of certain apps or app features from our streaming platform and harm our streaming device sales, user base growth, engagement, and monetization
12. 12If our content partners do not participate in new features that we may introduce from time to time or choose to develop their apps on alternative streaming platforms, our business may be harmed
13. 13If our users sign up for offerings and services outside of our streaming platform or through other apps on our streaming platform, our business may be harmed
14. 14Our growth depends in part on our ability to develop, maintain, and expand relationships with our licensed Roku TV partners and manufacturing partners
15. 15We and our licensed Roku TV partners depend on retail sales channels to effectively market and sell our respective products, and if we or our partners fail to maintain and expand effective retail sales channels, we or our partners could experience lower product sales44% rewritten
16. 16If our efforts to build and maintain a strong brand and customer satisfaction and loyalty are not successful, we may not be able to attract or retain users, and our business may be harmed
17. 17If we or our licensed Roku TV partners encounter problems with contract manufacturers or fail to accurately forecast inventory needs, our business may be harmedNew
18. 18Our products incorporate key components from sole source suppliers, and if our contract manufacturers are unable to obtain sufficient quantities of these components on a timely basis, we will not be able to deliver our products to our retailers and distributors27% rewritten
19. 19If our products do not operate effectively with various offerings, technologies, and systems from content partners and other third parties that we do not control, our business may be harmed
20. 20Our products are complex and may contain hardware defects and software errors, which could manifest themselves in ways that could harm our reputation and our business
21. 21Components used in our products may fail as a result of manufacturing, design, or other defects that were unknown to us or over which we have no control and may render our products permanently inoperable
22. 22We must continue to innovate and develop new and existing products and services to remain competitive, and new products and services expose our business to new risks
23. 23We are incorporating AI technologies into some of our products and services, which may present operational, legal, and reputational risks42% rewritten
24. 24If we fail to provide adequate levels of quality customer support, we could lose users, advertisers, content partners, and licensed Roku TV partners, which could harm our business

Risks Related to Operating and Growing Our Business

1. 25We have incurred operating losses in the past, may incur operating losses in the future, and may not be able to maintain profitabilityNew
2. 26Our quarterly operating results may be volatile and are difficult to predict, and our stock price may decline if we fail to meet the expectations of securities analysts or investors
3. 27If we have difficulty managing our growth in operating expenses, our business could be harmed
4. 28If we fail to manage our growth effectively, including if we grow our business too rapidly, we may not be able to execute our business strategies, which could harm our business and adversely affect our financial condition, results of operations, or cash flows
5. 29We may be unable to successfully expand our international operations, and our international expansion plans, if implemented, will subject us to a variety of risks that may harm our business22% rewritten
6. 30Our revenue and gross profit are subject to seasonality and other potential fluctuations, and if our sales during the affected periods fall below our expectations, our business may be harmed
7. 31If we fail to attract and retain key personnel, effectively manage succession, or hire, develop, and motivate our employees, we may not be able to execute our business strategy or continue to grow our business
8. 32We need to maintain operational and financial systems that can support our expected growth, increasingly complex business arrangements, and rules governing revenue and expense recognition, and any inability or failure to do so could adversely affect our financial reporting, billing, and payment services
9. 33We may pursue acquisitions and other strategic transactions involving a number of risks, which could harm our business if not successfully addressed52% rewritten
10. 34Our credit facility provides our lenders with a first-priority lien against substantially all of our assets and contains financial covenants and other restrictions on our actions that may limit our operational flexibility or otherwise adversely affect our financial condition
11. 35We may require additional capital to meet our financial obligations and support planned business growth, and this capital might not be available on acceptable terms or at all
12. 36Our Credit Agreement matures on September 16, 2029
13. 37Our liquidity and financial performance could be adversely affected by uninsured cash depositsNew
14. 38Macroeconomic uncertainties can adversely impact our business, results of operations, and financial condition69% rewritten
15. 39Natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business

Risks Related to Cybersecurity, Reliability, and Data Privacy

1. 40Data security incidents, including cybersecurity attacks, or other significant disruptions of our information technology systems could harm our reputation, cause us to modify our business practices, and otherwise adversely affect our business and subject us to liability
2. 41We and our service providers and partners collect, process, transmit, disclose, and store personal information, which creates legal obligations and exposes us to potential liability
3. 42Any significant disruption in our information technology systems or those of third parties we utilize in our operations could result in a loss or degradation of service on our platform and could harm our business
4. 43Changes in how network operators manage data that travel across their networks could harm our business

Risks Related to Intellectual Property

1. 44Litigation and claims regarding intellectual property rights could result in the loss of rights important to our products and streaming platform, cause us to incur significant legal costs, or otherwise harm our business
2. 45If we fail to, or are unable to, protect or enforce our intellectual property or proprietary rights, our business and operating results could be harmed
3. 46Our use of open-source software could impose limitations on our ability to commercialize our products and our streaming platform or could result in public disclosure of competitively sensitive trade secrets
4. 47Under our agreements with many of our content partners, licensees, distributors, retailers, contract manufacturers, and suppliers, we are required to provide indemnification in the event our technology is alleged to infringe upon the intellectual property rights of third parties

Legal and Regulatory Risks

1. 48We have been, are currently, and may in the future be subject to various lawsuits and other legal proceedings, disputes, claims, and government inquiries and investigations, which could cause us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business23% rewritten
2. 49If government regulations or laws relating to the internet, video, advertising, or other areas of our business change, we may need to alter the manner in which we conduct our business, or our business could be harmed
3. 50Changes in U.S. or foreign trade policies, geopolitical conditions, general economic conditions, and other factors beyond our control may adversely impact our business and operating results34% rewritten
4. 51The ability of internet access network operators in some jurisdictions to degrade users’ internet speeds or limit internet data consumption by users, including unreasonable discrimination in the provision of broadband internet access services, could harm our business
5. 52If we are found liable for content that is distributed through or advertising that is served through our platform, our business could be harmed
6. 53In addition, regardless of any legal protections that may limit our liability for the actions of third parties, we may be adversely impacted if copyright holders assert claims, or commence litigation, alleging copyright infringement against the developers of apps that are distributed on our platform
7. 54If we fail to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and our stock price may be adversely affected
8. 55Our financial results may be adversely affected by changes in accounting principles applicable to us
9. 56If we fail to comply with the laws and regulations relating to the payment of income taxes and the collection of indirect taxes, we could be exposed to unexpected costs, expenses, penalties, and fees, which could harm our business22% rewritten
10. 57New legislation that would change U.S. or foreign taxation of international business activities or other tax-reform policies could harm our businessNew

Risks Related to Ownership of Our Class A Common Stock

1. 58The market price of our Class A common stock has been, and may continue to be, volatile, and the value of our Class A common stock may decline
2. 59Future sales and issuances of our capital stock or rights to purchase capital stock could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline
3. 60Future sales of shares by existing stockholders could cause our stock price to decline22% rewritten
4. 61We cannot guarantee that our stock repurchase program will be fully consummated or that it will preserve or enhance long-term stockholder valueNew
5. 62If securities or industry analysts publish unfavorable research about our business or if they downgrade our stock, our stock price could decline94% rewritten
6. 63We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies in the United States, which may harm our business
7. 64We do not intend to pay dividends in the foreseeable future
8. 65Provisions of our charter documents and Delaware law may prevent or frustrate attempts by our stockholders to change our management or hinder efforts to acquire a controlling interest in us, and the market price of our Class A common stock may be lower as a result