Xperi (XPER) risk factors, FY2024 10-K

Risks Relating to Our Business Operations

1. 01We may not be able to develop and timely deliver innovative technologies and services in response to changes in our markets and industries
2. 02may not correctly identify new or changing market trends at an early enough stage to capitalize on market opportunities
3. 03Our products and services face intense competition from various sources, and we may not be able to compete effectively
4. 04our competitive position is affected by the rate of adoption and incorporation of our technologies by semiconductor manufacturers, assemblers, foundries, manufacturers of consumer and communication electronics, and the TV, automotive and consumer electronics industry
5. 05Our monetization strategy is relatively new and may not be successful, which could adversely impact our business
6. 06Our Media Platform business may not be successful in developing, maintaining, and expanding key relationships with TV OEMs and content publishers
7. 07We may not be able to manage our disparate business operations efficiently, which may lead to disposition of such business and related assets, and the disposition of one or more business lines or assets exposes us to a variety of risks
8. 08Our business depends, in part, on royalty-based and advertising-based revenue models, which are inherently risky
9. 09the impact of poor financial performance of our customers
10. 10Our licensees may delay, refuse to or be unable to make payments to us due to financial difficulties or otherwise, or shift their licensed products to other companies to lower their royalties to us
11. 11It is difficult for us to verify royalty amounts owed to us under our licensing agreements, and this may cause us to lose revenue
12. 12Competition for employees is intense, and we may not be able to attract and retain the qualified and skilled employees needed to support our business
13. 13We face competitive risks in the provision of entertainment offerings involving the distribution of digital content provided by third party application and content providers through broadband
14. 14Our license agreements are typically non-exclusive, and therefore our licensees are free to enter into similar agreements with third parties, including our competitors. Our licensees may develop or pursue alternative technologies either on their own or in collaboration with others, including our competitors
15. 15Our pursuit of acquisitions and divestitures may adversely affect our business operations or stock price if we cannot successfully execute our strategies
16. 16manage operations in multiple time zones with different cultures and languages
17. 17We may not be able to maintain enough content released in the DTS audio format, which may reduce demand for our technologies, products, and services
18. 18Demand for our Connected Car technologies, including HD Radio and DTS AutoStage, may be insufficient to sustain projected growth
19. 19the marketing and pricing strategies that we employ and that are employed by our customers and retailers
20. 20If we are unable to further penetrate the streaming and downloadable content delivery markets and adapt our technologies for those markets, our royalties and ability to grow our business could be adversely impacted
21. 21The success of certain of our solutions depends on the interoperability of our technologies with consumer hardware devices
22. 22Our failure to adequately manage our increasingly complex distribution agreements, including licensing, development and engineering services, may cause unexpected delays and loss of revenue in the deployment of advanced television solutions
23. 23We make significant investments in new products and services that may not achieve technological feasibility or profitability or that may limit our growth
24. 24Our business involves the use of artificial intelligence technologies, which could subject us to risks
25. 25product offerings; continue our operations and efficiently manage our operating expenses; and respond effectively to competitive developments
26. 26We develop and offer complex solutions, which we license and otherwise provide to customers. The performance of these solutions typically involves working with sophisticated software, computing, and communications systems
27. 27Dependence on the cooperation of third parties for the provision and delivery of our metadata may adversely affect our revenue
28. 28We depend on a limited number of third parties to design, manufacture, distribute and supply hardware devices upon which our TiVo software and services operate
29. 29For TiVo OS, we are relying on third-party hardware companies to assist in the development, distribution and launch of a new market entry product. If one or more of these third parties is unable or unwilling to meet its obligations regarding such entry, the success of TiVo OS could be harmed
30. 30We maintain inventories of TiVo-branded products based on our demand forecast, which may be incorrect and lead to excess or insufficient inventory
31. 31Qualifying, certifying and supporting our technologies, products and services is time-consuming and expensive
32. 32We are exposed to the risks related to international sales and operations
33. 33difficulties in obtaining approval for significant transactions
34. 34We may need to raise additional debt or equity capital in order to pursue our business objectives or respond to opportunities, challenges, or unforeseen circumstances. If such capital is not available to us on viable terms or at all, our business, operating results, and financial condition may be harmed

Risks Related to Cybersecurity and Data Privacy

1. 35Given the rapidly evolving nature of the regulatory landscape, we may be unable to ensure timely compliance with these requirements, which may adversely impact our business, financial condition and results of operations
2. 36In addition, cloud service providers upon which our services depend are experiencing heightened scrutiny from EU regulators, which may lead to significant shifts or unavailability of cloud services to transfer Personal Information outside the EU, which may significantly impact our costs or ability to operate
3. 37We will continue to review our business practices and may find it necessary or desirable to make changes to our personal information processing to cause our transfer and receipt of EEA residents’ personal information to conform to applicable European law

Risks Related to Intellectual Property

1. 38Litigation and claims regarding intellectual property rights could result in the loss of rights important to our products and services, cause us to incur significant legal costs, or otherwise harm our business
2. 39If we fail to protect and enforce our intellectual property rights, contract rights, or our confidential information, our business may suffer
3. 40We may not be able to protect our brand from third-party infringement or increase our brand awareness
4. 41Some software we provide may be subject to “open source” licenses, which may restrict how we use or distribute our software or require that we release the source code of certain products subject to those licenses
5. 42Unauthorized use of generative artificial intelligence technologies in the development of our products or the operation of our business could expose us to risks of unauthorized disclosure of proprietary information, security vulnerabilities, or intellectual property infringement claims
6. 43Under our agreements with many of our customers and partners, we are required to provide indemnification in the event our technology is alleged to infringe upon the intellectual property rights of third parties
7. 44Current and future governmental and industry standards may significantly limit our business opportunities

Risks Related to Macroeconomic Conditions

1. 45Macroeconomic uncertainties have in the past and may continue to adversely impact our business, results of operations, and financial condition
2. 46Natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business
3. 47Our business and operations may be subject to a variety of U.S. federal, state and international laws and regulations regarding the environment and social responsibility, as well as increased stakeholder scrutiny and related expenses which may affect our business and operations

Risks Related to Financial Matters

1. 48We face risks associated with financial instruments we hold
2. 49If our goodwill and other intangible assets become impaired, we may be required to record a significant charge to earnings

Risks Related to Regulatory and Legal Matters

1. 50If 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
2. 51U.S. or international rules (or the absence of rules) that permit internet access network operators 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
3. 52If we are found liable for content that is distributed through or advertising that is served through our platform, our business could be harmed
4. 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 products or services
5. 54The TV, automotive, cable, and telecommunications industries are subject to pervasive regulation, both in the United States and in other countries. For example, the FCC in the United States has licensing and other requirements, in addition to extensive regulation by local and state authorities
6. 55If we fail to comply with anti-corruption or bribery laws, our business could be harmed
7. 56We have been, are currently, and may in the future be subject to litigation, claims, regulatory inquiries, investigations, and other legal proceedings, which could cause us to incur substantial costs or require us to change our business practices in a way that could seriously harm our business
8. 57Our activities to advertise, market and sell our services directly to consumers are highly regulated by constantly evolving state and federal laws and regulations
9. 58The absence of regulations relating to the compatibility between cable systems and CE equipment could harm our business

Risks Related to the Separation

1. 59If the Distribution, together with certain related transactions, were to fail to qualify for non-recognition treatment for U.S. federal income tax purposes, then we and our stockholders could be subject to significant tax and liability
2. 60The IRS may assert that the Mergers cause the Distribution and other related transactions to be taxable to our Former Parent, in which case we could be subject to significant indemnification liability
3. 61We are subject to continuing contingent tax-related liabilities of our Former Parent following the Distribution
4. 62We may be required to adjust our tax accounts if our Former Parent utilizes certain pre-Separation tax attributes

Risks Relating to Ownership of Our Common Stock

1. 63We cannot be certain that an active trading market for our common stock will be sustained and our stock price may fluctuate significantly
2. 64Our stock repurchase program may not be fully consummated, may not enhance long-term stockholder value, may increase the volatility of our stock prices and, as we implement it, will diminish our cash reserves
3. 65We cannot guarantee the timing, amount or payment of dividends, if any, on our common stock in the future
4. 66A stockholder’s percentage of ownership in us may be diluted in the future
5. 67Certain provisions in our amended and restated certificate of incorporation and bylaws, Delaware law and in the Tax Matters Agreement may prevent or delay an acquisition of us, which could decrease the trading price of our common stock
6. 68For as long as we are an emerging growth company, we are not required to comply with certain requirements that apply to other public companies
7. 69subsequently elect instead to comply with these public company effective dates, such election would be irrevocable pursuant to the JOBS Act
8. 70Changes in our tax rates or exposure to additional tax assessments may adversely affect our effective tax rates and negatively affect our business and financial condition
9. 71If we fail to maintain effective internal control over financial reporting, our ability to produce accurate financial statements could be impaired, which could increase our operating costs and affect our ability to operate our business
10. 72If 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 as a result of our noncompliance, which could harm our business
11. 73We earn a portion of our income in foreign countries and, as such, we are subject to tax laws in the United States and numerous foreign jurisdictions. Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change