Xperi (XPER) risk factors, FY2025 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 business33% rewritten
6. 06Our Media Platform business may not be successful in developing, maintaining, and expanding key relationships with manufacturers of TV and other streaming devices, Pay-TV Operators as well as content publishers55% rewritten
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- and advertising-based revenue models, which are inherently risky21% rewritten
9. 09the impact of poor financial performance of our customers24% rewritten
10. 10Our licensees have and may in the future 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 us32% rewritten
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 broadband34% rewritten
14. 14has made the industry less predictable and more volatile and if we are unable to adapt to developments in this space, our business, financial condition and results of operations may be harmedNew
15. 15Our 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
16. 16Our pursuit of acquisitions and divestitures may adversely affect our business operations or stock price if we cannot successfully execute our strategies
17. 17manage operations in multiple time zones with different cultures and languages
18. 18We may not be able to maintain enough content released in the DTS audio format, which may reduce demand for our technologies, products, and services
19. 19Demand for our Connected Car technologies, including HD Radio and DTS AutoStage, may be insufficient to sustain projected growth21% rewritten
20. 20the marketing and pricing strategies that we employ and that are employed by our customers and retailers42% rewritten
21. 21the marketing and pricing strategies that we employ and that are employed by our customers and retailers, and the success of advertising-based business models we may adoptNew
22. 22The success of certain of our solutions depends on the interoperability of our technologies with consumer hardware devices
23. 23Our 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
24. 24We make significant investments in new products and services that may not achieve technological feasibility or profitability or that may limit our growth
25. 25Our business involves the use of artificial intelligence technologies, which could subject us to risks65% rewritten
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 operate31% rewritten
29. 29For TiVo OS, we are relying on third-party hardware companies to assist in the development, distribution and launch of a relatively 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 harmed70% rewritten
30. 30Qualifying, certifying and supporting our technologies, products and services is time-consuming and expensive
31. 31We are exposed to the risks related to international sales and operations
32. 32difficulties in obtaining approval for significant transactions64% rewritten
33. 33health conditions that adversely affect the global economy may adversely affect our business, financial condition and results of operationsNew
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
35. 35Our restructuring plan and cost-reduction efforts may not be successfulNew

Risks Related to Cybersecurity and Data Privacy

1. 36our business partners, our users, and other relevant stakeholders, and harm to our reputation by impacting the attractiveness of our services to existing and potential usersNew
2. 37Given 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 operations27% rewritten
3. 38In 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 operate50% rewritten
4. 39We 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. 40Litigation 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 business35% rewritten
2. 41If we fail to protect and enforce our intellectual property rights, contract rights, or our confidential information, our business may suffer
3. 42We may not be able to protect our brand from third-party infringement or increase our brand awareness
4. 43Some 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 licenses35% rewritten
5. 44Unauthorized 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. 45Under 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. 46Current and future governmental and industry standards may significantly limit our business opportunities

Risks Related to Macroeconomic Conditions

1. 47Macroeconomic uncertainties have in the past and may continue to adversely impact our business, results of operations, and financial condition
2. 48Natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business69% rewritten
3. 49natural disasters or other business disruptions in these areas. Our insurance coverage may not compensate us for losses that may occur in the event of an earthquake or other significant natural disasterNew
4. 50Our 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 stakeholder scrutiny and related expenses which may affect our business and operations40% rewritten

Risks Related to Financial Matters

1. 51We face risks associated with financial instruments we hold
2. 52If our goodwill and other intangible assets become impaired, we may be required to record a significant charge to earnings22% rewritten

Risks Related to Regulatory and Legal Matters

1. 53If 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 harmed53% rewritten
2. 54U.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. 55If we are found liable for content that is distributed through or advertising that is served through our platform, our business could be harmed
4. 56In 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. 57The 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. 58If we fail to comply with anti-corruption or bribery laws, our business could be harmed
7. 59We 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. 60Our activities to advertise, market and sell our services directly to consumers are highly regulated by constantly evolving state and federal laws and regulations
9. 61The absence of regulations relating to the compatibility between cable systems and CE equipment could harm our business

Risks Related to the Separation

1. 62If 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. 63The 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

Risks Relating to Ownership of Our Common Stock

1. 64We cannot be certain that an active trading market for our common stock will be sustained and our stock price may fluctuate significantly
2. 65Our 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. 66We cannot guarantee the timing, amount or payment of dividends, if any, on our common stock in the future
4. 67A stockholder’s percentage of ownership in us may be diluted in the future
5. 68Certain 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. 69For as long as we are an emerging growth company, we are not required to comply with certain requirements that apply to other public companies58% rewritten
7. 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
8. 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
9. 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
10. 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