Roku (ROKU) Financial Report Summaries

Risks

• Our future growth depends our ability to grow revenues from advertising on our streaming platform.*
• We may not be successful in our efforts to further monetize our streaming platform, which may harm our business.*
• If we are not successful in working with third-party demand sources or in running our demand-side platform (“DSP”), our business may be harmed.*
• Our growth depends in part on our ability to develop, maintain, and expand relationships with our licensed Roku TV partners and manufacturing partners and, to a lesser extent, service operators.
• We depend on a small number of content partners for a majority of our Streaming Hours, and if we fail to maintain these relationships, our business could be harmed.*
• If popular or new content publishers do not publish content on our streaming platform, we may fail to retain existing users and attract new users.*
• The 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 may harm our streaming device sales, Streaming Household growth, and engagement.
• If we are unable to maintain an adequate supply of quality video ad inventory on our streaming platform or generate sufficient demand to effectively sell our available video ad inventory, our business may be harmed.*
• If our content partners do not participate in new features that we may introduce from time to time, our business may be harmed.*
• If the advertising campaigns on our streaming platform decrease, or the campaigns that run are not relevant or not engaging to our users, our business may be adversely impacted.*
• If our efforts to build a strong brand and maintain customer satisfaction and loyalty are not successful, we may not be able to attract or retain users, and our business may be harmed.
• We are subject to payment-related risks and, if our advertisers, advertising agencies, or programmatic partners do not pay or dispute their invoices, our business may be harmed.*
• The quality of our customer support is important, and if we fail to provide adequate levels of customer support, we could lose users, advertisers, content partners, and licensed Roku TV partners, which could harm our business.
• We 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.*
• We do not have our own manufacturing capabilities and primarily depend upon a limited number of contract manufacturers, and our operations could be disrupted if we encounter problems with our contract manufacturers.*
• The supply of Roku TV models to the market could be disrupted if our licensed Roku TV partners encounter problems with their internal operations or with their contract manufacturers, assemblers, or component suppliers.*
• If we fail to accurately forecast our manufacturing requirements for our products and manage our inventory with our contract manufacturers, we could incur additional costs, experience manufacturing delays, and lose revenue.
• Our 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 distributors.
• If 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.*
• Our 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.*
• Components 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.
• If we are unable to obtain or maintain necessary or desirable licenses, certifications, or approvals related to our use or support of third-party technology, intellectual property, or services, then our ability to develop and introduce new products and services, and continue to manufacture, update, and commercialize existing products and services, may be impaired.*
• We are incorporating AI technologies into some of our products and services, which may present operational and reputational risks.*
• Our 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.*
• If we have difficulty managing our growth in operating expenses, our business could be harmed.*
• We 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 business.*
• If 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.
• We 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.
• We may pursue acquisitions, which involve a number of risks, and if we are unable to address and resolve these risks successfully, such acquisitions could harm our business.
• We 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.*
• We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance.
• We and our service providers and partners collect, process, transmit, and store personal and confidential information, which creates legal obligations and exposes us to potential liability.*
• Any 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.*
• Changes in how network operators manage data that travel across their networks could harm our business.
• Litigation 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.
• If we fail to, or are unable to, protect or enforce our intellectual property or proprietary rights, our business and operating results could be harmed.
• Our 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.
• Under 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.
• Natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events could disrupt and impact our business.*
• Changes 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 results.
• The 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.*
• If 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.*
• Our financial results may be adversely affected by changes in accounting principles applicable to us.
• If 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.
• New legislation that would change U.S. or foreign taxation of international business activities or other tax-reform policies could harm our business.
• The 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.*
• Future 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.
• Future sales of shares by existing stockholders could cause our stock price to decline.
• If securities or industry analysts do not publish research or publish unfavorable research about our business or if they downgrade our stock, our stock price and trading volume could decline.
• We 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.
• We do not intend to pay dividends in the foreseeable future.*
• Provisions 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.
• Our certificate of incorporation provides that the Delaware Court of Chancery and the U.S. federal district courts will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.