Telenav Financial Report Summaries

Risks

• We face significant risks related to the COVID-19 pandemic and related economic recession, which we expect to continue, and which could significantly disrupt our operations and have a material adverse effect on our results of operations and financial condition.
• We incurred losses in each period from fiscal 2015 through our first quarter of fiscal 2020. Although we were profitable for part of fiscal 2020, we may incur additional losses in fiscal 2021, and we cannot predict when, or if, we will return to consistent profitability.
• Our quarterly revenue and operating results have fluctuated in the past and may fluctuate in the future due to a number of factors. As a result, we may fail to meet or exceed the expectations of securities analysts or investors, which could cause our stock price to decline.
• We are dependent on Ford and GM for a substantial portion of our billings and revenue, and our business, financial condition and results of operations will be harmed if our billings and revenue from Ford and GM do not continue to grow or if they decline.
• The success of our automotive navigation products may be affected by the number of vehicle models offered with our navigation solutions, as well as overall demand for new vehicles.
• If we fail to comply with our automobile manufacturer and tier one contracts, our business, financial condition and results of operations could suffer.
• Our automotive revenue and earnings could fluctuate due to the complexities of revenue recognition and capitalization of expenses related to customized products.
• We may not be successful at adapting our business model for the Chinese automotive navigation market, which may reduce our revenue per vehicle.
• We may not be successful in generating material revenue from automobile manufacturers and tier ones other than Ford and GM. As a result, our business, financial condition and results of operations will be harmed if we are unable to diversify our automotive revenue.
• We may incur substantial costs when engaging with a new automotive navigation customer and may not realize substantial revenue from that new customer in the short-term, if at all.
• We rely on our customers for timely and accurate vehicle and subscriber sales information. A failure or disruption in the provisioning of this data to us would materially and adversely affect our ability to manage our business effectively.
• We recently implemented a new enterprise resource planning system and are also implementing project and human resources management systems. If these new systems prove ineffective, we may be unable to timely or accurately prepare financial reports, or invoice and collect from our customers.
• Our business practices with respect to data could give rise to liabilities or reputational harm as a result of governmental regulation, legal requirements or industry standards relating to consumer privacy and data protection.
• Changes to United States tax, tariff and import/export regulations may have a negative effect on global economic conditions, financial markets and our business.
• Our operations in certain emerging markets expose us to political, economic and regulatory risks.
• We conduct substantial research and development operations in China; risks associated with a business presence in China could negatively affect our business and results of operations.
• We could be subject to additional income tax liabilities.
• Our international operations and corporate structure subject us to potential adverse tax consequences.
• Our customer requirements and content management obligations are complex. If we inadvertently include content for which we have liability to the vendor but may not be entitled to payment from our customer, our financial condition and results of operation could be harmed.
• We face intense competition in our market, especially from competitors that offer their location services for free, which could make it difficult for us to acquire and retain customers and end users.
• If we are unable to integrate future investments or acquisitions successfully, our operating results and prospects could be harmed.
• We may be required to recognize a significant charge to earnings if our goodwill becomes impaired.
• Our investment portfolio and cash balances may become impaired by poor investment performance, deterioration of the financial markets or the economic effects of COVID-19.
• Warranty claims, product liability claims, product recalls and regulatory liability claims could subject us to significant costs and adversely affect our financial results.
• Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement, damages caused by defective software and other losses.
• Our transaction with Grab involved application of complex accounting principles; we may be required to revalue our Grab shareholdings periodically, which could impact our financial statements.
• Changes in accounting principles, or interpretations thereof, could have a significant impact on our financial position and results of operations.
• We rely on a proprietary provisioning and reporting system for our navigation products and services to track end user activation, deactivation and usage data, and any material failures in this system could harm our revenue, affect our costs and impair our ability to manage our business effectively.
• We rely on third party data and content to provide our services and if we were unable to obtain content at reasonable prices, or at all, our gross margins and our ability to provide our services would be harmed.
• Network failures, disruptions or capacity constraints in our third party hosted data center facilities could affect the performance of our navigation services and harm our reputation and our revenue.
• We may not be able to enhance our location services to keep pace with technological and market developments, or develop new location services in a timely manner or at competitive prices.
• The U.K.’s decision to leave the EU will have uncertain effects and could adversely affect us.
• We rely on our management team and need specialized personnel to grow our business, and the loss of one or more key employees or our inability to attract and retain qualified personnel could harm our business.
• We rely on network infrastructures provided by our wireless carriers, mobile phones and in-car wireless connections for the delivery of our navigation services to end users.
• Mergers, consolidations or other strategic transactions in the mapping data industry could weaken our competitive position, reduce the number of our map providers and adversely affect our business.
• Changes in business direction and market conditions could lead to charges related to structural reorganization and discontinuation of certain products or services, which may adversely affect our financial results.
• We operate in an industry with extensive intellectual property litigation. Claims of infringement against us, our customers, or other business partners may cause our business, operating results and financial condition to suffer.
• Unauthorized control or manipulation of our systems in vehicles may cause them to operate improperly or not at all, or compromise their safety and data security, which could result in loss of confidence in us and our products, cancellation of contracts with certain of our automobile manufacturer or tier-one customers and harm our business.
• Our business is subject to online security risks, including potential security and privacy incidents.
• Vulnerabilities in our products and services have been publicly disclosed before, and if we are unable to adequately detect and address vulnerabilities in our products and services, it may result in harm to our business.
• Changes in government regulation of the wireless communications, automobile and in car commerce industries may adversely affect our business.
• We are subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection and other matters and violations of these complex and dynamic laws, rules and regulations may result in claims, changes to our business practices, monetary penalties, increased costs of operations, and/or other harms to our business.
• Certain of our products are subject to U.S. export controls; where we fail to comply with these laws, we could suffer monetary or other penalties.
• Government regulation designed to protect end user privacy may make it difficult for us to provide our services or provide in car commerce services.
• If we are unable to obtain the required government licenses or approvals to comply with government regulation relating to map data and location-based services, we may not be able to provide our products and services and our business could be adversely impacted.
• If we are unable to protect our intellectual property and proprietary rights, or if claims are asserted against us, our competitive position and our business could be harmed.
• Confidentiality agreements with employees and others may not adequately prevent disclosure of our trade secrets and other proprietary information.
• Our use of open source software could negatively affect our ability to sell our products and services and subject us to possible litigation.
• As a public company, we are obligated to develop and maintain effective internal control over financial reporting. We may not always complete our assessment of the effectiveness of our internal control over financial reporting in a timely manner, or such internal control may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
• We will continue to incur high costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could harm our operating results.
• Regulations relating to investments in offshore companies by Chinese residents may subject our Chinese-resident beneficial owners or our Chinese subsidiaries to liability or penalties, limit our ability to inject capital into our Chinese subsidiaries, limit our Chinese subsidiaries’ ability to increase their registered capital or limit their ability to distribute profits to us.
• If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.
• Our stock price has fluctuated significantly and may continue to fluctuate in the future.
• The concentration of ownership of our capital stock limits your ability to influence corporate matters.
• Certain provisions in our charter documents and under Delaware law could limit attempts by our stockholders to replace or remove members of our board of directors or current management and may adversely affect the market price of our common stock.
• We have a share repurchase program, but we cannot guarantee that our repurchase of shares will enhance long-term stockholder value. Our share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves.