DOCN

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How DOCN rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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In addition to the other risks described herein, factors that may affect our results of operations include the following: • fluctuations in demand for or pricing and usage of our platform and products; • our ability to attract new customers and retain existing customers, including increasing their usage of our products; • customer expansion rates; • integration of new products; • timing and amount of our investments and capital expenditures related to successfully optimizing, utilizing and expanding our data center facilities; • the investment in and integration of new products and features relative to investments in our existing infrastructure and products; • our ability to control costs, including our operating expenses, and the timing of payment for expenses; • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments and other non-cash charges; • the amount and timing of costs associated with recruiting, training and integrating new employees and retaining and motivating existing employees; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, including heightened inflation or changes in interest rates, uncertainty regarding changes in trade policies, and economic conditions specifically affecting industries in which our customers participate; • changes in regulatory or legal environments that may cause us to, among other elements, be unable to continue operating in a particular market, remove certain customers from our platform, and/or incur expenses associated with compliance; • changes in the competitive dynamics of our market, including consolidation among competitors or customers or new entrants into our market; • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and platform capabilities; • our ability to control fraudulent registrations and usage of our platform, reduce bad debt and lessen capacity constraints on our data centers, servers and equipment; and • the impact of new accounting pronouncements.
If our self-service customer acquisition model is not as effective as we anticipate or our sales force is not successful at growing our customer base, specifically our DNE Customers, our future growth will be impacted.
We are focused on expanding the number of DNE Customers on our platform, both through expanding usage by existing customers and attracting new DNE Customers.
Net new sales to DNE Customers involve risks that may not be present or that are present to a lesser extent with sales to smaller customers.
Sales to DNE Customers involve risks that may not be present or that are present to a lesser extent with sales to smaller customers, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales.
For example, DNE Customers may require considerable time to evaluate and test our solutions and those of our competitors prior to making a decision on whether to subscribe to our platform.
Moreover, DNE Customers often begin to deploy our products on a limited basis, but nevertheless demand configuration, integration services and pricing negotiations, which increase our upfront investment in the sales effort with no guarantee that these customers will deploy our products widely enough across their organization to justify our substantial upfront investment.
We intend to continue to devote substantial resources to the market for our DNE Customers and the broader market for growing technology companies.
A growing part of our business involves AI/ML products and services, and we are devoting significant resources to develop and deploy such strategies.
The AI/ML landscape is rapidly evolving and may create risks and challenges for our business.
There can be no assurance that we will realize the desired or anticipated benefits with respect to the significant resources we are devoting to develop and deploy our AI/ML strategies.
Accordingly, it is uncertain whether our AI/ML strategies will attract customers or generate revenue required to succeed in this highly competitive and rapidly changing market, and the failure to realize the anticipated benefits could adversely affect our business operating results or financial condition.
We have developed policies governing the use of AI/ML technology to help reasonably ensure that such AI/ML technology is developed and used in a responsible manner by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, financial information, personal data we may collect or process, and customer information, are protected.
Finally, the use of AI/ML technology also presents emerging ethical issues and if our use of third-party AI/ML technology becomes controversial or if there is noncompliance with our policies governing the use of AI/ML technology, we may experience brand or reputational harm, competitive harm or legal liability.
We rely on third-party data center providers to help ensure the functionality of our platform and products.
Other factors, many of which are beyond our control, that can affect the delivery, performance, and availability of our platform and products include: • the development, maintenance, and functioning of the infrastructure of the internet as a whole; • the performance and availability of third-party telecommunications services with the necessary speed, data capacity, and security for providing reliable internet access and services; • the failure of our redundancy systems, in the event of a service disruption at one of the facilities hosting our network infrastructure, to redistribute load to other components of our network; • the failure of our disaster recovery and business continuity plans; • the failure of utility providers to deliver power at sufficient levels on commercially acceptable terms to support our data centers; and • decisions by the owners and operators of the co-location and ISP-partner facilities where our network infrastructure is deployed or by global telecommunications service provider partners who provide us with network bandwidth to terminate our contracts, discontinue services to us, shut down operations or facilities, increase prices, change service levels, limit bandwidth, declare bankruptcy, breach their contracts with us, or prioritize the traffic of other parties.
In addition, if we do not optimize and operate these data center facilities efficiently, or if we fail to expand our data centers in a timely manner to meet increased customer demand, it could result in either lack of available capacity (resulting in poor service performance or technical issues) or excess data center capacity (resulting in increased unnecessary costs), both of which could result in the dissatisfaction or loss of customers and cause our business, results of operations and financial condition to suffer.
Security incidents (including breaches of security) or unauthorized access to our platform and products have in the past and may in the future result in the loss of our or our customers’, employees’ or users’ data, litigation, disruptions to our business operations, indemnity obligations, fines, penalties, disputes, regulatory investigations and actions, and other liabilities.
We have in the past and may in the future also be impacted by and the target of cyber-attacks by third parties seeking unauthorized access to our or our customers’, employees’ or users’ sensitive or proprietary data or to disrupt our ability to provide our services.
Cyber-attacks, computer malware, viruses, supply chain attacks, social engineering (including through AI-enabled deep fakes, which may be increasingly more difficult to identify as fake, and spear phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats have become more prevalent in our industry, particularly against cloud services.
In addition, we must also continue to effectively manage our capital expenditures by maintaining and expanding our data center capacity, servers and equipment, grow in geographies where we currently have a small presence and support the performance, features and reliability of our service offerings and our customer service to remain competitive in a rapidly changing technological environment.
Our reliance on these suppliers exposes us to risks, including: • reduced control over production costs and constraints based on the then current availability, terms, and pricing of these components; • competition with larger cloud computing companies and other consumers with respect to high demand equipment, such as GPUs; • limited ability to control the quality, quantity and cost of our products or of their components; • the potential for binding price or purchase commitments with our suppliers at higher than market rates; • limited ability to adjust production volumes in response to our customers’ demand fluctuations; • labor and political unrest at facilities we do not operate or own; • geopolitical disputes and tensions, regulatory restrictions and sanctions disrupting our supply chain; • changes in trade policies and related uncertainties, including the imposition and enforceability of tariffs, trade controls and other trade barriers or retaliation for those measures by other governments, which may impact the pricing and availability of these components and future pricing expectations; • business, legal compliance, litigation and financial concerns affecting our suppliers or their ability to manufacture and ship our products in the quantities, quality and manner we require; • impacts on our supply chain from adverse public health developments, including outbreaks of contagious diseases; and • disruptions due to floods, earthquakes, storms and other natural disasters, particularly in countries with limited infrastructure and disaster recovery resources.
Examples in this category include OVHcloud, Akamai (Linode), Hetzner, Vultr, and Contabo.
In 2024, we hired a Chief Executive Officer, Chief Ecosystem and Growth Officer and Chief Revenue Officer, and in 2026, we hired a new Chief Product and Technology Officer, in addition to other members of senior management.
Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, supply chain disruptions, inflationary pressures, interest rates, financial and credit market fluctuations, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, international trade relations, economic sanctions, political turmoil, political instability and transitions of power in regions where we operate, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting Russia, Ukraine, the Middle East or elsewhere could cause a decrease in business investments in information technology or otherwise decrease or delay business spending by our current and prospective customers and business partners, reduce demand for or usage of our products and services and negatively affect the growth of our business and our results of operations.
Geopolitical risks, including those arising from trade tension and/or the imposition and enforceability of trade tariffs or other changes in trade policies and related uncertainties (including U.S. tariffs imposed or threatened to be imposed, any retaliatory actions taken by other countries, and uncertainties regarding the ability to obtain refunds for previously paid tariffs that have subsequently been invalidated), terrorist activity or acts of civil or international hostility, and other geopolitical conflicts and developments, including tensions between China and Taiwan, are increasing.
Macroeconomic and political conditions and uncertainties have in the past adversely affected, and may in the future adversely affect, our business, results of operations and financial condition, and any related impacts or disruptions may also exacerbate the impact of other risks described in this Annual Report on Form 10-K.
Our failure to successfully manage our international operations and the associated risks could limit the future growth and success of our business.
In addition, increased interest rates could adversely affect the value of our investments and cash on hand and increase our borrowing costs, and could also increase our customers' operating costs, which could result in reduced less demand for our products or services, or delays in new orders, renewals or payments due to us.
The impact of economic conditions, including the effects of changing interest rates, could adversely affect our business, operating results and financial condition.
As of December 31, 2025, we had net operating losses (“NOL”) carryforwards for federal, state and foreign income tax purposes and other tax credit carryforwards for federal and state tax purposes.
On May 5, 2025, we entered into the Credit Agreement, which provides for the Term Loan Facility and the Revolving Facility (collectively, the “2025 Credit Facility”).
Upon entry into the Credit Agreement, we terminated the 2022 Credit Facility.
In addition, on August 14, 2025, we issued $625.0 million aggregate principal amount of 0.00% convertible senior notes due 2030 (the “2030 Convertible Notes”) in a private placement.
We used approximately $83.9 million of the net proceeds from the 2030 Convertible Notes offering to pay the cost of related capped call transactions, and approximately $1.131 billion, consisting of approximately $606.1 million of the net proceeds from the 2030 Convertible Notes offering, together with $380.0 million of term loans under the Term Loan Facility and cash on hand, to repurchase in cash approximately $1.188 billion aggregate principal amount of our 0.00% Convertible Senior Notes due 2026.
As of December 31, 2025, we had $420.0 million borrowing capacity available under our 2025 Credit Facility.
We may enter into other financing arrangements from time to time.
For example, during the year ended December 31, 2025, we entered into equipment financing arrangements with a third-party financial institution for $131.5 million.
These restrictions also do not prevent us from incurring certain obligations, such as trade payables.
The capped call transactions entered into in connection with the issuance of the 2030 Convertible Notes subject us to counterparty risk, may not operate as planned and could affect the value of our common stock.

and 73 more.

Gone since FY2024

In addition to the other risks described herein, factors that may affect our results of operations include the following: • fluctuations in demand for or pricing and usage of our platform and products; • our ability to attract new customers and retain existing customers; • customer expansion rates; • integration of new products; • timing and amount of our investments and capital expenditures related to successfully optimizing, utilizing and expanding our data center facilities; • the investment in and integration of new products and features relative to investments in our existing infrastructure and products; • our ability to control costs, including our operating expenses, and the timing of payment for expenses; • the amount and timing of non-cash expenses, including stock-based compensation, goodwill impairments and other non-cash charges; • the amount and timing of costs associated with recruiting, training and integrating new employees and retaining and motivating existing employees; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, and economic conditions specifically affecting industries in which our customers participate; • changes in regulatory or legal environments that may cause us to, among other elements, be unable to continue operating in a particular market, remove certain customers from our platform, and/or incur expenses associated with compliance; • changes in the competitive dynamics of our market, including consolidation among competitors or customers or new entrants into our market; • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our products and platform capabilities; • our ability to control fraudulent registrations and usage of our platform, reduce bad debt and lessen capacity constraints on our data centers, servers and equipment; and • the impact of new accounting pronouncements.
If our self-service customer acquisition model is not as effective as we anticipate or our sales force is not successful at growing our customer base, specifically our Higher Spend Customers, our future growth will be impacted.
We are focused on expanding the number of Higher Spend Customers on our platform, both through expanding usage by existing customers and attracting new Higher Spend Customers.
Net new sales to Higher Spend Customers involve risks that may not be present or that are present to a lesser extent with sales to smaller customers.
Sales to Higher Spend Customers involve risks that may not be present or that are present to a lesser extent with sales to smaller customers, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales.
For example, Higher Spend Customers may require considerable time to evaluate and test our solutions and those of our competitors prior to making a decision on whether to subscribe to our platform.
Moreover, Higher Spend Customers often begin to deploy our products on a limited basis, but nevertheless demand configuration, integration services and pricing negotiations, which increase our upfront investment in the sales effort with no guarantee that these customers will deploy our products widely enough across their organization to justify our substantial upfront investment.
We intend to continue to devote substantial resources to the market for our Higher Spend Customers and the broader market for growing technology companies.
While we believe that the AI/ML offerings and services that we offer to customers will drive significant growth in our business, the AI/ML landscape is rapidly evolving and may create risks and challenges for our business.
We have developed policies governing the use of AI/ML technology to help reasonably ensure that such AI/ML technology is developed and used in a trustworthy manner by our employees, contractors, and authorized agents and that our assets, including intellectual property, competitive information, financial information, personal data we may collect or process, and customer information, are protected.
Finally, the use of AI/ML technology also presents emerging ethical issues and if our use of third-party AI/ML technology becomes controversial, we may experience brand or reputational harm, competitive harm or legal liability.
We rely on third-party data center providers to ensure the functionality of our platform and products.
Other factors, many of which are beyond our control, that can affect the delivery, performance, and availability of our platform and products include: • the development, maintenance, and functioning of the infrastructure of the internet as a whole; • the performance and availability of third-party telecommunications services with the necessary speed, data capacity, and security for providing reliable internet access and services; • the failure of our redundancy systems, in the event of a service disruption at one of the facilities hosting our network infrastructure, to redistribute load to other components of our network; • the failure of our disaster recovery and business continuity plans; and • decisions by the owners and operators of the co-location and ISP-partner facilities where our network infrastructure is deployed or by global telecommunications service provider partners who provide us with network bandwidth to terminate our contracts, discontinue services to us, shut down operations or facilities, increase prices, change service levels, limit bandwidth, declare bankruptcy, breach their contracts with us, or prioritize the traffic of other parties.
In addition, if we do not optimize and operate these data center facilities efficiently, or if we fail to expand our data centers to meet increased customer demand, it could result in either lack of available capacity (resulting in poor service performance or technical issues) or excess data center capacity (resulting in increased unnecessary costs), both of which could result in the dissatisfaction or loss of customers and cause our business, results of operations and financial condition to suffer.
Security incidents (including breaches of security) or unauthorized access to our platform and products have in the past and may in the future result in the loss of our or our customers’ or users’ data, litigation, disruptions to our business operations, indemnity obligations, fines, penalties, disputes, regulatory investigations and actions, and other liabilities.
We have in the past and may in the future also be impacted by and the target of cyber-attacks by third parties seeking unauthorized access to our or our customers’ or users’ sensitive or proprietary data or to disrupt our ability to provide our services.
Cyber-attacks, computer malware, viruses, supply chain attacks, social engineering (including through deep fakes, which may be increasingly more difficult to identify as fake, and spear phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats have become more prevalent in our industry, particularly against cloud services.
In addition, we must also continue to effectively manage our capital expenditures by maintaining and expanding our data center capacity, servers and equipment, grow in geographies where we currently have a small presence and ensure that the performance, features and reliability of our service offerings and our customer service remain competitive in a rapidly changing technological environment.
Our reliance on these suppliers exposes us to risks, including: • reduced control over production costs and constraints based on the then current availability, terms, and pricing of these components; • competition with larger cloud computing companies and other consumers with respect to high demand equipment, such as GPUs; • limited ability to control the quality, quantity and cost of our products or of their components; • the potential for binding price or purchase commitments with our suppliers at higher than market rates; • limited ability to adjust production volumes in response to our customers’ demand fluctuations; • labor and political unrest at facilities we do not operate or own; • geopolitical disputes, regulatory restrictions and sanctions disrupting our supply chain; • business, legal compliance, litigation and financial concerns affecting our suppliers or their ability to manufacture and ship our products in the quantities, quality and manner we require; • impacts on our supply chain from adverse public health developments, including outbreaks of contagious diseases; and • disruptions due to floods, earthquakes, storms and other natural disasters, particularly in countries with limited infrastructure and disaster recovery resources.
Examples in this category include OVHcloud, Akamai (Linode), Hetzner, Vultr, Contabo, Scaleway, UpCloud, and Heroku.
In 2024, we hired a Chief Executive Officer, Chief Product and Technology Officer, Chief Ecosystem and Growth Officer and Chief Revenue Officer, in addition to other members of senior management.
Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, supply chain disruptions, inflationary pressures, interest rates, financial and credit market fluctuations, volatility in the capital markets, liquidity concerns at, and failures of, banks and other financial institutions, international trade relations, economic sanctions, political turmoil, political instability and transitions of power in regions where we operate, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe or elsewhere, including military actions affecting Russia, Ukraine, the Middle East or elsewhere could cause a decrease in business investments in information technology and negatively affect the growth of our business and our results of operations.
Geopolitical risks, including those arising from trade tension and/or the imposition of trade tariffs (including recent U.S. tariffs imposed or threatened to be imposed and any retaliatory actions taken by other countries), terrorist activity or acts of civil or international hostility, are increasing.
Any such disruptions may also exacerbate the impact of other risks described in this Annual Report on Form 10-K.
As of December 31, 2024, we had net operating losses (NOL) carryforwards for federal, state and foreign income tax purposes and other tax credit carryforwards for federal and state tax purposes.
In November 2021, we issued $1.5 billion aggregate principal amount of 0% convertible senior notes due 2026 in a private placement.
As of December 31, 2024, we had no outstanding indebtedness, but significant borrowing capacity, under our credit facility with KeyBank National Association, as administrative agent, and the other lenders party thereto.
These restrictions also do not prevent us from incurring obligations, such as trade payables.
In addition, in connection with our acquisition of Paperspace, we acquired a number of equipment leases, which remain outstanding.
Pursuant to the terms of the equipment leases, we may be restricted from engaging in certain activities.
The credit agreement that governs our credit facility imposes significant operating and financial restrictions on us.
Our failure to comply with any of the existing restrictions described above or any other restrictions associated with the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their due date.
Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our facilities or the facilities of our public cloud providers could result in disruptions, outages, and other performance and quality problems.
If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster and to execute successfully on those plans in the event of a disaster or emergency, our business would be seriously harmed.
Customer or user content or activity may be infringing, illegal, hostile, offensive, unethical, or inappropriate, may violate our terms of service or a customer’s own policies, or may be intended to, or inadvertently, circumvent or threaten the confidentiality, integrity, security or availability of information or network services of other products, services, or systems, including, for example, by launching various attacks.
These changes could affect, among other things, areas related to our business such as the following: • the liability of online service providers for actions by customers or users, including fraud, illegal content, spam, phishing, libel and defamation, hate speech, infringement of third-party intellectual property and other abusive conduct; • other claims based on the nature and content of internet materials; • user data privacy and security issues; • consumer protection risks; • evolving regulatory framework for AI/ML; • digital marketing aspects; • characteristics and quality of services, including changes to networking relationships and anti-circumvention technologies; • the contractual terms within our terms of service and other agreements with customers; • cross-border e-commerce issues; and • ease of access by our users to our platform.
Such legal changes could increase our costs of doing business, subject our business to increased liability for non-compliance, or prevent us from marketing or delivering our services over the internet or in specific jurisdictions, thereby materially harming our business and results of operations.
In addition, certain jurisdictions may attempt to require us to establish a corporate presence in the country, which, if we were to comply, may also increase our exposure to government requests for censorship and to data breaches in general and, in the case of noncompliance, may subject us to fines or being blocked from doing business in the region.
The success of our business depends on our customers’ continued and unimpeded access to our platform on the internet and, as a result, also depends on internet providers and the related regulatory environment.
Our customers must have internet access in order to use our platform.

and 68 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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