Tucows 2013 Annual Report Download - page 20

The pace of recovery of U.S. and global economies, political and economic conditions, and the debt crisis in the United
States and other countries may adversely affect our revenue and results of operations and stock price.
The U.S. and other global economies continue to experience slow recovery from the recent recession that affected
the economy as a whole, resulting in continued issues with the pace of economic growth, loss of consumer confidence and
uncertainty about economic stability, and increased unemployment. U.S. and foreign credit and financial markets continue to
experience instability, resulting in increased volatility in the stock market and reduced availability of credit. The U.S.
continues to face budgetary issues and constraints which may result in a failure to raise the "debt ceiling" and austerity
measures such as automatic sequesters, cuts in government spending and programs, increased taxes, and other related actions
or inactions by the U.S. government. Other countries and economies continue to experience adverse effects of sovereign debt
crises and related austerity measures. These issues may cause a cascading effect impacting other countries and economies.
Our services may be considered discretionary on the part of many of our current and potential customers and be dependent
upon levels of consumer spending. As a result, resellers and consumers considering whether to purchase our services may be
influenced by macroeconomic factors that affect consumer spending such as unemployment, continuing increases in fuel
costs, conditions in the residential real estate and mortgage markets and access to credit.
To the extent conditions in the economy remain uncertain or deteriorate, our business could be impacted as
customers choose to leave our services, to reduce their service level or to stop purchasing our services. In addition, our
efforts to attract new customers may be adversely affected. The current economic conditions may also adversely impact our
key vendors. In uncertain and adverse economic conditions, decreased consumer spending is likely to result in a variety of
negative effects such as reduction in revenues, increased costs, lower gross margin percentages, increased allowances for
doubtful accounts and write-offs of accounts receivable, and recognition of impairments of assets, including goodwill and
other intangible assets. Uncertainty and adverse economic conditions may also lead to a decreased ability to collect payment
for our services due primarily to a decline in the ability of our business customers to use or access credit, including through
credit cards, which is how most of our customers pay for our services. We also expect to continue to experience volatility in
foreign exchange rates, which could negatively impact the amount of expenses we incur and the net assets we record in
future periods. If any of the above risks are realized, we may experience a material adverse effect on our business, financial
condition and results of operations.
Our quarterly and annual operating results may fluctuate and our future revenues and profitability are uncertain.
Our quarterly and annual operating results may fluctuate significantly in the future as a result of a variety of factors,
many of which are outside of our control. Our quarterly and annual operating results may be adversely affected by a wide
variety of factors, including:
•
our ability to maintain revenue growth at current levels or anticipate a decline in revenue from any of our services;
•
our ability to identify and develop new technologies or services and to commercialize those technologies into new
services in a timely manner;
•
the mix of our services sold during the quarter or year;
•
our ability to make appropriate decisions which will position us to achieve further growth;
•
concentrated capital expenditures in any particular period to support our growth or for other reasons;
•
changes in our pricing policies or those of our competitors, changes in domain name fees charged to us by Internet
registries or ICANN, or other competitive pressures on selling prices;
•
our ability to identify, hire, train, motivate and retain highly qualified personnel, and to achieve targeted productivity
levels;
•
market acceptance of Internet services generally and of new and enhanced versions of our services in particular;
•
our ability to establish and maintain a competitive advantage;
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the continued development of our global distribution channel and our ability to compete in multiple countries
successfully as part of our sales and marketing strategy;