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Financial report summary
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Troika MediaRisks
- The COVID-19 pandemic has had, and may continue to have, an adverse impact on our business, financial condition and results of operations.
- Our growth and financial health are subject to a number of economic risks.
- Our historical reductions in our prices are expected to continue in an inflationary economy even as our costs may increase.
- Events beyond our control may impact our ability to provide our services to our customers or increase the costs or reduce the profitability of providing our services.
- We need to retain existing customers and continue to add new customers in order to become consistently profitable and cash flow positive.
- A substantial and long-term shift to remote work may impact our ability to add new customers and to retain existing customers.
- Lower vacancy rates as a result of diminished lease terminations and increased leasing and subleasing activity will be a key factor in driving renewed growth in our corporate business.
- Our business and operations are growing rapidly, and we may not be able to efficiently manage our growth.
- Demand from certain employees to work remotely may reduce the attractiveness of our business as an employer versus some competitors who are allowing employees to work remotely.
- Our connections to the Internet require us to establish and maintain relationships with other providers, which we may not be able to maintain.
- The sector in which we operate is highly competitive, and we may not be able to compete effectively.
- Our business could suffer because telephone companies and cable companies may provide better delivery of certain Internet content, including content originating on their own networks, than content on the public Internet.
- Our network may be the target of potential cyber-attacks and other security breaches that could have significant negative consequences.
- If the information systems that we depend on to support our customers, network operations, sales, billing and financial reporting do not perform as expected, our operations and our financial results may be adversely affected.
- Our network is comprised of a number of separate components, and we may be unable to obtain or maintain the agreements necessary to augment or maintain our network.
- Our off-net business could suffer delays and problems due to the actions of “last mile” providers on whom we are partially dependent.
- Our business could suffer from an interruption of service from our fiber providers.
- Our international operations expose us to numerous risks.
- As an Internet service provider, we may incur liabilities for the content disseminated through our network or for network failures, delays or errors in transmissions.
- Existing and proposed privacy regulations may impact our business.
- Changes in laws, rules, and enforcement could adversely affect us.
- We may be required to censor content on the Internet, which we may find difficult to do and which may impact our ability to provide our services in some countries as well as impact the growth of Internet usage, upon which we depend.
- Governments may assert that we are liable for taxes which we have not collected from our customers or paid to our vendors, and we may have to begin collecting a multitude of taxes if Internet services become subject to taxation similar to the taxation of telephone service.
- The utilization of certain of our net operating loss carryforwards is limited and depending upon the amount of our taxable income we may be subject to paying income taxes earlier than planned.
- We have substantial debt which we may not be able to repay when due.
- Our substantial level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our notes and our other indebtedness.
- Despite our leverage we may still be able to incur more debt. This could further exacerbate the risks that we and our subsidiaries face.
- The agreements governing our various debt obligations impose restrictions on our business and could adversely affect our ability to undertake certain corporate actions.
- To service our indebtedness, we will require a significant amount of cash. However, our ability to generate cash depends on many factors, many of which are beyond our control.
Management Discussion
- In this section, we discuss the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022. For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022.
- Service Revenue. We continually work to grow our total service revenue by increasing the number of potential customers that we can reach on our network. We do this by investing capital to expand the geographic footprint of our network, increasing the number of buildings that we are connected to, including CNDC’s and MTOB’s, and increasing our penetration rate into our existing buildings.
- These efforts broaden the global reach of our network and increase the size of our potential addressable market. We also seek to grow our service revenue by investing in our sales and marketing team. We typically sell corporate connections at similar pricing to our competitors, but our customers benefit from our significantly faster speeds, greater aggregate throughput, enhanced service level agreements and rapid installation times. In the net-centric market, we offer comparable services in terms of capacity but typically at significantly lower prices.