What changed in this filing

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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-28 · 230 added, 114 removed, 590 unchanged (37% of the section changed)

8 unchanged sentences

• predicting the long-term rate of client subscription renewals or adoption of our solutions;

• the unpredictable and time-consuming nature of our sales cycles;

• the unpredictable, time-consuming and costly nature of our sales cycles;

• integration with and reliance on third-party software, content and services;

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• cybersecurity breaches or other compromises of our security measures or those of third parties upon which we rely;

• privacy and data security concerns, laws, regulations and standards and our processing and use of the PI of end users;

• privacy and data security concerns, data collection and transfer restrictions, contractual obligations, laws, regulations and standards and our processing and use of the PI of end users;

• risks and challenges associated with the development and use of AI technologies;

• intense competition in the markets we serve;

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• reliance on the development of the market for digital banking solutions;

• regulations and laws applicable to us, our clients and our solutions;

• regulations and laws applicable to us, our clients and our solutions, including the impact of tariffs and trade policies on us and our clients;

• protecting our intellectual property rights and defending ourselves against claims that we are misappropriating the intellectual property rights of others;

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• the fluctuation of our quarterly and annual results of operations relative to our expectations and guidance;

• the way we recognize revenue, which has the effect of delaying changes in the subscriptions for our solutions from being reflected in our operating results;

• our limited operating history, our history of operating losses and our ability to use our net operating loss carryforwards;

• our ability to raise sufficient capital and the resulting dilution and the terms of our Amended Credit Agreement (as defined below);

• the way we recognize revenue, beginning from the live use of the service, which causes changes in client subscriptions to not be immediately apparent in our reported operating results;

• our ability to raise sufficient capital in a timely manner and the resulting dilution and the terms of our Amended Credit Agreement (as defined below);

• unanticipated changes in tax laws or regulations;

• loss of emerging growth company status;

• risks from our indebtedness and liabilities;

• our ability to meet certain operating and financial covenants and restrictions under our Amended Credit Agreement (as defined below);

• our ability to raise necessary funds to repurchase the 2030 Convertible Notes (as defined below) or to pay any cash amounts due upon their maturity or conversion of the 2030 Convertible Notes and dilution to our common stock upon the conversion of the 2030 Convertible Notes;

• risks from our accounting method of the 2030 Convertible Notes;

• counterparty risk with respect to the Capped Calls (as defined below);

• future strategic initiatives, including acquisitions of businesses and strategic investments;

• future sales of shares of our common stock, our lack of an intention to pay dividends and significant influence of our principal stockholders;

• anti-takeover and exclusive forum provisions in our governing documents.

• provisions in the Indenture (as defined below) delaying or preventing beneficial takeover and anti-takeover and exclusive forum provisions in our governing documents;

• the volatility of the trading price of our common stock;

• risks from actions of activist stockholders or others;

• significant expenses and administrative burdens as a public company

Risks Relating to Our Business

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In addition, for us to maintain or improve our results of operations, it is important that our clients renew their subscriptions with us on similar or more favorable terms to us when their existing subscription term expires.

Our revenue growth rates may decline or fluctuate as a result of a number of factors, including client spending levels, client dissatisfaction with our solutions, decreases in the number of client customers, changes in the type and size of our clients, pricing changes, competitive conditions, the loss of our clients to other competitors and general economic conditions.

Our revenue growth rates may decline or fluctuate as a result of a number of factors, including client spending levels, client dissatisfaction with our solutions, decreases in the number of client customers or members, changes in the type and size of our clients, pricing changes, competitive conditions, the loss of our clients to other competitors and general economic conditions.

We cannot assure you that our current clients will renew or expand their use of our solutions.

If we are unable to attract new clients or retain or attract new business from current clients, our business, financial condition and results of operations may be materially and adversely affected.

The growth of our business also depends on our ability to develop and maintain resale agreements with favorable terms for third-party solutions through our digital banking platform agreements.

The growth of our business also depends on our ability to develop and maintain resale agreements with favorable terms for third-party solutions through our Digital Sales and Service Platform agreements.

If we are unable to develop and maintain such resale agreements, our business, financial condition and results of operations may be materially and adversely affected.

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While we may choose to engage in a broader marketing campaign to further promote our brand, this effort may not be successful or cost effective.

Our brand promotion activities may not generate customer awareness or yield increased revenues, and even if they do, any increased revenues may not offset the expenses we incur in building our brand.

Our brand promotion activities may not generate client awareness or yield increased revenues, and even if they do, any increased revenues may not offset the expenses we incur in building our brand.

If we are unable to maintain or enhance client awareness in a cost-effective manner, our brand and our business, financial condition and results of operations could be materially and adversely affected.

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If we are unable to effectively integrate our solutions with other systems used by our clients, or if there are performance issues with such third-party systems, our solutions will not operate effectively, and our business, financial condition and results of operations could be materially and adversely affected.

The Alkami Digital Banking Platform integrates with other third-party systems used by our clients, including core processing and payment systems.

The Alkami Digital Sales & Service Platform integrates with other third-party systems used by our clients, including core processing and payment systems.

We do not have formal arrangements with many of these third-party providers regarding our access to their application program interfaces to enable these client integrations.

If we are unable to effectively integrate with third-party systems, our clients’ operations may be disrupted, which could result in disputes with clients, negatively impact client satisfaction and materially and adversely affect our business, financial condition and results of operations.

Additionally, if we are unable to address our clients’ needs or preferences in a timely fashion or further develop and enhance our solutions, or if a client is not satisfied with the quality of work performed by us or with the technical support services rendered, we could incur additional costs to address the situation, and clients’ dissatisfaction with our solutions could damage our ability to maintain or expand our client base.

Additionally, if we are unable to address our clients’ needs or preferences in a timely fashion or further develop

and enhance our solutions, or if a client is not satisfied with the quality of work performed by us or with the technical support services rendered, we could incur additional costs to address the situation, and clients’ dissatisfaction with our solutions could damage our ability to maintain or expand our client base.

If the software of such third-party providers has performance or other problems, such issues may reflect poorly on us and the adoption and renewal of our solutions, which could significantly harm our reputation.

Moreover, any negative publicity related to our solutions, regardless of its accuracy or whether the ultimate cause of any poor performance actually results from our products or from the systems of our clients, may further damage our business by affecting our reputation and may materially and adversely affect our business, financial condition and results of operations.

Our business, financial condition and results of operations could be materially and adversely affected if our clients are not satisfied with our digital banking solutions or our systems and infrastructure fail to meet their needs.

If our clients are not satisfied with our digital banking solutions or our systems and infrastructure fail to meet their needs, our business, financial condition and results of operations could be materially and adversely affected.

Our business depends on our ability to satisfy our clients and meet their digital banking needs.

Our clients use a variety of network infrastructure, hardware and software, and our digital banking solutions must support the specific configuration of our clients’ existing systems, including in many cases the solutions of third-party providers.

Our implementation expenses increase when clients have unexpected data, network infrastructure, hardware or software technology challenges, or complex or unanticipated business or regulatory requirements.

In addition, our clients typically require complex acceptance testing related to the implementation of our solutions.

Implementation delays may also require us to delay revenue recognition under the related sales agreement longer than expected.

Further, because we do not fully control our clients’ implementation schedules, if our clients do not allocate the internal resources necessary to meet implementation timelines or if there are unanticipated implementation delays or difficulties as a result of expansions of project scope or otherwise, our revenue recognition may be delayed.

Further, any failure of or delays in our systems could cause service interruptions or impaired system performance.

Some of our client agreements require us to issue credits for downtime in excess of certain thresholds and in some instances give our clients the ability to terminate their

agreements with us in the event of significant amounts of downtime.

Any failure of or delays in our systems could cause service interruptions or impaired system performance.

Some of our client agreements require us to issue credits for downtime in excess of certain thresholds and in some instances give our clients the ability to terminate their agreements with us in the event of significant amounts of downtime.

If sustained or repeated, these performance issues could reduce the attractiveness of our solutions to new and existing clients, cause us to lose clients, decrease our revenues and lower our renewal rates by existing clients, each of which could materially and adversely affect our business, financial condition and results of operations.

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Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

Defects, errors or other performance problems in the Alkami Digital Banking Platform could harm our reputation, result in significant costs to us, impair our ability to sell our solutions and subject us to substantial liability.

The Alkami Digital Banking Platform is complex and may contain defects or errors when implemented or when new functionality is released, or when we modify, enhance, upgrade and implement new systems, procedures and controls to reflect changes in our business, technological advancements and changing industry trends.

From time to time, we have discovered, and may in the future discover, defects or errors in

our solutions.

Defects, errors or other performance problems in the Alkami Digital Sales & Service Platform could harm our reputation, result in significant costs to us, impair our ability to sell our solutions and subject us to substantial liability.

The Alkami Digital Sales & Service Platform is complex and may contain defects or errors when implemented or when new functionality is released, or when we modify, enhance, upgrade and implement new systems, procedures and controls to reflect changes in our business, technological advancements and changing industry trends.

From time to time, we have discovered, and may in the future discover, defects or errors in our solutions.

Any performance problems or defects in our solutions could materially and adversely affect our business, financial condition and results of operations.

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We rely on our management team and other key employees, and the loss of one or more key employees could harm our business.

Our success and future growth depend upon the continued services of our management team, in particular Alex Shootman, our Chief Executive Officer, W.

Bryan Hill, our Chief Financial Officer, and other key employees, including in the areas of research and development, marketing, sales, services and general and administrative functions.

Our success and future growth depend upon the continued services of our management team, in particular Alex Shootman, our Chief Executive Officer, Cassandra Hudson, our Chief Financial Officer, and other key employees, including in the areas of research and development, marketing, sales, services and general and administrative functions.

From time to time, there may be changes in our management team resulting from the hiring or departure of executives, which could disrupt our business.

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In addition, our clients typically require complex acceptance testing related to the implementation of our solutions.

Implementation delays may also require us to delay revenue recognition under the related client agreement longer than expected.

Implementation delays, whether from implementation challenges or our strategic decisions, may also require us to delay revenue recognition under the related client agreement longer than expected.

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Our profit margins can vary depending on numerous factors, including the scope and complexity of our implementation efforts, the number of account holders and registered users on our solutions, the type, frequency and volume of their use of our solutions and the level of client support services required by our clients.

For example, the third-party service offerings that we resell typically have a much higher cost of revenues than the service offerings that we have internally developed, so any increase in sales of third-party services as a proportion of our subscriptions would have an adverse effect on our overall gross margin and results of operations.

For example, the third-party service offerings that we resell typically have a much higher cost of revenues than the

service offerings that we have internally developed, so any increase in sales of third-party services as a proportion of our subscriptions would have an adverse effect on our overall gross margin and results of operations.

If we are unable to increase the number of registered users and the number of transactions they perform on our solutions, the types of FIs that purchase our solutions change or the mix of solutions purchased by our clients changes, our profit margins could decrease and our business, financial condition and results of operations could be materially and adversely affected.

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We may also enter into relationships with other businesses to expand our solutions, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies.

Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to approvals that are beyond our control.

Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to conditions that are beyond our control.

In addition, we have limited experience in acquiring other businesses, and the market reaction to our acquisitions may be unfavorable, which may impact our stock price.

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If we are successful in acquiring an additional business, we may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

• our inability to integrate or benefit from acquired technologies or services;

• an inability to integrate or benefit from acquired technologies or services;

• unanticipated costs or liabilities associated with the acquisition;

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Any of our operating facilities or infrastructure may be harmed or rendered inoperable by natural or man-made disasters, including hurricanes, tornadoes, wildfires, floods, earthquakes, nuclear disasters, acts of terrorism or other criminal activities, infectious disease outbreaks or pandemic events, such as the COVID-19 pandemic, power outages and other infrastructure failures, which may render it difficult or impossible for us to operate our business for some period of time.

Various environmental and social pressures, including climate change, may increase the frequency or intensity of such disasters or contribute to chronic changes that may have similar impacts.

Our facilities would likely be costly to repair or replace, and any such efforts would likely require substantial time.

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We have expanded our presence abroad by establishing a subsidiary in India during 2024.

While its operations are currently immaterial, we may face challenges related to regulatory compliance, tax implications, labor laws, currency fluctuations, and operational scaling in the future.

Our current and potential future operations in India are subject to certain risks, including:

We may face challenges related to regulatory compliance, tariffs, tax implications, labor laws, currency fluctuations, and operational scaling in the future.

Our current and potential future operations in India

are subject to certain risks, including:

• difficulties and costs of staffing and managing foreign operations as well as additional employment regulations, union workforce negotiations and potential disputes;

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We are subject to various risks associated with environmental and social matters.

There is increased scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other environmental and social matters.

There is increased scrutiny from investors, clients, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other environmental and social matters.

While we may from time to time engage in initiatives to manage such matters and address stakeholder expectations, such initiatives can be costly and may not have the desired effect.

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Regulatory expectations are likewise not uniform, which may increase the cost or complexity of compliance.

Addressing stakeholder expectations can result in a diversion of resources and management attention, and any failure to successfully navigate such expectations, as well as evolving interpretations of any existing governmental laws or requirements, may result in reputational harm, issues attracting and retaining employees or customers, regulatory or investor engagement, or other adverse impacts to our business.

Addressing stakeholder expectations can result in a diversion of resources and management attention, and any failure to successfully navigate such expectations, as well as evolving interpretations of any existing governmental laws or requirements, may result in reputational harm, issues attracting and retaining employees or clients, regulatory or investor engagement, or other adverse impacts to our business.

Risks Relating to Cybersecurity, Data Privacy and Artificial Intelligence

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We own and manage some of these IT Systems but also rely on IT Systems and related services that are operated, managed, integrated or otherwise provided by a host of third-party service providers, vendors, and business partners.

In addition, certain elements of our solutions process and store PI, including banking and payment data and other PI regarding our clients’ customers, such as social security numbers, and we may also have access to PI during various stages of the implementation process or during the course of providing client support.

We, like other organizations, particularly in the financial technology sector, are vulnerable to and have experienced cybersecurity attacks, insider threats and other incidents that threaten the confidentiality, integrity and availability of critical IT Systems and PI or other information regarding clients, client customers, vendors, employees, third-party providers, or our company and business.

In addition, certain elements of our solutions process and store PI, including banking and payment data and other PI regarding our clients’ customers or members, such as social security numbers, and we may also have access to PI during various stages of the implementation process or during the course of providing client support.

We, like other organizations, particularly in the financial technology sector, are vulnerable to and have experienced cybersecurity attacks, insider threats and other incidents that threaten the confidentiality, integrity and availability of critical IT Systems and PI or other information regarding clients, client customers or members, vendors, employees, third-party providers, or our company and business.

While to date no attacks or incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.

Information security risks for banking and technology companies such as ours have significantly increased in recent years, in part because of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.

Information security risks for banking and technology companies such as ours have significantly increased in recent years, in part because of the proliferation of new technologies, such as AI, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties.

Because of our position in the financial services industry, we expect to continue to be a target of such threats and attacks.

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Violations of our policies, procedures and technological safeguards and administrative controls designed to protect our IT Systems and applications have occurred in the past, and there can be no assurance that our cybersecurity risk management program and processes (or those of our third-party providers or partners) will prevent damage to, or interruption or breach of, our IT Systems and operations.

Given the unpredictability of the timing, nature and scope of cybersecurity attacks and other security-related incidents, it is impossible to comprehensively secure IT Systems or the data and PI we maintain in our databases, and we cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of data or PI, other security events that impact the confidentiality, integrity or availability of data, PI or our IT Systems, or the related costs of mitigating the consequences from such events.

Given the unpredictability of the timing, nature and scope of cybersecurity attacks and other security-related incidents, it is impossible to comprehensively secure IT Systems or the data and PI we maintain or use in our business, and we cannot entirely eliminate the risk of improper or unauthorized access to or disclosure of data or PI, other security events that impact the confidentiality, integrity or availability of data, PI or our IT Systems, or the related costs of mitigating the consequences from such events.

Additionally, we cannot guarantee that our insurance coverage would be sufficient to cover all losses or that relevant insurance will be available in the future on economic terms or at all.

Further, the Alkami Digital Banking Platform involves flexible and complex software solutions, which by their very nature are subject to misconfigurations, implementation errors, “bugs,” defects or other security vulnerabilities.

Further, the Alkami Digital Sales & Service Platform involves flexible and complex software solutions, which by their very nature are subject to misconfigurations, implementation errors, “bugs,” defects or other security vulnerabilities.

And, given the scanning tools we deploy in our broader network environment, we regularly identify, track and patch security vulnerabilities but are unable to comprehensively apply patches or mitigating measures or ensure that patches or measures will be applied before vulnerabilities can be exploited by a threat actor.

We have experienced unlawful attempts to disrupt or gain access to our IT Systems, and we are vulnerable to future attacks that may result in unauthorized access to or disclosure of client customer PI or other data and disruption of our or our clients’ operations.

We have experienced unlawful attempts to disrupt or gain access to our IT Systems, and we are vulnerable to future attacks that may result in unauthorized access to or disclosure of client customer or member PI or other data and disruption of our or our clients’ operations.

We cannot anticipate or prevent all techniques used by threat actors to obtain unauthorized access or to sabotage systems or implement adequate preventative measures.

Additionally, we and client customers integrate our solutions with certain third-party systems used by our clients, which have access to PI and other data about our clients.

Our ability to monitor such third parties’ security measures is limited, and a vulnerability in a third-party system with which we integrate could result in a disruption to our IT Systems or unauthorized access to or disclosure, modification, misuse, loss or destruction of our clients’ and client customers’ PI and other data, including our business information.

Additionally, we and client customers or members integrate our solutions with certain third-party systems used by our clients, which have access to PI and other data about our clients.

Our ability to monitor such third parties’ security measures is limited, and an exploited vulnerability in a third-party system with which we integrate could result in a disruption to our IT Systems or unauthorized access to or disclosure, modification, misuse, loss or destruction of our clients’ and client customers’ or members’ PI and other data, including our business information.

Any of the foregoing could result in a material adverse effect on our business, reputation, financial condition and results of operations.

In addition, because we leverage third-party providers, including cloud, software, data center and other critical technology vendors to deliver our solutions to our clients and their customers, we rely heavily on the data security technology practices and policies adopted by these third-party providers.

In addition, because we leverage third-party providers, including cloud, software, data center and other critical technology vendors to deliver our solutions to our clients and their customers or members, we rely heavily on the data security technology practices and policies adopted by these third-party providers.

Such third-party providers have access to PI and other data about our clients and employees, and some of these providers in turn subcontract with other third-party providers.

Our ability to monitor our third-party providers’ data security is limited.

A vulnerability in our third-

party providers’ software or systems, a failure of our third-party providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in a material compromise to the confidentiality, integrity or availability of our IT Systems or the data housed in our third-party solutions.

An exploited vulnerability in our third-party providers’ software or systems, a failure of our third-party providers’ safeguards, policies or procedures, or a breach of a third-party provider’s software or systems could result in a material compromise to the confidentiality, integrity or availability of our IT Systems or the data housed in our third-party solutions.

Due to the size and complexity of our technology platform and services, the amount of PI and other data that we store and the number of clients, employees and third-party providers with access to PI and other data, we are vulnerable to a variety of cybersecurity attacks and other security-related incidents and threats, which could result in a material adverse effect on our business, financial condition and results of operations.

In addition, we have acquired and continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to significant cybersecurity risks.

Cybersecurity attacks and other malicious internet-based activity continue to increase, evolve in nature and become more sophisticated, and providers of digital products and services have been and are expected to continue to be targeted.

We have incorporated and may continue to incorporate artificial intelligence/machine learning solutions and features within our business, which may create additional cybersecurity risks or increase cybersecurity risks, including risks of security breaches and incidents.

Furthermore, the use of generative artificial intelligence has made it easier for threat actors to develop and evolve attacks.

We have incorporated and will likely continue to incorporate AI/machine learning solutions and features within our business, which gives rise to additional and evolving cybersecurity risks.

Furthermore, the use of generative AI has made it easier for threat actors to develop and evolve attacks.

Threats to our IT Systems and those of our third-party providers or clients include those resulting from human error, fraud or malice on the part of employees or third parties, including state-sponsored organizations with significant financial and technological resources, or from accidental technological failure.

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We have acquired and will likely continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to additional cybersecurity, operational, and financial risks.

Any cybersecurity attacks, security breaches, phishing attacks, ransomware attacks, computer malware, computer viruses, computer hacking attacks, unauthorized access, coding or configuration errors or similar incidents experienced by us or our third-party providers could result in material operational disruptions and the material loss, compromise or corruption of client or client customer data (including PI) or data we rely on to provide our solutions, including our analytics initiatives and offerings, and impair our ability to provide our solutions and meet our clients’ requirements, resulting in decreased revenues and otherwise adversely affecting our business, financial condition and results of operations.

Any cybersecurity attacks, security breaches, phishing attacks, ransomware attacks, computer malware, computer viruses, computer hacking attacks, unauthorized access, coding or configuration errors or similar incidents experienced by us or our third-party providers could result in material operational disruptions and the material loss, compromise or corruption of client or client customer or member data (including PI) or data we rely on to provide our solutions, including our analytics initiatives and offerings, and impair our ability to provide our solutions and meet our clients’ requirements, resulting in decreased revenues and otherwise adversely affecting our business, financial condition and results of operations.

Any such incidents may also result in regulatory investigations and orders, litigation (including class actions), disputes, investigations, indemnity obligations, damages for contract breach or penalties for violation of applicable laws or regulations.

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Any security compromise in our industry, whether actual or perceived, could erode client confidence in the effectiveness of our security measures, negatively impact our ability to attract new clients, cause existing clients to elect not to renew or expand their use of our solutions or subject us to third-party lawsuits, regulatory fines or other actions or liabilities, which could materially and adversely affect our business, financial condition and results of operations.

If we are not able to detect and identify activity on our platform that might be nefarious in nature or design processes or systems to reduce the impact of similar activity at a third-party provider, our clients and/or clients’ customers could suffer material harm, including because many of our products and services are integrated with or connected to our clients’ systems and processes.

In such cases, we could face exposure to legal claims, particularly if the client and/or client customer suffered actual harm.

If we are not able to detect and identify activity on our platform that might be nefarious in nature or design processes or systems to reduce the impact of similar activity at a third-party provider, our clients and/or clients’ customers or members could suffer material harm, including because many of our products and services are integrated with or connected to our clients’ systems and processes.

In such cases, we could face exposure to legal claims, particularly if the client and/or client customer or member suffered actual harm.

We cannot ensure that any limitations of liability provisions in our client and user agreements, contracts with third-party providers and other contracts for a security lapse or breach or other security-related matter would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim.

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The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our reputation and our business, financial condition and results of operations.

In addition, our clients contractually require notification of certain data security compromises and include representations and warranties in their contracts with us that our solutions comply with certain legal and technical standards related to data security and privacy and meet certain service levels.

service levels.

In our contracts, a data security compromise or operational disruption impacting us or one of our critical vendors, or system unavailability or damage due to other circumstances, may constitute a material breach and give rise to a client’s right to terminate its contract with us.

In these circumstances, it may be difficult or impossible to cure such a breach in order to prevent clients from potentially terminating their contracts with us.

In these circumstances, it may be difficult or impossible to cure such a breach in order to prevent clients from terminating their contracts with us.

Privacy and data security concerns, data collection and transfer restrictions, contractual obligations and U.S.

and foreign laws, regulations and industry standards related to data privacy, security and protection could materially and adversely affect our business, financial condition and results of operations.

In operating our business and providing services and solutions to our clients, we collect, use, store, transmit and otherwise process sensitive employee and client data, including PI regarding client customers and other individuals, in and across multiple jurisdictions, including at times, across national borders.

In operating our business and providing services and solutions to our clients, we collect, use, store, transmit and otherwise process sensitive employee and client data, including PI regarding client customers or members and other individuals, in and across multiple jurisdictions, including at times, across national borders.

As a result, we are subject to a variety of laws and regulations in the United States, Europe and around the world, as well as contractual obligations and industry standards, regarding data privacy, security and protection.

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Data privacy, information security, and data protection are significant issues in the United States and globally.

The regulatory framework

governing the collection, processing, storage, use and sharing of certain information, particularly financial and other PI, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations.

The regulatory framework governing the collection, processing, storage, use and sharing of certain information, particularly financial and other PI, is rapidly evolving and is likely to continue to be subject to uncertainty and varying interpretations.

The occurrence of unanticipated events and development of evolving technologies often rapidly drives the adoption of legislation or regulation affecting the use, collection or other processing of data and manner in which we conduct our business.

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For example, California enacted CCPA which, among other things, requires companies covered by the legislation to provide new disclosures to California consumers and afford such consumers new rights, including the right to access and delete certain personal information, as well as the right to opt-out of certain sales of personal information.

The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information.

The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches involving defined categories of personal information.

This private right of action may increase the likelihood of, and risks associated with, data breach litigation.

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In addition, new privacy and security legislation may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies

Internationally, many jurisdictions have established their own data privacy and security legal framework with which we or our clients may need to comply as client customers travel outside of the United States, including, but not limited to, the European Union (“EU”).

The EU’s data protection landscape is currently evolving, resulting in possible significant operational costs for internal compliance and risk to our business.

The EU has adopted the General Data Protection Regulation (“GDPR”), which contains numerous requirements and changes from previously existing EU law, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies.

In particular, under the GDPR, fines of up to 20 million euros or up to 4% of the annual global revenues of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements.

Internationally, many jurisdictions have established their own data privacy and security legal framework with which we or our clients may need to comply as client customers or members travel outside of the United States, including, but not limited to, the United Kingdom (“UK”) and the European Union (“EU”).

The UK’s and EU’s data protection landscape is continuing to evolve, resulting in possible significant operational costs for internal compliance and risk to our business.

The UK and EU have adopted a General Data Protection Regulation (“GDPR”), which contains numerous requirements and changes from existing law, including more robust obligations on data processors and heavier documentation requirements for data protection compliance programs by companies.

In particular, under the EU GDPR, fines of up to 20 million euros or up to 4% of the annual global revenues of the noncompliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements.

Such penalties are in addition to any civil litigation claims by clients and data subjects.

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Any such laws, rules and regulations may be inconsistent among different jurisdictions, subject to differing interpretations or may conflict with our current or future practices.

Additionally, our clients may be subject to differing privacy laws, rules and legislation, which may mean that they require us to be bound by varying contractual requirements applicable to certain other jurisdictions.

Additionally, our clients may be subject to differing privacy laws, rules and legislation, which may mean that

they require us to be bound by varying contractual requirements applicable to certain other jurisdictions.

Adherence to such contractual requirements may impact our collection, use, processing, storage, sharing and disclosure of various types of information including financial information and other PI, and may mean we become bound by, or voluntarily comply with, self-regulatory or other industry standards relating to these matters that may further change as laws, rules and regulations evolve.

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As we expand our client base, these requirements may vary from client to client, further increasing the cost of compliance and doing business.

AI presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data, increasing our regulatory and compliance burden and increasing competition.

As with many technological innovations, AI presents opportunities for enhanced productivity and innovation, but also presents risks and challenges that could impact our business.

Issues in the development and use of AI, combined with an uncertain regulatory environment and emerging ethical issues, may result in reputational harm, liability or other adverse consequences to our business operations.

We currently incorporate AI technologies into our operations and certain of our products, and we may continue to adopt and integrate AI, including generative AI, into our operations and products in the future for specific use cases.

Additionally, our employees, vendors and third-party partners may use AI to perform their work.

Our vendors could in turn incorporate AI tools into their offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security.

If we, our vendors, or our third-party partners experience an actual or perceived data breach or cybersecurity incident because of the use of AI, we may lose valuable intellectual property, personal data and/or confidential information, and our reputation and the public perception of the effectiveness of our security measures could be harmed.

Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of personal information, confidential information, and intellectual property.

Any of these outcomes could damage our reputation, subject us to legal liability, result in the loss of valuable property and information, and adversely impact our business.

The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain such systems to help ensure that AI is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.

For example, AI systems can present risks of bias, errors and false or “hallucinatory” inferences or outputs.

Furthermore, if the content, analyses, or recommendations that AI systems assist in producing are, or are alleged or perceived to be inaccurate, deficient, or biased, our reputation, competitive position, business, financial condition, and results of operations may be adversely affected.

The use of certain AI technologies can also give rise to intellectual property risks, including by disclosing or otherwise compromising our confidential or proprietary intellectual property, or by undermining our ability to assert or defend ownership rights in intellectual property created with the assistance of AI tools.

Any of these effects could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.

We use AI technologies licensed from third parties, including in our products, and our ability to continue to use such third-party AI at the scale we need may be dependent on access to specific third-party software and infrastructure.

We cannot control the availability or pricing of such third-party AI technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers.

If any such third-party AI technologies become incompatible with our products and programs or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI technologies are offered or terminate their relationship with us, our products may become less appealing to our clients and our business may be adversely affected.

In addition, to the extent any third-party AI technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our products, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.

The regulatory framework for AI is rapidly evolving as many federal, state and foreign government bodies and agencies have enacted or are currently considering laws and regulations governing AI.

Additionally, existing laws and regulations may be interpreted or enforced in ways that would affect our use of AI.

As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot predict the impact future laws, regulations, or standards, or the market perception of their requirements, may have on our business or how we will respond to these laws or regulations.

In the U.S., states have enacted various laws regulating different aspects of AI.

For example, California has enacted laws and regulations related to AI safety protocols, reporting and transparency, among other AI-related topics.

In addition, Colorado’s Artificial Intelligence Act will require developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic discrimination (among other requirements), and the Texas Responsible Artificial Intelligence Governance Act prohibits the development and deployment of AI systems for certain purposes.

In Europe, on August 1, 2024, the EU Artificial Intelligence Act (the “EU AI Act”) entered into force, establishing a comprehensive, risk-based governance framework for AI in the EU, with the majority of its substantive requirements becoming applicable August 2, 2026.

The EU AI Act applies to companies that develop, use and/or provide AI in the EU and—depending on the AI use case—includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose AI and foundation models.

Any or all of the foregoing regulatory developments could affect our use of AI and our ability to provide, improve or commercialize our services, require changes to our operations and processes, and materially adversely affect our business, results of operations, and financial condition.

Further, any failure or perceived failure by us to comply with existing or newly enacted laws, regulations and other requirements relating to AI could result in legal claims or proceedings (including class actions), regulatory investigations or enforcement actions.

In addition, our competitive position could be harmed if we fail to adopt and integrate AI effectively into our operations and product offerings.

While we believe that AI technologies present opportunities for improving our operations and enhancing our product offerings, the successful implementation of AI technology requires significant investment in talent, infrastructure, and ongoing research and development.

Developing, testing and deploying AI systems may also increase the cost profile of our products due to the nature of the computing costs involved in such systems.

Market acceptance, understanding, and valuation and consumer perceptions of platforms, products, and programs that incorporate AI technologies are uncertain and the perceived value of AI technologies could be inaccurate.

Misjudging the convergence of AI with our business needs may lead to inefficiencies or obsolescence of our services or products.

Further, if our use of AI technologies is restricted or limited due to legal or regulatory requirements or becomes controversial due to implementation or emerging ethical issues, our service offerings may be impacted, our business may be less efficient, we may suffer brand or reputation harm or we may be at a competitive disadvantage.

Our future success will depend, in part, on our ability to leverage AI responsibly, effectively and in compliance with laws and regulations.

Because AI technology is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI.

Risks Relating to Our Industry

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Potential clients may also prefer to continue their relationship with their existing partner rather than change to a new partner regardless of product performance or features.

As a result, even if the features of the Alkami Digital Banking Platform are superior, clients may not purchase our solution.

As a result, even if the features of the Alkami Digital Sales & Service Platform are superior, clients may not purchase our solution.

In addition, innovative start-up companies, and larger companies that are making significant investments in research and development, may develop similar or superior products and technologies that compete with our solutions.

Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their market position.

As a result, our current or potential competitors might be able to adapt more quickly to new technologies and client customer needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisitions or other opportunities more readily, or develop and expand their product and service offerings more quickly than we can.

As a result, our current or potential competitors might be able to adapt more quickly to new technologies and client customer or member needs, devote greater resources to the promotion or sale of their products and services, initiate or withstand substantial price competition, take advantage of acquisitions or other opportunities more readily, or develop and expand their product and service offerings more quickly than we can.

Further, conditions in our industry could change rapidly and significantly as a result of technological advancements.

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The process of developing new technologies and solutions is complex and expensive.

The introduction of new solutions by our competitors, the market acceptance of competitive solutions based on new or alternative technologies, such as artificial intelligence and machine learning technologies, or the emergence of new technologies or solutions in the broader financial services industry could render our solutions obsolete or less effective.

The introduction of new solutions by our competitors, the market acceptance of competitive solutions based on new or alternative technologies, such as AI and machine learning technologies, or the emergence of new technologies or solutions in the broader financial services industry could render our solutions obsolete or less effective.

Advances in AI may allow FIs to develop solutions internally rather than license third-party platforms such as ours, which could further reduce demand for our solutions.

The success of any enhanced or new solution depends on several factors, including timely completion, adequate testing and market release and acceptance of the solution.

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Changes to any applicable statutes, regulations, rules or policies, including the interpretation or implementation of statutes, regulations, rules or policies could affect us in substantial and unpredictable ways, including limiting the types of software products we may offer and increasing the ability of third parties to offer competing services and products to FIs.

Assuring that our products adapt to changes in the compliance obligations or expectations of our customers requires significant expense and devotion of resources on our part, which may adversely affect our ability to operate profitably.

Assuring that our products adapt to changes in the compliance obligations or expectations of our clients requires significant expense and devotion of resources on our part, which may adversely affect our ability to operate profitably.

Our clients and prospective clients, as FIs, are highly regulated and are generally required to comply with stringent regulations in connection with managing their vendors, in particular those that are performing business functions that our solutions address.

As a provider of technology services to such FIs, we may in the future be subject to examination by various federal and state regulatory agencies, including those agencies that comprise the FFIEC, and we are also required to review and perform due diligence on certain of our third-party providers.

Matters subject to review and examination by the FFIEC, federal and state regulatory agencies and external auditors include, but are not limited to, our internal information technology controls in connection with our performance of data processing services, the agreements giving rise to those processing activities and the design of our solutions, as well as our systems and technical infrastructure, our cybersecurity posture, our business recovery planning, our management and our financial condition.

Matters subject to review and examination by the FFIEC, federal and state regulatory agencies and external auditors include, but are not limited to, our internal information technology controls in connection with our performance of data processing services, the agreements giving rise to those processing activities and the design of our solutions, as well as our systems and technical infrastructure, our information security and notification obligations, our cybersecurity posture, our business recovery planning, our management and our financial condition.

In addition, while we are not regulated by the NCUA, as a result of our registration as a CUSO, we are subject to disclosure, annual reporting and other requirements imposed by the NCUA.

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While many of our operations are not directly subject to the same regulations applicable to FIs, we are legally and contractually obligated to our clients to provide software solutions and maintain internal systems and processes that comply with certain federal and state regulations applicable to them.

Changes to any applicable statutes, regulations, rules or policies, including the interpretation or implementation of statutes, regulations, rules or policies, could affect us in substantial and unpredictable ways, including limiting the types of software products we may offer and increasing the ability of third parties to offer competing services and products to FIs.

Compliance with current or future digital accessibility, privacy, data protection and information security laws to which we or our FI clients are subject could result in higher compliance and technology costs and could restrict our ability to fully exploit our capabilities or provide certain products and services, which could materially and adversely affect our ability to operate profitably.

Our failure to offer products and solutions that directly or indirectly comply with such laws, including as interpreted and applied by courts and regulators, could result in potentially significant regulatory and/or governmental investigations and/or actions, litigation, fines, sanctions and damage to our reputation and our brand.

In recent years, there has been increasing enforcement activity in the areas of digital accessibility, privacy, data protection and information security in various markets in which our customers operate.

For example, as a result of obligations under our client contracts, we are required to comply with certain provisions of the GLBA related to the privacy of consumer information and may be subject to other privacy, security and digital accessibility requirements because of the solutions we provide to FIs.

We may also be subject to other laws because of the solutions we provide to FIs.

Any inability to satisfy regulatory or contractual expectations in connection with applicable regulations and guidance could adversely affect our ability to conduct our business, including attracting and maintaining clients, require significant costs to correct, harm our reputation, or lead to liability to third parties, including our customers or their consumers.

Further, if we have to make changes to our internal processes and solutions as result of applicable regulations or guidance or findings from examinations, we could be required to invest substantial additional time and funds and divert time and resources from other corporate purposes to remedy any identified deficiency or gap.

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Finally, actions by regulatory authorities could influence both the decisions our clients make concerning the purchase of our solutions and the timing and implementation of these decisions.

Substantial research and development and other corporate resources have been and will continue to be applied to adapt our solutions to this evolving, complex and often unpredictable regulatory environment.

Substantial research and development and other corporate resources have been and will continue to be applied to adapt our solutions to this evolving, complex

and often unpredictable regulatory environment.

Risks Relating to Our Intellectual Property, Software and Third-Party Licenses

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

An adverse outcome in such litigation or proceedings

may expose us to a loss of our competitive position, expose us to significant liabilities or require us to seek licenses that may not be available on commercially acceptable terms, if at all.

An adverse outcome in such litigation or proceedings may expose us to a loss of our competitive position, expose us to significant liabilities or require us to seek licenses that may not be available on commercially acceptable terms, if at all.

Some of our products and services contain open-source software, which may pose particular risks to our proprietary software, products and services in a manner that could have a material and adverse effect on our business, financial condition and results of operations.

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From time to time, third parties may assert, and in the past have asserted, claims of infringement, misappropriation or other violation of intellectual property rights against us and FIs with whom we do business.

Recently, for instance, a large financial services company has been successfully enforcing certain patents related to the use of remote deposit capture technology--a process that virtually every FI offers to its end users.

For instance, a large financial services company successfully enforced certain patents related to the use of remote deposit capture technology--a process that virtually every FI offers to its end users.

Any claim of infringement, misappropriation or other violation of intellectual property rights by a third party, even those without merit and regardless of the outcome, could cause us to incur substantial costs defending against the claim, distract our management from our business, require us to redesign or cease use of such intellectual property, pay substantial amounts to satisfy judgments or settle claims or lawsuits, pay substantial royalty or licensing fees, or satisfy indemnification obligations that we have with certain parties with whom we have commercial relationships.

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In addition, we could be found liable for significant monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed upon a patent or other intellectual property right.

Claims that we have misappropriated the confidential information or trade secrets of third parties could similarly harm our business.

If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement, misappropriation or violation claims

against us, such payments, costs or actions could have a material adverse effect on our competitive position, business, financial condition and results of operations.

Claims that we have

misappropriated the confidential information or trade secrets of third parties could similarly harm our business.

If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement, misappropriation or violation claims against us, such payments, costs or actions could have a material adverse effect on our competitive position, business, financial condition and results of operations.

Additionally, in certain of our agreements with clients and licensors of software we use internally or license to our clients, we agree to indemnify them for losses related to, among other things, claims by third parties that our intellectual property infringes upon, misappropriates or violates the intellectual property of such third party.

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Defense of any lawsuit or failure to obtain any of these licenses on favorable terms could prevent us from commercializing products, which could have a material adverse effect on our competitive position, business, financial condition and results of operations.

Risks Relating to our Financial Results, Operating History and Capital Structure

Risks Relating to our Financial Results, Operating History, Indebtedness and Capital Structure

Our quarterly and annual results of operations are likely to fluctuate in future periods.

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• new government regulations;

• changes in trade policies and restrictions, including tariffs;

• changes in our pricing policies or those of our competitors;

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Our subscription model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as we generally recognize subscription revenues from new clients over the applicable subscription terms once they have begun live use of our services.

Our limited operating history makes it difficult to evaluate our current business and future prospects, and our recent success may not be indicative of our future results of operations.

We began business in 2009 and, as a result, have only a limited operating history upon which to evaluate our business and future prospects.

We have encountered and will continue to encounter risks and difficulties frequently experienced by rapidly growing companies in constantly evolving industries, including the risks described in this document.

If we do not address these risks successfully, our business, financial condition and results of operations will be adversely affected and the market value of our common stock could decline.

Further, because we have limited historical financial data and we operate in a rapidly evolving market, any predictions about our future revenues and expenses may not be as accurate as they would be if we had a longer operating history or operated in a more predictable market.

You should not consider our revenue growth rate in recent periods as indicative of our future performance.

You should not rely on our revenues for any prior quarterly or annual periods as an indication of our future revenues or revenue growth.

If we are unable to maintain revenue growth, it may be difficult for us to achieve and maintain profitability.

We have a history of operating losses and may not achieve or maintain profitability in the future.

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If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could adversely affect our business, financial condition and results of operations.

We also have incurred debt pursuant to our Amended Credit Agreement (as defined below), and the lenders have rights senior to holders of common stock to make claims on our assets.

The terms of our Amended Credit Agreement could restrict our operations, and we may be unable to service or repay the debt.

Furthermore, if we issue additional equity securities, stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock.

We also have incurred debt pursuant to our Amended Credit Agreement (as defined below), and the Indenture (as defined below) and the lenders have rights senior to holders of common stock to make claims on our assets.

The terms of our Amended Credit Agreement and the Indenture could restrict our operations, and we may be unable to service or repay the debt.

Furthermore, if we issue additional equity securities or some or all of the 2030 Convertible Notes are converted, stockholders may experience dilution, and the new equity securities could have rights senior to those of our common stock.

Because our decision to incur debt or issue securities in a future offering will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the impact any future incurrence of debt or issuance of equity securities will have on us.

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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

We have incurred substantial NOLs during our history.

We have incurred substantial net operating losses (“NOLs”) during our history.

Under the rules of Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership over a rolling three-year period, the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.

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For these reasons, we may not be able to utilize a material portion of our NOLs and other tax attributes, which could adversely affect our future cash flows.

Unanticipated changes in tax laws or regulations could have an adverse effect on our business and result of operations.

Unanticipated changes in tax laws or regulations could have an adverse effect on our business and results of operations.

We are subject to federal, state, and local income taxes.

Our future effective tax rate could be affected by changes in the valuation of our deferred tax assets and liabilities, certain non-deductible expenses related to acquisitions, and changes in federal, state, or local tax laws or their interpretation.

If such changes take place, there is a risk that our effective tax rate may be favorably or unfavorably affected, impacting our result of operations.

The Trump administration has proposed a number of changes to the U.S.

Many aspects of these proposals are unclear or undeveloped, and we are unable to predict which, if any, U.S.

tax reform proposals will be enacted into law, and what effects any enacted legislation might have on our tax liabilities.

If such changes take place, there is a risk that our effective tax rate may be favorably or unfavorably affected, impacting our results of operations.

The Trump administration has proposed or implemented a number of changes to the U.S.

Many remain unclear or undeveloped, and we are unable to predict the effects of these proposals, if adopted, on our tax liabilities.

Additionally, an increasing number of states have adopted laws or administrative practices that impose new taxes on all or a portion of gross revenue or impose additional tax collection obligations on out-of-state companies.

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One or more states where we do not collect taxes may successfully assert that such taxes are applicable, which could result in material tax assessments, including for past sales, as well as penalties and interest.

Our indebtedness and liabilities could limit the cash flow available for our operations, expose us to risks that could adversely affect our business, financial condition and results of operations and impair our ability to satisfy our obligations under the 2030 Convertible Notes.

Our indebtedness could have significant negative consequences for our security holders and our business, results of operations and financial condition by, among other things:

• increasing our vulnerability to adverse economic and industry conditions;

• limiting our ability to obtain additional financing;

• requiring the dedication of a substantial portion of our cash flow from operations to service our indebtedness, which will reduce

the amount of cash available for other purposes;

• limiting our flexibility to plan for, or react to, changes in our business;

• diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon conversion of the 2030

Convertible Notes;

• placing us at a possible competitive disadvantage with competitors that are less leveraged than us or have better access to capital.

Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness, including the 2030 Convertible Notes and the Amended Credit Agreement, and our cash needs may increase in the future.

If we fail to comply with certain covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.

Any future indebtedness, combined with our other financial obligations, could increase our vulnerability to adverse changes in general economic, industry and market conditions, limit our flexibility in planning for, or reacting to, changes in our business and the industry and impose a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.

The terms of our Amended Credit Agreement require us to meet certain operating and financial covenants and place restrictions on our operating and financial flexibility.

If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.

On July 1, 2024, the Company entered into a Second Amendment (the “Second Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank (“SVB”), a division of First-Citizens Bank & Trust Company, as Administrative Agent, and the other lenders party thereto.

On July 1, 2024, the Company entered into a Second Amendment (the “Second Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as Administrative Agent, and the other lenders party thereto.

The Second Amendment, among other things, extended the maturity date of the Amended Credit Agreement to April 29, 2027.

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If market rates continue to increase, we will have to pay additional interest on this indebtedness, which would further reduce cash available for our other business needs.

We cannot assure you that our business will generate sufficient cash flow from operations or that future financing will be available to us in amounts sufficient to enable us to make required and timely payments on our indebtedness, or to fund our operations.

In addition, our obligations under the Amended Credit Agreement are guaranteed by our subsidiaries and secured by all or substantially all of our assets and our subsidiaries’ assets.

Our obligations under the Amended Credit Agreement are guaranteed by our subsidiaries and secured by all or substantially all of our assets and our subsidiaries’ assets.

The security interest granted over our assets could limit our ability to obtain additional debt financing.

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If that were to happen, we may not be able to repay all of the amounts that would become due under our indebtedness or refinance our debt, which could materially harm our business and force us to seek bankruptcy protection.

competitive disadvantage compared to our competitors that have less debt or better debt servicing options.

We no longer qualify as an emerging growth company as of December 31, 2024 and, as a result, we will no longer be able to avail ourselves of certain reduced reporting requirements applicable to emerging growth companies.

As a result of the aggregate market value of our common stock held by non-affiliates as of June 28, 2024 (the last business day of our most recently completed second quarter) exceeding $700.0 million, we became a large accelerated filer under the Exchange Act as of December 31, 2024, and no longer qualify as an “emerging growth company.”

As a large accelerated filer, we are subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us due to our status as an emerging growth company.

These requirements include, but are not limited to:

• the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act of 2002;

• the requirement that we provide three years of audited financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations;”

• compliance with any requirements that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or supplement to the auditors’ report providing additional information about the audit and the financial statements;

• the requirement that we provide more detailed disclosures regarding executive compensation;

• compliance with the required public company effective dates for any new or revised accounting standards;

• the requirement that we hold a non-binding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously approved;

• the requirement that annual reports on Form 10-K shall be filed within 60 days after the fiscal year end covered by the report.

We expect that compliance with these additional requirements will substantially increase our legal and financial compliance costs.

In addition, any failure to comply with these additional requirements in a timely manner, or at all, could have an adverse effect on our business and results of operations and could cause a decline in the price of our common stock.

We may be unable to raise the funds necessary to repurchase the 2030 Convertible Notes for cash following a fundamental change or to pay any cash amounts due upon maturity or conversion of the 2030 Convertible Notes, and our other indebtedness may limit our ability to repurchase the 2030 Convertible Notes or to pay any cash amounts due upon their maturity or conversion.

In March 2025, we issued $345 million principal amount of our 1.50% Convertible Senior Notes due 2030 (the “2030 Convertible Notes” or “Notes”) pursuant to an indenture (the “Indenture”), dated as of March 13, 2025, between the Company and U.S.

Bank Trust Company, National Association, as trustee.

Noteholders may, subject to a limited exception, require us to repurchase their 2030 Convertible Notes following a “fundamental change” (as defined in the Indenture) at a cash repurchase price generally equal to the principal amount of the 2030 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.

Upon maturity of the 2030 Convertible Notes, we must pay their principal amount and accrued and unpaid interest in cash, unless they have been previously repurchased, redeemed or converted.

In addition, upon conversion, we will satisfy part or all of our conversion obligation in cash unless we elect to settle conversions solely in shares of our common stock.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2030 Convertible Notes or pay the cash amounts, if any, due upon their maturity or conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2030 Convertible Notes or to pay the cash amounts, if any, due upon their maturity or conversion.

For example, the Amended Credit Agreement includes restrictions on our ability to settle conversions of the 2030 Convertible Notes in cash.

Our failure to repurchase 2030 Convertible Notes or to pay the cash amounts, if any, due upon their maturity or conversion when required will constitute a default under the Indenture.

A default under the Indenture or the fundamental change itself could also lead to a default under agreements governing our other indebtedness, which may result in that other indebtedness becoming immediately payable in full.

We may not have sufficient funds to satisfy all amounts due under the other indebtedness and the 2030 Convertible Notes.

The accounting method for the 2030 Convertible Notes could adversely affect our reported financial condition and results.

The accounting method for reflecting the 2030 Convertible Notes on our balance sheet and accruing interest expense for the 2030 Convertible Notes may adversely affect our reported loss and financial condition.

In accordance with applicable accounting standards, the 2030 Convertible Notes are reflected as a liability on our balance sheets, with the initial carrying amount equal to the principal amount of the 2030 Convertible Notes, net of discount and issuance costs.

The issuance costs are treated as a debt discount for accounting purposes, which are amortized into interest expense over the term of the 2030 Convertible Notes.

As a result of this amortization, the interest expense recognized for the 2030 Convertible Notes for accounting purposes is greater than the cash interest payments, which results in higher reported losses.

Furthermore, if any of the conditions to the convertibility of the 2030 Convertible Notes is satisfied, then we may be required under applicable accounting standards to reclassify the liability carrying value of the 2030 Convertible Notes as a current, rather than a long-term, liability.

This reclassification could be required even if no noteholders convert their 2030 Convertible Notes and could materially reduce our reported working capital.

We are subject to counterparty risk with respect to the Capped Calls.

In connection with the issuance of the 2030 Convertible Notes, we entered into Capped Calls with certain financial institutions (collectively, the “option counterparties”).

The Capped Calls are expected generally to reduce the potential dilution to our common stock upon any conversion of the 2030 Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2030 Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap.

The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the Capped Calls.

Our exposure to the credit risk of the option counterparties will not be secured by any collateral.

Past and recent global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions.

If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the Capped Calls with such option counterparty.

Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock.

In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of the option counterparties.

Future strategic initiatives, including acquisitions of businesses and strategic investments, could negatively affect our business, financial condition and results of operations if we fail to integrate the acquired businesses and their employees successfully into our existing operations or achieve the desired results of our initiatives.

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Risks Related to Ownership of Our Common Stock

Transactions relating to our 2030 Convertible Notes may affect the value of our common stock.

The conversion of some or all of the 2030 Convertible Notes would dilute the ownership interests of existing stockholders to the extent we satisfy our conversion obligation by delivering shares of our common stock upon any conversion of such 2030 Convertible Notes.

Convertible Notes may become, in the future, convertible at the option of their holders under certain circumstances.

If holders of our 2030 Convertible Notes elect to convert their notes, in certain circumstances we will be required to settle our conversion obligation by delivering shares of our common stock, which would cause dilution to our existing stockholders.

From time to time, the option counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2030 Convertible Notes (and are likely to do so (x) during any observation period related to a conversion of the 2030 Convertible Notes or following any repurchase of the 2030 Convertible Notes by us in connection with any redemption or fundamental change, (y) following any other repurchase of the 2030 Convertible Notes if we elect to unwind a corresponding portion of the Capped Calls in connection with such repurchase and (z) if we otherwise unwind all or a portion of the Capped Calls).

This activity could cause or avoid an increase or a decrease in the market price of our common stock.

Substantial future sales of shares of our common stock could cause the market price of our common stock to decline.

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This influence over our affairs could, under some circumstances, be adverse to the interests of the other stockholders.

Provisions in the Indenture could delay or prevent an otherwise beneficial takeover of us.

Certain provisions in the 2030 Convertible Notes and the Indenture could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then, subject to certain exceptions, noteholders will have the right to require us to repurchase their 2030 Convertible Notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate.

In either case, and in other cases, our obligations under the 2030 Convertible Notes and the Indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us, including in a transaction that noteholders or holders of our common stock may view as favorable.

Anti-takeover provisions contained in our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.

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(i) unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for:

limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (C) any action asserting a claim against the Company or any of our current or former directors, officers, other employees, agents or stockholders arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (D) any action asserting a claim related to or involving the Company that is governed by the internal affairs doctrine;

(A) any derivative action or proceeding brought on behalf of the Company, (B) any action asserting a claim for or based on a breach of a fiduciary duty owed by any of our current or former director, officer, other employee, agent or stockholder to the Company or our stockholders, including, without limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (C) any action asserting a claim against the Company or any of our current or former directors, officers, other employees, agents or stockholders arising pursuant to any provision of the Delaware General Corporation Law or our certificate of incorporation or bylaws or as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (D) any action asserting a claim related to or involving the Company that is governed by the internal affairs doctrine;

(ii) unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act and the rules and regulations promulgated thereunder;

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Nothing in our current certificate of incorporation or bylaws or our restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act from bringing such claims in federal court, to the extent that the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law.

The trading price of our common stock has been and may continue to be volatile.

The trading price of our common stock has fluctuated, and may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control and may not be related to our operating performance, including:

• price and volume fluctuations in the overall stock market from time to time;

• significant volatility in the market price and trading volume of technology companies in general and of companies in our

industry, including due to impacts or perceived impacts of AI;

• actual or anticipated changes in our results of operations or fluctuations in our operating results;

• whether our operating results meet the expectations of securities analysts or investors;

• issuance of new or updated research or reports by securities or industry analysts, including the publication of unfavorable reports

or change in recommendation or downgrading of our common stock;

• cessation of coverage of our company or failure to publish reports on our company by one or more securities or industry analysts;

• actual or anticipated developments in our competitors’ businesses or the competitive landscape generally;

• litigation involving us, our industry or both;

• general economic conditions and trends, including the impact of interest rates on the overall stock market and the market for

technology company stocks;

• major catastrophic events;

• sales of large blocks of our stock;

• departures of key personnel.

In several recent situations where the price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the issuer.

If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our business, operating results and financial condition.

Our business could be negatively affected as a result of actions of activist stockholders or others.

We are at times subject to actions or proposals from activist stockholders or others, and these may not align with our business strategies or the interests of our other stockholders.

As a result, we could incur significant expenses related to stockholder matters in the future.

Such activist stockholders frequently propose to involve themselves in the governance, strategic direction and operations of companies, including companies’ efforts regarding environmental, sustainability and governance standards.

Responding to actions from activist stockholders can be costly and time-consuming, disrupt our business and operations, and divert the attention of our board of directors, management, and employees from the pursuit of our business strategies.

Such activities could interfere with our ability to execute our strategic plan.

Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy, which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel and potential clients, and may affect our relationships with current clients, vendors, investors, and other third parties.

In addition, a proxy contest for the election of directors at our annual meeting of stockholders would require us to incur significant

legal fees and proxy solicitation expenses and require significant time and attention by management and our board of directors.

The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

We incur significant expenses and administrative burdens as a public company, which could have a material adverse effect on our operations and financial results.

As a public company, we incur significant legal, accounting, administrative and other costs and expenses.

Compliance with rules and regulations applicable to public companies may increase our costs, make some activities more time-consuming, and divert management’s attention from operational and other business matters to devote substantial time to these public company requirements.

Ensuring that we have adequate internal financial and accounting controls and procedures in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements in accordance with U.S.

generally accepted accounting principles, or GAAP.

If we identify any issues in complying with public company reporting requirements (for example, if our financial systems prove inadequate or we or our auditors identify deficiencies in our internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us.

While we have documented and assessed our internal controls, we continue to evaluate opportunities to further strengthen the effectiveness and efficiency of our internal controls and procedures for compliance with Section 404 of the Sarbanes-Oxley Act, which requires annual management assessment and annual independent registered public accounting firm attestation reports of the effectiveness of our internal control over financial reporting.

If we make additional acquisitions, we will need to similarly assess and ensure the adequacy of the internal financial and accounting controls and procedures of such acquisitions.

If we fail to maintain proper and effective internal controls, including with respect to acquired businesses, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, harm our ability to operate our business and reduce the trading price of our common stock.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.

These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.

This situation could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We may be required to invest additional resources to comply with evolving laws, regulations and standards.

If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate investigations, inquiries, administrative proceedings or legal proceedings against us and our business may be adversely affected.

Additionally, proposals submitted by stockholders at our annual meeting or other advocacy efforts by stockholders and third parties also may prompt additional changes in governance and reporting requirements, which could further increase our costs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors