What changed in this filing

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Item 1A. Risk Factors

2025-09-04 compared with 2025-05-29 · 65 added, 54 removed, 592 unchanged (17% of the section changed)

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Operational and Execution Risks

• Any breaches in our security measures or those of our third-party data center hosting facilities, cloud computing platform providers or third-party service partners, or the underlying infrastructure of the Internet that cause unauthorized access to a customer’s data, our data or our IT systems, or the blockage or disablement of authorized access to our services.

• Any breaches in our security measures or those of our third-party data center hosting facilities, cloud computing platform providers, customers or third-party service partners, or the underlying infrastructure of the Internet that cause unauthorized access to a customer’s data, our data or our IT systems, or the blockage or disablement of authorized access to our services.

• Any defects or disruptions in our services that diminish demand for our services.

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Operational and Execution Risks

If our security measures or those of our third-party data center hosting facilities, cloud computing platform providers or third-party service partners, or the underlying infrastructure of the Internet are breached, and unauthorized access is obtained to a customer’s data, our data or our IT systems, or authorized access is blocked or disabled, our services may be perceived as not being secure, customers may curtail or stop using our services, and we may incur significant reputational harm, legal exposure and liabilities, or a negative financial impact.

If our security measures or those of our third-party data center hosting facilities, cloud computing platform providers, customers or third-party service partners, or the underlying infrastructure of the Internet are breached, and unauthorized access is obtained to a customer’s data, our data or our IT systems, or authorized access is blocked or disabled, our services may be perceived as not being secure, customers may curtail or stop using our services, and we may incur significant reputational harm, legal exposure and liabilities, or a negative financial impact.

Our services involve the storage and transmission of our customers’ and our customers’ customers’ proprietary and other sensitive data, including financial, health and other personal information.

Our services and underlying infrastructure may in the future be materially breached or compromised as a result of the following:

• third-party attempts to fraudulently induce our employees, partners or customers to disclose sensitive information to gain access to our customers’ data or IT systems, or our data or our IT systems;

• third-party attempts to fraudulently induce our employees or partners to disclose sensitive information to gain access to our customers’ data or IT systems, or our data or our IT systems;

• third party attempts to fraudulently induce our customers to disclose sensitive information to gain access to our customers’ data or IT systems;

• efforts by hackers or sophisticated groups, such as criminal organizations, state-sponsored organizations or nation-states, to launch coordinated cyberattacks on internally built infrastructure or on third-party cloud-computing platform providers, including ransomware, destructive malware and distributed denial-of-service attacks;

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For example, our ability to mitigate these risks may be impacted by the following:

• evolving techniques used to breach or sabotage IT systems and infrastructure, including as a result of the increased use of AI technologies by bad actors, which are generally not recognized until launched against a target, and could result in our being unable to anticipate or implement adequate measures to prevent such techniques;

• evolving techniques used to breach or sabotage IT systems and infrastructure, including as a result of the increased use of AI technologies by bad actors, which are generally not recognized until launched against a target, and could result in our inability to anticipate or implement adequate measures to prevent such techniques;

• the increasing complexity of our internal IT systems as we incorporate and secure IT environments from acquired companies and early adoption of new technologies and new ways of sharing data;

• our limited control over our customers or third-party technology providers (including those authorized by customers to access their data), or the processing of data by third-party technology providers, which may not allow us to maintain the integrity or security of such transmissions or processing.

In the normal course of business, we are and have been the target of malicious cyberattacks and have experienced other security incidents.

Although, to date, such identified security events have not had a material financial impact, there can be no assurance that future cyberattacks will not be material or significant.

In the normal course of business, we and our customers are and have been the target of malicious cyberattacks and have experienced other security incidents.

Although, to date, we have not identified any security events involving our systems that have had a material financial impact on us, there can be no assurance that future cyberattacks will not be material or significant.

Additionally, as our market presence grows, we may face increased risks of cyberattacks or security threats, and as AI technologies, including generative AI models, develop rapidly, threat actors are using these technologies to create new sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against.

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as a result of employee, contractor or other third-party action or inaction;

or due to the complexity of our services, which incorporate a variety of hardware, proprietary software and third-party and open-source software.

or due to the complexity of our services, which incorporate a variety of hardware, proprietary software and

third-party and open-source software.

Across the industry, cloud services frequently contain undetected errors when first introduced or when new versions or enhancements are released.

We may also encounter difficulties integrating acquired or

licensed technologies into our services and in augmenting the technologies we use to meet quality standards that are consistent with our brand and reputation, which may result in our services containing errors or defects.

We may also encounter difficulties integrating acquired or licensed technologies into our services and in augmenting the technologies we use to meet quality standards that are consistent with our brand and reputation, which may result in our services containing errors or defects.

We have experienced and may in the future experience defects in our products that create vulnerabilities that inadvertently permit access to protected customer data.

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Any loss of the right to use any of these hardware, software, data or cloud computing platforms could significantly increase our expenses and disrupt or otherwise result in delays in the provisioning of our services until equivalent technology is either developed by us, or, if available, is identified, obtained through purchase or license and integrated into our services, and no assurance can be provided that such equivalent technology would be developed or obtained in a timely manner or at all.

As we scale our operations, the amount and type of information transferred on our offerings continues to evolve, including as a result of the deployment of AI technologies, and our infrastructure capacity requirements, including network capacity, computing power and energy requirements, may increase as a result.

If we do not accurately plan for our infrastructure capacity requirements and we experience significant strains on our data center capacity, our customers could experience performance degradation or service outages that may subject us to financial liabilities, result in customer losses and harm our reputation and business.

As we add data centers and capacity and continue to move to cloud computing platform providers, we move or

transfer our data and our customers’ data from time to time.

As we scale our operations, the amount and type of information transferred on our offerings continue to evolve, including as a result of the deployment of AI technologies, and our infrastructure capacity requirements, including network capacity, computing power and energy requirements, may increase as a result.

Additionally, increased energy consumption, including as a result of AI-related growth, climate-related events, energy market volatility, and power grid disruptions, may increase the operational costs related to inputs across our value chain, including for data centers.

If we experience significant strains on our

data center capacity, whether due to insufficient infrastructure capacity or for other reasons outside of our control, our customers could experience performance degradation or service outages that may subject us to financial liabilities, result in customer losses, subject us to litigation and harm our reputation and business.

As we add data centers and capacity and continue to move to cloud computing platform providers, we move or transfer our data and our customers’ data from time to time.

Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery of our services, which may damage our business.

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As part of our business strategy, we periodically acquire complementary businesses, joint ventures, services and technologies and intellectual property rights.

We continue to evaluate such opportunities and expect to make such acquisitions in the future.

We continue to evaluate such opportunities and expect to make such acquisitions in the future, such as the pending acquisition of Informatica announced in May 2025.

Acquisitions and other transactions and arrangements involve numerous risks and could create unforeseen operating difficulties and expenditures, including:

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In addition, to facilitate acquisitions, we may seek additional equity or debt financing, which may not be available on terms favorable to us or at all, which may affect our ability to complete subsequent acquisitions, and which may affect the risks of owning our common stock.

For example, if we finance acquisitions by issuing equity or convertible or other debt securities or loans, our existing stockholders may be diluted, or we could face constraints related to the terms of, and repayment obligation related to, the incurrence of indebtedness that could affect the market price of our common stock.

If we finance acquisitions by issuing equity or convertible or other debt securities or taking out loans, our existing stockholders

may be diluted, or we could face constraints related to the terms of, and repayment obligation related to, the incurrence of indebtedness that could affect the market price of our common stock.

For example, in connection with our pending acquisition of Informatica, we entered into a 364-day Credit Agreement for up to $4.0 billion and a three-year Credit Agreement for up to $2.0 billion, both on an unsecured basis.

For more information, see Note 8 “Debt” to the consolidated financial statements in Item I of Part 1.

Our ability to acquire other businesses or technologies, or integrate acquired businesses effectively, may be impaired by trade tensions and increased global scrutiny of foreign investments and acquisitions in the technology sector.

several countries, including the United States and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions of varying kinds on transactions involving foreign investments and acquisitions.

For example, several countries, including the United States and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions of varying kinds on transactions involving foreign investments and acquisitions.

Antitrust authorities in a number of countries have also reviewed acquisitions in the technology industry with increased scrutiny.

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If the implementations of these new applications are delayed, or if we encounter unforeseen problems with our new systems and processes or in migrating away from our existing systems and processes, our operations and our ability to manage our business could be negatively impacted.

For example, in the second quarter of fiscal 2026, we implemented a new enterprise resource planning system (“ERP”).

Among other things, our ERP is essential to our financial planning, reporting, and compliance programs, and any unforeseen problems with our new ERP or in migrating away from previous systems and processes could harm our ability to manage our business.

Our success will depend in part upon the ability of our senior management to plan and manage our projected growth effectively.

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This may also require increasingly sophisticated and costly sales efforts that are targeted at senior management.

Similarly, the rate at which our customers purchase new or enhanced services depends on a number of factors, including general economic conditions and customer receptiveness to any price changes related to these additional features and services.

Similarly, the rate at which our customers purchase new or enhanced services

depends on a number of factors, including general economic conditions and customer receptiveness to any price changes related to these additional features and services.

In addition, the markets and monetization strategies for certain offerings, including Agentforce and Data Cloud, remain relatively new and uncertain and as a result our expansion into such offerings, and related investments, may present additional risks and challenges.

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The above factors may also negatively impact our ability to successfully expand into emerging market countries, where we have little or no operating experience, where it can be costly and challenging to establish and maintain operations, including hiring and managing required personnel, and difficult to promote our brand, and where we may not benefit from any first-to-market advantage or otherwise succeed.

may have to delay revenue recognition for some complex transactions, all of which could harm our business and operating results.

As more of our sales efforts are targeted at larger enterprise customers, our sales cycle may become more time-consuming and expensive, we may encounter pricing pressure and implementation and configuration challenges, and we may have to delay revenue recognition for some complex transactions, all of which could harm our business and operating results.

As we target more of our sales efforts at larger enterprise customers, including governmental entities, and specific industries, such as financial services and healthcare and life sciences, we may face greater costs, longer sales cycles, greater competition and less predictability in completing some of our sales.

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The technology industry is subject to substantial and continuous competition for engineers with high levels of experience in designing, developing and managing software and technology services, as well as competition for sales executives, data scientists and operations personnel.

We have experienced challenges with significant competition in talent recruitment and retention, and may not in the future be successful in recruiting or retaining such talent.

We have experienced challenges with significant competition in talent recruitment and retention, particularly for engineers with experience in AI, and may not in the future be successful in recruiting or retaining such talent.

We have experienced and expect to continue to experience difficulty in hiring, developing, integrating and retaining highly skilled employees with appropriate qualifications.

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In addition, many of our current and potential competitors have established marketing relationships and access to larger customer bases, and have major distribution agreements with consultants, system integrators and resellers.

We also experience competition from smaller, younger competitors that may be more agile in responding to customers’ demands and offer more targeted and simplified solutions.

We also experience competition from smaller, younger

competitors that may be more agile in responding to customers’ demands and offer more targeted and simplified solutions.

Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements, or provide competitive pricing, more flexible contracts or faster implementations.

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New AI offerings may disrupt workforce needs and negatively impact demand for our offerings, or our competitors may be able to incorporate AI into their offerings more efficiently or successfully than we are able to and achieve greater and faster adoption.

Even if our services are more effective

than the products and services that our competitors offer, potential customers might select competitive products and services in lieu of purchasing our services.

Even if our services are more effective than the products and services that our competitors offer, potential customers might select competitive products and services in lieu of purchasing our services.

For all of these reasons, we may not be able to compete successfully against our competitors, which could negatively impact our future sales and harm our business.

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Our investments range from early to late stage companies, including investments made concurrent with a company’s initial public offering.

Investments in early stage companies are inherently speculative, as these companies may not yet be revenue-generating and could still be in the process of developing their products

and services at the time of our investment.

Investments in early stage companies are inherently speculative, as these companies may not yet be revenue-generating and could still be in the process of developing their products and services at the time of our investment.

The financial success of our investment in any company is typically dependent on a liquidity event, such as a public offering, acquisition or other favorable market event reflecting appreciation to the cost of our initial investment.

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Inadequate or ineffective AI development, deployment, content labeling or governance by us or others that result in controversy could also impair the acceptance of AI solutions or result in unintended performance of the services.

This in turn could undermine confidence in the decisions, predictions, analysis or other content that our AI applications produce, subjecting us to competitive harm, legal liability and brand or reputational harm.

This in turn could undermine confidence in the decisions, predictions, analysis or other content that our AI applications produce, subjecting us to competitive

harm, legal liability and brand or reputational harm.

The rapid evolution of AI will require the application of resources to develop, test and maintain our products and services to help ensure that AI is implemented ethically in order to minimize unintended, harmful impact.

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Known risks of generative AI currently include risks related to accuracy, bias, toxicity, privacy and security and data provenance.

For example, AI technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed, or

contains copyrighted or other protected material, and if our customers or others use this flawed or protected content to their detriment, or the owners of such copyrighted material seek to enforce their rights, we may be exposed to brand or reputational harm, competitive harm and/or legal liability.

For example, AI technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed, or contains copyrighted or other protected material, and if our customers or others use this flawed or protected content to their detriment, or the owners of such copyrighted material seek to enforce their rights, we may be exposed to brand or reputational harm, competitive harm and/or legal liability.

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

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In addition, various safe harbors have historically been provided to those who hosted content provided by others, such as safe harbors from monetary damages for copyright infringement arising from copyrighted content provided by customers and others and for defamation and other torts arising from information provided by customers and others.

There is an increasing demand for repealing or limiting these safe harbors by either judicial decision or legislation, and we have active legal proceedings that have been impacted by the repeal or limiting of safe harbors that were previously available to us.

There is an increasing demand for repealing or limiting these safe harbors by either judicial decision or legislation, and we have active legal

proceedings that have been impacted by the repeal or limiting of safe harbors that were previously available to us.

Loss of these safe harbors may require altering or limiting some of our services or may require additional contractual terms to avoid liabilities for our customers’ misconduct.

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Furthermore, privacy laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions.

These and other requirements are causing increased scrutiny among customers, particularly in the public sector and highly regulated industries,

and may be perceived differently from customer to customer.

These and other requirements are causing increased scrutiny among customers, particularly in the public sector and highly regulated industries, and may be perceived differently from customer to customer.

In addition, we may be subject to increased liability exposure and scrutiny for the use of certain technology related to the collection and management of customer data, including the use of cookies.

These developments could reduce demand for our services, require us to take on more onerous obligations in our contracts, restrict our ability to store, transfer and process data or, in some cases, impact our ability or our customers’ ability to offer our services in certain locations, to deploy our solutions, to reach current and prospective customers, or to derive insights from customer data globally.

For example, in July 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-U.S.

For example, statutory damages available through a private right of action for certain data breaches under the CCPA may increase our and our customers’ potential liability and the demands our customers place on us.

In addition, in July 2020, the Court of Justice of the European Union (“CJEU”) invalidated the EU-U.S.

Privacy Shield Framework, one of the mechanisms that allowed companies, including us, to transfer personal data from the European Economic Area (“EEA”) to the United States.

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Certain countries outside of the EEA have also passed or are considering passing laws requiring varying degrees of local data residency.

By way of further example, statutory damages available through a private right of action for certain data breaches under the CCPA, may increase our and our customers’ potential liability and the demands our customers place on us.

Additionally, recent government actions have increased the perceived risk that our services, particularly in the EU, could be disrupted, suspended, or terminated in response to evolving geopolitical and regulatory developments.

The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from our commitments to customers and our customers’ customers, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation, or slow the pace at which we close sales transactions, in particular where customers request specific warranties and unlimited indemnity for noncompliance with privacy laws, any of which could harm our business.

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If we are unable to comply with these guidelines or controls, or if our customers are unable to obtain regulatory approval to use our services where required, our business may be harmed.

In addition, an inability to satisfy the standards of certain voluntary third-party certification bodies that our customers may expect, such as an attestation of compliance with the

Payment Card Industry Data Security Standards, may have an adverse impact on our business and results.

In addition, an inability to satisfy the standards of certain voluntary third-party certification bodies that our customers may expect, such as an attestation of compliance with the Payment Card Industry Data Security Standards, may have an adverse impact on our business and results.

Any inability in the future to achieve or maintain industry-specific certifications or other requirements or standards relevant to our customers may harm our business and adversely affect our results.

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The UK is advancing similar legislation and other countries may follow.

Further, countries and states are applying their data and consumer protection laws to AI, and particularly generative AI, and/or are enacting or considering legal frameworks on AI, such as the Utah Artificial Intelligence Policy Act, the Colorado Artificial Intelligence Act and the draft CCPA regulations on automated decision-making technology.

Further, countries and states are applying their data and consumer protection laws to AI, and particularly generative AI, and/or are enacting or considering legal frameworks on AI, such as the EU’s AI Act, and the Utah Artificial Intelligence Policy Act, the Colorado Artificial Intelligence Act and the draft CCPA regulations on automated decision-making technology.

Any failure or perceived failure by us to comply with such requirements could have an adverse impact on our business.

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Our technologies may be subject to injunction if they are found to infringe the rights of a third party or we may be required to pay damages, or both.

Further, many of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling on such a claim.

Further, many

of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling on such a claim.

In addition, we have in the past been, and may in the future be, sued by third parties who seek to target us for actions taken by our customers, including through the use or misuse of our products.

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Additionally, we may have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringement risks with respect to acquired companies or technologies.

In addition, third parties have made

claims in connection with our acquisitions and may do so in the future, and they may also make infringement and similar or related claims after we have acquired technology that had not been asserted prior to our acquisition.

In addition, third parties have made claims in connection with our acquisitions and may do so in the future, and they may also make infringement and similar or related claims after we have acquired technology that had not been asserted prior to our acquisition.

The outcome of any claims or litigation, regardless of the merits, is inherently uncertain.

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Our business depends, in part, on sales to government organizations, and significant changes in the contracting or fiscal policies of such government organizations could adversely affect our business and operating results.

Contracting with federal, state, local and foreign governments or state-owned entities subjects us to various procurement regulations and other requirements relating to these contracts’ formation, administration and performance, and how we engage with government officials.

Contracting with federal, state, local and foreign governments or state-owned entities subjects us to various procurement regulations and other

requirements relating to these contracts’ formation, administration and performance, and how we engage with government officials.

Government contracts may also at times be modified or terminated for convenience.

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changing interest rates and inflation;

the growing complexity of our business, including the use of multiple pricing and packaging models and the increasing amount of revenue from term software license sales;

the growing complexity of our business, including the use of multiple pricing

and packaging models and fluctuations to the amount of revenue from term software license sales;

and our increasing focus on enterprise cloud computing services, we may not be able to realize our projected revenue growth plans.

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Additionally, if sales through indirect channels or for consumption-based product offerings increase, this may lead to greater difficulty in forecasting revenue and anticipated rate of growth.

As a result, our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis and revenue

growth rates may not be sustainable and may decline in the future.

As a result, our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis and revenue growth rates may not be sustainable and may decline in the future.

If we are not able to provide continued operating margin expansion, our business could be harmed and the market price of our common stock could decline.

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Any changes, ambiguity or uncertainty in taxing jurisdictions’ administrative interpretations, decisions, policies and positions could also materially impact our income tax liabilities.

For example, as a result of the recently enacted One Big Beautiful Bill Act (the “OBBBA”), we expect to be subject to Corporate Alternative Minimum Tax (“CAMT”).

While certain changes brought forth by the OBBBA, notably, the immediate deduction of domestic research and development expenditures favorably impact our cash flows from operating activities, our tax provision may be adversely impacted to the extent additional clarification or interpretive guidance related to the OBBBA is released, or if there are changes to our valuation allowance assessment related to CAMT credits.

We may also be subject to additional tax liabilities and penalties due to changes in non-income based taxes resulting from changes in federal, state, local or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, or changes to our business operations, including as a result of acquisitions.

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Furthermore, our growing prominence may bring public attention to our tax profile, and if perceived negatively, may cause brand or reputational harm.

Global tax developments applicable to multinational businesses may have a material impact to our business, cash flows, or financial results.

Such developments, for example, may include the proposed legislation in the United States, certain provisions introduced by the Organization for Economic Co-operation and Development’s proposals, and the European Commission’s and certain major jurisdictions’ heightened interest in and taxation of companies participating in the digital economy.

Furthermore, governments’ responses to macroeconomic factors and tax revenue needs may lead to tax rule changes that could materially and adversely affect our cash flows and financial results.

Global tax developments may have a material impact to our business, cash flows, or financial results.

For example, heightened interest in multinationals participating in the digital economy led many countries to adopt Pillar Two, a 15% corporate minimum tax proposed by the Organization for Economic Cooperation and Development (“OECD”).

However, in response to trade negotiations with the United States, the Group of Seven (“G7”) countries proposed to exempt US multinationals from Pillar Two by adopting a “side-by-side” system between Pillar Two and the existing US global minimum tax provisions.

These ongoing negotiations and governments’ responses may lead to tax rule changes that could materially and adversely affect our cash flows and financial results.

We are exposed to fluctuations in currency exchange rates that have in the past and could in the future negatively impact our financial results and cash flows from changes in the value of the U.S.

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Our debt service obligations, lease commitments and other contractual obligations may adversely affect our financial condition, results of operations and cash flows.

As of April 30, 2025, we had a substantial level of outstanding debt, including our Senior Notes.

As of July 31, 2025, we had a substantial level of outstanding debt, including our Senior Notes.

We are also party to the Revolving Loan Credit Agreement, which provides for our $5.0 billion Credit Facility.

Although there were no outstanding borrowings under the Credit Facility as of April 30, 2025, we may use the proceeds of future borrowings under the Credit Facility for general corporate purposes.

Although there were no outstanding borrowings under the Credit Facility as of July 31, 2025, we may use the proceeds of future borrowings under the Credit Facility for general corporate purposes.

In addition to the outstanding and potential debt obligations above, we have also recorded substantial liabilities associated with noncancellable future payments on our long-term lease agreements.

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A failure to comply with the covenants and other provisions of our outstanding debt could result in events of default under such instruments, which could permit acceleration of all of our debt and borrowings.

Any required repayment of our debt as a result of a fundamental change or other acceleration would lower our current cash on hand such that we would not have those funds available for use in our business.

Any required repayment of our debt as a result of a fundamental change or other acceleration would lower our current cash on our balance sheet such that we would not have those funds available for use in our business.

Lease accounting guidance requires that we record a liability for operating lease activity on our condensed consolidated balance sheet, which increases both our assets and liabilities and therefore may impact our ability to obtain the necessary financing from financial institutions at commercially viable rates or at all.

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• the costs associated with acquiring and integrating new businesses and technologies;

• expenses related to our real estate or changes in the nature or extent of our use of existing real estate, including our office leases and our data center capacity and expansion;

• expenses related to our real estate or changes in the nature or extent of our use of existing real estate, including our office leases and data centers;

• timing of additional investments in our enterprise cloud computing application and platform services and in our consulting services;

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Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers, and could decrease demand for our services.

Our corporate headquarters, and a significant portion of our personnel, research and development activities and other critical business operations, are located near major seismic faults in the San Francisco Bay Area.

Our corporate headquarters, and a significant

portion of our personnel, research and development activities and other critical business operations, are located near major seismic faults in the San Francisco Bay Area.

Because we do not carry earthquake insurance for direct earthquake-related losses and significant recovery time could be required to resume operations, our financial condition and operating results could be materially and adversely affected in the event of a major earthquake or catastrophic event, and the adverse effects of any such catastrophic event would be exacerbated if experienced at the same time as another unexpected and adverse event.

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While we seek to mitigate our business risks associated with climate change by establishing appropriate environmental programs and partnering with organizations who are also focused on mitigating their own climate-related risks, there are inherent climate-related risks where our business is conducted.

In particular, increased energy consumption, including as a result of AI-related growth, climate-related events, energy market volatility, and power grid disruptions, may increase the operational costs related to inputs across our value chain, including for data centers.

Any of our primary locations may be vulnerable to the adverse effects of climate change.

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Furthermore, it is more difficult to mitigate the impact of these events on our employees working remotely or at client sites.

Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the United States and elsewhere have the potential to disrupt our business, the business of companies we invest in, the business of third-party providers or suppliers that we rely on to conduct our business and the business of our customers,

and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations.

In particular, increased energy consumption as a result of AI-related growth, climate-related events, energy market volatility, and power grid disruptions may increase the operational costs related to inputs across our value chain, including for data centers.

Additionally, failure to uphold, meet or make timely forward progress against our public commitments and goals related to climate action could adversely impact the resilience of our business to the impacts of climate-related events.

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-Q

Item 1A. Risk Factors