What changed in this filing

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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-16 · 272 added, 257 removed, 743 unchanged (42% of the section changed)

6 unchanged sentences

• We have a history of losses, and we may not be able to achieve profitability or, if achieved, sustain profitability.

• We have experienced significant growth in recent periods, and our recent growth rates may not be indicative of our future growth.

• We have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

5 unchanged sentences

• Our ability to attract new customers and increase revenue from existing customers depends on our ability to develop new features, integrations, capabilities, and enhancements and to partner with third parties to design complementary products.

• We have experienced significant growth in recent periods and our recent growth rates may not be indicative of our future growth.

• Our business depends substantially on our customers renewing their subscriptions and purchasing additional subscriptions from us.

Any decline in our customer retention would harm our future operating results.

• We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business.

• We recognize revenue over the term of our customer contracts.

• We recognize revenue from subscriptions over the term of our customer contracts.

Consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern.

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• We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability.

• Our business depends substantially on our customers renewing their subscriptions and purchasing additional subscriptions from us.

Any decline in our customer retention would harm our future operating results.

• A substantial portion of our business and operations are located in India, and we are subject to regulatory, economic, social, and policy uncertainties in India.

We are subject to various labor laws, regulations and standards.

Those uncertainties and non-compliance with and changes in such laws may adversely affect our business, results of operations, and financial condition.

• The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our stock prior to our initial public offering, including our executive officers, employees, and directors and their affiliates, and limiting your ability to influence corporate matters, which could adversely affect the trading price of our Class A common stock.

4 unchanged sentences

As of December 31, 2024, we had an accumulated deficit of $3.7 billion.

We do not expect to be profitable in the near future, and while we achieved profitability for one quarter in 2020, we cannot assure you that we will achieve profitability again in the future or that, if we do become profitable, we will sustain profitability.

We do not expect to be profitable in the near future, and we cannot assure you that, if we do become profitable, we will sustain profitability.

Any failure by us to achieve and sustain profitability could cause the value of our Class A common stock to decline.

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We have experienced significant growth in recent periods and our recent growth rates may not be indicative of our future growth.

While we have experienced significant growth in recent periods, our revenue growth rate has declined more recently.

We have experienced significant growth in recent periods.

Even if our revenue continues to increase, we expect that our revenue growth rate may continue to decline in the future as a result of a variety of factors, including the maturation of our business.

O ur growth may continue to be impacted by macroeconomic factors beyond our control, including, but not limited to rising interest rates, foreign exchange rate volatility, global geopolitical uncertainties, and supply-chain issues.

O ur growth may continue to be impacted by macroeconomic factors beyond our control, including, but not limited to high interest rates, inflation, foreign exchange rate volatility, global geopolitical uncertainties, and supply-chain issues.

Further, as we operate in a rapidly changing industry, widespread acceptance and use of our products are critical to our future growth and success.

42 unchanged sentences

Our quarterly results of operations, including the levels of our revenue, deferred revenue, working capital, and cash flows, have varied significantly in the past and may vary significantly in the future, such that period-to-period comparisons of our results of operations may not be meaningful.

Our quarterly financial results have and may continue to fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to:

Our quarterly financial results have and may continue to fluctuate due to a variety of factors, many of which are outside of our control and have been, and may continue to be, difficult to predict, including, but not limited to:

• the level of demand for our products;

5 unchanged sentences

• the timing of expenses and recognition of revenue;

• security breaches, technical difficulties, or interruptions to our products;

• pricing pressure as a result of competition or otherwise;

• the continued ability to hire high quality and experienced talent in a fiercely competitive environment;

• the timing of the grant or vesting of equity awards to employees, directors, or consultants;

• pricing pressure as a result of competition or otherwise;

• seasonal buying patterns for software spending;

• declines or increases in the values of foreign currencies, primarily the Indian rupee, British pound, and euro, relative to the U.S.

• general economic conditions in either domestic or international markets, including inflationary pressures and geopolitical uncertainty and instability and their effects on software spending;

• security breaches, technical difficulties, or interruptions to our products;

• the timing of the grant or vesting of equity awards to employees, directors, or consultants;

• changes in, and continuing uncertainty in relation to, the legislative or regulatory environment;

• legal and regulatory compliance costs in new and existing markets;

• costs and timing of expenses related to the potential acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs;

• health epidemics, influenza, and other highly communicable diseases or viruses;

• costs and timing of expenses related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs;

• adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs;

• general economic conditions in either domestic or international markets, including inflationary pressures and geopolitical uncertainty and instability and their effects on software spending.

• health epidemics, influenza, and other highly communicable diseases or viruses.

Any one or more of the factors above may result in significant fluctuations in our quarterly results of operations, which may negatively impact the trading price of our Class A common stock.

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Larger customers are becoming a bigger part of our business.

Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, more complex customer

requirements, substantial upfront sales costs, and less predictability in completing some of our sales.

Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales.

For example, large customers may require considerable time to evaluate and test our products prior to making a purchase decision.

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As a result, the length of our sales cycle, from identification of the opportunity to deal closure, may vary significantly from customer to customer, with sales to large enterprises typically taking longer to complete.

Our typical sales cycle for mid-market and enterprise customers is approximately 150 days, as compared to 30 days for SMB customers.

Our typical sales cycle for mid-market and enterprise customers is approximately 130 to 150 days, as compared to 30 days for SMB customers.

Moreover, large customers are often more demanding than other customers and begin to deploy our products on a limited basis, but, nevertheless require implementation services and negotiate pricing discounts or other onerous terms, which increase our upfront investment in the sales effort with no guarantee that sales to these customers will justify our substantial upfront investment, which can affect our roadmaps and deliverables.

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Our ability to grow is also subject to the risk of future disruptive technologies.

Uncertainty around new and emerging AI applications, such as generative AI content creation, may require additional investment in the development of proprietary datasets, machine learning models and systems to test for accuracy, bias and other variables, which are often complex.

Uncertainty around new and emerging AI applications, such as generative AI content creation, has required and may continue to require additional investment in the development of proprietary datasets, machine learning models and systems to test for accuracy, bias and other variables, which are often complex.

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 order for such complementary products to enhance our customers’ use of our products, we must maintain interoperability as described further below.

Our business depends substantially on our customers renewing their subscriptions and purchasing additional subscriptions from us.

Any decline in our customer retention would harm our future operating results.

Our business is primarily subscription based, and customers are not obligated to and may not renew their subscriptions after their existing subscriptions expire.

In order for us to maintain or improve our operating results, it is important that our customers renew their subscriptions when the initial contract term expires and add additional users to their subscriptions.

Our customers have no obligation to renew their subscriptions, and we cannot ensure that customers will renew subscriptions with a similar contract period, with the same or greater number of users, or for the same or upgraded level of subscription plan.

Customers may or may not renew their subscription plans as a result of a number of factors, including their satisfaction or dissatisfaction with our products, our pricing or pricing structure, the pricing or capabilities of the products and services offered by our competitors, the effects of general economic conditions, inflation, or customers’ budgetary constraints.

If customers do not renew their subscriptions, renew on less favorable terms, or fail to add more users, or if we fail to upgrade trial customers to our paid subscription plans, or expand the adoption of our products within and across organizations, our revenue may decline or grow less quickly than anticipated, which would harm our business, results of operations, and financial condition.

We have also experienced and may experience in the future a reduction in renewal rates and increased churn rates, particularly within our SMB customers, many of whom are on month-to-month subscriptions, as well as reduced customer spend and delayed payments that could materially impact our business, results of operations, and financial condition in future periods.

If we fail to predict customer demands or fail to attract new customers and maintain and expand new and existing customer relationships, our revenue may grow more slowly than expected, may not grow at all, or may decline, and our business may be harmed.

We use generative artificial intelligence, including in certain of our products and services, which may result in operational challenges, legal liability and reputational concerns that could adversely affect our business and results of operations.

We deploy generative AI into certain of our products and services, which may result in adverse effects to our operations, legal liability, reputation and competitive risks.

The use of generative AI may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.

The rapid evolution of AI and the use of generative AI may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.

Generative AI in our products and services may be difficult to deploy successfully due to operational issues inherent to the nature of such technologies.

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

For example, AI algorithms use machine learning and predictive analytics which may be insufficient or of poor quality and reflect inherent biases and could lead to flawed, biased, and inaccurate results.

Since we may use AI outputs to make certain decisions, due to these potential inaccuracies or flaws, the model could be biased and could lead us to make decisions that could bias certain individuals (or classes of individuals), and adversely impact their rights, employment, and ability to obtain certain pricing, products, services, or benefits, including exposure to reputational and competitive harm, customer loss, and legal liability.

In addition, 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 content to their detriment, we may be exposed to brand or reputational harm, competitive harm, and/or legal liability.

4 unchanged sentences

We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business.

The market for customer service (CS), IT service management (ITSM), and customer relationship management (CRM) products is rapidly evolving and increasingly competitive, fragmented, and subject to rapidly changing technology, shifting user and customer needs, new market entrants, and frequent introductions of new products and services.

The market for employee experience (EX) and customer experience (CX) products is rapidly evolving and increasingly competitive, fragmented, and subject to rapidly changing technology, shifting user and customer needs, new market entrants, and frequent introductions of new products and services.

We compete with a significant number of companies that range in size from large and diversified enterprises with significant financial resources to smaller companies.

These competitors have developed or are developing products and services that currently, or in the future may, compete with some or all of our offerings.

Within CS, we primarily face competition from CS suites, such as Salesforce and Zendesk, and legacy vendors, such as Oracle and SAP.

Within ITSM, we primarily face competition from traditional vendors, such as ServiceNow, BMC, Ivanti/Cherwell, and modern pure-play vendors, such as Atlassian.

Within CRM, we primarily face competition from full-featured vendors, such as Salesforce, HubSpot, and Microsoft Dynamics, and legacy vendors, such as Oracle, SAP, and Sage.

For our EX products, we primarily face competition from traditional vendors, such as ServiceNow, BMC, Ivanti/Cherwell, and modern pure-play vendors, such as Atlassian.

For our CX solutions, with regards to customer service, we primarily face competition from customer service suites, such as Salesforce and Zendesk, and legacy vendors, such as Oracle and SAP and, with regards to customer relationship management, we primarily face competition from full-featured vendors, such as Salesforce, HubSpot, and Microsoft Dynamics, and legacy vendors, such as Oracle, SAP, and Sage.

Many of our current and potential competitors may have longer operating histories, greater brand name recognition, stronger and more extensive partner relationships, significantly greater financial, technical, marketing, and other resources, lower labor and development costs, and larger customer bases than we do.

1 unchanged sentence

Our competitors may also offer their products and services at a lower price, or may offer price concessions, delayed payment terms, financing terms, or other terms and conditions that are more enticing to potential customers.

Additionally, we are using or building our Freddy AI offerings into many of our product and we are facing increased competition as AI technologies are integrated into the various competitive offerings.

Our competitors may be able to develop new AI offerings that disrupt our customers’ needs and negatively impact demand for our products, or incorporate AI into their offerings more successfully than we do and achieve greater and faster adoption.

The market for our products is rapidly evolving and highly competitive, with relatively low barriers to entry, and in the future there will likely be an increasing number of similar products offered by additional competitors.

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Limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies.

If our key business metrics are not accurate representations of our business, if we discover material inaccuracies with respect to these figures, or if investors perceive there to be inaccuracies, our stock price could decline, we may be, and currently are, subject to stockholder litigation, our reputation may be significantly harmed, and our business, results of operations, and financial condition could be materially adversely affected.

In addition, we are currently, and may in the future be, subject to stockholder litigation, which may significantly harm our reputation, and could materially adversely affect our business, results of operations, and financial condition.

We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability.

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We expect that we will continue to operate at a loss, and our profitability may be lower than it would be if our strategy were to maximize near-term profitability.

If we are ultimately unable to achieve or improve profitability at the level or during the time frame anticipated by securities or industry analysts and our stockholders, the trading price of our Class A common stock may decline.

We recognize revenue over the term of our customer contracts.

If we are ultimately unable to achieve or

improve profitability at the level or during the time frame anticipated by securities or industry analysts and our stockholders, the trading price of our Class A common stock may decline.

We recognize revenue from subscriptions over the term of our customer contracts.

Consequently, downturns or upturns in new sales may not be immediately reflected in our operating results and may be difficult to discern.

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In addition, because we believe a substantial percentage of subscriptions to our products are shorter than many comparable SaaS companies and because we have many variations of billing cycles, our remaining performance obligations may be a less meaningful indicator of our future financial results as compared to other SaaS companies.

A significant portion of our costs are expensed as incurred, while revenue is recognized over the life of the agreement with the applicable customer.

Our business depends substantially on our customers renewing their subscriptions and purchasing additional subscriptions from us.

Any decline in our customer retention would harm our future operating results.

Our business is subscription based, and customers are not obligated to and may not renew their subscriptions after their existing subscriptions expire.

If customers do not

renew their subscriptions, renew on less favorable terms, or fail to add more users, or if we fail to upgrade trial customers to our paid subscription plans, or expand the adoption of our products within and across organizations, our revenue may decline or grow less quickly than anticipated, which would harm our business, results of operations, and financial condition.

A significant portion of our costs are expensed as incurred, while revenue from subscriptions is recognized over the life of the agreement with the applicable customer.

Failure to effectively develop and expand our direct sales capabilities would harm our ability to expand usage of our products within our customer base and achieve broader market acceptance of our products.

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If our channel partners do not effectively market and sell our products, or fail to meet the needs of our customers, our reputation and ability to grow our business may also be adversely affected.

The failure to attract and retain additional qualified personnel or to maintain our company culture could harm our business and culture and prevent us from executing our business strategy and growth plans.

The failure to attract and retain additional qualified personnel could harm our business and prevent us from executing our business strategy and growth plans, and the steps we took recently to realign our workforce to our focused priorities may not have the expected benefits or may exacerbate these difficulties.

Our success depends largely upon the continued services and performance of our senior management and other key personnel.

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We currently do not have “key person” insurance on any of our employees.

The loss of key personnel may cause disruptions in, and harm to, our operations and have an adverse effect on our ability to grow our business and our results of operations and financial condition.

loss of key personnel may cause disruptions in, and harm to, our operations and have an adverse effect on our ability to grow our business and our results of operations and financial condition.

In addition, to execute our business model, we must attract and retain highly qualified personnel.

Competition for executive officers, software engineers and product managers (particularly with AI and machine learning backgrounds), sales personnel, and other key personnel in our industry and in the San Francisco Bay Area, where our headquarters is located, in India where our engineering, product, and inside sales resources are concentrated, and in other locations where we maintain offices, is intense.

As we become a more mature company, we may find our recruiting efforts more challenging.

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Many of the companies with which we compete for experienced personnel have greater resources than we have.

In addition, to remain competitive in India, we must maintain our reputation as a premier employer in India, including by providing competitive wages and benefits.

Our recruiting efforts may also be limited by laws and regulations, such as restrictive immigration laws, and restrictions on travel or availability of visas.

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We have invested substantial time and resources in building out our team with an emphasis on shared values and a commitment to diversity and inclusion.

As we continue to develop the infrastructure to support our growth, we will need to maintain our culture among a larger number of employees dispersed in various geographic regions, including those who may be working remotely outside of an office environment.

As we continue to develop the infrastructure to support our growth, we will need to maintain our culture among a larger number of employees dispersed across the globe.

Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel.

If our information technology, systems, or those of third parties upon which we rely, or our data are or were to be compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, and other adverse consequences.

On November 5, 2024, we committed to a plan intended to realign our workforce to our focused priorities that resulted in a 13% reduction in force.

In connection with the reduction in force, we incurred a charge of approximately $9.7 million in the three months ended December 31, 2024.

We may fail to achieve the expected benefits of this workforce realignment.

Moreover, public reports of the reduction in force could exacerbate recruiting challenges, harm our reputation and negatively impact our culture, which could negatively affect our future success.

In the ordinary course of business, we and the third parties upon which we rely collect, receive, access, store, process, generate, use, transfer, disclose, share, make accessible, protect, secure, and dispose of (collectively, Process or Processing) a large amount of information from our users, customers, and our own employees, including personal information and other sensitive and confidential information including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, and financial information (collectively, Sensitive Information).

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Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.

Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.

During times of war and other major conflicts, we, the third parties with whom we work, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.

We and the third parties upon which we rely are susceptible to a variety of evolving threats, including, but not limited to, damage, disruptions, or shutdowns, software or hardware vulnerabilities, security incidents, server malfunctions, software bugs, ransomware attacks, social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), supply-chain attacks, failures during the process of upgrading or replacing software, databases, or components, power outages, fires, natural disasters, hardware failures, malicious code (such as viruses, worms, spyware), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential harvesting or stuffing, attacks by computer hackers, personnel misconduct or error, telecommunication failures, attacks enhanced or facilitated by AI, user errors (including non-employees who may have authorized access to our networks), user malfeasance, catastrophic events, or other similar threats.

During times of war and other major geopolitical conflicts, we and the third parties upon which we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.

During times of war and other major geopolitical conflicts, we and the third parties upon which we rely

may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services.

While we have implemented security measures, technical controls, and contractual precautions designed to identify, detect, and prevent unauthorized Processing of Sensitive Information, our security measures, as well as those of our third-party service providers, could fail or may be insufficient, resulting in the unauthorized access to or the disclosure, modification, misuse, unavailability, destruction, or loss of our or our customers’ data or other Sensitive Information.

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We also rely on third-party service providers to provide other products, services, parts, or otherwise to operate our business.

Our ability to monitor these third parties’ information security practices is limited, and these

third parties may not have adequate information security measures in place.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.

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In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.

Remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations.

Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations.

Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.

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Additionally, although we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

We take steps designed to detect and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely).

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely).

Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information.

We may not, however, detect and remediate all such vulnerabilities including on a timely basis.

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Vulnerabilities could be exploited and result in a security incident.

Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work.

Following a breach of security or other incident, we cannot guarantee that recovery protocols and backup systems will be sufficient to prevent data loss or ensure that we are able to recover promptly any data rendered inaccessible.

Additionally, breaches of security or other incidents can damage our reputation and brand, cause our business to suffer, and could require us to expend significant capital and other resources to alleviate problems caused by such breaches or incidents, and we could be exposed to risk of loss, litigation, or regulatory action, and other potential liability.

Actual or perceived security breaches or attacks on our systems or those of our third-party service providers can cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants and may require notification under applicable data privacy regulations or contractual obligations, or for customer relations or publicity purposes, which could result in additional reputational harm, costly litigation (including class action litigation), material contract breaches, liability, settlement costs, loss of sales, regulatory scrutiny, actions or investigations, a loss of confidence in our business, systems and Processing, a diversion of management’s time and attention, and significant fines, penalties, assessments, fees, and expenses.

Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services.

Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences.

If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

additional reporting requirements and/or oversight;

restrictions on processing sensitive information (including personal data);

litigation (including class claims);

indemnification obligations;

negative publicity;

reputational harm;

monetary fund diversions;

diversion of management attention;

interruptions in our operations (including availability of data);

financial loss;

and other similar harms.

Security incidents and attendant material consequences may prevent or cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.

While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

We continue to devote significant resources to protect against security breaches or other incidents, and we may need to devote significant resources in the future to address problems caused by breaches, including notifying affected individuals, regulators, investors, customers, or other relevant stakeholders of security incidents, and responding to any resulting litigation, which in turn, diverts resources from the growth and expansion of our business.

Actual or anticipated security breaches, including a breach of the systems or networks of our third-party providers, could compromise our systems or networks, creating system outages, disruptions or slowdowns and exploiting security vulnerabilities of our networks.

Actual or suspected security breaches, including a breach of the systems or networks of our third-party providers, could compromise our systems or networks, creating system outages, disruptions or slowdowns and exploiting security vulnerabilities of our networks.

In addition, the information stored on our network, or the networks of our third-party providers could be accessed, publicly disclosed, altered, lost or stolen, which could subject us to liability and cause us financial harm.

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We cannot guarantee that others will not independently develop technology with the same or similar functions to any proprietary technology we rely on to conduct our business and differentiate ourselves from our competitors.

Unauthorized parties may also attempt to copy or obtain and use our technology to develop applications with the same functionality as our solutions.

Unauthorized parties may also

attempt to copy or obtain and use our technology to develop applications with the same functionality as our solutions.

Any unauthorized disclosure or use of our trade secrets or other confidential proprietary information could make it more expensive to do business, thereby harming our operating results.

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Some generative AI tools may be offered under terms that do not protect the confidentiality of the prompts or inputs that users submit to such tools, and even if the terms do include confidentiality protections, the vendors of these generative AI tools may fail to comply with their contractual obligations regarding the confidentiality or security of any data or other inputs provided to such vendor, or outputs generated by their generative AI tools.

Additionally, the providers of generative AI tools could use inputs to further train the third parties’ AI/ML model.

Additionally, the providers of generative AI tools could use inputs to further train the third parties’ AI and machine learning (AI/ML) model.

Not all providers offer an option to opt-out of such usage, and, even where we do opt-out, we cannot guarantee that the opt-out will be fully effective.

Additionally, where an AI/ML model ingests personal information and makes connections using such data, those technologies may reveal other personal or Sensitive Information generated by the model.

We do not have formal policies and procedures in place to review and track our employees’, personnel’ and vendors’ use of generative AI, and accordingly, these risks could be particularly difficult to eliminate or manage, and, if not addressed, could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

Moreover, AI/ML models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.

This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor “poisons” the AI/ML with bad inputs or logic), or if the logic of the AI/ML is flawed (a so-called “hallucination”).

We may use AI/ML outputs to make certain decisions.

Due to these potential inaccuracies or flaws, the model could be biased and could lead us to make decisions that could bias certain individuals (or classes of individuals), and adversely impact their rights, employment,

and ability to obtain certain pricing, products, services, or benefits, including exposure to reputational and competitive harm, customer loss, and legal liability.

Although we have guidelines with respect to our employees’ use of generative AI tools that encourage the review of certain use cases at the executive level, we do not have processes in place to track and evaluate our employees’, personnel’ and vendors’ use of generative AI tools and cannot guarantee that all uses will be in accordance with our guidelines.

Accordingly, these risks could be particularly difficult to eliminate or manage, and, if not addressed, could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

If we fail to manage our technical operations infrastructure, or experience service outages, interruptions, or delays in the deployment of our products, our results of operations may be harmed.

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Our business would be disrupted if any of this third-party hardware, software, and infrastructure becomes unavailable on commercially reasonable terms, or at all.

Furthermore, delays or complications with respect to the transition of critical business functions from one third-party product to another, or any errors or defects in third-party hardware, software, or infrastructure could result in errors or a failure of our products, which could harm our business and results of operations.

Furthermore, delays or complications with respect to the transition of critical business functions from one third-party product to another, or any errors

or defects in third-party hardware, software, or infrastructure could result in errors or a failure of our products, which could harm our business and results of operations.

If we are unable to ensure that our products interoperate with a variety of software applications that are developed by others, including our integration partners, we may become less competitive and our business, results of operations, and financial condition may be harmed.

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Any reduction in the number of users directed to our website could reduce our revenue or require us to increase our sales and marketing expenditures.

We rely on third parties maintaining open digital marketplaces to distribute our mobile applications for our Freshdesk, Freshchat, Freshcaller, Freshservice, and Freshsales products.

We rely on third parties maintaining open digital marketplaces to distribute our mobile applications for our Freshservice, Freshdesk, Freshchat, Freshcaller, and Freshsales products.

If such third parties interfere with the distribution of our mobile applications, our business would be adversely affected.

We rely on third parties maintaining open digital marketplaces, including the Apple App Store and Google Play, which make our mobile applications for our Freshdesk, Freshchat, Freshcaller, Freshservice, and Freshsales, products available for download.

We rely on third parties maintaining open digital marketplaces, including the Apple App Store and Google Play, which make our mobile applications for our Freshservice, Freshdesk, Freshchat, Freshcaller, and Freshsales products available for download.

We cannot assure you that the marketplaces through which we distribute these mobile applications will maintain their current structures or that such marketplaces will not charge us fees to list our application for download.

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If customers do not accept our new purchase plans, we may increasingly have difficulty in attracting new customers, as well as our ability to retain existing customers to the extent we apply new pricing models to existing customer subscriptions.

Our pricing model may impact our customer’s pricing decisions and adoption of our subscription plans and negatively impact our

overall revenue.

Our pricing model may impact our customer’s pricing decisions and adoption of our subscription plans and negatively impact our overall revenue.

In the future we may be required to reduce our prices or develop new pricing models, which could adversely affect our revenue, gross margin, profitability, financial position, and cash flow.

Finally, as the market for our products matures, or as new competitors introduce new products or services that compete with ours, we may be unable to attract new customers at the same price or based on the same pricing models as we have used historically.

We face exposure to foreign currency exchange rate fluctuations.

While we have historically transacted in U.S.

dollars with our customers and vendors, we have transacted in some foreign currencies with such parties and for our payroll in those foreign jurisdictions where we have operations, and expect to continue to transact in more foreign currencies in the future.

We actively manage the exposure of our foreign currency risk pursuant to our foreign currency risk management policy, however these efforts may not be successful.

Fluctuations in the value of foreign currencies relative to the U.S.

dollar, have in the past and may in the future continue to adversely affect our revenue, operating expenses and results of operations due to transactional and translational remeasurement that is reflected in our earnings.

Specifically, our results of operations and cash flows are subject to currency fluctuations primarily in the Indian rupee, British pound and euro against the U.S.

These exposures may change over time as business practices evolve, economic and political conditions change and evolving tax regulations come into effect.

Also, fluctuations in the values of foreign currencies relative to the U.S.

dollar could make it more difficult to detect underlying trends in our business and results of operations.

Additionally, global events as well as geopolitical developments, such as the conflict between Russia and Ukraine and the evolving events in Israel and Gaza, fluctuating commodity prices, trade tariff developments and inflation have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which could amplify the volatility of currency fluctuations.

Beginning in 2023, we entered into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency expenses denominated in Indian rupee.

Our hedging program is designed to reduce, but does not eliminate, the risk that our earnings and cash flows may be adversely affected by changes in exchange rates.

We may enter into other hedging transactions in the future if our exposure to foreign currency becomes more significant.

We derive, and expect to continue to derive, substantially all of our revenue from a limited number of products.

We derive, and expect to continue to derive, substantially all of our revenue from our Freshdesk, Freshservice, and Freshsales products.

We derive, and expect to continue to derive, substantially all of our revenue from our Freshservice and Freshdesk products.

As such, the continued growth in market demand for and market acceptance of these products is critical to our continued success.

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and general economic conditions and trends.

If we are unable to continue to meet the demands of users and customers to keep up with trends in preferences for CS, ITSM, or CRM products, or to achieve more widespread market acceptance of our products, our business, results of operations, and financial condition would be harmed.

In addition, some current and potential customers, particularly larger organizations, may develop or acquire their own tools or continue to rely on traditional tools and software for their CS, ITSM, or CRM needs, which would reduce or eliminate their demand for our products.

If we are unable to continue to meet the demands of users and customers to keep up with trends in preferences for CX or EX products, or to achieve more widespread market acceptance of our products, our business, results of operations, and financial condition would be harmed.

In addition, some current and potential customers, particularly larger organizations, may develop or acquire their own tools or continue to rely on traditional

tools and software for their CX or EX needs, which would reduce or eliminate their demand for our products.

If demand for our products declines for any of these or other reasons, our business, results of operations, and financial condition would be adversely affected.

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Any failure to provide such support could harm our reputation.

We are subject to stringent and evolving US and foreign laws, regulations, industry standards, policies, rules, contractual obligations, and other obligations related to data privacy and security.

Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;

We and the third parties with whom we work are subject to stringent and evolving US and foreign laws, regulations, and rules, contractual obligations, industry standards, policies, and other obligations related to data privacy and security.

The actual or perceived failure by us or by the third parties with whom we work to comply with such obligations could lead to regulatory investigations or actions;

litigation (including class action claims) and mass arbitration demands;

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loss of revenue or profits;

loss of customers or sales;

and other adverse business consequences.

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In the United States, federal, state, and local governments have enacted numerous Data Protection Laws, including data breach notification laws, personal information privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

Additionally, in the past few years, numerous U.S.

states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal information.

Numerous U.S.

states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal information.

As applicable, such rights may include the right to access, correct, or delete certain personal information, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

The exercise of these rights may impact our business and ability to provide our products and services.

Certain states also impose stricter requirements for processing certain personal information, including sensitive information, such as conducting data privacy impact assessments.

Certain states also impose stricter requirements for processing certain personal information,

including sensitive information, such as conducting data privacy impact assessments.

These state laws allow for statutory fines for noncompliance.

For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, CCPA) applies to personal information of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights, such as those noted below.

The CCPA provides for administrative fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.

The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.

Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.

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Outside the United States, an increasing number of Data Protection Laws and Data Protection Obligations may govern privacy, data protection, and information security.

For example, the EU General Data Protection Regulation (EU GDPR), the EU GDPR as it forms part of UK law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR), Australia’s Privacy Act, and India’s new privacy legislation, the Digital Personal Data Protection Act (DPDP), impost strict requirements for Processing personal information.

For example, under the EU GDPR, we may be subject to fines of up to €20 million or 4% of the total worldwide annual group turnover of the preceding financial year (whichever is higher) and up to the greater of £17.5m or 4% of annual global revenues in respect of the UK GDPR.

In addition to the foregoing, violations of the EU GDPR or UK GDPR could result in regulatory investigations, reputational damage, orders to cease/change our Processing of our data, enforcement notices, assessment notices (for a compulsory audit), and/or other corrective action, such as class action brought by classes of data subjects or by consumer protection organizations authorized at law to represent their interests.

For example, the EU General Data Protection Regulation (EU GDPR), the EU GDPR as it forms part of UK law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR), Australia’s Privacy Act, and India’s new privacy legislation, the Digital Personal Data Protection Act, 2023 (Data Protection Act), impost strict requirements for Processing personal information.

For example, under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;

significant fines;

or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

In addition, we may be unable to transfer personal information from the EU, UK, and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.

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In particular, the European Economic Area (EEA) and the UK have significantly restricted the transfer of personal information to the United States and other countries whose privacy laws it generally believes are inadequate.

Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.

Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.

Although there are currently various mechanisms that may be used to transfer personal information from the EEA and UK to the United States in compliance with law, such as the EU-U.S.

Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who, like us, self-certify compliance and participate in the Framework), the EEA and UK’s standard contractual clauses, and the UK’s International Data Transfer Agreement / Addendum, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to

the United States.

If there is no lawful manner for us to transfer personal information from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business to Processing activities to other jurisdictions (such as Europe) at significant expense, and increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our Processing or transferring of personal information necessary to operate our business.

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Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal information out of Europe for allegedly violating the EU GDPR’s cross-border data transfer limitations.

We publish privacy policies, marketing materials, and other statements, regarding privacy, data protection, and information security.

If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

In India, the Digital Personal Data Protection Act, 2023 (Data Protection Act) deals with processing of all personal information in digital form, whether collected digitally or offline and digitalized later for processing.

The Data Protection Act requires companies collecting and dealing with high volumes of personal information and who are notified as significant data fiduciaries, to fulfil certain additional obligations such as appointment of a data protection officer for grievance redressal and an independent data auditor to evaluate compliance with the Data Protection Act.

Regulators in the United States such as the Department of Justice are also increasingly scrutinizing certain personal data transfers and have proposed and may enact certain data localization requirements, for example, the Biden Administration’s executive order Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.

We publish privacy policies, marketing materials, whitepapers, and other statements, such as statements related to compliance with certain certifications or self-regulatory principles, concerning data privacy, security, and artificial intelligence.

Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

In India, the Data Protection Act deals with processing of all personal information in digital form, whether collected digitally or offline and digitalized later for processing.

The Data Protection Act requires companies collecting and dealing with

high volumes of personal information and who are notified as significant data fiduciaries, to fulfil certain additional obligations such as appointment of a data protection officer for grievance redressal and an independent data auditor to evaluate compliance with the Data Protection Act.

It also provides for the establishment of a Data Protection Board of India for taking remedial actions and imposing penalties for breach of the provisions of the Data Protection Act.

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The provisions of the Data Protection Act shall come into force upon being notified by the Government of India.

The Ministry of Electronics and Information Technology of the Government of India has also released the Draft Digital Personal Data Protection Rules, 2025 (Draft Data Protection Rules) for public consultation.

The Draft Data Protection Rules set out minimum technical safeguards that must necessarily be undertaken which, inter alia , include:

(i) implementation of access control measures;

(ii) maintenance and monitoring of logs of personal data access;

and (iii) maintenance of back-up data.

The Draft Data Protection Rules also provide that any entity processing personal data within India or outside India (in relation to offering goods/services to data principals in India) may only transfer personal data to any country or territory outside India subject to restrictions imposed by the Government of India on making such personal data available to a foreign state or entities or agencies under its control.

Additionally, the Draft Data Protection Rules require significant data fiduciaries to undertake measures to ensure that they do not transfer any personal data (and traffic data related to its flow) outside India as may be identified by the Government of India upon recommendations of a committee it constitutes.

The provisions of the final rules shall come into force, once released, approved and notified by the Government of India.

The implementation of the Data Protection Act and rules could cause a significant financial burden on us and in case of any non-compliances with these, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

Our employees and personnel may use generative artificial intelligence technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy obligations.

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AI/ML are subject to Data Protection Laws, as well as increasing regulation and scrutiny.

Several jurisdictions around the globe, including the EU and certain US states, have proposed or enacted laws governing AI/ML.

For example, European regulators have proposed a stringent AI regulation, which will take direct effect across all EU member states if adopted, and we expect other jurisdictions will adopt similar laws.

Several jurisdictions around the globe, including the EU and certain US states, have proposed or enacted laws governing AI/ML, for example, the EU's Artificial Intelligence Act.

Additionally, certain Data Protection Laws extend rights to consumers (such as the right to delete certain personal information) and regulate automated decision making, which may be incompatible with our use of AI/ML.

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For example, the Federal Trade Commission has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI/ML where they allege the company has violated privacy and consumer protection laws.

Any failure or perceived failure by us to comply with applicable Data Protection Laws or any of our Data Protection Obligations may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us.

If we cannot use AI/ML or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.

We may at times fail (or be perceived to have failed) in our efforts to comply with Data Protection Laws or any of our Data Protection Obligations.

Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.

If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable Data Protection Laws or any of our Data Protection Obligations, we could face significant consequences, including governmental enforcement actions e.g., investigations, fines, penalties, audits, inspections, and similar), litigation (including class-action claims) and mass arbitration demands, claims, or public statements against us, additional reporting requirements and/or oversight;

bans or restrictions on processing personal data;

orders to destroy or not use personal data;

and imprisonment of company officials.

If we are unable to develop and offer products or internal processes that meet legal requirements or help our users and customers meet their obligations under the Data Protection Laws, or if we violate or are perceived to violate any Data Protection Laws, we may cause our customers to lose trust in us and experience reduced demand for our products, harm to our reputation, and become subject to investigations, claims, and other remedies, which would expose us to significant fines, penalties, and other damages, all of which would harm our business.

Given the breadth and depth of changes in global data protection obligations, compliance has caused us to expend significant resources, and such expenditures are likely to continue into the future as we continue our compliance efforts and respond to new interpretations and enforcement actions.

Further, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers may limit the adoption and use of, and reduce the overall demand for, our products and services.

We strive to comply with Data Protection Laws and Data Protection Obligations to the extent possible, but we may at times fail, or may be perceived to have failed, to do so.

Moreover, despite our efforts, we may not be successful in achieving compliance if our employees, partners, or vendors do not comply with applicable Data Protection Laws and Data Protection Obligations.

A finding that our privacy policies are, in whole or part, inaccurate, incomplete, deceptive, unfair, or

misrepresentative of our actual practices, a failure or perceived failure by us to comply with Data Protection Laws or Data Protection Obligations or any data compromise that results in the unauthorized release or transfer of business or personal information or other user or customer data, may increase our compliance and operational costs, limit our ability to market our products or services and attract new and retain current customers, limit or eliminate our ability to Process data, and result in domestic or foreign governmental enforcement actions and fines, litigation, significant costs, expenses, and fees (including attorney fees), cause a material adverse impact to business operations or financial results, and otherwise result in other material harm to our business.

In addition, any such failure or perceived failure could result in public statements against us by consumer advocacy groups, the media or others, which may cause us material reputational harm.

Our actual or perceived failure to comply with Data Protection Laws and Data Protection Obligations could also subject us to litigation, claims (including class-action claims and mass arbitration demands), proceedings, actions, or investigations by governmental entities, authorities, or regulators that could require changes to our business practices, diversion of resources and the attention of management from our business, regulatory oversights and audits, discontinuance of necessary Processing, or other remedies that adversely affect our business.

We face exposure to foreign currency exchange rate fluctuations.

While we have historically transacted in U.S.

We actively manage the exposure of our foreign currency risk pursuant to our foreign currency risk management policy, however these efforts may not be successful.

Fluctuations in the value of foreign currencies relative to the U.S.

Specifically, our results of operations and cash flows are subject to currency fluctuations primarily in the Indian Rupee, British Pound and Euro against the U.S.

These exposures may change over time as business practices evolve, economic and political conditions change and evolving tax regulations come into effect.

Also, fluctuations in the values of foreign currencies relative to the U.S.

dollar could make it more difficult to detect underlying trends in our business and results of operations.

In 2023, we entered into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency expenses denominated in Indian Rupee.

Our hedging program is designed to reduce, but does not eliminate, the risk that our earnings and cash flows may be adversely affected by changes in exchange rates.

We may enter into other hedging transactions in the future if our exposure to foreign currency becomes more significant.

Risks Related to Our Operations in India

A substantial portion of our business and operations are located in India, and we are subject to regulatory, economic, social, and policy uncertainties in India.

A substantial portion of our operations and employees are located in India, including a majority of our software engineering resources, and we intend to continue to develop and expand our operations in India.

Consequently, our financial performance and the market price of our Class A common stock will be affected by changes in exchange rates and controls, interest rates, changes in government policies, including taxation policies, and other social and economic developments in or affecting India.

The Government of India and the state governments of India have exercised and continue to exercise significant influence over many aspects of the Indian economy.

India has a mixed economy with a large public sector and an extensively regulated private sector.

Increased regulation, changes in existing regulations, or significant changes in India’s policy of economic liberalization may require us to change our business policies and practices.

We may not be able to react to such changes promptly or in a cost-effective manner and therefore such changes may increase the cost of providing services to our customers, which would have an adverse effect on our operations and our financial condition and results of operations.

We are subject to various labor laws, regulations, and standards in India.

Non-compliance with and changes in such laws may adversely affect our business, results of operations, and financial condition.

By virtue of having a significant number of employees in India, we are required to comply with various labor and industrial laws in India, which change regularly.

If we are unable to comply with such regulations on a timely basis, we may be subjected

to sanctions, fines, or other regulatory actions.

We cannot assure you that our costs of complying with current and future labor laws and other regulations will not adversely affect our business, results of operations, or financial condition.

Wage increases in India may diminish our competitive advantage against companies located in the United States and European Union and may reduce our profit margins.

Our wage costs in India have historically been significantly lower than wage costs in the United States and the EU for comparably skilled professionals, and this has been one of our competitive advantages.

However, wage increases in India due to legislation or other factors may prevent us from sustaining this competitive advantage and may negatively affect our financial performance.

We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent.

Unless we are able to continue to increase the efficiency and productivity of our employees over the long term, wage increases may negatively affect our financial performance.

For instance, in September 2020, the Government of India passed new legislation relating to social security and wages called the Code on Social Security, 2020 (the Social Security Code).

The provisions of the Social Security Code are yet to be fully effective, and the rules under the Social Security Code have not yet been notified.

Through its notifications, the Government of India has brought into force certain sections of the Social Security Code including in relation to the Employees’ Pension Scheme, 1995 and use of Aadhar number for establishment of identity of an employee or an unorganized worker for certain purposes under the Social Security Code.

The remaining provisions of the Social Security Code will be brought into force on a date to be notified by the Government of India.

The Social Security Code will impact overall employee expenses which, in turn, could impact our profitability.

The Social Security Code includes the novel concept of deemed remuneration, such that where an employee receives more than half (or such other percentage as may be notified by the Government of India) of such employee’s total remuneration in the form of allowances, and other amounts that are not included within the definition of wages under the Social Security Code, the excess amount received shall be deemed as remuneration and accordingly added to wages for the purposes of the Social Security Code, and the compulsory contribution made towards the employees’ provident fund.

Further, the Social Security Code has introduced the concept of workers outside the traditional employer-employee work-arrangements (including in online and digital platform), such as “gig workers” and “platform workers,” and provides for the mandatory registration of such workers in order to enable these workers to avail themselves to the benefits of, among others, life and disability insurance coverage, health and maternity benefits and old age protection.

As a consequence, the Social Security Code could increase the financial burden on the employer and could impact profitability.

Further, the Government of India has notified three other labor codes, namely, the Code on Wages 2019, the Industrial Relations Code 2020, and the Occupational Safety, Health and Working Conditions Code 2020, which are yet to fully come into force, and the rules for these codes have not yet been published.

Further, through its notifications the Government of India has brought in force certain sections of the Code on Wages 2019 in relation to the constitution and functioning of the central advisory board and repeal of certain sections of the Minimum Wages Act, 1948, as amended.

The remaining provisions will be brought into force on a date to be notified by the Government of India.

Further, the Industrial Relations Code 2020 and the Occupational Safety, Health and Working Conditions Code 2020 will come into effect on a date to be notified by the Government of India.

Accordingly, while we are unable to ascertain with certainty the impact, financial or otherwise, due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective.

Government regulation on e-commerce and foreign investment, including investment in e-commerce in India, is evolving, and unfavorable changes to, or failure by us to comply with, these evolving regulations could adversely affect our business, financial condition, and results of operations.

The ownership of Indian companies by non-residents is regulated by the Government of India and the Reserve Bank of India (RBI).

Under its consolidated foreign direct investment policy (FDI Policy) and India’s Foreign Exchange Management Act, 1999 and the rules and regulations thereunder, particularly the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, each as amended (FEMA), the Government of India has specific requirements with respect to the level of foreign investment permitted in certain business sectors both without (known as the automatic route) and with (known as the approval route) prior regulatory approval, as well as the pricing of such investments, downstream investments by Indian companies owned or controlled by foreign entities, and the transfer of ownership or control of Indian companies in sectors with caps on foreign investment from resident Indian persons or entities to non-residents of India.

Under the FDI Policy, 100% foreign ownership is allowed under the automatic route (i.e., generally without prior regulatory approval) in companies engaged in business to business (B2B) e-commerce activities.

Our current business operations and holding structure comply with these foreign investment restrictions and conditions.

However, the Government of India has made and may continue to make revisions to the FEMA and the FDI Policy as regards e-commerce in India, including in relation to inventory, pricing, discounting, and permitted services.

The Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India is also in the process of legislating a national e-commerce

policy, which will address e-commerce regulation and data protection.

The timing or impact of this policy, which remains in draft form, is not yet certain.

Such changes may require us to make changes to our business in order to comply with Indian law.

The regulatory framework applicable to e-commerce is constantly evolving and remains subject to change by the Government of India and the RBI.

Any failure, or perceived failure, by us to comply with any of these evolving laws or regulations could result in proceedings or actions against us by governmental entities or others.

Further, any such framework changes, such as the mandate on recurring credit and debit card payments that went into effect on September 30, 2021, may adversely affect our results of operations.

Changes in the taxation system in India could adversely affect our business.

Our business, financial condition, and results of operations could be materially and adversely affected by any change in the extensive central and state tax regime in India applicable to us and our business.

Tax and other levies imposed by the central and state governments in India that affect our tax liability include central and state taxes and other levies, income tax, turnover tax, goods and service tax, stamp duty, and other special taxes and surcharges, which are introduced on a temporary or permanent basis from time to time.

This extensive central and state tax regime is subject to change from time to time.

The final determination of our tax liability involves the interpretation of local tax laws and related regulations in each jurisdiction, as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred.

and Indian transfer-pricing regulations require that any international transaction involving associated enterprises be at an arm’s-length price.

Transactions among us and our subsidiaries may be considered such transactions.

Accordingly, we determine the pricing among our entities on the basis of detailed functional and economic analysis involving benchmarking against transactions among entities that are not under common control.

If the income tax authorities review any of our tax returns and determine that the transfer price applied was not appropriate, we may incur increased tax liabilities, including accrued interest and penalties.

If the stockholders (being non-residents under Indian tax laws) of the foreign company exit by way of redemption of the shares held by them in the foreign company or by selling the shares in foreign company, the stockholders could be taxed in India where the foreign company derives substantial value from India subject to stockholders being either entitled to small stockholder exemption available under Income Tax Act, 1961 or a benefit under the applicable double taxation avoidance agreement.

Tax laws and regulations are also subject to differing interpretations by various authorities in India.

Differing interpretations of tax and other fiscal laws and regulations may exist within governmental ministries, including tax administration and appellate authorities, thus creating uncertainty and potential unexpected results.

The degree of uncertainty in tax laws and regulations, combined with significant penalties for default and a risk of aggressive action by the governmental or tax authorities, may result in tax risks in the jurisdictions in which we operate being significantly higher than expected.

Unfavorable changes in or interpretations of existing, or the promulgation of new, laws, rules and regulations including foreign investment and stamp duty laws governing our business and operations could result in us being deemed to be in contravention of such laws and may require us to apply for additional approvals.

We may incur increased costs and other burdens relating to compliance with such new requirements, which may also require significant management time and other resources, and any failure to comply may adversely affect our business, results of operations and prospects.

Uncertainty in the applicability, interpretation or implementation of any amendment to, or change in, governing law, regulation or policy, including by reason of an absence, or a limited body, of administrative or judicial precedent may be time consuming as well as costly for us to resolve and may impact the viability of our current businesses or restrict our ability to grow our businesses in the future.

We are continually under review by the Indian tax authorities and have not received any assessments to date that would have a material impact to our financial statements.

Our ability to receive dividends and other payouts from our Indian subsidiary is subject to Indian legal restrictions and withholding tax.

Whether our Indian subsidiary will pay us dividends in the future and the amount of any such dividends, if declared, will depend on a number of factors, including future earnings, financial condition and performance, cash flows, working capital requirements, capital expenditures and other factors considered relevant by us and the board of our Indian subsidiary.

We may decide to retain a substantial portion or all of our earnings in our Indian subsidiary to finance the development and expansion of our business and, therefore, may not declare dividends.

In the event dividends are declared, the Income Tax Act, 1961, as amended, requires that any dividends paid by an Indian company be subject to tax in the hands of the stockholders at applicable rates, such taxes will be withheld by the Indian subsidiary paying dividends.

Further, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that may be applicable to the businesses of our customers, for example, the EU's Digital Operations Resilience Act, may limit the adoption and use of, and reduce the overall demand for, our products and services.

In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.

Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.

Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to:

loss of customers;

interruptions or stoppages in our business operations;

inability to process personal data or to operate in certain jurisdictions;

limited ability to develop or commercialize our products;

expenditure of time and resources to defend any claim or inquiry;

adverse publicity;

or substantial changes to our business model or operations, or other remedies that adversely affect our business.

Risks Related to International Operations

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For the fiscal year ended December 31, 2024, 53% of our revenue was generated from customers outside North America.

Besides India and the United States, we have sales and marketing operations primarily in Australia, Canada, France, Germany, Netherlands, Singapore and the United Kingdom.

Besides India and the United States, we have sales and marketing operations primarily in Australia, select countries in the European Union and the United Kingdom.

Operating in international markets requires significant resources and management attention and subjects us to regulatory, economic, and political risks that are different from those in the United States.

In addition, we will face risks in doing business internationally that could adversely affect our business and results of operations, including:

• the need to localize and adapt our products for specific countries, including translation into foreign languages and associated expenses;

• data privacy laws that impose different and potentially conflicting obligations with respect to how personal information is Processed or require that customer data be stored in a designated territory;

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• changes in tax laws or tax regulations;

• the request to localize and adapt our products for specific countries, including translation into foreign languages and associated expenses;

• public health or similar issues, such as a pandemics or epidemics;

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In particular, the majority of our software development operations are in India.

South Asia has from time to time experienced instances of civil unrest, terrorist attacks and hostilities among neighboring countries.

To the extent that such unrest affects or involves India, our business may be significantly impacted due to the extent of our operations in India.

South Asia has from time to time experienced instances of civil unrest, natural disasters, terrorist attacks and hostilities among neighboring countries.

To the extent that such interruptions or unrest affects or involves India, our business may be significantly impacted due to the extent of our operations in India.

Further, such activities could disrupt communications, make travel more difficult, and create a greater perception that investments in companies with large operations in India involve a higher degree of risk.

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Any investigations, actions, or sanctions could harm our business, results of operations, and financial condition.

A substantial portion of our business and operations are located in India, and we are subject to regulatory, economic, social, and policy uncertainties in India.

Non-compliance with and changes in such laws may adversely affect our business, results of operations, and financial condition.

A substantial portion of our operations and employees are located in India, including a majority of our software engineering resources.

Consequently, our financial performance and the market price of our Class A common stock will be affected by changes in exchange rates and controls, interest rates, changes in labor law, changes in government policies, including taxation policies, and other social and economic developments in or affecting India.

The Government of India and the state governments of India have exercised and continue to exercise significant influence over many aspects of the Indian economy.

India has a mixed economy with a large public sector and an extensively regulated private sector.

Increased regulation, changes in existing regulations, or significant changes in India’s policy of economic liberalization may require us to change our business policies and practices.

If we are unable to comply with such regulations on a timely basis, we may be subjected to sanctions, fines, or other regulatory actions.

Additionally, wage increases in India may diminish our competitive advantage against companies located in the United States and European Union and may reduce our profit margins.

However, wage increases in India due to legislation or other factors may prevent us from sustaining this competitive advantage and may negatively affect our financial performance.

We may need to increase the levels of our employee compensation more rapidly than in the past to retain talent.

Unless we are able to continue to increase the efficiency and productivity of our employees over the long term, wage increases may negatively affect our financial performance.

For instance, in September 2020, the Government of India passed new legislation relating to social security and wages called the Code on Social Security, 2020 (the Social Security Code).

The provisions of the Social Security Code are yet to be fully effective, and the rules under the Social Security Code have not yet been notified.

The Social Security Code, when brought into effect, will impact overall employee expenses which, in turn, could impact our profitability.

While we are unable to ascertain with certainty the impact, financial or otherwise, due to these changes, it is possible that our wage costs in India may increase as a result of these changes when they become effective.

We are subject to various export control, import, and trade and economic sanction laws and regulations that could impair our ability to compete in international markets and subject us to liability for noncompliance.

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In addition, the use of the internet as a business tool could be harmed due to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability, cost, ease of use, accessibility, and quality of service.

The performance of the internet and its acceptance as a business tool has been harmed by “viruses,” “worms,” and similar malicious programs and the internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure.

performance of the internet and its acceptance as a business tool has been harmed by “viruses,” “worms,” and similar malicious programs and the internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure.

If the use of the internet is adversely affected by these issues, demand for our products could decline.

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This could in turn have an adverse effect on our operations and the value of our Class A common stock.

The ownership of Indian companies by non-residents is regulated by the Government of India and the Reserve Bank of India (RBI).Under its consolidated foreign direct investment policy, 2020 (FDI Policy) and India’s Foreign Exchange Management Act, 1999 and the rules and regulations thereunder, particularly the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, each as amended (FEMA), the Government of India has specific requirements with respect to the level of foreign investment permitted in certain business sectors both without (known as the automatic route) and with (known as the approval route) prior regulatory approval, as well as the pricing of such investments, downstream investments by Indian companies owned or controlled by foreign entities, and the transfer of ownership or control of Indian companies in sectors with caps on foreign investment from resident Indian persons or entities to non-residents of India.

Our current business operations and holding structure comply with these foreign investment restrictions and conditions.

The Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India is also in the process of legislating a national e-commerce policy, which will address e-commerce regulation and data protection.

The timing or impact of this policy, which remains in draft form, is not yet certain.

Such changes may require us to make changes to our business in order to comply with Indian law.

The regulatory framework applicable to e-commerce is constantly evolving and remains subject to change by the Government of India and the RBI.

Any failure, or perceived failure, by us to comply with any of these evolving laws or regulations could result in proceedings or actions against us by governmental entities or others.

Further, any such framework changes, such as the mandate on recurring credit and debit card payments that went into effect on September 30, 2021, may adversely affect our results of operations.

Risks Related to Intellectual Property

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In addition, while we maintain a policy prohibiting our employees from using the confidential information of third parties or former employers (without their express permission) in performing their work for us, we cannot guarantee that the policies or processes we have enacted will prevent employees from acting without our knowledge in contravention of such policies.

Further, we may have little or no insight into the third party content and materials used to train the third party generative AI tools we use, or the extent of the original works which remain in the outputs, and the use or adoption of AI offerings in our

products and services may expose us to copyright infringement or other intellectual property misappropriation claims related to AI training or output.

As a result, we may face claims from third parties claiming infringement of their intellectual property rights, or mandatory compliance with open source software or other license terms, with respect to software, or other materials or content we believed to be available for use, and not subject to license terms or other third party proprietary rights.

As we face increasing competition and our public profile increases, the possibility of intellectual property rights claims against us may also increase.

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Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights.

If the protection of our intellectual property rights is inadequate to prevent use or misappropriation by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our products and methods of operations.

effectively mimic our products and methods of operations.

Any of these events would have a material adverse effect on our business, results of operations, and financial condition.

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Many patent applications in the United States may not be public for a period of time after they are filed, and since publication of discoveries in the scientific or patent literature tends to lag behind actual discoveries by several months, we cannot be certain that we will be the first to file patent applications on such inventions.

Because some patent applications may

not be public for a period of time, there is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued.

Because some patent applications may not be public for a period of time, there is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued.

We also rely on unpatented proprietary technology.

It is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology.

Additionally, copyright and other intellectual property protection for materials that we develop with the use of AI tools may be limited, if available at all, and we therefore may be unable to obtain protection for such works.

To protect our trade secrets and other proprietary information, we require employees, consultants, and independent contractors to enter into confidentiality agreements.

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Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose source code that incorporates or is a modification of such licensed software.

Furthermore, there is an increasing number of open-source software license types, almost none of which have been tested in a court of law, resulting in a dearth of guidance regarding the proper legal interpretation of such license types.

license types.

If an author or other third party that distributes open source software that we use or license were to allege that we had not complied with the conditions of the applicable open source license, we could expend substantial time and resources to re-engineer some or all of our software or be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software, and required to comply with the foregoing conditions, including public release of certain portions of our proprietary source code.

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Any errors or defects in third-party software could result in errors or a failure of our products or mobile applications.

foregoing would disrupt the distribution and sale of subscriptions to our products and harm our business, results of operations, and financial condition.

Our use of generative artificial intelligence tools may pose particular risks to our proprietary software and systems and subject us to legal liability.

We use generative AI tools in our business, including as part of our Freddy AI product, and expect to use generative AI tools in the future.

We have no formal policy regarding use of generative AI and have taken a discretionary-based approach with respect to our employees use of generative AI tools.

Although we have guidelines with respect to our employees’ use of generative AI tools that encourage the review of certain use cases at the executive level, we do not have processes in place to track and evaluate our employees’ use of generative AI tools and cannot guarantee that all uses will be in accordance with our guidelines.

Generative AI tools producing content which can be indistinguishable from that generated by humans is a relatively novel development, with benefits, risks, and liabilities still unknown.

Recent decisions of governmental entities and courts (such as the U.S.

Patent and Trademark Office, and U.S.

Court of Appeals for the Federal Circuit) interpret U.S.

copyright and patent law as limited to protecting works and inventions created by human authors and inventors, respectively.

We are therefore unlikely to be able to obtain U.S.

copyright or patent protection for works or inventions wholly created by a generative AI tool, and our ability to obtain U.S.

copyright and patent protection for source code, text, images, inventions or other materials, which are developed with some use of generative AI tools may be limited, if available at all.

Likewise, the availability of such IP protections in other countries is unclear.

As a result, we could have no remedy if third parties reused those same materials, or similar materials, also generated by AI tools.

In addition, we may have little or no insight into the third party content and materials used to train third party generative AI tools, or the extent of the original works which remain in the outputs.

We could also be subject to claims from the providers of the generative AI tools, if we use any of the generated materials in a manner inconsistent with their terms of use.

Any of these claims could result in legal proceedings and could require us to purchase a costly license, comply with the requirement of open source software license terms, or limit or cease using the implicated software, or other materials or content unless and until we can re-engineer such software, materials, or content to avoid infringement or change the use of, or remove, the implicated third party materials, which could reduce or eliminate the value of our technologies and services.

Any use of generative AI tools to develop source code may also present additional security risks because the generated source code may have been modelled from publicly available code, or otherwise not subject to all of our standard internal controls, which may make it easier for hackers and other third parties to determine how to breach our website and systems that rely on the code.

Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a material adverse effect on our business, results of operations, financial condition, and future prospects.

Any of the foregoing would disrupt the distribution and sale of subscriptions to our products and harm our business, results of operations, and financial condition.

Risks Related to Tax Matters

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New legislation could require us to incur substantial costs, including costs associated with tax calculation, collection, and remittance and audit requirements, and could adversely affect our business and results of operations.

Furthermore, the U.S.

Supreme Court has ruled in South Dakota v.

Wayfair that a U.S.

state may require an online retailer to collect sales taxes imposed by the state in which the buyer is located, even if the retailer has no physical presence in that state, thus permitting a wider enforcement of such sales tax collection requirements.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes to offset taxable income or taxes may be limited.

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In addition, we have foreign tax credits of $8.1 million that will begin to expire in 2027.

Furthermore, we have state net operating loss carryforwards of $147.2 million, portions of which will begin to expire beginning in 2024.

Furthermore, we have state net operating loss carryforwards of $146.8 million, portions of which will begin to expire in 2025.

Portions of these net operating loss carryforwards and foreign tax credits could expire unused and be unavailable to offset future income tax liabilities.

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Our existing net operating losses may be subject to limitations arising from transactions that have occurred since our inception, which may trigger such an ownership change pursuant to Section 382.

In the future, we may experience ownership changes as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

In the future, we may experience ownership changes as a result of

subsequent shifts in our stock ownership, some of which may be outside of our control.

If an ownership change occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.

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The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.

taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.

The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.

If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations.

Our financial statements could fail to reflect adequate reserves to cover such a contingency.

Changes in the taxation system in India could adversely affect our business.

This extensive central and state tax regime is subject to change from time to time.

and Indian transfer-pricing regulations require that any international transaction involving associated enterprises be at an arm’s-length price.

Transactions among us and our subsidiaries may be considered such transactions.

Accordingly, we

determine the pricing among our entities on the basis of detailed functional and economic analysis involving benchmarking against transactions among entities that are not under common control.

Tax laws and regulations are also subject to differing interpretations by various authorities in India.

We are continually under review by the Indian tax authorities and have not received any assessments to date that would have a material impact to our financial statements.

Our ability to receive dividends and other payouts from our Indian subsidiary is subject to Indian legal restrictions and withholding tax.

We may decide to retain a substantial portion or all of our earnings in our Indian subsidiary to finance the development and expansion of our business and, therefore, may not declare dividends.

Risks Related to Ownership of Our Class A Common Stock

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Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share.

Based on shares of common stock held as of December 31, 2023, our directors, executive officers, and holders of more than 5% of our Class A common stock or Class B common stock, and their respective affiliates held in the aggregate approximately 86% of the voting power of our outstanding capital stock, and our Chief Executive Officer, Mr.

Based on shares of common stock held as of December 31, 2024, our directors, executive officers, and holders of more than 5% of our Class A common stock or Class B common stock, and their respective affiliates held in the aggregate approximately 81.0% of the voting power of our outstanding capital stock, and our Executive Chairman, Mr.

Mathrubootham, controlled approximately 13.1% of the voting power of our outstanding common stock.

As a result, these stockholders, acting together, and potentially our Chief Executive Officer on his own have significant influence over our management and affairs and over all matters requiring stockholder approval, including election of directors and significant corporate transactions, such as a merger or other sale of the company or our assets, for the foreseeable future.

As a result, these stockholders, acting together, and potentially our Executive Chairman on his own have significant influence over our management and affairs and over all matters requiring stockholder approval, including election of directors and significant corporate transactions, such as a merger or other sale of the company or our assets, for the foreseeable future.

Corporate action might be taken even if other stockholders oppose them.

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Future transfers by holders of shares of Class B common stock will generally result in those shares converting to shares of Class A common stock, which will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term.

Certain permitted transfers, as specified in our amended and restated certificate of incorporation, will not result in shares of Class B common stock automatically converting to shares of Class A common stock, including certain estate planning transfers as well as transfers to our founders or our founders’ estates or heirs upon death or incapacity of such founder.

If, for example, Mr.

Mathrubootham (or family trusts to which he were to transfer shares of Class B common stock) retain a significant portion of his holdings of Class B common stock for an extended period of time, he (or such trusts) could, in the future, control a majority of the combined voting power of our Class A common stock and Class B common stock.

As a board member, Mr.

Mathrubootham owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders.

As a stockholder, Mr.

Mathrubootham is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

Additional stock issuances could result in significant dilution to our stockholders.

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Any such issuances could result in substantial dilution to our existing stockholders and cause the trading price of our Class A common stock to decline.

We may not realize the anticipated long-term stockholder value of our stock repurchase program, and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price.

In November 2024, our board of directors approved a stock repurchase program for the repurchase of up to $400 million of the Company’s outstanding Class A common stock.

Under the repurchase program, we may repurchase shares of our outstanding Class A common stock from time to time in the open market, through privately negotiated transactions and/or other means in compliance with the Securities Exchange Act of 1934, as amended (Exchange Act) and the rules and regulations thereunder.

Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18 under the Exchange Act.

We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares of common stock under this authorization.

The timing and amount of any repurchases will be determined by management based on an evaluation of market conditions and other factors.

The program does not obligate us to acquire any particular amount of Class A common stock and may be suspended or discontinued at any time at our discretion.

Any failure to repurchase stock after we have announced our intention to do so may negatively impact our reputation, investor confidence in us, or our stock price.

The existence of our stock repurchase program could cause our stock price to be higher than it otherwise would be and could potentially reduce the market liquidity for our stock.

Although our stock repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so because the market price of our common stock may decline below the levels at which we repurchase shares, and short-term stock price fluctuations could reduce the effectiveness of the program.

Repurchasing our common stock reduces the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or investments, other business opportunities, and other general corporate projects, and we may fail to realize the anticipated long-term stockholder value of any stock repurchase program.

The trading price of our Class A common stock may be volatile, and you could lose all or part of your investment.

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We have also filed registration statements to register shares reserved for future issuance under our equity compensation plans.

As a result, subject to the satisfaction of applicable exercise periods and applicable volume and restrictions that apply to affiliates, the shares issued upon exercise of outstanding stock options or upon settlement of outstanding RSU awards are available for immediate resale in the United States in the open market.

As a result, subject to the satisfaction of applicable exercise periods and applicable volume and restrictions that apply to affiliates, the shares issued upon exercise of outstanding stock options or upon settlement of outstanding RSU or PRSU awards are available for immediate resale in the United States in the open market.

Sales of our shares could also impair our ability to raise capital through the sale of additional equity securities in the future and at a price we deem appropriate.

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The trading market for our Class A common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.

The analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations.

The analysts’ estimates are based upon their own opinions and are often different

from our estimates or expectations.

If one or more of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, the price of our securities would likely decline.

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We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources.

Significant assumptions and estimates used in preparing our consolidated financial statements include those related to the useful lives and carrying values of long-lived assets, allowance for doubtful accounts, stock-based compensation expense, the expected benefit period of deferred contract acquisition costs, the fair value of our employee defined benefit and other compensation liabilities, and valuation of deferred tax assets.

Significant assumptions and estimates used in preparing our consolidated financial statements include those related to the useful lives and carrying values of long-lived assets, allowance for doubtful accounts, stock-based compensation expense, the benefit period of deferred contract acquisition costs, the fair value of our employee defined benefit and other compensation liabilities, and valuation of deferred tax assets.

Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock.

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A failure to maintain an effective system of disclosure controls and internal control over financial reporting, could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (Exchange Act), the Sarbanes-Oxley Act, and the rules and regulations of the applicable Nasdaq listing standards.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable Nasdaq listing standards.

We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time consuming, and costly, and place significant strain on our personnel, systems, and resources.

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In addition, changes in accounting principles or interpretations could also challenge our internal controls and require that we establish new business processes, systems, and controls to accommodate such changes.

We have limited experience with implementing the systems and controls that are necessary to operate as a public company, as well as adopting changes in accounting principles or interpretations mandated by the relevant regulatory bodies.

We have limited experience with implementing the systems and controls that are necessary to operate as a public company.

Additionally, if these new systems, controls, or standards and the associated process changes do not give rise to the benefits that we expect or do not operate as intended, it could adversely affect our financial reporting systems and processes, our ability to produce timely and accurate financial reports or the effectiveness of internal control over financial reporting.

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We are currently planning and designing information systems enhancements, and problems with the design or implementation of these enhancements could interfere with our business and operations.

We are currently in the process of significantly enhancing our information systems, have recently implemented a new enterprise resource planning (ERP) system and are in the process of starting the implementation of new platforms such as a new human capital management platform.

We are currently in the process of significantly enhancing our information systems, have recently implemented a new enterprise resource planning system and new human capital management platform.

The implementation of significant enhancements to information systems is frequently disruptive to the underlying business of an enterprise, which may especially be the case for us due to the size and complexity of our businesses.

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Data integrity problems or other issues may also be discovered during or as a result of the implementation which, if not corrected, could impact our business or financial results.

If we are unable to successfully design and implement our information system enhancements, our financial position, results of operations and cash flows could be negatively impacted.

If we are unable to successfully design and implement our information system enhancements, our financial position,

results of operations and cash flows could be negatively impacted.

Additionally, if we do not effectively implement the information system enhancements as planned or the information systems do not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess those controls adequately could be further delayed.

We have in the past and may in the future engage in merger and acquisition activities, which would require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our business, results of operations, and financial condition.

We have in the past and may in the future engage in merger and acquisition activities, which require significant management attention, and could disrupt our business, dilute stockholder value, and adversely affect our business, results of operations, and financial condition.

As part of our business strategy to expand our product offerings and grow our business in response to changing technologies, customer demand, and competitive pressures, we have in the past and may in the future make investments or acquisitions in other companies, products, or technologies.

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In addition, if we fail to successfully integrate such acquisitions, or the assets, technologies, or personnel associated with such acquisitions, into our company, the business and results of operations of the combined company would be adversely affected.

For example, we may have difficulty with transitioning the acquired technology onto our existing platforms and customer acceptance of multiple platforms on a temporary or permanent basis.

In addition, we may face challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues, including subscription-based revenues and term software license revenue, as well as appropriate allocation of the customer consideration to the individual deliverables.

Acquisitions may disrupt our ongoing operations, divert management from their primary responsibilities, subject us to additional liabilities, increase our expenses, subject us to increased regulatory requirements, cause adverse tax consequences or unfavorable accounting treatment, expose us to claims and disputes by stockholders and third parties, and adversely impact our business, financial condition, and results of operations.

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In addition, the introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny.

The increased scrutiny of certain acquisitions in

the technology industry also could affect our ability to enter into strategic transactions or to acquire other businesses.

The increased scrutiny of certain acquisitions in the technology industry also could affect our ability to enter into strategic transactions or to acquire other businesses.

Compliance with new or modified laws and regulations could increase our cost of conducting the business, limit the opportunities to increase our revenue, or prevent us from offering products or services.

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Additionally, our India subsidiary is subject to Indian foreign exchange controls that regulate borrowing in foreign currencies.

Such regulatory restrictions limit our financing sources and could constrain our ability to obtain financing on competitive terms and refinance existing indebtedness.

Such regulatory restrictions limit our financing sources and could constrain our ability to obtain financing on competitive terms.

In addition, we cannot assure you that the required approvals will be granted to us without onerous conditions, or at all.

Limitations on raising foreign debt may have an adverse impact on our business growth, financial condition, results of operations, and cash flows.

Limitations on incurring or raising debt may have an adverse impact on our business growth, financial condition, results of operations, and cash flows.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends for the foreseeable future.

We expect to retain future earnings, if any, to fund the development and growth of our business.

Any future determination to pay dividends on our capital stock will be at the discretion of our board of directors.

Accordingly, stockholders must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

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federal courts have exclusive jurisdiction.

complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant to such complaint.

For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.

In addition, our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant to such complaint.

For the avoidance of doubt, this provision is intended to benefit and

may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.

While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions.

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Any provision in our amended and restated certificate of incorporation or our amended and restated bylaws (as each may be amended from time to time) or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends for the foreseeable future.

We expect to retain future earnings, if any, to fund the development and growth of our business.

Any future determination to pay dividends on our capital stock will be at the discretion of our board of directors.

Accordingly, stockholders must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Failure to effectively and efficiently address ESG matters could adversely impact us.

There is an increasing focus from certain investors, regulators, customers, employees, and other stakeholders concerning ESG matters.

Some investors may use these non-financial performance factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies and actions relating to ESG are inadequate.

We may also face reputational damage in the event that we do not meet the ESG standards set by various constituencies.

As ESG best practices and reporting standards continue to develop, we may incur increasing costs relating to ESG monitoring and reporting and complying with ESG initiatives.

For example, proposed or adopted climate and other ESG reporting regulations from the SEC, California, and other jurisdictions may increase our compliance costs.

Our disclosures on ESG matters or a failure to meet evolving stakeholder expectations for ESG practices and reporting may potentially harm our reputation and customer relationships.

Due to new regulatory standards and market standards, certain new or existing customers, particularly those in the EU, may impose stricter ESG guidelines or mandates for, and may scrutinize relationships more closely with, their counterparties, including us, which may lengthen sales cycles or increase our costs.

Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current investors may elect to invest with our competitors instead.

In addition, in the event that we communicate certain initiatives or goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals.

If we fail to satisfy the expectations of investors, customers, employees and other stakeholders or our initiatives are not executed as planned, our business, financial condition, results of operations, and prospects could be adversely affected.

Catastrophic events, including climate change, natural disasters and other events beyond our control, may disrupt our business.

Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce, and the global economy, and thus could harm our business.

Our business operations are subject to interruption by natural disasters such as earthquakes, monsoons, cyclones, floods, extreme heat, and other effects of climate change, pandemics such as COVID-19, and other catastrophic events such as fire, power loss, terrorism, political unrest, telecommunications failure, vandalism, cyberattacks, geopolitical instability, war, and other events beyond our control.

Natural disasters or other catastrophic events may cause damage or disruption to our employees, operations, international commerce, and the global economy, and thus could harm our business.

Our business operations are subject to interruption by natural disasters such as earthquakes, monsoons, cyclones, tsunamis, floods, extreme heat, and other effects of climate change, pandemics, and other catastrophic events such as fire, power loss, terrorism, political unrest, telecommunications failure, vandalism, cyberattacks, geopolitical instability, war, and other events beyond our control.

The majority of our research and development activities, customer service operations, IT systems, and other critical business operations are located in India.

Although we maintain disaster response plans, such events could require significant time to resume operations to deliver our services to our customers, could decrease demand for our services, could cause us to incur substantial expense and may cause reputational harm, delays in our sales efforts, delays in our products’ development, breaches of data security, and loss of critical data, all of which would harm our business, results of operations, and financial condition.

data, all of which would harm our business, results of operations, and financial condition.

Acts of terrorism would also cause disruptions to the internet or the economy as a whole.

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Furthermore, we may be subject to increased costs, regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business.

Failure to effectively and efficiently address ESG matters could adversely impact us.

There is continuing debate among certain investors, regulators, customers, employees, and other stakeholders concerning ESG matters.

We may also face reputational damage in the event that we do not meet the ESG standards set by various constituencies.

As ESG best practices and reporting standards continue to develop, we may incur increasing costs relating to ESG monitoring and reporting and complying with ESG initiatives.

For example, proposed or adopted climate and other ESG reporting regulations from the SEC, California, and other jurisdictions may increase our compliance costs.

Our disclosures on ESG matters or a failure to meet evolving stakeholder expectations for ESG practices and reporting may potentially harm our reputation and customer relationships.

Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current investors may elect to invest with our competitors instead.

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