What changed in this filing

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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-20 · 256 added, 400 removed, 615 unchanged (52% of the section changed)

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Below is a summary of the principal factors that make an investment in our Class A common stock speculative or risky:

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

• Although we recently generated net income, we have a history of losses and we may not be able to sustain profitability.

• 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.

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• 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.

• Failure or perceived failure to comply with existing or future laws, regulations, contracts, self-regulatory schemes, standards, and other obligations related to data privacy or security (including security incidents) could harm our business.

Compliance or the actual or perceived failure to comply with such obligations could increase the costs of our products and services, limit their use or adoption, and otherwise negatively affect our operating results and business.

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

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Risks Related to Our Business

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

We have incurred net losses in each fiscal year since our founding.

We generated net losses of $95.4 million and $137.4 million for the years ended December 31, 2024 and 2023, respectively.

Although we recently generated net income, we have a history of losses and we may not be able to sustain profitability.

Other than the fiscal year ended December 31, 2025, we have incurred net losses in each fiscal year since our founding.

We generated net income of $183.7 million and incurred a net loss $95.4 million for the years ended December 31, 2025 and 2024.

As of December 31, 2025, we had an accumulated deficit of $3.6 billion.

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.

These losses reflect, among other things, the significant investments we made to develop and commercialize our products, serve our existing customers, and broaden our customer base.

As a result of expected investments and expenditures related to the growth of our business, we may experience increasing losses in future periods and these losses may be significantly greater than the losses we would incur if we developed our business more slowly.

Although we generated net income in the fiscal year ended December 31, 2025, we cannot assure you that we will sustain profitability.

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

Our losses reflect, among other things, the significant investments we made to develop and commercialize our products, serve our existing customers, and broaden our customer base.

As a result of expected investments and expenditures related to the growth of our business, we may experience losses in future periods and these losses may be significantly greater than the losses we would incur if we developed our business more slowly.

In addition, we may find that these efforts are more expensive than we currently anticipate or that they may not result in increases in our revenue.

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• expand the features and capabilities of our products, including artificial intelligence (AI) and machine learning features;

• increase awareness of our brand on a global basis;

• provide excellent customer experience and customer service;

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• successfully compete against and withstand competitive pressure from established companies and new market entrants;

• increase awareness of our brand on a global basis;

• comply with existing and new applicable laws and regulations.

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The growth and expansion of our business and products may place a significant strain on our management and our operational and financial resources.

As we grow and expand, we will need to continue to successfully manage a variety of relationships with partners, customers, and other third parties.

We must continue to improve and expand our information technology (IT) and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with various partners and other third parties, and our ability to manage headcount and processes in an efficient manner to manage our growth effectively.

Furthermore, we operate in an industry that is characterized by rapid technological innovation, intense competition, changing customer needs, and frequent introductions of new products, technologies, and services.

We may not be able to sustain the pace of improvements to our products successfully or implement systems, processes, and controls in an efficient or timely manner or in a manner that does not negatively affect our results of operations.

Our failure to improve our systems, processes, and controls, or their failure to operate in the intended manner, may result in our inability to manage the growth of our business, forecast our revenue, expenses, and earnings accurately, or prevent losses.

We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in evolving industries.

In addition, our future growth rate is subject to a number of uncertainties, such as general economic and market conditions.

In particular, we have limited experience operating our business at its current scale under economic conditions characterized by high inflation or in recessionary or uncertain economic environments.

If general economic and market conditions diminish the rate of global IT spending, small and mid-sized businesses (SMBs) that are our target customers may cease to operate, which could adversely affect demand for our products.

If our assumptions regarding these risks and uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in the market, or if we do not address these risks successfully, our results of operations could differ materially from our expectations, and our business, results of operations, and financial condition would suffer.

Macroeconomic uncertainties, including inflationary pressures, supply chain disruptions, labor shortages, significant volatility in global markets, and recession risks, have in the past adversely affected and may continue to adversely affect our business, future results of operations, and financial condition, the effects of which remain uncertain.

To keep growing successfully, we will need to:

• Strengthen our technology systems and financial infrastructure;

• Improve security and compliance processes;

• Manage relationships with partners and customers effectively;

• Scale our team and operations efficiently.

Additionally, we operate in an industry that is characterized by rapid technological innovation, intense competition, changing customer needs, and frequent introductions of new products, technologies, and services.

If we cannot keep pace with these changes or fail to build the right systems and processes, we may struggle to manage our growth and accurately predict our financial performance.

Our future growth rate is subject to a number of uncertainties, such as general economic and market conditions, including high inflation and recessionary or other uncertain economic environments.

If general economic and market conditions diminish the rate of global IT spending, the demand for our products would be adversely affected.

If our assumptions regarding these risks and uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in the market, or if we do not address these risks successfully, our results of operations could fall short of our expectations, and our business, results of operations, and financial condition would suffer.

Macroeconomic uncertainties, including inflationary pressures, rising interest rates, supply chain disruptions, labor market volatility, geopolitical tensions, and recession risks, have in the past adversely affected and may continue to adversely affect our business, future results of operations, and financial condition.

Global economic and business activities continue to face widespread macroeconomic uncertainties, including inflation, supply chain disruptions, labor shortages, as well as recession risks, which may continue for an extended period and which have resulted and may in the future result in decreased business spending by our customers and prospective customers and business partners and third-party business partners, reduced demand for our products, lower renewal rates by our customers, longer or delayed sales cycles, including due to existing customers and prospective customers delaying contracts, entering into new subscriptions, renewing existing subscriptions, or reducing budgets related to the products that we offer, all of which could have an adverse impact on our business operations and financial condition.

The technology industry in particular has experienced heightened sensitivity to macroeconomic conditions, with enterprise technology spending often viewed as discretionary and subject to deferral during periods of economic uncertainty.

Our customers have in the past and may continue to respond to macroeconomic pressures by reducing their technology budgets, delaying implementations, seeking shorter contract terms, or demanding more favorable pricing, all of which could have an adverse impact on our business operations, financial condition, and growth prospects.

To the extent that macroeconomic uncertainties continue to harm our business, many of the other risks described in these risk factors may be exacerbated including, but not limited to, those relating to our ability to increase sales to existing and new customers, develop and deploy new offerings and applications and maintain effective marketing and sales capabilities.

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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.

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

A number of factors influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our products, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval processes.

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 130 to 150 days, as compared to 30 days for SMB customers.

Sales to large customers involve longer sales cycles, more complex customer requirements, substantial upfront sales costs, and less predictability in completing some of our sales.

A number of factors influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our products, the considerable time spent by potential customers to evaluate and test our products prior to making a purchase decision, the discretionary nature of purchasing and budget cycles, and the competitive nature of

evaluation and purchasing approval processes.

Our typical sales cycle for mid-market and enterprise customers is approximately 130 to 150 days, 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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To increase our revenue and achieve profitability, we must increase our customer base through various methods, including, but not limited to, adding new customers, converting customers using our free trial versions into paying customers, and expanding usage across our existing customers' organizations.

We encourage customers on our free trial version to upgrade to paid subscription plans and customers on our base level paid plans to upgrade to plans with more features and to incorporate add-ons.

We encourage customers on our base level paid plans to upgrade to plans with more features and to incorporate add-ons.

Additionally, we seek to expand within organizations by having organizations add new users, upgrade their plans, or expand their use of our products into other departments within the organization.

While we have experienced significant growth in the number of customers on our products, we do not know whether we will continue to achieve similar customer growth rates in the future.

Numerous factors may impede our ability to add new customers, convert customers using our free trial versions into paying customers, expand usage within organizations, and sell subscriptions to our products, including but not limited to, our failure to attract, retain, and effectively train and motivate new sales and marketing personnel, develop or expand relationships with our partners, compete effectively against alternative products or services, successfully deploy new features and integrations, provide a quality customer experience and customer support, or ensure the effectiveness of our marketing programs.

Numerous factors may impede our ability to add new customers, convert customers using free trial versions into paying customers, expand usage within organizations, and sell subscriptions to our products, including but not limited to, our failure to attract, retain, and effectively train and motivate new sales and marketing personnel, develop or expand relationships with our partners, compete effectively against alternative products or services, successfully deploy new features and integrations, provide a quality customer experience and customer support, or ensure the effectiveness of our marketing programs.

In addition, because many of our new customers originate from word-of-mouth and other non-paid referrals from existing customers, we must ensure that our existing customers continue using our products in order for us to benefit from those referrals.

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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 on a strong brand, and if we are not able to maintain and enhance our brand, our ability to attract and expand our base of customers may be impaired, and our business and results of operations will be harmed.

We believe that the brand identity that we have developed has significantly contributed to the success of our business with our existing customer base.

We also believe that maintaining and enhancing the “Freshworks” brand is critical to expanding our customer base and establishing and maintaining relationships with partners.

Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and on our ability to ensure that our products remain high-quality, reliable, and useful at competitive prices, as well as with respect to our free trial version.

Maintaining and enhancing our brand may require us to make substantial investments, and these investments may not be successful.

If we fail to promote and maintain the

“Freshworks” brand, or if we incur excessive expenses in this effort, our business, results of operations, and financial condition would be adversely affected.

We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become more difficult and expensive.

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

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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.

If customers do not renew their subscriptions, renew on less favorable terms, or fail to add more users, or if we fail to 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 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.

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

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

The rapid evolution of AI and the use of generative and agentic 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.

For example, there is ongoing litigation over whether the use of copyrighted materials to train certain AI models is lawful, and the impact of decisions in such litigation on our use of AI tools is unknown.

Generative and agentic 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 and agentic 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.

For example, deficient or inaccurate recommendations, summaries, or analyses that generative AI features assist in producing could lead to customer rejection or skepticism of our products, affect our reputation or brand, and negatively affect our financial results.

Further, unauthorized use or misuse of generative AI by our employees or others may result in disclosure of confidential company and customer data, reputational harm, privacy law violations and legal liability.

Generative AI is also the subject of a quickly evolving legal and regulatory environment, and new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications related to our use of generative AI could cause us to divert resources towards compliance and adversely affect our business, reputation, or financial results.

Our use of generative AI may also lead to novel and urgent cybersecurity risks, including the misuse of personal data, which may adversely affect our operations and reputation.

In addition, generative and agentic 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.

For example, deficient or inaccurate recommendations, summaries, or analyses that generative or agentic AI features assist in producing could lead to customer rejection or skepticism of our products, affect our reputation or brand, and negatively affect our financial results.

Further, unauthorized use or misuse of generative or agentic AI by our employees or others may result in disclosure of confidential company and customer data, reputational harm, privacy law violations and legal liability.

While we have policies and practices designed to mitigate risk around our use of AI tools, our practices may not be error free, and our use of such tools may inadvertently violate a third party’s rights, be non-compliant with the applicable terms of use or our other legal obligations, or result in a security or privacy risk or data leakage.

Moreover, because our products and services are configurable, there is a risk that our customers could use our products and services in way that violates applicable law, contract, or our acceptable use and conduct policy.

Our use of generative and agentic AI may also lead to novel and urgent cybersecurity risks, including the misuse of personal data, which may adversely affect our operations and reputation.

Generative and agentic AI is also the subject of a quickly evolving legal and regulatory environment, and new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns, or other complications related to our use of generative or agentic AI could cause us to divert resources towards compliance and adversely affect our business, reputation, or financial

For example, the U.S.’s regulatory framework related to AI technologies remains in development and has been the subject of federal level executive orders and legislation has been introduced and enacted at the state level.

Additionally, obligations under the EU AI Act have gone into effect and will continue to be implemented in phases through 2030, and other jurisdictions have passed or are considering similarly focused legislation.

Some of our operations are subject to the EU AI Act and depending on how the EU AI Act is implemented and interpreted, we may have to adapt our business practices, contractual arrangements and services to comply with such obligations.

Our use of AI technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits.

Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, financial condition, results of operations, and growth prospects.

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

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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.

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.

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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.

We also use and build AI offerings into many of our products and we face increased competition as AI technologies are integrated into the various competitive offerings.

Our current and potential competitors may develop and market new technologies, including through more effective utilization of evolving AI technologies, greater investment in AI research and development, access to superior training datasets, or deployment of more advanced AI models, which could materially reduce the competitiveness of, or render obsolete, our existing or future products and materially adversely affect our business, results of operations, and financial condition.

If we fail to effectively develop, integrate, or utilize AI technologies in our products and services, or if competitors gain advantages through superior AI implementations, our competitive position, value proposition, and market share could be adversely affected.

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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If the internal systems and tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate.

While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globally.

numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globally.

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.

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A significant part of our business strategy and culture is to focus on long-term growth and customer success over short-term financial results.

For example, in the year ended December 31, 2024, we increased our operating expenses to $745.7 million as compared to $663.2 million for the year ended December 31, 2023, while continuing to generate a net loss of $95.4 million in the year ended December 31, 2024.

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.

Our profitability may be lower than it would be if our strategy were to maximize near-term profitability.

If we are ultimately unable to improve growth and 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.

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They may also cease marketing our products with limited or no notice and without penalty.

We expect that any additional channel partners we identify and develop will be similarly non-exclusive and not bound by any requirement to continue to market our products.

We expect that

any additional channel partners we identify and develop will be similarly non-exclusive and not bound by any requirement to continue to market our products.

If we fail to identify additional channel partners in a timely and cost-effective manner, or at all, or are unable to assist our current and future channel partners in independently selling and deploying our products, our business, results of operations, and financial condition could be adversely affected.

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

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.

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.

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

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We believe that a critical component of our success has been our culture.

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.

We have invested substantial time and resources in building 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 across the globe.

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

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.

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, loss of customers or sales, and other adverse consequences.

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).

As a result, we and the third parties upon which we rely face a variety of evolving threats that could cause security incidents.

Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon which we rely.

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.

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.

Ransomware attacks, in particular, are becoming increasingly prevalent and severe, and can lead to significant interruptions in operations, loss of Sensitive Information and income, reputational harm, and diversion of funds.

Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments, for example, due to applicable laws or regulations prohibiting such payments.

Similarly, our reliance on third-party service providers could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations.

We rely on third-party service providers and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions.

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.

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

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.

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 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.

Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

Despite our efforts to maintain the security, privacy, integrity, confidentiality, availability, and authenticity of our Processing, information, and IT networks and systems, we or our third-party vendors have not in the past and may not in the future be able to anticipate or implement effective preventive and remedial measures against all data security and privacy threats.

No security solution, strategy, or measures can address all possible security threats or block all methods of penetrating a network or otherwise perpetrating a security incident.

For example, we and our third-party providers have been in the past and may in the future be compromised by threats like those described above, and result in unauthorized, unlawful, or accidental Processing of our information, or vulnerabilities in the products or systems upon which we rely.

The risk of unauthorized circumvention of our security measures or those of our third-party providers, customers, and partners has been heightened by advances in computer and software capabilities and the increasing sophistication of hackers who employ complex techniques.

Because the techniques used by hackers change frequently, we may be unable to anticipate these techniques or implement adequate preventive measures to protect against them.

Our applications, systems, networks, software, and physical facilities could have material vulnerabilities, be breached, or personal or confidential information could be otherwise compromised due to employee error or malfeasance, if, for example, third parties attempt to fraudulently induce our personnel or our customers to disclose information or usernames and/or passwords, or otherwise compromise the security of our networks, systems, and/or physical facilities.

Third parties may also exploit vulnerabilities in, or obtain unauthorized access to, platforms, software, applications, systems, networks, Sensitive Information, and/or physical facilities utilized by our vendors.

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, 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.

Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.

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.

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.

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 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.

A breach of the security measures of one of our third-party providers could result in the destruction, modification or exfiltration of confidential corporate information or other data that may provide additional avenues of attack.

Breaches or perceived breaches of our systems or networks or the systems or networks of our third-party providers, whether or not any such breach is due to a vulnerability in our platform, may also undermine confidence in us or our industry and result in damage to our reputation, negative publicity, loss of users, partners and sales, increased remediation costs, and costly litigation or regulatory fines.

The costs to respond to a security breach and/or to mitigate any security vulnerabilities that may be identified could be significant, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service, and other harm to our business and our competitive position.

We could be required to fundamentally change our business activities and practices in response to a security breach or incident, or related regulatory actions or litigation, which could have an adverse effect on our business.

We may not have adequate insurance coverage for security incidents or breaches, including fines, judgments, settlements, penalties, costs, attorney fees, and other impacts that arise out of incidents or breaches.

If the impacts of a security incident or breach, or the successful assertion of one or more large claims against us exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), it could have an adverse effect on our business.

In addition, we cannot be sure that our existing insurance coverage, cyber coverage, and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to all or part of any future claim or loss (including, for example, as a result of the payment of ransomware) or that our insurance premiums will not increase as a result of any claims.

Our risks are likely to increase as we continue to expand, grow our customer base, and Process increasingly large amounts of Sensitive Information.

Additionally, policing unauthorized use of our know-how, technology and intellectual property is difficult and may not be effective.

Despite our precautions, it may be possible for unauthorized third parties to copy our platform or technology and use information that we regard as proprietary to create products or services that compete with our offerings.

Some of the provisions of our agreements that protect us against unauthorized use, copying, transfer and disclosure of our platform may be unenforceable under the laws of certain jurisdictions and foreign countries.

Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to ours.

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.

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.

In addition to experiencing a security incident, third parties may gather, collect, or infer Sensitive Information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

Additionally, our Sensitive Information or our customers’ Sensitive Information could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.

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 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.

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 our information technology, systems, or those of third parties with whom we work, 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, loss of customers or sales, and other adverse consequences.

We (and the third parties with whom we work) process large amounts of sensitive information, including personal data, proprietary business information, trade secrets, and intellectual property, making us and our third-party service providers targets for evolving cyber threats.

We (and the third parties with whom we work) face a variety of risks and threat actors, including ransomware attacks (which are becoming increasingly prevalent and severe), social engineering (including AI-enhanced deep fakes), online and offline fraud, malware, malicious code, denial-of-service attacks credential stuffing/harvesting attacks, personnel misconduct or error, software bugs, supply-chain attacks, nation-state actors, organized criminal groups, and attacks enhanced or facilitated by AI technologies.

These risks and threat actors are increasingly sophisticated and difficult to detect.

During geopolitical conflicts and depending on the relevant jurisdictions in which we (or third parties with whom we work or to whom we provide services) operate, we may face heightened risks of retaliatory cyber-attacks that could materially disrupt our operations and ability to deliver services.

Hybrid work arrangements and business transactions (for example, acquisitions) further expand our cybersecurity risks.

For example, acquired entities’ information technology systems may introduce additional vulnerabilities and other security issues that were not discovered during due diligence.

Additionally, our data and information technology systems may be damaged or fail for reasons other than a cyberattack, such as hardware failures or natural disasters.

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 with whom we work).

However, we have not and may not in the future detect and remediate all such vulnerabilities, including on a timely basis.

Additionally, we face security threats and vulnerabilities as a SaaS company arising from any vulnerabilities in our products and services and our customers’ use of our products and service

(for example, customers’ failure to appropriately secure their account credentials or other manner in which they interact with our products and services).

Our reliance on third-party service providers for cloud infrastructure, data centers, and other critical functions also introduces cybersecurity risks beyond our direct control, including supply-chain attacks and vulnerabilities in vendor systems.

Additionally, use of third-party AI technologies by our personnel or in our products/services poses significant data security risks, as these tools may not protect the confidentiality of inputs, may use our data to train third-party models, or could inadvertently reveal sensitive information through AI-generated outputs.

For example despite implementing guidelines for AI tool usage, we cannot guarantee compliance or track all relevant personnel interactions with these technologies, creating risks that may be particularly difficult to eliminate or manage.

It is difficult and costly to maintain measures designed to detect, investigate, mitigate, contain and remediate security incidents.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective, and we have in the past and may in the future experience security incidents.

For example, we have been the target of unsuccessful phishing / credential stuffing / other type of cyberattack attempts in the past, and expect such attempts will continue in the future.

Any actual or perceived security incident impacting us (or the third parties with whom we work) could result in government investigations, enforcement actions, litigation, regulatory penalties, operational disruptions, reputational harm, customer loss, monetary fund diversions, diversions of management attention, financial costs for remediation, notification, and legal proceedings and other adverse consequences.

Applicable obligations may require us or we may voluntarily choose to notify relevant stakeholders of security incidents.

We may be required to fundamentally change our business practices in response to security incidents, and our insurance coverage and limitations of liability in our contracts may be inadequate to cover all potential damages, costs and other losses.

The costs and resources required to prevent, detect, and respond to security threats continue to increase as we expand our business and process larger volumes of sensitive information, potentially diverting resources from growth initiatives and adversely affecting our competitive position.

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.

We have in the past and may in the future experience system slowdowns and interruptions from time to time.

In addition, continued growth in our customer base could place additional demands on our products and could cause or exacerbate slowdowns or interrupt the availability of our products.

We have in the past and may in the future experience system slowdowns and interruptions.

Additionally, growth in our customer base could place additional demands on our products and cause or otherwise exacerbate slowdowns or interrupt the availability of our products.

If there is a substantial increase in the volume of usage of our products, we will be required to further expand and upgrade our technology and infrastructure.

There can be no assurance that we will be able to accurately project the rate or timing of increases, if any, in the use of our products or expand and upgrade our systems and infrastructure to accommodate such increases on a timely basis.

In such cases, if our users are not able to access our products or encounter slowdowns when doing so, we may lose customers or partners.

In such cases, we may lose customers or partners if our users are not able to access our products or encounter slowdowns when doing so.

Some of our subscriptions include standard service-level commitments.

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Our disaster recovery plan may not be sufficient to address all aspects or any unanticipated consequence or incidents, and our insurance may not be sufficient to compensate us for the losses that could occur.

Moreover, Amazon Web Services (AWS) provides the vast majority of our cloud computing infrastructure that we use to host our products, mobile applications, and many of the internal tools we use to operate our business.

We have a long-term commitment with AWS pursuant to a commercial agreement, and our products, mobile applications, and internal tools use computing, storage capabilities, bandwidth, and other services provided by AWS.

Any significant disruption of, limitation of our access to, or other interference with our use of AWS would negatively affect our operations and could seriously harm our business.

In addition, any transition of the cloud services currently provided by AWS to another cloud services provider would require significant time and expense and could disrupt or degrade delivery of our products.

Our business relies on the availability of our products for our users and customers, and we may lose users or customers if they are not able to access our products or encounter difficulties in doing so.

The level of service provided by AWS could affect the availability or speed of our products, which may also impact the usage of, and our customers’ satisfaction with, our products and could seriously harm our business and reputation.

If AWS increases pricing terms, terminates or seeks to terminate our contractual relationship, establishes more favorable relationships with our competitors, or changes or interprets its terms of service or policies in a manner that is unfavorable with respect to us, our business, results of operations, and financial condition would be harmed.

In addition, we rely on hardware and infrastructure purchased or leased from third parties and software and SaaS products licensed from third parties to operate critical business functions.

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.

Amazon Web Services (AWS) provides the vast majority of our cloud computing infrastructure for hosting our products, mobile applications, and internal business tools under a long-term commercial agreement.

Any significant disruption of, limitation of access to, or interference with AWS would negatively affect our operations and could seriously harm our business.

Transitioning to another cloud provider would require significant time and expense and could disrupt service delivery.

If AWS increases pricing, terminates our relationship, establishes more favorable terms with competitors, or changes its terms of service unfavorably, our business and financial condition would be materially harmed.

In addition, we rely on hardware and infrastructure purchased or leased from third parties and software, AI tools and SaaS products licensed from third parties to operate critical business functions, and we face risks as a result of our reliance on these third-party providers, including risks inherent in how third party AI tools used in our solutions have been developed and deployed, including situations in which the third party may lack a proper license or consent for the data used to train their AI tools.

Our business would be disrupted if any such third-party hardware, software, AI tools, SaaS products and infrastructure becomes unavailable on commercially reasonable terms, or at all or has degradations in performance.

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

Additionally, should we choose to switch any third-party hardware, software, AI tools, SaaS products and/or infrastructure, delays or complications with respect to the transition could adversely impact 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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If we are unable to effectively anticipate and manage these risks, or if it is difficult for customers to access and use our products, our business, results of operations, and financial condition may be harmed.

We rely on traditional web search engines to direct traffic to our website.

If our website fails to rank prominently in unpaid search results, traffic to our website could decline and our business would be adversely affected.

Our success depends in part on our ability to attract users through unpaid internet search results on traditional web search engines such as Google.

The number of users we attract to our website from search engines is due in large part to how and where our website ranks in unpaid search results.

These rankings can be affected by a number of factors, many of which are not in our direct control, and they may change frequently.

For example, a search engine may change its ranking algorithms, methodologies, or design layouts.

As a result, links to our website may not be prominent enough to drive traffic to our website, and we may not know how or otherwise be in a position to influence the results.

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 Freshservice, Freshdesk, Freshchat, Freshcaller, and Freshsales products.

We rely on search engines, including traditional web search and emerging AI-powered platforms, to drive traffic to our websites, and changes in these platforms could adversely affect our business.

Our success depends in part on our ability to attract users through unpaid search results on traditional web search engines such as Google.

Search engines frequently update their algorithms, ranking methodologies, and user interfaces in ways that are outside our control.

The search ecosystem is also evolving to include AI-generated responses and standalone AI search experiences, which increasingly provide answers without requiring users to click through to a website.

These changes have contributed to a rise in “zero-click” searches, which could have an adverse impact on business, results of operations, and financial condition.

Historically, traffic to our websites from search engines has been driven by our position in unpaid search results.

Traffic from large language model (LLM)-based platforms currently represents a small portion of our total website traffic but has been growing in recent quarters.

As these platforms become more widely adopted, they may become a more material component of our customer acquisition strategy.

At the same time, the rise of AI-powered search may reduce the effectiveness of traditional SEO strategies.

Our rankings and visibility may be affected by changes to search engine algorithms, crawling or indexing practices, or interface designs that prioritize AI-generated content over traditional web links.

These changes may reduce traffic to our sites, even if our content remains high-quality.

Additionally, our content may be used by AI systems to generate responses or train models without driving attributable traffic or revenue.

Although we have made investments to improve our visibility in both traditional and AI-powered search environments, there can be no assurance that these efforts will fully offset the impact of ongoing changes in user behavior and search technology.

If we are unable to maintain or improve our visibility, our ability to attract users through unpaid channels may decline, requiring increased investment in paid marketing to meet growth targets.

This could increase customer acquisition costs and negatively affect our operating results.

We rely on third parties maintaining open digital marketplaces to distribute our mobile applications for our 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 Freshservice, Freshdesk, Freshchat, Freshcaller, 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 certain of our 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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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 face exposure to foreign currency exchange rate fluctuations that could adversely affect our revenue, operating expenses, and results of operations.

While we have historically transacted primarily in U.S.

dollars, we increasingly transact in foreign currencies with customers and vendors and for payroll in foreign jurisdictions where we operate.

Our results of operations and cash flows are subject to currency fluctuations primarily in the Indian rupee, British pound, and euro, as the Company is exposed to remeasurement to the U.S.

dollar, which is our functional currency.

These exposures may change as business practices evolve, economic and political conditions shift, and tax regulations develop.

Additionally, fluctuations in foreign currency values could make it more difficult to detect underlying trends in our business and results of operations.

Global events and geopolitical developments, including ongoing conflicts, fluctuating commodity prices, trade tariff developments, and inflation, have caused and may continue to cause global economic uncertainty and interest rate volatility, which could amplify currency fluctuation volatility.

We enter into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency expenses denominated in Indian rupee, and we may enter into additional hedging transactions if our foreign currency exposure becomes more significant.

However, 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, and these risk management efforts may not be successful.

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

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

Demand for our products is affected by a number of factors, some of which are beyond our control, such as the rate of adoption of our products within an organization, the timing of development and release of new products by our competitors;

Demand for our products is affected by a number of factors, some of which are beyond our control, such as the rate of

adoption of our products within an organization, the timing of development and release of new products by our competitors;

the development and acceptance of new features, integrations, and capabilities for our products;

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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 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 we are unable to continue to meet the demands of users and customers to keep up with trends in preferences for employee and customer experience 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 employee and customer experience 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.

Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to expand our base of customers may be impaired, and our business and results of operations will be harmed.

We believe that the brand identity that we have developed has significantly contributed to the success of our business with our existing customer base.

We also believe that maintaining and enhancing the “Freshworks” brand is critical to expanding our customer base and establishing and maintaining relationships with partners.

Maintaining and enhancing our brand may require us to make substantial investments, and these investments may not be successful.

If we fail to promote and maintain the “Freshworks” brand, or if we incur excessive expenses in this effort, our business, results of operations, and financial condition would be adversely affected.

We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become more difficult and expensive.

If we fail to offer high-quality customer support, our business and reputation will suffer.

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Any failure to provide such support could harm our reputation.

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;

fines and penalties;

disruptions of our business operations;

reputational harm;

loss of revenue or profits;

loss of customers or sales;

and other adverse business consequences.

As a regular part of our business, we Process Sensitive Information belonging to our users, customers, suppliers, partners, consultants, leads and employees.

Our Processing of such information subjects us to numerous federal, state, local, and foreign laws, orders, codes, regulations, and regulatory guidance regarding privacy, data protection, information security, and the Processing of personal information (collectively, Data Protection Laws), the number and scope of which are changing, subject to differing applications and interpretations, and may be inconsistent among countries, or conflict with other rules, laws, or Data Protection Obligations (defined below).

We are also subject to the terms of our internal and external privacy and security policies, representations, certifications, industry standards, publications, frameworks, contractual requirements, and other obligations to third parties related to privacy, data protection, and information security (collectively, Data Protection Obligations).

The requirements or obligations of the regulatory framework for privacy, information security, data protection, and data Processing worldwide is, and is likely to remain, uncertain for the foreseeable future and any significant change in Data Protection Laws or Data Protection Obligations could increase our costs and could require us to modify our products or operations, possibly in a material manner, and may limit our ability to develop new services and features that make use of the data that our users and customers voluntarily share, or may limit our ability to store and Process customer data and operate our business.

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).

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.

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 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.

These new developments further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.

Additionally, under various Data Protection Laws and other obligations, we may be required to obtain certain consents to Process personal information.

For example, some of our Processing practices, including certain of our products or services, may be challenged under wiretapping laws if we obtain consumer information from, or share consumer information with, third parties through various methods including chatbots or third-party marketing pixels.

These practices may be subject to increased challenges by class action plaintiffs.

Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.

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, 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.

The EU and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal information to other countries.

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 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.

Additionally, companies that transfer personal information out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activities groups.

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.

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.

It imposes restrictions and obligations on data fiduciaries, resulting from dealing with personal information and further, provides for levy of penalties for breach of obligations prescribed under the Data Protection Act.

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.

Governments have passed and are likely to pass additional laws regulating generative AI.

Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits.

If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages.

We use AI, including generative AI, and ML technologies in our products and services.

The development and use of AI/ML present various privacy and security risks that may impact our business.

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, 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.

These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI/ML, or prevent or limit our use of AI/ML.

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.

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 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.

We and the third parties with whom we work are subject to stringent and evolving global data privacy and security laws, regulations, contractual obligations, industry standards, and other obligations relating to data privacy or security.

Our actual or perceived failure (or that of the third parties with whom we work) to comply with these requirements could result in regulatory investigations, litigation, fines, business disruptions, reputational harm, loss of customers or revenue, and other adverse consequences.

We process sensitive information (including personal information) belonging to users, customers, suppliers, partners, and personnel, subjecting us to numerous federal, state, local, and foreign data protection laws that are changing, subject to differing interpretations, and may be inconsistent among jurisdictions.

For example, in the United States, certain comprehensive state consumer privacy laws impose obligations including specific privacy notice disclosures, consumer rights to access, correct, or delete personal information, and opt-out rights for targeted advertising and automated decision-making.

These laws allow for statutory fines and, in some cases, private litigation with significant statutory damages.

Internationally, regulations such as the EU GDPR, UK GDPR, and India's Digital Personal Data Protection Act impose strict processing requirements with consequences for noncompliance including potential processing bans, significant fines, and private litigation.

Additional data privacy and security laws may be proposed or enacted in the jurisdictions in which we, our customers or other third parties with whom we work operate or offer products or services.

We may be unable to transfer personal information from the EU, UK, and other jurisdictions to the United States or other relevant jurisdictions due to data localization requirements or cross-border transfer limitations.

While mechanisms such as the EU-U.S.

Data Privacy Framework exist, these are subject to legal challenges and regulatory scrutiny.

If we cannot lawfully transfer personal information or if compliance requirements become too onerous, we could face adverse consequences such as operational interruptions, the need to relocate business activities to other jurisdictions at significant expense, regulatory actions, substantial fines, and injunctions against data processing necessary to operate our business.

In addition to laws, we are subject to other obligations related to data privacy or security such as contracts, industry standards, and policies.

For example, we are bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.

We also publish policies, marketing materials, and other statements concerning data privacy, security, and AI.

Regulators are increasingly scrutinizing such statements, and if they are found to be inaccurate, misleading, or otherwise deficient we may be subject to regulatory investigations, enforcement actions, or other adverse consequences.

Our use of artificial intelligence, including generative and agentic AI and machine learning (ML) technologies, in products and services presents additional privacy and security risks.

AI technologies are subject to increasing regulation (for example, in relation to data privacy and security as well as general consumer protection) in jurisdictions around the globe, including the EU's Artificial Intelligence Act and emerging US state laws.

Privacy and data protection laws that regulate automated decision-making and extend consumer rights may be incompatible with our AI/ML use, potentially requiring us to disgorge profits, change business practices, retrain AI systems, and limit AI deployment.

If we cannot use AI technologies or such use is

restricted, our business may be less efficient and we may otherwise be at a competitive disadvantage.

Personnel use of generative AI technologies could result in inadvertent disclosure of personal information, creating additional compliance costs and regulatory risks.

Compliance obligations related to data privacy and security continue to evolve and become more stringent.

These obligations are subject to differing applications and interpretations across jurisdictions.

some of which may be inconsistent.

Such obligations have required and will continue to require from us significant resource expenditures, and may limit our ability to develop new services, store and process customer data, or operate our business effectively.

Any actual or perceived non-compliance with such obligations by us or by the third parties with whom we work (including our customers) could result in adverse consequences such as governmental enforcement actions, investigations, fines, penalties, audits, litigation including class actions and mass arbitration demands, additional reporting requirements, processing restrictions, orders to destroy data, and potential imprisonment of company officials.

Data privacy and security-related claims are increasingly common, with some allowing statutory damages on a per-violation basis that could result in substantial financial exposure.

For example, we have in the past and may in the future experience legal demands related to data privacy or security, such as in relation to our use of digital tracking technologies on our website.

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

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adverse publicity;

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

or substantial changes to our business model or operations.

Additionally, many of our products and services are general-purpose solutions that our customers can configure and deploy for their particular use cases.

Depending on the manner in which our customers use our products and services, it could expose us to additional data privacy and security obligations (for example, those related to telemarketing, employment, and AI).

Although we maintain measures designed to prohibit customers from using our products and services in unlawful or other harmful ways, customers may attempt (and have at times in the past attempted) to use our products and services in ways that violate our policies, terms or applicable laws, which could lead to adverse consequences for us such as those described above.

Risks Related to International Operations

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As of December 31, 2025, approximately 3,600 of our employees reside in India, representing approximately 81% of our total employee population.

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

For the fiscal year ended December 31, 2025, approximately 54% 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, select countries in the European Union and the United Kingdom.

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In addition, following Russia’s military invasion of Ukraine in February 2022, the United States, EU, and other nations announced various sanctions and export restrictions against Russia and Belarus.

Such restrictions include blocking sanctions on some of the largest state-owned and private Russian financial institutions, and their removal from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.

Such restrictions included blocking sanctions on some of the largest state-owned and private Russian financial institutions, and their removal from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.

The Russia-Ukraine conflict and the measures that have been taken, and could be taken in future, by the United States, NATO, and other countries have created global security concerns that could result in a regional conflict and otherwise have a lasting impact on regional and global economies, any or all of which could adversely affect our business, including preventing us from performing existing contracts, pursuing new business opportunities, or receiving payments for services already provided to customers.

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Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly and prohibit companies and their employees and agents from promising, authorizing, making, offering, soliciting, or accepting, directly or indirectly, improper payments or other benefits to or from any person whether in the public or private sector.

As we increase our international sales and business further, our risks under these laws may increase especially given our substantial reliance on sales to and through resellers and other intermediaries.

Our risks under these laws may increase as we increase our international sales and business further, especially given our substantial reliance on sales to and through resellers and other intermediaries.

Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, adverse media coverage, and other consequences.

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

Such investigations and enforcement actions, regardless of their outcome, could be costly, time-consuming, disruptive to our operations, and harmful to our reputation and business relationships.

Additionally, the costs of implementing and maintaining compliance programs, conducting due diligence on third-party partners, and responding to regulatory inquiries continue to increase as these laws evolve and enforcement intensifies globally.

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.

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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.

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.

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.

Further, Government of India introduced (i) the Code on Wages 2019 ("Wages Code");

(ii) the Code on Social Security, 2020 ("Social Security Code");

(iii) the Occupational Safety, Health and Working Conditions Code, 2020;

and (iv) the Industrial Relations Code, 2020, which consolidate, subsume and replace numerous existing central labour legislations.

Pursuant to notifications issued by Government of India dated November 21, 2025, the Occupational Safety, Health and Working Conditions Code, 2020 and Industrial Relations Code, 2020 have been made fully effective and certain provisions of the Wages Code and Social Security Code have been made effective, each as of November 21, 2025.

The effect of these provisions on us including impact on overall employee expenses which in turn may affect our profitability cannot be predicted with certainty at this stage.

We are subject to complex and evolving export control, import, and trade sanctions laws that could impair our ability to compete internationally, result in significant penalties, and adversely affect our business and results of operations.

Our business activities are subject to various export control, import, and trade and economic sanction laws and regulations, including, among others, the U.S.

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Violations of Trade Controls may subject our company, including responsible personnel, to various adverse consequences, including civil or criminal penalties, government investigations, and loss of export privileges.

Further, obtaining the necessary authorizations, including any required licenses, for particular transactions or uses of our products may be time-consuming, is not guaranteed, and may result in the delay or loss of sales opportunities.

In addition, if our channel partners fail to obtain any required import, export, or re-export licenses or permits, this could result in a violation of law by us, and we may also suffer reputational harm and other negative consequences, including government investigations and penalties.

Finally, changes in our products or future changes in Trade Controls could result in our inability to provide our products to certain customers or decreased use of our products by existing or potential customers with international operations.

Any decreased use of our products or mobile applications or increased limitations on our ability to export or sell our products and mobile applications would adversely affect our business, results of operations, and financial condition.

Changes in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products and could harm our business.

The future success of our business depends upon the continued use of the internet as a primary medium for commerce, communication, and business applications.

Federal, state, or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet as a commercial medium.

Changes in these laws or regulations could require us to modify our products in order to comply with these changes.

In addition, government agencies or private organizations have imposed and may impose additional taxes, fees, or other charges for accessing the internet or commerce conducted via the internet.

These laws or charges could limit the growth of internet related commerce or communications generally or result in reductions in the demand for internet-based products such as ours.

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.

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.

Restrictive changes to immigration laws may hamper our growth.

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Risks Related to Intellectual Property

We may become subject to intellectual property rights claims and other litigation that are expensive to support, and if resolved adversely, could have a material adverse effect on us.

We have in the past, and may in the future, become subject to intellectual property or other disputes.

Our success depends, in part, on our ability to develop and commercialize our offerings without infringing, misappropriating or otherwise violating the intellectual property rights of third parties.

However, we may not be aware that our offerings are infringing, misappropriating, or otherwise violating third-party intellectual property rights.

From time to time, our competitors or other third parties have claimed, and may in the future claim, that we are infringing upon, misappropriating, or violating their intellectual property rights, even if we are unaware of the intellectual property rights that such parties may claim cover our products or some or all of the other technologies we use in our business.

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.

The costs of supporting such litigation, regardless of merit, are considerable, and such litigation may divert management and key personnel’s attention and resources, which might seriously harm our business, results of operations, and financial condition.

We may be required to settle such litigation on terms that are unfavorable to us.

For example, a settlement may require us to obtain a license to continue practices found to be in violation of a third party’s rights, which may not be available on reasonable terms and may significantly increase our operating expenses.

A license to continue such practices may not be available to us at all.

As a result, we may also be required to develop alternative non-infringing technology or practices or discontinue the practices.

The development of alternative non-infringing technology or practices would require significant effort and expense.

Similarly, if any litigation to which we may be a party fails to settle and we go to trial, we may be subject to an unfavorable judgment which may not be reversible upon appeal.

For example, the terms of a judgment may require us to cease some or all of our operations or require the payment of substantial amounts to the other party.

Any of these events would cause our business and results of operations to be materially and adversely affected as a result.

Moreover, insurance might not cover such claims or disputes, might not provide sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available on terms acceptable to us.

A claim or dispute brought against us that is uninsured or underinsured could result in unanticipated costs and could have a material adverse effect on our business, results of operations, and financial condition.

We are also frequently required to indemnify our channel partners and customers in the event of any third-party infringement claims against our customers and third parties who offer our products, and such indemnification obligations may be excluded from contractual limitation of liability provisions that limit our exposure.

These claims may require us to initiate or defend protracted and costly litigation on behalf of our customers and channel partners, regardless of the merits of these claims.

If any of these claims succeed, we may be forced to pay damages on behalf of our customers and channel partners, may be required to modify one or more products to make it non-infringing, or may be required to obtain licenses for the products used.

If we cannot obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using one or more products, and our channel partners may be forced to stop selling one or more of our products.

We face risks from intellectual property infringement claims and other litigation that could result in significant costs, operational restrictions, and material adverse effects on our business and results of operations.

Our success depends on developing and commercializing offerings without infringing third-party intellectual property rights.

However, we may be subject to claims of infringement, misappropriation of violation of such rights, and competitors or other parties may claim infringement even when we are unaware of their alleged intellectual property coverage.

While we maintain policies prohibiting employees from using confidential information of third parties or former employers, we cannot guarantee compliance, and employees may act without our knowledge in contravention of such policies.

Additionally, our use of third-party generative AI tools exposes us to copyright infringement and other intellectual property claims, as we may have limited insight into the content used to train these AI systems or the extent to which original works remain in AI outputs.

Intellectual property litigation, regardless of merit, involves considerable costs and diverts management attention and resources, potentially harming our business and results of operations.

We may be required to settle litigation on unfavorable terms, obtain licenses that may not be available on reasonable terms or at all, develop alternative non-infringing technology at significant expense, or discontinue certain practices or operations.

Adverse judgments could require us to cease operations or pay substantial damages.

Our insurance may not cover such claims, provide sufficient coverage, or remain available on acceptable terms, resulting in unanticipated costs and material adverse effects on our business.

We indemnify channel partners and customers against third-party infringement claims, and these obligations may be excluded from contractual liability limitations.

Such claims may require us to initiate or defend costly litigation regardless of

merit, pay damages on behalf of customers and partners, modify products to make them non-infringing, or obtain necessary licenses.

If we cannot obtain required licenses on commercially reasonable terms, customers may be forced to stop using our products and channel partners may be forced to stop selling them, adversely affecting our business and results of operations.

If we are unable to protect our intellectual property rights both in the United States and abroad, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected.

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The intellectual property laws and protections offered in countries outside of the United States may not protect proprietary rights to the same extent as laws in the United States.

Therefore, our efforts to protect our intellectual property may not be adequate and competitors may independently develop similar technology or duplicate our products or services and compete with us in this and other geographies where enforcement of intellectual property rights is less clear than in the United States.

While we maintain a policy requiring our employees, consultants, independent contractors, and third parties who are engaged to develop any material intellectual property for us to enter into confidentiality and invention assignment agreements to control access to and use of our proprietary information and to ensure that any intellectual property developed by such employees, contractors, consultants, and other third parties are assigned to us, we cannot guarantee that the confidentiality and invention assignment agreements or other employee, consultant, or independent contractor agreements we enter into adequately protect our intellectual property rights and other proprietary information.

In addition, we cannot guarantee that these agreements will not be breached, that we will have adequate remedies for any breach, or that the applicable counter-parties to such agreements will not assert rights to our intellectual property rights or other proprietary information arising out of these relationships.

Furthermore, the steps we have taken and may take in the future may not prevent misappropriation of our proprietary solutions or technologies, particularly with respect to employees who are no longer employed by us.

Furthermore, third parties may knowingly or unknowingly infringe or circumvent our intellectual property rights, and we may not be able to prevent infringement without incurring substantial expense.

Litigation brought to protect and enforce our intellectual property rights would be costly, time-consuming, and distracting to management and key personnel, and could result in the impairment or loss of portions of our intellectual property.

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.

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

Our failure to obtain or maintain the right to use certain of our intellectual property would negatively affect our business.

Our future success and competitive position depend in part upon our ability to obtain or maintain certain intellectual property used in our products.

While we have been issued patents for certain aspects of our intellectual property in the United States and have additional patent applications pending in the United States, we have not applied for patent protection in foreign jurisdictions, and may be unable to obtain patent protection for the technology covered in our patent applications.

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Furthermore, any issued patents may be challenged, invalidated, or circumvented by third parties.

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.

We use trademarks, trade names, and brand names to distinguish our solutions from the products of our competitors, and have registered or applied to register many of these trademarks in the United States and certain countries outside the United States.

As we rely in part on brand names and trademark protection to enforce our intellectual property rights, efforts by third parties to oppose trademark applications, limit use of our brand names or trademarks and barriers to the registration of brand names and trademarks in various countries may restrict our ability to promote and maintain a cohesive brand throughout our key markets.

In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which would result in loss of brand recognition and would require us to devote resources to advertising and marketing new brands.

We also rely on unpatented proprietary technology.

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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.

To protect our trade secrets and other proprietary information, we require employees, consultants, and independent contractors to enter into confidentiality agreements and invention assignment agreements to control access to and use of our proprietary information and to ensure that any intellectual property developed by such employees, contractors, consultants, and other third parties are assigned to us.

We cannot assure you that these agreements will provide meaningful protection for our trade secrets, know-how, or other proprietary information in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how, or other proprietary information.

If we are unable to maintain the proprietary nature of our technologies, our business would be materially adversely affected

We rely on our trademarks, trade names, and brand names to distinguish our solutions from the products of our competitors, and have registered or applied to register many of these trademarks in the United States and certain countries outside the United States.

However, occasionally third parties may have already registered identical or similar marks for products or solutions that also address the software market.

As we rely in part on brand names and trademark protection to enforce our intellectual property rights, efforts by third parties to limit use of our brand names or trademarks and barriers to the registration of brand names and trademarks in various countries may restrict our ability to promote and maintain a cohesive brand throughout our key markets.

There can also be no assurance that pending or future U.S.

or foreign trademark applications will be approved in a timely manner or at all, or that such registrations will effectively protect our brand names and trademarks.

Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.

Furthermore, third parties may knowingly or unknowingly infringe or circumvent our intellectual property rights, and we may not be able to prevent infringement without incurring substantial expense.

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

Our use of “open source” and third-party software could impose unanticipated conditions or restrictions on our ability to commercialize our products and could subject us to possible litigation.

A portion of the technologies we use in our products and mobile applications incorporates “open source” software, and we may incorporate open source software in our products and mobile applications in the future.

From time to time, companies that use third-party open source software have faced claims challenging the use of such open source software and their compliance with the terms of the applicable open source license.

We may be subject to suits by parties claiming ownership of what we believe to be open source software or claiming non-compliance with the applicable open source licensing terms.

This exposes us to potential claims of ownership by parties of what we believe to be open source software or non-compliance claims as to the applicable open source licensing terms.

Some open source licenses require end-users who distribute or make available across a network software and services that include open source software to make available all or part of such software, which in some circumstances could include valuable proprietary code, at no cost, or license such code under the terms of the particular open source license.

While we employ practices designed to monitor our compliance with the licenses of third-party open source software and protect our valuable proprietary source code, we may inadvertently use third-party open source software in a manner that exposes us to claims of non-compliance with the applicable terms of such license, including claims for infringement of intellectual property rights or for breach of contract.

manner that exposes us to claims of non-compliance with the applicable terms of such license, including claims for infringement of intellectual property rights or for breach of contract.

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.

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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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.

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

Our ability to utilize net operating loss carryforwards and other tax attributes to offset taxable income may be limited by ownership changes, evolving tax laws, and utilization restrictions, which could increase our future tax obligations and adversely affect our results of operations.

As of December 31, 2025, we had U.S.

federal net operating loss carryforwards of $67.3 million portions of which will begin to expire in 2034 if not utilized.

federal net operating losses arising in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in a taxable year is limited to 80% of taxable income in such year.

In addition, we have foreign tax credits of $17.6 million that will begin to expire in 2028.

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

Under the legislation enacted in 2017, titled the Tax Cuts and Jobs Act (Tax Act), as modified by the Coronavirus Aid, Relief, and Economic Security (CARES Act), U.S.

federal net operating losses incurred in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal net operating losses in taxable years beginning after December 31, 2020, is limited.

It is uncertain how various states will respond to the Tax Act and the CARES Act.

For state income tax purposes, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

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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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• changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

• changes in tax laws, tax treaties, and regulations or the interpretation of them, including the Tax Act;

• changes in tax laws, tax treaties, and regulations or the interpretation of them, including the One Big Beautiful Bill Act ("OBBBA");

• changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;

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• limitations or adverse findings regarding our ability to do business in some jurisdictions.

In particular, new income, sales and use or other tax laws or regulations could be enacted at any time, which could adversely affect our business operations and financial performance.

In addition, changes in tax laws or regulations could be enacted or existing tax laws or regulations could be applied to us or our customers in a manner that could increase the costs of our products and harm our business.

Changes in tax laws or regulations could be enacted or existing tax laws or regulations could be applied to us or our customers in a manner that could increase the costs of our products and harm our business.

Further, existing tax laws and regulations could be interpreted, modified or applied adversely to us.

For example, the Tax Act enacted many significant changes to the U.S.

Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Act may affect us, and certain aspects of the Tax Act could be repealed or modified in future legislation.

For example, the CARES Act modified certain provisions of the Tax Act.

In addition, it is uncertain if and to what extent various states will conform to the Tax Act, the CARES Act, or any newly enacted federal tax legislation.

Changes in corporate tax rates, the realization of net operating losses, and other deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Act or future reform legislation could have a material impact on the value of our deferred tax assets and could increase our future U.S.

For example, the OBBBA, together with prior tax legislation, enacted many significant changes to the U.S.

Future guidance from the Internal Revenue Service and other tax authorities with respect to any tax legislation may affect us, and certain aspects of such legislation could be repealed or modified or sunset in future years.

Changes in corporate tax rates, the realization of net operating losses, and other deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses or future tax reform legislation could have a material impact on the value of our deferred tax assets and could increase our future U.S.

Our international operations may subject us to potential adverse tax consequences.

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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.

Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable nexus, often referred to as a “permanent establishment” under international tax treaties.

If such a challenge, disagreement or assertion 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.

Changes in India's taxation system could adversely affect our business, financial condition, and results of operations due to the complex and evolving nature of central and state tax regimes.

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.

permanent basis from time to time.

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

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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.

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.

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Risks Related to Ownership of Our Class A Common Stock

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.

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, 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 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.

This concentration of ownership could also delay or prevent a change of control of us that other stockholders may view as beneficial.

Mathrubootham is no longer employed with us, he will continue to have the same influence over matters requiring stockholder approval.

In addition, the holders of Class B common stock collectively will continue to be able to control all matters submitted to our stockholders for approval even though their stock holdings represent less than 50% of the outstanding shares of our common stock.

Because of the 10-to-1 voting ratio between our Class B common stock and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock even when the shares of Class B common stock represent as little as 10% of all outstanding shares of our Class A common stock and Class B common stock.

This concentrated control will limit your ability to influence corporate matters for the foreseeable future, and, as a result, the market price of our Class A common stock could be adversely affected.

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.

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

We may issue our capital stock or securities convertible into our capital stock from time to time in connection with a financing, acquisition, investments, or otherwise.

We intend to issue an additional 2,850,000 shares of our Class A common stock and donate such shares to a newly formed U.S.

charitable foundation in the future, which will result in additional dilution to our existing stockholders.

Additional issuances of our stock will result in dilution to existing holders of our stock.

We expect to grant equity awards to employees, officers, directors and other service providers under our equity incentive plans and to the extent stock options to purchase our stock are exercised or restricted stock units settle, there will be further dilution.

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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Such litigation has been instituted against us and could result in substantial costs and a diversion of our management’s attention and resources.

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, 2025, 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 71.1% of the voting power of our outstanding capital stock, and our former Executive Chairman, Mr.

Mathrubootham, controlled approximately 18.3% of the voting power of our outstanding common stock.

As a result, these stockholders, acting together, 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.

This concentration of ownership could also delay or prevent a change of control of us that other stockholders may view as beneficial.

Mathrubootham, our former Executive Chairman controlled approximately 18.3% of the voting power of our outstanding common stock as of December 31, 2025, may continue to have influence over matters requiring stockholder approval.

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

We may issue our capital stock or securities convertible into our capital stock from time to time in connection with a financing, acquisition, investments, or otherwise.

Additional issuances of our stock will result in dilution to existing holders of our stock.

We continue to reserve 2,850,000 shares of our Class A common stock for donation to a newly formed U.S.

charitable foundation in the future, which will result in additional dilution to our existing stockholders.

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.

Our stock repurchase programs subject us to various risks that could materially and adversely affect our business, financial condition, results of operations, and stock price.

These risks include market timing and valuation uncertainties, impacts on key financial metrics, liquidity constraints, regulatory limitations, conflicts with strategic objectives, adverse market perceptions, and execution challenges.

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, which was completed in August 2025.

Our stock repurchase programs are subject to significant market timing and valuation risks that could result in suboptimal capital allocation and adverse impacts on shareholder value.

We may repurchase shares at prices that subsequently prove to have been excessive relative to the intrinsic value of our stock, particularly during periods of market volatility or when our stock price is trading at elevated multiples.

Market conditions, investor sentiment, and macroeconomic factors beyond our control can cause substantial fluctuations in our stock price, making it difficult to determine optimal timing and pricing for repurchases.

If we execute repurchases when our stock is overvalued, we may destroy shareholder value by paying more for shares than they are ultimately worth, reducing the economic benefit to continuing shareholders.

Conversely, if we suspend or reduce repurchases during periods when our stock may be undervalued due to temporary market dislocations, we may miss opportunities to enhance shareholder returns.

Our repurchase decisions are based on management's assessment of various factors, including stock price, market conditions, available cash, and alternative investment opportunities, but these assessments may prove incorrect.

Additionally, the timing of our repurchases may create unintended signaling effects to the market about management's confidence in the company's prospects, potentially leading to increased volatility or adverse market reactions if our subsequent performance does not meet market expectations established by our repurchase activity.

Substantial future sales of shares of our Class A common stock by existing holders in the public market could cause the market price of our Class A common stock to decline.

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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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In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure, including regulations implemented by the SEC and Nasdaq, may increase legal and financial compliance costs and make some activities more time consuming.

For example, in July 2023, the SEC adopted rules requiring the disclosure of specified elements of cybersecurity risk management, strategy and governance and requiring the disclosure of material cybersecurity incidents within a short time period.

In addition, the SEC has recently proposed climate change and environmental, social, and governance matters (ESG) reporting requirements, which, if approved, would increase our compliance costs.

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

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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.

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.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

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Any disruptions relating to our systems enhancements, particularly any disruptions impacting our operations during the design or implementation periods, could adversely affect our ability to process customer orders, provide products and support to our customers, invoice and collect from our customers, fulfill contractual obligations, and otherwise run our business.

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.

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.

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.

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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.

There is continuing debate among certain investors, regulators, customers, employees, and other stakeholders concerning environmental, social, and governance ("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 not in line with their philosophy.

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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.

At the same time, anti-ESG sentiment has gained momentum among certain groups in the United States, and the federal and state governments have enacted or proposed “anti-ESG” policies.

In addition, the U.S.

Supreme Court’s ruling striking down race-based affirmative action in higher education has increased scrutiny of private sector employment practices, and activist groups and state attorneys general have begun to analogize the outcome of that case to private employment matters, asserting that certain corporate practices are discriminatory and unlawful.

Such anti-ESG related policies, legislation, initiatives and scrutiny could expose us to the risk of litigation or result in legal costs and reputational harm.

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.

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