Item 1A. Risk Factors
ITEM 1A—RISK FACTORS
The following represent material changes to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2019. The risks factors set forth below update, and should be read together with, the risk factors in our Form 10-K for the year ended December 31, 2019 and our Form 10-Q for the quarters ended June 30, 2020 and March 31, 2020.
Our business has been and will likely continue to be negatively affected by the COVID-19 outbreak.
The outbreak of COVID-19 in many countries and regions, including the United States, Europe and Asia-Pacific, which was declared a pandemic by the World Health Organization on March 11, 2020, continues to adversely affect global commercial activity and has contributed to significant volatility in the financial markets. We have experienced significant revenue declines related to COVID-19 due to a reduction in consumer spending and closures of certain of our merchant customer businesses throughout North America, Europe and Asia Pacific. We expect that the negative effects of the COVID-19 pandemic on our financial results will continue until economic conditions improve.
We may also experience financial losses due to a number of operational factors, including but not limited to:
• Third-party disruptions, including potential outages at network providers, call centers and other suppliers;
• Increased cyber and payment fraud risk related to COVID-19, as cybercriminals attempt to profit from the disruption, given increased online banking, e-commerce and other online activity; and
• Challenges to the availability and reliability of our solutions and services due to changes to operations, including the possibility of one or more clusters of COVID-19 cases occurring at our facilities, affecting our employees or affecting the systems or employees of our clients or other third parties on which we depend.
These factors may remain prevalent for a significant period of time and may continue to adversely affect our business, results of operations and financial condition even after the COVID-19 pandemic has subsided. The full effects of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows will depend on future developments, which are highly uncertain and are difficult to predict at this time, including, but not limited to, the duration and spread of the pandemic, its severity, the restrictive actions taken to contain the virus or treat its effects, its effects on our customers and how quickly and to what extent normal economic conditions, operations and demand for our services can resume. The current outbreak or continued spread of COVID-19 has caused an economic slowdown and recession in the United States and other markets in which we operate, and it is possible that it could cause a global recession. It may also impact financial markets and corporate credit markets which could adversely impact our access to financing or the terms of any such financing. Accordingly, the ultimate effects on our operations, financial condition and cash flows cannot be determined at this time. Nevertheless, despite the uncertainty of the COVID-19 situation, we expect that the COVID-19 pandemic will have an adverse effect on our revenues and financial results for the remainder of 2020.
Furthermore, the COVID-19 pandemic and the resulting adverse and unpredictable economic conditions are likely to implicate or exacerbate other risks identified in our Annual Report on Form 10-K for the year ended December 31, 2019, which in turn could materially adversely affect our business, financial condition, results of operations and liquidity.
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