What changed in this filing

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Item 1A. Risk Factors

2024-02-20 compared with 2023-02-23 · 108 added, 95 removed, 585 unchanged (26% of the section changed)

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• We may make decisions based on the best interests of our users in order to build long-term trust that may result in us forgoing short-term gains.

• We rely on third parties to perform certain key functions, and their failure to perform those functions could adversely affect our business, financial condition and results of operations.

• We compete in a highly competitive and rapidly evolving market with a number of other companies and we face the possibility of new entrants disrupting our market over time.

• Our recent international expansion subjects us to additional costs and risks which could harm our business, revenue and financial results, and our continued international expansion may be unsuccessful.

• We are making substantial investments in new product offerings and technologies, and expect to increase such investments in the future.

These new efforts are inherently risky, and we may never realize any expected benefits from them.

• We are actively investing in new product offerings, technologies, and minority investments, with plans to further increase these investments in the future.

While these endeavors hold significant potential, they also come with inherent risks, and there is no guarantee that we will realize the anticipated benefits.

• Our financial performance is dependent on our ability to successfully refer users to financial services partners, and these partners are not precluded from offering products and services outside of our platform.

• Macroeconomic developments such as inflationary conditions in the U.S.

have caused macroeconomic uncertainty and may have an adverse impact on our business, results of operations l and our vertical diversification strategy.

have caused macroeconomic uncertainty and may have an adverse impact on our business, results of operations and our vertical diversification strategy.

• Adverse conditions in the consumer finance markets, or poor or uncertain macroeconomic conditions, could harm our business, financial condition and results of operations if our financial services partners reduce their marketing budgets and decrease spending on our platform.

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If consumers do not find value in our platform or do not like the consumer experience on our platform, the number of matches on our platform may decline, which would harm our business, financial condition and results of operations.

We believe that the growth of our business and revenue depends upon our ability to engage our existing users and to add new users in our current as well as new markets.

We believe that the growth of our business and revenue depends upon our ability to engage our existing users and to add new users in our current as well as new verticals.

If we lose users or user engagement diminishes, our business and financial condition will be negatively impacted.

If we fail to remain competitive on customer experience, editorial articles and product offerings, our ability to grow our business may also be adversely affected.

While a key part of our business strategy is to engage users in our existing markets, we also intend to expand our operations into new markets.

In doing so, we may incur losses or otherwise fail to enter new markets successfully.

Our expansion into new markets may place us in unfamiliar competitive environments and involve various risks, including competition, government regulation, the need to invest significant resources and the possibility that returns on such investments will not be achieved for several years or at all.

While a key part of our business strategy is to engage users in our existing verticals, we also intend to expand our operations into new verticals.

In doing so, we may incur losses or otherwise fail to enter new verticals successfully.

Our expansion into new verticals may place us in unfamiliar competitive environments and involve various risks, including competition, government regulation, the need to invest significant resources and the possibility that returns on such investments will not be achieved for several years or at all.

There are many factors that could negatively affect our ability to grow our user base and engagement, including if:

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If search engines’ algorithms, methodologies, and/or policies are modified or enforced in ways we do not anticipate, or if our search results page rankings decline for other reasons, traffic to our platform or user growth or engagement could decline, any of which would harm our business, financial condition and results of operations.

We are dependent on internet search engines, primarily Google, to direct traffic to our platform, including our website.

Search engines, such as Google, may modify their search algorithms and policies or enforce those policies in ways that are detrimental to us, and without prior notice to us.

If that occurs, we may experience significant declines in the organic search ranking of our search results, leading to a decrease in traffic to our platform.

We have experienced declines in traffic and user growth as a result of these changes in the past, and anticipate fluctuations as a result of such actions in the future.

The introduction of AI-assisted technologies may impact the relevance of search engines and also result in declines in our search engine ranking, leading to decreased traffic to our platform, which may impact our financial results if we are not able to adapt our content strategy to a changing web search landscape.

In addition, Google may take action against websites for behavior that it believes unfairly influences search results.

Google does not publish guidelines explaining the types of behavior that may trigger an action.

For example, in 2017, Google took action against us which temporarily resulted in lower search rankings and decreased traffic to our website.

Our ability to appeal these actions is limited, and we may not be able to revise our content strategies to recover the loss in domain authority, page rankings, traffic or user growth resulting from such actions.

Any significant reduction in the number of users directed to our website or mobile application from search engines would harm our business, revenue and financial results.

Our reliance on internet search engines, particularly Google, for directing traffic to our platform, poses risks.

Search engines, like Google, may modify algorithms or policies without prior notice, potentially resulting in significant declines in our organic search ranking and decreased platform traffic.

Past changes have caused declines in traffic and user growth, with anticipated fluctuations in the future.

The introduction of AI-assisted technologies could further impact search engine relevance, causing declines in our ranking and decreased platform traffic, affecting our financial results.

Additionally, Google may take action against websites for behavior deemed to unfairly influence search results, without providing published guidelines.

In 2017, Google’s action temporarily resulted in lower search rankings and decreased traffic to our website.

Limited appeal options may hinder recovery from such actions.

A substantial reduction in users directed from search engines would harm our business, revenue, and financial results.

In anticipation of Google’s deprecation of third-party advertising cookies, we have reduced their use since 2022.

We are also exploring new audience targeting and measurement approaches and focusing on direct consumer connections through registration ramps to minimize reliance on search engines.

Changes in our marketing approach and consumer relationships are ongoing, with uncertain outcomes on actionable marketing data.

Negative effects on targeting consumers would impact our ability to match them with financial services partners, posing a threat to our business, revenue, and financial results.

Failure to maintain our reputation and brand recognition and attract and engage users in a cost-effective manner would harm our business, financial condition and results of operations.

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We may make decisions based on the best interests of our users in order to build long-term trust that may result in us forgoing short-term gains.

One of our fundamental values is to build our business by making decisions based upon the best interests of our users, which we believe has been essential to our success in building user trust in our platform and increasing our user growth rate and engagement.

We believe this best serves the long-term interests of our company and our stockholders.

In the past, we have forgone, and we may in the future continue to forgo, certain expansion or short-term revenue opportunities that we do not believe are in the best interests of our platform and our users, even if such decisions adversely affect our results of operations in the short term.

For example, we do not use impression-based advertising on our platform (i.e., where payment is based on digital views or engagement);

we publish editorial content on topics that do not generate revenue for us, and our editorial team maintains editorial independence from our business teams.

Reviews and ratings of financial services products are neither influenced by whether a product is offered on our platform nor by the pricing we may have with a financial services partner.

However, this strategy of focusing on building long-term trust instead of short-term revenue opportunities may not result in the long-term benefits that we expect, in which case our user traffic and engagement, business, financial condition and results of operations could be harmed.

We are committed to building our business by prioritizing the best interests of our users, a value we consider instrumental in establishing user trust and driving platform growth and engagement.

We believe that this approach aligns with the long-term interests of both our company and stockholders.

Historically and potentially in the future, we may choose to forego certain expansion or short-term revenue opportunities that do not align with the best interests of our platform and users, even if such decisions adversely impact our short-term results.

For instance, our platform avoids the use of impression-based advertising, refrains from generating revenue through certain editorial content topics, and ensures the editorial team maintains independence from our business teams.

Reviews and ratings of financial services products remain unbiased, unaffected by product placement on our platform or pricing agreements with financial services partners.

Additionally, we may invest in products or features that may not yield immediate financial benefits but are expected to drive consumer engagement or offer potential long-term advantages.

As an illustration, the 2023 launch of the NerdUp credit card, aimed at helping consumers build and improve their credit, is not anticipated to generate significant direct profitability from interchange fees.

Instead, we view this product as a means to build consumer trust by offering a compelling product designed for those who want to build or improve their credit.

We expect that as these consumers qualify for non-secured credit cards, they will transact on our site, allowing us to earn fees from matching them with financial services partners.

However, the focus on building long-term trust and consumer engagement over short-term revenue opportunities may not always yield the expected long-term benefits, potentially resulting in harm to user traffic, engagement, business, financial condition, and operational results.

We rely on third parties to perform certain key functions, and their failure to perform those functions could adversely affect our business, financial condition and results of operations.

We rely on certain third-party computer systems and third-party service providers for a variety of services, including cloud technology providers, third-party data providers, credit bureaus, data transfer networks, and remote and offshore engineering and other services to run our platform and support or carry out certain functions.

Any significant disruption to the infrastructure of our third-party service providers and/or any changes in our third-party service providers’ service levels may significantly impact our business operations, including making our platform unavailable to our users.

A lengthy interruption in the availability of our platform would result in a loss of matches with our financial partners and corresponding revenue, which would impact our operating results and cash flow.

In addition, it would negatively impact search engine ranking, user experience and our reputation with our financial partners.

Furthermore, in the event that any of our agreements with our third-party service providers are terminated, we may experience significant costs or downtime in connection with the transfer to, or

the addition of, new hosting providers.

Although alternative providers could host our platform on a substantially similar basis, such transition could potentially be disruptive and we could incur significant costs in connection therewith.

We compete in a highly competitive and rapidly evolving market with a number of other companies and we face the possibility of new entrants disrupting our market over time.

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We entered the Canadian and Australian markets organically in the third quarter of 2021 and the fourth quarter of 2022, respectively.

We believe our growth strategy depends, in part, on our continued international expansion.

We believe part of our growth strategy depends on our continued international expansion.

We continue to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will be successful.

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As we continue to expand our international operations, our success will depend in large part on our ability to anticipate and effectively manage these risks, which in turn will require significant management attention and financial resources.

In addition, certain international markets where we do business, such as the UK are subject to significant economic uncertainty.

Significant economic developments in the UK, or the perception that any of them could occur, creates further challenges for operating in this market.

In addition, certain international markets where we do business are subject to significant economic uncertainty.

Significant economic developments in these markets, or the perception that any of them could occur, creates further challenges for operating in these markets.

If we are unable to successfully manage any of these risks, our existing international operations and any future international expansion could be compromised, which could harm our business, financial condition and results of operations.

We are making substantial investments in new product offerings and technologies, and expect to increase such investments in the future.

These efforts are inherently risky, and we may never realize any expected benefits from them.

We have made substantial investments to develop new product offerings and technologies, including our mobile application, personal finance management tools, our data infrastructure and our recommendation engine, and we intend to continue investing significant resources in developing new technologies, tools, features, services, products and product offerings.

We expect to increase our investments in these new initiatives in the near term which may result in lower margins.

Additionally, following our acquisition of On the Barrelhead (OTB) in the third quarter of 2022, we plan to invest significant resources to integrate, develop and expand new offerings using our newly acquired technology.

We also expect to spend substantial amounts as we seek to grow the verticals in which we operate our platform and increase our scale, and to expand our offerings to additional geographic markets.

If we do not spend our development budget efficiently or effectively on commercially successful and innovative technologies, we may not realize the expected benefits of our strategy.

Our new initiatives also have a high degree of risk, as each involves strategies, technologies and regulatory requirements with which we have limited or no prior development or operating experience.

There can be no assurance that consumer demand for such initiatives will exist or be sustained at the levels that we anticipate, or that any of these initiatives will gain sufficient traction or

market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with these new investments.

It is also possible that product offerings developed by others will render our product offerings noncompetitive or obsolete.

Further, our development efforts with respect to new product offerings and technologies could distract management from current operations, and will divert capital and other resources from our more established product offerings and technologies.

Even if we are successful in developing new product offerings or technologies, regulatory authorities may subject us to new rules or restrictions in response to our innovations that could increase our expenses or prevent us from successfully commercializing new product offerings or technologies.

If we do not realize the expected benefits of our investments, our business, financial condition and operating results may be harmed.

We are actively engaged in significant investments in new product offerings, technologies, and minority investments, with plans to further increase these investments in the future.

However, these endeavors inherently carry risks, and the realization of expected benefits is not guaranteed.

Our substantial investments encompass the development of various products, technologies, and minority investments, including our mobile application, personal finance management tools, data infrastructure, and recommendation engine.

We are committed to continuing substantial resource allocation for the creation of new technologies, tools, features, services, and product offerings.

Anticipating an increase in investments in the near term, we acknowledge that this may impact our margins.

Following the acquisition of On the Barrelhead (OTB) in the third quarter of 2022, we plan to continue investing in developing and expanding new offerings using the acquired technology.

Moreover, we plan to allocate substantial resources to grow the verticals on our platform, increase our scale, and expand into additional geographic markets.

However, the efficient and effective allocation of our development budget on commercially successful and innovative technologies is crucial for realizing the expected benefits of our strategy.

The high degree of risk associated with our new initiatives includes limited or no prior development or operating experience in the strategies, technologies, and regulatory requirements involved.

There is no assurance of sustained consumer demand or sufficient market acceptance to generate revenue that offsets new expenses or liabilities associated with these investments.

Competitive dynamics pose a risk, as product offerings developed by others may render our offerings noncompetitive or obsolete.

Furthermore, the development efforts for new product offerings and technologies could distract management attention from current operations and redirect capital and resources from our established products.

Even if successful, regulatory authorities may impose new rules or restrictions in response to our innovations, potentially increasing expenses or hindering successful commercialization.

The failure to realize the expected benefits of these investments may adversely impact our business, financial condition, and operating results.

Our financial performance is dependent on our ability to successfully refer users to financial services partners, and these partners are not precluded from offering products and services outside of our platform.

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economic conditions.

We have less experience operating in some of the newer market verticals to which we have expanded.

We have expanded to new verticals over the last several years, including SMB products and insurance products.

We do not have as much experience with these newer verticals as we do with the other more established verticals on our platform.

Accordingly, newer verticals may be subject to greater risks than the more established verticals on our platform.

The success of our entry into new verticals will depend on a number of factors, including:

We have less experience operating in some of the newer market verticals and products to which we have expanded.

We have expanded to new verticals and products over the last several years.

We do not have as much experience with these newer verticals and products as we do with the other more established verticals on our platform.

Accordingly, newer verticals and products may be subject to greater risks than the more established verticals on our platform.

The success of our entry into new verticals and products will depend on a number of factors, including:

• Implementing in a cost effective manner product features expected by consumers and financial services providers;

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For example, the number of MUUs on our platform is based on activity associated with a unique device identifier during a certain time period.

Certain individuals may have more than one device and therefore may be counted more than once in our count of Monthly Unique Users.

Certain individuals may have more than one device and therefore may be counted more than once in our count of MUUs.

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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For example, during the COVID-19 pandemic in 2020 when our credit card vertical was under pressure, other verticals such as the investing vertical and mortgage vertical were strong.

Similarly in 2022, as interest rates began to increase and the mortgage and investing verticals were impacted, the credit card and SMB verticals were strong.

Similarly in 2022, as interest rates began to increase and the mortgage and investing verticals were impacted, the credit card and SMB product verticals were strong.

We cannot, however, guarantee that this offsetting between our verticals will continue or that our business model will be able to withstand the various macroeconomic developments we may see in the future.

During 2023 we saw that increasing interest rates both put pressure on our loans verticals and drove strength in our banking vertical, continuing the offsetting we have seen in the past.

After the regional bank failures that began in the spring of 2023, however, increasing issuer conservatism caused our credit card vertical revenue to begin to decline without any offsetting overperformance in another vertical.

Continued inflationary conditions, higher interest rates, and a tightening of credit markets would pose challenges to our business and may impact many of our verticals and may not be offset by performance in other verticals.

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Thus, our business is dependent on the consumer finance markets and the demand for the products offered by our financial services partners.

We have not experienced a prolonged economic downturn since our founding following the Great Recession, but we would expect a market downturn to lead our financial services partners to tighten underwriting standards making it more difficult for users to be matched with their products and to implement cost-reduction initiatives that reduce or eliminate marketing budgets.

While we have not experienced a prolonged economic downturn since our founding following the Great Recession, we did see impact from the regional bank failures in the spring of 2023 in the form of increased conservatism by our financial services partners that led them to decrease their spending on our platform.

We would expect a prolonged market downturn to lead our financial services partners to tighten underwriting standards making it more difficult for users to be matched with their products and to implement cost-reduction initiatives that reduce or eliminate marketing budgets.

Both of these actions would lead to decreased monetization on our platform and could adversely affect our business, financial condition and results of operations.

Changes in the loan markets could harm our business, financial condition and results of operations.

The loan market, including student loans, mortgages and personal loans, is an important part of our business.

The loan market, including student loans, business loans, mortgages and personal loans, is an important part of our business.

Fluctuations and constraints in the loan markets in the past have harmed, and may in the future, harm our business, financial condition and results of operations.

Economic factors such as increased interest rates, slow economic growth or recessionary conditions, the pace of home price appreciation or the lack of it, changes in household debt levels, and increased unemployment or stagnant or declining wages can affect the loan markets by impacting the number of loan applications and loan approval rates which can adversely affect our business.

In 2022 the U.S.

Federal Reserve increased the benchmark federal funds rate multiple times in an attempt to rein in inflation.

This policy change led to a softening of the housing market and reduced demand for mortgage refinancings and originations on our platform.

At the same time inflationary conditions in the U.S.

have led consumers to seek increased credit both in the form of credit cards and personal loans, but there may be changes to the risk appetite of our financial services partners as economic conditions become more uncertain or as they see higher rates of default from consumers.

A tightening of underwriting standards by our financial services partners could negatively impact our loans vertical by making it more difficult for us to find matches for their products.

In the student loan markets, a prolonged loan deferral program has negatively impacted our student loans vertical and a proposed loan forgiveness program by the Biden administration, if implemented, would continue to negatively impact our student loans vertical.

In 2022 and 2023 the U.S.

Federal Reserve increased the benchmark federal funds rate many times in an attempt to rein in inflation.

This policy change has led to a softening of the housing market and reduced consumer demand for mortgage refinancings and originations on our platform.

At the same time, increased conservatism by our financial services partners following the regional bank failures in the spring of 2023 led to a tightening of underwriting standards by our financial services partners.

Further interest rate increases and continued conservatism by our financial services partners would negatively impact our loans and SMB product verticals by both reducing demand for loan products and reducing the supply of credit available, making it more difficult for us to match consumers and small and mid-sized businesses with financial services products.

Risks Related to Regulation

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We also anticipate that U.S.

federal regulators relevant to our business, such as the Federal Trade Commission and the Consumer Financial Protection Bureau, may pursue more enforcement actions under a Democratic administration.

federal regulators relevant to our business, such as the Federal Trade Commission and the Consumer Financial Protection Bureau, may pursue more enforcement actions.

In addition, the government and regulatory authorities in the UK, Canada, Australia and U.S.

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Certain of our products that are not otherwise subject to the GLBA or FCRA may be subject to additional laws and regulations.

For example, the California Consumer Privacy Act (CCPA) created new data privacy rights for California-resident users that will be expanded when the California Privacy Rights Act (CPRA), which was approved in November 2020, goes into effect on January 1, 2023.

In addition, Virginia and Colorado recently passed their own respective privacy laws, which will go into effect around the same time as CPRA.

Many other states are also either considering or in various stages of enacting privacy laws.

These laws, as well as any associated regulations, may increase our operating costs and potential liability (particularly in the event of a data breach), delay or impede the development of new products, and have a material adverse effect on our business, including how we use information about individuals, our financial condition and the results of our operations or prospects.

For example, the California Consumer Privacy Act (CCPA) created new data privacy rights for California-resident users that were expanded when the California Privacy Rights Act (CPRA) went into effect

In addition, a growing number of states have passed or are expected to pass their own respective privacy laws.

These laws, as well as any associated regulations, create a patchwork that poses challenges for our business and may increase our operating costs and potential liability (particularly in the event of a data breach), delay or impede the development of new products, and have a material adverse effect on our business, including how we use information about individuals, our financial condition and the results of our operations or prospects.

As we expand internationally, we will also be subject to international laws regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other user data.

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Among other stringent requirements, the UK GDPR (like its EU counterpart) restricts transfers of data from the UK to third countries deemed to lack adequate privacy protections (such as the U.S.), unless an appropriate safeguard is implemented.

Following the result of a referendum in 2016, the UK left the EU on January 31, 2020, in a withdrawal commonly referred to as Brexit.

Brexit has created uncertainty with regard to the regulation of data protection in the UK.

Although UK privacy, data protection and data security laws are designed to be consistent with the EU’s GDPR, uncertainty remains regarding how privacy, data protection, information security and data transfers to and from the UK will be regulated notwithstanding Brexit.

With substantial uncertainty over the interpretation and application of data transfer, privacy, data protection, and information security in the UK, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and may incur significant costs and expenses in an effort to do so.

In the aftermath of the UK’s withdrawal from the EU in January 2020 (an event commonly referred to as Brexit), there was uncertainty with regard to the regulation of data protection in the UK.

Since then, the UK has undergone efforts to introduce post-Brexit data protection reform in the form of the Data Protection and Digital Information (No.

2) Bill (the “Bill”) which is intended to supersede the UK’s version of the GDPR.

As of December 2023, the Bill was at the Committee Stage of the House of Lords and further progress is expected during the course of 2024.

While the Bill has largely remained consistent with the spirit of the EU’s GDPR, there are few instances where changes have been made, and more changes are possible during the course of the legislative process.

As a result, we may face challenges in addressing and implementing the requirements of the proposed new law in light of uncertainty over its interpretation and application to data transfer, privacy, data protection, and information security in the UK, and may incur significant costs and expenses in an effort to do so.

Any failure or perceived failure by us to comply with applicable laws and regulations or any of our other legal obligations relating to privacy, data protection, or information security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us.

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Security incidents, or real or perceived errors, failures or bugs in our systems and platform could impair our operations, compromise our confidential information or our users’ personal information, damage our reputation and brand, and harm our business and operating results.

Our continued success depends on our systems, applications, and software continuing to operate and to meet the changing needs of our customers and users and financial services partners.

We rely on our technology and engineering staff and vendors to successfully implement changes to and maintain our systems and services in an efficient and secure manner.

Our continued success depends on our systems, applications, and software continuing to operate and to meet the changing needs of our users and financial services partners.

We rely on our technology and engineering staff and third party services providers to successfully implement changes to and maintain our systems and services in an efficient and secure manner.

Like all information systems and technology, our platform may contain or develop material errors, failures, vulnerabilities or bugs, particularly when new features or capabilities are released, and may be subject to computer viruses or malicious code, break-ins, phishing impersonation attacks, attempts to overload our servers with denial-of-service or other attacks, ransomware and similar incidents or disruptions from unauthorized use of our computer systems, as well as unintentional incidents causing data leakage, any of which could lead to interruptions, delays or shutdown of our platform.

Operating our business and products involves the collection, storage, use and transmission of large volumes of sensitive, proprietary and confidential information, including financial and personal information, pertaining to our current, prospective and past users, as well as our staff, contractors, and business partners.

The security measures we take to protect this information may be breached as a result of computer malware, viruses, social engineering, ransomware attacks, account takeover attacks, hacking and cyberattacks, including by state-sponsored and other sophisticated organizations.

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We do not have redundant network or rapid disaster recovery capabilities in most cases for the services provided by third-party service providers.

These service providers may not have adequate security measures and could experience a security incident that compromises the confidentiality, integrity or availability of the systems they operate for us or the information they process on our behalf.

Such occurrences could adversely affect our business to the same degree as if we had experienced these occurrences directly and we may not have recourse to the responsible third-party service providers for the resulting liability we incur.

In addition, it would negatively impact search engine ranking, user experience and our reputation with our financial partners.

Furthermore, in the event that any of our agreements with our third-party service providers are terminated, we may experience significant costs or downtime in connection with the transfer to, or the addition of, new hosting providers.

Although alternative providers could host our platform on a substantially similar basis, such transition could potentially be disruptive and we could incur significant costs in connection therewith.

These third party service providers may be susceptible to operational, technological and security vulnerabilities, including security breaches or other security incidents that compromise the confidentiality, integrity or availability of the systems they operate for us or the information they process on our behalf.

In addition, these providers may rely on subcontractors to provide services to us that face similar risks.

Our ability to monitor our third-party service providers’ data security is limited and yet such occurrences could adversely affect our business to the same degree as if we had experienced these occurrences directly.

Although we incorporate contractual provisions that require that our providers and their subcontractors protect our data and information, including personal data, any failure or security breaches by or of our third-party service providers or their subcontractors that result in an interruption in service, unauthorized access, misuse, loss or destruction of data or other similar occurrences could interrupt our business, cause us to incur losses, result in loss of reputation and consumer trust and subject us to customer complaints, significant fines, litigation, disputes, claims, and regulatory investigations or other inquiries.

Furthermore, any

contractual protections such as a counterparty’s obligation to indemnify us may not be sufficient to protect us if our counterparty doesn’t have adequate resources or if we are unable to enforce such protections.

Claims by others that we infringed their proprietary technology or other intellectual property rights could harm our business.

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In addition, we typically enter into confidentiality and invention assignment agreements with employees and contractors, and confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our confidential or proprietary information.

However, these contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation or disclosure of our proprietary

information nor deter independent development of similar technologies by others.

However, these contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation or disclosure of our proprietary information nor deter independent development of similar technologies by others.

Failure to protect or maintain our intellectual property could harm our business, financial condition and results of operations.

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Additionally, we could face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we develop using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license.

These claims could result in litigation and could require us to make our software source code freely available, purchase a costly license or cease offering the implicated products or services unless and until we can re-engineer such source code to eliminate use of such open

source software.

This re-engineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully.

In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, assurance of title or controls on the origin or operation of the open source software, which are risks that cannot be eliminated, and could, if not properly addressed, negatively affect our business.

We cannot be sure that all of our use of open source software is in a manner that is consistent with our current policies and procedures, or will not subject us to liability.

We cannot be sure that all of our use of open source software is in a manner that is consistent with our current policies and

procedures, or will not subject us to liability.

Any of these risks could be difficult to eliminate or manage, and, if not addressed, would have a negative effect on our business, financial condition and operating results.

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Our debt agreements contain certain restrictions that may limit our ability to operate our business.

The terms of our existing credit agreement, as amended, and the related collateral documents with Silicon Valley Bank (SVB) as administrative agent contain, and any future indebtedness may contain, a number of restrictive covenants that impose significant operating and financial restrictions on us, including restrictions on our ability, and the ability of our subsidiaries, to take actions that may be in our best interests, including, among others, disposing of assets, entering into change of control transactions, mergers or acquisitions, incurring additional indebtedness, granting liens on our assets, declaring and paying dividends, repurchasing stock, making investments and agreeing to do any of the foregoing, in each case subject to certain exceptions.

Our credit agreement also contains financial covenants which require us to maintain a minimum adjusted quick ratio and a minimum consolidated adjusted EBITDA if the adjusted quick ratio falls below a specified level, measured in each case at the end of each fiscal quarter.

The terms of our credit agreement, as amended, and the related collateral documents with JPMorgan Chase Bank, N.A.

(JPM) as administrative agent contain, and any future indebtedness may contain, a number of restrictive covenants that impose significant operating and financial restrictions on us, including restrictions on our ability, and the ability of our subsidiaries, to take actions that may be in our best interests, including, among others, disposing of assets, entering into change of control transactions, mergers or acquisitions, incurring additional indebtedness, granting liens on our assets, declaring and paying dividends, repurchasing stock, making investments and agreeing to do any of the foregoing, in each case subject to certain exceptions.

Our credit agreement also contains financial covenants which require us to comply with a maximum total net leverage and minimum fixed charge coverage ratios.

Our ability to meet those financial covenants can be affected by events beyond our control, and we may not be able to continue to meet those covenants.

A breach of any of these covenants or the occurrence of other events (including an event or condition that has had a material adverse effect (as defined in the credit agreement)) specified in the credit agreement and/or the related collateral documents could result in an event of default under the credit agreement.

Upon the occurrence of an event of default, SVB and/or our lenders under the credit agreement could elect to declare all amounts outstanding under the credit agreement, if any, to be immediately due and payable and terminate all commitments to extend further credit.

If we were unable to repay those amounts, SVB and our lenders could proceed against the collateral granted to them to secure such indebtedness, which consists of all of our assets other than our intellectual property.

Upon the occurrence of an event of default, JPM and/or our lenders under the credit agreement could elect to declare all amounts outstanding under the credit agreement, if any, to be immediately due and payable and terminate all commitments to extend further credit.

If we were unable to repay those amounts, JPM and our lenders could proceed against the collateral granted to them to secure such indebtedness, which consists of all of our assets.

We have, and certain of our subsidiaries have, pledged substantially all of our respective assets as collateral under the loan documents.

If SVB and our lenders accelerate the repayment of borrowings, if any, we may not have sufficient funds to repay our debt.

Our existing debt agreement may not be sufficient for our capital needs and we may require additional capital to support business growth, which might not be available on acceptable terms, if at all.

If JPM and our lenders accelerate the repayment of borrowings, if any, we may not have sufficient funds to repay our debt.

Our debt agreement may not be sufficient for our capital needs and we may require additional capital to support business growth, which might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and we may require additional funds to continue to do so.

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Acquisitions also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process.

In addition, our acquisition agreements with KYM and Fundera, which we acquired in 2020, contain earn-out provisions.

Disputes over whether the earn-out targets have been met could lead to litigation, management distraction and significant expense.

We may have to pay cash, incur additional debt, or issue equity to pay for any future acquisitions or investments, each of which could adversely affect our financial condition.

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For example, certain index providers have announced restrictions on including companies with multiple class share structures in certain of their indexes.

For example, in July 2017, FTSE Russell and Standard & Poor’s announced that they would cease to allow most newly public companies utilizing dual or multi-class capital structures to be included in their indices.

Under the announced policies, our dual class capital structure would make us ineligible for inclusion in any of these indices.

Under such policies, our dual class capital structure would make us ineligible for inclusion in certain indexes, and as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track such indexes will not be investing in our stock.

It is uncertain what effect, if any, these policies will have on the valuations of publicly traded companies excluded from the indexes, but it is possible that they may depress such valuations when compared to those of other similar companies that are included.

Because of our dual class structure, we will likely be excluded from certain of these indexes, and we cannot assure you that other stock indexes will not take similar actions.

Given the sustained flow of investment into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors.

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Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our Board of Directors and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects and other factors our Board of Directors may deem relevant.

The terms of our credit agreement with Silicon Valley Bank and certain other lenders restrict our ability to pay dividends, and we may enter into additional agreements in the future that could also contain restrictions on payments of cash dividends.

The terms of our credit agreement with JPM and certain other lenders restrict our ability to pay dividends, and we may enter into additional agreements in the future that could also contain restrictions on payments of cash dividends.

We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors.

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As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of Nasdaq and other applicable securities rules and regulations.

Despite reforms made possible by the JOBS Act, compliance with these rules and regulations will nonetheless increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an emerging growth company.

Despite reforms made possible by the JOBS Act, compliance with these rules and regulations have increased our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an emerging growth company.

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results.

As a result of disclosure of information in filings required of a public company, our business and financial condition will become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.

As a result of disclosure of information in filings required of a public company, our business and financial condition has become more visible, which we believe may result in threatened or actual litigation, including by competitors and other third parties.

If such claims are successful, our business, results of operations, financial condition and prospects could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our brand and reputation, business, results of operations, financial condition and prospects.

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If a court were to find either exclusive-forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.

Unresolved Staff Comments.

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