What changed in this filing

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Item 1A. Risk Factors

2022-08-05 compared with 2021-08-05 · 222 added, 155 removed, 398 unchanged (49% of the section changed)

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Risks Related to our Business and Industry

The COVID-19 pandemic has and may continue to further negatively affect our business, operations and financial performance

In March 2020, COVID-19 was characterized as a pandemic by the World Health Organization.

Since December 2019, COVID-19 has spread globally, with a high concentration of cases in certain regions in which we sell our products and services and conduct our business operations, including the United States, Canada, Europe and Asia.

The spread of COVID-19 and resulting tight government controls and travel bans implemented around the world, such as declarations of states of emergency, business closures, manufacturing restrictions and a prolonged period of travel, commercial and/or other similar restrictions and limitations, have caused disruption to global supply chains and economic activity.

The spread of COVID-19 has had and is continuing to have an adverse impact on the global economy, the severity and duration of which is difficult to predict, and has adversely affected and may continue to further adversely affect our financial performance, as well as our ability to successfully execute our business strategies and initiatives, including by negatively impacting the demand for our products and services, restricting our sales operations and marketing efforts, disrupting the supply chain of hardware needed to operate our SaaS offerings or run our business and disrupting our ability to conduct product development and other important business activities.

While the restrictions and limitations noted above have and may continue to be relaxed or rolled back if COVID-19 abates and vaccination rates increase, they may be reinstated as the pandemic continues to evolve, including as a result of the impact of variants, and in response to actual or potential resurgences.

The scope and timing of any such reinstatement are difficult to predict and may materially affect our operations in the future.

We are continuing to focus on the safety and protection of our workforce and our customers by conducting business with substantial modifications to employee travel, employee work locations and virtualization or cancellation of all sales and marketing events, which we expect to continue throughout calendar year 2021, among other modifications.

To mitigate anticipated negative financial and operational impacts of COVID-19, we implemented certain cost cutting measures, some of which have been restored, and approved our COVID-19 restructuring plan which includes a move towards a significant work from home model.

We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by governments, or that we determine are in the best interest of our employees, customers, partners, suppliers and shareholders.

The extent of the adverse impact of the pandemic on the global economy and markets will depend, in part, on the length and severity of the measures taken to limit the spread of the virus, including the distribution and effectiveness of vaccines and treatments, and, in part, on the size, effectiveness and duration of the compensating measures taken by governments and monetary authorities.

To the extent the COVID-19 pandemic continues to adversely affect the global economy, and/or adversely affects our business, operations or financial performance, it may also have the effect of increasing the likelihood and/or magnitude of other risks described herein, including those risks related to market, credit, geopolitical and business operations and cyber, or risks described in our other filings with the SEC and the applicable Canadian securities regulatory authorities.

In addition, the COVID-19 pandemic may also affect our business, operations or financial performance in a manner that is not presently known to us.

We are closely monitoring the potential adverse effects and impact on our operations, businesses and financial performance, including liquidity and capital usage, though the extent of the impact is difficult to fully predict at this time due to the rapid and continuing evolution of this uncertain situation.

The impact of the COVID-19 pandemic continues to create significant uncertainty in the global economy and for our business, operations and financial performance

The COVID-19 pandemic has significantly impacted health and economic conditions throughout the United States and globally.

The global spread of COVID-19 has been, and continues to be, complex and rapidly evolving, with governments, public institutions and other organizations imposing or recommending, and businesses and individuals implementing, restrictions on various activities or other actions to combat its spread, such as travel restrictions and bans, social distancing, quarantine or shelter-in-place directives, limitations on the size of gatherings, and closures of non-essential businesses.

These restrictions have disrupted and may continue to disrupt economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, inflation, volatility in the global economy, instability in the credit and financial markets, labor shortages, regulatory recommendations to provide relief for impacted consumers, and disruption in supply chains.

The extent to which the COVID-19 pandemic impacts our business, operations, and financial performance is highly uncertain and will depend on numerous evolving factors that we may not be able to accurately predict or assess, including, but not limited to, the severity, extent and duration of the pandemic or any resurgences in the future, including any economic recession resulting from the pandemic, the distribution and effectiveness of vaccines and treatments, and the continued governmental, business and individual actions taken in response to the pandemic.

Impacts related to the COVID-19 pandemic are expected to continue to pose risks to our business for the foreseeable future, may heighten many of the risks and uncertainties identified herein, and could have a material adverse impact on our business, operations or financial performance in a manner that is difficult to predict.

The restructuring of our operations, including steps taken to mitigate the anticipated negative impact of the COVID-19 pandemic, may be ineffective and may adversely affect our business or our finances, and we may incur restructuring charges in connection with such actions

We often undertake initiatives to restructure or streamline our operations, particularly during the period post-acquisition, and most recently in response to the COVID-19 pandemic.

We may incur costs associated with implementing a restructuring initiative beyond the amount contemplated when we first developed the initiative and these increased costs may be substantial.

Additionally, such costs would adversely impact our results of operations for the periods in which those adjustments are made.

We will continue to evaluate our operations, and may propose future restructuring actions as a result of changes in the marketplace, including the exit from less profitable operations or the decision to terminate products or services that are not valued by our customers.

Any failure to successfully execute these initiatives on a timely basis may have a material adverse effect on our business, operating results and financial condition.

In particular, in order to mitigate anticipated negative financial and operational impacts of COVID-19, we implemented certain cost cutting measures.

This includes our COVID-19 Restructuring Plan, which involves a move towards a significant work from home model and a reduction in our real estate footprint around the world.

Such steps to reduce costs, and further changes we may make in the future, may negatively impact our business, operations and financial performance in a manner that is difficult to predict.

For example, employing a remote work environment could affect employee productivity, including due to a lower level of employee oversight, distractions caused by the pandemic and its impact on daily life, health conditions or illnesses, disruptions due to caregiving or childcare obligations or slower or unreliable Internet access.

OpenText systems, client, vendor and/or borrower data may be subject to additional risks presented by increased phishing activities targeting employees, vendors, third party service providers and counterparties in transactions, the possibility of attacks on OpenText systems or systems of employees working remotely as well as by decreased physical supervision.

In addition, we may rely, in part, on third-party service providers to assist us in managing monitoring and otherwise carrying out aspects of our business and operations, and COVID-19 may affect their ability to devote sufficient time and resources to perform work for the Company.

Such events may result in a period of business disruption or reduced operations, which could materially affect our business, financial condition and results of operations.

While our pre-existing controls were not specifically designed to operate in our current work from home environment, we believe that established internal controls over financial reporting continue to address all identified risk areas.

If our productivity is impacted as a result of the transition, we may incur additional costs to address such issues and our financial condition and operating results may be adversely impacted.

For more information regarding the impact of COVID-19 on our cybersecurity, see "Business disruptions, including those related to data security breaches, may adversely affect our operations." For more information on our COVID-19 Restructuring Plan, see note 18 “Special Charges (Recoveries)” to our Consolidated Financial Statements.

If we do not continue to develop technologically advanced products that successfully integrate with the software products and enhancements used by our customers, future revenues and our operating results may be negatively affected

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If our software products and services do not gain market acceptance, our operating results may be negatively affected

We intend to pursue our strategy of being a market leading consolidator for cloud-based Information Management solutions, and grow the capabilities of our Information Management software offerings through our proprietary research and the development of new software product and service offerings, as well as through acquisitions.

We intend to pursue our strategy of being a market leading consolidator for cloud-based Information Management solutions.

We intend to grow the capabilities of our Information Management software offerings through our proprietary research and the development of new software product and service offerings, as well as through acquisitions.

It is important to our success that we continue to enhance our software products and services in response to customer demand and to seek to set the standard for Information Management capabilities.

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or (iv) complete software products and services currently under development.

In addition, increased competition could put significant pricing pressures on our products, which could negatively impact our margins and profitability.

If our software products and services are not

accepted by our customers or by other businesses in the marketplace, our business, operating results and financial condition will be materially adversely affected.

In addition, increased competition and our transition from perpetual license sales to subscription-based business model could put significant pricing pressures on our products, which could negatively impact our margins and profitability.

If our software products and services are not accepted by our customers or by other businesses in the marketplace, our business, operating results and financial condition will be materially adversely affected.

Failure to protect our intellectual property could harm our ability to compete effectively

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We intend to protect our intellectual property rights vigorously;

however, there can be no assurance that these measures will, in all cases, be successful, and these measures can be costly and/or subject us to counterclaims.

however, there can be no assurance that these measures will, in all cases, be successful, and these measures can be costly and/or subject us to counterclaims, including challenges to the validity and enforceability of our intellectual property rights.

Enforcement of our intellectual property rights may be difficult, particularly in some countries outside of North America in which we seek to market our software products and services.

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In addition, certain of our products contain open-source software.

Licensees of open source software may be required to make public certain source code, to license proprietary software for free or to permit others to create derivative works of our proprietary software.

Licensees of open-source software may be required to make public certain source code, to license proprietary software for free or to permit others to create derivative works of proprietary software.

While we monitor and control the use of open source software in our products and in any third party software that is incorporated into our products, and try to ensure that no open source software is used in such a way that negatively affects our proprietary software, there can be no guarantee that such use does not occur inadvertently, which in turn, could harm our intellectual property position and have a material adverse effect on our business, results of operations and financial condition.

Further, any undetected errors or defects in open source software could prevent the deployment or impair the functionality of our software products, delay the introduction of new solutions, or render our software more vulnerable to breaches or security attacks.

Other companies may claim that we infringe their intellectual property, which could materially increase costs and materially harm our ability to generate future revenues and profits

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In the case of third-party software, we believe this software is licensed from the entity holding the intellectual property rights.

While we believe that we have secured proper licenses for all material third-party intellectual property that is integrated into our products in a manner that requires a license, third parties have and may continue to assert infringement claims against us in the future, including the sometimes aggressive and opportunistic actions of non-practicing entities whose business model is to obtain patent-licensing revenues from operating companies such as us.

In particular, our efforts to protect our intellectual property through patent litigation may result in counterclaims of patent infringement by counterparties in such suits.

Any such assertion, regardless of merit, may result in litigation or require us to obtain a license for the intellectual property rights of third parties.

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In addition, as we continue to develop software products and expand our portfolio using new technology and innovation, our exposure to threats of infringement may increase.

Any infringement claims and related litigation could be time-consuming and disruptive to our ability to generate revenues or enter into new market opportunities and may result in significantly increased costs as a result of our defense against those claims or our attempt to license the intellectual property rights or rework our products to avoid infringement of third party rights.

Any infringement claims and related litigation could be time-consuming and disruptive to our ability to generate

revenues or enter into new market opportunities and may result in significantly increased costs as a result of our defense against those claims or our attempt to license the intellectual property rights or rework our products to avoid infringement of third-party rights.

Typically, our agreements with our partners and customers contain provisions that require us to indemnify them for damages sustained by them as a result of any infringement claims involving our products.

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If these defects, errors and/or other failures are discovered, we may not be able to successfully correct them in a timely manner.

In addition, despite the extensive tests we conduct on all our software products or services, we may not be able to fully simulate the environment in which our products or services will operate and, as a result, we may be unable to adequately detect the design defects or software or hardware errors that may become apparent only after

the products are installed in an end-user's network, and only after users have transitioned to our services.

The occurrence of errors, defects and/or other failures in our software products or services could result in the delay or the denial of market acceptance of our products and alleviating such errors, defects and/or other failures may require us to make significant expenditure of our resources.

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Laws and regulations relating to the solicitation, collection, processing or use of personal or consumer information could affect our customers’ ability to use and share data, potentially reducing demand for Internet-based solutions and restricting our ability to store, process, analyze and share data through the Internet.

Although we believe that the Internet will continue to provide opportunities to expand the use of our products and services, we cannot guarantee that our efforts to capitalize on these opportunities will be successful or that increased usage of the Internet for business integration products and services, increased competition or heightened regulation will not adversely affect our business, results of operations and financial condition.

Business disruptions, including those related to data security breaches, may adversely affect our operations

increased usage of the Internet for business integration products and services, increased competition or heightened regulation will not adversely affect our business, results of operations and financial condition.

Business disruptions, including those arising from disasters or other catastrophic events, may adversely affect our operations

Our business and operations are highly automated, and a disruption or failure of our systems may delay our ability to complete sales and to provide services.

Business disruptions can be caused by several factors, including natural disasters, terrorist attacks, power loss, telecommunications and system failures, computer viruses, physical attacks and cyber-attacks.

Business disruptions can be caused by several factors, including climate change, natural disasters, terrorist attacks, power loss, telecommunications and system failures, computer viruses, physical attacks and cyber-attacks.

A major disaster or other catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems, including our cloud services, could severely affect our ability to conduct normal business operations.

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We also rely on third parties that provide critical services in our operations and despite our diligence around their disaster recovery processes, we cannot provide assurances as to whether these third-party service providers can maintain operations during a disaster or disruption.

Furthermore, global climate change may aggravate natural disasters that affect our business operations, thereby compelling us to build additional resiliency in order to mitigate their impact.

Furthermore, global climate change may aggravate natural disasters and increase severe weather events that affect our business operations, thereby compelling us to build additional resiliency in order to mitigate their impact.

Any business disruption could negatively affect our business, operating results or financial condition.

In particular, in connection with COVID-19, there has been a spike in cybersecurity attacks as shelter in place orders and work from home measures have led businesses to increase reliance on virtual environments and communications systems, which have been subjected to increasing third-party vulnerabilities and security risks.

Malicious hackers may attempt to gain access to our network or data centers;

steal proprietary information related to our business, products, employees, and customers;

or interrupt our systems and services or those of our customers or others.

Although we monitor our networks and continue to enhance our security protections, hackers are increasingly more sophisticated and aggressive, and our efforts may be inadequate to prevent all incidents of data breach or theft.

In addition, if data security is compromised, this could materially and adversely affect our operating results given that we have customers that use our systems to store and exchange large volumes of proprietary and confidential information and the security and reliability of our services are of significant importance to these customers.

We have experienced attempts by third parties to identify and exploit product and service vulnerabilities, penetrate or bypass our security measures, and gain unauthorized access to our or our customers' or service providers' cloud offerings and other products and systems.

If our products or systems, or the products or systems of third-party service providers on whom we rely, are attacked or accessed by unauthorized parties, it could lead to major disruption or denial of service and access to or loss, modification or theft of our and our customers' data, which may require us to spend material resources on correcting the breach and indemnifying the relevant parties and/or on litigation, regulatory investigations, regulatory proceedings, increased insurance premiums, lost revenues, penalties, fines and/or other potential liabilities.

Our efforts to protect against cyber-attacks and data breaches may not be sufficient to prevent such incidents, which could have material adverse effects on our reputation, business, operating results and financial condition.

Unauthorized disclosures and breaches of data security may adversely affect our operations

Unauthorized disclosures, cyber-attacks and breaches of data security may adversely affect our operations

Most of the jurisdictions in which we operate have laws and regulations relating to data privacy, security and protection of information.

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These risks to our business may increase as we expand the number of web-based and cloud-based products and services we offer and as we increase the number of countries in which we operate.

In particular, in connection with COVID-19, there has been a spike in cybers-attacks as shelter in place orders and work from home measures have led businesses to increase reliance on virtual environments and communications systems, which have been subjected to increasing third-party vulnerabilities and security risks.

Malicious hackers may attempt to gain access to our network or data centers;

steal proprietary information related to our business, products, employees and customers;

or interrupt our systems and services or those of our customers or others.

Furthermore, it is possible that the risk of cyber-attacks and other data security breaches or thefts to us or our customers may increase due to global geo-political uncertainty.

We have experienced attempts by third parties to identify and exploit product and services vulnerabilities, penetrate or bypass our security measures and gain unauthorized access to our or our customers’ or service providers’ cloud offerings and other products and systems.

Our efforts to protect against cyber-attacks and data breaches, including increased risks associated with work from home measures, may not be sufficient to prevent such incidents, which could have material adverse effects on our reputation, business, operating results and financial condition .

Our success depends on our relationships with strategic partners, distributors and third-party service providers and any reduction in the sales efforts by distributors, cooperative efforts from our partners or service from third party providers could materially impact our revenues

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Also, a portion of our service revenues may be impacted by the level of service provided by third party service providers relating to Internet, telecommunications and power services.

Our success will depend, in part, upon our ability to maintain access to existing channels of distribution and to gain access to new channels if and when they develop.

Our success will depend, in part, upon our ability to maintain access to and grow existing channels of distribution and to gain access to new channels if and when they develop.

We may not be able to retain a sufficient number of our existing distributors or develop a sufficient number of future distributors.

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In addition, our financial results could be materially adversely affected if the financial condition of our distributors or third-party service providers were to weaken.

of our distributors and third party service providers may have insufficient financial resources and may not be able to withstand changes in business conditions, including economic weakness, industry consolidation and market trends.

The loss of licenses to use third-party software or the lack of support or enhancement of such software could adversely affect our business

Some of our distributors and third-party service providers may have insufficient financial resources and may not be able to withstand changes in business conditions, including economic weakness, industry consolidation and market trends.

The loss of licenses to resell or use third-party software or the lack of support or enhancement of such software could adversely affect our business

We currently depend upon a limited number of third-party software products.

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Such increased costs, lost revenues or delays could adversely affect our business.

For example, with the recent acquisition of Zix, we extended our partnership with Microsoft by becoming one of their nine authorized Cloud Solutions Providers in North America.

If our key partners were to terminate our relationship, make an adverse change in their reseller program, change their product offerings or experience a major cyber-attack or similar event, it could reduce our revenues and adversely affect our business.

Current and future competitors could have a significant impact on our ability to generate future revenues and profits

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If our customers cancel or fail to renew their service contracts or fail to purchase additional services or products, then our revenues could decrease, and our operating results could be materially adversely affected.

Factors influencing such contract terminations and failure to purchase additional services or products could include changes in the financial circumstances of our customers, dissatisfaction with our products or services, our retirement or lack of support for our legacy products and services, our customers selecting or building alternate technologies to replace our products or services, the cost of our products and services as compared to the cost of products and services offered by our competitors, our ability to attract, hire and maintain qualified personnel to meet customer needs, consolidating activities in the market, changes in our customers’ business or in regulation impacting our customers’ business that may no longer necessitate the use of our products or services, general economic or market conditions, or other reasons.

Factors influencing such contract terminations and failure to purchase additional services or products could include changes in the financial circumstances of our customers, including as a result of any potential recession, dissatisfaction with our products or services, our retirement or lack of support for our legacy products and services, our customers selecting or building alternate technologies to replace our products or services, the cost of our products and services as compared to the cost of products and services offered by our competitors, acceptance of future price increases by us, including due to inflationary pressures, our ability to attract, hire and maintain qualified personnel to meet customer needs, consolidating activities in the market, changes in our customers’ business or in regulation impacting our customers’ business that may no longer necessitate the use of our products or services, general economic or market conditions, or other reasons.

Further, our customers could delay or terminate implementations or use of our services and products or be reluctant to migrate to new products.

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Any material reduction in our profit margin may have a material adverse effect on the operations or finances of our business, which could hinder our ability to raise capital in the public markets at opportune times for strategic acquisitions or for general operational purposes, which may then, in turn, prevent effective strategic growth or improved economies of scale or put us at a disadvantage to our better capitalized competitors.

We may be unable to maintain or expand our base of SMB and consumer customers, which could adversely affect our anticipated future growth and operating results

With the acquisitions of Carbonite and Zix, we have expanded our presence in the SMB market as well as the consumer market.

Expanding in this market may require substantial resources and increased marketing efforts, different to what we are accustomed to historically.

If we are unable to market and sell our solutions to the SMB market and consumers with competitive pricing and in a cost-effective manner, it may harm our ability to grow our revenues and adversely affect our results of operations.

In addition, SMBs frequently have limited budgets and are more likely to be significantly affected by economic downturns than larger, more established companies.

As such, SMBs may choose to spend funds on items other than our solutions, particularly during difficult economic times, which may hurt our projected revenues, business financial condition and results of operations.

Our sales to government clients expose us to business volatility and risks, including government budgeting cycles and appropriations, early termination, audits, investigations, sanctions and penalties

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Additionally, government contracts are generally subject to audits and investigations that could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refund of a portion of fees received, forfeiture of profits, suspension of payments, fines and suspensions or debarment from future government business.

We may be unable to maintain or expand our base of SMB and consumer customers, which could adversely affect our anticipated future growth and operating results

With the acquisition of Carbonite, we have expanded our presence in the SMB market as well as the consumer market.

Expanding in this market may require substantial resources and increased marketing efforts, different to what we are accustomed to.

addition, SMBs frequently have limited budgets and are more likely to be significantly affected by economic downturns than larger, more established companies.

Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine conflict, has affected and may continue to affect our business

Geopolitical instability, political unrest, war and other global conflicts may result in adverse effects on macroeconomic conditions, including volatility in financial markets, adverse changes in trade policies, inflation, higher interest rates, direct and indirect supply chain disruptions, increased cybersecurity threats and fluctuations in foreign currency.

These events may also impact our decision or limit our ability to conduct business in certain areas or with certain entities.

For example, in response to the Russia-Ukraine conflict, we have ceased all direct business in Russia and Belarus and with known Russian-owned companies.

Sanctions and export controls have also been imposed by the United States, Canada and other countries in connection with Russia's military actions in Ukraine, including restrictions on selling or exporting goods, services or technology to certain regions, and travel bans and asset freezes impacting political, military, business and financial organizations and individuals in or connected with Russia.

To support certain of our cloud customers headquartered in the United States or allied countries that rely on our network to manage their global business (including their business in Russia), we have allowed nonetheless these customers to continue to use our services to the extent that it can be done in strict compliance with all applicable sanctions and export controls.

However, as the situation develops and the regulatory environment continues to evolve, we may adjust our business practices as required by applicable rules and regulations.

Our compliance with sanctions and export controls could impact the fulfillment of certain contracts with customers and partners doing business in these affected areas and future revenue streams from impacted parties and certain countries.

While we do not expect our decision to cease all direct business in Russia and Belarus and with known Russian-owned companies to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict the broader consequences of this conflict or other conflicts, which could include sanctions, embargoes, regional instability, changes to regional trade ecosystems, geopolitical shifts and adverse effects on the global economy, on our business and operations as well as those of our customers, partners and third party service providers.

The COVID-19 pandemic has and may continue to further negatively affect our business, operations and financial performance

In March 2020, COVID-19 was characterized as a pandemic by the World Health Organization.

The spread of COVID-19 has had and is continuing to have an adverse impact on the global economy, the severity and duration of which is difficult to predict and has adversely affected and may continue to further adversely affect our financial performance,

as well as our ability to successfully execute our business strategies and initiatives, including by negatively impacting the demand for our products and services, restricting our sales operations and marketing efforts, disrupting the supply chain of hardware needed to operate our SaaS offerings or run our business and disrupting our ability to conduct product development and other important business activities.

While the restrictions and limitations noted above have and may continue to be relaxed or rolled back if COVID-19 abates and vaccination rates increase, COVID-19 cases (including the emergence and spread of more transmissible variants) continue to surge in certain parts of the world, including the U.S., and such restrictions and limitations may be reinstated as the pandemic continues to evolve, including as a result of the impact of variants, and in response to actual or potential resurgences.

The scope and timing of any such reinstatement are difficult to predict and may materially affect our operations in the future.

We are continuing to focus on the safety and protection of our employees and our customers by conducting business with modifications to employee travel, employee work locations and virtualization or cancellation of certain sales and marketing events, among other modifications.

To mitigate anticipated negative financial and operational impacts of COVID-19, we made a strategic decision to move towards a significant work from home model and we implemented certain restructuring activities to streamline our operations and significantly reduce our real estate footprint around the world.

In addition, as many local governments and officials have started lifting pandemic restrictions in accordance with the guidance of public health experts, in July 2022 we implemented a Flex-Office program in which a majority of our employees work a portion of their time in the office and a portion remotely.

The transition to a flexible workforce may subject us to further operational challenges and risks, which may adversely affect our business, operations or financial performance.

For more information regarding the impact of the Flex-Office program, see “We have implemented a Flex-Office program, which will subject us to certain operational challenges and risks.”

To the extent the COVID-19 pandemic continues to adversely affect the global economy, and/or adversely affects our business, operations or financial performance, it may also have the effect of increasing the likelihood and/or magnitude of other risks described herein, including those risks related to market, credit, geopolitical and business operations and cybersecurity, or risks described in our other filings with the SEC and the applicable Canadian securities regulatory authorities.

In addition, the COVID-19 pandemic may also affect our business, operations or financial performance in a manner that is not presently known to us.

The impact of the COVID-19 pandemic continues to create significant uncertainty in the global economy and for our business, operations and financial performance

The COVID-19 pandemic has significantly impacted health and economic conditions throughout the United States and globally.

These restrictions have disrupted and may continue to disrupt economic activity, resulting in reduced commercial and consumer confidence and spending, increased unemployment, closure or restricted operating conditions for businesses, inflation, volatility in the global economy, instability in the credit and financial markets, labour shortages, regulatory recommendations to provide relief for impacted consumers and disruption in supply chains.

The extent to which the COVID-19 pandemic impacts our business, operations and financial performance is highly uncertain and will depend on numerous evolving factors that we may not be able to accurately predict or assess, including, but not limited to, the severity, extent and duration of the pandemic or any resurgences in the future, any economic recession, the distribution and effectiveness of vaccines and treatments, and the continued governmental, business and individual actions taken in response to the pandemic.

The restructuring of our operations, including steps taken to mitigate the anticipated negative impact of the COVID-19 pandemic, may be ineffective and may adversely affect our business and our finances, and we may incur additional restructuring charges in connection with such actions

We often undertake initiatives to restructure or streamline our operations, particularly during the period post-acquisition, as well as in response to the COVID-19 pandemic and as part of our return to office planning.

We may incur costs associated with implementing a restructuring initiative beyond the amount contemplated when we first developed the initiative, and these increased costs may be substantial.

Additionally, such costs would adversely impact our results of operations for the periods in which those adjustments are made.

We will continue to evaluate our operations and may propose future restructuring actions as a result of changes in the marketplace, including the exit from less profitable operations, the decision to terminate products or services that are not valued by our customers or adjusting our workforce.

Any failure to successfully execute these initiatives on a timely basis may have a material adverse effect on our business, operating results and financial condition.

In particular, in order to mitigate anticipated negative financial and operational impacts of COVID-19, we implemented certain cost cutting measures.

This included our COVID-19 Restructuring Plan, which involved a move towards a significant work from home model and a reduction in our real estate footprint around the world.

Further, as part of our return to office planning, during the third quarter of Fiscal 2022, we made a strategic decision to implement restructuring activities to streamline our operations and further reduce our real estate footprint around the world (Fiscal 2022 Restructuring Plan).

Such steps to reduce costs, and further changes we may make in the future, may negatively impact our business, operations and financial performance in a manner that is difficult to predict.

For more information on our COVID-19 Restructuring Plan and our Fiscal 2022 Restructuring Plan, see Note 18 “Special Charges (Recoveries)” to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

We have implemented a Flex-Office program, which will subject us to certain operational challenges and risks

In response to the COVID-19 pandemic, our employees shifted from in-person to remote work.

As many local governments and officials have started lifting pandemic restrictions in accordance with the guidance of public health experts, in July 2022 we implemented a Flex-Office program in which a majority of our employees work a portion of their time in the office and a portion remotely.

As a result, we expect to continue to be subject to the challenges and risks of having a remote work environment, as well as new operational challenges and risks from having a flexible workforce.

OpenText systems, client, vendor and/or borrower data may be subject to additional risks presented by increased cyber-attacks and phishing activities targeting employees, vendors, third party service providers and counterparties in transactions, the possibility of attacks on OpenText systems or systems of employees working remotely as well as by decreased physical supervision.

Such events may result in a period of business disruption or reduced operations, which could materially affect our business, financial condition and results of operations.

While our controls prior to the onset of the COVID-19 pandemic were not specifically designed to operate in a home environment, we believe that established internal controls over financial reporting continue to address all identified risk areas.

The transition to a flexible workforce may also subject us to other operational challenges and risks.

For example, our shift to a Flex-Office program may adversely affect our ability to recruit and retain personnel who prefer a fully remote or fully in-person work environment.

Operating our business with both remote and in-person workers, or workers who work on flexible schedules, could have a negative impact on our corporate culture, decrease the ability of our employees to collaborate and communicate effectively, decrease innovation and productivity, or negatively affect employee morale.

In addition, we have incurred costs related to our return to office planning and the transition to a flexible workforce, including due to reducing our real estate footprint around the world.

If we are unable to effectively transition to a flexible workforce, including due to potential future surges of COVID-19 causing reinstatements of governmental restrictions and/or other similar limitations, manage the cybersecurity and other risks of remote work, and maintain our corporate culture and employee morale, our financial condition and operating results may be adversely impacted.

For more information regarding the impact of COVID-19 on our cybersecurity, see “Business disruptions, including those arising from disasters or other catastrophic events, may adversely affect our operations.”

We must continue to manage our internal resources during periods of company growth, or our operating results could be adversely affected

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Competition for such people is intense, substantial and continuous, and we may not be able to attract, integrate or retain highly qualified technical, sales or managerial personnel in the future.

In our effort to attract and retain critical personnel, we may experience increased compensation costs that are not offset by either improved productivity or higher prices for our software products or services.

In our effort to attract and retain critical personnel, and in responding to inflationary wage pressure, we may experience increased compensation costs that are not offset by either improved productivity or higher prices for our software products or services.

In addition, the loss of the services of any of our executive officers or other key employees could significantly harm our business, operating results and financial condition.

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Any failure to achieve the targets set under our long-term incentive plan could significantly reduce or eliminate payments made under this plan, which may, in turn, materially and adversely affect our ability to retain the key personnel paid under this plan.

Increased attention from shareholders, customers and other key relationships regarding our ESG practices could impact our business activities, financial performance and reputation

Shareholders, customers and other key relationships are placing a greater emphasis on ESG factors when evaluating companies for business and investment opportunities.

We actively manage a broad range of ESG matters and annually publish a Corporate Citizenship Report regarding our policies and practices on a variety of ESG matters, including our:

governance framework;

community involvement;

ED&I initiatives;

employee health and safety;

targets regarding greenhouse gas emissions, waste diversion and energy consumption;

and practices relating to data privacy and information security.

Our approach to and disclosure of ESG matters may result in increased attention from our shareholders, customers, employees, partners and suppliers, and such key relationships may not be satisfied with our approach to ESG as compared to their expectations and standards, which continue to evolve.

Additionally, third-party organizations evaluate our approach to ESG, and an unfavorable rating from such organizations could lead to negative investor sentiment and reduced demand for our securities.

See “Changes in the market price of our Common Shares and credit ratings of our outstanding debt securities could lead to losses for shareholders and debt holders.”

The Company has disclosed the OpenText Zero-In Initiative, where we have committed to:

(1) science-based GHG emissions target of 50% reduction by 2030, and net zero GHG emissions by 2040;

(2) zero waste from operations by 2030;

(3) by 2030, a majority ethnically diverse staff, with 50/50 representation in key roles and 40% women in leadership positions at all management levels.

Achieving our targets and ongoing compliance with evolving laws and regulatory requirements may cause us to reconfigure facilities and operations or adjust our existing processes.

This could result in significant unexpected expenses, changes in our relationships with certain strategic partners, distributors and third-party service providers, loss of revenue and business disruption.

We may not meet our goals which would have adverse effects on our reputation, business, operating results and financial condition.

Further, we may incur additional costs and require additional resources to be able to collect reliable emissions and waste data (in part, due to unavailable third-party data or inconsistent industry standards on the measurement of certain data), measure our performance against our targets and adjust our disclosure in line with market expectations.

We may also incur additional compliance costs under evolving ESG-related regulations across the world, including in the EU, the U.S.

If we fail to meet our ESG targets or other ESG criteria set by third parties on a timely basis, or at all, or fail to respond to any perceived ESG concerns, our business activities, financial performance and reputation may be adversely affected.

Risks Related to Acquisitions

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These activities create risks such as:

(i) the need to integrate and

manage the businesses and products acquired with our own business and products;

(i) the need to integrate and manage the businesses and products acquired with our own business and products;

(ii) additional demands on our resources, systems, procedures and controls;

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In addition, while we conduct due diligence prior to consummating an acquisition, joint venture or business collaboration, such diligence may not identify all material issues associated with such activities.

We may also experience unanticipated difficulties identifying suitable new acquisition candidates that are available for purchase at reasonable prices.

Even if we are able to identify such candidates, we may be unable to consummate an acquisition on suitable terms.

We may also experience unanticipated difficulties identifying suitable or attractive acquisition candidates that are available for purchase at reasonable prices.

Even if we are able to identify such candidates, we may be unable to consummate an acquisition on suitable terms or in the face of competition from other bidders.

Moreover, if we are unable to access capital markets on acceptable terms or at all, we may not be able to consummate acquisitions, or may have to do so on the basis of a less than optimal capital structure.

Our inability (i) to take advantage of growth opportunities for our business or for our products and services, or (ii) to address risks associated with acquisitions or investments in businesses, may negatively affect our operating results and financial condition.

Our inability:

(i) to take advantage of growth opportunities for our business or for our products and services, or (ii) to address risks associated with acquisitions or investments in businesses, may negatively affect our operating results and financial condition.

Additionally, any impairment of goodwill or other intangible assets acquired in an acquisition or in an investment, or charges associated with any acquisition or investment activity, may materially adversely impact our results of operations and financial condition which, in turn, may have a material adverse effect on the market price of our Common Shares or credit ratings of our outstanding debt securities.

Businesses we acquire may have disclosure controls and procedures and internal controls over financial reporting, cybersecurity and compliance with data privacy laws that are weaker than or otherwise not in conformity with ours

We have a history of acquiring complementary businesses of varying size and organizational complexity and we may continue to engage in such acquisitions.

Upon consummating an acquisition, we seek to implement our disclosure controls and procedures, our internal controls over financial reporting as well as procedures relating to cybersecurity and compliance with data privacy laws and regulations at the acquired company as promptly as possible.

Depending upon the nature and scale of the business acquired, the implementation of our disclosure controls and procedures as well as the implementation of our internal controls over financial reporting at an acquired company may be a lengthy process and may divert our attention from other business operations.

Our integration efforts may periodically expose deficiencies in the disclosure controls and procedures and internal controls over financial reporting as well as procedures relating to cybersecurity and compliance with data privacy laws and regulations of an acquired company that were not identified in our due diligence undertaken prior to consummating the acquisition or contractual protections intended to protect against any such deficiencies may not fully eliminate all related risks.

If such deficiencies exist, we may not be in a position to comply with our periodic reporting requirements and, as a result, our business and financial condition may be materially harmed.

Refer to Item 9A "Controls and Procedures", included elsewhere in this Annual Report on Form 10-K, for details on our internal controls over financial reporting for recent acquisitions.

We may be unable to successfully integrate acquired businesses or do so within the intended timeframes, which could have an adverse effect on our financial condition, results of operations and business prospects

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If, despite our retention and recruiting efforts, key employees depart, the loss of their services and their experience and knowledge regarding our business or an acquired business could have an adverse effect on our future operating results and the successful ongoing operation of our businesses.

We may fail to realize all of the anticipated benefits of any acquisitions, including our acquisition of Zix, or those benefits may take longer to realize than expected

We may be required to devote significant management attention and resources to integrating the business practices and operations of our acquisitions, including the acquisition of Zix.

As we integrate our acquisitions, we may experience disruptions to our business and, if implemented ineffectively, it could restrict the realization of the full expected benefits.

The failure to meet the challenges involved in the integration process and to realize the anticipated benefits of any acquisition could cause an interruption of, or loss of momentum in, our operations and could adversely affect our business, financial condition and results of operations.

Furthermore, as we integrate our acquisitions, including Zix, it may result in material unanticipated problems, expenses, charges, liabilities, competitive responses, loss of customers and other business relationships, and diversion of management’s attention.

Additional integration challenges may include:

• Difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the acquisition;

• Difficulties in the integration of operations and systems, including pricing and marketing strategies;

• Difficulties in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures.

Many of these factors will be outside of our control and any one of them could result in increased costs, including restructuring charges, decreases in the amount of expected revenues and diversion of management’s time and energy, which could adversely affect our business, financial condition and results of operations.

We have a history of acquiring complementary businesses of varying size and organizational complexity and we may continue to engage in such acquisitions.

business operations.

contractual protections intended to protect against any such deficiencies may not fully eliminate all related risks.

If such deficiencies exist, we may not be in a position to comply with our periodic reporting requirements and, as a result, our business and financial condition may be materially harmed.

Refer to Item 9A “Controls and Procedures”, included elsewhere in this Annual Report on Form 10-K, for details on our internal controls over financial reporting for recent acquisitions.

Risks Related to Laws and Regulatory Compliance

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Although we believe our estimates are reasonable, the ultimate outcome with respect to the taxes we owe may differ from the amounts recorded in our financial statements, and this difference may materially affect our financial position and financial results in the period or periods for which such determination is made.

For more information on tax audits to which we are subject, see notes 14 "Guarantees and Contingencies" and 15 "Income Taxes" to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

As part of the ongoing audit of our Canadian tax returns by the Canada Revenue Agency (CRA), we have received notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 and the CRA is currently auditing Fiscal 2017.

For more information on tax audits to which we are subject, see Note 14 “Guarantees and Contingencies” and Note 15 “Income Taxes” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

As part of the ongoing audit of our Canadian tax returns by the Canada Revenue Agency (CRA), we have received notices of, and are appealing, reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, and the CRA is auditing Fiscal 2017.

An adverse outcome of these ongoing audits could have a material adverse effect on our financial position and results of operations

As part of its ongoing audit of our Canadian tax returns, the CRA has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016.

As part of its ongoing audit of our Canadian tax returns, the Canada Revenue Agency (CRA) has disputed our transfer pricing methodology used for certain intercompany transactions with our international subsidiaries and has issued notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 2022, in connection with the CRA's reassessments for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $75 million.

As of June 30, 2022, we have provisionally paid approximately $34 million in order to fully preserve our rights to object to the CRA's audit positions, being the minimum payment required under Canadian legislation while the matter is in dispute.

This amount is recorded within “Long-term income taxes recoverable” on our Consolidated Balance Sheets as of June 30, 2021.

This amount is recorded within “Long-term income taxes recoverable” on the Consolidated Balance Sheets as of June 30, 2022.

The notices of reassessment for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 would, as drafted, increase our taxable income by approximately $90 million to $100 million for each of those years, as well as impose a 10% penalty on the proposed adjustment to income.

Audits by the CRA of our tax returns for fiscal years prior to Fiscal 2012 have been completed with no reassessment of our income tax liability.

We strongly disagree with the CRA’s positions and believe the reassessments of Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 (including any penalties) are without merit.

We have filed notices of objection for Fiscal 2012,

Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016.

We are currently seeking competent authority consideration under applicable international treaties in respect of these reassessments.

We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016 (including any penalties) are without merit, and we are continuing to contest these reassessments.

On June 30, 2022, we filed a notice of appeal with the Tax Court of Canada seeking to reverse all such reassessments (including any penalties) in full.

Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012, Fiscal 2013, Fiscal 2014, Fiscal 2015 and Fiscal 2016, we have elective deductions available for those years (including carry-backs from later years) that would offset such increased amounts so that no additional cash tax would be payable, exclusive of any assessed penalties and interest, as described above.

The CRA is also currently auditing Fiscal 2017 on a basis that we strongly disagree with and will vigorously contest.

The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada in July 2016.

The CRA has also audited Fiscal 2017 on a basis that we strongly disagree with and are contesting.

The focus of the CRA audit has been the valuation of certain intellectual property and goodwill when one of our subsidiaries continued into Canada

from Luxembourg in July 2016.

In accordance with applicable rules, these assets were recognized for tax purposes at fair market value as of that time, which value was supported by an expert valuation prepared by an independent leading accounting and advisory firm.

In conjunction with the Fiscal 2017 audit, the CRA issued a proposal letter dated April 7, 2021 (Proposal Letter) indicating to us that it proposes to reduce the depreciable basis of these assets.

We are currently engaged in dialogue with the CRA regarding the 2017 audit and expect to be making extensive submissions in support of our position shortly.

CRA’s currently-proposed position for Fiscal 2017 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit.

Other aspects of CRA’s currently-proposed position for Fiscal 2017 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position.

If the CRA determines to reassess on the basis of its position set forth in the Proposal Letter and we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $470 million.

In conjunction with the Fiscal 2017 audit, the CRA issued a proposal letter dated April 7, 2021 (Proposal Letter) indicating to us that it proposes to reassess our Fiscal 2017 tax year to reduce the depreciable basis of these assets.

We have made extensive submissions in support of our position.

CRA’s position for Fiscal 2017 relies in significant part on the application of its positions regarding our transfer pricing methodology that are the basis for its reassessment of our fiscal years 2012 to 2016 described above, and that we believe are without merit.

Other aspects of CRA’s position for Fiscal 2017 conflict with the expert valuation prepared by the independent leading accounting and advisory firm that was used to support our original filing position.

On January 27, 2022, the CRA issued a notice of reassessment in respect of Fiscal 2017 on the basis of its position set forth in the Proposal Letter.

On April 19, 2022, we filed our notice of objection regarding the reassessment in respect of Fiscal 2017.

If we are ultimately unsuccessful in defending our position, the estimated impact of the proposed adjustment could result in us recording an income tax expense, with no immediate cash payment, to reduce the stated value of our deferred tax assets of up to approximately $470 million.

Any such income tax expense could also have a corresponding cash tax impact that would primarily occur over a period of several future years based upon annual income realization in Canada.

We strongly disagree with the CRA’s position for Fiscal 2017 and intend to vigorously defend our original filing position.

We will continue to vigorously contest the proposed adjustments to our taxable income and any penalty and interest assessments, as well as any proposed reduction to the basis of our depreciable property.

We strongly disagree with the CRA’s position for Fiscal 2017 and intend to vigorously defend our original filing position, We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 due to the utilization of available tax attributes;

however, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we expect to make certain minimum payments required under Canadian legislation, which may need to be provisionally made starting in Fiscal 2024 while the matter is in dispute.

We will continue to vigorously contest the adjustments to our taxable income and any penalty and interest assessments, as well as any reduction to the basis of our depreciable property.

We are confident that our original tax filing positions were appropriate.

Accordingly, as of the date of this Annual Report on Form 10-K, we have not recorded any accruals in respect of these reassessments or proposed reassessment in our Consolidated Financial Statements.

However, an adverse outcome of any of these reassessments or proposed reassessment could have a material adverse effect on our financial position and results of operations.

The CRA has also advised us that they are currently in preliminary stages of auditing Fiscal 2018 and Fiscal 2019.

For further details on these and other tax audits to which we are subject, see notes 14 “Guarantees and Contingencies” and 15 “Income Taxes” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

The CRA is currently in preliminary stages of auditing Fiscal 2018 and Fiscal 2019.

For further details on these and other tax audits to which we are subject, see Note 14 “Guarantees and Contingencies” and Note 15 “Income Taxes” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

Risks associated with data privacy issues, including evolving laws and regulations and associated compliance efforts, may adversely impact our business

Our business depends on the processing of personal data, including data transfer between our affiliated entities, to and from our business partners and customers, and with third-party service providers.

The laws and regulations relating to personal data constantly evolve, as federal, state and foreign governments continue to adopt new measures addressing data privacy and processing (including collection, storage, transfer, disposal and use) of personal data.

Moreover, the interpretation and application of many existing or recently enacted privacy and data protection laws and regulations in the European Union, the U.S.

The laws and regulations relating to personal data are constantly evolving, as federal, state and foreign governments continue to adopt new measures addressing data privacy and processing (including collection, storage, transfer, disposal and use) of personal data.

Moreover, the interpretation and application of many existing or recently enacted privacy and data protection laws and regulations in the EU, United Kingdom, the U.S.

and elsewhere are uncertain and fluid, and it is possible that such laws and regulations may be interpreted or applied in a manner that is inconsistent with our existing data management practices or the features of our products and services.

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Additionally, the Federal Trade Commission (FTC) and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, transfer and security of data.

Congress and state legislatures, along with federal regulatory authorities, have recently increased their attention to matters concerning personal data, and this may result in new legislation which could increase the cost of compliance.

Congress and state legislatures, along with federal regulatory authorities, have recently increased their attention to matters concerning personal data, and this has and may continue to result in new legislation which could increase the cost of compliance.

For example, the California Consumer Privacy Act of 2018 (CCPA) came into effect on January 1, 2020.

The CCPA requires companies that process information of California residents to make new disclosures to consumers about their

data collection, use and sharing practices, allows consumers to access and request deletion of their data and opt out of certain data sharing with third parties and provides a new private right of action for data breaches.

The CCPA requires companies that process information of California residents to make new disclosures to consumers about their data collection, use and sharing practices, allows consumers to access and request deletion of their data and opt out of certain data sharing with third parties and provides a new private right of action for data breaches.

Violations of the CCPA are enforced by the California Attorney General with sizeable civil penalties, particularly for violations that impact large numbers of consumers.

Further, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020 (CPRA), which significantly modifies the CCPA with additional data privacy compliance requirements, expands consumers' rights with respect to certain sensitive personal information and establishes a regulatory agency dedicated to enforcing the requirements of the CCPA and CPRA.

It remains unclear how various provisions of the CCPA and CPRA will be interpreted and enforced.

It remains unclear how various provisions of the

CCPA and CPRA will be interpreted and enforced when CPRA comes into effect in most material respects on January 1, 2023.

Virginia, Colorado, Utah and Connecticut have similarly passed broad laws relating to privacy, data protection and information security, further complicating our privacy compliance obligations through the introduction of increasingly disparate requirements across the various U.S.

jurisdictions in which we operate.

In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us or our clients.

Some of our operations are subject to the European Union’s General Data Protection Regulation (GDPR), which took effect from May 25, 2018, including as it forms part of the United Kingdom's retained EU law (as defined in the European Union (Withdrawal) Act 2018).

The GDPR introduces a number of new obligations for subject companies and we will need to continue dedicating financial resources and management time to GDPR compliance.

The GDPR enhances the obligations placed on companies that control or process personal data including, for example, expanded disclosures about how personal data is to be used, new mechanisms for obtaining consent from data subjects, new controls for data subjects with respect to their personal data (including by enabling them to exercise rights to erasure and data portability), limitations on retention of personal data and mandatory data breach notifications.

Additionally, the GDPR places companies under new obligations relating to data transfers and the security of the personal data they process.

The GDPR provides that supervisory authorities in the European Union may impose administrative fines for certain infringements of the GDPR of up to EUR 20,000,000, or 4% of an undertaking’s total, worldwide, annual turnover of the preceding financial year, whichever is higher.

Some of our operations are subject to the EU’s General Data Protection Regulation (the EU GDPR), which took effect from May 25, 2018, the General Data Protection Regulation as it forms part of retained EU law in the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 and as amended by the Data Protection, Privacy and Electronic Communications (Amendments etc) (EU Exit) Regulations 2019 (SI 2019/419) (the UK GDPR, and together with the EU GDPR, the GDPR), and the UK Data Protection Act 2018.

The GDPR imposes a number of obligations for subject companies, and we will need to continue dedicating financial resources and management time to GDPR compliance.

The GDPR enhances the obligations placed on companies that control or process personal data including, for example, expanded disclosures about how personal data is to be used, mechanisms for obtaining consent from data subjects, controls for data subjects with respect to their personal data (including by enabling them to exercise rights to erasure and data portability), limitations on retention of personal data and mandatory data breach notifications.

Additionally, the GDPR places companies under obligations relating to data transfers and the security of the personal data they process.

The GDPR provides that supervisory authorities in the EU and the United Kingdom may impose administrative fines for certain infringements of the GDPR of up to EUR 20,000,000 under the EU GDPR (or GBP 17,500,000 under the UK GDPR), or 4% of an undertaking’s total, worldwide, annual turnover of the preceding financial year, whichever is higher.

Individuals who have suffered damage as a result of a subject company’s non-compliance with the GDPR also have the right to seek compensation from such company.

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Given the potential fines, liabilities and damage to our reputation in the event of an actual or perceived violation of the GDPR, such a violation may have a material adverse effect on our business and operations.

In light of the recent decision of the Court of Justice of the European Union in Data Protection Commissioner vs Facebook Ireland Limited and Maximillian Schrems (C-311/118), there is currently ongoing uncertainty with respect to the legality of certain transfers of personal data from the European Economic Area (EEA) and the United Kingdom to so-called "third countries" outside the EEA, including the U.S.

In addition, the GDPR restricts transfers of personal data outside of the European Economical Area (EEA) and the United Kingdom to third countries deemed to lack adequate privacy protections unless an appropriate safeguard is implemented.

In light of the July 2020 decision of the Court of Justice of the European Union in Data Protection Commissioner vs Facebook Ireland Limited and Maximillian Schrems (C-311/118) (Schrems II) invalidating the EU-U.S.

Privacy Shield Framework, there is potential uncertainty with respect to the legality of certain transfers of personal data from the European Economic Area (EEA) and the United Kingdom to so-called “third countries” outside the EEA, including the U.S.

In addition to the increased legal risk in the event of any such transfers, additional costs might also need to be incurred in order to implement necessary safeguards to comply with GDPR.

Outside of the U.S.

and the European Union, many jurisdictions have adopted or are adopting new data privacy laws that may impose further onerous compliance requirements, such as data localization, which prohibits companies from storing and/or processing outside the jurisdiction data relating to resident individuals.

While the Court of Justice of the European Union upheld the adequacy of the old standard contractual clauses (SCCs), a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, it made clear that reliance on them alone may not necessarily be sufficient in all circumstances.

In June 2021, the European Commission issued new SCCs that must be used for relevant new data transfers, and existing SCCs must be migrated to the new SCCs by December 27, 2022.

At the same time, the United Kingdom’s Information Commissioner’s Office released two new agreements governing international data transfers out of the United Kingdom that can be used from March 21, 2022:

the International Data Transfer Agreement (IDTA) and the Data Transfer Addendum (Addendum).

All existing contracts and any new contracts signed before September 21, 2022 can continue to use the old SCCs until March 21, 2024, after which the old SCCs must be replaced by either the IDTA or the Addendum in conjunction with the new SCCs.

All contracts signed after September 21, 2022 must use either the IDTA or the Addendum in conjunction with the new SCCs.

Additionally, on March 25, 2022, the U.S.

and European Commission announced that they had agreed in principle to a new “Trans-Atlantic Data Privacy Framework” to enable trans-Atlantic data flows and address the concerns raised in the Schrems II decision.

Outside of the U.S., the EU and the United Kingdom, many jurisdictions have adopted or are adopting new data privacy laws that may impose further onerous compliance requirements, such as data localization, which prohibits companies from storing and/or processing outside the jurisdiction data relating to resident individuals.

The proliferation of such laws within the jurisdictions in which we operate may result in conflicting and contradictory requirements, particularly in relation to evolving technologies such as cloud computing.

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In addition, unexpected and dramatic devaluations of currencies in developing, as well as developed, markets could negatively affect our revenues from, and the value of the assets located in, those markets.

Transactional foreign currency gains (losses) included in the Consolidated Statements of Income under the line item “Other income (expense) net” for Fiscal 2021, Fiscal 2020 and Fiscal 2019 were ($1.3) million, ($4.2) million, and ($4.3) million, respectively.

Transactional foreign currency gains (losses) are included in the Consolidated Statements of Income under the line item “Other income (expense) net.” See Item 8.

Financial Statements and Supplementary Data.

While we use derivative financial instruments to attempt to reduce our net exposure to currency exchange rate fluctuations, fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S.

dollar against major currencies or the currencies of large developing countries, could materially affect our financial results.

These risks and their potential impacts may be exacerbated by the ongoing COVID-19 pandemic, Brexit, as defined below, and any policy changes, including those resulting from trade and tariff disputes.

See "The COVID-19 pandemic has and is expected to further negatively affect our business, operations and financial performance" and “The impact of Brexit could adversely affect us”.

These risks and their potential impacts may be exacerbated by the ongoing COVID-19 pandemic, the Russia-Ukraine conflict and any policy changes, including those resulting from trade and tariff disputes.

Our indebtedness could limit our operations and opportunities

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As of June 30, 2022, our credit facilities consisted of a $1.0 billion term loan facility (Term Loan B) and a $750 million committed revolving credit facility (the Revolver).

Borrowings under Term Loan B and the Revolver, if any, are or will be secured by a first charge over substantially all of our assets.

Borrowings under Term Loan B and the Revolver, if any, are or will be secured by a first charge over substantially all of our assets, which security interests may limit our financial flexibility.

Repayments made under Term Loan B are equal to 0.25% of the original principal amount in equal quarterly installments for the life of Term Loan B, with the remainder due at maturity.

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The terms of Term Loan B and the Revolver include customary restrictive covenants that impose operating and financial restrictions on us, including restrictions on our ability to take actions that could be in our best interests.

These restrictive covenants include certain limitations on our ability to make investments, loans and acquisitions, incur additional debt, incur liens and encumbrances, consolidate, amalgamate or merge with any other person, dispose of assets, make certain restricted payments, including a limit on dividends on equity securities or payments to redeem, repurchase or retire equity securities or other indebtedness, engage in transactions with affiliates, materially alter the business we conduct, and enter into certain restrictive agreements.

certain restrictive agreements.

Term Loan B and the Revolver includes a financial covenant relating to a maximum consolidated net leverage ratio, which could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions.

Our failure to comply with any of the covenants that are included in Term Loan B and the Revolver could result in a default under the terms thereof, which could permit the lenders thereunder to declare all or part of any outstanding borrowings to be immediately due and payable.

As of June 30, 2021, we also have $850 million in aggregate principal amount of our 5.875% senior unsecured notes due 2026 (Senior Notes 2026), $900 million in aggregate principal amount of 3.875% Senior Notes due 2028 (Senior Notes 2028) and $900 million in aggregate principal amount of 4.125% Senior Notes due 2030 (Senior Notes 2030 and together with the Senior Notes 2028 and Senior Notes 2026, the Senior Notes) outstanding, respectively issued in private placements to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to

Regulation S under the Securities Act.

As of June 30, 2022, we also have $900 million in aggregate principal amount of 3.875% Senior Notes due 2028 (Senior Notes 2028), $850 million in aggregate principal amount of 3.875% Senior Notes due 2029 (Senior Notes 2029), $900 million in aggregate principal amount of 4.125% Senior Notes due 2030 (Senior Notes 2030) and $650 million in aggregate principal amount of our 4.125% senior unsecured notes due 2031 (Senior Notes 2031 and, together with the Senior Notes 2028, Senior Notes 2029 and Senior Notes 2030, the Senior Notes) outstanding, respectively issued in private placements to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain persons in offshore transactions pursuant to Regulation S under the Securities Act.

Our failure to comply with any of the covenants that are included in the indentures governing the Senior Notes could result in a default under the terms thereof, which could result in all or a portion of the Senior Notes to be immediately due and payable.

Our Term Loan B and Revolver have variable rates of interest, some of which use London Inter-Bank Offered Rate (LIBOR) as a benchmark.

All CHF, EUR, GBP, and JPY LIBOR settings and the one-week and two-month USD LIBOR setting will either cease to be provided by any administrator or no longer continue to be representative after December 31, 2021 and the remaining USD LIBOR settings will either cease to be provided by any administrator or no longer continue to be representative after June 30, 2023.

Our Term Loan B and Revolver have variable rates of interest, which will increase our cost of borrowing during times of rising interest rates.

Also, some of our variable rates of interest use London Inter-Bank Offered Rate (LIBOR) as a benchmark.

After December 31, 2021, all CHF and EUR LIBOR settings, the one-week and two-month USD LIBOR settings and the overnight/spot next, one-week, two-month and twelve-month GBP and JPY LIBOR settings have ceased to be published and the remaining USD LIBOR settings will either cease to be provided by any administrator or no longer continue to be representative after June 30, 2023.

As a result, any financial instruments or agreements using LIBOR as a benchmark interest rate may be adversely affected.

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We experience significant fluctuations in revenues and operating results caused by many factors, including:

• Impact of the ongoing COVID-19 pandemic and actual or potential resurgences on our business and on general economic and business conditions;

• Impact of the ongoing COVID-19 pandemic and actual or potential resurgences on our business and on general economic and business conditions, including any potential recession;

• Changes in the demand for our software products and services and for the products and services of our competitors;

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• Changes in foreign currency exchange rates, LIBOR and other applicable interest rates (including the expected replacement of LIBOR as a benchmark rate);

• Fluctuations in the value of our investments related to certain investment funds in which we are a limited partner:

• Acquisitions and the integration of acquired businesses;

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• Changes in laws and regulations affecting our business, including data privacy and cybersecurity laws and regulations;

• Changes in general economic and business conditions, including the impact of the COVID-19 pandemic and the resulting supply chain disruptions and global micro-chip shortages;

• Changes in general political developments, such as the impact of Brexit, changes to international trade policies and policies taken to stimulate or to preserve national economies.

• Changes in general economic and business conditions, including the impact of the COVID-19 pandemic and the resulting direct and indirect supply chain disruptions and global micro-chip shortages;

• Changes in general political developments, international trade policies and policies taken to stimulate or to preserve national economies.

A general weakening of the global economy or a continued weakening of the economy in a particular region or economic or business uncertainty could result in the cancellation of or delay in customer purchases.

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(v) impacts of the COVID-19 pandemic and related economic conditions or (vi) other events or factors.

In addition, financial markets experience significant price and volume fluctuations that particularly affect the market prices of equity securities of many technology companies.

In addition, financial markets experience significant price and volume fluctuations that particularly affect the market prices of equity securities of many technology companies in particular due to concerns about increasing interest rates, rising inflation or any potential recession.

These fluctuations have often resulted from the failure of such companies to meet market expectations in a particular quarter, and thus such fluctuations may or may not be related to the underlying operating performance of such companies.

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Our revenues and particularly our new software license revenues are difficult to forecast, and, as a result, our quarterly operating results can fluctuate substantially.

Sales forecasts may be particularly inaccurate or unpredictable given the extraordinary nature of the COVID-19 pandemic.

Sales forecasts may be particularly inaccurate or unpredictable given the

extraordinary nature of the COVID-19 pandemic.

We use a “pipeline” system, a common industry practice, to forecast sales and trends in our business.

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Our sales pipeline is only an estimate and may be an unreliable predictor of actual sales activity, both in a particular quarter and over a longer period of time.

Many factors may affect actual sales activity, such as weakened economic conditions, which may cause our customers and potential customers to delay, reduce or cancel information technology-related purchasing decisions and the tendency of some of our customers to wait until the end of a fiscal period in the hope of obtaining more favorable terms from us.

Many factors may affect actual sales activity, such as weakened economic conditions, including as a result of any potential recession, which may cause our customers and potential customers to delay, reduce or cancel information technology-related purchasing decisions, our decision to increase prices in response to rising inflation, and the tendency of some of our customers to wait until the end of a fiscal period in the hope of obtaining more favorable terms from us.

If actual sales activity differs from our pipeline estimate, then we may have planned our activities and budgeted incorrectly, and this may adversely affect our business, operating results and financial condition.

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Also, international expansion may be difficult, time consuming and costly.

These risks and their potential impacts may be exacerbated by the ongoing COVID-19 pandemic and Brexit.

See "The COVID-19 pandemic has and is expected to further negatively affect our business, operations and financial performance" and “The impact of Brexit could adversely affect us.” As a result, if revenues from international operations do not offset the expenses of establishing and maintaining international operations, our business, operating results and financial condition will suffer.

The impact of Brexit could adversely affect us

The June 2016 United Kingdom referendum on its membership in the EU resulted in a majority of United Kingdom voters voting to exit the EU (Brexit) and on January 31, 2020, the United Kingdom withdrew from the EU.

On December 24, 2020, a new trade agreement was concluded between the EU and the United Kingdom (TCA), which took effect on May 1, 2021.

The TCA is complex and a number of sectors are not comprehensively included within its scope.

Furthermore, certain provisions within the TCA apply on a phased basis and anticipate further agreements between the United Kingdom and the EU.

Accordingly, aspects of the UK-EU relationship may be subject to uncertainties and future disagreements between the United Kingdom and the EU.

We have operations in the United Kingdom and the EU, and as a result, we face risks associated with the continued uncertainty and disruptions that have resulted from Brexit, including with respect to volatility in exchange rates and interest rates and potential material changes to the regulatory regime applicable to our operations in the United Kingdom.

Brexit could adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in global political institutions, regulatory agencies and financial markets.

Disruptions and uncertainty caused by Brexit may also cause our customers to closely monitor their costs and reduce their spending budget on our products and services.

Continued uncertainty as to the terms of Brexit may result in heightened near term economic volatility.

While we have not experienced any material financial impact from Brexit on our business to date, we cannot predict its future implications.

Any impact from Brexit on our business and operations over the long term will depend, in part, on the outcome of tariff, tax treaties, trade, regulatory, and other negotiations the United Kingdom conducts, and could adversely affect our business, operating results and financial condition.

These risks and their potential impacts may be exacerbated by the ongoing COVID-19 pandemic and the Russia-Ukraine conflict.

See “The COVID-19 pandemic has and may continue to further negatively affect our business, operations and financial performance” and “Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine conflict, has affected and may continue to affect our business” As a result, if revenues from international operations do not offset the expenses of establishing and maintaining international operations, our business, operating results and financial condition will suffer.

We may become involved in litigation that may materially adversely affect us

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The declaration, payment and amount of any dividends will be made pursuant to our dividend policy and is subject to final determination each quarter by our Board of Directors in its discretion based on a number of factors that it deems relevant, including our financial position, results of operations, available cash resources, cash requirements and alternative uses of cash that our Board of Directors may conclude would be in the best interest of our shareholders.

Our dividend payments are subject to relevant

contractual limitations, including those in our existing credit agreements and to solvency conditions established by the Canada Business Corporations Act (CBCA), the statute under which we are incorporated.

Our dividend payments are subject to relevant contractual limitations, including those in our existing credit agreements and to solvency conditions established by the Canada Business Corporations Act (CBCA), the statute under which we are incorporated.

Accordingly, there can be no assurance that any future dividends will be equal or similar in amount to any dividends previously paid or that our Board of Directors will not decide to reduce, suspend or discontinue the payment of dividends at any time in the future.

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Our overall performance depends in part on worldwide economic conditions.

Certain economies have experienced periods of downturn as a result of a multitude of factors, including, but not limited to, turmoil in the credit and financial markets, concerns regarding the stability and viability of major financial institutions, declines in gross domestic product, increases in unemployment, volatility in commodity prices and worldwide stock markets, excessive government debt and disruptions to global trade or tariffs.

The severity and length of time that a downturn in economic and financial market conditions may persist, as well as the timing, strength and sustainability of any recovery, are unknown and are beyond our control.

Recently, COVID-19, Brexit and its impact on the United Kingdom and the EU, as well as any policy changes resulting from trade and tariff disputes, have raised additional concerns regarding economic uncertainties.

The severity and length of time that a downturn in economic and financial market conditions may persist, as well as the timing, strength and sustainability of any recovery from such downturn, are unknown and are beyond our control.

Recently, the COVID-19 pandemic, the Russia-Ukraine conflict, the inflationary environment, as well as any policy changes resulting from trade and tariff disputes, have raised additional concerns regarding economic uncertainties.

Moreover, any instability in the global economy affects countries in different ways, at different times and with varying severity, which makes the impact to our business complex and unpredictable.

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Any of these events, as well as a general weakening of, or declining corporate confidence in, the global economy, or a curtailment in government or corporate spending, could delay or decrease our revenues and therefore have a material adverse effect on our business, operating results and financial condition.

For more information regarding the impact of COVID-19 on our business and global economic conditions, see "The COVID-19 pandemic has and is expected to further negatively affect our business, operations and financial performance" and "The impact of the COVID-19 pandemic continues to create significant uncertainty in the global economy and for our business, operations and financial performance".

For more information regarding the impact of COVID-19 on our business and global economic conditions, see “The COVID-19 pandemic has and may continue to further negatively affect our business, operations and financial performance” and “The impact of the COVID-19 pandemic continues to create significant uncertainty in the global economy and for our business, operations and financial performance.”

Stress in the global financial system may adversely affect our finances and operations in ways that may be hard to predict or to defend against

Financial developments seemingly unrelated to us or to our industry may adversely affect us over the course of time.

For example, material increases in LIBOR or other applicable interest rate benchmarks may increase the debt payment costs for our credit facilities such as our Term Loan B and the Revolver that have variable rates of interest, some of which use LIBOR as a benchmark.

All CHF, EUR, GBP, and JPY LIBOR settings and the one-week and two-month USD LIBOR settings will either cease to be provided by any administrator or no longer continue to be representative after December 31, 2021 and the remaining USD LIBOR settings will either cease to be provided by any administrator or no longer continue to be representative after June 30, 2023.

For example, material increases in LIBOR or other applicable interest rate benchmarks may increase the interest expense for our credit facilities such as our Term Loan B and the Revolver that have variable rates of interest, some of which use LIBOR as a benchmark.

As a result, any financial instruments or agreements using LIBOR as a benchmark interest rate may be adversely affected.

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Credit contraction in financial markets may hurt our ability to access credit in the event that we identify an acquisition opportunity or require significant access to credit for other reasons.

Similarly, volatility in the market price of our Common Shares due to seemingly unrelated financial developments could hurt our ability to raise capital for the financing of acquisitions or other reasons.

Similarly, volatility in the market price of our Common Shares due to seemingly unrelated financial developments, such as a recession, inflation or an economic slowdown in the United States or internationally, could hurt our ability to raise capital for the financing of acquisitions or other reasons.

Potential price inflation caused by an excess of liquidity in countries where we conduct business may increase the cost we incur to provide our solutions and may reduce profit margins on agreements that govern the licensing of our software products and/or the sale of our services to customers over a multi-year period.

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As a result, these customers may need to reduce their licensing of our software products or their purchases of our services, or we may experience greater difficulty in receiving payment for the licenses and services that these customers purchase from us.

In addition, inflation is often accompanied by higher interest rates, which may cause additional economic fluctuation.

Any of these events, or any other events caused by turmoil in world financial markets, may have a material adverse effect on our business, operating results and financial condition.

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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