What changed in this filing

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Item 1A. Risk Factors

2026-08-06 compared with 2025-08-07 · 191 added, 199 removed, 478 unchanged (45% of the section changed)

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Risks Related to our Business and Industry

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.

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

Our success depends upon our ability to design, develop, test, market, license, sell and support new software products and services and enhancements of current products and services on a timely basis in response to both competitive threats and marketplace demands.

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Further, as we develop, acquire and introduce new products and services, including those that incorporate AI, we may be subject to new or heightened legal, ethical and other challenges, which may impact our ability to continue to innovate.

In addition, if the integrated or new products or enhancements do not achieve acceptance by the marketplace, our operating results will be materially adversely affected.

Moreover, if new industry standards emerge that we do not anticipate or adapt to, or, if alternatives to our services and solutions are developed by our competitors in times of rapid technological change, our software products and services could be rendered less competitive or obsolete, causing us to lose market share and, as a result, harm our business and operating results and our ability to compete in the marketplace.

In addition, if the integrated or new products or enhancements do not achieve acceptance by the marketplace, our operating results could be materially adversely affected.

Moreover, if new industry standards

emerge that we do not anticipate or adapt to, or, if alternatives to our services and solutions, including new AI technologies, are developed by our competitors in times of rapid technological change, our software products and services could be rendered less competitive or obsolete, causing us to lose market share and, as a result, harm our business and operating results and our ability to compete in the marketplace.

Product development is a long, expensive and uncertain process, and we may terminate one or more of our development programs.

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Our investment in our current research and development efforts may not provide a sufficient or timely return.

The development of information management software products is a costly, complex and time-consuming process, and the investment in information management software product development often involves a long wait until a return is achieved on such an investment.

The development of data management software products is a costly, complex and time-consuming process, and the investment in data management software product development often involves a long wait until a return is achieved on such an investment.

We are making, and will continue to make, significant investments in software research and development and related product and service opportunities.

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Commercial success depends on many factors, including the degree of innovation of the software products and services developed through our research and development efforts, sufficient support from our strategic partners and effective distribution and marketing.

Accelerated software product introductions and short product life cycles require high levels of expenditures for research and development and the potential introduction of government regulation, including that related to the use of AI, may increase the costs of research and development as well as compliance with such regulation.

Accelerated software product introductions and short product life cycles require high levels of expenditures for research and development and the potential introduction of government regulation, including those related to the use of AI, and may increase the costs of research and development as well as compliance with such regulation.

These expenditures may adversely affect our operating results if they are not offset by corresponding revenue increases.

We believe that we must continue to

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dedicate a significant amount of resources to our research and development efforts in order to maintain our competitive position.

We believe that we must continue to dedicate a significant amount of resources to our research and development efforts in order to maintain our competitive position.

However, significant revenues from new software product and service investments may not be achieved for a number of years, if at all.

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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.

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.

We intend to pursue our strategy of strengthening our position in data management by helping organizations manage and govern enterprise data for AI-enabled applications.

We intend to grow the capabilities of our data 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 client demand and to seek to set the standard for data management capabilities that enable clients’ increasing adoption of enterprise AI.

The primary market for our software products and services is rapidly evolving, and the level of acceptance of products and services that have been released recently, or that are planned for future release to the marketplace, is not certain.

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(ii) develop new software products and services and enhancements to current software products and services;

(iii) complete customer implementations on a timely basis;

(iii) complete client implementations on a timely basis;

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

In addition, increased competition and transitioning 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.

In addition, increased competition and transitioning from perpetual license sales to subscription-based business model could put significant pricing pressures on our products and result in revenue mix shifts that affect the timing and recognition of our revenues, which could negatively impact our margins and profitability.

If this transition does not proceed as anticipated, or if clients do not adopt our cloud offerings at the rate or on the timeline we expect, our operating results may be adversely affected.

If our software products and services are not accepted by our clients 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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The absence of internationally harmonized intellectual property laws makes it more difficult to ensure consistent protection of our proprietary rights.

Additionally, the laws and enforcement mechanisms to protect our intellectual property from unauthorized use in new technologies like AI and other machine learning technology are evolving and may be inadequate, including the risk that third parties may use our proprietary software, content or outputs to train AI models without authorization.

Furthermore, our own use of AI in developing our products may create uncertainty regarding the ownership, validity or enforceability of the resulting intellectual property, as the legal framework governing the protectability of AI-generated or AI-assisted works and inventions remains unsettled.

Software piracy has been, and is expected to be, a persistent problem for the software industry, and piracy of our software products represents a loss of revenue to us.

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Claims of infringement (including misappropriation and/or other intellectual property violation) are common in the software industry and increasing as related legal protections, including copyrights and patents, are applied to software products.

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Although most of our technology is proprietary in nature, we do include certain third-party and open source software in our software products.

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Such licenses may not be available, or they may not be available on commercially reasonable terms.

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.

In addition, as we continue to develop software products and expand our portfolio using new technology and innovation, including AI and machine learning technologies, 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.

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

With certain exceptions, our agreements with our partners and clients typically contain provisions that require us to indemnify

them for damages sustained by them as a result of any infringement claims involving our products.

Any of the foregoing infringement claims and related litigation could have a material adverse impact on our business and operating results as well as on our ability to generate future revenues and profits.

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Our software products and services are highly complex and sophisticated and, from time to time, may contain design defects, software errors, hardware failures or other computer system failures that are difficult to detect and correct.

Errors, defects and/or other failures may be found in new software products or services or improvements to existing products or services after delivery to our customers, including as a result of the introduction of new and emerging technologies such as AI.

Errors, defects and/or other failures may be found in new software products or services or improvements to existing products or services after delivery to our clients, including as a result of the introduction of new and emerging technologies such as AI.

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

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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.

Customers often use our services and solutions for critical business processes and, as a result, any defect or disruption in our solutions, any data breaches or misappropriation of proprietary information or any error in execution, including human error or intentional third-party activity such as denial of service attacks or hacking, may cause customers to reconsider renewing their contracts with us.

The errors in or failure of our software products and services could also result in us losing customer transaction documents and other customer files, causing significant customer dissatisfaction and possibly giving rise to claims for monetary damages.

Clients often use our services and solutions for critical business processes and, as a result, any defect or disruption in our solutions, any data breaches or misappropriation of proprietary information or any error in execution, including human error or intentional third-party activity such as denial of service attacks or hacking, may cause clients to reconsider renewing their contracts with us.

The errors in or failure of our software products and services could also result in us losing client transaction documents and other client files, causing significant client dissatisfaction and possibly giving rise to claims for monetary damages.

The harm to our reputation resulting from product and service errors, defects and/or other failures may be material.

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However, such provisions may not effectively protect us against claims and the attendant liabilities and costs associated with such claims.

Any claims for actual or alleged losses to our customers’ businesses may require us to spend significant time and money in litigation or arbitration or to pay significant sums in settlements or damages.

Any claims for actual or alleged losses to our clients’ businesses may require us to spend significant time and money in litigation or arbitration or to pay significant sums in settlements or damages.

Defending a lawsuit, regardless of merit, can be costly and would divert management’s attention and resources.

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Accordingly, any such claim could negatively affect our business, operating results or financial condition.

Our software products rely on the stability of infrastructure software that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business.

Our development of Internet and intranet applications depends on the stability, functionality and scalability of the infrastructure software of the underlying intranet, such as the infrastructure software produced by Hewlett-Packard, Oracle, Microsoft and others.

Our software products rely on the stability of third-party software, cloud infrastructure and platforms that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business.

Our development of our software products and services depends on the stability, functionality and scalability of underlying third-party infrastructure software, such as operating systems, databases and middleware produced by Oracle, Microsoft and others.

If weaknesses in such infrastructure software exist, we may not be able to correct or compensate for such weaknesses.

If we are unable to address weaknesses resulting from problems in the infrastructure software such that our software products do not meet customer needs or expectations, our reputation, and consequently, our business, may be significantly harmed.

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Risks associated with the evolving use of the Internet, including changing standards, competition and regulation and associated compliance efforts, may adversely impact our business.

The use of the Internet as a vehicle for electronic data interchange (EDI) and related services continues to raise numerous issues, including those relating to reliability, data security, data integrity and rapidly evolving standards.

New competitors, including media, software vendors and telecommunications companies, offer products and services that utilize the Internet in competition with our products and services, which may be less expensive or process transactions and data faster and more efficiently.

If we are unable to address weaknesses resulting from problems in the infrastructure software such that our software products do not meet client needs or expectations, our reputation, and consequently, our business, may be significantly harmed.

In addition, as an increasing portion of our products and services is delivered through the cloud, we depend on third-party cloud infrastructure and platform providers to host and deliver our cloud offerings.

Our business could be adversely affected if these providers experience outages, performance or capacity constraints, security vulnerabilities or service interruptions, if they change their pricing, terms or availability, or if they discontinue or limit services on which we rely.

Any such disruption could impair the availability, performance or security of our cloud offerings, harm our reputation and relationships with clients, expose us to liability, and adversely affect our business, results of operations and financial condition.

Risks associated with the evolving use of the Internet and AI, including changing standards, competition and regulation and associated compliance efforts, may adversely impact our business.

New competitors, including software vendors, cloud providers and other technology companies, offer products and services that utilize the Internet and AI in competition with our products and services, which may be less expensive or process transactions and data faster and more efficiently.

Internet-based commerce is subject to increasing regulation by Canadian, U.S.

federal and state and foreign governments, including in the areas of data privacy and breaches and taxation.

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.

Laws and regulations relating to the solicitation, collection, processing or use of personal or consumer information could affect our clients’ 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 and AI 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 and AI for business integration products and services, increased competition or heightened regulation will not adversely affect our business, results of operations and financial condition.

Unauthorized disclosures, cyber-attacks, breaches of data security and other information technology risks 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.

We have certain measures to protect our information systems against unauthorized access and disclosure of personal information and of our confidential information and confidential information belonging to our customers.

We have policies and procedures in place dealing with data security and records retention.

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However, there is no assurance that the security measures we have put in place will be effective in every case, and our response process to incidents may not be adequate, may fail to accurately assess the severity of an incident, may not be fast enough to prevent or limit harm, or may fail to sufficiently remediate an incident.

Failures and breaches in security could result in a negative impact for us and for our customers, adversely affecting our and our customers’ businesses, assets, revenues, brands and reputations, disrupting our operations and resulting in penalties, fines, litigation, regulatory proceedings, regulatory investigations, increased insurance premiums, remediation efforts, indemnification expenditures, reputational harm, negative publicity, lost revenues and/or other potential liabilities, in each case depending on the nature of the information disclosed.

Security breaches could also affect our relations with our customers, damage our reputation and harm our ability to keep existing customers and to attract new customers.

Failures and breaches in security could result in a negative impact for us and for our clients, adversely affecting our and our clients’ businesses, assets, revenues, brands and reputations, disrupting our operations and resulting in penalties, fines, litigation, regulatory proceedings, regulatory investigations, increased insurance premiums, remediation efforts, indemnification expenditures, reputational harm, negative publicity, lost revenues and/or other potential liabilities, in each case depending on the nature of the information disclosed.

Security breaches could also affect our relations with our clients, damage our reputation and harm our ability to keep existing clients and to attract new clients.

Some jurisdictions, including all U.S.

states, Canada and the European Union (EU), have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data, and in some cases our agreements with certain customers require us to notify them in the event of a data security incident.

Such mandatory disclosures could lead to negative publicity and may cause our current and prospective customers to lose confidence in the effectiveness of our data security measures.

states, Canada and the European Union (EU), have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data, and in some cases our agreements with certain clients require us to notify them in the event of a data security incident.

Such mandatory disclosures could lead to negative publicity and may cause our current and prospective clients to lose confidence in the effectiveness of our data security measures.

These circumstances could also result in adverse impact on the market price of our Common Shares.

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

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

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

steal proprietary information related to our business, products, systems, solutions, employees and clients;

interrupt our systems and services or those of our clients or others;

or attempt to exploit any vulnerabilities in our products, systems or solutions, and such acts may go undetected.

Also, the development and proliferation of specific AI applications and other machine learning technologies, alongside related technological innovations, may increase our exposure to cyber-attacks and other cybersecurity risks by potentially enhancing the capabilities of third parties to breach our systems.

Threat actors may also use AI technologies, including generative AI, to develop attack methods, such as deepfakes and AI-generated phishing, that are more automated and may be more difficult to detect.

In addition, our deployment of agentic AI systems with access to our infrastructure and data could expand our attack surface if controls over those systems prove inadequate.

To address these challenges, we strive to continuously fortify our defenses through strategic investments in advanced security technologies and practices, comprehensive risk management frameworks, and ongoing staff training in efforts to safeguard the integrity, confidentiality, and availability of our data and systems against sophisticated threats, while also enhancing our security posture.

Increased information technology security threats and more sophisticated cybercrimes and cyberattacks, including computer viruses and other malicious codes, ransomware, unauthorized access attempts, denial-of-service attacks, phishing, social engineering, hacking, and other types of attacks, pose a risk to the security and availability of our information technology systems, networks, products, solutions and services, including those that are managed, hosted, provided, or used by third parties (and which may not provide the same level of information security as our own products, systems or solutions), as well as the confidentiality, availability and integrity of our data and the data of our customers, partners, consumers, employees, stockholders, suppliers and others.

Increased information technology security threats and more sophisticated cybercrimes and cyberattacks, including computer viruses and other malicious codes, ransomware, unauthorized access attempts, denial-of-service attacks, phishing, social engineering, hacking, and other types of attacks, pose a risk to the security and availability of our information technology systems, networks, products, solutions and services, including those that are managed, hosted, provided, or used by third parties (and which may not provide the same level of information security as our own products, systems or solutions), as well as the confidentiality, availability and integrity of our data and the data of our clients, partners, consumers, employees, stockholders, suppliers and

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

A series of issues may also be determined to be material at a later date in the aggregate, even if they may not be material

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individually at the time of their occurrence.

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 geopolitical uncertainty, in particular such as the ongoing Russia-Ukraine and Middle East conflicts.

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 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, systems or solutions.

A series of issues may also be determined to be material at a later date in the aggregate, even if they may not be material individually at the time of their occurrence.

Furthermore, it is possible that the risk of cyber-attacks and other data security breaches or thefts to us or our clients may increase due to global geopolitical uncertainty, in particular such as the ongoing Russia-Ukraine and Middle East conflicts.

In addition, if data security is compromised, this could materially and adversely affect our operating results given that we have clients 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 clients.

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 clients’ or service providers’ cloud offerings and other products, systems or solutions.

We may experience future security issues, whether due to human error or misconduct, system errors or vulnerabilities in our or our third-party service providers’ products, systems or solutions.

If our products, systems or solutions, or the products, systems or solutions of third-party service providers on whom we rely or may rely in the future, 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 financial or other resources on correcting the breach and indemnifying the relevant parties and/or on litigation, regulatory investigations, regulatory proceedings, increased insurance premiums, lost revenues, penalties, reputational harm, negative publicity, fines and/or other potential liabilities.

If third-party service providers fail to implement adequate data security practices or otherwise suffer a security breach, our or our customer’s data may be improperly accessed, disclosed, used or otherwise lost, which could lead to reputational, business, operating and financial harms.

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 or mitigate such incidents, which could have material adverse effects on our reputation, business, operating results and financial condition .

If our products, systems or solutions, or the products, systems or solutions of third-party service providers on whom we rely or may rely in the future, 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 clients’ data, which may require us to spend material financial or other resources on correcting the breach and indemnifying the relevant parties and/or on litigation, regulatory investigations, regulatory proceedings, increased insurance premiums, lost revenues, penalties, reputational harm, negative publicity, fines and/or other potential liabilities.

If third-party service providers fail to implement adequate data security practices or otherwise suffer a security breach, our or our client’s data may be improperly accessed, disclosed, used or otherwise lost, which could lead to reputational, business, operating and financial harms.

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

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

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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 and grow 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.

Distributors may also give higher priority to the licensing or sale of software products and services other than ours (which could include competitors’ products and services) or may not devote sufficient resources to marketing our software products and services.

The performance of third-party distributors and third-party service providers is largely outside of our control, and we are unable to predict the extent to which these distributors and service providers will be successful in either marketing and licensing or selling our software products and services or providing adequate Internet, telecommunication and power services so that disruptions and outages are not experienced by our customers.

A reduction in strategic partner cooperation or sales efforts, a decline in the number of distributors, a decision by our distributors to

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discontinue the licensing of our software products or a decline or disruption in third-party services could cause users and the general public to perceive our software products and services as inferior and could materially reduce our revenues.

A reduction in strategic partner cooperation or sales efforts, a decline in the number of distributors, a decision by our distributors to discontinue the licensing of our software products or a decline or disruption in third-party services could cause users and the general public to perceive our software products and services as inferior and could materially reduce our revenues.

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.

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

For example, with our acquisition of Zix, we extended our partnership with Microsoft by becoming one of their 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.

The markets for our software products and services are intensely competitive and are subject to rapid technological change and other pressures created by changes in our industry.

If our key partners were to terminate our relationship, make an adverse change in their regional system integrator 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, including through the use of AI and other emerging technologies.

As client demand evolves toward AI-enabled enterprise workflows, the markets for our software products and services are intensely competitive and are subject to rapid technological change and other pressures created by changes in our industry.

The convergence of many technologies has resulted in unforeseen competitors arising from companies that were traditionally not viewed as threats to our market position.

We expect competition to increase and intensify in the future as the pace of technological change and adaptation quickens and as additional companies enter our markets, including those competitors who offer solutions similar to ours, but offer it through a different form of delivery.

In particular, our competitors may use AI tools to generate software code quickly and cheaply that replicates the functions of our software and related services, or may utilize AI technology to offer solutions that bypass our software products and services altogether, each of which would significantly negatively impact our business and the demand for our software products and services.

Numerous releases of competitive products have occurred in recent history and are expected to continue in the future.

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This could result in lower revenues or reduced margins, either of which may materially adversely affect our business and operating results.

Moreover, our competitors may affect our business by entering into exclusive arrangements with our existing or potential customers, distributors or third-party service providers.

Additionally, if prospective consumers choose methods of information management delivery different from that which we offer, our business and operating results could also be materially adversely affected.

Moreover, our competitors may affect our business by entering into exclusive arrangements with our existing or potential clients, distributors or third-party service providers.

Additionally, if prospective consumers

choose methods of data management delivery different from those which we offer, our business and operating results could also be materially adversely affected.

The length of our sales cycle can fluctuate significantly, which could result in significant fluctuations in revenues being recognized from quarter to quarter.

The decision by a customer to license our software products or purchase our services often involves a comprehensive implementation process across the customer’s network or networks.

As a result, the licensing and implementation of our software products and any related services may entail a significant commitment of resources by prospective customers, accompanied by the attendant risks and delays frequently associated with significant technology implementation projects.

The decision by a client to license our software products or purchase our services often involves a comprehensive implementation process across the client’s network or networks.

As a result, the licensing and implementation of our software products and any related services may entail a significant commitment of resources by prospective clients, accompanied by the attendant risks and delays frequently associated with significant technology implementation projects.

Given the significant investment and commitment of resources required by an organization to implement our software products, our sales cycle may be longer compared to other companies within our own industry, as well as companies in other industries.

Also, because of changes in customer spending habits, it may be difficult for us to budget, forecast and allocate our resources properly.

Also, because of changes in client spending habits, it may be difficult for us to budget, forecast and allocate our resources properly.

In weak economic environments, such as a recession or slowdown, it is not uncommon to see reduced information technology spending.

It may take several months, or even several quarters, for marketing opportunities to materialize, especially following a prolonged period of weak economic environment.

If a customer’s decision to license our software or purchase our services is delayed or if the implementation of these software products takes longer than originally anticipated, the date on which we may recognize revenues from these licenses or sales would be delayed.

Such delays and fluctuations could cause our

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revenues to be lower than expected in a particular period and we may not be able to adjust our costs quickly enough to offset such lower revenues, potentially negatively impacting our business, operating results and financial condition.

Our existing customers might cancel contracts with us, fail to renew contracts on their renewal dates and/or fail to purchase additional services and products, and we may be unable to attract new customers, which could adversely affect our operating results.

We depend on our installed customer base for a significant portion of our revenues.

We have significant contracts with our license customers for ongoing support and maintenance, as well as significant service contracts that provide recurring services revenues to us.

In addition, our installed customer base has historically generated additional new license and services revenues for us.

Service contracts are generally renewable at a customer’s option and/or subject to cancellation rights, and there are generally no mandatory payment obligations or obligations to license additional software or subscribe for additional services.

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, 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.

As a result, such customers may not generate the revenues we may have expected within the anticipated timelines, or at all, and may be less likely to invest in additional services or products from us in the future.

If a client’s decision to license our software or purchase our services is delayed or if the implementation of these software products takes longer than originally anticipated, the date on which we may recognize revenues from these licenses or sales would be delayed.

Such delays and fluctuations could cause our revenues to be lower than expected in a particular period and we may not be able to adjust our costs quickly enough to offset such lower revenues, potentially negatively impacting our business, operating results and financial condition.

Our existing clients might cancel contracts with us, fail to renew contracts on their renewal dates and/or fail to purchase additional services and products, and we may be unable to attract new clients, which could adversely affect our operating results.

We depend on our installed client base for a significant portion of our revenues.

We have significant contracts with our license clients for ongoing support and maintenance, as well as significant service contracts that provide recurring services revenues to us.

In addition, our installed client base has historically generated additional new license and services revenues for us.

Service contracts are generally renewable at a client’s option and/or subject to cancellation rights, and there are generally no mandatory payment obligations or obligations to license additional software or subscribe for additional services.

As we transition our clients from legacy, perpetual license and client support arrangements to cloud subscriptions, the timing and recognition of our revenues and the mix among our revenue types may shift, including a shift from revenues recognized upfront to revenues recognized ratably over the subscription term.

If our clients 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 clients, 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 clients 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 client needs, consolidating activities in the market, changes in our clients’ business or in regulation impacting our clients’ business that may no longer necessitate the use of our products or services, general economic or market conditions, or other reasons.

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

As a result, such clients may not generate the revenues we may have expected within the anticipated timelines, or at all, and may be less likely to invest in additional services or products from us in the future.

Any decline in our renewal rates, or our inability to maintain or improve them, could adversely affect our revenues and operating results.

We may not be able to adjust our expense levels quickly enough to account for any such revenue losses.

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Acquisitions by large, well-capitalized technology companies have changed the marketplace for our software products and services by replacing competitors that are comparable in size to our Company with companies that have more resources at their disposal to compete with us in the marketplace.

In addition, other large corporations with considerable financial resources either have products and/or services that compete with our software products and services or have the ability to encroach on our competitive position within our marketplace.

In addition, other large corporations with considerable financial resources either have products and/or services that compete with our software products

and services or have the ability to encroach on our competitive position within our marketplace.

These companies have considerable financial resources, channel influence and broad geographic reach;

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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 SMBs 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 anticipated future growth and operating results.

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.

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

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Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine and Middle East conflicts have 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 and tariff 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, sanctions and export controls have 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 nonetheless allowed 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.

For example, sanctions, export controls and related laws and regulations imposed by the United States, Canada and other countries, including those targeting Russia in connection with its military actions in Ukraine restrict the sale or export of goods, services or technology to certain regions, impose travel bans and asset freezes and impact political, military, business and financial organizations and individuals in or connected with Russia.

To support certain of our cloud clients 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 nonetheless allowed these clients 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 continues and the regulatory environment further evolves, 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 the Russia-Ukraine and Middle East conflicts have not had and are not expected to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict how these conflicts will unfold and the broader consequences of these conflicts 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.

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

While the Russia-Ukraine and Middle East conflicts have not had and are not expected to have a material adverse effect on our overall business, results of operations or financial condition, it is not possible to predict how these conflicts will unfold and the broader consequences of these conflicts or other conflicts, which could include sanctions, embargoes, regional instability, tariffs, trade restrictions, 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 clients, partners and third-party service providers.

Our global operations expose us to risks associated with an evolving international trade and tariff environment, which may adversely affect our business, financial condition, and results of operations.

We conduct business globally and are subject to a complex, dynamic, and evolving international trade, tariff and regulatory environment.

Our operations and customer base span multiple countries, which subjects us to a broad range of risks arising from international trade laws and policies.

Our operations and client base span multiple countries, which subjects us to a broad

range of risks arising from international trade laws and policies.

In recent years, trade tensions among major global economies, including the United States, China, Canada, the EU, and others, have escalated, resulting in the imposition and threatened imposition of tariffs, export controls, sanctions, and other trade barriers or restrictive measures.

Although recent trade and tariff restrictions have primarily targeted physical goods and manufacturing components, we cannot predict the direction of future trade and tariff policy, including whether additional tariffs or non-tariff barriers will be applied to digital goods and services or whether new regulatory frameworks will be introduced to govern cross-border data flows, digital services taxation, or intellectual property transfers, any of which could impact our business.

Although recent trade and tariff restrictions have primarily targeted physical goods and manufacturing components, we cannot predict the direction of future trade and tariff policy, including whether additional tariffs or non-tariff barriers will be applied to digital goods and services or whether regulatory frameworks governing cross-border data flows, digital services taxation, or intellectual property transfers will be expanded or new measures introduced, any of which could impact our business.

Increased protectionist policies, retaliatory trade and tariff actions, or regulatory divergence across jurisdictions may increase our costs, limit our ability to sell products and services in certain markets, delay or prevent the delivery of our services, or compel us to alter our operations to comply with new international trade and tariff laws and policies.

Any such developments could disrupt our supply chains, reduce the competitiveness of our offerings, or create uncertainty for our customers and partners.

Any such developments could disrupt our supply chains, reduce the competitiveness of our offerings, or create uncertainty for our clients and partners.

Moreover, we cannot predict the broader macroeconomic impacts of global trade disputes or policy changes, including the effects on foreign exchange rates, inflation, capital markets or economic growth in key markets.

Adverse changes in global

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trade dynamics could weaken customer demand, delay purchasing decisions, or result in reduced access to critical technologies or skilled talent.

Adverse changes in global trade dynamics could weaken client demand, delay purchasing decisions, or result in reduced access to critical technologies or skilled talent.

These risks could materially and adversely impact our business, financial condition, and results of operations.

The restructuring of certain of our operations may be ineffective, 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, such as the Micro Focus Acquisition Restructuring Plan and Business Optimization Plan (each as defined below).

We often undertake initiatives to restructure or streamline our operations, particularly during the period post-acquisition and as part of ongoing efforts to improve operating efficiency, such as the Micro Focus Acquisition Restructuring Plan and Business Optimization Plan (each as defined below).

In addition, during the fourth quarter of Fiscal 2026, we launched an end-to-end enterprise assessment to identify actions to drive growth, focusing on areas including our go-to-market strategy, portfolio composition and differentiation, sales and marketing enablement, and our execution model.

Under the Business Optimization Plan and other savings initiatives, we are targeting total estimated savings within a range that we have disclosed, to be realized over multiple fiscal years.

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, or the failure to realize the expected financial benefits of such strategic initiatives, may have a material adverse effect on our business, operating results and financial condition.

Actions arising from the enterprise assessment may include changes to our operating model, product portfolio and investment priorities, including possible divestitures, workforce changes and additional restructuring.

In addition, as a result of the assessment, our outlook metrics, or the categories in which we present them, may be adjusted or removed, which may make period-to-period comparisons of our results more difficult and affect how investors and analysts evaluate our business.

Any failure to successfully execute these initiatives on a timely basis, or the failure to realize the expected financial benefits of such strategic initiatives within the estimated amounts or on the anticipated timeline, may have a material adverse effect on our business, operating results and financial condition.

For example, we have historically made strategic decisions to implement restructuring activities to streamline our operations, further reduce our real estate footprint around the world, or strategically align our workforce to support our growth and innovation plans.

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

The information management market in which we compete continues to evolve at a rapid pace.

We have grown significantly through acquisitions and, in conjunction with our plan to de-lever, may continue to review acquisition opportunities as a means of increasing the size and scope of our business.

The data management market in which we compete continues to evolve at a rapid pace.

We have grown both organically and through acquisitions and may from time to time evaluate selective acquisition opportunities.

Our growth, coupled with the rapid evolution of our markets, has placed, and will continue to place, significant strains on our administrative and operational resources and increased demands on our internal systems, procedures and controls.

Our administrative infrastructure, systems, procedures and controls may not adequately support our operations.

Our administrative infrastructure, systems, procedures and controls may not adequately support our

In addition, our management may not be able to achieve the rapid, effective execution of the product and business initiatives necessary to successfully implement our operational and competitive strategy.

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Our success is also highly dependent on our continuing ability to identify, hire, train, retain and motivate highly qualified management, technical, sales and marketing personnel.

In particular, the recruitment and retention of top research developers and experienced salespeople, particularly those with specialized knowledge, remains critical to our success, including providing consistent and uninterrupted service to our customers.

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.

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Our compensation structure may hinder our efforts to attract and retain vital employees.

A portion of our total compensation program for our executive officers and key personnel includes the award of options to buy our Common Shares.

If the market price of our Common Shares performs poorly, such performance may adversely affect our ability to retain or attract critical personnel.

In addition, any changes made to our stock option policies, or to any other of our compensation practices, which are made necessary by governmental regulations or competitive pressures, could adversely affect our ability to retain and motivate existing personnel and recruit new personnel.

For example, any limit to total compensation that may be prescribed by the government or applicable regulatory authorities or any significant increases in personal income tax levels levied in countries where we have a significant operational presence may hurt our ability to attract or

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retain our executive officers or other employees whose efforts are vital to our success.

A portion of our total compensation program for our executive officers and key personnel consists of equity-based awards, the value of which depends in part on the performance of our Common Shares.

If the market price of our Common Shares performs poorly, the value of these awards may decline, which may adversely affect our ability to retain or attract critical personnel.

In addition, any changes made to our equity-based compensation policies, or to any other of our compensation practices, which are made necessary by governmental regulations or competitive pressures, could adversely affect our ability to retain and motivate existing personnel and recruit new personnel.

Additionally, payments under our long-term incentive plans (the details of which are described in Item 11 of this Annual Report on Form 10-K), are dependent to a significant extent upon the future performance of our Company both in absolute terms and in comparison to similarly situated companies.

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Increasing corporate citizenship expectations, regulatory complexity, and disclosure obligations may negatively impact our business, financial performance, and reputation.

We are facing growing scrutiny and expectations from shareholders, customers, governments, employees, and other key stakeholders regarding corporate citizenship-related practices, disclosures, and performance.

We are facing growing scrutiny and expectations from shareholders, clients, governments, employees, and other key stakeholders regarding corporate citizenship-related practices, disclosures, and performance.

These expectations, which continue to evolve, influence business, investment, and procurement decisions and may differ or conflict across stakeholders.

At the same time, we are subject to a complex and rapidly changing global regulatory landscape (including laws and emerging frameworks in the U.S., Canada, and the EU) governing corporate citizenship-related disclosures.

In particular, legislation in a number of jurisdictions, including the U.S., prohibiting or limiting such disclosures have been enacted or proposed.

While certain legislation has been challenged or paused, the imposition of such obligations either now or in the future may cause us to revise our policies and practices, stated targets or disclosure regarding such matters.

In particular, legislation in a number of jurisdictions, including the U.S., prohibiting or limiting such disclosures has been enacted or proposed.

While certain rules and legislation have been challenged, paused or proposed to be rescinded, the imposition of such obligations either now or in the future may cause us to revise our policies and practices, stated targets or disclosure regarding such matters.

Further, certain jurisdictions are also introducing anti-ESG (environmental, social and governance) or anti-greenwashing rules, which increase legal uncertainty and reputational risk given the interpretation and application of such rules remain uncertain.

We may incur additional costs and resource demands to meet these expectations, including collecting reliable data (including data such as emissions or waste metrics), complying with inconsistent or contradictory requirements across jurisdictions, and meeting evolving third-party ratings, benchmarks, and regulatory standards.

Conversely, disclosure mandates, including with respect to climate, tax and other matters, requiring in-scope companies to collect and report specified data and, in some cases, obtain third-party insurance.

Complying with these and similar mandates may require us to collect and report data we have not previously tracked and incur additional compliance costs, and the requirements, timing, and implementation of these mandates remain subject to change and legal challenge.

across jurisdictions, and meeting evolving third-party ratings, benchmarks, and regulatory standards.

Failure or perceived failure to align with stakeholder values, meet stated targets, or comply with regulatory obligations could harm our reputation, employee engagement, and investor sentiment;

reduce customer demand and business opportunities, including impacting our ability to attract and retain certain government contracts;

reduce client demand and business opportunities, including impacting our ability to attract and retain certain government contracts;

expose us to penalties, litigation, or investigations;

and ultimately impact our operating results, financial condition, and competitiveness.

Our workforce includes both remote and hybrid employees, which subjects us to certain operational challenges and risks.

We have implemented flexible remote and hybrid work models across many of our operations.

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

For example, employing a remote work environment could affect employee productivity, including due to a lower level of employee oversight, health conditions or illnesses, disruptions due to caregiving or childcare obligations or slower or unreliable Internet access.

Our use of a mixed workforce model, including remote, hybrid and in-office employees, and changes to our in-office requirements, subject us to operational challenges and risks, including risks to employee retention and morale.

Our workforce includes a mix of in-office, hybrid and remote employees across our global operations, and we have been increasing our in-office expectations over time.

As a result, we remain subject to the challenges and risks of operating a remote and hybrid work environment, while changes to our in-office requirements may give rise to additional risks.

For example, a hybrid work environment could affect employee productivity, including due to a lower level of employee oversight, 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 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.

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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.

A flexible workforce may also subject us to other operational challenges and risks.

For example, a hybrid work program may adversely affect our ability to recruit and retain personnel who prefer a fully remote work environment.

A mixed workforce, and changes to our in-office requirements, may also subject us to other operational challenges and risks.

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 reducing our real estate footprint around the world.

If we are unable to effectively continue a flexible workforce, 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.

At the same time, increasing our in-office requirements may adversely affect our ability to recruit and retain personnel who prefer remote or hybrid work arrangements, particularly in competitive labor markets where other employers continue to offer such flexibility, and could result in employee attrition, including of key personnel.

If we are unable to effectively manage our workforce model and any changes to our in-office requirements, retain and attract talent, 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 business disruptions on our cybersecurity, see “Business disruptions, including those arising from disasters, pandemics or catastrophic events, may adversely affect our operations .

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As a result of the continually evolving marketplace in which we operate, we regularly evaluate acquisition opportunities and at any time may be in various stages of discussions with respect to such opportunities.

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We plan to continue to pursue acquisitions that complement our existing business, represent a strong strategic fit and are consistent with our overall growth strategy and disciplined financial management.

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and (iii) the acquisition or disposition of product lines or businesses.

Also, such activities could result in charges and expenses and have the potential to either dilute the interests of existing shareholders or result in the issuance or assumption of debt, which could have a negative impact on the credit ratings of our outstanding debt securities or the market price of our Common Shares.

Also, such activities could result in charges and expenses and have the potential to either dilute the

interests of existing shareholders or result in the issuance or assumption of debt, which could have a negative impact on the credit ratings of our outstanding debt securities or the market price of our Common Shares.

Such acquisitions, investments, joint ventures or other business collaborations may involve significant commitments of financial and other resources of our Company.

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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.

Further, we have made, and may in the future make, investments as a limited partner in one or more strategic investment funds that are separate from our business (each, a “Fund”).

We do not control the investment decisions of any Fund, our investments may require us to fund capital commitments through capital calls, and losses or fluctuations in the value of our Fund interests may adversely affect our results of operations and financial condition.

In addition, certain of our directors, officers or their immediate family members may, from time to time, serve on a Fund’s investment committee or advisory committee, and may also hold positions as directors, executives or significant equity holders (including ownership interests in excess of 10%) in one or more companies in which a Fund invests.

See Part III, Item 13 “Certain Relationships and Related Transactions, and Director Independence” of this Annual Report on Form 10-K.

We may fail to realize all of the anticipated benefits of our acquisitions and divestitures, or those benefits may take longer to realize than expected.

We have divested, and may in the future divest, non-core assets, including the divestitures of eDOCS and Vertica completed in Fiscal 2026.

We may be unable to complete planned divestitures on acceptable terms or at all, or may complete them at valuations below our expectations, which could result in losses on sale, impairment charges or the write-down of assets classified as held for sale, and any failure to realize the anticipated proceeds or strategic benefits of a divestiture could adversely affect our business, results of operations and financial condition.

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

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Integrating acquisitions into our business may be disruptive to our business and may adversely affect our existing relationships with employees and business partners.

Uncertainties related to the integration of acquisitions may also impair our ability to attract, retain and motivate key personnel and could divert the attention of our management and other employees from day-to-day business and operations.

Uncertainties related to the integration of acquisitions may also create uncertainty among current and prospective employees about their future roles, impair our ability to attract, retain and motivate key personnel, and divert the attention of our management and other employees from day-to-day business and operations.

The loss of key employees, and their experience and knowledge regarding our business or an acquired business, could adversely affect our operations.

Furthermore, we cannot assure you that the due diligence undertaken with respect to any potential acquisition will reveal all relevant facts that may be necessary to evaluate such acquisition or to formulate a business strategy.

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Our ability to realize the anticipated benefits of acquired businesses will depend, in part, on our ability to successfully and efficiently integrate acquired businesses and operations with our own.

The integration of acquired businesses with our existing

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business will be complex, costly and time-consuming, and may result in additional demands on our resources, systems, procedures and controls, disruption of our ongoing business and diversion of management’s attention from other business concerns.

The integration of acquired businesses with our existing business will be complex, costly and time-consuming, and may result in additional demands on our resources, systems, procedures and controls, disruption of our ongoing business and diversion of management’s attention from other business concerns.

Although we cannot be certain of the degree and scope of operational and integration problems that may arise, the difficulties and risks associated with the integration of acquired businesses, which may be complex and time-consuming, may include, among others:

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• integrating (i) personnel with diverse business backgrounds, corporate cultures and management philosophies, and (ii) the standards, policies and compensation structures, as well as the complex systems, technology, networks and other assets, of the businesses;

• successfully managing relationships with our strategic partners and combined supplier and customer base;

• successfully managing relationships with our strategic partners and combined supplier and client base;

• implementing expected cost synergies of the acquisitions;

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Further, following such transactions, we may continue to incur significant anticipated and unanticipated transaction costs, and these ongoing costs could adversely affect our results of operations in the period in which such expenses are recorded or our cash flow in the period in which any related costs are actually paid.

Loss of key personnel could impair the integration of acquired businesses, lead to loss of customers and a decline in revenues, or otherwise could have an adverse effect on our operations.

Our success as a combined business with any prior or future acquired businesses will depend, in part, upon our ability to retain key employees, especially during the integration phase of the businesses.

It is possible that the integration process could result in current and prospective employees of ours and the acquired business to experience uncertainty about their future roles with us, which could have an adverse effect on our ability to retain or recruit key managers and other employees.

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.

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.

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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.

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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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These factors include, but are not limited to, changes in tax laws, regulations and/or rates, results of audits by tax authorities, changing interpretations of existing tax laws or regulations, changes in estimates of prior years’ items, the impact of transactions we complete, future levels of research and development spending, changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments, changes in the overall mix of income among the different jurisdictions in which we operate and changes in overall levels of income before taxes.

For instance, the provision for income taxes from the Tax Cuts and Jobs Act of 2017, which required capitalization and amortization of research and development costs starting in Fiscal 2023, has increased cash taxes.

Subsequent to the year ended June 30, 2025, the One Big Beautiful Bill Act (the OBBBA) was passed on July 4, 2025.

Management is still analyzing the impact of the OBBBA on cash taxes and the effective tax rate.

Furthermore, new accounting pronouncements or new interpretations of existing accounting pronouncements, and/or any internal restructuring initiatives we may implement from time to time to streamline our operations, can have a material impact on our effective income tax rate.

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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.

The United Kingdom (UK) tax authorities have challenged certain historic tax filing positions of Micro Focus.

Based on Micro Focus’ assessment of the value of the underlying tax benefit under dispute, and as supported by external professional advice, it believed that it had no liability in respect of these matters and therefore no tax charge was recorded in current or previous periods.

Although the Company believes that assessment is reasonable, no assurance can be made regarding the ultimate outcome of these matters.

The Company is also subject to income taxes in numerous jurisdictions and significant judgment has been applied in determining its worldwide provision for income taxes, including historical Micro Focus matters related to the EU State Aid and UK tax authority challenge in respect of prior periods.

The Company is also subject to income taxes in numerous jurisdictions and significant judgment has been applied in determining its worldwide provision for income taxes.

The provision for income taxes may be impacted by various internal and external factors that could have favourable or unfavourable effects, including changes in estimates of prior years’ items, the impact of transactions completed, the structuring of activities undertaken, the application of complex transfer pricing rules, changes in the valuation of deferred tax assets and liabilities, changes in overall mix and levels of income before taxes, changes in tax laws, regulations and/or rates and changing interpretations of existing tax laws or regulations.

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However, it is possible that the implementation of relevant legislation could impact our liability for taxes.

Further, due to Micro Focus’ complex acquisitive history, we could become subject to additional tax audits in jurisdictions in which we have not historically been subject to examination.

As a result, our worldwide provision for income taxes and any ultimate tax liability may differ from the amounts initially recorded and such differences could have an adverse effect on the combined company’s financial condition and results of operations.

For further details on certain tax matters relating to the Company 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 through Fiscal 2020.

As part of the ongoing audit of our Canadian tax returns by the CRA, we have received notices of, and are appealing, reassessments for Fiscal 2012 through Fiscal 2021.

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.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 2025, 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 $86 million.

As of June 30, 2025, we have provisionally paid approximately $32 million in order to fully preserve our rights to object to the CRA’s audit positions, being the minimum payment required under Canadian

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legislation while the matter is in dispute.

Assuming the utilization of available tax attributes (further described below), we estimate our potential aggregate liability, as of June 30, 2026, in connection with the CRA’s reassessments for Fiscal 2012 through Fiscal 2016, to be limited to penalties, interest and provincial taxes that may be due of approximately $87.4 million.

As of June 30, 2026, we have provisionally paid approximately $32 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 the Consolidated Balance Sheets as of June 30, 2026.

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.

The notices of reassessment for Fiscal 2012 through 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, and we are continuing to contest these reassessments.

We strongly disagree with the CRA's positions and believe the reassessments of Fiscal 2012 through 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 penalties) in full and the customary court process is ongoing.

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 has audited Fiscal 2017, Fiscal 2018, Fiscal 2019 and Fiscal 2020 on a basis that we strongly disagree with and are contesting.

Even if we are unsuccessful in challenging the CRA's reassessments to increase our taxable income for Fiscal 2012 through 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 has audited Fiscal 2017 through Fiscal 2021 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.

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We are not required to provisionally pay any cash amounts to the CRA as a result of the reassessment in respect of Fiscal 2017 through Fiscal 2019 due to utilization of available tax attributes;

however, for Fiscal 2020 and, to the extent the CRA reassesses subsequent fiscal years on a similar basis, we may be required to make certain minimum payments required under Canadian legislation on a provisional basis while the matter remains in dispute.

however, for Fiscal 2020 and 2021, we have provisionally paid approximately $40.3 million in order to fully preserve our rights to object to the CRA’s audit positions and intend to make an additional payment of $19.3 million on account of Fiscal 2021 by December 31, 2026.

To the extent the CRA reassesses subsequent fiscal years on a similar basis, we may make certain minimum payments required under Canadian legislation.

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.

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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.

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

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.

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We could also be required to fundamentally change our business activities and practices, or modify our products and services, which could have an adverse effect on our business.

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In the U.S., various laws and regulations apply to the collection, processing, transfer, disposal, unauthorized disclosure and security of personal data.

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The CCPA also establishes a regulatory agency dedicated to enforcing the requirements of the CCPA.

Comprehensive privacy laws also came into effect in in Colorado, Connecticut, Utah, and Virginia in 2023;

in Oregon, Texas, and Montana in 2024;

and in Delaware, Iowa, Minnesota, Nebraska, New Hampshire, New Jersey, and Tennessee to date in 2025.

Maryland’s comprehensive privacy laws come into effect later this year.

Indiana, Kentucky, and Rhode Island have similarly enacted broad laws relating to privacy, data protection and information security that will come into effect in 2026, further complicating our privacy compliance obligations through the introduction of increasingly disparate requirements across the various U.S.

There is a growing patchwork of comprehensive privacy laws at the state level, with nearly two dozen states advancing comprehensive privacy legislation, further complicating our privacy compliance obligations through the introduction of increasingly disparate requirements across the various U.S.

jurisdictions in which we operate.

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Given the breadth of the GDPR, compliance with its requirements is likely to continue to require significant expenditure of resources on an ongoing basis, and there can be no assurance that the measures we have taken for the purposes of compliance will be successful in preventing violation of the GDPR.

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.

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

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To implement the commitments of the U.S.

under the TDPF, in October 2022, President Biden signed an

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Executive Order on Enhancing Safeguards for the United States Signals Intelligence Activities (the Executive Order).

under the TDPF, in October 2022, President Biden signed an Executive Order on Enhancing Safeguards for the United States Signals Intelligence Activities (the Executive Order).

This subsequently prompted the European Commission to adopt an adequacy decision based on the Executive Order on July 10, 2023, having determined that the TDPF ensures that the protection of personal information transferred from the EU to the certified organizations within the U.S.

will be essentially equivalent to the protection offered in the EU.

However, there remains a degree of legal uncertainty, as critics and privacy advocacy groups have already commenced challenges to the validity of such decision before the Court of Justice of the EU.

However, there remains a degree of legal uncertainty, as critics and privacy advocacy groups have commenced challenges to the validity of such decision before the Court of Justice of the EU.

Outside of the U.S., the EU and the UK, 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.

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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 and AI.

In addition, because our products and services are used by our clients to collect, store, process and manage their own data, including regulated and personal data, changes in privacy laws and regulations may affect the design, functionality, requirements and marketability of our products and services, and may give rise to contractual obligations to our clients, including as a data processor on their behalf.

Failure to adapt our offerings to evolving legal requirements, or to meet such contractual obligations, could reduce demand for our products and services or expose us to liability.

Additionally, as we expand our European sovereign cloud offerings through partnerships with hyperscalers such as Amazon Web Services and Google Cloud, we are subject to heightened data residency, sovereignty, and security requirements specific to regulated European clients.

Managing compliance with these requirements across multiple sovereign cloud frameworks adds operational complexity and cost that may adversely affect our business and results of operations.

Any failure to successfully navigate the changing regulatory landscape could result in legal liability or impairment to our reputation in the marketplace, which could have a material adverse effect on our business, results of operations and financial condition.

Privacy-related claims or lawsuits initiated by governmental bodies, customers or other third parties, whether meritorious or not, could be time consuming, result in costly regulatory proceedings, litigation, penalties, fines, or other potential liabilities, or require us to change our business practices, sometimes in expensive ways.

Unfavourable publicity regarding our privacy practices could damage our reputation, harm our ability to keep existing customers or attract new customers or otherwise adversely affect our business, assets, revenue and brands.

Privacy-related claims or lawsuits initiated by governmental bodies, clients or other third parties, whether meritorious or not, could be time consuming, result in costly regulatory proceedings, litigation, penalties, fines, or other potential liabilities, or require us to change our business practices, sometimes in expensive ways.

Unfavourable publicity regarding our privacy practices could damage our reputation, harm our ability to keep existing clients or attract new clients or otherwise adversely affect our business, assets, revenue and brands.

Certain of our products may be perceived as, or determined by the courts to be, a violation of privacy rights and related laws.

Any such perception or determination could adversely affect our revenues and results of operations.

Because of the nature of certain of our products, including those relating to digital investigations, potential customers and purchasers of our products or the general public may perceive that the use of these products results in violations of individual privacy rights.

Because of the nature of certain of our products, including those relating to digital investigations, potential clients and purchasers of our products or the general public may perceive that the use of these products results in violations of individual privacy rights.

In addition, certain courts or regulatory authorities could determine that the use of our software solutions or other products is a violation of privacy laws, particularly in jurisdictions outside of the U.S.

Any such determination or perception by potential customers and purchasers, the general public, government entities or the judicial system could harm our reputation and adversely affect our revenues and results of operations.

AI and other machine learning technology is being integrated into some of our products, systems or solutions, which could present risks and challenges to our business.

Any such determination or perception by potential clients and purchasers, the general public, government entities or the judicial system could harm our reputation and adversely affect our revenues and results of operations.

AI and other machine learning technology is being integrated into some of our products, systems or solutions, which could present risks and challenges to our business, and rapid advances in AI could intensify competitive pressures, accelerate technological change and reduce demand for certain of our existing offerings.

AI and other machine learning technology is being integrated into some of our products, systems or solutions and could be a significant factor in future offerings.

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If the output from AI in our products, systems or solutions are deemed to be inaccurate or questionable, or if the use of AI does not operate as anticipated or perform as promised, our business and reputation may be harmed.

As the adoption of AI quickens, we expect competition to intensify and additional companies may enter our markets offering similar products, systems or solutions.

We may not be able to compete effectively with our competitors and our strategy to integrate AI and other machine learning technology into our products, systems or solutions may also not be accepted by our customers or by other businesses in the marketplace.

Client uses of and preferences for AI vary widely and are evolving rapidly and the pace and extent of AI adoption may differ significantly across clients, industries and markets.

As AI adoption evolves, we expect competition to intensify and additional companies may enter our markets offering similar products, systems or solutions.

Advances in AI, including generative AI and large language models, have made certain foundational capabilities cheaper and easier to replicate, potentially enabling companies not previously focused on data management to provide solutions that compete with aspects of our offerings.

We may not be able to compete effectively with our competitors and our strategy to integrate AI and other machine learning technology into our products, systems or solutions may also not be accepted by our clients or by other businesses in the marketplace at the rate or extent we anticipate.

Additionally, clients may develop internal, AI-powered alternatives to third-party enterprise software solutions, which could reduce demand for our products and services.

The integration of AI may also expose us to risks regarding intellectual property ownership and license rights, particularly if any copyrighted material is embedded in training models.

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Inventions or works of authorship created through the use of such technologies may be based or rely on, or contain, materials that were used in the training of such technologies and which are subject to third-party intellectual property, which could further limit our ability to obtain intellectual property protection in such inventions or works of authorship.

Further, there is a risk that the data

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inputted into such technologies may contain confidential information, including trade secrets, resulting in such information becoming accessible by third parties.

The use of AI, including potential inadvertent disclosure of confidential information or personal data, could also lead to legal and regulatory investigations and enforcement actions, or may give rise to specific obligations, including required notices, consents and opt-outs, under various data privacy, protection and cybersecurity laws and regulations in a number of jurisdictions.

See “Risks associated with data privacy issues, including evolving laws and regulations and associated compliance efforts, may adversely impact our business” and “Unauthorized disclosures, cyber-attacks, breaches of data security and other information technology risks may adversely affect our operations.”

Further, there is a risk that the data inputted into such technologies may contain confidential information, including trade secrets, resulting in such information becoming accessible by third parties.

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

“Unauthorized disclosures, cyber-attacks, breaches of data security and other information technology risks may adversely affect our operations.”

The use of copyrighted materials in AI and other machine learning technology has not been fully interpreted by U.S.

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See “Geopolitical instability, political unrest, war and other global conflicts, including the Russia-Ukraine and Middle East conflicts have affected and may continue to affect our business.”

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Our indebtedness could limit our operations and opportunities.

As of June 30, 2025, we had $6.5 billion of total indebtedness.

As of June 30, 2026, we had approximately $5.8 billion of total indebtedness.

This level of indebtedness could have important consequences to our business, including, but not limited to:

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For more information on our indebtedness, see Note 11 “Long-Term Debt” to the Consolidated Financial Statements included in this Annual Report on Form 10-K.

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Risks Related to Ownership of our Common Stock

Risks Related to Ownership of our Common Shares

Our revenues and operating results are likely to fluctuate, which could materially impact the market price of our Common Shares.

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

• The introduction or enhancement of software products and services by us and by our competitors;

• The introduction or enhancement of technology and software products and services by us and by our competitors;

• Market acceptance of our software products, enhancements and/or services;

• Delays in the introduction of software products, enhancements and/or services by us or by our competitors;

• Customer order deferrals in anticipation of upgrades and new software products;

• Client order deferrals in anticipation of upgrades and new software products;

• Changes in the lengths of sales cycles;

• Changes in our pricing policies or those of our competitors;

• Delays in software product implementation with customers;

• Delays in software product implementation with clients;

• Change in the mix of distribution channels through which our software products are licensed;

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

A general weakening of the global economy, a continued weakening of the economy in a particular region, economic or business uncertainty or changes in political developments, tax policies, trade and tariff policies or policies implemented to stimulate or preserve economies could result in the cancellation of or delay in customer purchases.

A cancellation or deferral of even a small number of license sales or services or delays in the implementation of our software products could have a material adverse effect on our business, operating results and financial condition.

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These forward-looking statements are based upon a number of assumptions and are based on information known when they are presented and, while there may be numerical specificity, are inherently subject to significant uncertainties and contingencies, as noted herein, relating to our business, many of which may be beyond our control and are based upon assumptions and risk with respect to future business decisions, some of which may change.

Therefore, the actual results we achieve may differ materially from any forward-looking statements, and investors should not rely upon such forward-looking statements in making an investment decision regarding our Common Shares.

Therefore, the actual results we achieve may differ materially from any forward-looking statements, and investors should not rely upon such forward-looking statements

in making an investment decision regarding our Common Shares.

Further, any perceived failure to achieve such forward-looking statements or meet analysts’ and shareholders’ expectations could also materially reduce the market price or trading volume of our Common Shares.

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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.

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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.

The developments in AI and volatility in the industry could lead to large fluctuations in equity valuations in the industries in which we operate, which may put pressure on the market price of our Common Shares.

In particular, the actual and perceived disruption from AI has negatively impacted the valuation of software company stocks, including our Common Shares, which may subject them to significant volatility and future downward pressure on their prices.

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

By reviewing the status of outstanding sales proposals to our customers and potential customers, we make an estimate as to when a customer will make a purchasing decision involving our software products.

By reviewing the status of outstanding sales proposals to our clients and potential clients, we make an estimate as to when a client will make a purchasing decision involving our software products.

These estimates are aggregated periodically to make an estimate of our sales pipeline, which we use as a guide to plan our activities and make internal financial forecasts.

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, 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 favourable terms from us.

Many factors may affect actual sales activity, such as actual and perceived disruptions from AI and weakened economic conditions, including as a result of any potential recession, which may cause our clients and potential clients 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 clients to wait until the end of a fiscal period in the hope of obtaining more favourable 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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We have significantly increased, and intend to continue to make efforts to increase, our international operations and anticipate that international sales will continue to account for a significant portion of our revenues.

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and international import and export laws and regulations and the Foreign Corrupt Practices Act, including potential violations by acts of agents or other intermediaries), costs related to localizing products for foreign markets, costs related to translating and distributing software products in a timely manner, costs related to increased financial accounting and reporting burdens and complexities, longer sales and collection cycles for accounts receivables, failure of laws or courts to protect our intellectual property rights adequately, local competition, and economic or political instability and uncertainties, including inflation, recession, interest rate fluctuations, trade and tariff policies and actual or anticipated military or geopolitical conflicts.

These international operations are subject to certain risks and costs, including the difficulty and expense of administering business and compliance abroad, differences in business practices, compliance with domestic and foreign laws (including without limitation domestic and international import, export and sanctions laws and regulations and the Foreign Corrupt Practices Act, including potential violations by acts of agents or other intermediaries), costs related to localizing products for foreign markets, costs related to translating and distributing software products in a timely manner, costs related to increased financial accounting and reporting burdens and complexities, longer sales and collection cycles for accounts receivables, failure of laws or courts to protect our intellectual property rights adequately, local competition, and economic or political instability and uncertainties, including inflation, recession, interest rate fluctuations, trade and tariff policies and actual or anticipated military or geopolitical conflicts.

International operations also tend to be subject to a longer sales and collection cycle.

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Significant international sales may also expose us to greater risk from political and economic instability, unexpected changes in Canadian, U.S.

or other governmental policies concerning import and export of goods and technology, regulatory requirements, tariffs and other trade barriers.

or other governmental policies concerning sanctions, import and export of goods and technology, regulatory requirements, tariffs and other trade barriers.

Additionally, international earnings may be subject to taxation by more than one jurisdiction, which may materially adversely affect our effective tax rate.

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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.

During such downturns, many customers may delay or reduce technology purchases.

During such downturns, many clients may delay or reduce technology purchases.

Contract negotiations may become more protracted, or conditions could result in reductions in the licensing of our software products and the sale of cloud and other services, longer sales cycles, pressure on our margins, difficulties in collection of accounts receivable or delayed payments, increased default risks associated with our accounts receivables, slower adoption of new technologies and increased price competition.

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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.

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Stress in the global financial system may adversely affect our finances and operations.

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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.

A reduction in credit, combined with reduced economic activity, may adversely affect businesses and industries that collectively constitute a significant portion of our customer base such as the public sector.

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.

A reduction in credit, combined with reduced economic activity, may adversely affect businesses and industries that collectively constitute a significant portion of our client base such as the public sector.

As a result, these clients 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 clients purchase from us.

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

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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