What changed in this filing

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Item 1A. Risk Factors

2025-03-24 compared with 2024-03-27 · 174 added, 186 removed, 919 unchanged (28% of the section changed)

6 unchanged sentences

We have incurred net losses in the past, anticipate continuing to incur significant operating expenses in the future, and may not achieve or sustain consistent profitability.

Although we generated GAAP profitability in the fourth quarter of our fiscal year 2024, we incurred a net loss in the year ended January 31, 2024, have incurred net losses in the past, and may continue to incur net losses in the future.

We have incurred net losses in the past, and may continue to incur net losses in the future.

We expect to continue to incur significant operating expenses in the foreseeable future.

This involves leveraging the investments made in our organization in prior years and continuing to implement initiatives designed to grow our business in a disciplined manner.

These initiatives include increasing our overall customer base and expanding sales within our current customer base, continuing to penetrate international markets, investing in research and development to improve the capabilities of our platform (including AI capabilities), acquiring businesses, technology, talent, and related integration efforts, growing our distribution channels and channel partner ecosystem, deepening our user community, hiring additional employees and investing in our existing workforce, expanding our operations and infrastructures both domestically and internationally, and incurring expenses related to legal, accounting, and other administrative expenses aspects of operating as a public company.

This includes leveraging the investments made in our organization in prior years and continuing to implement initiatives designed to grow our business in a disciplined manner.

infrastructures both domestically and internationally, and incurring expenses related to legal, accounting, and other administrative expenses aspects of operating as a public company.

In particular, we intend to continue to expend significant funds to further develop our platform.

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These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses, and achieve, or once achieved, sustain profitability.

We may delay or re-evaluate these efforts due to any anticipated or actual adverse impact to our business as a result of, among other things, global economic and geopolitical uncertainties, rising levels of inflation, interest rates, pandemics, government shutdowns, regional conflicts, or other similar events or circumstances.

We may delay or re-evaluate these efforts due to any anticipated or actual adverse impact to our business as a result of, among other things, global economic and geopolitical uncertainties, fluctuating inflation and interest rates, tariffs, government shutdowns, regional conflicts, or other similar events or circumstances.

In addition, growth of our revenue may slow, or revenue may decline for a number of reasons, including a decrease in our ability to attract and retain customers, a failure to increase our number of channel partners, an increase in competition, a decrease in growth of our overall market, a decrease in the term lengths of our contracts with customers, an inability to timely and cost-effectively introduce new products and services that are favorably received by customers and partners, and as a result of global economic conditions, such as rising inflation and interest rates, that could cause our customers to reduce their spending levels with us.

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Additionally, we have encountered, and may in the future encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as unforeseen operating expenses, difficulties, complications, delays, and other known or unknown factors that may result in losses in future periods.

our revenue or ARR growth does not meet our expectations in future periods, our business, financial condition, and results of operations may be harmed, and we may not achieve or maintain profitability in the future.

If our revenue or ARR growth does not meet our expectations in future periods, our business, financial condition, and results of operations may be harmed, and we may not achieve or maintain profitability in the future.

If we are unable to sustain profitability, the value of our business and Class A common stock may significantly decrease.

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We may not successfully accomplish any of these objectives, and as a result, it is difficult for us to forecast our future results of operations.

Further, actions we may decide to take in the future in our attempt to achieve or sustain profitability may not be successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business.

If the assumptions that we use to plan our business are incorrect, or change in reaction to changes in our market, or if we are unable to maintain consistent revenue, ARR, or revenue or ARR growth, our stock price could be volatile, and it may be difficult to achieve and sustain profitability.

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Moreover, sales outside the U.S.

accounted for 57% of our revenue for the fiscal year ended January 31, 2024.

accounted for 56% of our revenue for fiscal year 2025.

As a result, our operations and our financial results, including our ability to execute our business strategy, design, develop, or sell products, and the demand for our products, are at times adversely affected by a number of global and regional factors outside of our control.

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changes or uncertainty in fiscal, monetary, or trade policy;

higher interest rates;

volatility in foreign exchange markets;

tighter credit;

fluctuating inflation and interest rates;

lower capital expenditures by businesses, including on IT infrastructure;

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An economic downturn or increased uncertainty may also lead to increased credit and collectability risks, higher borrowing costs or reduced availability of the capital and credit markets, reduced liquidity, asset impairments, adverse impact on our partners or failures of counterparties including financial institutions and insurers.

Trade policies and disputes at times result in

increased tariffs, trade barriers, and other protectionist measures, which can make our products less competitive, reduce demand for our products, limit our ability to sell to certain customers, or impede or slow the movement of our products across borders.

Trade policies and disputes have resulted and will result in increased tariffs, trade barriers, and other protectionist measures, which can make our products less competitive, reduce demand for our products, limit our ability to sell to certain customers, or impede or slow the movement of our products across borders.

Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to, some markets.

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• continuing uncertainty regarding social, political, immigration, tax, and trade policies in the U.S.

• global tensions and conflict in areas where we have customers or employees , and in surrounding areas, such as the Russian military operation in Ukraine, Israel-Hamas conflict, past conflicts in Lebanon and the current conflict in the Red Sea, and rising tensions between China and Taiwan.

• global tensions and conflict in areas where we have customers or employees , and in surrounding areas, such as the Russian military operation in Ukraine, conflict in the Middle East, and rising tensions between China and Taiwan.

Although our operations in Belarus, China, Israel, Ukraine, and Russia rep resent an immaterial portion of our business, individually and in the aggregate, s uch global and regional factors may have adversely impacted and could adversely impact our customers and employees ;

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• seasonality;

• the investment in new products and features relative to investments in our existing infrastructure and products;

• investment in new products and features relative to investments in our existing infrastructure and products;

• the timing of customer purchases;

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We derive our revenue from the sale of our software licenses for use of our proprietary software, maintenance and support for our licenses, right to access certain products that are hosted by us (i.e., SaaS), and professional services.

Under ASC 606, Revenue from Contracts with Customers , we recognize revenue when a customer obtains control of promised goods or when services are rendered.

Under ASC 606, Revenue from Contracts with Customers , we recognize revenue when a customer obtains control of promised goods or as services are rendered.

The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these goods or services.

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If our quarterly or annual results of operations fall below the expectations of securities analysts or investors who follow our stock, the price of our Class A common stock could decline substantially, and we have faced and could in the future face lawsuits that are costly and may divert management’s attention, including securities class action suits and derivative actions.

We may not be able to successfully manage our growth and, if we are not able to grow efficiently, we may not be able to reach or maintain profitability, and our business, financial condition, and results of operations could be harmed.

We have experienced and may continue to experience rapid growth and organizational changes, which has placed and may continue to place significant demands on our management and our operational and financial resources.

Actions we may decide to take in the future in our attempt to achieve or maintain profitability may not be successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business.

Implementation of a go forward plan and any other cost-saving initiatives, including possible future restructuring efforts, may be costly and disruptive to our business, the expected costs and charges may be greater than forecasted, and the estimated cost savings may be lower than forecasted.

Because we derive substantially all of our revenue from our UiPath Business Automation Platform, failure of this platform to satisfy customer demands could adversely affect our business, financial condition, results of operations, and growth prospects.

We derive and expect to continue to derive substantially all of our revenue from our UiPath Business Automation Platform.

Because we derive substantially all of our revenue from our UiPath Platform™, failure of this platform to satisfy customer demands could adversely affect our business, financial condition, results of operations, and growth prospects.

We derive and expect to continue to derive substantially all of our revenue from our UiPath Platform™.

As such, market adoption of our automation platform is critical to our continued success.

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If we are not able to continue to provide high levels of customer service, our reputation, as well as our business, financial condition, and results of operations could be harmed.

As usage of our platform capabilities grow, we will need to continue to devote additional resources to improving and maintaining our infrastructure and integrating with third-party applications.

As usage of our platform grows, we will need to continue to devote additional resources to improving and maintaining our infrastructure and integrating with third-party applications.

In addition, we have needed and will continue to need to appropriately scale our internal business systems and our services organization, including customer support and professional services, to serve our growing customer base.

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Part of our growth strategy relies on our ability to deliver significant value in a short time to our customers, so that our customers will scale the use of our platform throughout their enterprise.

Accordingly, our future success

depends in part on our ability to exhibit this value and sell additional licenses and products to our existing customers, and our customers renewing their licenses with us and our channel partners when contract terms expire.

Accordingly, our future success depends in part on our ability to exhibit this value and sell additional licenses and products to our existing customers, and our customers renewing their licenses with us and our channel partners when contract terms expire.

Our license agreements primarily have annual terms, and some of our license agreements have multi-year terms.

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In addition, as our market matures, our products evolve, and competitors introduce lower cost or differentiated products that are perceived to be alternatives to our platform and products, our ability to sell licenses for our products could be impaired.

Further, as various forms of AI, including generative AI, become more widely adopted

and acceptable, if customers were to feel that our technology was not developing apace, our business and growth prospects could be harmed.

Further, as various forms of AI, including generative and agentic AI, become more widely adopted and acceptable, if customers were to feel that our technology was not developing apace, our business and growth prospects could be harmed.

The rapid evolution of AI may require the application of resources to develop, test, and maintain our products and services so that they are ethically designed to minimize unintended, harmful impacts.

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Our platform and products provide automation solutions that our customers can integrate throughout their businesses.

Accordingly, we compete with RPA software providers and adjacent automation and integration platform companies in markets such as low-code, BPM, iPaaS, process mining, IDP, and test automation vendors, and with enterprise platform vendors that are acquiring, building, or investing in automation and AI functionality or partnering with automation and AI providers.

Accordingly, we compete with enterprise platform vendors that are acquiring, building, or investing in automation and AI functionality or partnering with automation and AI providers, RPA software providers and adjacent automation and integration platform companies in markets such as low-code, BPM, iPaaS, process mining, IDP, and test automation vendors, among others.

We also compete with companies that provide and support the traditional systems relying on manual tasks and processes that our platform and products are designed to replace, including companies that facilitate outsourcing of such tasks and processes to lower cost workers.

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Additionally, open source alternatives for automation that are offered at no cost may impact our ability to sell our products to certain customers who may prefer to rely on these tools.

Our competitors may be able to respond more quickly to new or expanding technology, such as newly emerging generative AI technologies, and devote more resources to product development than we can.

Our competitors may be able to respond more quickly to new or expanding technology, such as newly emerging generative and agentic AI technologies, and devote more resources to product development than we can.

The speed of technological development may prove disruptive to some of our markets if we are unable to maintain the pace of innovation.

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If we fail to retain and motivate members of our management team or other key employees or to integrate new team members, or fail to attract additional qualified personnel to support our operations, our business and future growth prospects could be harmed.

On July 7, 2023, Daniel Dines notified our board of directors that he would resign from his position as our Co-CEO , effective as of January 31, 2024.

Robert Enslin, then UiPath's Co-CEO, continued to serve in the Co-CEO role through January 31, 2024.

As of February 1, 2024, Mr.

Enslin assumed the role of our sole CEO .

Dines assumed the newly-created role of Chief Innovation Officer, and continues to serve as the Executive Chairman of the board of directors.

In his new capacity at UiPath as Chief Innovation Officer, Mr.

Dines plans to drive our AI and technology initiatives.

Our success and future growth depend largely upon the continued services of our executive officers, particularly Daniel Dines, Chief Innovation Officer, co-founder, and Chairman, as well as our other key employees in the areas of research and development, and sales and marketing.

Our success and future growth depend largely upon the continued services of our executive officers, particularly Daniel Dines, our CEO , co-founder, and Chairman, as well as our other key employees in the areas of research and development, and sales and marketing.

Additionally, many members of our management team have been with us for a short period of time.

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The loss of one or more of our executive officers, or the failure by our executive team to effectively work with our employees and lead UiPath, could harm our business.

Further, in fiscal year 2023 we streamlined our senior management structure.

Further, we have in the past taken and may in the future take actions to streamline our senior management structure.

Any of these changes may not achieve our desired results.

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In addition, prospective and existing employees often consider the value of the equity awards they receive in connection with their employment.

As some of our employees' perception of our equity awards has declined, and may decline from time to time due to the lower price of our Class A common stock, if the Class A common stock continues to experience significant volatility, or volatility increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees.

recruit and retain key employees.

If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.

Changes in our management structure and in senior leadership could affect our business and financial results.

As of February 1, 2024, Robert Enslin succeeded Daniel Dines as our CEO, and Mr.

Dines became our Chief Innovation Officer, both as previously announced.

Senior leadership transitions can be difficult to manage and may cause disruptions to our operations.

A leadership transition may also increase the likelihood of turnover amongst our employees and result in changes in our business strategy, which may create uncertainty, and negatively impact our ability to execute our business strategy quickly and effectively.

As of February 1, 2024, Robert Enslin (who had served alongside Daniel Dines as our Co-CEO since April 2022) assumed the role of our sole CEO.

Dines assumed the newly-created role of Chief Innovation Officer, and continued to serve as the Executive Chairman of the board of directors.

Effective June 1, 2024, Mr.

Enslin resigned, and Mr.

Dines again assumed the role of sole CEO, which he had held prior to April 2022.

Such senior leadership transitions can be difficult to manage and may cause disruptions to our operations.

This or other leadership transitions may also increase the likelihood of turnover amongst our employees and result in changes in our business strategy, which may create uncertainty, and negatively impact our ability to execute our business strategy quickly and effectively.

Leadership transitions may also impact our relationships with our customers and other market participants, creating uncertainty among investors, employees, and others concerning our future direction and performance.

Any significant disruption, uncertainty, or change in

business strategy could adversely affect our business, financial condition, and operating results.

Any significant disruption, uncertainty, or change in business strategy could adversely affect our business, financial condition, and operating results.

Finally, our organizational structure is becoming more complex as we continue to scale our operational, financial, and management controls as well as our reporting systems and procedures.

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In addition, the financial health of our channel partners and our continuing relationships with them are important to our success.

Some of these channel partners may be unable to withstand adverse changes in economic conditions, which could result in insolvency and/or the inability of such distributors to obtain credit to finance purchases of our products and services, which could negatively impact our future financial performance.

Some of these channel partners may be unable to withstand adverse changes in economic conditions, which could result in insolvency and/or the inability of such partners to obtain credit to finance purchases of our products and services, which could negatively impact our future financial performance.

In addition, weakness in the end-user market could negatively affect the cash flows of our channel partners who could, in turn, delay paying their obligations to us, which would increase our credit risk exposure.

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These strategic alliances may also include non-cancelable commitments we make to these third-party alliance partners whereby we plan to leverage the partner’s products or services in arrangements with third-party customers.

Should we be unable to deploy the partner’s products or services in arrangements with third-party customers, it may materially and adversely impact our gross margins, profitability, and financial results in any given period.

Should we be unable to deploy the partner’s products or services in arrangements with third-party customers, it may materially and adversely impact our revenue, gross margin, profitability, and financial results in any given period.

Further, these strategic alliances are a vector for potential growth and expansion for us and these alliances may not be successful and/or as profitable as we project.

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We have been increasing our channel partner and customer enablement through our UiPath Academy and other training initiatives designed to create an ecosystem of people that are skilled in the use and integration of our platform in business operations.

However, if we and our channel partners are unable to provide sufficient high-quality consulting, training, integration, and maintenance resources, our customers may not effectively integrate our automation platform into their business or realize sufficient business value from our products to justify follow-on sales, which could impact our future financial performance.

However, if we and our channel partners are unable to provide sufficient high-quality consulting, training, integration, and maintenance resources, our customers may not effectively integrate our automation platform into their businesses or realize sufficient business value from our products to justify follow-on sales, which could impact our future financial performance.

Additionally, if our channel partners fail to perform or if any of our channel partners suffer reputational or brand harm, our customers may choose to not rely on our channel partners for consulting, training, integration, and maintenance resources.

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The success of new products, enhancements, and developments depends on several factors including, but not limited to:

our anticipation of market changes and demands for product features, successful product design and timely release of new functionality, sufficient customer demand, and cost effectiveness of our product development efforts.

our anticipation of market changes and demands for product features, successful product design and timely release of new functionality, sufficient customer

demand, and cost effectiveness of our product development efforts.

In addition, because our platform is designed to operate with a variety of third-party systems, applications, data, and devices, we will need to continuously modify and enhance our platform to keep pace with changes in such systems.

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We also offer professional services including consulting and training and must continually adapt to assist our customers in deploying our platform in accordance with their specific automation strategies.

If we cannot introduce new services or enhance our existing services to keep pace with changes in our customers’ deployment strategies, we may not be able to attract new customers, retain existing customers, and expand their use of our software or secure renewal contracts, which are important for the future of our business.

If we cannot introduce new services or enhance our existing services to keep pace with changes in our customers’ deployment strategies, we may not be able to attract new customers, retain existing customers, or expand customers' use of our software or secure renewal contracts, which are important for the future of our business.

We are subject to numerous risks associated with the evolving market for products with AI capabilities.

The markets and use cases for products with AI capabilities have been rapidly evolving, are difficult to predict, and may impact demand for our products, our sales cycles, our ability to forecast results from sales of these products, and the preferences of our customers and potential customers.

The significant investments we have made to develop products and software to address what we believe will be increasing demand for AI capabilities may be insufficient, and we face significant hurdles, including whether demand will materialize, whether third-party software providers will develop functionality that allows their software to utilize the AI capabilities of our products, and whether we will be successful in developing, pricing, and packaging products that can compete with offerings by established competitors.

We have in the past invested and may in the future continue to invest in potentially disruptive technologies, through various vehicles such as equity or debt investments, joint ventures, or strategic partnerships.

Such investments may not produce the expected results, may require more financial resources than anticipated, or may otherwise be unsuccessful, and the value of the investments may decline or be impaired, or our business may be adversely impacted.

Additionally, our use of AI technology in general may subject us to reputational, financial, legal, or regulatory risks.

As we continue to incorporate AI technology into our products and services, any failures to address concerns relating to the responsible use of the evolving AI technology in our products and services may cause harm to our reputation or result in financial liability, and as such, may increase our costs to address or mitigate such risks and issues.

AI technology may create ethical issues, generate defective algorithms, and present other risks that create challenges with respect to its adoption.

In addition, evolving rules, regulations, and industry standards governing AI may require us to expend significant resources to modify, maintain, or align our business practices or products to comply with U.S.

rules and regulations, the nature of which cannot be determined at this time.

Several jurisdictions around the globe, including the EU and certain U.S.

states, have already proposed or enacted laws governing the development and use of AI, such as the EU's AI Act.

We expect other jurisdictions will adopt similar laws.

The regulatory environment surrounding the impact of the implementation of AI on our products and services may adversely affect our ability to produce and export products, and as a result, may cause harm to our reputation and result in financial liability.

Risks associated with the use of AI (including ML and large language models) in our platforms may result in reputational harm or liability.

AI is enabled by or integrated into parts of our technology platform and remains a significant and growing element of our business.

As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, use, and therefore, our business.

AI is enabled by or integrated into parts of our technology platform and may also be used directly or indirectly as part of our internal systems and processes.

As such, AI remains a significant and growing element of our business and operations.

As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use.

AI algorithms and models may be flawed.

Our AI-related efforts, particularly those related to generative AI, or the datasets that we use in training our systems, subject us to risks related to harmful or illegal content, accuracy, bias, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, sanctions, and export controls, among others.

Third-party AI capabilities that can be integrated with our platform, including generative AI, could also produce false or "hallucinatory" inferences about customer data, enterprises, other information, or subject matter.

The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns, and risks that are significant, or that we may not be able to predict, especially if our use of these technologies in our products and services were to become more important to us over time.

If the recommendations, forecasts, or analyses that AI applications assist in producing are deficient or inaccurate, we could be subject to competitive harm, potential legal liability, including under existing and future legislation or regulations, including in the U.S.

The rapid evolution of AI may also require additional resources to develop, test, and maintain our platforms and products to help ensure that AI is implemented appropriately in order to minimize unintended or harmful impact, which may be costly, and may not produce the benefits and results that we expect.

Some AI scenarios may present ethical issues, and the enablement or integration of AI into our platform may subject us to new or heightened legal, regulatory, ethical, or other challenges, as this is an area of rapid development.

Our AI-related efforts, particularly those related to generative and agentic AI, or the datasets that we use in training our systems, subject us to risks related to harmful or illegal content, accuracy, bias, intellectual property infringement or misappropriation,

defamation, data privacy, cybersecurity, sanctions, and export controls, among others.

Third-party AI capabilities that can be integrated with our platform or used in our internal systems and processes, including generative AI, could also produce false or "hallucinatory" inferences about customer data, enterprises, other information, or subject matter.

The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns, and risks that are significant, or that we may not be able to predict, especially if our direct or indirect use of these technologies in our products and internal systems and processes were to become more important to us over time.

If the recommendations, forecasts, or analyses that AI applications, including AI agents, assist in producing are deficient or inaccurate, we could be subject to competitive harm or potential legal liability, including under existing and future legislation or regulations, including in the U.S.

The rapid evolution of AI may also require us to expend additional resources to help ensure that AI is implemented appropriately in order to minimize unintended or harmful impact which may adversely affect our business, financial condition, and results of operations.

Some AI scenarios may present ethical issues, and the enablement or integration of AI into our platform or internal processes may subject us to new or heightened legal, regulatory, ethical, or other challenges, as this is an area of rapid development.

We take into consideration these challenges when designing our technologies and implementing our business practices.

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As a result, if we face any claims or litigation relating to our use of AI, including its purported or real impact to, human rights, data privacy, employment, or other societal issues, we may experience brand or reputational harm, as well as regulatory or legal scrutiny, which could have a material adverse effect on our operations, and business outlook.

We are subject to numerous risks associated with the evolving market for products with AI capabilities.

The markets and use cases for products with AI capabilities have been rapidly evolving, are difficult to predict, and may impact demand for our products.

The significant investments we have made to develop products and software to address what we believe will be increasing demand for AI capabilities may be insufficient, and we face significant hurdles, including whether demand will materialize, whether third-party developers will develop the software to utilize the AI capabilities of our products, and whether we will be successful in developing products that can compete with offerings by established competitors.

Our use of AI technology may subject us to reputational, financial, legal, or regulatory risks.

AI technology may create ethical issues, generate defective algorithms, and present other risks that create challenges with respect to its adoption.

rules and regulations, the nature of which cannot be determined at this time.

Several jurisdictions around the globe, including the EU and certain U.S.

states, have already proposed or enacted laws governing AI.

federal agencies are likely to release AI regulations in the near future in light of the Biden administration's October 30, 2023 Executive Order on AI.

The regulatory environment surrounding the impact of the implementation

of AI on our products and services may adversely affect our ability to produce and export products, and as a result, may cause harm to our reputation and result in financial liability.

We offer free trials and a free tier of our platform to drive awareness of our products, and encourage use and adoption.

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Despite testing by us, real or perceived errors, failures, or bugs may not be found until our customers use our platform and products.

Such failures or bugs can cause reputational damage, and in some cases can affect our revenue due to the impact of service level commitments that we offer to our customers, as described below.

Such failures or bugs can cause reputational damage, and in some cases can affect our revenue due to the impact of service level commitments that we offer to our customers.

Our platform and products also empower our customers to develop their own use cases for our automation platform and products.

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For instance, our customers may use our products in a manner in which they were not intended and that could cause our platform or products to be implicated in any resulting errors or failures.

Real or perceived errors, failures, or

bugs in our platform and products could result in negative publicity, loss of or delay in market acceptance of our platform and products, regulatory investigations and enforcement actions, harm to our brand, weakening of our competitive position, claims by customers for losses sustained by them, or failure to meet the stated service level commitments in our customer agreements.

Real or perceived errors, failures, or bugs in our platform and products could result in negative publicity, loss of or delay in market acceptance of our platform and products, regulatory investigations and enforcement actions, harm to our brand, weakening of our competitive position, claims by customers for losses sustained by them, or failure to meet the stated service level commitments in our customer agreements.

In such an event, we may be required, or may choose, for customer relations or other reasons, to expend significant additional resources in order to help correct the problem.

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Our cloud-based products depend on virtual cloud infrastructure hosted by third-party hosting services.

UiPath protects these services by maintaining the configuration, architecture, features, and interconnection specifications, as well as the information stored in these virtual data centers, which is transmitted by third-party internet service providers.

UiPath protects these services by maintaining the configuration, architecture, features, and

interconnection specifications, as well as the information stored in these virtual data centers, which is transmitted by third-party internet service providers.

Any disruption as a result of cyberattacks or similar issues, or any limitation on the capacity of our third-party hosting services, could impede our ability to onboard new customers or expand the usage of our existing customers, or otherwise adversely affect our business, which could adversely affect our financial condition and results of operations.

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In the event that our service agreements with our third-party hosting services are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity, or damage to such facilities, we could experience interruptions in access to our cloud-based products as well as significant delays and additional expense in arranging or creating new facilities and services, and/or re-architecting our cloud-based products for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition, and results of operations.

Delays or difficulties associated with the design, implementation, or post-implementation use of our new enterprise resource planning system could adversely impact our business, financial condition, and results of operations.

We rely on information systems, particularly ERP technology, to manage our business, summarize our operating and financial results, and provide timely information to our management.

We are currently engaged in a multi-year implementation of a new ERP system.

This implementation is a complex project with broad scope, in which we have invested and will continue to invest significant financial and human capital.

Despite our efforts, we may experience delays, unexpected costs, or other difficulties as the implementation process continues.

Further, although we plan to run our existing technology in parallel with the new ERP system for a period of time and to conduct extensive testing to ensure that the new ERP system is operating as intended, post-implementation disruptions to or difficulties in use of the new ERP could require us to incur additional costs, or could impair, among other things, our ability to record sales, process transactions, collect receivables, and produce timely and accurate historical and forecasted financial information, which could adversely impact our business, financial condition, and results of operations.

Additionally, if the new ERP system does not ultimately operate as intended, the effectiveness of our internal control over financial reporting could be harmed.

Seasonality may cause fluctuations in our sales and results of operations.

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We define ARR as annualized invoiced amounts per solution SKU from subscription licenses and maintenance and support obligations assuming no increases or reductions in customers' subscriptions.

ARR does not include the costs we may incur to obtain such subscription licenses or provide such maintenance and support, and does not include invoiced amounts associated with perpetual licenses or professional services.

ARR is not a forecast of future revenue and does not reflect any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves, such as those for credit losses or disputed amounts.

ARR does not include the costs we may incur to obtain such subscription licenses or provide such maintenance and support.

ARR also does not reflect nonrecurring rebates payable to partners (upon establishing sufficient history of their nonrecurring nature), the impact of nonrecurring incentives (such as one-time discounts provided under sales promotional programs), and any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves (for example, those for credit losses or disputed amounts).

As a result, ARR and our other operational data may not reflect our actual performance, and investors should consider these metrics in light of the assumptions used in calculating such metrics and limitations as a result thereof.

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We have funded our operations since inception primarily through customer payments and net proceeds from sales of equity securities.

We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations, our planned investments, or the growth of our business.

We cannot be certain whether our operations will consistently generate sufficient cash to fully fund our ongoing operations, our planned investments, or the growth of our business.

Following our IPO, we focused on growing our business to take advantage of our market opportunities.

While growth remains important, we are also focused on the path to profitability.

Our planned investments to drive growth may require us to engage in equity or debt financings to secure additional funds.

Additional financing may not be available on terms favorable to us, if at all.

Any future investments we make to drive growth may require us to engage in equity or debt financings to secure additional funds.

Financing may not be available on terms favorable to us, if at all.

The effects of the disruptions to and volatility in the credit and financial markets in the U.S.

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If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, financial condition, and results of operations.

If we incur debt, the debt holders would have rights senior to holders of Class A common stock to make claims on our assets, and the terms of any future debt could restrict our operations, including our ability to pay dividends on our Class A common stock.

If we incur debt, the debt holders would have rights senior to holders of Class A common stock to make claims on our assets, and the terms of any future debt could restrict our operations, including the ability to pay dividends on our Class A common stock.

Furthermore, if we issue additional equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our Class A common stock.

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Our ability to maintain and enhance our brand may also be subject to factors that are outside of our control.

For instance, media stories regarding the potential effects on employment of automation and technologies that replace traditional, human-driven systems are commonplace.

Unfavorable publicity regarding the impact automation may have on unemployment could harm our brand and reputation, even if unrelated to our products.

For instance, media stories regarding the potential effects on employment of automation and AI technologies that replace traditional, human-driven systems are commonplace.

Unfavorable publicity regarding the impact automation may have on unemployment levels could harm our brand and reputation, even if unrelated to our products.

Such negative publicity could also reduce the potential demand and size of the market for our products and decrease our revenue.

We may not be able to protect all of our registered or unregistered trademarks or trade names relevant to our brand, and our rights may be challenged, infringed, circumvented, declared generic, lapsed, or determined to be infringing on or dilutive of other marks.

If we are unable to protect our rights in these trademarks and trade names, third parties may file for registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion.

Additionally, we may not be able to protect all of our registered or unregistered trademarks or trade names relevant to our brand, and our rights may be challenged, infringed, circumvented, declared generic, lapsed, or determined to be infringing on or dilutive of other marks.

If we are unable to protect our rights in these trademarks and trade names, third parties may file for registration of trademarks similar or identical to our trademarks, thereby

impeding our ability to build brand identity and possibly leading to market confusion.

If we fail to successfully promote and maintain our brand, our business, financial condition, and results of operations may suffer.

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Any dispute with a customer or other third-party with respect to such obligations could have adverse effects on our relationship with such customer or other third-party and other existing or prospective customers, reduce demand for our products and services, and adversely affect our business, financial condition, and results of operations.

In addition, although we carry general liability and cybersecurity insurance, our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise

protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.

In addition, although we carry general liability and cybersecurity insurance, our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.

We have in the past engaged, and may in the future engage, in acquisition and investment activities, which could divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our results of operations and financial condition.

As part of our business strategy, we continually evaluate opportunities to acquire or invest in businesses, products, or technologies that we believe could complement or expand our products and solutions, enhance our technical capabilities, or otherwise offer growth opportunities.

For example, in March 2021, we acquired Cloud Elements, Inc., a provider of a leading API integration platform for SaaS application providers and the digital enterprise.

In July 2022, we acquired Re:infer, an NLP company for unstructured documents and communications.

For example, in July 2022, we acquired Re:infer, an NLP company for unstructured documents and communications.

In March 2025, we acquired Peak AI Limited, a U.K.-based software company offering an AI platform that provides pricing and inventory intelligence to customers in manufacturing and retail.

In the future, we may be unable to identify suitable acquisition candidates and, even if we do, we may not be able to complete desired acquisitions on favorable terms, if at all.

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This may result in a lack of consistent comparative data from period to period or between UiPath and other companies in the same industry.

In addition, our processes and controls may not comply with evolving standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required of public companies by the SEC and other regulatory agencies to which we may be subject, including newly-adopted SEC climate-

related disclosure requirements and the EU's CSRD which is still subject to member country adoption;

In addition, our processes and controls may not comply with evolving standards for identifying, measuring, and reporting ESG metrics, including ESG-related disclosures that may be required by the SEC, state regulations, and other global regulatory requirements to which we may be subject, including SEC climate-related disclosure requirements and the EU's Corporate Sustainability Reporting Directive;

such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.

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From time to time, we have undertaken and may continue to undertake internal restructuring activities in an effort to better align our resources with our business strategy.

For example, we initiated a restructuring plan in June 2022 that resulted in a reduction in our global workforce by approximately 5%, aimed at simplifying our go-to-market approach to improve market segmentation, increase sales productivity, and provide best-in-class customer experience and outcomes.

In November 2022, our board of directors approved further restructuring actions to reduce our global workforce across functions by an additional 6%.

The aforementioned workforce restructuring actions were completed during the second quarter of fiscal year 2024.

For example, we initiated a restructuring plan in July 2024.

This follows an earlier restructuring plan we initiated in fiscal year 2023 that was completed during the second quarter of fiscal year 2024.

We incur substantial costs to implement restructuring plans, and our restructuring activities may subject us to reputational risks and litigation risks and expenses.

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Risks Related to Data Privacy and Cybersecurity

We are subject to stringent and evolving U.S.

We and third parties with whom we do business are subject to stringent and evolving U.S.

and foreign laws, regulations, and rules, contractual obligations, industry standards, policies, and other obligations related to data privacy and security.

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In the ordinary course of business, we collect, receive, access, generate, transfer, store, disclose, share, make accessible, protect, secure, dispose of, and use (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, financial information, geolocation information, social security numbers, government-issued identification information, and sensitive third-party data about employees, contractors, customers, suppliers, and others (collectively, sensitive information).

Our data processing activities subject us to numerous data privacy and security obligations, such as

various laws, codes, regulations, industry standards, external and internal privacy and security policies, contracts, and other obligations.

Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, codes, regulations, industry standards, external and internal privacy and security policies, contracts, and other obligations.

In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

For example, HIPAA , as amended by the HITECH , imposes specific requirements relating to the privacy, security, and transmission of individually identifiable protected health information.

In the past few years, numerous U.S.

states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.

For example, the Health Insurance Portability and Accountability Act , as amended by the Health Information Technology for Economic and Clinical Health Act , imposes specific requirements relating to the privacy, security, and transmission of individually identifiable protected health information.

Numerous U.S.

states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.

As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

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For example, the CCPA, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively CCPA), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosure in privacy notices and honor requests of such individuals to exercise certain privacy rights.

The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.

The CCPA provides for statutory fines and allows private litigants affected by certain data breaches to recover significant statutory damages.

Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.

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

Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.

These developments further complicate our compliance efforts, and increase legal risk and compliance costs for us, the third parties upon whom do business, and our customers.

Additionally, under various privacy laws and other obligations, we are required to obtain certain consents to process personal data.

For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels.

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

These practices are subject to increased challenges by class action plaintiffs.

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

In the E EA , the Collective Redress Directive (effective June 2023) will allow collective actions to be brought by a representative body against businesses if they breach legislation intended to protect EU consumers, including for data protection matters.

In the EEA , the Collective Redress Directive

(effective June 2023) will allow collective actions to be brought by a representative body against businesses if they breach legislation intended to protect EU consumers, including for data protection matters.

Outside the U.S., an increasing number of laws, regulations, and industry standards apply to data privacy and security.

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GDPR (collectively, "GDPR"), Brazil’s LGPD , India's Digital Personal Data Protection Act, and China’s PIPL impose strict requirements for processing personal data.

For example, under the GDPR, companies may face temporary or definitive bans on data processing;

fines of up to 20 million euros under the EU GDPR, 17.5 million pounds sterling under the U.K.

GDPR or, in each case 4% of annual global revenue, whichever is greater;

or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized by law to represent their interest.

Violations may result in temporary or definitive bans on data processing, material fines, or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized by law to represent their interest.

We may have to change our business practices to comply with such obligations.

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These new regulations create additional reporting obligations and oblige us to enhance our content moderation practices, update our internal procedures to allow users to notify of illegal content, and create internal mechanisms to handle complaints.

Failures to comply with the DSA obligations may result in fines up to 6% of global turnover.

Failures to comply with the DSA obligations may result in material fines.

In addition, privacy advocates and industry groups have proposed, and may propose, standards with which we are legally or contractually bound to comply.

Our employees and personnel may use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.

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

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

Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.

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

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

We also use AI/ML to assist us in making certain decisions, which is regulated by certain privacy laws.

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If we cannot use AI/ML, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.

Furthermore, in Europe, the proposed European Artificial Intelligence Regulation (EU AI Act), which has extraterritorial scope, will impose onerous obligations for providers and deployers of AI-related systems.

Furthermore, in the EU, the EU AI Act, which has extraterritorial scope, imposes onerous obligations for providers and deployers of AI-related systems.

Certain jurisdictions have enacted data localization laws and cross-border personal data transfer laws, which could make it more difficult to transfer information across jurisdictions (such as transferring or receiving personal data that originates in the EU or in other foreign jurisdictions).

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Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of the EEA for allegedly violating the GDPR's cross-border data transfer limitations.

Regulators in the United States such as the Department of Justice are also increasingly scrutinizing certain personal data transfers and have proposed and may enact certain data export restrictions and localization requirements, for example, the Preventing Access to U.S.

Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons rule finalized by the Department of Justice in late 2024, enacting the Biden Administration’s executive order Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern, which is due to go into effect April 8, 2025.

In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups, and we may become subject to additional such obligations in the future.

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Our business model materially depends on our ability to process personal data, so we are particularly exposed to the risks associated with the rapidly changing legal landscape.

For example, we may be at heightened

risk of regulatory scrutiny, and any changes in the regulatory framework could require us to fundamentally change our business model.

For example, we may be at heightened risk of regulatory scrutiny, and any changes in the regulatory framework could require us to fundamentally change our business model.

We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.

Moreover, despite our efforts, our personnel or the third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.

Moreover, despite our efforts, our personnel or the third parties with whom we do business may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.

For example, any failure by a third-party processor to comply with applicable laws, regulations, or contractual obligations could result in adverse effects, including inability to or interruption in our ability to operate our business and proceedings against us by governmental entities or others.

If we or the third parties upon whom we rely fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences, including, but not limited to:

If we or the third parties upon whom we do business fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences, including, but not limited to:

government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

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Additionally, we publish privacy policies, marketing materials and other statements, such statements regarding our compliance with certain certifications or self-regulatory principles, regarding data privacy and security.

If these policies, material, or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

Regulators are increasingly scrutinizing these statements, and if these policies, material, or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.

Although we endeavor to comply with our privacy policies and other data protection obligations, we may at times fail to do so or may be perceived to have failed to do so.

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We have in the past received and may in the future receive inquiries from or be subject to investigations by data protection authorities regarding, among other things, our privacy, data protection, and information security practices.

We have been subject to investigations by regulators in Romania and Turkey in connection with a security incident affecting our information technology systems in 2020;

however, we have remediated the incident and notified all affected individuals and relevant data protection authorities as required under applicable privacy laws.

Both investigations were recently finalized.

The Turkish authority imposed a fine of approximated $4 thousand.

The Romanian investigation resulted in the imposition of a 70 thousand Euro penalty in addition to various reporting and oversight obligations.

The result of these investigations could impact our brand reputation, subject us to monetary remedies and costs, interrupt or require us to change our business practices, divert resources and the attention of management from our business, or subject us to other remedies that adversely affect our business .

If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

The result of such investigations has in the past impacted and could in the future impact our brand reputation, subject us to monetary remedies and costs, interrupt or require us to change our business practices, divert resources and the attention of management from our business, or subject us to other remedies that adversely affect our business .

If our information technology systems or data, or those of third parties with whom we do business, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

fines and penalties;

of our business operations;

disruptions of our business operations;

reputational harm;

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and other adverse consequences.

In the ordinary course of our business, we and the third parties upon which we rely process proprietary, confidential, and sensitive information, including personal data, intellectual property, and trade secrets.

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

In the ordinary course of our business, we and the third parties with whom we do business process proprietary, confidential, and sensitive information, including personal data, intellectual property, and trade secrets.

Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer "hackers", threat actors, "hacktivists", organized criminal threat actors, personnel (such as employee theft or misuse), and sophisticated nation-state and nation-state supported actors.

Some actors now engage and are expected to continue to engage in cyberattacks, including without limitation, nation-state actors for geopolitical reasons, in conjunction with military conflicts and defense activities.

During times of geopolitical and other major conflicts, we, the third-party service providers upon which we rely, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our goods and services.

We and the third parties upon which we rely may be subject to a variety of evolving threats.

During times of geopolitical and other major conflicts, we, the third parties with whom we do business, and our customers may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our goods and services.

We and the third parties with whom we do business may be subject to a variety of evolving threats.

These include but are not limited to;

social-engineering attacks (including through deepfakes, which may be increasingly difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, and other similar threats.

In particular, severe ransomware attacks have become increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of resources.

social-engineering attacks (including through deepfakes, which are difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, and other similar threats.

In particular, severe ransomware attacks have become increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data, loss of income, reputational harm, and diversion of resources.

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

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The potential liability and associated consequences we could suffer as a result of such a large-scale event could be catastrophic, and result in irreparable harm.

In addition, remote work has become more common, and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside of our premises or network, including working at home, while in transit, and in public locations.

In addition, remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside of our premises or network, including working at home, while in transit, and in public locations.

Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities' systems and technologies.

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

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

cloud-based infrastructure, encryption and authentication technology, employee email, content delivery to customers, and other functions.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

We may share or receive sensitive information with or from third parties.

We share and receive sensitive information with and from third parties.

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

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While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely).

We may not, however, detect and remediate all such vulnerabilities including on a timely basis.

Even if we have issued or otherwise made available patches or information to address vulnerabilities in our software applications, products, or services, our customers may be unwilling or unable to deploy such patches and use such

information effectively and in a timely manner.

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we do business).

We have not detected and in the future may not detect and remediate all such vulnerabilities including on a timely basis.

Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities, which could lead to such vulnerabilities being exploited and result in a security incident.

Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, or disclosure of, or access to, our sensitive information or information technology systems, or those of the third parties upon which we rely.

A security incident or other interruption could disrupt our ability (and that of third parties upon which we rely) to provide our platform.

For example, we have in the past been the target of unsuccessful phishing attempts, and we expect that such attempts will continue in the future.

A security incident or other interruption could disrupt our ability (and that of third parties with whom we do business) to provide our platform.

We may expend significant resources or modify our business activities to try to protect against security incidents.

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Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

If we (or a third-party upon which we rely) experience a security incident, or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

If we (or a third-party with whom we do business) experience a security incident, or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

additional reporting requirements and/or oversight;

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and other similar harms.

For example, the investigation conducted by Romanian regulatory authorities in connection with our 2020 security incident resulted in the imposition of a 70 thousand Euro penalty in addition to various reporting and oversight obligations.

Security incidents and attendant consequences may prevent customers from using or cause customers to stop using our platform and products, deter new customers from using our platform and products, and negatively impact our ability to grow and operate our business.

A security incident may cause us to breach customer contracts.

Our agreements with certain customers may require us to use industry-standard or reasonable measures to safeguard personal information.

We also may be subject to laws that require us to use industry-standard or reasonable security measures to safeguard personal information.

Our agreements with certain customers require us to use industry-standard or reasonable measures to safeguard personal information.

We are also subject to laws that require us to use industry-standard or reasonable security measures to safeguard personal information.

Our contracts may not contain limitations of liability, and even when they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.

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As a result, we could be subject to legal action or our customers could end their relationships with us.

There can be no assurance that the limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities or damages, and in some cases our customer agreements do not limit our remediation costs or liability with respect to data breaches.

In some cases our customer agreements do not limit our remediation costs or liability with respect to data breaches.

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

Further, sensitive information belonging to us or our customers could be leaked, disclosed, or revealed as a result of, or in connection with, our employees', personnel's, or vendors' use of generative AI technologies.

Any sensitive information (including confidential, competitive, proprietary, or personal data) that we input into a third-party generative AI/ML model could be leaked or disclosed to others, including if sensitive information is used to train the third party's AI/ML model.

Any sensitive information (including confidential, competitive, proprietary, or personal data) that we input into a third-party generative AI/ML

model could be leaked or disclosed to others, including if sensitive information is used to train the third party's AI/ML model.

Additionally, where an AI/ML model ingests personal data and makes connections using such data, those technologies may reveal other personal or sensitive information generated by the model.

Additionally, we face unique threats and vulnerabilities as a SaaS company, including, but not limited to, adverse consequences resulting from any vulnerabilities in our platform and products and customer misuse of our platform and products.

We face unique threats and vulnerabilities as a SaaS company, including, but not limited to, adverse consequences resulting from any vulnerabilities in our platform and products and customer misuse of our platform and products.

The reliability and continuous availability of our platform and products is critical to our success.

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has imposed Trade Controls that restrict the export of U.S.-regulated products and technology in response to geopolitical actions.

Specifically, in 2022, the U.S.

significantly increased U.S.

export controls on AI and advanced computing products.

In 2023, the U.S.

added to the restrictions in those areas.

During this time, the U.S.

has increasingly added Chinese companies to the prohibited lists.

These and potential future restrictions could adversely affect our financial performance and result in reputational harm to us.

The Russian military operation in Ukraine, initiated in 2022, resulted in the imposition of financial and other sanctions and Trade Controls against Russia and Belarus.

(We had no exports to Russia and Belarus in fiscal year 2024).

Such Trade Controls and any further restrictions that may be promulgated by relevant governmental authorities could adversely affect our business.

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Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain.

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

Despite our precautions, it may be possible for unauthorized third parties to copy our

brands, products, and platform capabilities, and use information that we regard as proprietary to create brands and products that compete with ours.

Effective patent, trademark, copyright, and trade secret protection may not be available to us or commercially feasible in every country in which our products are available.

Further, intellectual property law, including statutory and case law, particularly in the U.S., is constantly developing, and any changes in the law could make it harder for us to enforce our rights.

The value of our intellectual property could diminish if

others assert rights in or ownership of our trademarks, patents, and other intellectual property rights, or adopt trademarks that are similar to our trademarks.

The value of our intellectual property could diminish if others assert rights in or ownership of our trademarks, patents, and other intellectual property rights, or adopt trademarks that are similar to our trademarks.

We may be unable to successfully resolve these types of conflicts to our satisfaction.

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Although we carry general liability and intellectual property insurance, our insurance may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed.

We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on our business, financial condition, or results of

We cannot predict the outcome of lawsuits and cannot ensure that the

results of any such actions will not have an adverse effect on our business, financial condition, or results of operations.

Any intellectual property litigation to which we might become a party, or for which we are required to provide indemnification, may require us to do one or more of the following:

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We rely heavily on trade secrets and confidentiality agreements to protect our unpatented know-how, technology, and other proprietary information and to maintain our competitive position.

However, trade secrets

and know-how can be difficult to protect.

We seek to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, and other third parties, including suppliers and other partners.

However, trade secrets and know-how can be difficult to protect.

We seek to protect these trade secrets and other proprietary technology, in

part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, and other third parties, including suppliers and other partners.

However, we cannot guarantee that we have entered into such agreements with each party that has or may have had access to our proprietary information, know-how, and trade secrets.

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If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from the sale of our products that contained the open source software, and required to comply with onerous conditions or restrictions on these products, which could disrupt the distribution and sale of these products.

From time to time, there have been claims challenging the ownership rights in open source software against companies that incorporate it into their products and the licensors of such open source software provide no

warranties or indemnities with respect to such claims.

As a result, we and our customers could be subject to lawsuits by parties claiming ownership of what we believe to be open source software.

Litigation could be costly for us to defend, have a negative effect on our business, financial condition, and results of operations, or require us to devote additional research and development resources to change our products.

Litigation could be costly for us to defend, have a negative effect on our business, financial condition, and results of operations, or require us to

devote additional research and development resources to change our products.

Some open source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis, which, if not properly addressed, could negatively affect the performance of our product.

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• greater difficulty collecting accounts receivable and longer payment cycles;

• potential changes in trade relations, regulations, or laws;

• potential changes in trade relations, regulations, laws, or tariffs;

• unexpected changes in laws or regulatory requirements, including tax laws and regulations;

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Weaknesses in our internal controls may be discovered in the future.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations, may result in a restatement of our financial statements for prior periods, may cause us to fail to meet our reporting obligations, could result in an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, and could lead to investigations or sanctions by regulatory authorities.

Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations, may result in

a restatement of our financial statements for prior periods, may cause us to fail to meet our reporting obligations, could result in an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, and could lead to investigations or sanctions by regulatory authorities.

Section 404 of SOX requires our management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting.

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For example, the IRS or another tax authority could challenge our allocation of income by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property in connection with our intercompany research and development cost sharing arrangement and legal structure.

We are currently under audit in certain jurisdictions, and topics as described above have been raised in the tax audits in Romania and India.

We believe our position is reasonable, however, the administrative procedures in finalizing the tax audits are in process and potential disputes and/or litigation may follow.

tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.

We are currently under audit in certain jurisdictions, and topics as described above have been raised in our current and prior tax audits in Romania and India, leading to disputes and litigation.

While we believe our positions are reasonable, the administrative procedures to finalize these tax audits, disputes, and litigation are in process.

The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.

The authorities in these jurisdictions could audit our tax returns or require us to file tax returns in jurisdictions in which we are not currently filing and could impose additional tax, interest, and penalties.

In addition, the authorities could claim that various withholding requirements apply to us or our subsidiaries, assert that benefits of tax treaties are not available to us or our subsidiaries, or challenge our methodologies for valuing developed technology or intercompany arrangements, including our transfer pricing.

If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.

Our financial statements could fail to reflect adequate reserves to cover such contingencies.

If such a challenge or disagreement were to occur, and our position was not

sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations.

Our financial statements may not include adequate accruals to cover such contingencies.

Furthermore, we are subject to periodic audits in the various jurisdictions in which we operate.

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Senate or otherwise modified.

Similarly, as our operations are material in Romania, legislative changes have been introduced to enact for fiscal years starting after January 1, 2024 an Alternative Minimum Corporate Tax and we will be subject to this legislation in the future.

Similarly, as our operations are material in Romania, legislative changes have resulted in an alternative minimum corporate tax for fiscal years starting after January 1, 2024, to which we are subject.

Future guidance from the IRS and other tax authorities with respect to any existing or new laws may affect us, and certain aspects of such laws could be repealed or modified in future legislation.

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In particular, the OECD is coordinating the implementation of rules to be adopted from 2023 for taxing the digital economy, specifically with respect to nexus and profit allocation (Pillar One), and for a global minimum tax (Pillar Two).

As these and other BEPS initiatives are subject to further final negotiation and implementation by each member country, we cannot predict the timing and ultimate outcome or the potential impact it may have on our tax obligations, operations, or our financial statements.

Although a number of jurisdictions, including the EU and the U.K., have enacted legislation to implement core elements of Pillar Two, it remains uncertain whether the U.S.

will enact similar legislation.

Additionally, the European Commission and several countries have issued (and continue to issue) legislation and proposals that could change various aspects of the current tax framework under which we are taxed.

These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes, including taxes based on a percentage of revenue or online sales (e.g.

Romanian Alternative Minimum Corporate Tax).

For example, several countries have proposed or enacted taxes applicable to digital services which could apply to our business (subject to any scaling back or withdrawal of such proposals or enactments following the implementation of Pillar One and Pillar Two and/or the introduction of mechanisms to avoid double taxation currently being assessed).

Romanian alternative minimum corporate tax, digital service taxes, equalization levies).

We continue to examine the impact of these and other tax reforms on our business, and cannot predict the timing and ultimate outcome or the potential impact they may have on our tax obligations, business, financial condition, and results of operations.

Due to the large and expanding scale of our international business activities, these types of changes to the taxation of our activities could increase our worldwide effective tax rate, increase the amount of taxes imposed on our business, and harm our financial position.

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Our ability to use our NOLs to offset future taxable income may be subject to certain limitations.

Certain of our NOLs could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S.

Certain of our NOLs could expire unused and be unavailable to reduce future income tax liabilities because of their limited duration or because of restrictions under U.S.

or foreign tax law.

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Risks Related to Ownership of Our Class A Common Stock

The dual class structure of our common stock has the effect of concentrating voting control with Daniel Dines, our Chief Innovation Officer, co-founder, and Chairman, which will limit stockholders' ability to influence the outcome of important decisions.

The dual class structure of our common stock has the effect of concentrating voting control with Daniel Dines, our Chief Executive Officer, co-founder, and Chairman, which will limit stockholders' ability to influence the outcome of important decisions.

Our Class B common stock has 35 votes per share and our Class A common stock has one vote per share.

Our Chief Innovation Officer, co-founder, and Chairman, Daniel Dines, collectively with his controlled entities, holds all our outstanding shares of Class B common stock, and beneficially owned shares representing approximately 86% voting power of our outstanding capital stock as of January 31, 2024.

Our CEO, co-founder, and Chairman, Daniel Dines, collectively with his controlled entities, holds all our outstanding shares of Class B common stock, and beneficially owned shares representing approximately 87% voting power of our outstanding capital stock as of January 31, 2025.

As a result, Mr.

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We have not elected to take advantage of the “controlled company” exemption to the corporate governance rules for publicly-listed companies but may do so in the future.

Because our Chief Innovation Officer, co-founder, and Chairman, Daniel Dines, who, collectively with his controlled entities, holds all our outstanding shares of Class B common stock, and beneficially owns shares representing in excess of 50% of the voting power of our outstanding capital stock, we are eligible to elect the “controlled company” exemption to the corporate governance rules for publicly-listed companies.

Because our CEO, co-founder, and Chairman, Daniel Dines, who, collectively with his controlled entities, holds all our outstanding shares of Class B common stock, and beneficially owns shares representing in excess of 50% of the voting power of our outstanding capital stock, we are eligible to elect the “controlled company” exemption to the corporate governance rules for publicly-listed companies.

We have not elected to do so.

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We cannot predict the impact our dual class structure may have on the market price of our Class A common stock.

We cannot predict whether our dual class structure, combined with the concentrated control of our Chief Innovation Officer, co-founder, and Chairman, Daniel Dines, who holds all of the outstanding shares of our Class B common stock, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences.

We cannot predict whether our dual class structure, combined with the concentrated control of our CEO, co-founder, and Chairman, Daniel Dines, who holds all of the outstanding shares of our Class B common stock, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences.

Certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indexes.

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will be the exclusive forum for resolving any complaint asserting a cause or causes of action arising under the Securities Act, including all causes of action asserted against any defendant to such complaint.

profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.

For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.

While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.

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In addition, a substantial portion of our operations rely on support from our headquarters in New York City and our office in Bucharest, Romania.

To the extent that fire, floods, unusual weather conditions, power loss, telecommunications failures, military actions, terrorist attacks, and other events beyond our control materially impacts our ability to operate those offices, it may have a material impact on our business operations as a whole.

To the extent that fire, floods, unusual weather conditions, power loss, telecommunications failures, military actions,

terrorist attacks, and other events beyond our control materially impacts our ability to operate those offices, it may have a material impact on our business operations as a whole.

To the extent that such events disrupt our business or the businesses of our current or prospective customers, or adversely impact our reputation, such events could adversely affect our business, financial condition, results of operations, and cash flows.

If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

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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