What changed in this filing

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Item 1. Business

2024-02-20 compared with 2023-02-21 · 82 added, 90 removed, 157 unchanged (52% of the section changed)

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We later began working with commercial enterprises, who often faced fundamentally similar challenges in working with data.

We have built three principal software platforms, Palantir Gotham (“Gotham”), Palantir Foundry (“Foundry”), and Palantir Apollo (“Apollo”).

Gotham and Foundry enable institutions to transform massive amounts of information into an integrated data asset that reflects their operations.

We have built four principal software platforms, Palantir Gotham (“Gotham”), Palantir Foundry (“Foundry”), Palantir Apollo (“Apollo”), and Palantir Artificial Intelligence Platform (“AIP”).

Gotham and Foundry enable institutions to transform massive amounts of information into an integrated data asset that reflects their operations, and AIP leverages the power of our existing machine learning technologies alongside large language models (“LLMs”) directly within Gotham and/or Foundry to help connect AI to enterprise data.

For over a decade, Gotham has surfaced insights for global defense agencies, the intelligence community, disaster relief organizations and beyond.

And Foundry is becoming a central operating system not only for individual institutions but also for entire industries.

Apollo is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems and allowing our customers to run their software in virtually any environment.

Recent crises and systemic shocks, such as the ongoing COVID-19 pandemic and the ongoing Russia-Ukraine conflict, have made clear to many of our customers that accommodating the extended timelines ordinarily required to realize results from implementing new software solutions is not a viable option.

Apollo, which we began offering as a commercial solution in 2021, is a cloud-agnostic, single control layer that coordinates ongoing delivery of new features, security updates, and platform configurations, helping to ensure the continuous operation of critical systems.

Apollo allows our customers to run their software in virtually any environment.

In 2023, we began deploying our newest offering, AIP, which is designed for customers across the commercial and government sectors, enabling them to derive value from recent breakthroughs in artificial intelligence via the combination of our existing

software platforms with LLMs.

We believe AIP uniquely allows users to connect LLMs and other AI with their data and operations to facilitate decision-making within the legal, ethical, and security constraints that they require.

Recent crises and systemic shocks, such as the ongoing Russia-Ukraine and Israel conflicts, have made clear to many of our customers that accommodating the extended timelines ordinarily required to realize results from implementing new software solutions is not a viable option.

As a result, customers are increasingly adopting our software, which can be ready in days, over internal software development efforts, which may take months or years.

See further discussion

in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Macroeconomic Trends .

See further discussion in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Macroeconomic Trends .

Our Platforms

We have built three principal software platforms:

Gotham, Foundry, and Apollo.

We have built four principal software platforms:

Gotham, Foundry, Apollo, and AIP.

Our software platforms provide the critical infrastructure needed to integrate our customers’ data and operations and run their software in virtually any environment.

The vertically integrated nature of Gotham and Foundry allows users of varying technical abilities to collaborate effectively in our platforms.

The vertically integrated nature of these platforms allows users of varying technical abilities to collaborate effectively in our platforms.

Data engineers can integrate new data sources, analysts can clean and transform data, data scientists can write models, business users can conduct daily workflows, and senior leaders can make critical decisions.

The two platforms can either be used separately or bundled together as a single ecosystem.

With AIP, trusted data from relevant sources can be integrated into business logic, machine-language models, optimizers, and other computations spread across varying environments to power enterprise processes and help drive critical decisions.

Customers may bundle these platforms together as a single ecosystem.

Data, analyses, decisions, and the metadata around each are secured with fine-grained access controls that propagate from source data to shared analyses.

Each platform is comprised of user-facing applications that are targeted to the specific industries and sectors in which they are used.

Each platform is comprised of user-facing applications that may be targeted to the specific industries and sectors in which they are used.

Despite their differences, Gotham and Foundry both serve as central operating systems for our customers.

Where they vary in specific functionality, they align in approach.

Both platforms, backed by Apollo, can be deployed in almost any environment.

While they vary in specific functionality, they align in approach.

AIP provides an integrated architecture to Gotham and Foundry that can bring AI to every decision.

These platforms, backed by Apollo, can be deployed in almost any environment.

Similarly, customers can now use Apollo to enable continuous deployment, configuration management, and central software operations management across almost any environment for their own software products.

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It also facilitates the hand-off between analysts and operational users, helping operators plan and execute real-world responses to threats that have been identified within the platform.

Gotham is now used broadly across government functions.

We also offer Gotham to our commercial customers, including to those in the financial services industry in connection with fraud investigations.

Gotham is now used broadly across government functions, and we also offer Gotham to our commercial customers.

Foundry transforms the ways organizations operate by creating a central operating system for their data.

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All of our commercial customers now use it, as do several of our government customers.

AIP enables responsible AI-advantage across the enterprise by using primary, core components built to effectively activate LLMs and other AI within any organization.

It provides unified access to open-source, self-hosted, and commercial LLMs that can transform structured and unstructured data into LLM-understandable objects and can turn organizations’ actions and processes into tools for humans and LLM-driven agents.

AIP can allow organizations to power operational use of AI and LLMs with interfaces for decision making, feedback, and safe hand-off among AI agents and human operators with wide-spectrum security and audit controls, which allow for granular control over model usage and integrated human review checkpoints throughout the workflows.

AIP is designed to be seamlessly bundled with existing Palantir offerings such as the Foundry, Gotham, and Apollo platforms.

We have always prioritized meeting our customers wherever they need us most.

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in the cloud, on-premises, or even more rugged environments.

Today, Apollo enables the rapid, secure delivery of our software and updates across our business.

In 2021, we began offering Apollo as a commercial solution to allow our customers to securely deploy their own software in virtually any environment.

Today, Apollo enables the rapid, secure delivery of our software and updates across our business, and also enables our customers to securely deploy their own software in virtually any environment.

Apollo provides a single control layer to coordinate ongoing delivery of new features, security updates, and platform configurations.

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As of December 31, 2023, we had 497 customers.

An overview of those customers and the ways in which they use our software follows below.

Our software is currently used across more than 60 industries around the world.

Of the $1.9 billion in revenue that we generated in 2022, 56% came from customers in the government segment, and 44% came from customers in the commercial segment.

Our business continues to have a global presence.

In 2022, we earned 61% of our revenue from customers in the United States, and 39% from those abroad.

The average revenue for our top twenty customers during the trailing twelve months ended December 31, 2022 was $49.4 million, and is up from 2021, when the average revenue from our top 20 customers during the trailing twelve months ended December 31, 2021 was $43.6 million, demonstrating our expanding relationships with existing customers.

Our Software at Work

Our software is in the hands of factory workers, soldiers, clinicians, prosecutors, investigators, claims adjusters, technicians, intelligence analysts, and social workers around the world.

It is used in a variety of applications including by utility operations analysts, automotive manufacturing workers, oil and gas technicians and operators, and pharmaceutical researchers in the United States;

Our software is currently used across approximately 80 industries around the world.

It is applied to a variety of use cases by users across various business functions and levels of organizations, including by utility operations analysts, automotive manufacturing workers, oil and gas technicians and operators, and pharmaceutical researchers in the United States;

supply-chain managers in South Korea;

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and special forces personnel and military officials in the United States and abroad.

Industries and Sectors

In addition to supporting individual institutions, our platforms have become central operating systems for entire industries and sectors.

Our work with Airbus S.A.S.

(“Airbus”), for example, was initially focused on the production of the A350 aircraft.

The deployment of our software soon grew into Skywise, our aviation platform that has become the central operating system of the airline industry.

Skywise connects more than 10,000 aircraft across a growing community of airlines, maintenance and repair organizations, authorities, and Airbus.

Decision makers at each of these institutions use Skywise to more efficiently design, manufacture, service, operate, and maintain their global fleets.

Our work with healthcare organizations across both the commercial and government sectors in the United States and globally has helped modernize public health information systems, including by facilitating pandemic management across U.S.

government agencies, integrating and harmonizing clinical trial data, and enabling proactive coordination across multi-threaded teams to effectively respond to real-time changes in patient demand and nursing supply.

Similarly, when it comes to our work with defense and intelligence agencies, our software is not only used by individual organizations but is also used to enable sharing of information and collaboration across agencies and countries.

This is made possible by our software’s access controls, which enable agencies to work on the same platform simultaneously and securely.

Of the $2.2 billion in revenue that we generated in 2023, 55% came from customers in the government segment, and 45% came from customers in the commercial segment.

Our business continues to have a global presence.

In 2023, we earned 62% of our revenue from customers in the United States, and 38% from those abroad.

The average revenue for our top twenty customers during the trailing twelve months ended December 31, 2023 was $54.6 million, and is up from 2022, when the average revenue from our top twenty customers during the trailing twelve months ended December 31, 2022 was $49.4 million, demonstrating our expanding relationships with existing customers.

Sales and Marketing

Our approach to sales and marketing is built around discussions with existing and prospective customers in order to understand the principal challenges our customers face and identify ways in which our software platforms can provide long-term value and results.

Beginning in 2023, we introduced AIP bootcamps to the initial stages of our customer acquisition process, which helped to accelerate these discussions and provide an opportunity for our customers to experience our platforms through their own use cases in days.

Customer Acquisition

Our customer acquisition strategy targets large-scale, hard-to-execute opportunities at large government and commercial institutions.

Our customer acquisition strategy generally targets large-scale, hard-to-execute opportunities at large government and commercial institutions.

The high installation costs, high failure risks, complexity of data environments, and the long sales cycles associated with these opportunities raise the barriers to entry for competition.

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The speed with which our platforms can be deployed has significantly expanded the range of potential customers with which we plan on partnering over the long term.

We anticipate that our reach among an increasingly broad set of customers, in both the commercial and government sectors, will accelerate moving forward.

Additionally, during 2023, we introduced AIP bootcamps, which allow us to deliver real workflows on actual customer data in days.

We anticipate that our reach among an increasingly broad set of customers, in both the commercial and government sectors, will accelerate moving forward, aided by our AIP bootcamps.

Our proximity to a variety of businesses and the industries in which they are operating has enhanced, and is expected to continue enhancing, our own product and business development efforts, as we continue expanding access to our platforms to the broadest possible set of customers.

We believe that, as these new partners grow, we will grow with them.

We have also made a number of investments in companies whose businesses rely on the ability of their organizations to manage and analyze data effectively at scale, though we do not currently anticipate entering into new investments to purchase, or commit to purchase, securities of special purpose acquisition companies.

Our proximity to these businesses and the industries in which they are operating has enhanced, and is expected to continue enhancing, our own product and business development efforts, as we continue expanding access to our platforms to the broadest possible set of customers.

Direct Sales Force

We have invested and continue to invest in an account-based sales force to identify and capture new customers and opportunities.

We believe that our decision to grow our sales force in recent years has resulted in multiple new customers, broadening and expanding our commercial customer base and relationships with leading government agencies around the world.

Sector and Industry Platforms

We have invested and may continue to invest in an account-based sales force to identify and capture new customers and opportunities.

We believe that our decision to build our sales force in recent years has resulted in multiple new customers, and the broadening and expansion of our commercial customer base and relationships with leading government agencies around the world.

Sector and Industry Operating Systems

In addition to supporting individual institutions, our platforms have become central operating systems for entire industries and sectors.

We are developing industry operating systems to help companies and government agencies manage operations across their entire organizations.

These operating systems allow our software to be distributed at scale to institutions within given industries.

For example, Skywise is our aviation platform that we have developed in partnership with Airbus.

Our approach with Airbus involves a collaborative go-to-market strategy to distribute the Foundry platform across the aviation industry.

The adoption of our software has been swift.

Since June 2017, Skywise has expanded from zero to more than one hundred airlines on the platform.

Each one is now an existing or potential customer.

We are working on similar partnerships in the insurance, healthcare, automotive, and government sectors, which we anticipate will have a significant impact on our business moving forward.

We have and are continuing to develop partnerships in the airline, insurance, healthcare, automotive, security and risk management, and government sectors, which we anticipate will have a significant impact on our business moving forward.

We continue to believe we are uniquely positioned to provide commercially available software to the U.S.

federal government.

Our government customers remain a meaningful and resilient source of revenue for our business.

We intend to capture an even greater share of U.S.

federal government spending on software systems, following our 2018 legal victory in federal court.

The ruling requires the government to consider commercially available products, such as our software, before attempting to build its own.

federal government spending on software systems.

See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Our Customers” for a discussion of the terms of our government contracts.

Channel Sales & Cloud Partnerships

We have entered into, and continue to explore the development of, channel sales partnerships for specific industries and sectors by partnering closely with leading providers of public, private, and hybrid cloud services, which have relationships with essentially every major enterprise in the world and have large, existing sales forces.

This channel emerged as an extension of the large computing requirements for our platforms and the migration towards the cloud as the hosting environment of choice for many customers.

We have entered into, and continue to explore the development of, partnerships for specific industries and sectors by partnering closely with leading providers of public, private, and hybrid cloud services, which have relationships with essentially every major enterprise in the world and have large, existing sales forces.

These cloud partnerships emerged as an extension of the large computing requirements for our platforms and the migration towards the cloud as the hosting environment of choice for many customers.

The existing footprint of these providers provides us with access to their large customer base and expands our distribution capabilities.

We have also continued to explore the establishment of channel sales relationships and similar alliances with public and private organizations, opening a path for us to partner with varying providers, including smaller technology providers.

Joint Ventures & New Business Partnerships

We intend to continue to form joint ventures and new business partnerships, where we believe specific industries or sectors require a partner and additional investment in order to realize the full potential of our platforms.

For example, in December 2023, we, through Palantir Technologies Japan KK, entered into a strategic global partnership with Fujitsu Limited through which the parties will incorporate the capabilities of Foundry and AIP as a key element in the data infrastructure for Fujitsu Uvance, a portfolio of global solutions that address business challenges and solve societal issues.

Account Growth

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Our research and development function is responsible for the design, development, testing, validation, and refinement of our platforms, and embedding with our users allows us to identify research and development opportunities for our platforms or new products.

We focus on innovating and developing new features and modules for our existing platforms, or new products, and further enhancing the functionality, reliability, usability, and performance of our platforms.

By leveraging the tens of thousands of front-line hours across various industries and using emerging technologies, we can better anticipate customer needs and bring new use cases and new applications of existing services to our existing and potential customers.

We focus on innovating and developing new features and modules for our new and existing platforms, including AIP, or new products, and further enhancing the functionality, reliability, usability, and performance of our platforms.

Our AIP bootcamps have and may continue to provide a forum to experience these new use cases and applications.

Many of our current research and development efforts are focused on deploying software, models, and other critical assets at the edge.

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We are not in the business of collecting, mining, or selling data.

We build software platforms that enable our customers to integrate their own data — data that they already have.

The same technology that makes Palantir so analytically powerful — its ability to construct a model of the real world from countless data points — is what allows our customers to monitor and control access to that data and its use.

As we build and implement technology to answer questions of increasing significance and complexity, we follow a set of principles that help us ensure we are doing so responsibly.

We build software platforms that enable our customers to integrate their own data — data to which they already have access.

The same technology that makes Palantir’s software platforms so analytically powerful — the ability to construct a model of the real world from countless data points — is what allows our customers to monitor and control access to that data and its use.

As we build and implement technology to answer questions of increasing significance and complexity, we follow a set of principles that help us ensure we are doing so responsibly, including the consideration of AI ethics and best practices.

• Systems should incorporate principles of “privacy by design.” Our goal has always been to eliminate the perceived trade-offs between privacy and utility.

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Customer Impact

Some examples of the ways in which our software facilitates data protection at our customers follow below.

• Our platforms provide a secure, privacy-protective cloud-based data enclave to centralize data on COVID-19 for collaborative clinical research.

Some examples of the ways in which our software facilitates data protection for our customers follow below.

• Our platforms serve as the central analytics system of a major law enforcement agency in northern Europe.

Scandinavia has long been at the forefront of data protection, and our software facilitates effective implementation of its rigorous privacy policies.

• A financial institution required strong cryptographic guarantees of access control and selective revelation for sensitive client information on a need-to-know basis.

Palantir Foundry’s integrated obfuscation tool for cryptographic processes provided both IT and data governance teams with the necessary functionality and security assurances to establish privacy and governance safeguards in operational workflows carried out by non-technical users.

This service, in conjunction with system-wide advanced encryption at both storage and network levels, helps to ensure continuous security guarantees for data throughout the full data use and management lifecycle.

• A customer in Europe needed to adhere to rigorous purpose specification and proportionality requirements during sensitive analytical workflows.

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Those controls were further supported by auditing capabilities to ensure that data processing satisfied legitimate purposes under the relevant regulations.

• A multinational insurer sought to build and apply machine-learning models to surface fraudulent insurance claims, while ensuring that processing was sufficiently transparent, interpretable, and accountable to decision makers and oversight authorities.

We helped to configure and implement a number of supporting privacy-enhancing features, including pseudonymization processes to minimize data exposure, rigorous documentation of machine learning model features and parameters, and auditing tools for users and regulators.

• Our platforms provide a secure, privacy-protective cloud-based data enclave which centralizes data on COVID-19 for collaborative clinical research.

We employ a team of engineers, lawyers, and social scientists to ensure that our company remains a leader in the field when it comes to privacy practices and software development.

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Privacy-Enhancing Technologies

• Access Controls.

Our platforms provide highly granular access restrictions with subtle and flexible access permissions, such as temporal and purpose-based limitations.

This allows for precision data management — even, at times, across multiple, independent databases — that closely aligns access with customer specifications.

For example, a user sees only the specific information necessary for a defined task (e.g., investigating a specific crime or determining whether to extend credit to an individual).

• Sensitive Data Inference.

Institutions managing sprawling collections of data often struggle to keep track of which data assets include sensitive fields such as personal identifiers or health records.

Our software provides inference tools to assist institutions in detecting the presence of such data so that they can flag and handle the data appropriately.

• Federation.

Federation allows users to search and analyze data from multiple, independent databases without duplicating and centralizing data in a single place.

Our platforms provide intelligent query interfaces that reduce the

complexity of federation so that users can access the information they need without directly integrating the source into the platform.

• Audit Logging and Analysis.

User actions — including searches, data use justifications, access requests, analyst collaborations, and report generation — within a system must be recorded to ensure that authorized oversight entities, both internal to an institution and external, can confirm appropriate and lawful data usage.

Our platforms maintain audit logs and make them accessible to (and readable by) authorized users to help them both retroactively investigate and proactively identify misuse of systems.

• Data Integrity and Redress.

Our platforms track the provenance and version history of all data in the system so that users can assess the reliability of the data and review and correct inaccuracies.

Providing users with well-curated, up-to-date data reduces the risks of erroneous conclusions.

• Granular Access Controls and Dynamic Data Minimization.

Our platforms provide granular access restrictions with flexible permissions frameworks, such as role-, temporal-, and purpose-based access controls.

These access control frameworks enable users to see only the specific information necessary for a defined task and only for the duration needed to complete it.

Beyond access controls, organizations can also apply dynamic data minimization procedures such as pseudonymization, obfuscation, and encryption to adhere to compliance obligations while considering the context of specific workflows.

• Sensitive Data Discovery and Management.

Palantir’s software platforms enable users to securely integrate and analyze sensitive data.

To ensure robust governance and to enforce data protection and compliance policies, our platforms also come with tools to detect and manage the use of such sensitive data.

• Oversight and Auditability.

Overseeing sensitive user actions within a system is critical to ensure that data is used appropriately and in compliance with applicable policies and regulations.

Palantir’s software platforms enable our customers’ internal governance, compliance, or audit teams to easily understand the nature of such sensitive user actions.

Our platforms also maintain audit logs and make them accessible to authorized users, allowing them to both investigate potential past misuse of systems and flag suspicious activity proactively.

• Data Retention and Deletion.

Institutions must be able to implement flexible and auditable retention policies and verify that data flagged for deletion has truly been purged from the system.

Our platforms enable institutions to schedule and manage the removal of old or irrelevant information as required by data management best practices or applicable regulations.

System administrators must be able to implement flexible and auditable retention policies and verify that data scheduled for deletion has truly been removed from the system.

Our platforms allow organizations to ensure that out-of-date, expired, or irrelevant information is removed efficiently in order to improve data protection, governance, and compliance in accordance with applicable regulations.

• Data Provenance.

Providing users with well-curated, up-to-date data is critical for building trust in an organization’s data foundation.

Our platforms automatically maintain complete records of both data provenance and all transformations applied to data in the system, allowing users to assess the reliability of the data and facilitate the review and correction of inaccuracies when necessary.

We are fundamentally competing with the internal software development efforts of our potential customers.

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We further control the use of our proprietary technology and intellectual property rights through provisions in our agreements with customers.

We generally experience seasonality in the timing of recognition of revenue as a result of the timing of the execution of our contracts and, to a lesser extent, the existence of certain acceptance criteria, as we have historically executed many of our contracts in the third and fourth quarters due to the fiscal year ends and procurement cycles of our customers and at times we may start work prior to finalizing such contracts.

We generally experience seasonality in the timing of recognition of revenue as a result of the timing of the execution of our contracts as we have historically executed many of our contracts in the third and fourth quarters due to the fiscal year ends and procurement cycles of our customers and at times we may start work prior to finalizing such contracts.

See “Risk Factors—Seasonality may cause fluctuations in our results of operations and financial position.”

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Our employees are critical to the success of our business.

As of December 31, 2022, we had 3,838 full-time employees, including 1,436 employees employed outside of the United States.

As of December 31, 2023, we had 3,735 full-time employees, 35% of whom are employed outside of the United States.

We also engage part-time employees, independent contractors, and third-party personnel to supplement our workforce.

Other than our employees in France, who are represented by a works council, none of our employees is represented by a labor union.

Other than in France, where we recognize a works council, we do not recognize a union or works council in respect of employees in other jurisdictions.

We have not experienced any work stoppages due to employee disputes, and we believe that our employee relations are strong.

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employee-led resource groups that celebrate unique perspectives and backgrounds and help guide our Diversity, Equity & Inclusion (“DEI”) business initiatives.

We also conduct regular company-wide surveys to assess the sentiment toward our values and culture, and our employees’ well-being and overall health.

We also conduct surveys to assess the sentiment toward our values and culture, and our employees’ well-being and overall health.

These surveys allow Palantir to get actionable feedback and drive awareness, discussion, and change.

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Available Information

Our website is https://www.palantir.com, our investor relations website is https://investors.palantir.com, our LinkedIn account is @Palantir Technologies and our Twitter account is @PalantirTech.

We have used, and intend to continue to use, our website, investor relations website, LinkedIn, and Twitter accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

Our website is https://www.palantir.com, our investor relations website is https://investors.palantir.com, our LinkedIn account is @Palantir Technologies and our X (formerly known as Twitter) account is @PalantirTech.

We have used, and intend to continue to use, our website, investor relations website, LinkedIn, and X (formerly known as Twitter) accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

The following filings are available for download free of charge through our investor relations website after we file them with the Securities and Exchange Commission (“SEC”):

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Additionally, we provide notifications of news or announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs as part of our investor relations website.

Further corporate governance information, including our corporate governance guidelines, code of business conduct and ethics, and committee charters is also available on our investor relations website under the heading “Governance.” The contents of the websites provided above are not intended to be incorporated by reference into this Annual Report on Form 10-K

or in any other report or document we file with the SEC.

Further, our references to the URLs for these websites are intended to be inactive textual references only.

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 1. Business