What changed in this filing

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Item 1A. Risk Factors

2021-02-26 compared with 2020-02-28 · 288 added, 294 removed, 136 unchanged (81% of the section changed)

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The risks and uncertainties described below are not the only ones we face.

The volatility of our stock price could adversely affect an investment in our common stock

The market price of our common stock has been, and may continue to be, highly volatile.

During fiscal 2019, our stock price ranged from $30.93 to $45.94.

We believe that a variety of factors could cause the price of our common stock to fluctuate, perhaps substantially, including:

general conditions in the worldwide economy,

quarterly fluctuations in our actual or anticipated operating results and order levels,

announcements and reports of developments related to our business, our major customers and partners, and the industries in which we compete or the industries in which our customers compete,

security breaches,

acquisition announcements,

new products or product enhancements announced or introduced by us or our competitors,

disputes with respect to developments in patents or other intellectual property rights,

developments in our relationships with our partners, customers, and suppliers,

the imposition of tariffs or other trade barriers,

political, economic or social uncertainty, and

acts of terrorism.

In addition, the stock market in general and the markets for shares of “high-tech” companies in particular have frequently experienced extreme price fluctuations, which have often been unrelated to the operating performance of affected companies.

Any such fluctuations in the future could adversely affect the market price of our common stock.

Risks related to our business

Our financial condition and results of operations have been and may continue to be adversely affected by the COVID-19 pandemic

Our overall performance depends upon domestic and worldwide economic and political conditions.

The global spread of COVID-19 has created volatility, uncertainty, and economic disruption.

The pandemic has caused and may continue to cause a slowdown in worldwide economic activity, decreased demand for products and services, and disruptions to global supply chains and financial markets.

These effects have resulted and may result in additional lost or delayed revenue to us and have disrupted our business operations as we have transitioned to remote working environments, restricted employee travel, and significantly limited access to, and imposed social distancing requirements within, our facilities including research and development facilities.

Our dealer network, suppliers, and contract manufacturers have been similarly impacted by the COVID-19 pandemic.

In the event of continuing and significant disruptions, there is no guarantee that we would be able to find alternative sources of distribution, supply, or manufacturing, which could delay our ability to market, source, manufacture, and ship our products.

These distribution and supply chain effects may have an adverse effect on our ability to meet customer demand and could result in an increase in our costs of production and distribution.

The extent to which COVID-19 impacts our business, operations, and financial results will depend on numerous evolving factors that we are not able to accurately predict, including:

• the duration and scope of the pandemic, the availability of and timing for distributing vaccines and the efficacy of vaccines, including with respect to new strains of the virus, and the continuing economic impacts of the pandemic;

• governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic;

• the effect on our customers and customer demand for and ability to pay for our products and services;

• restrictions or disruptions to transportation, including reduced availability of ground or air transport;

• disruption of the supply chain for our products;

• our ability to comply with financial covenants, including maintaining required leverage ratios, which could result in debt becoming due and payable prior to its stated maturity;

• changes in our effective tax rate due to effects of COVID-19 on our geographic mix of earnings.

In addition, the impact of COVID-19 on macroeconomic conditions may impact the proper functioning of financial and capital markets, foreign currency exchange rates, commodity and energy prices, and interest rates.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession that has occurred or may occur in the future.

In regions that fail to fully contain COVID-19 or suffer a COVID-19 relapse, those markets may not recover as quickly or at all, which could have a material adverse effect on our business, financial condition, and results of operations.

We operate globally and are subject to significant risks in many jurisdictions

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• uncertain economic and political conditions in countries where we do business;

local business and cultural factors that differ from our normal standards and practices, and

increased uncertainty regarding social, political, immigration, and trade policies in the U.S.

and abroad, such as recent U.S.

government action and policies, and the continuing uncertainty regarding the United Kingdom's impending withdrawal from the European Union ("Brexit").

• local business and cultural factors that differ from our normal standards and practices;

• differing regional responses and restrictions related to global pandemics, like the COVID-19 pandemic;

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

and abroad, including the impact of the United Kingdom’s recent withdrawal from the European Union (“Brexit”).

There is inherent risk that political, diplomatic, or military events could result in trade disruptions, including tariffs, trade embargoes, export restrictions, and other trade barriers.

A significant trade disruption or the establishment or increase of any trade barrier in any area where we do business, including the Asia Pacific region, could increase the cost of our products, which could adversely impact the margin that we earn on sales;

make our products more expensive for customers or create uncertainty around demand for certain types of products, which could make our products less competitive and reduce customer demand;

or otherwise have a materially adverse impact on our future revenue and profits, our and our customers’ businesses, and our results of operations.

response to U.S.

tariffs, other countries may adopt tariffs and other trade barriers that could limit our ability to competitively offer our products and services.

Recently, the U.S.

government imposed tariffs on certain products imported into the U.S., and the Chinese government imposed tariffs on certain products imported into China.

Tariffs may be increased in the future.

Given the current U.S.

political climate and recent actions of the administration, there is significant uncertainty about the trade policies, treaties, government regulations, and tariffs that could apply to trade between the U.S.

and China, as well as other nations, in the future.

In addition, if there is significant deterioration in the global economy, the economies of the countries or regions where our customers are located or do business, or the industries that we or our customers serve, the demand for our products and services would likely decrease and our results of operations, financial position, and cash flows could be materially and adversely affected.

A significant trade disruption or the establishment or increase of any trade barrier in any area where we do business could increase the cost of our products, which could adversely impact the margin that we earn on sales, make our products more expensive for customers or create uncertainty around demand for certain types of products, which could make our products less competitive and reduce customer demand.

Given the change in U.S.

presidential administration and the current political climate, there is uncertainty about the trade policies, treaties, government regulations, and tariffs that could apply to trade.

In addition, if there is continuing deterioration in the global economy, the economies of the countries or regions where our customers are located or do business, or the industries that we or our customers serve, the demand for our products and services would likely decrease.

In addition, government or customer efforts, attitudes, laws or policies may lead to non-U.S.

customers favoring domestic suppliers that could compete with or replace our products, which would also have an adverse effect on our business.

Changes in economic conditions and political uncertainty surrounding international trade also make it difficult to make financial forecasts, which could cause us to miss our financial guidance and adversely affect our stock price.

We face risks inherent in conducting business internationally, including compliance with international and U.S.

laws and regulations that apply to our international operations.

These laws and regulations include data privacy requirements, labor relations laws, tax laws, anti-competition regulations, import and trade restrictions, export control laws, and laws that prohibit corrupt payments to governmental officials or certain payments or remunerations to customers, including the U.S.

Foreign Corrupt Practices Act ("FCPA"), the U.K.

Bribery Act, or other anti-corruption laws that have recently been the subject of a substantial increase in global enforcement.

Many of our products are subject to U.S.

export law restrictions that limit the destinations and types of customers to which our products may be sold or that require an export license in connection with sales outside the United States.

Given the high level of complexity of these laws, there is a risk that some provisions may be inadvertently or intentionally breached, for example through fraudulent or negligent behavior of individual employees, our failure to comply with certain formal documentation requirements or otherwise.

Also, we may be held liable for actions taken by our local dealers and partners.

Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, and prohibitions or conditions on the conduct of our business.

Any such violations could include prohibitions or conditions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business, and our operating results.

We operate in many parts of the world that have experienced significant governmental corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices.

We may be subject to competitive disadvantages to the extent that our competitors are able to secure business, licenses, or other preferential treatment by making payments to government officials and others in positions of influence or through other methods that relevant law and regulations prohibit us from using.

Our success depends, in part, on our ability to anticipate these risks and manage these difficulties.

Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations, and various U.S.

federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy and data security-related matters.

For example, the European Union General Data Protection Regulation became effective in May 2018 and is wide-ranging in scope.

In order to be compliant with the new EU requirements, we must continue to invest resources necessary to implement and manage policy changes across our business units and services relating to how we collect and use personal data relating to customers, employees, and vendors.

Failure to comply may lead to sizable fines.

In parallel, with the advent of the EU-U.S.

Privacy Shield (the new framework agreement between the U.S.

Department of Commerce and the European Commission for transferring personal data from the European Union to the United States) and other national requirements, we expect that the international transfer of personal data will present ongoing compliance challenges and complicate our business transactions.

Countries outside the EU are considering or have passed legislation that requires local storage and processing of data, which could increase the cost and complexity of delivering our services.

We may be affected by fluctuations in currency exchange rates.

We are potentially exposed to adverse as well as beneficial movements in currency exchange rates.

Although most of our sales occur in U.S.

dollars, expenses may be paid in local currencies.

An increase in the value of the dollar could increase the real cost to our customers of our products in those markets outside the U.S.

where we sell in dollars, and a weakened dollar could increase the cost of expenses such as payroll, utilities, tax, and marketing expenses, as well as overseas capital expenditures.

We also conduct certain investing and financing activities in local currencies.

Our hedging programs reduce, but do not eliminate, the impact of currency exchange rate movements;

therefore, changes in exchange rates could harm our results of operations and financial condition.

Catastrophic events or geopolitical conditions could disrupt our operations.

Acts of war, acts of terrorism or civil unrest, natural disasters and other catastrophic events, especially any events that impact our larger markets or GNSS signals or systems, could have a material adverse impact on our business, operating results, and financial condition.

The threat of terrorism and war and heightened security and military activity in response to this threat, or any future acts of terrorism or hostilities, may involve a redeployment of the satellites used in GNSS or interruptions of the system.

Civil unrest, local conflicts, or other political instability

may adversely impact regional economies, cause work stoppages, or result in limitations on business transactions with the affected foreign jurisdictions.

To the extent that such interruptions result in delays or the cancellation of orders, disruption of the manufacturing or shipment of our products, or reduced demand for our products, these interruptions could have a material adverse effect on our business, results of operations, and financial condition.

Public health crises and epidemics, such as the novel coronavirus outbreak that is significantly affecting China, could impact our international operations and sales.

Our results of operations could be adversely affected to the extent that the novel coronavirus or any other epidemic harms the Chinese economy or other significant markets where we do business.

Contagious disease epidemics or global pandemics could significantly impact our international supply chain and result in component and product shortages and general disruptions to the economy.

Such outbreaks could also result in mass quarantines, business closures, and significantly impact our suppliers, customers, and commercial partners in affected areas, which may materially and adversely affect our business, financial condition, and results of operations.

Changes in economic conditions and political uncertainty surrounding international trade also make it difficult to make financial forecasts.

Any of these factors or any combination of these factors could cause us to miss our financial projections and adversely affect our business, financial condition, and results of operations.

Engaging in international business inherently involves a number of other difficulties and risks.

These risks include:

Risks associated with engaging in international business include:

• longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;

difficulties and costs of staffing and managing foreign operations,

• difficulties and costs of staffing and managing international operations;

• differing local customer product preferences and requirements than our U.S.

• difficulties protecting or procuring intellectual property rights.

These factors or any combination of these factors may adversely affect our revenue or our overall financial performance.

Investing in and integrating new acquisitions could be costly, place a significant strain on our management systems and resources, or may fail to deliver the expected return on investment, which could negatively impact our operating results

These factors or any combination of these factors could adversely affect our business, financial condition, and results of operations.

If we are unable to effectively manage our increasingly diverse and complex businesses and operations, our ability to generate growth and revenue from new or existing customers may be adversely affected

Because our operations are geographically diverse and increasingly complex, our personnel resources and infrastructure could become strained, and our reputation in the market and our ability to successfully manage and grow our business may be adversely affected.

The size, complexity, and diverse nature of our business and the expansion of our product lines and customer base have placed increased demands on our management and operations, and future growth may place additional strains on our resources in the future.

Our ability to effectively compete and to manage our planned future growth will depend on, among other things, the following:

• maintaining continuity in our senior management and key personnel;

• increasing the productivity of our existing employees;

• attracting, retaining, training, and motivating our employees, particularly our technical and management personnel;

• deploying our solutions using third-party information systems, which may require changes to our applications, documentation, and operational processes;

• improving our operational, financial, and management controls;

• improving our information reporting systems and procedures.

We have increasingly diversified the nature of our businesses both organically and by acquisition.

As a result, an increasing amount of our business involves business models that require managerial techniques and skill sets that are different from those required to manage our historical core businesses.

Over the last few years, we have focused more on subscription models.

As a result, we expect to derive an increasing portion of our revenue in the future from subscriptions.

The subscription models provide our customers the right to access certain of our software in a hosted environment or use downloaded software for a specified subscription period.

Market acceptance of such offerings is affected by a variety of factors, including but not limited to security, reliability, performance, current license terms, customer preference and industry adoption, social/community engagement, customer concerns with entrusting a third party to store and manage their data, public concerns regarding privacy and the enactment of restrictive laws or regulations.

We may be unable to successfully support and host our subscription offerings in light of the foregoing risks and uncertainties.

These factors or a combination of these factors could have an adverse impact on our business, financial condition, and results of operations.

Changes in our software and subscription businesses may adversely impact our operations and financial results

An increasing portion of our revenue is generated through software maintenance and subscription revenue, which includes SaaS and new subscription services for integrated solutions.

Our customers have no obligation to renew their agreements for our software maintenance or subscription services after the expiration of their initial contract period, which typically ranges from one to three years.

Our customer acquisition and renewal rates may decline or fluctuate as a result of a number of factors, including overall economic conditions, the health of their businesses, competitive offerings, and customer dissatisfaction with our services.

If customers do not renew their contracts for our products, our maintenance and subscription revenue will decline, and our financial results will suffer.

Any reduction in the number of licenses that we sell, even if our customer acquisition rates do not change, will have an adverse impact on our future maintenance revenue growth.

If any of our assumptions about expenses, revenue or revenue recognition principles from these initiatives proves incorrect, or our attempts to improve efficiency are not successful, our actual results may vary materially from those anticipated, our business, financial condition, and results of operations could be adversely impacted.

We continually re-evaluate our software licensing programs and subscription programs, including specific license models, delivery methods, and terms and conditions.

Changes to our licensing programs and subscription programs, including the introduction of new subscription services for integrated solutions that include hardware, the timing of the release of enhancements, upgrades, maintenance releases, the term of the contract, discounts, promotions, and other factors could impact the timing of the recognition of revenue for our products, and could adversely affect our operating results and financial condition.

We may implement different licensing models that require us to recognize licensing fees over a longer period.

Over the last few years, we have increasingly offered additional products through a SaaS model.

SaaS revenue is currently recognized ratably over the subscription period.

Any significant increase in the percentage of our business generated from a subscription model could increase the amount of revenue to be recognized over time as opposed to upfront, which would delay revenue recognition and have an adverse impact on our operating results in a quarterly period.

Due to these complexities, we may not be able to accurately forecast our revenue, which could cause us to miss our earnings estimates or revenue projections and adversely impact our stock price.

We may not be able to enter into or maintain important alliances and distribution relationships

We believe that in certain business opportunities, our success will depend on our ability to form and maintain alliances with industry participants, such as Caterpillar, Nikon, Hilti, and CNH Global.

Our failure to form and maintain such alliances, or the preemption or disruption of such alliances by actions of competitors, could adversely affect our ability to sell our products to customers.

Our relationships with substantial industry participants such as Caterpillar and CNH Global are complex and multifaceted and are likely to evolve over time based upon the changing business needs and objectives of the parties.

Evolution of our respective business strategies and diversification of product portfolios may lead to increased competition with our strategic allies, placing additional pressure on these relationships.

Since these strategic relationships contribute to significant ongoing business in certain of our important markets, changes in these relationships could adversely affect our sales.

In addition, we utilize dealer networks, including those affiliated with some of our strategic allies such as Caterpillar and CNH Global to market, sell, and service many of our products.

Changes in our product mix, including increasing provision of subscription services for integrated solutions tailored to the needs of specific vertical markets, impose new demands on our distribution channels and may require significant changes in the skills and expertise required to successfully distribute our products and services, or the creation of new distribution channels.

Recruiting and retaining qualified channel partners and training them in the use and the selling of our technology and product offerings requires significant time and resources.

and training, and those processes and procedures may become increasingly complex and difficult to manage.

The time and expense required for sales and marketing organizations of our channel partners to become familiar with our product offerings, including our new product developments, and newer types of offering, such as subscription programs for integrated solutions that include hardware, software maintenance, and other recurring services, may make it more difficult to introduce those products to end-users and delay end-user adoption, which could result in lower revenue.

Disruption of dealer coverage within specific geographic or end-user markets could cause difficulties in marketing, selling, or servicing our products and have an adverse effect on our business, financial condition, and results of operations.

Moreover, dealers who carry products that compete with our products may focus their inventory purchases and sales efforts on goods provided by competitors due to industry demand or profitability.

Such sourcing decisions can adversely impact our sales, financial condition, and results of operations.

We typically acquire a number of businesses each year and intend to continue to acquire other businesses.

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• inability to accurately forecast the performance of recently acquired businesses, resulting in unforeseen adverse effects on our operating results;

potential liabilities, including liabilities resulting from known or unknown compliance or legal issues, associated with an acquired business, and

negative accounting impact to our results of operations because of purchase accounting treatment and the business or accounting practices of acquired companies.

• potential liabilities, including liabilities resulting from known or unknown compliance or legal issues, associated with an acquired business;

• adverse accounting impact to our results of operations because of purchase accounting treatment and the business or accounting practices of acquired companies.

Any such effects from acquisitions could be costly and place a significant strain on our management systems and resources.

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Changes in business conditions or in the prospects or results of operations of the acquired business could require negative adjustments to the valuation of these assets resulting in write-offs that would adversely affect our results.

If we divest a business and the proceeds are less than the net book value at the time, we would be forced to write off the difference.

If we divest a business and the proceeds are less than the net book value at the time, we would have to write off the difference.

In addition, changes in the operating results or the valuation of companies in which we have investments may have a direct impact on our financial statements or could result in our having to write down the value of such investment.

Even if successfully negotiated and closed, acquisitions may not yield expected synergies, may not advance our business strategy as expected, may fall short of expected return-on-investment targets, or may not prove successful or effective for our business.

Companies that we acquire may operate with different cost and margin structures, which could further cause fluctuations in our operating results and adversely affect our operating margins.

Companies that we acquire may operate with different cost and margin structures, which could further cause fluctuations in our operating results and adversely affect our business, financial condition, and results of operations.

We face substantial competition in our markets, which could decrease our revenue and growth rates or impair our financial condition and results of operations

Our markets are highly competitive, and we expect that both direct and indirect competition will increase in the future.

Our overall competitive position depends on a number of factors including the price, quality and performance of our products, the effectiveness of our distribution channel and direct sales force, the level of customer service, the development of new technology, and our ability to participate in emerging markets.

Within each of our markets, we encounter direct competition from other GNSS, software, optical, and laser suppliers, and competition may intensify from various larger U.S.

competitors and new market entrants, particularly from markets such as China.

Our products, which commonly use GNSS for basic location information, may be subject to competition from alternative location technologies such as simultaneous location and mapping technology.

In our software and subscription services businesses, we face competition from a group of large, well-established companies, particularly in the areas of design, enterprise resource planning (ERP), collaboration and project management solutions.

Our integrated hardware and software products may be subject to increasing competition from mass

market devices such as smartphones and tablets used in conjunction with relatively inexpensive applications, which have not been heavily used for commercial applications in the past.

These developments may require us to rapidly adapt to technological and customer preference changes that we have not previously been exposed to, including those related to cloud computing, mobile devices, and new computing platforms.

Such competition has in the past resulted, and in the future may result, in price reductions, reduced margins or loss of market share, any of which could decrease our revenue and growth rates or impair our operating results and financial condition.

We believe that our ability to compete successfully in the future against existing and additional competitors will depend largely on our ability to execute our strategy to provide products with significantly differentiated features compared to currently available products.

We may not be able to implement this strategy successfully, and our products may not be competitive with other technologies or products that may be developed by our competitors, many of whom have significantly greater financial, technical, manufacturing, marketing, sales, and other resources than we do.

Risks related to our technology and products

Our products are highly technical and may contain undetected errors, product defects, security vulnerabilities, or software errors

Our products, including our software products, are highly technical and complex and, when deployed, may contain errors, defects, or security vulnerabilities.

We must develop our products quickly to keep pace with the rapidly changing market, and we have a history of frequently introducing new products.

Products and services as sophisticated as ours could contain undetected errors or defects, especially when first introduced or when new models or versions are released.

Such occurrences could result in damage to our reputation, lost revenue, diverted development resources, increased customer service and support costs, warranty claims, and litigation.

We warrant that our products will be free of defect for various periods of time, depending on the product.

In addition, certain of our contracts include epidemic failure clauses.

If invoked, these clauses may entitle the customer to return or obtain credits for products and inventory, or to cancel outstanding purchase orders even if the products themselves are not defective.

Errors, viruses, or bugs may be present in software or hardware that we acquire or license from third parties and incorporate into our products or in third party software or hardware that our customers use in conjunction with our products.

Our customers’ proprietary software and network firewall protections may corrupt data from our products and create difficulties in implementing our solutions.

Changes to third party software or hardware that our customers use in conjunction with our software could also render our applications inoperable.

Any errors, defects, or security vulnerabilities in our products or any defects in, or compatibility issues with, any third-party hardware or software or customers’ network environments discovered after commercial release could result in loss of revenue or delay in revenue recognition, loss of customers, theft of trade secrets, data or intellectual property and increased service and warranty cost, any of which could adversely affect our business, financial condition, and results of operations.

Undiscovered vulnerabilities in our products alone or in combination with third party hardware or software could expose them to hackers or other unscrupulous third parties who develop and deploy viruses, and other malicious software programs that could attack our products.

Actual or perceived security vulnerabilities in our products could harm our reputation and lead some customers to return products, to reduce or delay future purchases, or use competitive products.

Our internal and customer-facing systems, and systems of third parties we rely upon, may be subject to cybersecurity breaches, disruptions, or delays

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Computer hackers, foreign governments, or cyber terrorists may attempt to or succeed in penetrating our network security and our website.

The recent discovery of wide-scale cybersecurity intrusions into U.S.

government and private company computer networks by alleged Russian state actors underscores the ongoing threat posed by sophisticated and foreign state-sponsored attacks.

Unauthorized access to our proprietary business information or customer data may be obtained through break-ins, sabotage, breach of our secure network by an unauthorized party, computer viruses, computer denial-of-service attacks, employee theft or misuse, breach of the security of the networks of our third-party providers, or other misconduct.

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We have experienced security breaches in the past, and despite our efforts to maintain the security and integrity of our systems, it is impossible to eliminate this risk.

For example, in late 2015 and early 2016, we were the subject of an attack by hackers operating in China.

This incident resulted in the theft of proprietary and confidential data related to our GPS technology but has not had a meaningful impact on our business.

Because the techniques used by computer hackers who may attempt to penetrate and sabotage our network security or our website change frequently, they may take advantage of weaknesses in third-party technology or standards of which we are unaware or that we do not control and may not be recognized until long after they have been launched against a target.

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Efforts to prevent hackers from disrupting our service or otherwise accessing our systems are expensive to develop, implement, and maintain.

Such efforts require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated and may limit the functionality of, or otherwise negatively impact our service offering and systems.

A cybersecurity incident affecting our systems may also result in theft of our intellectual property, proprietary data, or trade secrets, which would compromise our competitive position, reputation, and operating results.

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Any disruptions or unexpected incompatibilities in our information systems and those of the third parties upon whom we rely could have a significant impact on our business.

An increasing portion of our revenue comes from SaaS solutions and other hosted services in which we store, retrieve, communicate, and manage data which is critical to our customers’ business systems.

An increasing portion of our revenue comes from SaaS solutions and other hosted services in which we store, retrieve, communicate, and manage data that is critical to our customers’ business systems.

Disruption of our systems that support these services and solutions could cause disruptions in our customers’ systems and in the businesses that rely on these systems.

Any such disruptions could harm our reputation, create liabilities to our customers, hurt demand for our services and solutions, and negatively impact our revenue and profitability.

We are subject to evolving privacy laws in the United States and other jurisdiction that are subject to potentially differing interpretations and which could adversely impact our business and require that we incur substantial costs and expenses

Existing privacy-related laws and regulations in the United States and other countries are evolving and are subject to potentially differing interpretations, and various U.S.

federal and state or other international legislative and regulatory bodies may expand or enact laws regarding privacy and data security-related matters.

For example, the European Union General Data Protection Regulation (“GDPR”) became effective in May 2018 and is wide-ranging in scope.

In order to be compliant with the EU requirements, we must continue to invest resources necessary to implement and manage policy changes across our business units

and services relating to how we collect and use personal data relating to customers, employees, and vendors.

Failure to comply may lead to sizable fines.

Brexit could also lead to further legislative and regulatory changes with regard to personal data.

The United Kingdom Data Protection Act that substantially implements the GDPR became law in May 2018.

It remains unclear, however, how United Kingdom data protection laws or regulations will develop in the medium to longer term and how data transfers to and from the United Kingdom will be regulated at the time that Brexit is effectuated and implemented.

In parallel, with the advent of the EU-U.S.

Privacy Shield (the new framework agreement between the U.S.

Countries outside the EU are considering or have passed legislation that requires local storage and processing of data, which could increase the cost and complexity of delivering our services.

In addition, in June 2018, California enacted the California Consumer Privacy Act (the “CCPA”), which took effect in January 2020.

The CCPA will, among other things, give California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.

The CCPA was amended in September 2018, and further modifications may be made to this law before it takes effect.

Additionally, in October 2019, the California Department of Justice published a notice of proposed rulemaking action with respect to draft regulations to implement the CCPA.

We cannot yet predict the impact of the CCPA on our business or operations, but it may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

We may not be able to enter into or maintain important alliances and distribution relationships

We believe that in certain business opportunities our success will depend on our ability to form and maintain alliances with industry participants, such as Caterpillar, Nikon, Hilti, and CNH Global.

Our failure to form and maintain such alliances, or the preemption or disruption of such alliances by actions of competitors, could adversely affect our ability to sell our products to customers.

Our relationships with substantial industry participants such as Caterpillar and CNH are complex and multifaceted and are likely to evolve over time based upon the changing business needs and objectives of the parties.

Since these strategic relationships contribute to significant ongoing business in certain of our important markets, changes in these relationships could adversely affect our sales and revenue.

In addition, we utilize dealer networks, including those affiliated with some of our strategic allies such as Caterpillar and CNH, to market, sell, and service many of our products.

Changes in our product mix, including increasing provision of software and bundled solutions tailored to the needs of specific vertical markets, impose new demands on our distribution channels and may require significant changes in the skills and expertise required to successfully distribute our products and services, or the creation of new distribution channels.

Recruiting and retaining qualified channel partners and training them in the use and the selling of our technology and product offerings requires significant time and resources.

In order to develop and expand our distribution channels, we must continue to expand and improve our processes and procedures that support our distribution channels, including our investment in systems and training, and those processes and procedures may become increasingly complex and difficult to manage.

The time and expense required for sales and marketing organizations of our channel partners to become familiar with our product offerings, including our new product developments, and newer types of offering such as software and services, may make it more difficult to introduce those products to end-users and delay end-user adoption, which could result in lower revenue.