What changed in this filing

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Item 1A. Risk Factors

2022-02-24 compared with 2021-02-25 · 49 added, 142 removed, 487 unchanged (28% of the section changed)

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Among these important risks are the following:

• Our growth depends on our ability to retain existing customers and secure additional subscriptions and cross-sell opportunities from existing customers.

• Any failure to offer high-quality customer service may adversely affect our relationships with our customers and our financial results.

• If we fail to manage our growth effectively, we may be unable to execute our business plan and maintain high levels of customer satisfaction.

• We have made, and expect to continue to make, acquisitions as a primary component of our growth strategy.

We may not be able to identify suitable acquisition candidates or consummate acquisitions on acceptable terms, or we may be unable to successfully integrate acquisitions, which could disrupt our operations and adversely impact our business and operating results.

• Our growth depends on our ability to retain existing customers and secure additional subscriptions and cross-sell opportunities from existing customers.

• Failure to maintain and expand our sales organization may negatively impact our revenue growth.

• We depend on our senior management team and the loss of one or more key personnel, or an inability to attract and retain highly skilled personnel may impair our ability to grow our business.

• Because we generally recognize revenue from our customers over the terms of their agreements, downturns or upturns in our business may not be immediately reflected in our operating results.

• Our growth and long-term success depends, in part, on our ability to expand our international sales and operations.

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Any failure to comply with applicable laws, regulations or contractual obligations may harm our business, results of operations and financial condition.

If we are subject to an investigation or suffer a breach, we may incur costs or be subject to forfeitures and penalties that could reduce our profitability.

• Any failure to comply with governmental export and import control laws and regulations could adversely affect our business.

• Our business is subject to complex and evolving foreign laws and regulations regarding privacy, data protection and other matters relating to information collection .

• The uncertainty surrounding the implementation and effect of Brexit may cause increased economic volatility, affecting our operations and business.

• The uncertainty surrounding the implementation and effect of Brexit may continue to affect our operations and business.

• The ongoing COVID-19 pandemic could adversely affect our business, results of operations and financial condition.

• Adverse economic conditions, including those related to the COVID-19 pandemic, may reduce our customers’ ability to spend money on information technology or enterprise work management software, or our customers may otherwise choose to reduce their spending on information technology or enterprise work management software, which may adversely impact our business.

• The market price of our common stock may be volatile, which could result in substantial losses for investors.

• Adverse economic conditions, including those related to the ongoing COVID-19 pandemic, may reduce our customers’ ability to spend money on information technology or enterprise work management software, or our customers may otherwise choose to reduce their spending on information technology or enterprise work management software, which may adversely impact our business.

• If securities or industry analysts do not publish, or cease publishing, research or reports about us, our business or our market, if they publish negative evaluations of our stock, or if we fail to meet the expectations of analysts, the price of our stock and trading volume could decline.

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Risks Related to Our Business

Our growth depends on our ability to retain existing customers and secure additional subscriptions and cross-sell opportunities from existing customers.

In order to improve our operating results, it is important that our customers renew or upgrade their agreements with us when the applicable contract term expires, and also purchase additional applications from us.

Typically contract terms are one to three years for subscription agreements.

Upon expiration, customers can renew their existing subscriptions, upgrade their subscriptions to add more seats or additional minimum contracted volume, downgrade their subscriptions to fewer seats or lower minimum contracted volume, or not renew.

A renewal constitutes renewing an existing contract for an application under the same terms, and an upgrade includes purchasing additional seats or volume under an existing contract.

We may also cross-sell additional applications to existing customers.

Our ability to grow revenue and achieve profitability depends, in part, on customer renewals, customer upgrades, and cross-sales to existing customers exceeding downgrades and non-renewals.

However, we may not be able to increase our penetration within our existing customer base as anticipated, and we may not otherwise retain subscriptions from existing customers.

Our customers may choose to not renew or upgrade their subscriptions, or may downgrade, because of several factors, including dissatisfaction with our prices, features or performance relative to competitive offerings, reductions in our customers’ spending levels, unused seats or volume, or limited adoption or use of our applications.

In addition, we may not be successful in cross-selling new applications to our existing customers.

If our customers do not upgrade or renew their subscriptions or purchase additional applications from us, or if they downgrade their subscriptions, our revenue may grow more slowly than expected or may decline, and our financial performance may be adversely affected.

Any failure to offer high-quality customer service may adversely affect our relationships with our customers and our financial results.

Our customers depend on our customer success organization to manage the post-sale customer lifecycle, including to implement new applications for our customers, provide training and ongoing education services, and resolve technical issues relating to our applications.

We may be unable to respond quickly enough to accommodate short-term increases in demand for our customer success services.

We also may be unable to modify the format of our customer success services to compete with changes in similar services provided by our competitors.

Increased customer demand for these services, without corresponding revenue, could increase costs and adversely affect our operating results.

In addition, our sales process is highly dependent on the reliable functional operation of our applications, our business reputation, and positive recommendations from our existing customers.

Any failure to maintain high-quality customer service, or a market perception that we do not maintain high-quality customer service, could adversely affect our reputation, our ability to sell our applications to existing and prospective customers, and our business, operating results, and financial position.

If we fail to manage our growth effectively, we may be unable to execute our business plan and maintain high levels of customer satisfaction.

Acquisitions are a primary component of our growth strategy, and as a result, we anticipate that we will continue to experience further rapid growth in our personnel and operations in the future.

Our growth has placed, and future growth will place, a significant strain on our managerial, administrative, operational, financial, and other resources.

For example, each acquisition we consummate requires us to devote personnel attention to the integration of the acquired company, which increases our costs and diverts attention from our existing business.

To manage the expected growth of our personnel and operations, we have developed an integration strategy that is intended to streamline our integration efforts and we intend to continue to improve our operational, financial and management controls, and our reporting systems and procedures.

Failure to effectively manage our growth could result in difficulty or delays in deploying our applications, declines in quality or customer satisfaction, increases in costs, and difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.

We have made, and expect to continue to make, acquisitions as a primary component of our growth strategy.

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A primary component of our growth strategy has been to acquire complementary businesses to grow our company.

We have completed 26 acquisitions since 2012 through December 31, 2020.

We have completed 29 acquisitions in the 10 years ending December 31, 2021.

We intend to continue to pursue acquisitions of complementary technologies, products, and businesses as a primary component of our growth strategy to enhance the features and functionality of our applications, expand our customer base, provide access to new markets, and increase benefits of scale.

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• record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges;

• experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates;

• experience volatility in earnings due to changes in contingent consideration related to acquisition earnout liability estimates;

• incur amortization expenses related to certain intangible assets;

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These benefits may not be achieved within the anticipated time frame, or at all.

Our growth depends on our ability to retain existing customers and secure additional subscriptions and cross-sell opportunities from existing customers.

Typically contract terms are one to three years for subscription agreements.

A renewal constitutes renewing an existing contract for an application under the same terms, and an upgrade includes purchasing additional seats or volume under an existing contract.

We may also cross-sell additional applications to existing customers.

Our ability to grow revenue and achieve profitability depends, in part, on customer renewals, customer upgrades, and cross-sales to existing customers exceeding downgrades and non-renewals.

However, we may not be able to increase our penetration within our existing customer base as anticipated, and we may not otherwise retain subscriptions from existing customers.

Failure to maintain and expand our sales organization may negatively impact our revenue growth.

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We face intense competition for qualified individuals from numerous technology and software companies.

If we fail to attract and retain suitably qualified individuals, including software engineers and sales personnel, our ability to implement our business plan and develop and maintain our applications could be adversely affected.

If we fail to attract

and retain suitably qualified individuals, including software engineers and sales personnel, our ability to implement our business plan and develop and maintain our applications could be adversely affected.

As a result, our ability to compete would decrease, our operating results would suffer, and our revenue would decrease.

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Our growth and long-term success depends, in part, on our ability to expand our international sales and operations.

As our operations have expanded, we have established and currently maintain offices in the United States, Canada, and the United Kingdom.

As our operations have expanded, we have established and currently maintain offices in the United States, Australia, Canada, Ireland and the United Kingdom.

We have limited experience in operating in foreign jurisdictions and expect to continue to expand our relationship with international customers.

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or in effectively selling subscriptions to our cloud offerings in all of the international markets that we enter.

In addition, conducting international operations subjects us to risks, including the following:

• uncertain political and economic climates, including those related to the COVID-19 pandemic;

• lack of familiarity and burdens of complying with foreign laws, accounting and legal standards, regulatory requirements, tariffs and other barriers;

• unexpected changes in regulatory requirements, taxes, trade laws, tariffs, export quotas, custom duties or other trade restrictions;

• lack of experience in connection with the localization of our applications, including translation into foreign languages and adaptation for local practices, and associated expenses and regulatory requirements;

• difficulties in adapting to differing technology standards;

• different pricing environments, longer sales cycles and accounts receivable payment cycles and difficulties in collecting accounts receivable;

• difficulties in managing and staffing international operations, including differing legal and cultural expectations for employee relationships, and increased travel, infrastructure and legal compliance costs associated with international operations;

• fluctuations in exchange rates that may increase the volatility of our foreign-based revenue and expenses;

• potentially adverse tax consequences, including the complexities of foreign value-added tax, goods and services tax and other transactional taxes;

• reduced or varied protection for intellectual property rights in some countries;

• difficulties in managing and adapting to differing cultures and customs;

• data privacy laws that require customer data to be stored and processed in a designated territory subject to laws different than the United States;

• sales and customer service challenges associated with operating in different countries;

• data privacy laws that require certain opt-in steps and restrict use and sharing of personally identifiable information than those required by the U.S.

privacy laws;

• new and different sources of competition as well as laws and business practices favoring local competitors and local employees;

• compliance with anti-bribery laws, including compliance with the Foreign Corrupt Practices Act;

• increased financial accounting and reporting burdens and complexities;

• restrictions on the repatriation of earnings.

Further, our international expansion efforts may be hindered by lower levels of cloud adoption and increased price sensitivity for our applications or other cloud-based offerings in international markets.

As a result of these and other factors, international expansion may be more difficult, take longer, and not generate the results we anticipate, which could negatively impact our growth and business.

Our sales cycles can be lengthy and variable, which may cause changes in our operating results.

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We may be forced to change the prices we charge for our applications or the pricing models upon which they are based.

We have limited experience with respect to determining the optimal prices and pricing models for certain of our applications and certain geographic markets.

As the markets for our applications mature, or as competitors introduce products or services that compete with ours, including bundling competing offerings with additional products or services, we may be unable to attract new customers at the same price or based on the same pricing models as we have used historically.

As the markets for our applications mature, or as competitors introduce products or services that compete with ours, including

bundling competing offerings with additional products or services, we may be unable to attract new customers at the same price or based on the same pricing models as we have used historically.

As a result, in the future we may be required to reduce our prices, which could adversely affect our financial performance.

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We primarily utilize communications and computer hardware systems operated by third-party Web hosting providers.

In addition, we utilize third-party hosting services in connection with our business operations and have migrated most of our applications to Amazon Web Services (AWS), a third-party hosting platform.

In addition, we utilize third-party hosting services in connection with our business operations and have migrated most of our applications to AWS or Azure, a third-party hosting platform.

Problems faced by us or our third-party hosting providers, including technological or business-related disruptions, could adversely impact the experience of our customers.

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Any security breaches, unauthorized access, unauthorized usage, virus, or similar breach or disruption could result in loss of confidential information, damage to our reputation, early termination of our contracts, litigation, regulatory investigations, indemnity obligations, or other liabilities.

If our security measures or those of our third-party software providers and data centers (such as Amazon Web Services) are breached as a result of third-party action, employee error, malfeasance or otherwise, resulting in unauthorized access to customer data, our reputation will be damaged, our business may suffer, and we could incur significant liability.

If our security measures or those of our third-party software providers and data centers (such as AWS and Azure) are breached as a result of third-party action, employee error, malfeasance or otherwise, resulting in unauthorized access to customer data, our reputation will be damaged, our business may suffer, and we could incur significant liability.

Unauthorized parties may attempt to misappropriate or compromise our confidential information or that of third parties, create system disruptions, product or service vulnerabilities or cause shutdowns.

These perpetrators of cyberattacks also may be able to develop and deploy viruses, worms, malware and other malicious software programs that directly or indirectly attack our products, services or infrastructure (including our third party cloud service providers).

Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched

against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

Because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

Any or all of these issues could negatively affect our ability to attract new customers, cause existing customers to elect not to renew or upgrade their subscriptions, result in reputational damage, or subject us to third-party lawsuits, regulatory fines, or other action or liability, which could adversely affect our operating results.

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To achieve market acceptance for our applications, we must effectively anticipate and offer applications that meet changing customer demands in a timely manner.

Customers may require features and capabilities not offered by our current applications.

Customers may require features and capabilities not

offered by our current applications.

We may experience difficulties that could delay or prevent our development, acquisition, or implementation of new applications and enhancements.

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Our current and future applications may contain serious defects.

Since our customers use our applications for critical business purposes, defects or other performance problems could negatively impact our customers and could result in:

• loss or delayed market acceptance and sales;

• breach of warranty or other claims for damages;

• sales credits or refunds for prepaid amounts related to unused subscription services;

• canceled contracts and loss of customers;

• diversion of development and customer service resources;

• injury to our reputation.

The costs incurred in correcting any material errors or defects might be substantial and could adversely affect our operating results.

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Competitors may also impede our attempts to create integration between our applications and competitive offerings, which may decrease demand for our applications.

In addition, an increasing number of individuals within organizations are utilizing devices other

than personal computers, such as mobile phones, tablets and other handheld devices, to access the Internet and corporate resources and to conduct business.

In addition, an increasing number of individuals within organizations are utilizing devices other than personal computers, such as mobile phones, tablets and other handheld devices, to access the Internet and corporate resources and to conduct business.

If we cannot effectively make our applications available on these devices, we may experience difficulty attracting and retaining customers.

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Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others, or defend against claims of infringement or invalidity.

Such litigation could be costly, time-consuming, and distracting to management, result in a diversion of resources or the narrowing or invalidation of portions of our intellectual property, and have a material adverse effect on our business, operating results, and financial condition.

Such litigation could be costly, time-

consuming, and distracting to management, result in a diversion of resources or the narrowing or invalidation of portions of our intellectual property, and have a material adverse effect on our business, operating results, and financial condition.

Furthermore, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our intellectual property rights or alleging that we infringe the counterclaimant’s own intellectual property.

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In order to take advantage of customer demand for cloud-based software applications, vendors of legacy systems are expanding their cloud-based enterprise workplace management applications through acquisitions and internal development.

A potential result of such expansion is that certain of our current or potential competitors may be acquired by third parties with greater available resources and the ability to further invest in product improvements and initiate or withstand substantial price competition.

A potential result of such expansion is that certain of our current or potential competitors may be acquired by third parties with greater available resources and the ability to further invest in

product improvements and initiate or withstand substantial price competition.

Our competitors also may establish or strengthen cooperative relationships with our current or future value-added resellers, third-party consulting firms or other parties with whom we have relationships, thereby limiting our ability to promote our applications.

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If our quarterly operating results or outlook fall below the expectations of research analysts or investors, the price of our common stock could decline substantially.

Fluctuations in our quarterly operating results or outlook may be due to a number of factors, including, but not limited to:

• the extent to which our existing customers purchase additional seats or volume for our applications, and the timing and terms of those purchases;

• the extent to which our existing customers renew their customer agreements for our applications and the timing and terms of those renewals;

• the extent to which we cross-sell additional applications to our existing customers and the timing and terms of such cross-selling;

• the addition or loss of customers, including through acquisitions or consolidations;

• the extent to which new customers are attracted to our applications to satisfy their enterprise work management needs;

• the rate of adoption and market acceptance of enterprise work management applications;

• the mix of our revenue, particularly between product and professional services revenue, for which the timing of revenue recognition is substantially different;

• changes in the gross profit we realize on our applications and professional services due to our differing revenue recognition policies applicable to subscription, product, and professional services revenue and other variables;

• the extent to which we enter into multi-year contracts, in which the support fees are typically paid in advance;

• the announcement or adoption of new regulations and policy mandates or changes to existing regulations and policy mandates;

• future accounting pronouncements or changes in our accounting policies;

• unforeseen litigation and intellectual property infringement;

• the number and size of new customers and the number and size of renewals in a particular period;

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

• the mix of applications sold during a period;

• the timing and expenses related to the acquisition of technologies, products, or businesses, and potential future charges for impairment of goodwill from such acquisitions;

• the amount and timing of operating expenses, including those related to the maintenance and expansion of our business, operations and infrastructure;

• the amount and timing of expenses related to the development of new products and technologies, including enhancements to our applications;

• the amount and timing of commissions earned by our sales personnel;

• the timing and success of new applications introduced by us or new offerings offered by our competitors;

• the length of our sales cycles;

• changes in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic collaborators;

• our ability to manage our existing business and future growth, including increases in the number of customers using our applications;

• the seasonality of our business or cyclical fluctuations in our industry;

• the timing and expenses related to any international expansion efforts we may undertake and the success of such efforts;

• various factors related to disruptions in access and delivery of our cloud-based applications, errors or defects in our applications, privacy and data security, and exchange rate fluctuations, each of which is described elsewhere in these risk factors;

• general economic, industry, and market conditions.

Financial Risks

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Our loan facility contains operating and financial covenants that may restrict our business and financing activities.

Our facility is comprised of $540.0 million in term loans and a $60.0 million revolving credit facility.

Our facility is comprised of $540.0 million in original principal term loans and a $60.0 million revolving credit facility.

Our obligations under the loan facility are secured by a security interest in substantially all of our assets and assets of the co-borrowers’ and of any guarantors, including intellectual property.

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The operating and other restrictions and covenants in the loan facility, and in any future financing arrangements that we may enter into, may restrict our ability to finance our operations, engage in certain business activities, or expand or fully pursue our business strategies, or otherwise limit our discretion to manage our business.

Our ability to comply with these restrictions and covenants may be affected by events beyond our control, and we may not be able to meet those restrictions and covenants.

Our ability to comply with these restrictions and covenants may be affected by events beyond our control, and we may not be able

to meet those restrictions and covenants.

A breach of any of the restrictions and covenants could result in a default under the loan facility or any future financing arrangements, which could cause any outstanding indebtedness under the loan facility or under any future financing arrangements to become immediately due and payable, and result in the termination of commitments to extend further credit.

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Our customers are generally invoiced in the currency of the country in which they are located.

In addition, we incur a portion of our operating expenses in foreign currencies, including Canadian dollars, British pounds and Euros, and in the future, as we expand into other foreign countries, we expect to incur operating expenses in other foreign currencies.

In addition, we incur a portion of our operating expenses in foreign currencies, including Australian dollars, British pounds, Canadian dollars, Euros and Israeli New Shekels, and in the future, as we expand into other foreign countries, we expect to incur operating expenses in other foreign currencies.

As a result, we are exposed to foreign exchange rate fluctuations as the financial results of our international operations and our revenue and operating results could be adversely affected.

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the market price of our common stock could be negatively affected;

and we could become subject to investigations by the stock exchange on which our securities are listed, the Securities and Exchange

Commission (the “SEC”), or other regulatory authorities, which could require additional financial and management resources.

and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

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federal net operating loss and credit carryforwards will expire beginning in 2022, if not utilized.

Approximately $23.8 million of the foreign net operating loss carryforwards carry forward indefinitely with the remainder expiring beginning in 2039.

federal net operating loss and credit carryforwards will expired beginning in 2022, if not utilized, with $36.6 million of net operating losses carrying forward indefinitely.

The entirety of the $38.5 million of the foreign net operating loss carryforwards carry forward indefinitely.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income and taxes may be limited.

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and foreign tax law changes, outcomes of current or future tax examinations, or by material differences between our forecasted and actual effective tax rates.

Our operations are subject to income and transaction taxes in the United States and in multiple foreign jurisdictions, with a significant amount of our foreign earnings generated by our subsidiaries organized in Canada, Ireland and the United Kingdom.

Any significant change in our future effective tax rates could adversely impact our results of operations for future periods.

Our future effective tax rates could be adversely affected by the following:

• changes in tax laws or the interpretation of such tax laws as applied to our business and corporate structure in the United States, Canada, the United Kingdom, Ireland, Israel, Australia, or other international locations where we have operations;

• changes in tax laws or the interpretation of such tax laws as applied to our business and corporate structure in the United States, Australia, Canada, Ireland, Israel, the United Kingdom, or other international locations where we have operations;

• earnings being lower than anticipated in countries where we are taxed at lower rates as compared to the United States federal and state statutory tax rates;

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Should the IRS or other tax authorities assess additional taxes, penalties or interest as a result of a current or a future examination, we may be required to record charges to operations in future periods that could have a material impact on our results of operations, financial position or cash flows in the applicable period or periods.

Forecasts of our annual effective tax rate are complex and subject to uncertainty because our income tax position for each year combines the effects of estimating our annual income or loss, the mix of profits and losses earned by us and our subsidiaries in tax jurisdictions with a broad range of income tax rates, as well as benefits from available deferred tax assets, the impact of various accounting rules, our interpretations of changes in tax laws and results of tax audits.

subsidiaries in tax jurisdictions with a broad range of income tax rates, as well as benefits from available deferred tax assets, the impact of various accounting rules, our interpretations of changes in tax laws and results of tax audits.

Forecasts of our annual effective tax rate do not include the anticipation of future tax law changes.

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The EC and OECD have also been evaluating new rules on the taxation of the digital economy to provide greater taxing rights to jurisdictions where customers or users are located and to address additional base erosion and profits shifting issues.

In addition, many countries have recently introduced new laws or

proposals to tax digital transactions.

In addition, many countries have recently introduced new laws or proposals to tax digital transactions.

These developments in tax laws and regulations, and compliance with these rules, could have a material adverse effect on our operating results, financial position and cash flows.

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Federal and state laws or proposed laws impose limits on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiable information (“PII”) of individuals.

We see increased regulation of data privacy and security, including the adoption of more stringent subject matter specific state laws in the United States.

We see increased regulation of data privacy and security, including the adoption of more stringent subject matter specific state laws

in the United States.

For example, in 2018, California enacted the California Consumer Privacy Act (“CCPA”), which became effective on January 1, 2020.

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In addition, changes in our applications or changes in applicable export or import regulations may create delays in the introduction and sale of our applications in international markets, prevent our customers with international operations from deploying our applications, or, in some cases, prevent the export or import of our applications to certain countries, governments, or persons altogether.

change in export or import regulations, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could also result in decreased use of our applications, or in our decreased ability to export or sell our applications to existing or potential customers with international operations.

Any change in export or import regulations, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could also result in decreased use of our applications, or in our decreased ability to export or sell our applications to existing or potential customers with international operations.

Any decreased use of our applications or limitation on our ability to export or sell our applications would likely adversely affect our business.

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Any such shipment could have negative consequences, including government investigations, penalties and reputational harm.

Our business is subject to complex and evolving foreign laws and regulations regarding privacy, data protection and other matters relating to information collection .

There are numerous foreign laws, regulations and directives regarding privacy and the collection, storage, transmission, use, processing, disclosure and protection of PII and other personal or customer data, the scope of which is continually evolving and subject to differing interpretations.

We must comply with applicable laws, regulations and directives and we may be subject to significant consequences, including penalties and fines, for our failure to comply.

Uncertainty and changes in the requirements of multiple jurisdictions may increase the cost of compliance, delay or reduce demand for our services, restrict our ability to offer services in certain locations, impact our customers’ ability to utilize our services in certain jurisdictions, or subject us to sanctions by national data protection regulators, all of which could harm our business, financial condition and results of operations.

For example, as of May 25, 2018, the General Data Protection Regulation (“GDPR”), replaced the Data Protection Directive with respect to the processing of PII in the EU.

The GDPR imposes several stringent requirements for controllers and processors of PII (including non-EU processors who process personal data on behalf of EU controllers), including, for example, more robust internal accountability controls, a strengthened individual data rights regime, shortened timelines for data breach notifications, limitations on retention and secondary use of information and additional obligations when we contract with third parties in connection with the processing of the PII.

Failure to comply with the requirements of GDPR and the applicable national data protection laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide annual revenue for the preceding financial year, whichever is higher, and other administrative penalties.

Complying with the GDPR has required us to implement additional mechanisms.

As we continue to operate under the GDPR, compliance may become onerous and adversely affect our business, financial condition, results of operations and prospects.

In addition, recent legal developments in Europe have created complexity and compliance uncertainty regarding certain transfers of information from the EU to the United States.

For example, the Privacy Shield Framework, to the extent applicable to us, is under review and there is currently litigation challenging other EU mechanisms for adequate data transfers (i.e., the standard contractual clauses).

It is uncertain whether the Privacy Shield Framework and/or the standard contractual clauses will be invalidated or adversely affected by European courts or legislatures.

We rely, or intend to rely, on a mixture of mechanisms, including the Privacy Shield Framework and standard contractual clauses, to transfer PII from the EU to the United States, and we could be impacted by changes in law as a result of a future review of these transfer mechanisms by European regulators under the GDPR, as well as current challenges to these mechanisms in European courts.

We and our customers are at risk of enforcement actions taken by European regulators until such point in time that we are able to ensure that all data transfers to us from the EU are legitimized.

We also may encounter additional complexity with respect to data privacy and data transfers from the U.K.

following the U.K.’s transition out of the EU.

If one or more of the legal bases for transferring PII from Europe to the United States is invalidated, or if we are unable to transfer PII between and among

countries and regions in which we may operate in the future, it could affect the manner in which we provide our services or could adversely affect our financial results.

Furthermore, any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any federal, state or international privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of customer confidence, damage to our brand and reputation or a loss of customers, any of which could have an adverse effect on our business.

In addition, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy, data-retention and data-protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with customers.

For example, some countries have adopted laws mandating that PII regarding customers in their country be maintained solely in their country.

Having to maintain local data centers and redesign product, service and business operations to limit PII processing to within individual countries could increase our operating costs significantly.

The uncertainty surrounding the implementation and effect of Brexit may cause increased economic volatility, affecting our operations and business.

The uncertainty surrounding the implementation and effect of Brexit may continue to affect our operations and business.

Effective January 31, 2020, the U.K.

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Furthermore, existing and potential customers may choose to reduce or delay technology spending in response to the coronavirus outbreak, or attempt to renegotiate contracts and obtain concessions, which may materially and negatively impact our operating results, financial condition and prospects.

Adverse economic conditions, including those related to the COVID-19 pandemic, may reduce our customers’ ability to spend money on information technology or enterprise work management software, or our customers may otherwise choose to reduce their spending on information technology or enterprise work management software, which may adversely impact our business.

Adverse economic conditions, including those related to the ongoing COVID-19 pandemic, may reduce our customers’ ability to spend money on information technology or enterprise work management software, or our customers may otherwise choose to reduce their spending on information technology or enterprise work management software, which may adversely impact our business.

Our business depends on the overall demand for information technology and enterprise work management software spend and on the economic health of our current and prospective customers.

If worldwide economic conditions become unstable, our existing customers and prospective customers may re-evaluate their decision to purchase our applications.

economic conditions or a reduction in information technology or enterprise work management software spending by our customers could harm our business in a number of ways, including longer sales cycles and lower prices for our applications.

Weak global economic conditions or a reduction in information technology or enterprise work management software spending by our customers could harm our business in a number of ways, including longer sales cycles and lower prices for our applications.

Risks Related to Ownership of Our Common Stock

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• fluctuations in the trading volume of our shares or the size of our public float;

• general economic, legal, industry and market conditions and trends, including those related to the COVID-19 pandemic, unrelated to our performance.

• general economic, legal, industry and market conditions and trends, including those related to the ongoing COVID-19 pandemic, unrelated to our performance.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company.

30 unchanged sentences

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