What changed in this filing

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Item 1A. Risk Factors

2024-03-13 compared with 2023-03-17 · 161 added, 124 removed, 708 unchanged (29% of the section changed)

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• Because we recognize revenue from subscriptions for our platform over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results.

• We have a limited operating history and our business has evolved, which makes it difficult to predict our future operating results.

• Our business has evolved, which makes it difficult to predict our future operating results.

• We have experienced significant changes to our organization and structure and may not be able to effectively manage such changes.

• Failure to adequately manage our sales force will impede our growth.

• We have expanded our international operations, which exposes us to significant risks.

• We have significant international operations, which exposes us to risk.

• Our growth depends in part on the success of our strategic relationships with existing and prospective Publisher Network application providers.

• Changes in our pricing models could adversely affect our operating results.

• Changes to our pricing models could adversely affect our operating results.

• Our success depends on a fragmented internet environment for finding information, particularly information about businesses.

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• Real or perceived errors, failures or bugs in our software, or in the software or systems of our third-party application providers and partners, could materially and adversely affect our operating results and growth prospects.

• We are incorporating generative artificial intelligence ("AI"), into some of our products.

This technology is new and developing and may present both compliance risks and reputational risks.

Risks Related to Laws, Regulation and Taxation

• We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business.

Compliance with such laws could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

Compliance with such laws and obligations could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

• Regulatory and legislative developments related to the use of AI could adversely affect our use of such technologies in our products, services, and business.

Risks Related to Ownership of Our Common Stock and Our Status as a Public Company

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Our revenue growth rate has slowed in recent periods.

We experienced revenue growth rates of 19% from the fiscal year ended January 31, 2020 to the fiscal year ended January 31, 2021, 10% from the fiscal year ended January 31, 2021 to the fiscal year ended January 31, 2022, and 3% from the fiscal year ended January 31, 2022 to the fiscal year ended January 31, 2023.

We expect our growth in the coming year to be slower.

Our historical revenue growth rates are not indicative of future growth, and we may not achieve similar revenue growth rates in future periods.

We experienced declines in our revenue growth rates in recent years, including revenue growth rates of 10% from the fiscal year ended January 31, 2021 to the fiscal year ended January 31, 2022, 3% from the fiscal year ended January 31, 2022 to the fiscal year ended January 31, 2023, and 1% from the fiscal year ended January 31, 2023 to the fiscal year ended January 31, 2024.

While our historical revenue growth rates are not indicative of future growth, we may not achieve revenue growth in future periods, or our growth rates may slow further or even contract in future periods.

You should not rely on our revenue for any prior quarterly or annual periods as an indication of our future revenue or revenue growth.

Our operating results may vary as a result of a number of factors, including our ability to execute on our business strategy, our ability to compete effectively for customers and business partners, the impact of the COVID-19 pandemic on our business, and other factors that are outside of our control.

As we adjust our strategies to reflect the recent changes in our business, including transitioning a portion of our services business to various third-party service providers, this may negatively impact our revenue growth rates.

Our operating results may vary as a result of a number of factors, including our ability to execute on our business strategy, our ability to compete effectively for customers and business partners, the impact of public health emergencies, such as the COVID-19 pandemic and other macroeconomic factors on our business, and other factors that are outside of our control.

If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it could be difficult to achieve or maintain profitability.

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As a result, we may continue to experience operating losses for the indefinite future.

Further, while we are reducing operating expenses in the near term, we expect our operating expenses may increase in the coming years as we hire additional personnel, expand our distribution channels, develop our technology and new features, face increased compliance costs associated with our growth and entry into new markets and geographies and adopt new systems to scale and automate our operations.

Further, while we have recently reduced operating expenses, we expect our operating expenses may increase in the coming years as we hire additional personnel, expand our distribution channels, develop our technology and new features, face increased compliance costs associated with our growth and entry into new markets and geographies and adopt new systems to scale and automate our operations.

If our revenue does not increase to offset these and other potential increases in operating expenses, we may not be profitable in future periods.

If we are unable to achieve and sustain profitability, the market price of our common stock may significantly decrease.

Adverse economic conditions or reduced technology spending may adversely impact our business.

Adverse economic conditions, including inflation or reduced technology spending, may adversely impact our business.

Our business depends on the overall demand for technology and on the economic performance of our current and prospective customers.

In general, worldwide economic conditions may remain unstable, including inflation, and these conditions would make it difficult for our customers, prospective customers and us to forecast and plan future business activities accurately, and they could cause our customers or prospective customers to reevaluate their decision to purchase our features.

In general, worldwide economic conditions such as inflation may remain unstable, and these conditions would make it difficult for our customers, prospective customers and us to forecast and plan future business activities accurately, and they could cause our customers or prospective customers to reevaluate their decision to purchase our features.

Weak global economic conditions, changes in consumer behavior or a reduction in technology spending even if economic conditions stabilize, could adversely impact our business and results of operations in a number of ways, including longer sales cycles, lower demand or prices for our platform, fewer subscriptions and lower or no growth.

For example, increased inflation in recent months, the residual effects of the collapse of Silicon Valley Bank, or SVB, and other financial institutions in March 2023, and related instability in the global financial markets, may cause difficulties for our customers, resulting in reduced spending by them on our business.

In addition, the economies of certain countries or regions around the world may experience weakness or uncertainty, which may lead to negative impacts on our business in those areas.

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As a result, most of the revenue we report in each quarter is the result of subscription agreements entered into during previous quarters.

Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter.

Consequently, a decline in new or renewed subscriptions in any one quarter may not

be reflected in our revenue results for that quarter.

Any such decline, however, will negatively affect our revenue in future quarters.

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We have experienced significant changes to our organization and structure and may not be able to effectively manage those changes.

Our headcount and operations have grown substantially since the Company went public.

We increased the number of our full-time employees from over 450 as of January 31, 2016 to approximately 1,200 as of January 31, 2023 and have hired several members of our senior management team in recent years.

Our management, headcount and operations have grown substantially since the Company went public in 2017, growing to approximately 1,100 as of January 31, 2024.

After years of growth, our overall headcount experienced a reduction in the fiscal year ended January 31, 2023.

In addition, a reduction in force was initiated in late January of 2023, resulting in additional terminations of approximately eight percent (8%) overall headcount that took effect in the early part of the new fiscal year.

Overall headcount after such terminations took effect was approximately 1,100.

In addition, a reduction in force was initiated in late January of 2023, resulting in additional terminations of approximately eight percent (8%) of overall headcount that took effect in the three months ended April 30, 2023.

Our overall headcount may fluctuate in the near term as we adjust our strategies to reflect the recent changes in our business.

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Additionally, in June 2022, our President and Chief Revenue Officer, David Rudnitsky resigned, and in October 2022, our Chief Revenue Officer, Brian Distelburger, announced that he would step down from his position as Chief Revenue Officer and Tom Nielsen was appointed as Chief Revenue Officer.

Distelburger further announced in March 2023 that he would be stepping back as an employee as well although he will continue to serve on our Board of Directors.

While we believe these will be of long term value to our stockholders, the resulting changes and related disruption has and will continue to have near-term effects on our business, growth and profitability.

Distelburger further announced in March 2023 that he would be stepping back as an employee as well, although he continues to serve on our Board of Directors.

More recently, in September 2023, Marc Ferrentino, our President and Chief Operating Officer, resigned.

While we believe these will be of long term value to our stockholders, the resulting changes and related disruption have and may continue to have near-term effects on our business, growth and profitability.

We believe that our corporate culture has been a critical component of our success.

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Any failure to manage organizational changes in a manner that preserves the key aspects of our culture could hurt our chance for future success, including our ability to recruit and retain personnel and effectively focus on and pursue our corporate objectives.

Furthermore, as a result of the COVID-19 pandemic, our corporate culture may be difficult to maintain as many of our employees continue to work remotely.

Furthermore, our corporate culture may be more difficult to maintain as many employees work remotely.

In addition, we will need to continue to improve our information technology infrastructure and our operational, financial and management systems and procedures.

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Changes to our systems and infrastructure may require us to commit additional financial, operational and management resources before our revenue increases and without any assurances that our revenue will increase.

If we fail to successfully manage this organizational complexity, we likely

will be unable to successfully execute our business strategy, which could have a negative impact on our business, operating results and financial condition.

If we fail to successfully manage this organizational complexity, we likely will be unable to successfully execute our business strategy, which could have a negative impact on our business, operating results and financial condition.

Failure to adequately manage our sales force will impede our growth.

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If new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if we are unable to retain and develop talented sales personnel, we may not be able to realize the expected benefits of this investment or increase our revenue.

We have expanded our international operations, which exposes us to significant risks.

We have significant international operations, which exposes us to risk.

In 2014, we opened our first office outside the United States, and we have expanded our operations abroad.

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Bribery Act, import and export control laws, tariffs, trade barriers, economic sanctions and other regulatory or contractual limitations on our ability to sell in certain foreign markets, and the risks and costs of non-compliance;

• compliance with international laws and regulations, including without limitation, those governing privacy, data security and data transfer, such as the General Data Protection Regulation, or GDPR, which may impair our ability to grow our business or offer our service in some locations, may subject us to liability for non-compliance or may require us to change our business practices;

• compliance with international laws and regulations, including without limitation, those governing privacy, data security and data transfer, such as the General Data Protection Regulation ("GDPR"), which may impair our ability to grow our business or offer our service in some locations, may subject us to liability for non-compliance or may require us to change our business practices;

• expanded demands on, and distraction of, senior management;

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• deterioration of political relations between the United States and other countries;

• natural disasters, pandemics, acts of terrorism and other events beyond our control;

• natural disasters, pandemics, acts of terrorism, war (including the ongoing military conflicts between Russia and Ukraine and in the Middle East, and resulting sanctions imposed by the United States and other countries), and other events beyond our control;

• political or social unrest or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.

In particular, in February 2022, Russia launched a large-scale military attack on Ukraine.

The invasion significantly amplified already existing geopolitical tensions among Russia, Ukraine, Europe, NATO and the West, including the United States.

It is not possible to predict the full extent of the broader consequences of Russia’s invasion of Ukraine, which could include sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, currency exchange rates and financial markets.

Our business, financial condition and results of operations may be materially adversely affected by any negative impact on the global economy and capital markets resulting from such conflict.

Also, our network service provider fees outside of the United States are generally higher than domestic rates, and our gross margin may be affected and may fluctuate as we expand our operations and customer base worldwide.

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As we expand internationally, we also must determine the appropriate price to enable us to compete effectively internationally.

In addition, if the mix of features we sell changes, then we may need to, or choose to, revise our pricing.

In addition, if the mix of products and features we sell changes, then we may need to, or choose to, revise our pricing.

As a result, in the future we may be required to reduce our prices or offer shorter contract durations, which could adversely affect our revenue, gross margin, profitability, financial condition and cash flow.

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Industry consolidation or technological advancements could result in a small number of websites or applications emerging as the predominant sources of information about businesses, thereby creating a less fragmented internet environment for purposes of end consumer searches about businesses.

Additionally, we may enter new geographies with less fragmented internet environments.

Additionally, we may enter new geographies with less

fragmented internet environments.

If most end consumers relied on a few websites or applications for this information, or if reliably accurate information across the most used websites and applications were generated from a single source, the need to synchronize information about a business and for our platform could decline significantly.

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If we are unable to compete effectively, our operating results could be adversely affected.

The market for our features is competitive, rapidly evolving and fragmented, and is subject to changing technology and shifting customer needs.

Many companies develop and market products and services that compete to varying extents with our features, and we expect competition in our market to intensify.

The market for our platform is competitive, rapidly evolving and fragmented, and is subject to changing technology and shifting customer needs.

Many companies develop and market products and services that compete to varying extents with ours, and we expect competition in our market to intensify.

As we develop our platform, we will introduce products and features that compete in new markets and as a result we will face new competitors.

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We also face many other competitors with a variety of product offerings.

These companies have developed, or are developing, products that currently, or in the future are likely to, compete with some or all of our features.

These companies have developed, or are developing, products that currently, or in the future are likely to, compete with some or all of ours.

A number of potential new competitors, such as application providers, that enter our markets through acquisitions or otherwise, may decide to create or acquire products that compete with our platform or we may develop products that compete with their existing platforms.

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Our renewal rates may decline or fluctuate as a result of a number of factors, including limited customer resources, changes in our pricing and subscription models, customer satisfaction with our platform and/or our services, the acquisition of our customers by other companies and deteriorating general economic conditions.

For example, as a result of the COVID-19 pandemic certain customers reduced their subscriptions, elected not to renew their subscriptions, reduced length of contracts, requested extended billing and payment terms or sought more favorable rates, and certain of these trends contributed to a general decline in our retention rate.

Challenging macroeconomic conditions may also contribute to similar results.

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We have invested and expect to continue to invest in new businesses, products, features, services, and technologies.

Such endeavors may involve significant risks and uncertainties, including insufficient revenue from such investments to offset any new liabilities assumed and expenses associated with these new

investments, inadequate return of capital on our investments, distraction of management from current operations, failure to adequately develop and enhance existing products and unidentified issues not discovered in our due diligence of such strategies and offerings that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated liabilities.

Such endeavors may involve significant risks and uncertainties, including insufficient revenue from such investments to offset any new liabilities assumed and expenses associated with these new investments, inadequate return of capital on our investments, distraction of management from current operations, failure to adequately develop and enhance existing products and unidentified issues not discovered in our due diligence of such strategies and offerings that could cause us to fail to realize the anticipated benefits of such investments and incur unanticipated liabilities.

Because these new strategies and offerings are inherently risky, no assurance can be given that they will be successful.

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Our ability to increase revenue and achieve profitability depends, in large part, on widespread acceptance of our platform by enterprises.

As we target our sales efforts at these customers, we face greater costs, longer sales cycles and less predictability in

completing some of our sales.

As we target our sales efforts at these customers, we face greater costs, longer sales cycles and less predictability in completing some of our sales.

As a result of the variability and length of the sales cycle, we have only a limited ability to forecast the timing of sales.

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For the fiscal years ended January 31, 2024, 2023 and 2022, the aggregate of our top five customers accounted for approximately 8%, 9% and 8%, respectively, of our revenue.

During the three months ended January 31, 2024, we experienced the attrition of one of these top five customers.

We expect that the corresponding absence of revenue from this customer will become more apparent in our quarterly results for the fiscal year ending January 31, 2025.

We anticipate that sales of our platform to a relatively small number of customers will continue to account for a significant portion of our revenue in future periods.

If we were to lose any of our significant customers, our revenue could decline and our business and results of operations could be materially and adversely affected.

These negative effects could be exacerbated by customer consolidation, changes in technologies or solutions used by customers, changes in demand for our features, selection of suppliers other than us, customer bankruptcies or customer departures from their respective industries, pricing competition or deviation from marketing and sales methods away from physical location retailing, any one of which may result in even fewer customers accounting for a high percentage of our revenue and reduced demand from any single significant customer.

If we were to lose any more of our large customers, our revenue could decline and our business and results of operations could be materially and adversely affected.

In addition, some of our customers have used, and may in the future use, the size and relative importance of their purchases to our business to require that we enter into agreements with more favorable terms than we would otherwise agree to, to obtain price concessions, or to otherwise restrict our business.

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Any natural disaster or other event affecting our data centers could have an adverse effect on our financial condition and operating results.

We depend on our senior management team and the loss of our chief executive officer, president or one or more key employees could adversely affect our business.

We depend on our senior management team, and the loss of one or more of our executive officers or key employees could adversely affect our business.

Our success depends largely upon the continued services of our key executive officers.

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Efforts to build our brand may involve significant expense and may not generate customer awareness or increase revenue at all, or in an amount sufficient to offset expenses we incur in building our brand.

In addition, we sell our features to companies in a number of industries, including healthcare, retail and financial services.

In addition, we sell our features to companies in a number of industries, including healthcare, hospitality, food services, retail and financial services.

If we are not successful in building our brand, we may become identified with a single industry, which could make it more difficult for us to penetrate other industries.

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The target markets in which we operate are also subject to a high degree of uncertainty and risk.

Our customers as well as analysts, market participants, and others may disagree with

our assessment of our target markets and we may never successfully compete in these markets.

In addition, third parties may have different assessments of the size of the markets in which in our products compete.

Our customers as well as analysts, market participants, and others may disagree with our assessment of our target markets and we may never successfully compete in these markets.

In addition, third parties may have different assessments of the size of the markets in which our products compete.

These estimates of total addressable market and growth forecasts are subject to significant uncertainty, are based on assumptions and estimates that may not prove to be accurate.

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Our chief executive officer and chief financial officer have limited experience managing a public company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.

While certain other executives have such experience, our management team, as a whole, may not successfully or efficiently manage the ongoing transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.

These new obligations and constituents will require significant attention from our senior management, particularly from our chief executive officer and chief financial officer, and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results and financial condition.

While certain other executives have such experience, our management team, as a whole, may not successfully or efficiently manage the significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors to which a public company is subject.

These obligations and constituents require significant attention from our senior management, particularly from our chief executive officer and chief financial officer, and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, operating results and financial condition.

We are exposed to fluctuations in currency exchange rates.

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Our credit facility may not be available to us at all or on the same terms as it has in the past.

Our credit facility contains restrictive covenants that limit our ability to transfer or dispose of assets, merge with other companies or consummate certain changes of control, acquire other companies, pay dividends or repurchase Yext stock, incur additional indebtedness and liens and enter into new businesses.

indebtedness and liens and enter into new businesses.

We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of the lender or terminate the credit facility, which may limit our operating flexibility.

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Any inability to make scheduled payments or meet the financial covenants on our credit facility would adversely affect our business.

In addition, our credit facility was provided by SVB.

On March 10, 2023, the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations.

No amounts were drawn on our credit facility as of March 15, 2023, although the facility backs approximately $14 million of letters of credit supporting our leases as of that date.

While the National Bank of Santa Clara has publicly assured holders of credit facilities that they intend to honor those facilities, this credit facility may not be available in all or in part in the near future depending on the resolution of SVB, and we may also need to replace it, including the letters of credit if required by various landlords.

SVB’s successor may seek to repudiate the agreement, and we may not be able to negotiate a replacement credit facility with terms materially equivalent or better than that existing credit facility.

In addition, our credit facility was provided by Silicon Valley Bank ("SVB").

Following the closure of SVB by the California Department of Financial Protection and Innovation on March 10, 2023, and its subsequent receivership by the Federal Deposit Insurance Corporation (“FDIC”), the FDIC announced that all of SVB’s deposits and substantially all of its assets had been transferred to a newly created, full-service FDIC-operated bridge bank, Silicon Valley Bridge Bank N.A ("SVBB").

On March 27, 2023, First Citizens Bank & Trust Company (“First Citizens”) acquired substantially all of the loans and certain other assets of SVBB, and assumed all customer deposits and certain other liabilities of SVBB.

As such, First Citizens assumed SVB’s obligations under the Credit Facility.

There can be no assurance that similar guarantees or actions will be made or taken in the event of further bank closures and continued instability in the global banking system.

Inability to access our credit facility or our need to use alternative cash to support the letters of credit could adversely affect our business.

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Notwithstanding, those institutions are subject to risk of failure.

For example, on March 10, 2023, SVB was unable to continue their operations and the Federal Deposit Insurance Corporation was appointed as receiver for SVB and created the National Bank of Santa Clara to hold the deposits of SVB after SVB was unable to continue their operations.

As of March 15, 2023, substantially all of our cash and cash equivalents are held with other large financial institutions, and we do not expect further developments with SVB to have a material impact on our cash and cash equivalents balance, expected results of operations, or

financial performance for the foreseeable future.

For example, on March 10, 2023, SVB was unable to continue their operations and the FDIC was appointed as receiver for SVB.

Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.

were each swept into receivership.

In addition, on May 1, 2023, the FDIC seized First Republic Bank and sold its assets to JPMorgan Chase & Co.

We do not expect further developments with such banks to have a material impact on our cash and cash equivalents balance, expected results of operations, or financial performance for the foreseeable future.

However, if further failures in financial institutions occur where we hold deposits, we could experience additional risk.

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We may not be able to obtain additional financing on terms favorable to us, if at all, particularly if interest rates continue to rise.

In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, scale our infrastructure, develop feature enhancements and respond to business challenges could be significantly impaired, and our business, operating results and financial condition may be adversely affected.

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Any such attack, or any security incident from any other source affecting us or our service providers, including, for example, through employee error or misconduct or additional vulnerabilities introduced by remote work arrangements, third-party integrations or other sources, could lead to interruptions, delays, website or application shutdowns, loss of data or unauthorized access to, or use or acquisition of, personal information, confidential information or other data that we or our service providers process or maintain.

If we experience compromises to our security that result in performance or availability problems, the complete shutdown of our platform or the actual or perceived loss of, or unauthorized access to, unavailability of, or unauthorized use, disclosure, destruction, or other unauthorized processing of, personal information or other types of confidential information, our customers or application providers may assert claims against us for credits, refunds or other damages, and may lose trust and confidence in our platform.

providers may assert claims against us for credits, refunds or other damages, and may lose trust and confidence in our platform.

Additionally, security breaches and incidents or other unauthorized access to, unavailability of, or unauthorized use, disclosure, destruction, acquisition, or other processing of, personal information or other types of confidential information that we or our service providers maintain, or the perception that any of these have occurred, could result in claims against us for identity theft or other similar fraud claims, breach of contract or indemnity, governmental enforcement actions, litigation, fines and penalties or adverse publicity, or other claims and litigation, and could cause our customers and partners to lose trust in us, any of which could have an adverse effect on our business, reputation, operating results and financial condition.

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An adverse determination of any litigation or defense proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly and could put our related pending patent applications at risk of not being issued.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could

be compromised by disclosure in the event of litigation.

During the course of litigation there could be public announcements of the results of hearings, motions or other interim proceedings or developments.

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Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.

Accordingly, our efforts to protect our intellectual property rights in such countries may be

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of intellectual property.

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Our customers access our platform through our website and related technologies.

We rely on internal systems and third-party service providers, including data center, cloud computing, bandwidth and telecommunications equipment providers, to maintain the availability of our platform.

We rely on internal systems and third-party service providers, including data center, cloud

computing, bandwidth and telecommunications equipment providers, to maintain the availability of our platform.

If any service provider fails to provide sufficient capacity to support our platform, experiences service outages, reduces or suspends service due to a natural disaster or pandemic, or otherwise ceases to do business, such failure could interrupt our customers' access to our services.

For example, we currently serve our customers from third-party data center hosting facilities and cloud computing providers located in the United States, Germany and Japan.

Our primary data center is in New Jersey, and our backup data center is in Texas.

We operate infrastructure in two colocation data center facilities in New Jersey and Texas.

If these data centers or cloud computing services become unavailable to us without sufficient advance notice, if we are unable to renew our agreements with these providers or if a provider is acquired or ceases business, we would likely experience delays in delivering our platform until we could migrate to an alternate provider.

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Such disruptions may be due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of customers and partners accessing our platform simultaneously and inadequate design.

For example, in July 2023, one of the data centers hosting our platform experienced a fire that forced shutdown of the facility.

While we were able to failover to a backup data center with minimal disruption to our consumer serving services, some customers experienced an outage of our administrative services.

We do not expect the effects of this disruption to be material, but we may experience reputational harm from impacted customers.

In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time.

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In addition, the proper functioning of our platform is dependent on the ability of our Publisher Network application providers and partners to maintain the availability and proper functioning of their software integrations with our systems and also is dependent on the ability of our third-party application providers to maintain the availability and proper functioning of their websites and applications on which business listing information is published for customers.

For example, a number of our Publisher Network application providers provide us with an Application Program Interface, or API, on which our ability to interface with that provider is based.

For example, a number of our Publisher Network application providers provide us with an API on which our ability to interface with that provider is based.

Furthermore, in a rapidly changing business environment, for example in connection with the COVID-19 pandemic, our Publisher Network application providers may experience limitations and delays, which could limit the functionality of our platform.

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If our Publisher Network application providers do not maintain the availability and proper functioning of their software, APIs, websites and applications, our business, operating results and financial condition could be materially affected.

We are incorporating generative artificial intelligence, or AI, into some of our products.

We are incorporating generative artificial intelligence ("AI"), into some of our products.

This technology is new and developing and may present both compliance risks and reputational risks.

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However, there is a risk that our algorithms could produce discriminatory or unexpected results or behaviors (e.g., hallucinatory behavior) that could harm our reputation, business, customers, or stakeholders.

In addition, the use of AI involves significant technical complexity and requires specialized expertise.

Any disruption or failure in our AI systems or infrastructure could result in delays or errors in our operations, which could harm our business and financial results.

Accordingly, while AI-powered applications may help provide more tailored or personalized learner experiences, if the content, analyses, answers or recommendations that AI-powered applications assist in producing on our platform are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be materially and adversely affected.

There are a limited number of AI service providers that license large language models ("LLMs") that are sufficient for use in our AI-powered applications.

If our agreements with these AI service providers terminate or cannot be renewed on favorable terms, it may affect our ability to develop our AI-powered platform innovations and features.

Any of the foregoing and any similar issues, whether actual or perceived, could negatively impact our users’ experience and diminish the perceived quality and value of our offerings.

This in turn could damage our brand, reputation, competitive position and business.

Additionally, if any of our employees, contractors, vendors or service providers use any third-party AI-powered software in connection with our business or the services they provide to us, it may lead to the inadvertent disclosure of our confidential information, including inadvertent disclosure of our confidential information into publicly available third-party training sets, which may impact our ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or confidential information, harming our competitive position and business.

Our ability to mitigate risks associated with disclosure of our confidential information, including in connection with AI-powered software, will depend on our implementation, maintenance, monitoring and enforcement of appropriate technical and administrative safeguards, policies and procedures governing the use of AI in our business.

Furthermore, any content created by us using generative AI tools may not be subject to copyright protection which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content.

In the United States, a number of civil lawsuits have been initiated related to the foregoing and other concerns, the outcome of any one of which may, amongst other things, require us to limit the ways in which we use AI in our business and may affect our ability to develop our AI-powered platform innovations and features.

While AI-related lawsuits to date have generally focused on the AI service providers themselves, our use of any output produced by any generative AI tools may expose us to claims, increasing our risks of liability.

For example, the output produced by generative AI tools may include information subject to certain rights of publicity or privacy laws or constitute an unauthorized derivative work of the copyrighted material used in training the underlying AI model, any of which could also create a risk of liability for us, or adversely affect our business or operations.

In addition, the use of AI has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of users of AI-powered applications.

To the extent that we do not have sufficient rights to use the data or other material or content used in or produced by the generative AI tools used in our business, or if we experience cybersecurity incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, publicity, contractual or other rights.

Further, our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively.

As the utilization of AI becomes more prevalent, we anticipate that it will continue to present new or unanticipated ethical, reputational, technical, operational, legal, competitive and regulatory issues, among others.

We expect that our incorporation of AI in our business will require additional resources, including the incurrence of additional costs, to develop and maintain our platform offerings, services, and features to minimize potentially harmful or unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our competitive position and to address any ethical, reputational, technical, operational, legal, competitive or regulatory issues which may arise as a result of any of the foregoing.

As a result, the challenges presented with our use of AI could adversely affect our business, financial condition and results of operations.

Risks Related to Laws, Regulation and Taxation

We are subject to general litigation that may materially adversely affect us.

From time to time, we may be involved in disputes or regulatory inquiries that arise in the ordinary course of business.

From time to time, we are and may be involved in disputes or regulatory inquiries that arise in the ordinary course of business.

We expect that the number and significance of potential disputes may increase as our business expands and our company grows larger.

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We are subject to governmental regulation and other legal obligations, including those related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business.

Compliance with such obligations could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

Compliance with such laws and obligations could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.

We receive, store, and process various types of data, including personal data, from and about customers, including third-party reseller customers, partners, end users of our services, and in limited cases, end consumers, as well as data from and about our personnel and service providers.

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Federal Trade Commission, or FTC, and various state, local and foreign agencies.

Our data processing also is subject to contractual obligations and industry standards.

federal and various state governments have adopted requirements related to the collection, distribution, use, storage, and security of personal data.

Our data processing is also subject to contractual obligations and industry standards.

federal and various state governments have adopted requirements related to the collection, distribution, use, storage and security of personal data, including unique online identifiers.

For example, the California Consumer Privacy Act of 2018, or CCPA, originally became effective January 1, 2020 and an amended version became effective on January 1, 2023.

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Under the amended CCPA, consumers include individuals that interact with us in a professional or employment capacity.

The CCPA provides a limited private cause of action for certain data breaches.

The amended law also created a new state agency that will be vested with authority to implement and enforce other aspects of the CCPA.

State privacy laws that impose similar obligations and are likewise enforced by regulators have been enacted in Colorado, Connecticut, Utah, and Virginia, as

of February 2023.

The CCPA provides a limited private cause of action for

certain data breaches.

Numerous other states have proposed, and in many cases, enacted, privacy legislation.

The effects of such state privacy laws are potentially significant and may require us to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.

We expect additional states may also enact legislation similar to the state privacy laws already adopted.

We expect additional states may continue to enact data protection legislation that may be similar to or different from the state privacy laws already adopted.

Additionally, the FTC and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the collection, use, dissemination, and security of personal data.

We may be required to incur costs and expenses to stay in compliance with these interpretations, and if we were found to have violated consumer protection laws, we may face enforcement actions which could adversely affect our business.

We also may be subject to laws and rules implemented and enforced by the FTC, the Federal Communications Commission, or FCC, and potentially other federal agencies, state laws, as well as international laws and regulations related to marketing, advertising, commercial electronic mail and other messages.

Compliance with these requirements may limit our ability to send certain types of messages.

We also may be subject to laws and rules implemented and enforced by the FTC, the Federal Communications Commission, or FCC, and potentially other federal agencies, as well as state, local or international laws and regulations related to marketing, advertising, commercial electronic mail and other messages.

Compliance with these requirements may limit our ability to engage in certain marketing and advertising activities.

If we were found to have violated such requirements, we may face enforcement actions and/or face civil penalties, either of which could adversely affect our business.

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We expect that additional jurisdictions may enact similar requirements.

Laws and regulations in these jurisdictions can apply broadly to the collection, use, storage, disclosure, and security of various types of data, including personal data, such as names, email addresses and in some jurisdictions, Internet Protocol, or IP, addresses.

In particular, the European Union General Data Protection Regulation, or GDPR, became effective in May 2018.

In particular, in the European Union, the GDPR became effective in May 2018.

The GDPR includes stringent operational requirements for processors and controllers of personal data and imposes significant penalties for non-compliance.

The United Kingdom has implemented data protection laws that substantially align with requirements under the GDPR and provide for similar penalties.

However, the United Kingdom’s decision to exit the European Union, known as Brexit, has created uncertainty regarding the regulation of data protection in the United Kingdom in the medium to long term, which may delay or deter transactions with customers that transfer personal data to and from the United Kingdom.

In addition, there has been uncertainty regarding transfers of certain personal data from the European Economic Area, Switzerland, and the United Kingdom following Brexit as well as the invalidation of both the EU-U.S.

The United Kingdom’s decision to adopt a separate data protection regime after its exit from the European Union, known as Brexit, has created uncertainty and the potential for differing regulations as compared to the European Union, which in turn may delay or deter transactions with customers that transfer personal data to and from the United Kingdom.

In addition, there remains uncertainty regarding transfers of certain personal data from the European Economic Area, Switzerland, and the United Kingdom following Brexit as well as the invalidation of both the EU-U.S.

Privacy Shield and Swiss-U.S.

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To protect the personal data that we process, including payment card information, we have implemented technical and organizational measures in an effort to preserve and protect our data and our customers' data against loss, misuse, corruption, destruction, or misappropriation caused by systems failures, unauthorized access, or other misuse.

Notwithstanding these measures, we could experience security incidents or be subject to liability claims relating to information security by individuals and customers whose data resides in our databases.

Notwithstanding these measures, we could experience security incidents, fail to handle personal data correctly or be subject to liability claims relating to information security by individuals and customers whose data resides in our databases.

We are also required to comply with applicable industry standards with respect to our handling of payment card information.

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For example, we have begun selling our platform to government entities.

Risks associated with sales to government entities include adherence to complex procurement regulations and other government-specific contractual requirements.

We may be subject to audits and investigations relating to our government contracts and any violations could result in various civil and criminal penalties and

administrative sanctions, including termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.

Risks associated with sales to government entities include

adherence to complex procurement regulations and other government-specific contractual requirements.

We may be subject to audits and investigations relating to our government contracts and any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.

Sales to government entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that we will successfully complete a sale.

As another example, in order to offer our products to certain customers in the health care industry we have implemented certain security and privacy measures and related procedures to comply with the Health Insurance Portability and Accountability Act of 1996, or HIPAA, and the Health Information Technology for Economic and Clinical Health Act, or HITECH.

This may require us to execute HIPAA business associate agreements, or BAAs, with certain customers that are “covered entities” under HIPAA, which would subject us to additional liabilities, penalties and fines in the event we fail to comply with the terms of such agreements.

We may execute HIPAA business associate agreements, or BAAs, with certain customers that are “covered entities” under HIPAA, which would subject us to additional liabilities, penalties and fines in the event we fail to comply with the terms of such agreements.

The storage of such information may require us to modify and enhance our platform at a significant cost.

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This could materially affect our business, operating results, and financial condition.

Furthermore, our third-party reseller customers, over which we have more limited control, may not comply with the laws, regulations, and policies described above, which may damage our reputation or subject us to costly legal or regulatory inquiries and liability.

We will continue to innovate, and work with new and emerging technologies that may subject the Company to new or different laws or regulations.

For example, the Answers platform utilizes Artificial Intelligence ("AI") technology in some of its products and/or features.

AI is an emerging technology, and is subject to a complex and evolving regulatory landscape, including data protection, privacy, and potentially other laws.

Additionally, different jurisdictions have taken varying approaches to regulating AI.

Compliance with these laws and regulations can be complex, costly and time-consuming, and there is a risk of regulatory enforcement actions or litigation if we fail to comply with these requirements.

As regulations evolve, we may have to alter our business practices or products in order to comply with regulatory requirements.

We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy, data protection, marketing, consumer communications, information security and cross-border data transfer in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.

We expect that there will continue to be new proposed laws, regulations and industry standards relating to privacy, data protection, marketing, advertising, communications, information security and cross-border data transfer in the United States, the European Union and other jurisdictions, and we cannot determine the impact such future laws, regulations and standards may have on our business.

Future laws, regulations, standards and other obligations or any changed interpretation of existing laws or regulations could impair our ability to develop and market new features and maintain and grow our customer base and increase revenue.

Future restrictions on the collection, use, sharing or disclosure of data or additional requirements placed upon us, our customers, partners or end consumers in connection with the use and disclosure of such information could require us to incur additional costs or modify our platform or other aspects of our products and services, possibly in a material manner, and could increase the complexity and cost of developing and deploying new products or limit our ability to develop new products and features altogether.

Regulatory and legislative developments related to the use of AI could adversely affect our use of such technologies in our products, services, and business.

We use AI, including machine learning and generative AI, throughout our business.

As the regulatory framework for machine learning technology, generative AI and automated decision making evolves, our business, financial condition and results of operations may be adversely affected.

The regulatory framework for AI and similar technologies, and automated decision making, is changing rapidly.

It is possible that new laws and regulations will be adopted in the United States and in non-U.S.

jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of our learning platforms and data analytics and the way in which we use AI and similar technologies.

We may not be able to adequately anticipate or respond to these evolving laws and regulations, and we may need to expend additional resources to adjust our offerings in certain jurisdictions if applicable legal frameworks are inconsistent across jurisdictions.

In addition, because these technologies are themselves highly complex and rapidly developing, it is not possible to predict all of the legal or regulatory risks that may arise relating to our use of such technologies.

Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.

For example, in Europe, the Council of the EU European Parliament and European Commission has reached provisional agreement on a revised draft of the AI Act which is currently expected to be enacted in early 2024.

The current draft of the AI Act, if enacted, would establish a risk-based governance framework for regulating high-risk AI systems operating in the EU market.

This framework would categorize AI systems based on the risks associated with such AI systems’ intended purposes as creating “unacceptable”, “high” or “limited” risks.

While the AI Act has not been enacted or enforced, there is a risk that our current or future AI-powered software or applications may be categorized as “high” risk or “limited” risk, obligating us to comply with the applicable requirements of the AI Act, which may impose additional costs on us, increase our risk of liability, or adversely affect our business.

For example, “high” risk AI systems are required, amongst other things, to implement and maintain certain risk and quality management systems, conduct certain conformity and risk assessments, use appropriate data governance and management practices, including in development and training, and meet certain standards related to testing, technical robustness, transparency, human oversight, and cybersecurity.

Even if our AI systems are not categorized as “high” risk we may be subject to additional transparency and other obligations for “low” risk AI system providers.

The AI Act sets forth certain penalties, including fines of the greater of EUR 35 million or 7% of worldwide annual turnover (as defined in the AI Act) for the prior year for violations related to offering prohibited AI-systems or data governance, fines of the greater of EUR 15 million or 3% of worldwide annual turnover for the prior year for violations related to the requirements for “high” risk AI systems, and fines of the greater of EUR 7.5 million or 1.5% of worldwide annual turnover for the prior year for violations related to supplying incorrect, incomplete or misleading information to the European Union and member state authorities.

If enacted in this form or a similar form, this regulatory framework is expected to have a material

impact on the way AI is regulated in the European Union, and together with developing guidance and/or decisions in this area, may affect our use of AI and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, financial condition and results of operations.

We are subject to anti-corruption and anti-bribery laws, and anti-money laundering laws and similar laws, and non-compliance with such laws can subject us to criminal penalties or significant fines and harm our business and reputation.

We are subject to anti-corruption and anti-bribery and similar laws, such as the U.S.

Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, the U.S.

We are subject to anti-corruption and anti-bribery and similar laws, such as the FCPA, the U.S.

domestic bribery statute contained in 18 U.S.C.

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customs regulations, the U.S.

Commerce Department's Export Administration Regulations and economic and

trade sanctions regulations maintained by the U.S.

Commerce Department's Export Administration Regulations and economic and trade sanctions regulations maintained by the U.S.

Treasury Department's Office of Foreign Assets Control.

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Federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the internet as a commercial medium.

In addition, government agencies or private organizations have imposed and may impose additional taxes, fees or other charges for accessing the internet, generally.

In addition, government agencies or private organizations have imposed and may impose additional taxes, fees or other

charges for accessing the internet, generally.

These laws or charges could limit the use of the internet or decrease the demand for internet-based solutions.

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While we regularly evaluate new information that may change our judgment resulting in recognition, derecognition or change in measurement of a tax position taken, there can be no assurance that the final determination of any examinations will not have an adverse effect on our business, operating results or financial condition.

Beginning in fiscal year 2023, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures currently and requires taxpayers to amortize such costs over a period of five or fifteen years.

Beginning in fiscal year 2023, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures currently and requires taxpayers to amortize such costs over a period of five or fifteen years.

Such provision may accelerate our cash taxes and increase our effective tax rate, resulting in an adverse effect on our overall results of operations and financial condition.

While it is possible that Congress may modify, defer, or repeal such provision, we have no assurance that the provision will be modified, deferred or repealed.

If no new legislation is passed, this provision may have an adverse effect on our effective tax rate resulting in additional cash taxes, as well as on our overall results of operations and financial condition.

In addition, global tax developments applicable to multinational businesses continue to evolve and create uncertainty to us.

For example, the United States recently enacted an alternative minimum tax for companies with modified GAAP net income in excess of $1 billion.

The Organization for Economic Cooperation and Development (the “OECD”) also has proposals regarding the implementation of global minimum tax.

Although these rules are not currently applicable to us, we operate in participating countries that have implemented or are expected to implement these rules.

We continue to evaluate the impact of these tax developments as new guidance and regulations are published and such becomes applicable.

We may have additional tax liabilities, which could harm our business, results of operations or financial condition.

Significant judgments and estimates are required in determining the (provision for) benefit from income taxes and other tax liabilities.

Significant judgments and estimates are required in determining the provision for income taxes and other tax liabilities.

We generally conduct our international operations through wholly-owned subsidiaries and report our taxable income based upon our business operations in those jurisdictions.

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

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

In determining the adequacy of income taxes, we assess the likelihood of adverse outcomes that could result if our tax positions were challenged by the Internal Revenue Service, or IRS, and other tax authorities.

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Any resulting increase in our tax obligation or cash taxes paid could adversely affect our results of operations and financial condition.

The United States recently enacted the Inflation Reduction Act which introduced several tax provisions including a 1% excise tax on certain stock repurchases made after December 31, 2022.

The United States enacted the Inflation Reduction Act in August 2022 which introduced several tax provisions including a 1% excise tax on certain stock repurchases made after December 31, 2022.

We may be subject to this new excise tax which could increase the cost of such repurchases.

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New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, possibly with retroactive effect, and could be applied solely or disproportionately to services provided over the internet.

These enactments could adversely affect our sales activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.

These enactments could adversely affect our sales

activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.

Existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us, possibly with retroactive effect, which could require us or our customers to pay additional tax amounts, as well as require us or our customers to pay fines or penalties and interest for past amounts.

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Certain jurisdictions in which we do not collect sales and use, value added or similar taxes may assert that such taxes are applicable, which has resulted or could result in tax assessments, penalties and interest, to us or our customers for past amounts, and we may be required to collect such taxes in the future.

If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs.

Such tax assessments, penalties and interest, or future requirements may adversely affect our operating results and financial condition.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

As of January 31, 2023, we had significant U.S.

federal and state net operating loss carryforwards, or NOLs, due to prior period losses.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an ownership change, which is generally defined as a greater than 50-percentage-point cumulative change by value in the equity ownership of certain stockholders over a rolling three-year period, is subject to limitations on its ability to utilize its pre-change NOLs to offset post-change taxable income.

Our existing NOLs may be subject to limitations arising from previous ownership changes, and if we undergo an ownership change our ability to utilize NOLs could be further limited by Section 382 of the Code and similar state provisions.

Future changes in our stock ownership, some of which may be outside of our control, could result in an ownership change under Section 382 of the Code.

Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire, decrease in value or otherwise be unavailable to offset future income tax liabilities.

Our ability to use our tax attributes to offset future income tax liabilities may be subject to certain limitations.

As of January 31, 2024, we had significant tax attributes due to U.S.

federal and state net operating loss carryforwards and U.S.

federal research and development tax credit carryforwards.

In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an ownership change, which is generally defined as a greater than 50-percentage-point cumulative change by value in the equity ownership of certain stockholders over a rolling three-year period, is subject to limitations on its ability to utilize its pre-change tax attributes to offset income tax liabilities arising from post-change taxable income.

Our existing tax attributes may be subject to limitations arising from previous ownership changes, and if we undergo an ownership change our ability to utilize these tax attributes could be further limited by Sections 382 and 383 of the Code and similar state provisions.

Future changes in our stock ownership, some of which may be outside of our control, could result in an ownership change under Sections 382 and 383 of the Code.

Furthermore, our ability to utilize tax attributes of companies that we may acquire in the future may be subject to limitations.

There is also a risk that due to regulatory changes, such as suspensions on the use of tax attributes, or other unforeseen reasons, our existing tax attributes could expire, decrease in value or otherwise be unavailable to offset future income tax liabilities.

Risks Related to Ownership of Our Common Stock and Our Status as a Public Company

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Factors that may cause fluctuations in our quarterly results include:

• our ability to attract new customers;

• our ability to attract and retain new and existing customers;

• our ability to execute on our business strategy;

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The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.

Some analysts have ceased covering us.

Some analysts have ceased covering us, and current coverage by analysts may be more limited than prior periods.

If additional analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.

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The market price of the shares of our common stock could decline as a result of the sale of a substantial number of our shares of common stock in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares.

Additionally, certain existing holders of our common stock, or their transferees, will have rights, subject to specified conditions, to require us to file one or more registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

If we were to register the resale of these shares, they could be freely sold in the public market.

If these additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could be adversely affected.

Additionally, certain holders of our common stock may negotiate to obtain rights, subject to specified conditions, to require us to file one or more registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

If we were to register the resale of such shares, they could be freely sold in the public market.

If such additional shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could be adversely affected.

We do not intend to pay dividends for the foreseeable future.

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We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.

In addition, our ability to pay dividends may be limited by our credit agreement.

In addition, our ability to pay dividends may be limited by our credit facility.

Consequently, stockholders must rely on sales of their common stock after price appreciation as the only way to realize any future gains on their investment.

Share repurchases could affect our stock price and increase its volatility and will diminish our cash reserves.

In March 2022, we announced a program to repurchase up to $100.0 million of our common stock.

In March 2022, we announced a program to repurchase up to $100.0 million of our common stock , which was increased by an additional $50.0 million in September 2023.

Such repurchases may be made from time to time subject to pre-determined price and volume guidelines.

As of January 31, 2023, we had repurchased 13,844,279 shares using $77.4 million of the program.

As of January 31, 2024, we repurchased 16,824,920 shares for $100.3 million.

Repurchases pursuant to our share repurchase program could affect our stock price and increase its volatility and will reduce the market liquidity for our stock.

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The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.

Unresolved Staff Comments

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