What changed in this filing

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Item 1A. Risk Factors

2025-03-13 compared with 2024-03-13 · 114 added, 115 removed, 754 unchanged (23% of the section changed)

8 unchanged sentences

Risks Related to Our Business and Industry

• Our revenue growth rate has slowed in recent periods.

• Our revenue has slowed and even contracted in recent periods.

• We have a history of losses and may not achieve profitability in the future.

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

• We have and may continue to expand our business through acquisitions, which may result in unexpected risks and challenges to complete and integrate.

• 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.

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• The reliability of our network and support infrastructure will be critical to our success.

Sustained failures or outages could lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation.

Sustained failures or outages could

lead to significant costs and service disruptions, which could negatively affect our business, financial results and reputation.

• 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.

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Risks Related to Our Business and Industry

Our revenue growth rate has slowed in recent 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.

Our revenue growth has slowed and even contracted in recent periods.

We experienced declines in our revenue growth in recent years, including revenue growth rates of 3% from the fiscal year ended January 31, 2022 to the fiscal year ended January 31, 2023, 1% from the fiscal year ended January 31, 2023 to the fiscal year ended January 31, 2024, and 4% from the fiscal year ended January 31, 2024 to the fiscal year ended January 31, 2025.

While total revenue increased by 4% from the fiscal year ended January 31, 2024 to the fiscal year ended January 31, 2025, this increase was inorganic due to our acquisition of Hearsay, and without this acquisition, our revenue would have otherwise declined 4% year-over-year in the same period.

This decline is inclusive of the resulting absence of revenue from a large customer that did not renew their contract as of 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 contract in future periods, despite any increase in revenue as a result of acquisitions.

We may also not be successful integrating acquisitions, which could lead to further erosion of revenue growth if we cannot retain the customers acquired.

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 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.

While our recent decline in growth rate was largely attributable to the departure of a large customer, we may continue to experience declines 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, geopolitical events and shifts such as regional conflicts that influence overall business activity, and other macroeconomic factors 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 has and may continue to negatively impact our revenue growth rates.

In addition, in June 2024, we initiated a substantial cost-cutting plan to reduce costs and increase our profitability, which could further limit our ability to grow organically and may even result in contraction of our revenue.

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 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.

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, acquire new businesses, 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.

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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 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.

In general, worldwide economic conditions such as inflation, interest rates and currency exchange rates 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.

lower demand or prices for our platform, fewer subscriptions and lower or no growth.

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.

For example, the U.S.

government is undergoing a period of rapid change as to spending and fiscal policy, which may have a considerable impact on the macroeconomic environment and behavior of our customers and end consumers.

We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.

We have in the past acquired and may in the future seek to acquire or invest in businesses, features or technologies that we believe could complement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities.

For example, on August 1, 2024, we completed our acquisition of Hearsay, and on February 7, 2025, we completed the acquisition of KabanaSoft, LLC d/b/a Places Scout.

We are currently in the process of integrating each business respective business into Yext.

The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

Although we have previously acquired businesses, we have limited acquisition experience.

If we acquire additional businesses, we may not be able to integrate the acquired personnel, operations and technologies successfully or effectively manage the combined business following the acquisition.

We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

• unanticipated liabilities associated with the acquisition or the acquired business;

• difficulty incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with our brand;

• inability to generate sufficient revenue to offset acquisition or investment costs;

• incurrence of acquisition-related costs;

• difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;

• difficulty converting the customers of the acquired business into our customers;

• diversion of our management’s attention from other business concerns;

• adverse effects to our existing business relationships as a result of the acquisition;

• potential loss of key employees;

• use of resources that are needed in other parts of our business;

• use of substantial portions of our available cash to consummate the acquisition.

In addition, the accounting for purchases can be complicated.

For example, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and intangible assets, which must be assessed for impairment at least annually.

In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, which could adversely affect our results of operations.

Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.

If an acquired business fails to meet our expectations, our business, operating results and financial condition may suffer.

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.

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

As a result of changes to our platform and our sales model, our ability to forecast our future operating results is limited and subject to a number of uncertainties, including our ability to plan for and model our future growth.

As a result of changes to our platform and our sales model, including as a result of acquisitions, our ability to forecast our future operating results is limited and subject to a number of uncertainties, including our ability to plan for and model our future growth.

The dynamic nature of our business and our industry may make it difficult to evaluate our current business and future prospects, and as a result our historical performance should not be considered indicative of our future performance.

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

Our management, headcount and operations have grown substantially since Yext went public in 2017, growing to approximately 1,150 as of January 31, 2025.

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%) of overall headcount that took effect in the three months ended April 30, 2023.

On June 4, 2024, we initiated a restructuring plan resulting in the reduction of our workforce by approximately twelve percent (12%) of overall headcount as compared to our headcount as of January 31, 2024, which we substantially completed in the three months ended July 31, 2024.

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

In addition, we have experienced significant leadership changes in recent quarters.

In March 2022, our Chief Executive Officer, Howard Lerman, and our Chief Financial Officer, Steven Cakebread resigned, and our Chairman, Michael Walrath, and our Chief Accounting Officer, Darryl Bond, succeeded them as Chief Executive Officer and Chief Financial Officer, respectively.

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 continues to serve on our Board of Directors.

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

In addition, we have experienced significant leadership changes in recent years.

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.

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We have implemented many of these systems and procedures only recently, and they may not work as we expect or at all.

If we grow in the future, additional headcount and capital investments will increase our costs, which will make it more difficult for us to address any future revenue shortfalls by reducing expenses in the short term.

If we grow in the future, including as a result of any acquisitions, additional headcount and capital investments will increase our costs, which will make it more difficult for us to address any future revenue shortfalls by reducing expenses in the short term.

However, to the extent we cannot scale our information technology infrastructure, we will continue to rely on manual processes that are costly, inefficient and subject to error.

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Much of our sales process is relationship-driven, which requires a significant sales force.

We have historically had difficulty recruiting and retaining a sufficient number of sales personnel, and this difficulty was heightened during the COVID-19 pandemic.

We have historically had difficulty recruiting and retaining a sufficient number of sales personnel, and this difficulty was heightened during the COVID-19 pandemic beginning in later 2019 and continuing for several years thereafter.

If we are unable to adequately recruit for and retain our sales force, we will not be able to reach our market potential and execute our business plan.

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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.

In 2014, we opened our first office outside the United States, and we have expanded our operations abroad, including as a result of acquisitions.

Our international expansion has created and will create significant challenges for our management, administrative, operational and financial infrastructure.

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

We have established strategic relationships with over 200 third-party service and application providers that comprise our Publisher Network, including Amazon Alexa, Apple Maps, Bing, Cortana, Facebook, Google, Google Assistant, Google Maps, Siri, Yelp and many others.

We have established strategic relationships with over 200 third-party service and application providers that comprise our Publisher Network, including Amazon Alexa, Apple, Bing, Facebook, Google Business Profile, and Yelp and many others.

These application providers provide us with direct access to update content on their websites and applications.

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For example, we recently began offering capacity-based pricing for our Pages and Search products.

There is no assurance that this new pricing and distribution model will be successful thus adversely affecting our financial results.

There is no assurance that this new pricing and distribution model will be successful thus could adversely affect our financial results.

Furthermore, as the markets for our features grow, as new competitors introduce new products or services that compete with ours or reduce their prices, or as we enter into new international markets, we may be unable to attract new customers or retain existing customers at the same price.

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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.

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

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

We believe that our platform offers value to our customers in part because of the difficulty for a customer to update information about their business across many websites and apps, many of which are owned or controlled by different entities and receive information from a variety of sources.

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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Our customers may seek to renew their subscriptions for fewer features, at renegotiated rates, or for shorter contract lengths, all of which could reduce the amount of the subscription.

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

The follow-on effects of inflation and disruption following the COVID-19 pandemic, coupled with additional geopolitical uncertainty, has meant that not all customers have returned or will return to our offerings.

Challenging macroeconomic conditions may also contribute to similar results.

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

As we enhance our platform and develop new features, our platform has also become increasingly sophisticated requiring additional technology, sales, customer support and professional services resources.

As we enhance our platform and develop or acquire new features, our platform has also become increasingly sophisticated requiring additional technology, sales, customer support and professional services resources.

In order for our customers to understand and derive value from these new products and features, we will need to devote additional resources to train our sales personnel and provide higher-quality customer support and professional services.

In addition, as our software becomes more complex, we may fail to detect errors, bugs or vulnerabilities.

As we continue to develop or acquire new products and features, including those that offer legal or regulatory compliance, we may be exposed to additional unforeseen risk.

Even if we are successful in these endeavors, diversifying our platform offerings will bring us more directly into competition with other providers that may be better established or have greater resources than we have.

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For the fiscal years ended January 31, 2025, 2024 and 2023, the aggregate of our top five customers accounted for approximately 8%, 8% and 9%, 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.

During the three months ended January 31, 2024, we experienced the attrition of one of these top five customers, and the corresponding absence of revenue from this customer has and will be realized primarily 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.

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Under standards established by the United States Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

As of January 31, 2021, we had identified a material weakness in our internal control over financial reporting associated with processes to calculate, record and account for sales commissions.

As of January 31, 2021, we had identified a material weakness in our internal control over financial reporting associated with

processes to calculate, record and account for sales commissions.

In fiscal year 2022, we remediated the previously identified deficiencies in internal control over financial reporting and concluded that as of January 31, 2022, and thereafter, we maintained effective internal control over financial reporting.

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Deficiencies in our internal control over financial reporting that are identified in such assessments may be deemed to be material weaknesses or may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.

We may acquire other companies or technologies, which could divert our management's attention, result in additional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.

Although we have previously acquired businesses, we have limited acquisition experience.

We also may not achieve the anticipated benefits from the acquired business due to a number of factors, including:

• unanticipated liabilities associated with the acquisition;

• difficulty incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with our brand;

• inability to generate sufficient revenue to offset acquisition or investment costs;

• incurrence of acquisition-related costs;

• difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;

• difficulty converting the customers of the acquired business into our customers;

• diversion of our management's attention from other business concerns;

• adverse effects to our existing business relationships as a result of the acquisition;

• potential loss of key employees;

• use of resources that are needed in other parts of our business;

• use of substantial portions of our available cash to consummate the acquisition.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and intangible assets, which must be assessed for impairment at least annually.

Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.

If an acquired business fails to meet our expectations, our business, operating results and financial condition may suffer.

Natural disasters and other events beyond our control could adversely affect us.

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While we maintain crisis management and disaster response plans, natural disasters and other events could also make it difficult or impossible for us to continue operations, and could decrease demand for our platform.

In addition, our data centers are located in New Jersey and Texas and our cloud computing providers operate from facilities in northern Virginia, Frankfurt, Germany and Tokyo, Japan, making our business particularly susceptible to natural disasters and other catastrophic events in those areas.

In addition, our data centers are located in New Jersey and Texas and our cloud computing providers operate from facilities in northern Virginia, Oregon, Frankfurt, Germany, Tokyo, Japan, Amsterdam, Netherlands, Warsaw, Poland and Mons, Belgium, making our business particularly susceptible to natural disasters and other catastrophic events in those areas.

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

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To estimate the size of these new markets and their growth rates, we have relied on historical estimates and forecasts provided by industry publications and other third-party sources, including Gartner.

We have not independently verified these estimates published by third parties and cannot assure you of their accuracy or completeness.

We have not independently verified these estimates

published by third parties and cannot assure you of their accuracy or completeness.

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

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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.

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

Even if the market in which we compete meets the size estimates and growth we forecast, our business could fail to grow at similar rates, if at all.

Our management team has limited experience managing a public company.

Certain members of our management team have limited experience managing a public company.

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.

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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.

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 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.

Our cash and cash equivalents may be exposed to failure of our banking institutions.

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Accordingly, we may need to engage in equity or debt financings to secure additional funds.

If we raise additional funds through future issuances of equity or convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

If we raise additional funds through future issuances of equity or

convertible debt securities, our stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities.

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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.

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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If asserted, we cannot assure you that an infringement claim will be successfully defended.

Certain third parties have substantially greater resources than we have and may be able to sustain the costs of intellectual property litigation for longer periods of time than we can.

Certain third parties have

substantially greater resources than we have and may be able to sustain the costs of intellectual property litigation for longer periods of time than we can.

A successful claim against us could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our platform, or require that we comply with other unfavorable terms.

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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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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.

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

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

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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 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.

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.

Furthermore, in a rapidly changing business environment, our Publisher Network application providers may experience limitations and delays, which could limit the functionality of our platform.

If the functionality of the software, APIs or websites of our third-party application providers is impaired, our customers may attribute such limitations to us and our platform thus damaging our reputation and customer relationships.

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This technology, which is a new and emerging technology that is in its early stages of commercial use, presents a number of risks inherent in its use.

AI algorithms are based on machine learning and predictive analytics, which can create unintended biases and discriminatory outcomes.

The AI algorithms we use in our products are based on machine learning and predictive analytics, which can create unintended biases and discriminatory outcomes.

We have implemented measures to address algorithmic bias, such as testing our algorithms and regularly reviewing our data sources.

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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.

There are a limited number of AI service providers from which we license the use of their large language models, or 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.

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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.

accessed via AI tools may be subject to third-party usage restrictions that could impede our ability to use such content or AI tools or

otherwise lead to liability.

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.

While AI-related lawsuits to date have generally focused on the AI service providers themselves, the collection and use of content for AI tools or 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.

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

From time to time, we are and 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 legal proceedings, disputes or regulatory inquiries that arise in the ordinary course of business, such as claims brought by our customers in connection with commercial disputes or employment claims made by our current or former employees.

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

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

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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.

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.

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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, the European Union has enacted legislation, the AI Act, which entered into force on August 1, 2024.

The AI Act establishes a risk-based governance framework for regulating high-risk AI systems operating in the EU market.

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

There is a risk that our current or future AI-powered software or applications may obligate 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.

Even if our AI systems are not categorized as “high” or “unacceptable” 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.

This regulatory framework is expected to have a material impact on AI regulation 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.

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While we have policies and procedures in this area, we cannot guarantee that none of our employees, agents, representatives, business partners or third-party intermediaries will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.

Any allegations concerning or violations of these laws could subject us to investigations, sanctions, settlements, prosecution, enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension or debarment from government contracting, the loss of export privileges, whistleblower complaints, reputational harm, adverse media coverage, and other collateral consequences, all of which could have an adverse effect on our business, results of operations, prospects and financial condition.

contracting, the loss of export privileges, whistleblower complaints, reputational harm, adverse media coverage, and other collateral consequences, all of which could have an adverse effect on our business, results of operations, prospects and financial condition.

In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense and compliance costs and other professional fees.

We are subject to governmental export and import controls and economic sanctions laws that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.

We are subject to governmental export and import controls and economic sanctions laws and regulations that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.

Our business activities are subject to various restrictions under U.S.

export and import controls and trade and economic sanctions laws, including U.S.

export and import controls and trade and economic sanctions laws and regulations, including U.S.

customs regulations, the U.S.

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Treasury Department’s Office of Foreign Assets Control.

export control laws and U.S.

economic sanctions laws include prohibitions on the sale or supply of certain products and services to U.S.

embargoed or sanctioned countries, governments, persons and entities and also require authorization for the export of certain items including encryption items.

In addition, various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our services or could limit our customers' ability to implement our services in those countries.

export control and U.S.

economic sanctions laws and regulations include prohibitions on the sale or supply of certain products and services to U.S.

embargoed or sanctioned countries, their governments, and prohibited or restricted persons and entities and also require authorization for the export of certain items including encryption items.

In addition, various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws and regulations that could limit our ability to distribute our services or could limit our customers’ ability to implement our services in those countries.

Although we take precautions to prevent our platform from being provided in violation of such laws, our platform may have been in the past, and could in the future be, provided inadvertently in violation of such laws, despite the precautions we take.

Additionally, although we take precautions to prevent transactions with U.S.

sanction targets, we could inadvertently provide our platform to persons prohibited by U.S.

If we fail to comply with these laws and regulations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export or import privileges, monetary penalties, and, in extreme cases, imprisonment of responsible employees for knowing and willful violations of these laws.

Obtaining the necessary authorizations, including any required license, for a particular transaction may be time-consuming, is not guaranteed, and may result in the delay or loss of sales opportunities.

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

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 products or in our decreased ability to export or sell our products to existing or potential customers with international operations.

For example, in February 2022, following Russia’s invasion of Ukraine, the United States and other countries announced economic sanctions against Russia, and the United States and other countries could impose wider sanctions and take other actions as the conflict further escalate.

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

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

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

Additionally, although we take precautions to prevent transactions with U.S.

sanction targets, we could inadvertently provide our platform to persons prohibited by U.S.

Violations of export and import regulations and economic sanctions could result in negative consequences to us, including government investigations, penalties and reputational harm.

Violations of export and import laws and regulations and economic sanctions could result in negative consequences to us, including government investigations, penalties and reputational harm.

Changes in laws and regulations related to the internet or changes in internet infrastructure itself may diminish the demand for our platform and could adversely affect our business and results of operations.

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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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We are subject to income taxes in the United States and various jurisdictions outside of the United States.

Our effective tax rate could fluctuate due to changes in the mix of earnings and losses in countries with differing statutory tax rates, changes in non-deductible expenses, expiration or non-utilization of net operating losses, changes in excess tax benefits related to exercises and vesting of stock options and awards compensation, changes in the valuation of deferred tax assets and liabilities and our ability to utilize them, the applicability of withholding taxes and changes in accounting principles and tax laws in jurisdictions where we operate.

Our effective tax rate could fluctuate due to changes in the mix of earnings and losses in countries with differing statutory tax rates, changes in non-deductible expenses, expiration or non-utilization of net operating losses, changes in excess tax benefits related to exercises and vesting of stock options and awards compensation, changes in the valuation of deferred tax assets and liabilities and our ability to utilize them, the applicability of withholding taxes, effects from acquisitions, and changes in accounting principles and tax laws in jurisdictions where we operate.

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.

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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.

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.

For example, the United States has 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.

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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 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.

The United States enacted the Inflation Reduction Act 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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• network outages and security breaches and incidents;

• natural disasters, pandemics including the COVID-19 pandemic, acts of terrorism and other events beyond our control;

• natural disasters, pandemics including the COVID-19 pandemic, acts of terrorism, geopolitical conflict and other events beyond our control;

• general economic, industry and market conditions;

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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 , which was increased by an additional $50.0 million in September 2023.

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 and an additional $50.0 million in March 2025.

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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors