FAIR ISAAC CORP

Previous wording

Our ability to increase our revenues depends to some extent upon introducing new products and services, upon introducing enhancements and improvements to existing products and services and upon entering new markets for products and services. If we are unable to successfully develop, or if the marketplace does not accept, new, enhanced or improved products and services, or if we experience defects, failures or delays associated with the introduction of new, enhanced or improved products or services, our business could suffer serious harm.

Current wording

Our ability to increase our revenue depends, in part, on our ability to successfully develop and introduce new products and services, enhance and improve our existing offerings, and expand into new markets. If we are unable to successfully develop and commercialize new, enhanced, or improved products and services, or if the marketplace does not adopt or accept these offerings, our business, financial condition, and results of operations could be adversely affected. In addition, any defects, failures, disruptions, or delays associated with the development, launch, or performance of new, enhanced, or improved products and services could harm our reputation, customer relationships, and business.

Previous wording

Our revenue growth and the success of our business strategy depend upon our ability to enhance and improve existing products and services, and to continue to introduce new products and services that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance. If we are unable to develop new, enhanced or improved products and services, including those that utilize AI technologies, or if we are not successful in introducing such products and services, we may not be able to grow our business or growth may occur more slowly than we anticipate. In addition, significant undetected errors or delays in new products or new versions of products may affect market acceptance of our products and could harm our business, financial condition or results of operations. In the past, we have experienced delays while developing and introducing new products and product enhancements, primarily due to difficulties developing models, acquiring data, and adapting to particular software operating environments and certain client or other systems. We have also experienced errors or “bugs” in our software products, despite testing prior to release of the products. These errors could affect the ability of our products to work with other hardware or software products, could delay the development or release of new products or new versions of products, and could adversely affect market acceptance of our products. Errors or defects in our products that are significant, or are perceived to be significant, could result in rejection of our products, damage to our reputation, loss of revenues, diversion of development resources, an increase in product liability claims, and increases in service and support costs and warranty claims. Our use of AI in the development of our products and our incorporation of AI features into some of our products could introduce errors, defects, or delays impacting our ability to successfully develop new products.

Current wording

Our revenue growth and the success of our business strategy depend on our ability to enhance and improve existing products and services, including FICO® Platform, and to continue to introduce new products and services that keep pace with technological developments, satisfy increasingly sophisticated customer requirements, and achieve market acceptance. Our revenue growth and strategy success also depend on our ability to adopt new software engineering technologies and processes, including AI-based software design and development platforms. If we are unable to develop new, enhanced, or improved products and services, or to adopt new software engineering technologies and processes, particularly those that utilize AI technologies, or if we are not successful in introducing such products and services, or in deploying such technologies and processes, we may not be able to grow our business or growth may occur more slowly than we anticipate. In addition, significant undetected errors, defects, or delays in new products or new versions of existing products could adversely affect market acceptance of our products and harm our business, financial condition, or results of operations. In the past, we have experienced delays in developing and introducing new products and product enhancements, primarily due to difficulties developing models, acquiring data, and adapting our products to particular software operating environments and certain client or other systems. We have also identified errors or “bugs” in our software products, despite testing prior to release of the products. These errors, defects, or compatibility issues could negatively impact the performance of our products, delay the development or release of new products or enhancements, and adversely affect market acceptance of our products. Errors or defects in our products that are significant, or that are perceived to be significant, could result in rejection of our products, damage to our reputation, loss of revenues, diversion of development resources, an increase in product liability claims, and increases in service and support costs and warranty claims. Additionally, our use of AI in the development of our products and our incorporation of AI features into some of our products could introduce errors, defects, or delays impacting our ability to successfully develop new products.

Previous wording

We also believe that much of the future growth of our business and the success of our business strategy may depend on our ability to continue to expand into newer markets for our products and services. Such areas are relatively new to our product development and sales and marketing personnel. Products and services that we plan to market in the future are in various stages of development. If these newer markets are not willing to adopt our products and services, either as a result of the quality of these products and services or due to other factors, such as economic conditions, our revenues may decrease.

Current wording

We also believe that much of the future growth of our business and the success of our business strategy depends on our ability to continue to expand into newer markets for our products and services. Such areas are relatively new to our product development and sales and marketing personnel. Products and services that we plan to market in the future are in various stages of development. If these newer markets are not willing to adopt our products and services, either as a result of the quality of these products and services or due to other factors, such as economic conditions, our revenues may decrease.

Previous wording

Demand for our products and services may be sensitive to product and pricing changes we implement, and our product and pricing strategies may not be accepted by the market. If our customers fail to accept our product and pricing strategies, our revenues, results of operations and business may suffer. The market for our solutions is intensely competitive and is constantly changing, and we expect competition to persist and intensify. Our regional and global competitors vary in size and in the scope of the products and services they offer, and include:

Current wording

Demand for our products and services may be sensitive to changes in our products and pricing, and our product and pricing strategies may not be accepted by the market. If our customers fail to accept our product and pricing strategies, our revenues, results of operations, and business may suffer. The market for our solutions is intensely competitive and is constantly changing, and we expect competition to persist and intensify. Our regional and global competitors vary in size and in the scope of the products and services they offer, and include:

Previous wording

•developers and providers of neural networks, machine learning, and AI systems;

Current wording

•developers and providers of large language models, machine learning, and AI systems;

Previous wording

•software companies supplying predictive analytic modeling, rules, or analytic development tools;

Current wording

•software companies supplying machine learning modeling, rules, or AI development tools;

Previous wording

•business process management and decision rules management providers;

Current wording

•business process management and intelligent decisioning platform providers;

Previous wording

Many of our existing and anticipated competitors have greater financial, technical, marketing, professional services and other resources than we do, and industry consolidation is creating even larger competitors in many of our markets. As a result, our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote greater resources than we can to develop, promote and sell their products. Many of these companies have extensive customer relationships, including relationships with many of our current and potential customers. For example, Experian, TransUnion and Equifax have formed a joint venture that is selling a credit scoring product competitive with our products. Furthermore, new competitors or alliances among competitors may emerge and rapidly gain significant market share. If we are unable to respond as quickly or effectively to changes in customer requirements as our competition, our ability to expand our business and sell our products will be negatively affected.

Current wording

Many of our existing and potential competitors have greater financial, technical, marketing, professional services and other resources than we do, and industry consolidation is creating even larger competitors in many of our markets. As a result, our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote greater resources than we can to develop, promote, and sell their products. Many of these competitors have long-standing or broad customer relationships, including with many of our current and prospective customers. In addition, new competitors or alliances among competitors may emerge and rapidly gain significant market share. If we are unable to respond as quickly or effectively to changes in customer requirements as our competition, our ability to expand our business and sell our products could be adversely affected.

Previous wording

Our competitors may be able to sell existing or new products competitive to ours at lower prices individually or as part of integrated suites of several related products. This ability may cause our customers to purchase products that directly compete with our products from our competitors, which could decrease our product sales and market share. Price reductions by our competitors could pressure us to reduce our product prices in a manner that negatively impacts our margins and could also harm our ability to obtain new long-term contracts and renewals of existing long-term contracts on favorable terms.

Current wording

Our competitors may offer existing or new products that compete with our products at lower prices, either on a standalone basis or as part of integrated product suites. As a result, our customers may purchase competing products instead of ours, which could decrease our sales and market share. Competitive pricing pressure may also require us to reduce our prices in a manner that negatively impacts our margins and could also harm our ability to obtain new long-term contracts and renewals of existing long-term contracts on favorable terms.

Previous wording

If use of the FICO® Score by Fannie Mae and Freddie Mac were to cease or decline, it could have a material adverse effect on our revenues, results of operations and stock price.

Current wording

The ability to use a competing credit score model in the U.S. mortgage market, including by Fannie Mae and Freddie Mac, has, and could continue to have, a material adverse effect on our stock price, and if use of the FICO® Score in the U.S. mortgage market were to cease or decline, it could have a material adverse effect on our revenues, results of operations, and stock price.

Previous wording

A significant portion of our revenues in our Scores segment is attributable to the U.S. mortgage market, which includes, for mortgages eligible for purchase by The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”), a requirement by those enterprises that U.S. lenders provide FICO® Scores for each mortgage delivered to them. However, their continued use of the FICO Score is subject to ongoing validation and approval by those enterprises and the Federal Housing Finance Agency (“FHFA”). If other credit score models are approved for use with mortgages delivered to Fannie Mae and Freddie Mac, or the FICO Score is not approved for continued use with those mortgages, it could have a material adverse effect on our revenues, results of operations and stock price. Other changes implemented by FHFA, Fannie Mae or Freddie Mac could also affect the demand for FICO Scores and thus could have similar adverse effects on our business, including, for example, the change announced by the FHFA Director in July 2025 permitting mortgage originators to choose the credit score they submit with mortgages delivered to Fannie Mae and Freddie Mac or a potential future change permitting mortgage originators to underwrite loans using credit scores from fewer than three national consumer reporting agencies. The ability of our FICO Score to compete effectively in the U.S. mortgage market may be constrained by the pricing and other business practices of the consumer reporting agencies, which could have a material adverse effect on our revenues, results of operations and stock price.

Current wording

It is difficult to predict the extent to which VantageScore will be adopted and used relative to FICO Scores for mortgages. Increased adoption and use of VantageScore or other competing credit score models could have a material adverse effect on our revenues and results of operations, and could continue to have a material adverse effect on our stock price. Other changes implemented by HUD, FHA, FHFA, or the Enterprises could also adversely affect the demand for FICO Scores and thus could have similar adverse effects. Further, if other credit score models are approved and adopted for use with mortgages delivered to the Enterprises, or for use with mortgages subject to other government programs, or if the FICO Score is not approved for continued use with those mortgages, it could have a material adverse effect on our revenues. The ability of our FICO Score to compete effectively in the U.S. mortgage market may also be constrained by delays by any of the foregoing entities in adopting the latest versions of our FICO Score or in supporting our newer distribution models, including the FICO® Mortgage Direct License Program we announced in October 2025, or by the pricing, distribution, and other business practices of the consumer reporting agencies, all of which could have a material adverse effect on our revenues, results of operations, and stock price.

Previous wording

We derive a substantial portion of our revenues from a small number of products and services, and if the market does not continue to accept these products and services, our revenues will decline.

Current wording

We derive a substantial portion of our revenues from a small number of products and services, and if the market does not continue to accept these products and services, our revenues may decline.

Previous wording

We expect that revenues derived from our scoring solutions, fraud solutions, customer communication services, customer management solutions and decision management software will continue to account for a substantial portion of our total revenues for the foreseeable future. Our revenues will decline if the market does not continue to accept these products and services. Factors that might affect the market acceptance of these products and services include the following:

Current wording

We expect that revenues derived from our scoring solutions, fraud solutions, customer communication services, customer management solutions, and decision management software, and their corresponding capabilities when enabled on FICO Platform, will continue to account for a substantial portion of our total revenues for the foreseeable future. Our revenues may decline if the market does not continue to accept these products and services. Factors that might affect the market acceptance of these products and services include the following:

Previous wording

•changes in technology, including increased use of artificial intelligence (“AI”);

Current wording

•changes in technology, including increased use of artificial intelligence (“AI”) and market disruption caused by AI-based offerings;

Previous wording

•failure to successfully adopt cloud-based technologies;

Current wording

•failure to successfully adopt cloud-based or AI technologies;

Previous wording

•failure to execute our selling approach; and

Current wording

•failure to execute our selling approach;

Previous wording

We have increasingly focused our Software segment’s business strategy on investing significant development resources to enable substantially all of our software to run on FICO® Platform, our modular software offering designed to enable advanced analytics and decisioning use cases. This business strategy is designed to enable us to increase our business by selling multiple connectable and extensible products to clients, and to allow our clients to more easily expand their usage and the use cases they enable over time. The market may be unreceptive to our general business approach, including being unreceptive to our cloud-based offerings and unreceptive to purchasing multiple products from us. As we continue to pursue this business strategy, we may experience volatility in our Software segment’s revenues and operating results caused by various factors, including the differences in revenue recognition treatment and timing between our cloud-based offerings and on-premises software licenses, the timing of investments and other expenditures necessary to develop and operate our cloud-based offerings, and the adoption of new sales, delivery and distribution methods. If this business strategy is not successful, we may not be able to grow our Software segment’s business, growth may occur more slowly than we anticipate, or revenues and profits may decline.

Current wording

We continue to focus our Software segment’s business strategy on investing significant development resources to develop and enhance, and to enable substantially all of our software capabilities to run on, FICO® Platform, our modular software offering designed to enable advanced analytics and decisioning use cases. This business strategy is designed to enable us to increase our business by selling multiple connectable and extensible products to clients, and to allow our clients to more easily expand their usage and the use cases they enable over time. The market may be unreceptive to our general business approach, including being unreceptive to our cloud-based offerings or unreceptive to purchasing multiple products from us. As we continue to pursue this business strategy, we may experience volatility in our Software segment’s revenues and operating results caused by various factors, including customer timing and adoption risk with respect to FICO Platform, the timing of investments and other expenditures necessary to develop and operate our cloud-based offerings, and the adoption of new sales, delivery, and distribution methods. If this business strategy is not successful, we may not be able to grow our Software segment’s business, growth may occur more slowly than we anticipate, or revenues and profits may decline.

Previous wording

We rely on relatively few customers, as well as our contracts with the three major consumer reporting agencies, for a significant portion of our revenues and profits. Many of our customers are significantly larger than we are and may have greater bargaining power. The businesses of our largest customers depend, in large part, on favorable macroeconomic conditions. If these customers are negatively impacted by weak global economic conditions, global economic volatility or the terms of these relationships otherwise change, our revenues and operating results could decline.

Current wording

We rely on relatively few customers, including our contracts with the three major consumer reporting agencies, for a significant portion of our revenues and profits. Many of our customers are significantly larger than we are and may have greater bargaining power, which could negatively impact the terms of our commercial agreements. In addition, the businesses of our largest customers depend, in large part, on favorable macroeconomic conditions. If these customers experience adverse business conditions, reduce their spending, renegotiate or terminate our agreements, or the terms of these relationships otherwise change, our revenues and operating results could be adversely affected.

Previous wording

In addition, the U.S. and other key international economies periodically experience downturns in which economic activity is impacted by falling demand for a variety of goods and services, increased volatility of interest rates, fluctuating rates of inflation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, trade policies and tariffs, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy. The potential for economic disruption presents considerable risks to our business, including potential bankruptcies or credit deterioration of financial institutions with which we have substantial relationships. Economic disruption could result in a decline in the sales of new products to our customers and the volume of transactions that we execute for existing customers. In addition, the volume of our Scores sales depends heavily on macroeconomic conditions, including, for example, the volume of transactions in the U.S. mortgage and credit card markets, which account for a significant portion of the revenues in our Scores segment.

Current wording

In addition, the U.S. and other key international economies periodically experience economic downturns and periods of heightened uncertainty, which may result in reduced demand for goods and services, increased volatility of interest rates, fluctuating rates of inflation, geopolitical tensions, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, trade policies and tariffs, equity and foreign exchange markets, bankruptcies, and overall uncertainty with respect to the economy. The potential for economic disruption presents considerable risks to our business, including potential bankruptcies or credit deterioration of financial institutions with which we have substantial relationships. Economic disruption could adversely affect demand for our products and services, resulting in a decline in the sales of new products to our customers and a reduction in transaction volumes from existing customers. In addition, the volume of our Scores sales depends heavily on macroeconomic conditions in the markets in which our customers operate. For example, the volume of transactions in the U.S. mortgage and credit card markets, which account for a significant portion of the revenues in our Scores segment, may be adversely affected by economic conditions.

Previous wording

We also derive a substantial portion of our Scores segment revenues and operating income from our contracts with the three major consumer reporting agencies in the U.S., Experian, TransUnion and Equifax, and other parties that distribute our products to certain markets. The loss of or a significant change in a relationship with one of the three consumer reporting agencies with respect to their distribution of our products or with respect to our myFICO® offerings, the loss of or a significant change in a relationship with a major customer, the loss of or a significant change in a relationship with a significant third-party distributor (including payment card processors), or the loss of or delay of significant revenues from these sources, could have a material adverse effect on our revenues and results of operations.

Current wording

We also derive a substantial portion of our Scores segment revenues and operating income from our contracts with the three major consumer reporting agencies in the U.S., Experian, TransUnion, and Equifax, as well as other parties that distribute our products to certain markets. The loss of, or a significant change in, our relationship with one of these consumer reporting agencies, including with respect to their distribution of our products or our myFICO® offerings, or with a major customer or third-party distributor (including payment card processors), or the loss of or delay of significant revenues from these sources, could have a material adverse effect on our revenues and results of operations.

Previous wording

Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) industry. If our clients’ industry experiences uncertainty, it will likely harm our business, financial condition or results of operations.

Current wording

Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) industry. If our clients’ industry experiences uncertainty, demand for our products and services could decline and could adversely impact our business, financial condition, or results of operations.

Previous wording

During fiscal 2025, 92% of our revenues were derived from sales of products and services to the banking industry. Periods of global economic uncertainty experienced in the past have produced substantial stress, volatility, illiquidity and disruption of global credit and other financial markets, resulting in the bankruptcy or acquisition of, or government assistance to, several major domestic and international financial institutions. The potential for future stress and disruptions, including in connection with geopolitical tensions, military conflicts, trade policies and tariffs, the level of inflation and the volatility of interest rates, presents considerable risks to our businesses and operations. These risks include potential bankruptcies or credit deterioration of financial institutions, many of which are our customers. Such disruption would result in a decline in the revenue we receive from financial and other institutions. In addition, if consumer demand for financial services and products and the number of credit applications decrease, the demand for our products and services could also be materially reduced. These types of disruptions could lead to a decline in the volumes of products and services we provide our customers and could negatively impact our revenue and results of operations.

Current wording

During fiscal 2026, 92% of our revenues were derived from sales of products and services to the banking industry. Periods of global economic uncertainty historically have produced substantial stress, volatility, illiquidity, and disruption of global credit and other financial markets, including the bankruptcy, acquisition, or government assistance related to certain major domestic and international financial institutions. The potential for future stress and disruptions, including in connection with geopolitical tensions, military conflicts, trade policies and tariffs, inflationary pressures, and interest rate volatility, presents considerable risks to our businesses and operations. These risks include potential bankruptcies or credit deterioration of financial institutions, many of which are our customers. Such disruption would result in a decline in the revenue we receive from financial and other institutions. In addition, if consumer demand for financial services and products and the number of credit applications decrease, including due to interest rate changes or other factors, the demand for our products and services could also be materially reduced. These types of disruptions could lead to a decline in the volumes of products and services we provide our customers and could negatively impact our revenue and results of operations.

Previous wording

While the rate of account growth in the U.S. banking industry has been slow, we have generated most of our revenue growth in the banking industry by selling and cross-selling our products and services to large banks and other credit issuers. If the banking industry experiences contraction in the number of participating institutions, we may have fewer opportunities for revenue growth due to reduced or changing demand for our products and services that support customer acquisition programs of our customers. In addition, industry contraction could affect the base of recurring revenues derived from contracts in which we are paid on a per-transaction basis as formerly separate customers combine their operations under one contract. There can be no assurance that we will be able to prevent future revenue contraction or effectively promote future revenue growth in our businesses.

Current wording

While the rate of account growth in the U.S. banking industry has been slow, we have generated most of our revenue growth in the banking industry by selling and cross-selling our products and services to large banks and other credit issuers. If the banking industry experiences contraction in the number of participating institutions, we may have fewer opportunities for revenue growth due to reduced or changing demand for our products and services that support customer-facing programs of our customers. In addition, industry contraction could affect the base of recurring revenues derived from contracts in which we are paid on a per-transaction basis as formerly separate customers combine their operations under one contract. There can be no assurance that we will be able to prevent future revenue contraction or effectively promote future revenue growth in our businesses.

Previous wording

We rely on relationships with third parties for marketing, distribution and certain services. If we experience difficulties in these relationships, including competition from these third parties, our future revenues may be adversely affected.

Current wording

We rely on relationships with third parties for technologies used in our products, and for marketing, distribution, deployment, and certain other services. If we experience difficulties in these relationships, including competition from these third parties, our future revenues may be adversely affected.

Previous wording

Many of our products are sold by distributors or partners, and we intend to continue to market and distribute our products through these existing distributor and partner relationships, as well as invest resources to develop additional sales, distribution and marketing relationships. For example, our Scores segment relies on, among others, Experian, TransUnion and Equifax. Failure of our existing and future distributors or partners to generate significant revenues or otherwise perform their expected services or functions, demands by such distributors or partners to change the terms on which they offer our products, or our failure to establish additional distribution or sales and marketing alliances, could have a material adverse effect on our business, operating results and financial condition. In addition, certain of our distributors and partners presently compete with us and may compete with us in the future, either by developing competitive products themselves or by distributing competitive offerings. For example, Experian, TransUnion and Equifax have developed a credit scoring product to compete directly with our products and are actively selling that product. Competition from distributors or other sales and marketing partners could significantly harm sales of our products and services.

Current wording

Failure of our existing or future technology suppliers to provide their products effectively or to perform their obligations as agreed could have a material adverse effect on our business, operating results, and financial condition. Failure of our existing or future distributors, resellers, or partners to generate significant revenues or otherwise perform their expected services or functions, demands by such distributors, resellers, or partners to change the terms on which they offer our products, or our failure to establish additional distribution, sales, and marketing relationships, could have a material adverse effect on our business, operating results, and financial condition. In addition, certain of our distributors, resellers, and partners currently compete with us and may compete with us in the future, either by developing competitive products themselves or by distributing competitive offerings. For example, our Scores segment relies on, among others, Experian, TransUnion, and Equifax for the distribution of certain products, and Experian, TransUnion, and Equifax have developed and are actively selling VantageScore to compete directly with our products. Competition from distributors, resellers, or other sales and marketing partners could materially adversely affect demand for our products and services.

Previous wording

We will continue to rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed.

Current wording

We rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed.

Previous wording

Our success depends, in part, upon our proprietary technology and other intellectual property rights. To date, we have relied primarily on a combination of copyright, patent, trade secret, and trademark laws, and nondisclosure and other contractual restrictions on copying and distribution, to protect our proprietary technology. This protection of our proprietary technology is limited, and our proprietary technology could be used by others without our consent. In addition, patents may not be issued with respect to our pending or future patent applications, and our patents may not be upheld as valid or may not prevent the development of competitive products. Any disclosure, loss, invalidity of, or failure to protect our intellectual property could negatively impact our competitive position, and ultimately, our business. The extent to which our intellectual property rights can be protected differs by jurisdiction, and is rapidly evolving with respect to AI technologies. There can be no assurance that our protection of our intellectual property rights in the U.S. or abroad will be adequate or that others, including our competitors, will not use our proprietary technology without our consent. Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition or results of operations.

Current wording

Our success depends, in part, upon our proprietary technology and other intellectual property rights. To date, we have relied primarily on a combination of copyright, patent, trade secret, and trademark laws, and nondisclosure and other contractual restrictions on copying and distribution, to protect our proprietary technology. These protections are limited, and our proprietary technology could be used by others without our consent. In addition, patents may not be issued with respect to our pending or future patent applications, and our issued patents may not be upheld as valid or may not prevent the development of competitive products. Any disclosure, loss, invalidity of, or failure to protect our intellectual property could negatively impact our competitive position and adversely affect our business. The extent to which our intellectual property rights can be protected differs by jurisdiction, and is rapidly evolving with respect to AI technologies. There can be no assurance that our protection of our intellectual property rights in the U.S. or abroad will be adequate or that others, including our competitors, will not use our proprietary technology without our consent. Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition, or results of operations.

Previous wording

In our markets, technology changes rapidly, and there are continuous improvements in computer hardware, network operating systems, programming tools, programming languages, operating systems, database technologies, cloud-based technologies and the use of the Internet. For example, AI technologies, including generative AI, and their use are currently undergoing rapid change. If we fail to enhance our current products and develop new products in response to changes in technology or industry standards, or if we fail to bring product enhancements or new product developments to market quickly enough, our products could rapidly become less competitive or obsolete. Our future success will depend, in part, upon our ability to:

Current wording

In our markets, technology changes rapidly, and there are continuous improvements in computer hardware, network operating systems, programming tools, database technologies, cloud-based technologies, AI-based offerings, and the use of the Internet. For example, AI technologies, including generative and agentic AI, and their use are currently undergoing rapid change. If we fail to enhance our current products and develop new products in response to changes in technology or industry standards, or if we fail to bring product enhancements or new product developments to market quickly enough, our products could rapidly become less competitive or obsolete. Our future success will depend, in part, upon our ability to:

Previous wording

Our reengineering efforts may cause our growth prospects and profitability to suffer.

Current wording

Our reengineering efforts may adversely affect our growth prospects and profitability.

Previous wording

As part of our management approach, we pursue ongoing reengineering efforts designed to grow revenues through strategic resource allocation and improve profitability through cost reductions. Our reengineering efforts may not be successful over the long term should we fail to reduce expenses or increase revenues to anticipated levels or at all. If our reengineering efforts are not successful over the long term, our revenues, results of operations and business may suffer.

Current wording

As part of our management approach, we pursue ongoing reengineering efforts designed to grow revenues through strategic resource allocation and improve profitability through cost reductions. These efforts may not be successful over the long term should we fail to reduce expenses or increase revenues to anticipated levels or at all. These efforts may also require us to make cash payments and incur charges, such as our recent plan of workforce reduction pursuant to which we incurred pre-tax charges of $27.3 million in the fourth quarter of fiscal 2026, substantially all of which are expected to result in future cash expenditures. If our reengineering efforts are not successful over the long term, our revenues, results of operations, and business may be adversely affected.

Previous wording

If we are unable to access new markets or develop new sales and distribution channels, our business and growth prospects could suffer.

Current wording

If we are unable to access new markets or develop new sales and distribution channels, our business and growth prospects could be adversely affected.

Previous wording

•an acquisition may not further our business strategy as we expected, we may not integrate acquired operations, systems or technology as successfully as we expected or we may overpay for our investments, or otherwise not realize the expected return, which could adversely affect our business or operating results;

Current wording

•an acquisition may not further our business strategy as we expected, we may not successfully integrate acquired operations, systems, or technology, we may overpay for our investments, or we may otherwise fail to realize expected returns, which could adversely affect our business or operating results;

Previous wording

•we may incur material charges as a result of acquisition costs or costs incurred in combining and/or operating the acquired business that are greater than anticipated;

Current wording

•we may incur material charges as a result of acquisition activities or costs incurred in combining and/or operating the acquired business that are greater than anticipated;

Previous wording

Because our business requires the storage, transmission and utilization of sensitive consumer and customer information, we will continue to routinely be the target of attempted cybersecurity and other security threats by technically sophisticated and well-resourced outside third parties, among others, attempting to access or steal the data we store. Many of our products are provided by us through the Internet. We are exposed to additional cybersecurity threats as we continue to migrate our software solutions and data from our legacy systems to cloud-based solutions. We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting security vulnerabilities or sophisticated attack methods. These threats include social engineering attacks, phishing attacks and other cyber-attacks, including state-sponsored cyber-attacks, industrial espionage, insider threats, denial-of-service attacks, computer viruses, ransomware and other malware, payment fraud or other cyber incidents. As a software and technology vendor, we may incorporate or distribute software or other materials from third parties. Attacks or other threats to our supply chain for such software and materials may render us unable to provide assurances of the origin of such software and materials, and could put us at risk of distributing software or other materials that may cause harm to ourselves, our customers or other third parties. In addition, increased attention on and use of AI increases the risk of cyber-attacks and data breaches, which can occur more quickly and evolve more rapidly when AI is used. Further, use of AI by our employees, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed.

Current wording

Because our business involves the storage, transmission, and utilization of sensitive consumer and customer information, we routinely face cybersecurity and other security threats by technically sophisticated and well-resourced outside third parties, among others, attempting to access or steal the data we store. Many of our products are provided through the Internet. We are exposed to additional cybersecurity threats as we continue to migrate our software solutions and data from our legacy systems to cloud-based solutions, and as we increase the use of AI in our operations and solutions. We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting security vulnerabilities or sophisticated attack methods. These threats include social engineering attacks, phishing attacks, state-sponsored cyber-attacks, AI-generated attacks, industrial espionage, insider threats, denial-of-service attacks, computer viruses, ransomware and other malware, payment fraud, or other cyber incidents. Advances in AI technology can allow for even minor security vulnerabilities to be detected and exploited by bad actors faster and in ways that existing industry-standard cybersecurity tools were not designed to detect and remediate. As a software and technology vendor, we may incorporate or distribute software or other materials from third parties. Attacks or other threats to our supply chain for such software and materials may impair our ability to verify the origin of such software and materials, and could result in our distribution of software or other materials that may cause harm to ourselves, our customers, or other third parties. In addition, increased attention on and use of AI technologies increase the risk of supply chain threats, cyber-attacks, and data breaches, which can occur more quickly, evolve more rapidly and become more sophisticated when AI is used. Further, the use of AI by our employees, whether authorized or unauthorized, increases the risk of inadvertent disclosure of our intellectual property and other proprietary information.

Previous wording

Cybersecurity breaches, including those that impact our third-party vendors and other security providers, could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, significant litigation, regulatory fines, penalties, loss of customers or reputational damage, indemnity obligations and other liability. There is no assurance that the programs, technologies and processes that we have put in place in an effort to maintain the security and protection of our non-public information and that of our customers will be fully implemented, complied with or effective. If our cybersecurity measures are breached as a result of third-party action, employee error, malfeasance or otherwise, and as a result, someone obtains unauthorized access to our systems or to consumer or customer information, sensitive data may be accessed, stolen, disclosed or lost, our reputation may be damaged, our business may suffer and we could incur significant liability. Because the techniques used to obtain unauthorized access, disable or degrade service or to sabotage systems change frequently and generally are not recognized until launched against a target, or even for some time after, we may be unable to anticipate these techniques, implement adequate preventative measures or remediate any intrusion on a timely or effective basis. Because a successful breach of our computer systems, software, networks or other technology asset could occur and persist for an extended period of time before being detected, we may not be able to immediately address the consequences of a cybersecurity incident.

Current wording

Cybersecurity breaches, including those that impact our third-party vendors and other security providers, could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, significant litigation, regulatory fines, penalties, loss of customers or reputational damage, indemnity obligations, and other liability. There can be no assurance that the programs, technologies, and processes that we have implemented in an effort to maintain the security and protection of our non-public information and that of our customers will be fully implemented, complied with, or effective. If our cybersecurity measures are breached as a result of third-party action, employee error, malfeasance or otherwise, resulting in unauthorized access to our systems or to consumer or customer information, sensitive data may be accessed, stolen, disclosed, or lost, our reputation may be damaged, our business may be adversely affected, and we could incur significant liability. Because the techniques used to obtain unauthorized access, disable or degrade service, or to sabotage systems change frequently and generally are not recognized until launched against a target, or even for some time after, we may be unable to anticipate these techniques, implement adequate preventative or detection measures, or remediate any cybersecurity incident on a timely or effective basis. In addition, a successful breach of our computer systems, software, networks, or other technology assets could remain undetected for an extended period of time, delaying our ability to contain the incident, mitigate its effects, and address the consequences.

Previous wording

Malicious third parties may also conduct attacks designed to temporarily deny customers, distributors and vendors access to our systems and services, and may demand payment by us in order to restore access. Cybersecurity breaches experienced by our vendors, by our distributors, by our customers, by companies that we acquire, or by us may trigger governmental notice requirements and public disclosures, which may lead to widespread negative publicity, statutory damages, and lawsuits filed by individuals impacted by cybersecurity breaches under privacy and cybersecurity statutes that create rights of action. We may also be affected by cybersecurity breaches experienced by customers who use our products on-premises, and those breaches may occur due to factors not under our control, including a customer’s failure to timely install updates and fixes to our products, vulnerabilities in a customer’s own cybersecurity measures, and other factors. Any cybersecurity breach, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to curtail or cease their use of our products and services, cause regulatory or industry changes that impact our products and services, or subject us to third-party lawsuits, regulatory fines or other action or liability, all of which could materially and adversely affect our business and operating results.

Current wording

Malicious third parties may conduct attacks designed to deny us, our customers, distributors, and vendors access to our systems and services, including through ransomware or other extortion-based attacks, and may demand payment to restore access or prevent the disclosure of sensitive information. Cybersecurity breaches affecting our vendors, distributors, customers, acquired companies, or us may trigger governmental notice requirements and public disclosures, resulting in negative publicity, regulatory investigations or enforcement actions, statutory damages, litigation by individuals or other parties, and other liabilities. We may also be affected by cybersecurity breaches experienced by customers that use our products on-premises, and those breaches may occur due to factors outside our control, including a customer’s failure to timely install updates and fixes to our products, vulnerabilities in a customer’s own cybersecurity measures, and other factors. Any cybersecurity breach, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to curtail or cease their use of our products and services, cause regulatory or industry changes that impact our products and services, or subject us to third-party lawsuits, regulatory fines, or other action or liability, all of which could materially and adversely affect our business and operating results.

Previous wording

Our ability to provide reliable products and services to our customers depends on the efficient and uninterrupted operation of our and our external service providers’ data centers, information technology and communication systems. Any disruption of or interference with our use of data centers, information technology or communication systems of our external service providers would adversely affect our operations and our business. As we continue to grow our Software segment’s business, our dependency on the continuing operation and availability of these systems increases. Our systems and data centers, and those of our external service providers, could be exposed to damage or interruption. These interruptions can include software or hardware malfunctions, communication failures, outages or other failures of third-party environments or service providers, or be due to defective updates, fires, floods, earthquakes, pandemics, war, terrorist acts or civil unrest, power losses, equipment failures, supply chain disruptions, computer viruses, denial-of-service or other cybersecurity attacks, employee or insider malfeasance, human error and other events beyond our control. Any steps that we or our external service providers have taken to prevent or reduce disruption may not be sufficient to prevent an interruption of services and disaster recovery planning may not account for all eventualities.

Current wording

Our ability to provide reliable products and services to our customers depends on the efficient and uninterrupted operation of our data centers, information technology, and communication systems, as well as those of our external service providers. Any disruption of or interference with our use of data centers, information technology, or communication systems of our external service providers could adversely affect our operations and our business. As our Software segment’s business continues to grow, our dependence on the continuing operation and availability of these systems increases. Our systems and data centers, and those of our external service providers, could be exposed to damage or interruption. These interruptions can include software or hardware malfunctions, communication failures, critical infrastructure failure, outages or other failures of third-party environments or service providers, or be due to defective updates, fires, floods, earthquakes, other extreme weather events or natural disasters, pandemics, war, terrorist acts or civil unrest, power losses, equipment failures, supply chain disruptions, computer viruses, denial-of-service or other cybersecurity attacks, employee or insider malfeasance, human error, and other events beyond our control. Any steps that we or our external service providers have taken to prevent or reduce disruption may not be sufficient to prevent an interruption of services and disaster recovery planning may not account for all eventualities.

Previous wording

An operational failure or outage in any of these systems, or damage to or destruction of these systems, which causes disruptions in our services, could result in loss of customers, damage to customer relationships, reduced revenues and profits, refunds of customer charges and damage to our brand and reputation and may require us to incur substantial additional expense to repair or replace damaged equipment and recover data loss caused by the interruption. Any one or more of the foregoing occurrences could have a material adverse effect on our reputation, business, financial condition, cash flows and results of operations.

Current wording

An operational failure or outage in any of these systems, or damage to or destruction of these systems, that disrupts our services could result in loss of customers, damage to customer relationships, reduced revenues and profits, refunds of customer charges, and damage to our brand and reputation. Such events may also require us to incur substantial additional expense to repair or replace damaged equipment and recover any resulting data loss. Any one or more of the foregoing events could have a material adverse effect on our reputation, business, financial condition, cash flows, and results of operations.

Previous wording

Our business strategy and our future success will depend in large part on our ability to attract and retain experienced sales, consulting, research and development, marketing, technical support and management personnel. The labor market for these individuals, particularly in the complex disciplines of enterprise platform sales, software engineering, data science, AI and cybersecurity, is very competitive due to the limited number of people available with the necessary skills and understanding to build, sell and support our complex products and it may become more competitive with general market growth. We cannot be certain that our compensation strategies will be perceived as competitive by current or prospective employees. This and other competitive factors could impair our ability to recruit and retain personnel. We have experienced past difficulty in recruiting and retaining qualified personnel, especially in these intensely competitive and technical skill areas, and we may experience future difficulty in recruiting and retaining such personnel, at a time when we may need additional staff to support expanded research and development efforts, new customers and/or increased customer needs. We may also recruit skilled technical professionals from other countries to work in the U.S., and from the U.S. and other countries to work abroad. Limitations imposed by current and changing immigration laws in the U.S. and abroad and the availability of visas in the countries where we do business could hinder our ability to attract and retain necessary qualified personnel and harm our business and future operating results. There is a risk that even if we invest significant resources in attempting to attract, train and retain qualified personnel, we will not succeed in our efforts, and our business could be harmed. The failure of the value of our stock to appreciate may adversely affect our ability to use equity and equity-based incentive plans to attract and retain personnel, and may require us to use alternative forms of compensation for this purpose.

Current wording

Our business strategy and future success depend, in large part, on our ability to attract and retain experienced sales, marketing, product management, software engineering, data science, AI, consulting, customer experience, and management personnel. The labor market for these individuals, particularly in the complex disciplines of enterprise platform sales, software engineering, data science, AI, and cybersecurity, is very competitive due to the limited availability of personnel with the necessary skills and understanding to build, sell, and support our complex products and it may become more competitive with general market growth. We cannot be certain that our compensation strategies will be perceived as competitive by current or prospective employees. This and other competitive factors could impair our ability to recruit and retain personnel. We have experienced difficulty in the past in recruiting and retaining qualified personnel, particularly in these intensely competitive and technical skill areas, and we may experience similar challenges in the future. These challenges may be heightened at times when we may need additional staff to support expanded research and development efforts, new customers, and/or increased customer needs. We may also recruit skilled technical professionals from other countries to work in the U.S., and from the U.S. and other countries to work abroad. Limitations imposed by current and changing immigration laws in the U.S. and abroad, and the availability of visas in the countries where we do business, could hinder our ability to attract and retain necessary qualified personnel and adversely affect our business and future operating results. There is a risk that, even if we invest significant resources in attempting to attract, train, and retain qualified personnel, we may not succeed in our efforts, which could harm our business. In addition, a decline in our stock price, such as we have recently experienced and may continue to experience, may adversely affect our ability to attract, retain, and motivate personnel, and may limit our ability to use equity and equity-based incentive plans for such purposes, potentially requiring us to use alternative forms of compensation.

Previous wording

Our business requires that we develop or obtain a reliable source of sufficient amounts of current and statistically relevant data to analyze transactions and update some of our products. In most cases, this data must be periodically updated and refreshed to enable our products to continue to work effectively in a changing environment. We do not own or control much of the data that we require, most of which is collected privately and maintained in proprietary databases. Customers and key business partners provide us with the data we require to analyze transactions, report results and build new models. Our business strategy depends in part upon our ability to access new forms of data to develop custom and proprietary analytic tools. If we fail to maintain sufficient data sourcing relationships with our customers and business partners, or if they decline to provide such data due to privacy, security, competitive concerns, regulatory concerns, or prohibitions or a lack of permission from their customers or partners, we could lose access to required data and our products. If this were to happen, our development of new products might become less effective. We could also become subject to increased legislative, regulatory or judicial restrictions or mandates on the collection, disclosure, transfer or use of such data, in particular if such data is not collected by our providers in a way that allows us to legally use the data. Third parties have asserted copyright and other intellectual property interests in this data, and these assertions, if successful, could prevent us from using this data. We may not be successful in maintaining our relationships with these external data source providers or in continuing to obtain data from them on acceptable terms or at all. Any interruption of our supply of data could seriously harm our business, financial condition or results of operations.

Current wording

Our business requires that we develop or obtain reliable sources of sufficient amounts of current and statistically relevant data to analyze transactions and update some of our products. In most cases, this data must be periodically updated and refreshed to enable our products to continue to work effectively in a changing environment. We do not own or control much of the data that we require, which is generally collected by third parties and maintained in proprietary databases. Customers and key business partners provide us with the data we require to analyze transactions, report results, and build new models. Our business strategy depends, in part, on our ability to access additional sources and types of data to develop custom and proprietary analytic tools. If we fail to maintain sufficient data sourcing relationships with our customers and business partners, or if they decline to provide such data due to privacy, security, competitive, or regulatory concerns, or prohibitions or a lack of permission from their customers or partners, we could lose access to required data, which could impair our ability to develop, maintain, and enhance our products. If this were to happen, our development of new products might become less effective. We could also become subject to increased legislative, regulatory, or judicial restrictions or mandates on the collection, disclosure, transfer, or use of such data, particularly if such data is not collected by our providers in a manner that allows us to legally use the data. Third parties have asserted copyright and other intellectual property interests in this data, and these assertions, if successful, could prevent us from using this data. We may not be successful in maintaining our relationships with these external data source providers or in continuing to obtain data from them on acceptable terms or at all. Any interruption of our supply of data could materially adversely affect our business, financial condition, or results of operations.