EXTREME NETWORKS INC

Previous wording

We face a number of risks and uncertainties which may have a material and adverse effect on our business, operations, industry, financial condition, operating results or future financial performance. While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may materially adversely affect our business, financial condition, operating results, and future financial performance.

Current wording

We face a number of risks and uncertainties which may have a material and adverse effect on our business, operations, industry, financial condition, operating results or future financial performance. While we believe we have identified and discussed below the material risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may materially adversely affect our business, financial condition, operating results, and future financial performance.

Previous wording

The ongoing unpredictability of U.S. economic policies including recent tariff adjustments, as well as broader geopolitical tensions, continue to create significant uncertainty in the world economy, including a risk of inflation. Potential impacts of these policies and tensions could include decreased demand for our products, increased costs to us, supply chain limitations, and volatility of our stock price.

Current wording

The ongoing unpredictability of U.S. economic and trade policies, including tariff actions and related government measures, continues to create significant uncertainty in the world economy, including inflationary pressures. In addition, various military actions, armed conflicts, and geopolitical tensions, including the Russia-Ukraine conflict, the Israel-Hamas conflict and related regional instability in the Middle East, and military actions involving the United States and Iran, have increased global uncertainty. Potential impacts of these policies and tensions could include decreased demand for our products, increased costs to us, supply chain limitations, and volatility of our stock price.

Previous wording

While we have diversified our manufacturing presence and limited our reliance on imports from China, tariffs have been imposed and threaten to be increased on other countries where our products are manufactured, such as Taiwan, Vietnam, and the Philippines. A majority of our products are currently excluded from the bulk of these tariffs, though we cannot predict that will continue to be the case. Any imposition of tariffs or imposition of new export controls assessed on importation of our products to the United States may result in increased costs and potential delays.

Current wording

While we have diversified our manufacturing presence and limited our reliance on imports from China, tariffs have been imposed and threaten to be increased on other countries where our products are manufactured, such as Taiwan, Vietnam, Thailand, and the Philippines. A majority of our products are currently excluded from the bulk of these tariffs, though we cannot predict that will continue to be the case. Any imposition of tariffs or new export controls affecting imports of our products to the United States may result in increased costs and potential delays.

Previous wording

The market for network switching and management solutions is intensely competitive and dominated primarily by Cisco Systems Inc., Hewlett-Packard Enterprise Company, Huawei Technologies Co. Ltd., and, prior to the recent merger with Hewlett-Packard Enterprise Company, Juniper Networks, Inc. To a lesser extent, Extreme competes with products and solutions from Arista Networks, Inc., CommScope Holding Company, Inc., Fortinet, Inc., and Ubiquiti Inc. Most of our competitors have longer operating histories, greater name recognition, larger customer bases, broader product lines and substantially greater financial, technical, sales, marketing and other resources. As a result, these competitors are able to devote greater resources to the development, promotion, sale and support of their products. In addition, they have larger distribution channels, stronger brand names, access to more customers, a larger installed customer base, and a greater ability to make attractive offers to channel partners and customers than we do. Further, many of our competitors have made substantial investments in hardware networking capabilities and offerings as well as software and AI functionality to run and manage the networks. These competitors may be able to gain market share by leveraging their investments to attract customers at lower prices or with greater synergies.

Current wording

The market for network switches, routers and software (including analytics) is intensely competitive and dominated primarily by Cisco Systems Inc., Hewlett Packard Enterprise Company, and Huawei Technologies Co. Ltd. To a lesser extent, Extreme competes with products and solutions from Arista Networks, Inc., RUCKUS Networks, Fortinet, Inc., and Ubiquiti Inc. Most of our competitors have greater name recognition, larger customer bases, broader product lines and substantially greater financial, technical, sales, marketing and other resources. As a result, these competitors are able to devote greater resources to the development, promotion, sale and support of their products. In addition, they have larger distribution channels, stronger brand names, access to more customers, a larger installed customer base, and a greater ability to make attractive offers to channel partners and customers than we do. Further, many of our competitors have made substantial investments in hardware networking capabilities and offerings as well as software and AI functionality to run and manage the networks. These competitors may be able to gain market share by leveraging their investments to attract customers at lower prices or with greater synergies.

Previous wording

There has been a trend toward industry consolidation in our markets for several years, and we expect this trend to continue as companies attempt to strengthen or hold their market positions in an evolving industry and as companies are acquired or are unable to continue operations. As competitors merge or acquire additional lines of business, their expanded resources may make competition more difficult. For example, while we see opportunity to grow our market share in the wake of the Hewlett-Packard Enterprise Company and Juniper Networks, Inc. merger, it is uncertain that we will be able to capitalize on this opportunity. If we fail to do so, we could lose market share to them or other competitors.

Current wording

There has been a trend toward industry consolidation in our markets for several years, and we expect this trend to continue as companies attempt to strengthen or hold their market positions in an evolving industry and as companies are acquired or are unable to continue operations. As competitors merge or acquire additional lines of business, their expanded resources may make competition more difficult.

Previous wording

We may also face increased competition from traditional networking solutions companies, companies in adjacent industries such as information security moving into networking, and cloud hyperscalers offering Infrastructure as a Service and Platform as a Service products to enterprise customers. In particular, AWS, Microsoft Azure, and GCP may provide enterprise customers with a cloud-based platform of data center computing and networking services that could compete with our services and adversely impact our market share and revenue.

Current wording

We may also face increased competition from traditional networking solutions companies, companies in adjacent industries such as information security moving into networking, and cloud hyperscalers offering Infrastructure as a Service and Platform as a Service products to enterprise customers. In particular, AWS, Microsoft Azure, and GCP may provide enterprise customers with a cloud-based platform of data center computing and networking services that could compete with our services and adversely impact our market share and revenue. In addition, AI software vendors and platforms could leverage their AI model capabilities, integrations, and agentic workflows to address network-centric use cases that compete with traditional network management solutions. If these technologies enable customers to manage, analyze, and operate network infrastructure through AI-enabled interfaces, they could disrupt portions of the networking industry and adversely affect our competitive position, revenue, and growth prospects. One of our key differentiators is the quality of our support and services. Our failure to continue to provide high-quality support and services could materially adversely affect our business, financial condition, operating results, and future growth prospects.

Previous wording

We primarily rely on our manufacturing partners Alpha Networks, Inc, Senao Networks, Inc., Wistron Neweb Corporation, Sercomm Corporation, Quanta Computer Inc, Lite-On Technology Corp, and select other partners to manufacture our products. In addition, we currently purchase some key components used in the manufacturing of our products from single or limited sources and are dependent upon supply from these sources to meet our needs. Our top six suppliers accounted for a significant portion of our purchases during the year. Given the concentration of our supply chain, particularly with certain sole or limited source providers, any significant disruption to any of the key suppliers or a termination of a relationship could temporarily impact our operations and our ability to meet customer orders.

Current wording

We primarily rely on our manufacturing partners Alpha Networks, Inc., Senao Networks, Inc., Wistron Neweb Corporation, Sercomm Corporation, Quanta Computer Inc., Lite-On Technology Corporation, and select other partners to manufacture our products. In addition, we currently purchase some key components used in the manufacturing of our products from single or limited sources and are dependent upon supply from these sources to meet our needs. Our top six suppliers accounted for a significant portion of our purchases during the year. Given the concentration of our supply chain, particularly with certain sole or limited source providers, any significant disruption to any of the key suppliers or a termination of a relationship could temporarily impact our operations and our ability to meet customer orders. Because we may represent a relatively small portion of the overall business of certain suppliers or manufacturing partners, our orders may not receive priority in times of constrained capacity, which could limit our ability to obtain sufficient product or components.

Previous wording

Such disruptions could be caused by natural disasters, public health emergencies such as pandemics, business interruption related to financial or operational factors, cyberattacks, geopolitical events such as the threat of political or military actions, including between China and Taiwan, energy constraints, regulatory constraints, labor or raw materials shortages, quality issues, transportation or shipping delays, tariffs or other trade restrictions, or other events. We have experienced in the past, and continue to experience, challenges obtaining components such as semiconductor chips due to high demand or limited supply. Currently, some vendors are shifting allocation of raw materials and resources from producing enterprise-grade components to producing components for more advanced technology. For example, Samsung has ceased production of certain memory chips to focus on higher end chips. These disruptions could result in sustained lead-times, higher overall costs, extra delivery costs for expedited shipments, and shortages and allocations of certain components, resulting in delays in filling orders or even delayed product introductions. Additional factors that may impact costs and availability of product include energy, raw material, and transportation costs.

Current wording

Such disruptions could be caused by natural disasters, public health emergencies such as pandemics, business interruption related to financial or operational factors, cyberattacks, geopolitical events such as the threat of political or military actions, energy constraints, regulatory constraints, labor or raw materials shortages, component price increases, quality issues, transportation or shipping delays, tariffs or other trade restrictions, or other events. Certain semiconductor components used in our products are manufactured in regions that are subject to heightened geopolitical risk. For example, a significant portion of the world’s advanced semiconductor manufacturing capacity is located in Taiwan, and any military conflict, blockade, trade disruption, or other instability affecting the region could further constrain component availability, increase costs, and adversely affect our ability to manufacture and deliver products.

Previous wording

While we maintain strong relationships with our manufacturing partners and suppliers, our agreements with them are generally of limited duration and pricing, quality, and volume commitments are negotiated on a recurring basis. Manufacturing partners and suppliers may be unable or unwilling to renew agreements with consistent terms, and could materially increase prices (including increases related to inflationary pressures) or reduce quantity, quality, volume, or service level standards. We may not be able to pass along increased costs to our customers, which could negatively impact gross margin. Reductions in quantity or quality of finished product could decrease the amount of product for sale and could negatively impact the Company’s operating results.

Current wording

We have experienced in the past, and continue to experience, challenges obtaining components such as semiconductor chips due to high demand or limited supply. In particular, we rely on certain memory and semiconductor components that have experienced supply constraints, reduced production capacity, and significant price volatility as suppliers shift to newer technologies, resulting in increased costs, longer lead times, and potential allocation limitations that could adversely affect our ability to manufacture and deliver products. Some vendors are reallocating raw materials and production capacity away from enterprise-grade components toward more advanced technologies. For example, certain manufacturers have reduced or discontinued production of certain older-generation memory chips in order to devote capacity to newer, higher-demand memory and AI-related components. These disruptions could result in extended lead times, higher overall costs, expedited shipping expenses, component shortages or allocations, and delayed product introductions. Additional factors that may impact costs and availability include energy, raw material, and transportation costs. Our ability to deliver products to customers also depends on global transportation and logistics networks that are subject to disruption from factors such as labor disputes, port congestion, geopolitical events, natural disasters, severe weather, and other factors beyond our control. Disruptions to these transportation and logistics networks could result in shipping delays, increased freight and logistics costs, reduced product availability, and delays in fulfilling customer orders. Climate change may exacerbate the frequency or severity of certain weather-related and natural disaster events affecting our suppliers, manufacturing partners, transportation networks, and other aspects of our supply chain. While we maintain strong relationships with our manufacturing partners and suppliers, our agreements with them are generally of limited duration and pricing, quality, and volume commitments are negotiated on a recurring basis. Manufacturing partners and suppliers may be unable or unwilling to renew agreements with consistent terms, and could materially increase prices (including increases related to inflationary pressures) or reduce quantity, quality, volume, or service level standards. We may not be able to pass along increased costs to our customers, which could negatively impact gross margin. Reductions in quantity or quality of finished product could decrease the amount of product for sale and could negatively impact the Company’s operating results.

Previous wording

System security risks, data breaches, and cyberattacks could compromise our proprietary information, disrupt our internal operations, impact services to customers, and harm public perception of our products, which could materially adversely affect our business, financial condition, operating results, and future growth prospects.

Current wording

System security risks, data breaches, cyberattacks, and other security incidents have occurred in the past and may occur in the future, potentially compromising our proprietary information, disrupting our internal operations, impacting services to customers, and harming public perception of our products, which could materially adversely affect our business, financial condition, operating results, and future growth prospects.

Previous wording

In the ordinary course of business using systems that we own and manage, we provide cloud-based services and store data, including our proprietary business information and that of our customers, suppliers and business partners on our networks. In addition, we store information through cloud-based services that may be hosted by third parties and in data center infrastructure maintained by third parties. The secure provision of services and maintenance of this information and our IT systems is critical to our operations and business strategy.

Current wording

In the ordinary course of business, we provide cloud-based services and store data, including personally identifiable information, as well as proprietary business information belonging to our business (such as trade secrets) and belonging to our customers, suppliers and business partners. We store such data on our computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). In addition, we store information through cloud-based services that may be hosted by third parties and in data center infrastructure maintained by third parties. We are also increasingly dependent on third-party service providers, including software-as-a-service providers and other vendors, for critical aspects of our operations. These providers may have short operating histories, fewer resources, or less mature security programs, which could increase the risk of service disruptions, security incidents, or operational failures affecting our business.

Previous wording

We face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of our IT systems and data. These threats come from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, including vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services. Increasingly, companies, including us, are subject to a variety of attacks on their networks and/or cloud-based services on an ongoing basis. The number of sophisticated attacks continues to increase on a global scale in frequency and magnitude, and with the availability to bad actors of AI to assist them in perpetrating these attacks, we expect the speed and complexity of these attacks to continue to escalate. Attacks could include supply chain attacks targeting our suppliers and attempts to penetrate our systems or disrupt our services directly. In some cases, sophisticated hardware and operating system software and applications that we produce or procure from third parties may contain vulnerabilities in design or manufacture that could allow network intrusion or unexpectedly interfere with the operation of our systems, products or services we provide to customers. Usage of “legacy” products that have been determined to have reached an end-of-life engineering status but will continue to operate for a limited amount of time may subject us or our customers to vulnerabilities. Further, employee error, malfeasance, or other disruptions can result in a security or data breach.

Current wording

We face numerous and evolving additional cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and data. These threats come from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), technological error, and as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, including vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products or services. Usage of “legacy” products that have been determined to have reached an end-of-life engineering status but will continue to operate for a limited amount of time may subject us or our customers to vulnerabilities. Increasingly, companies, including us, are subject to a variety of attacks on their networks and/or cloud-based services on an ongoing basis. Geopolitical tensions and military conflicts may further increase the frequency and sophistication of cyberattacks, espionage, and other hostile activities directed at private-sector organizations. Additionally, any integration of AI in our or any third party’s operations, products, or services is expected to pose new or unknown cybersecurity risks and challenges. The number of sophisticated attacks continues to increase on a global scale in frequency and magnitude, and with the availability to bad actors of AI to assist them in perpetrating these attacks, we expect the speed and complexity of these attacks to continue to escalate. Attacks could include supply chain attacks targeting our suppliers and attempts to penetrate our systems or disrupt our services directly. In some cases, sophisticated hardware, operating system software, and software applications and services that we produce or procure from third parties may contain vulnerabilities in design or manufacture or security defects that could allow network intrusion or unexpectedly interfere with the operation of our systems, products or services we provide to customers. In addition, outages, disruptions, or security incidents affecting our services or those of our third-party providers could result in our failure to meet service level commitments, which may require us to provide service credits, refunds, or other remedies to customers, and could expose us to contractual liability. Further, employee error, malfeasance, or other disruptions can result in a security or data breach.

Previous wording

Despite our security measures, we may not be able to effectively detect, prevent, or protect against or otherwise mitigate losses from all cyberattacks or prevent all security or data breaches. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with, or effective in protecting our IT systems and data. Because the techniques and tools used by bad actors, many of whom are highly sophisticated and well-funded, to access or sabotage networks change frequently and generally are not recognized until after they are used, we may be unable to anticipate or immediately detect and remediate these techniques. Any such breach could compromise our networks, products, or cloud-based services by creating system disruptions, slowdowns or even shutdowns, and exploiting security vulnerabilities of our products, services, and the information stored as part of our operations could be accessed, publicly disclosed, lost or stolen. Additionally, because our products and services are integrated with our customers’ systems and processes, any circumvention or failure of our cybersecurity defenses or measures could compromise the confidentiality, integrity, and availability of our customers’ own IT systems and/or our customers’ proprietary or other sensitive information.

Current wording

Despite our security measures, we may not be able to effectively detect, prevent, or protect against or otherwise mitigate losses from all cyberattacks or prevent all security or data breaches. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with, or effective in protecting our IT Systems and data. Because the techniques and tools used by bad actors, many of whom are highly sophisticated and well-funded, to access or sabotage networks change frequently and generally are not recognized until after they are used, we may be unable to anticipate or immediately detect and remediate these techniques. Any such breach could compromise our networks, products, or cloud-based services by creating system disruptions, slowdowns or even shutdowns, and exploiting security vulnerabilities of our products, services, and the information stored as part of our operations could be accessed, publicly disclosed, lost or stolen. Remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks. Additionally, because our products and services are integrated with our customers’ systems and processes, any circumvention or failure of our cybersecurity defenses or measures could compromise the confidentiality, integrity, and availability of our customers’ own IT Systems and/or our customers’ proprietary or other sensitive information.

Previous wording

Any adverse impact to the availability, integrity or confidentiality of our IT systems, including any actual or perceived breach of network security occurs in our products, network, or in the network of a customer of our networking products, regardless of whether the breach is attributable to our products, the market perception of the effectiveness or security of our products could be harmed. This could impede our sales efforts and impact our market share and future revenue. Such events require significant management attention and resources, impacting our expenses and resources available to commit to other efforts. In addition, the economic costs to us to eliminate, mitigate, or recover from, or remediate cyber or other security problems, such as bugs, viruses, worms, ransomware or other malware, and security vulnerabilities could be significant and may be difficult to anticipate or measure. Further, this could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all. Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition.

Current wording

Any adverse impact to the availability, integrity, or confidentiality of our IT Systems, including any actual or perceived breach of network security involving our products, network, or the network of a customer of our networking products, regardless of whether the breach is attributable to our products, could harm the market perception of the effectiveness or security of our products. This could impede our sales efforts and impact our market share and future revenue. Such events require significant management attention and resources, impacting our expenses and resources available to commit to other efforts. In addition, the economic costs to us to eliminate, mitigate, or recover from, or remediate cyber or other security problems, such as bugs, viruses, worms, ransomware or other malware, and security vulnerabilities could be significant and may be difficult to anticipate or measure. Further, this could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties. We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all. Any or all of the foregoing could materially adversely affect our business, operating results, and financial condition.

Previous wording

For example, cloud-based network management is the fastest growing segment of the networking industry. Our success may be impacted by our ability to provide successful cloud networking solutions that address the needs of our customers more effectively and economically than those of other competitors or existing technologies. If the cloud networking solutions market does not develop in the way we anticipate, if our solutions do not offer significant benefits compared to competing legacy products, or if end customers do not recognize the benefits that our solutions provide, then our potential for growth in this cloud-based network management segment could be adversely affected. If we are unsuccessful in attaching cloud services and maintenance services to our hardware product, our ability to grow our subscription revenue could be limited. If we are unsuccessful in integrating AI into the functionality of our products and achieving customer adoption of our AI-integrated platform, our revenue growth could be limited.

Current wording

For example, cloud-based network management is among the fastest growing market categories within the networking industry. Our success may be impacted by our ability to provide cloud-based networking solutions that address the needs of our customers more effectively and economically than those of other competitors or existing technologies. If the cloud-based network management market does not develop in the way we anticipate, if our solutions do not offer significant benefits compared to competing legacy products, if end customers do not recognize the benefits that our solutions provide, or if we are unable to successfully execute on the transition to, and customer adoption of, our cloud-based networking solutions and related subscription offerings, then our growth prospects, including our ability to grow our subscription revenue, could be adversely affected. Because a portion of our revenues from cloud-based or subscription offerings is recognized over time, changes in customer bookings, renewals, or consumption levels may not be immediately reflected in our reported revenue, which could reduce visibility into the underlying performance of our business. If we are unsuccessful in integrating AI into the functionality of our products and achieving customer adoption of our AI-powered platform, our revenue growth could be limited. We may also face challenges accurately forecasting customer renewal rates, conversion rates from on-premises to cloud offerings, and levels of customer usage or consumption, which could result in volatility in our operating results. Our ability to grow subscription revenue also depends on our ability to attract new subscribers, retain existing customers, expand adoption of subscription and cloud offerings, and maintain favorable renewal and attach rates, any of which may be adversely affected by competition, customer budget constraints, pricing pressures, or changes in customer preferences.

Previous wording

Substantially all of our international sales are U.S. Dollar-denominated. The recent weakness of the U.S. Dollar relative to foreign currencies could have the effect of increasing our operating expenses, which are often paid in local currency. In the future, we may elect to invoice a larger portion of our international customers in local currency, which would expose us to greater fluctuations in exchange rates between the U.S. Dollar and the particular local currency. If we do so, we may decide to engage in hedging transactions to minimize the risk of such fluctuations. We have entered into foreign exchange forward contracts to offset the impact of payment of operating expenses in local currencies to some of our operating foreign subsidiaries. However, if we are not successful in managing these foreign currency transactions, we could incur losses from these activities.

Current wording

Substantially all of our international sales are U.S. Dollar-denominated. Fluctuations in exchange rates between the U.S. Dollar and foreign currencies could increase our operating expenses, which are often paid in local currency. In the future, we may elect to invoice a larger portion of our international customers in local currency, which would expose us to greater fluctuations in exchange rates between the U.S. Dollar and the particular local currency. If we do so, we may decide to engage in hedging transactions to minimize the risk of such fluctuations. We have entered into foreign exchange forward contracts to offset the impact of payment of operating expenses in local currencies to some of our operating foreign subsidiaries. However, if we are not successful in managing these foreign currency transactions, we could incur losses from these activities.

Previous wording

We maintain sufficient inventory of finished goods and, to a lesser extent, raw materials and drive demand with our third-party manufacturers in amounts that we believe allow for timely fulfillment of sales. We estimate required levels of inventory based on current and anticipated demand, market conditions, and product development cycles. Our estimates are also based on inventory levels and sales data from our distributors, which are not always reliable or timely. The actual levels of inventory are subject to the impact of external factors such as supply shortages, macroeconomic conditions, technology shifts, or price changes. Distributors may increase or decrease the levels of inventory that they order to meet supply shortages or expected demand. If distributors increase orders to build up stock out of concern for product shortages, or to meet anticipated demand that does not materialize, we may have excess channel inventory, leading to reductions in future period orders from our distributors.

Current wording

We maintain sufficient inventory of finished goods and, to a lesser extent, raw materials and drive demand with our third-party manufacturers in amounts that we believe allow for timely fulfillment of sales. We estimate required levels of inventory based on current and anticipated demand, market conditions, and product development cycles. Our estimates are also based on inventory levels and sales data from our distributors, which are not always reliable or timely. The actual levels of inventory are subject to the impact of external factors such as supply shortages, macroeconomic conditions, technology shifts, or price changes. Distributors may increase or decrease the levels of inventory that they order to meet supply shortages or expected demand. If distributors increase orders to build up stock out of concern for product shortages, or to meet anticipated demand that does not materialize, we may have excess channel inventory, and subsequent inventory corrections by distributors or other channel partners may lead to reductions in future period orders and adversely affect our operating results.

Previous wording

Our success depends to a significant degree upon the continued contributions of our key management, engineering, sales and marketing, service, finance, and operations personnel, many of whom would be difficult to replace. We have experienced and may in the future experience significant turnover in our executive personnel. Changes in our management and key employees could affect our financial results, and our prior reductions in force may impede our ability to attract and retain highly skilled personnel. We believe our future success will also depend in large part upon our ability to attract and retain highly skilled managerial, engineering, sales and marketing, service, finance, and operations personnel. The market for such personnel is competitive in certain regions for certain types of technical skills, particularly AI.

Current wording

Our success depends to a significant degree upon the continued contributions of our key management, engineering, sales and marketing, service, finance, and operations personnel, many of whom would be difficult to replace. We have experienced and may in the future experience significant turnover in our executive personnel. Changes in our management and key employees could affect our financial results, and our prior reductions in force may impede our ability to attract and retain highly skilled personnel. We believe our future success will also depend in large part upon our ability to attract and retain highly skilled managerial, engineering, sales and marketing, service, finance, and operations personnel. The market for such personnel is competitive in certain regions for certain types of technical skills, particularly AI-related skills.

Previous wording

Our cloud solutions are hosted from and use computing infrastructure provided by third parties, including AWS, GCP, and Azure. We do not own or control the operation of the third-party facilities or equipment used to provide the cloud services. Our computing infrastructure service providers have no obligation to renew their agreements with us on commercially reasonable terms or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our computing infrastructure service providers is acquired, we may be required to transition to a new provider and we may incur significant costs and possible service interruption in connection with doing so. In addition, such service providers could decide to close their facilities or change or suspend their service offerings without adequate notice to us. Moreover, any financial difficulties, such as bankruptcy, faced by such service providers may have negative effects on our business, the nature and extent of which are difficult to predict.

Current wording

We increasingly rely on third-party cloud providers, including AWS, GCP, and Azure, to host our cloud solutions and support a growing number of our products, services, and internal operations, including enterprise systems. We do not own or control the operation of the third-party facilities or equipment used to provide the cloud services. Our computing infrastructure service providers have no obligation to renew their agreements with us on commercially reasonable terms or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our computing infrastructure service providers is acquired, we may be required to transition to a new provider and we may incur significant costs and possible service interruption in connection with doing so. In addition, such service providers could decide to close their facilities or change or suspend their service offerings without adequate notice to us. Moreover, any financial difficulties, such as bankruptcy, faced by such service providers may have negative effects on our business, the nature and extent of which are difficult to predict.

Previous wording

If these third-party service providers experience service outages, performance problems or errors, this could adversely affect the experience of our customers. Our agreements with third-party computing infrastructure service providers may not entitle us to corresponding service level credits to those we offer to our customers. Any changes in third-party service levels at our computing infrastructure service providers or any related disruptions or performance problems with our solutions could adversely affect our reputation and impact our customers’ operations, result in lengthy interruptions in our services, or result in potential losses of customer data. Interruptions in our services might reduce our revenues, cause us to issue refunds to customers for prepaid and unused subscriptions, subject us to service level credit claims and potential liability, or adversely affect our renewal rates.

Current wording

Service outages, performance problems, or errors at these third-party providers could adversely affect customer experience. Our agreements with third-party computing infrastructure service providers may not entitle us to corresponding service level credits to those we offer to our customers. Any changes in third-party service levels at our computing infrastructure service providers or any related disruptions or performance problems with our solutions could adversely affect our reputation and impact our customers’ operations, result in lengthy interruptions in our services, or result in potential losses of customer data. Interruptions in our services might reduce our revenues, cause us to issue refunds to customers for prepaid and unused subscriptions, subject us to service level credit claims and potential liability, or adversely affect our renewal rates.

Previous wording

We have instituted an internal AI Council to provide governance for our use of AI, and to help identify and mitigate risks associated with our and our vendors’ use of AI. However, we may not be able to anticipate or mitigate all risk. Any investigation or litigation related to our use of AI could have an adverse impact on our results of operations due to the associated costs and any related fines, and could also have an adverse impact on our customer relationships and ability to grow revenue.

Current wording

We have instituted an internal AI Council to provide governance for our use of AI, and to help identify and mitigate risks associated with our and our vendors’ use of AI. In addition, certain of our AI-enabled offerings are designed to execute tasks autonomously within customer-defined governance frameworks. If these capabilities do not perform as intended, take erroneous or unintended actions, or are deployed in customer environments in ways we did not anticipate, they could disrupt customer networks, result in service outages or security exposures, give rise to contractual or other liability, and harm our reputation. We may also not achieve general availability of announced AI capabilities on the timelines we have communicated, or at all. However, we may not be able to anticipate or mitigate all risk. Our employees and contractors may use artificial intelligence tools in the course of their work. Improper or unauthorized use of such tools could result in the unintended disclosure of confidential or proprietary information, including trade secrets, or may expose us to intellectual property, data protection, or cybersecurity risks. Any investigation or litigation related to our use of AI could have an adverse impact on our results of operations due to the associated costs and any related fines, and could also have an adverse impact on our customer relationships and ability to grow revenue.

Previous wording

Our products are designed to interface with our customers’ existing networks, each of which have different specifications and utilize multiple protocol standards and products from other vendors. Many of our customers’ networks contain multiple generations of products that have been added over time as these networks have grown and evolved. Our products must inter-operate with many or all of the products within these networks as well as future products to meet our customers’ requirements. If we find errors in the existing software or defects in the hardware used in our customers’ networks, we may need to modify our software networking solutions to fix or overcome these errors so that our products will inter-operate and scale with the existing software and hardware, which could be costly. In addition, if our products do not inter-operate with those of our customers’ networks, demand for our products could be adversely affected or orders for our products could be canceled. This could materially adversely affect our business, financial condition, operating results, and future financial performance.

Current wording

Our products are designed to interface with our customers’ existing networks, each of which may have different specifications and utilize multiple protocol standards, products from other vendors, third-party platforms, operating systems, cloud environments, applications, and applications that we do not control. Many of our customers’ networks contain multiple generations of products that have been added over time as these networks have grown and evolved. Our products must interoperate with many or all of these third-party products, as well as future products, to meet our customers’ requirements. If we identify errors in existing software, defects in hardware, changes to third-party platforms, modifications to application programming interfaces, delays in access to new releases, or restrictions on interoperability, we may need to modify our solutions to maintain compatibility, which could be costly and time consuming. In addition, if our products do not successfully interoperate with our customers’ networks or other third-party technologies, demand for our products could be adversely affected, orders could be delayed or canceled, and the functionality of our offerings could be impaired. This could materially adversely affect our business, financial condition, operating results, and future financial performance.

Previous wording

Our operating results for any given period have and will continue to depend to a significant extent on large orders from a relatively small number of channel partners and other customers. However, we do not have binding purchase commitments from any of them. A substantial reduction or delay in sales of our products to a significant reseller, distributor or other customer could harm our business because our expense levels are based on our expectations as to future revenues and, to a large extent, are fixed in the short term. Some third-party distributors have contractual terms that allow them to return products to us and unexpected returns. Any or all of the foregoing could materially adversely affect our business, financial condition, operating results, and future financial performance.

Current wording

Our operating results for any given period have and will continue to depend to a significant extent on large orders from a relatively small number of channel partners and other customers. However, we do not have binding purchase commitments from any of them. A substantial reduction or delay in sales of our products to a significant reseller, distributor or other customer could harm our business because our expense levels are based on our expectations as to future revenues and, to a large extent, are fixed in the short term. Some third-party distributors have contractual terms that allow them to return products to us, including unexpected returns. Any or all of the foregoing could materially adversely affect our business, financial condition, operating results, and future financial performance.

Previous wording

Some companies, including ours, that have had volatile market prices for their securities have had securities class action lawsuits filed against them. Such suits, regardless of the merits or outcome, can result in substantial costs and divert management’s attention and resources.

Current wording

Volatility in the trading price of our common stock has, in the past, resulted in securities class action litigation. Such suits, regardless of the merits or outcome, can result in substantial costs and divert management’s attention and resources.

Previous wording

A significant portion of our revenues comes from sales to both public and private K-12 educational institutions. Public schools receive funding from local tax revenues, and from state and federal governments through a variety of programs, many of which seek to assist schools located in underprivileged or rural areas. The funding for a portion of our sales to U.S.-based educational institutions comes from a federal funding program known as the E-Rate program. E-Rate is a program of the Federal Communications Commission (the “FCC”) that subsidizes the purchase of approved telecommunications, Internet access, and internal connection costs for eligible public educational institutions. The E-Rate program, its eligibility criteria, the timing and specific amount of federal funding actually available and which Wi-Fi infrastructure and product sectors will benefit, are uncertain and subject to final federal program approval and funding appropriation continues to be under review by the FCC, and we cannot assure that this program or its equivalent will continue, and as a result, our business may be harmed. Furthermore, if state or local funding of public education is significantly reduced because of legislative or policy changes or by reductions in tax revenues due to changing economic conditions, our sales to educational institutions may be negatively impacted by these changed conditions. Any reduction in spending on information technology systems by educational institutions could materially adversely affect our business, financial condition, operating results, and future financial performance.

Current wording

A significant portion of our revenues comes from sales to both public and private K-12 educational institutions. A portion of our sales to educational institutions depends on government funding programs, including E-Rate. Changes in the availability, timing, or scope of such funding could adversely affect demand for our products. In addition, if state or local funding of public education is significantly reduced because of legislative or policy changes or by reductions in tax revenues resulting from economic conditions, our sales to educational institutions could be adversely impacted. Any reduction in spending on information technology systems by educational institutions could materially adversely affect our business, financial condition, operating results, and future financial performance.

Previous wording

Our credit facilities impose financial and operating restrictions on us and if we fail to meet our payment or other obligations under our 2023 Credit Agreement, as amended (as defined in Item 7, “Liquidity and Capital Resources”), the lenders under such 2023 Credit Agreement could foreclose on, and acquire control of, substantially all of our assets.

Current wording

Our credit facilities impose financial and operating restrictions on us and if we fail to meet our payment or other obligations under our 2026 Credit Agreement, as amended from time to time and discussed in Item 7, “Liquidity and Capital Resources,” the lenders under such 2026 Credit Agreement could foreclose on, and acquire control of, substantially all of our assets.

Previous wording

Our 2023 Credit Agreement imposes, and the terms of any future debt may impose, operating and other restrictions on us. These restrictions could affect, and in many respects limit or prohibit, among other items, our ability to:

Current wording

Our 2026 Credit Agreement imposes, and the terms of any future debt may impose, operating and other restrictions on us. These restrictions could affect, and in many respects limit or prohibit, among other items, our ability to: incur additional indebtedness; create liens; make investments; enter into transactions with affiliates; sell assets; guarantee indebtedness; declare or pay dividends or other distributions to stockholders; repurchase equity interests; change the nature of our business; enter into swap agreements; issue or sell capital stock of certain of our subsidiaries; and consolidate, merge, or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.

Previous wording

Further, our 2023 Credit Agreement is jointly and severally guaranteed by us and certain of our subsidiaries. Borrowings under our 2023 Credit Agreement are secured by liens on substantially all of our assets, including the capital stock of certain of our subsidiaries, and the assets of our subsidiaries that are loan party guarantors. If we are unable to repay outstanding borrowings when due or comply with other obligations and covenants under our 2023 Credit Agreement, the lenders under our 2023 Credit Agreement will have the right to proceed against these pledged capital stock and take control of substantially all of our assets.

Current wording

Further, our 2026 Credit Agreement is jointly and severally guaranteed by us and certain of our subsidiaries. Borrowings under our 2026 Credit Agreement are secured by liens on substantially all of our assets, including the capital stock of certain of our subsidiaries, and the assets of our subsidiaries that are loan party guarantors. If we are unable to repay outstanding borrowings when due or comply with other obligations and covenants under our 2026 Credit Agreement, the lenders under our 2026 Credit Agreement will have the right to proceed against the pledged capital stock and take control of substantially all of our assets.

Previous wording

If we or our independent registered public accounting firm identifies material weaknesses in our internal controls, the disclosure of that fact, even if quickly remedied, may cause investors to lose confidence in our financial statements and its stock price may decline. Remediation of a material weakness could require us to incur significant expenses and, if we fail to remedy any material weakness, our ability to report our financial results on a timely and accurate basis may be adversely affected, our access to the capital markets may be restricted, our stock price may decline, and we may be subject to sanctions or investigation by regulatory authorities, including the SEC or Nasdaq. We may also be required to restate our financial statements from prior periods. Execution of restatements creates a significant strain on our internal resources and could cause delays in our filing of quarterly or annual financial results, increase our costs and cause management distraction. Restatements may also significantly affect our stock price in a materially adverse manner.

Current wording

If we or our independent registered public accounting firm identifies material weaknesses in our internal controls, the disclosure of that fact, even if quickly remedied, may cause investors to lose confidence in our financial statements and our stock price may decline. Remediation of a material weakness could require us to incur significant expenses and, if we fail to remedy any material weakness, our ability to report our financial results on a timely and accurate basis may be adversely affected, our access to the capital markets may be restricted, our stock price may decline, and we may be subject to sanctions or investigation by regulatory authorities, including the SEC or Nasdaq. We may also be required to restate our financial statements from prior periods. Execution of restatements creates a significant strain on our internal resources and could cause delays in our filing of quarterly or annual financial results, increase our costs and cause management distraction. Restatements may also significantly affect our stock price in a materially adverse manner.

Previous wording

We have undertaken restructuring efforts in the past to streamline operations and reduce operating expenses. Our ability to achieve the anticipated cost savings and other benefits from our restructuring efforts within expected time frames is subject to many estimates and assumptions and may vary materially based on factors such as market conditions and the effect of our restructuring efforts on our work force. These estimates and assumptions are subject to significant economic, competitive and other uncertainties, some of which are beyond our control. We cannot assure that we will fully realize the anticipated positive impacts to future financial results from our current or future restructuring efforts. If our estimates and assumptions are incorrect or if other unforeseen events occur, we may not achieve the cost savings expected from such restructurings, and our business, financial condition, operating results and future financial performance could be materially adversely affected.

Current wording

We have undertaken restructuring efforts in the past to streamline operations and reduce operating expenses. Our ability to achieve the anticipated cost savings and other benefits from our restructuring efforts within expected time frames is subject to many estimates and assumptions and may vary materially based on factors such as market conditions and the effect of our restructuring efforts on our work force. These estimates and assumptions are subject to significant economic, competitive, and other uncertainties, some of which are beyond our control. We cannot ensure that we will fully realize the anticipated positive impacts to future financial results from our current or future restructuring efforts. If our estimates and assumptions are incorrect or if other unforeseen events occur, we may not achieve the cost savings expected from such restructurings, and our business, financial condition, operating results and future financial performance could be materially adversely affected.

Previous wording

We are subject to complex tariff regulations, export control laws and economic and trade sanctions. If we fail to comply with these laws and regulations, we could incur penalties and sanctions from governments, and could be restricted from exporting products.

Current wording

We are required to comply with complex export control laws, economic sanctions, and other trade regulations. If we fail to comply with these laws and regulations, we could incur penalties and sanctions from governments and could be restricted from exporting products.

Previous wording

We are required to comply with laws, rules and regulations of the United States and other countries, as applicable, relating to export controls and economic sanctions, including, but not limited to, trade sanctions administered by the Office of Foreign Assets Control within the U.S. Department of the Treasury, as well as the Export Administration Regulations administered by the U.S. Department of Commerce. These regulations restrict our ability to market, sell, distribute or otherwise transfer our products or technology to prohibited countries or persons. Violations of these regulations, laws, or key control policies by our employees, contractors, channel partners, or agents could result in termination of our relationship, financial reporting problems, fines, and/or civil or criminal penalties for us, or prohibition on the importation or exportation of our products and could have a material adverse effect on our business, financial condition, and operating results. For example, on October 7, 2022, we submitted voluntary disclosures to the U.S. Treasury Department’s Office of Foreign Assets Control, the Bureau of Industry and Security’s Office of Export Enforcement, and the Department of Justice (collectively, the “Agencies”) regarding the potential export and sale of certain of our networking equipment to end users in Russia subject to U.S. sanctions and export control restrictions. We are continuing our review of the matter in conjunction with outside counsel. Given the uncertainty of the outcome of the investigation, and the potential outcome of the Agencies’ determination, we cannot estimate at this time the possible loss or range of loss that may result from this action.

Current wording

We are required to comply with laws, rules and regulations of the United States and other countries, as applicable, relating to export controls and economic sanctions, including, but not limited to, trade sanctions administered by the Office of Foreign Assets Control within the U.S. Department of the Treasury, as well as the Export Administration Regulations administered by the U.S. Department of Commerce. These regulations restrict our ability to market, sell, distribute or otherwise transfer our products or technology to prohibited countries or persons, or for prohibited end-uses. Military actions, armed conflicts, and geopolitical tensions may result in the expansion of sanctions programs, export control restrictions, or other trade measures that could further restrict our ability to market, sell, distribute, or transfer products and technology in certain markets. Violations of these regulations, laws, or key control policies by our employees, contractors, channel partners, or agents could result in the termination of contractual relationships, financial reporting problems, fines, and/or civil or criminal penalties for us, or prohibition on the importation or exportation of our products and could have a material adverse effect on our business, financial condition, and operating results. For example, on October 7, 2022, we submitted voluntary disclosures to the U.S. Treasury Department’s Office of Foreign Assets Control, the Bureau of Industry and Security’s Office of Export Enforcement, and the Department of Justice (collectively, the “Agencies”) regarding the potential export and sale of certain of our networking equipment to end users in Russia subject to U.S. sanctions and export control restrictions. We are continuing our review of the matter in conjunction with outside counsel. Given the uncertainty of the outcome of the investigation, and the potential outcome of the Agencies’ determination, we cannot estimate at this time the possible loss or range of loss that may result from this action.

Previous wording

We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. However, we cannot ensure that the actions we have taken will adequately protect our intellectual property rights or that other parties will not independently develop similar or competing products that do not infringe on our patents. With the advent of GenAI, there is a risk that when employees use GenAI tools, data will leak outside the Company that could lead to breach of confidentiality or a disclosure of trade secrets that are being developed.

Current wording

We rely on a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. However, we cannot ensure that the actions we have taken will adequately protect our intellectual property rights or that other parties will not independently develop similar or competing products that do not infringe on our patents.

Previous wording

We are a U.S. multinational company subject to income tax as well as non-income-based taxes in various jurisdictions including Ireland, where we have an operating company supporting our business in most non-U.S. jurisdictions. Our income taxes are subject to volatility and could be adversely affected by a number of factors including earnings that are lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates, changes in tax laws and regulations and interpretations of those changes, expiration of or lapses in the research and development tax credit laws, changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments related to our methods for valuing developed technology or intercompany arrangements, tax effects of nondeductible compensation, including stock-based compensation, a change in our decision to indefinitely reinvest certain foreign earnings, changes in accounting principles and imposition of withholding or other taxes on payments by subsidiaries or customers. In particular, there are many aspects of the U.S.’s One Big Beautiful Bill Act for which specific guidance is not yet available, and could impact us in unanticipated ways.

Current wording

We are a U.S. multinational company subject to income tax as well as non-income-based taxes in various jurisdictions including Ireland, where we have an operating company supporting our business in most non-U.S. jurisdictions. Our income taxes are subject to volatility and could be adversely affected by a number of factors including earnings that are lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates, changes in tax laws and regulations and interpretations of those changes, expiration of or lapses in the research and development tax credit laws, changes in the valuation of our deferred tax assets and liabilities, transfer pricing adjustments related to our methods for valuing developed technology or intercompany arrangements, tax effects of nondeductible compensation, including stock-based compensation, a change in our decision to indefinitely reinvest certain foreign earnings, changes in accounting principles and imposition of withholding or other taxes on payments by subsidiaries or customers.

Previous wording

The Organization for Economic Co-operation and Development (“OECD”), an international association comprised of 38 countries including the U.S. and Ireland, has made changes to numerous long-standing tax principles in the form of its Pillar Two framework, which effectively imposes a minimum tax rate of 15% in each taxing jurisdiction globally. Many countries have adopted or are positioned to adopt portions or all of the proposed rules. Where enacted, the rules are effective for us in fiscal 2025. We have assessed the impact of Pillar Two to be immaterial to our overall tax provision for fiscal 2025, however, there can be no assurance that future adoption of these rules by associated countries, will not have a materially adverse impact on our provision for income taxes.

Current wording

The Organization for Economic Co-operation and Development (“OECD”), an international association comprised of 38 countries including the U.S. and Ireland, has made changes to numerous long-standing tax principles in the form of its Pillar Two framework, which effectively imposes a minimum tax rate of 15% in each taxing jurisdiction globally. Many countries have adopted portions or all of these rules, and additional jurisdictions may do so in the future. Although we have assessed the impact of Pillar Two to date and do not believe it has had a material impact on our tax provision, the interpretation, implementation, and future adoption of these rules by additional jurisdictions could increase our tax obligations, compliance costs, or administrative burden and could materially adversely affect our provision for income taxes, cash tax liabilities, or effective tax rate.

Previous wording

Many countries are also actively considering changes to existing tax laws and rates or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate the business including taxes on digital services, withholding taxes on royalties and taxes on intercompany service charges. We have assessed the impacts of these rules in the countries where we currently operate and do not currently anticipate a material impact to our tax liabilities, however, given the lack of statutory guidance and historical precedent, we can provide no assurance that our tax liabilities will not be materially impacted in the future under these or similar initiatives.

Current wording

Many countries are also actively considering changes to existing tax laws and rates or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate the business including taxes on digital services, withholding taxes on services and taxes on intercompany service charges. We have assessed the impacts of these rules in the countries where we currently operate and do not currently anticipate a material impact to our tax liabilities, however, given the lack of statutory guidance and historical precedent, we can provide no assurance that our tax liabilities will not be materially impacted in the future under these or similar initiatives.

Previous wording

In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”), including from and about actual and prospective customers, as well as our employees and business contacts and information we process for or on behalf of our customers in the course of our business. We are therefore subject to certain laws, regulations and other requirements relating to the privacy, security, and handling of Personal Information either directly or where we are processing Personal Information for or on behalf of our customers or another third party. For example, the E.U.’s General Data Protection Regulation, and similar laws in other jurisdictions require us to adhere to certain disclosure restrictions and deletion obligations with respect to the Personal Information of their residents, and allow for penalties for violations. We have invested, and continue to invest, human and technology resources in our efforts to comply with such requirements that may be time-intensive and costly.

Current wording

In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws (collectively, “Personal Information”), including from and about actual and prospective customers, as well as our employees and business contacts and information we process for or on behalf of our customers in the course of our business. We are therefore subject to laws, regulations and other requirements relating to the privacy, security, and handling of Personal Information either directly or where we are processing Personal Information for or on behalf of our customers or another third party. For example, the EU General Data Protection Regulation, U.S. state privacy laws, and other global privacy, cybersecurity, and data protection requirements impose disclosure obligations, security, retention, deletion, and other compliance requirements with respect to Personal Information and may allow for penalties for violations. We have invested, and continue to invest, human and technology resources in our efforts to comply with such requirements that may be time-intensive and costly.

Previous wording

The application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment. In some cases, these requirements may be either unclear in their interpretation and application or they may have inconsistent or conflicting requirements with each other. Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security, including in relation to cybersecurity incidents. In addition, some such requirements place restrictions on our ability to process Personal Information across our business or across country borders.

Current wording

The application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment. In some cases, these requirements may be either unclear in their interpretation and application or may have inconsistent or conflicting requirements. Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security, including in relation to artificial intelligence, data rights and cybersecurity incidents. In addition, some such requirements place restrictions on our ability to process Personal Information across our business or across country borders.

Previous wording

the timely adoption and market acceptance of industry standards, and timely resolution of conflicting U.S. and international industry standards; and

Current wording

the timely adoption and market acceptance of industry standards, and timely resolution of conflicting U.S. and international industry standards;

Previous wording

our ability to influence the development of emerging industry standards and to introduce new and enhanced products that are compatible with such standards;

Current wording

our ability to influence the development of emerging industry standards and to introduce new and enhanced products that are compatible with such standards; and