Risks Related to Our Business and Industry We are exposed to general global economic and market conditions, particularly those impacting the communications industry. We provide software and services primarily to service providers in the communications industry, and our business is therefore highly dependent upon conditions in that industry. Developments in the communications industry, such as the impact of global economic conditions, industry consolidation, emergence of new competitors, commoditization of voice, video and data services and changes in the regulatory environment, at times have had, and could continue to have, a material adverse effect on our existing or potential customers. These conditions have reduced, and may continue to reduce, the growth rates that the communications industry had previously experienced and caused the market value, financial results and prospects and capital spending levels of many communications companies to decline or degrade. Industry consolidation involving our customers, which has been significant in recent years, may place us at risk of losing business to the incumbent provider to one of the parties to the consolidation or to new competitors. During previous economic downturns, the communications industry experienced significant financial pressures that caused many in the industry to cut expenses and limit investment in capital intensive projects and, in some cases, led to restructurings and bankruptcies. Continuing uncertainty as to the pace of economic recovery following such economic downturns may have adverse consequences for our customers and our business. Downturns in the business climate for communications companies have in the past resulted, and may in the future result, in slower customer buying decisions and price pressures that adversely affected, and may continue to adversely affect, our ability to generate revenue. The current macroeconomic conditions, including as a result of geopolitical events, or other global or regional events, such as pandemics, as well as the current inflationary environment, trade disputes and barriers to trade and foreign exchange rate fluctuations, and the effects of these conditions on our customers’ businesses and levels of business activity and the resulting spending decisions of customers, have had and may continue to have a negative impact on our business by decreasing our new customer engagements and the size of initial or ongoing spending commitments under those engagements, as well as decreasing the level of demand and expenditures by existing customers. In addition, a slowdown in buying decisions may extend our sales cycle period and may limit our ability to forecast our flow of new contracts. If such adverse business conditions continue, our business may be harmed. If we fail to adapt to changing market conditions and cannot compete successfully with existing or new competitors, our business could be harmed. We may be unable to compete successfully with existing or new competitors, particularly as we expand into new market segments. Our failure to adapt to changing market conditions, new or evolving market segments such as 5G standalone networks, fixed wireless access (“FWA”), and fiber, the cloud, and AI including GenAI, and to compete successfully with established or new competitors could have a material adverse effect on our results of operations and financial condition. We face intense competition for the software products and services that we sell, including competition for the managed services we provide to customers under long-term service agreements. These managed services include management of data center operations and IT infrastructure, application management and ongoing support, systems modernization and consolidation, cloud environment management and management of end-to-end IT processes for the business and operations of our customers. The market for communications information systems is highly competitive and fragmented, and we expect competition to continue to increase. We compete with independent software and service providers and with the in-house IT and network departments of communications companies. Our main competitors include firms that provide IT services (including consulting, systems integration and managed services), software vendors that sell products for particular aspects of a total information system, software vendors that specialize in systems for particular communications services (such as internet, wireline and wireless services, cable, satellite and service bureaus) and network equipment providers that offer software systems in combination with the sale of network equipment. We also compete with companies that provide digital commerce software and solutions. We believe that our ability to compete with other vendors as well as with in-house IT and network departments of communications companies, depends on a number of factors, including: •the development by others of software products and services that are competitive with our products and services; •the price at which others offer competitive software and services; •effective and efficient integration of AI including GenAI into products, services and our own internal operations; 2 •the constant competition for talent in the industry, including the ability of our competitors to hire, retain and motivate key personnel; •the ability of competitors to deliver projects at a level of quality that rivals our own; and •the responsiveness of our competitors to customer needs. A number of our competitors have long operating histories, large customer bases, substantial financial, technical, sales, marketing and other resources, and strong name recognition. Current and potential competitors have established, and may establish in the future, cooperative relationships among themselves or with third parties to increase their abilities to address the needs of our existing or prospective customers. In addition, our competitors have acquired, and may continue to acquire in the future, companies that may enhance their market offerings, or may themselves be acquired by larger companies with more resources and ability to leverage existing business relationships. Accordingly, new competitors or alliances among competitors may emerge and rapidly acquire significant market share. As a result, our competitors may be able to adapt more quickly than us to new or emerging technologies and changes in customer requirements, and may be able to devote greater resources to the promotion and sale of their products. Additionally, our competitors are able to offer services related to their software, platform and other solutions that require integration with their other existing services. These more integrated services may represent more attractive alternatives to customers than some of our software products and services. We cannot assure you that we will be able to compete successfully with existing or new competitors. If we fail to adapt to changing market conditions and to compete successfully with established or new competitors, our results of operations and financial condition may be adversely affected. If we do not continually enhance our products and service offerings, introduce new products and features and adopt and monetize new technologies and methodologies in the marketplace, we may have difficulty retaining existing customers and attracting new customers. We believe that our future success will depend, to a significant extent, upon our ability to enhance our existing products and services, to introduce new products, services and features to meet the requirements of our customers, and to adopt and leverage new technologies and methodologies such as 5G standalone networks, FWA, and fiber, the cloud, microservices-based architecture, DevSecOps, automation, and AI, in a rapidly developing and evolving market. We devote significant resources to refining and expanding our base software modules and to developing our products, services and development methodologies and tools. We offer solutions involving GenAI, as well as predictive analytics and robotic process automation. Our inability to identify any future changes or disruptions in the technology space, inability to develop services around them, tailor our go-to-market strategy to take these services to our global customers ahead of our competition and enhance our delivery capabilities to execute those services may impact our competitive positioning, market share and revenues. In some instances, we rely on cooperative relationships with third parties to assist us in delivering certain products and services to our customers. Our present or future products, services and technology may not satisfy the evolving needs of the communications industry or of other industries that we serve. If we are unable to anticipate or respond adequately to such needs, due to resource, technological or other constraints, our business and results of operations could be harmed. Technological developments may materially affect the cost and use of technology by our customers and could affect the nature of how we generate revenue. Some of these technological developments have reduced and replaced, in whole or in part, some of our historical services and solutions and will continue to do so in the future. This has caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies. Such technological developments and spending delays can negatively impact our results of operations if we are unable to introduce new pricing or commercial models that reflect the value of these technological developments or if the pace and level of spending on new technologies are not sufficient to make up any shortfall. Our use of AI and Related Tools, as well as applications, features, and functionality that we may introduce in the future, may result in difficulties, including with product development and integration, and may otherwise not prove efficient or profitable, may not be widely or timely accepted by our customers or the market, may enhance intellectual property, privacy, cybersecurity, operational and technological risks, or may otherwise adversely impact our business or operations, or subject us to possible litigation. As we continue to diversify our product and service offerings, we may utilize AI and Related Tools in connection with our product and service offerings and in our own internal operations. For example, we include GenAI capabilities in the existing products and services through our Amdocs amAIz suite and have entered into partnerships to leverage existing GenAI platforms. Given the short time that has elapsed since GenAI became commercially viable, and the rapid pace of change in the GenAI space, we have limited experience with GenAI and may experience any number of difficulties including with respect to product development and integration with our existing offerings, IT systems and service providers. Additionally, there are significant risks involved in utilizing AI and Related Tools and no assurance can be provided that the usage of such AI and Related Tools will enhance our business, the business of our customers, or assist us in being more efficient or profitable. Further, AI and Related Tools may have biases, errors or inadequacies that are not easily detectable, and mature and proven solutions to mitigate for these risks may not yet be available. For example, certain AI and Related Tools may utilize historical market or sector data in their analytics. To the extent that such historical data is not indicative of the current or future conditions in the applicable market or sector, or the AI and Related Tools fail to filter 3 biases in the underlying data or collection methods, the usage of AI and Related Tools may lead us or our customers to make determinations or decisions on behalf of our business or our customers’ business that are based on such flawed data, including determinations or decisions that may have an adverse effect. If AI and Related Tools are incorrectly or inadequately designed or the data used to train them is incomplete, inadequate or biased in some way, use of AI and Related Tools may inadvertently reduce efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our or our customers’ business goals, do not comply with our or our customers’ policies or interfere with the performance of our or our customers’ products, services, business and reputation. Additionally, reliance on AI and Related Tools could pose ethical concerns and lead to a lack of human oversight and control, which could have negative implications for our organization or that of our customers. Any of the foregoing flaws in our or our service providers’ AI and Related Tools or the AI and Related Tools of others in our industry, whether actual or perceived, may adversely impact our business, reputation, operations, and product or service offerings. Further, as we continue to incorporate AI and Related Tools in our product and service offerings, including in new markets, and in our own internal operations, we continue to face new sources of competition, new business models, and new partner, service provider and customer relationships. In order to be successful, we need to continue to cultivate new industry relationships, strengthen existing relationships, and otherwise invest significant resources to bring new AI and Related Tool solutions and offerings to market and develop and support our existing AI and Related Tool solutions and offerings. The success of any AI and Related Tools or similar solutions we develop will depend on many factors, including market demand, our ability to win and maintain customers, and the cost, performance and perceived value of any such offerings we develop, including Amdocs amAIz, as well as their compatibility with our existing offerings. As a result, there can be no assurance that any AI and Related Tool solutions we develop will be adopted by the market or be profitable or viable. Given the short time that has elapsed since GenAI became commercially viable, and the rapid pace of change in the GenAI space, our limited experience with respect to GenAI offerings could limit our ability to successfully execute on this growth strategy or adapt to market changes. If we are unsuccessful in developing, integrating and offering AI and Related Tool solutions, our business, results of operations and financial condition could be adversely affected. In addition, the use of AI and Related Tools may enhance intellectual property, privacy, cybersecurity, operational and technological risks. If any of our employees, contractors, vendors or service providers use any third-party AI and Related Tools in connection with our business or the services they provide to us, it may lead to the inadvertent disclosure of our confidential information, including inadvertent disclosure of our confidential information into publicly available third-party training sets, which may impact our ability to realize the benefit of, or adequately protect and enforce our intellectual property or confidential information, harming our competitive position and business. Our ability to mitigate risks associated with disclosure of our confidential information in connection with AI and Related Tools, will depend on our successful implementation, maintenance, monitoring and enforcement of appropriate technical and administrative safeguards, policies, and procedures governing the use of AI and Related Tools in our business and in our own internal operations. Further, any content created by us using GenAI may not be subject to copyright protection which may adversely affect our intellectual property rights in, or ability to commercialize or use, any such content. In addition, the use of AI and Related Tools by companies has resulted in, and may in the future result in, cybersecurity and data privacy breach incidents that implicate the personal or confidential information or data of users of AI and Related Tools. The technologies underlying AI and Related Tools and their use cases are subject to a variety of laws and regulations, including intellectual property, privacy, consumer protection and federal equal opportunity laws and regulations, and are expected to be subject to new laws and regulations (including the EU AI Act, the first set of provisions of which became effective in February 2025, with additional provisions becoming effective on later dates) or new applications of existing laws and regulations. If we do not have sufficient rights to use the data or other material or content on which AI and Related Tools rely, we may incur liability through the violation of applicable laws or regulations, third-party privacy, intellectual property or other rights or contracts to which we are a party. For example, the output produced by GenAI may include information subject to certain rights of publicity or privacy laws or constitute an unauthorized derivative work of the copyrighted material used in training the models underlying the AI and Related Tools, any of which could create a risk of liability for us or adversely affect our business or operations. Furthermore, the technologies underlying AI and Related Tools are complex and rapidly developing, and as a result, it is not possible to predict all of the legal, operational or technological risks related to the use of AI and Related Tools. Moreover, AI and Related Tools are the subject of evolving review by various governmental and regulatory agencies, including the SEC and the U.S. Federal Trade Commission and EU regulatory bodies, and changes in laws, rules, directives and regulations governing the use of AI and Related Tools may adversely affect the ability of our business to use AI and Related Tools. We may not be able to anticipate how to respond to or comply with these rapidly developing legal and regulatory frameworks, and we may need to expend significant resources to adjust our offerings in certain jurisdictions if the legal and regulatory frameworks are inconsistent across jurisdictions. 4 Our business is dependent on a limited number of significant customers, and the loss of any one of our significant customers, or a significant decrease in business from any such customer, could harm our results of operations. Our business is dependent on a limited number of significant customers, of which AT&T has historically been our largest. AT&T accounted for 25.9% and 24.5% of our revenue in fiscal years 2025 and 2024, respectively. In fiscal years 2025 and 2024, our next largest customer, T-Mobile, accounted for 19.9% and 22.6% of our revenue, respectively. Excluding the phase out in fiscal year 2025 of several low margin, non-core business activities(1), the percentage of revenue of AT&T and T-Mobile for fiscal year 2025 remained roughly stable as compared to fiscal year 2024. For each of AT&T and T-Mobile we provide multiple services, run multiple activities and have a large portion of the business under our managed services. We cannot assure you that our revenues from AT&T, T-Mobile or any of our significant customers will remain the same or grow in future years. Aggregate revenue derived from the multiple business arrangements we have with the ten largest of our significant customers accounted for approximately 70% of our revenue in fiscal years 2025 and 2024. The loss of any significant customer, including as a result of industry consolidation involving our customers, a significant decrease in business from any such customer or a reduction in customer revenue due to adverse changes in the terms of our contractual arrangements, market conditions, customer circumstances (such as financial condition and market position) or other factors could harm our results of operations and financial condition. Revenue from individual customers may fluctuate from time to time based on the commencement, scope and completion of projects or other engagements, the timing and magnitude of which may be affected by market or other conditions. Although we have received a substantial portion of our revenue from recurring business with established customers, many of our major customers do not have any obligation to purchase additional products or services from us and generally have already acquired fully paid licenses for their installed systems. Therefore, our customers may not continue to purchase new systems, system enhancements or services in amounts similar to previous years or may delay implementation or significantly reduce the scope of committed projects, each of which could reduce our revenue and profits. See “Risk Factors — We are exposed to general global economic and market conditions, particularly those impacting the communications industry". Our future success will depend on our ability to develop and maintain long-term relationships with our customers and to meet their expectations in providing products and performing services. We believe that our future success will depend to a significant extent on our ability to develop and maintain long-term relationships with successful network operators and service providers with the financial and other resources required to invest in significant ongoing development of our products and services. If we are unable to develop new customer relationships, our business will be harmed. In addition, our business and results of operations depend in part on our ability to provide high-quality services to customers that have already implemented our products and extend and expand existing customer relations. If we are unable to meet customers’ expectations in providing products or performing services, our business and results of operations could be harmed. Our revenue, earnings and profitability are affected by the length of our sales cycle, and a longer sales cycle could adversely affect our results of operations and financial condition. Our business is directly affected by the length of our sales cycle. Information systems for communications companies are relatively complex and their purchase generally involves a significant commitment of capital, with attendant delays frequently associated with large capital expenditures and procurement procedures within an organization. The purchase of these types of products and services typically also requires coordination and agreement across many departments within a potential customer’s organization. Delays associated with such timing factors could have a material adverse effect on our results of operations and financial condition. In periods of economic slowdown in the communications industry, price pressure or changes in customers’ demand and spending behavior, our typical sales cycle lengthens, which means that the average time between our initial contact with a prospective customer and the signing of a sales contract increases. The lengthening of our sales cycle could reduce growth in our revenue. In addition, the lengthening of our sales cycle contributes to increased selling expenses, thereby reducing our profitability. If our security measures for our software, hardware, services or cloud offerings are compromised and as a result, our data, our customers’ data, our IT systems, or our customers’ IT systems are accessed improperly, made unavailable, or improperly modified, our products and services may be perceived as vulnerable and it may materially affect our business and result in potential legal liability. Our products and services, including our cloud offerings, store, retrieve, and manage our customers’ information and data, as well as our own information and data. We have a reputation for secure and reliable product offerings and related services and we have invested a great deal of time and resources in protecting the integrity and security of our products, services and the internal and external information and data that we manage. Despite our efforts to implement security measures, we cannot guarantee that our systems are fully protected from vulnerabilities, including viruses, worms, ransomware and other malicious software programs, "phishing" attacks, denial-of-service attacks, break-ins, fraud, theft, social engineering, unauthorized access to or tampering with personal or confidential information and data, and similar cyberattacks, breaches or disruptions. Cybersecurity threats are constantly expanding and evolving, thereby increasing the difficulty of detecting, defending against and responding to them. For example, we may not discover a security breach or a loss of information for a significant amount of time after the breach, and may not be able to anticipate attacks or implement sufficient mitigating or remedial measures. (1) For more details, please refer to "Note 22 - Segment Information and Revenue from Significant Customers" in the Notes to the Consolidated Financial Statements. 5 Also, due to, among others, geopolitical conflicts and threats and acts of terrorism, we and our third-party vendors and customers are vulnerable to a heightened risk of cybersecurity threats. “Phishing” and other types of attempts to obtain unauthorized information or access are often sophisticated and difficult to detect or defeat. In particular, ransomware attacks, which often involve extortion payments demanded by threat actors, are becoming increasingly prevalent and can lead to significant reputational harm, loss of data, operational disruption, and monetary loss, and we may also be unwilling or unable to make payments of the nature demanded by threat actors based on laws or regulations that may apply. Organized criminals, nation state threat actors, state-sponsored actors, computer hackers, terrorists, motivated hacktivists and other threat actors, including insiders, that target us have the possibility of impacting our systems, networks, data and business operations. In addition, security measures in our products and services may be penetrated or bypassed by such threat actors who may gain unauthorized access to our or our customers’ or partners’ software, hardware, cloud offerings, networks, data or systems. Such threat actors may use a wide variety of methods, which may include developing and deploying malicious software to attack our products and services and gain access to our networks and data centers using or acting in a coordinated manner to launch distributed denial of service or other coordinated attacks. This is also true for third party data, products or services incorporated into our own. Data may also be accessed or modified improperly as a result of customer, partner, employee, supplier or other insider error or malfeasance and third parties may attempt to use social engineering techniques to fraudulently induce customers, partners, employees, suppliers or other insiders into disclosing sensitive information such as user names, passwords or other information in order to gain access to our data or IT systems or our customers’ or partners’ data or IT systems. Our exposure to cybersecurity and data privacy breach incidents may increase due to a large number of employees working remotely. Any of the foregoing occurrences could create system disruptions and cause shutdowns or denials of service or compromise data, including personal or confidential information or data, of ours, our employees, our partners or our customers. Additionally, our customers may fail to implement recommended or required updates to our software on their systems timely, or at all, which in turn makes them more vulnerable to the kinds of cybersecurity and data privacy breach incidents described in greater detail above. If any such incidents were to affect customers using our software, it could negatively affect our reputation and, in turn, our results of operations. Any of the foregoing risks may be heightened by our use of AI and Related Tools (For more information on risks related to AI and Related Tools, please see “Risk Factors — Our use of AI and Related Tools may adversely impact our business and subject us to possible litigation.”) If a cyberattack or other security incident (for example, phishing, advanced persistent threats, or social engineering) were to result in unauthorized access to, or deletion of, and/or modification and/or exfiltration of our customers’ data, other external data or our own data or our IT systems or if the services we provide to our customers were disrupted, customers could lose confidence in the security and reliability of our products and services, including our cloud offerings, and perceive them not to be secure. This in turn could lead to fewer customers using our products and services and result in reduced revenue and earnings. The costs we would incur to address and fix these security incidents would increase our expenses. These risks will increase as we continue to grow our cloud solutions and network offerings and store and process increasingly large amounts of data, including personal and confidential information and data, and host or manage parts of our customers’ businesses in cloud-based IT environments. In addition, we have acquired certain companies, products, services and technologies over the years and have partnered with other companies for certain of our other offerings. While we make significant efforts to address any IT security issues with respect to our acquired companies and partners, we may still inherit such risks when we integrate these companies, products, services and technologies or work with our partners. Any of the events described above could cause our customers to make claims against us for damages allegedly resulting from a security breach or service disruption, which could adversely affect our business, results of operations and financial condition. The skilled and highly qualified workforce that we need to develop, implement, maintain and modify our solutions may be difficult to hire, train and retain, and we have and could continue to face increased costs to attract and retain our skilled workforce. Our business operations depend in large part on our ability to attract, hire, train, motivate and retain highly skilled information technology professionals, software programmers and communications engineers on a worldwide basis, particularly as we operate and expand into developing market segments such as network automation, the cloud and GenAI. In addition, our competitive success will depend on our ability to attract and retain other outstanding, highly qualified employees, consultants and other professionals. Because our software products and services are highly complex and are generally used by our customers to perform critical business functions, we depend heavily on skilled technology professionals. Skilled technology professionals are often in high demand and short supply. If we are unable to hire or retain qualified technology professionals to develop, implement, maintain and modify our solutions, we may be unable to meet the needs of our customers. In addition, serving several new customers or implementing several new large-scale projects in a short period of time may require us to attract and train additional technology professionals at a rapid rate. We may face difficulties identifying and hiring qualified personnel and, in particular, we may face difficulties in our ability to attract and retain employees with technical and project management skills, including those from developing countries. Although we are heavily investing in training our new employees, we may not be able to train them rapidly enough to meet the increasing demands on our business, particularly in light of high attrition rates in some regions where we have operations. 6 Additionally, there is increasing competition for talent in the technology sector, by our competitors as well as our customers' internal technology groups. Thus, our inability to hire, train and retain the appropriate personnel could further increase our costs of retaining a skilled workforce and make it difficult for us to manage our operations, meet our commitments and compete for new customer contracts. In particular, wage costs in lower-cost markets where we have historically added personnel, such as India, are increasing and we may need to continue increasing the levels of our employee compensation more rapidly than in the past to remain competitive. As a result of our entry into new domains, we now compete for high-quality employees in those domains’ limited and competitive talent market. In addition, cost containment measures effected in recent years, such as increased presence in lower-costs countries, may lead to greater employee attrition and further increase the cost of retaining our most skilled employees. The transition of projects to new locations may also lead to business disruptions due to differing levels of employee knowledge and organizational and leadership skills. Although we have never experienced an organized labor dispute, strike or work stoppage, any such occurrence, including in connection with unionization efforts, could disrupt our business and operations and harm our financial condition. In addition, a national union and a group of our employees had attempted in the past to secure the approval of the minimum number of employees needed for union certification with respect to our employees in Israel or elsewhere. While these efforts have not resulted in either group being recognized as a representative union, we cannot be certain there will be no such efforts in the future. In the event an organization is recognized as a representative union for our employees in Israel, we would be required to enter into negotiations to implement a collective bargaining agreement. We are unable to predict whether, and to what extent, efforts to unionize our employees would have an adverse effect on our business, operations or financial condition. Our continued growth and success will also depend upon the continued active participation of a relatively small group of senior management personnel, and requires us to hire, retain and develop our leadership bench. If we are unable to attract and retain talented, highly qualified senior management and other key executives, as well as provide for the succession of senior management, our growth and results of operations may be adversely impacted. We continuously seek to acquire companies or technologies and we cannot assure that we will be able to identify attractive opportunities, be successful in the integration of our acquisitions nor that such activities will strengthen our financial or competitive position. We regularly review and assess potential acquisitions and targets in order to expand our offerings and enhance our market diversification and strategic strengths. In recent years, we have completed numerous acquisitions and we are actively evaluating potential new opportunities, some of which could be significant, stand alone or in the aggregate. In the future, we intend to continue expanding our portfolio of products, services and technologies that we believe we will advance our business strategy and market diversification through acquisitions. However, we may not be able to identify suitable future targets, consummate them on favorable terms or complete otherwise favorable acquisitions because of various factors, such as regulatory or other concerns. For instance, some countries, including the United States and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions on transactions involving foreign investments. Additionally, even if we are able to identify and consummate new acquisitions, the success of such new acquisitions will depend on many factors, including our ability to win and maintain customers in new industries and markets. Also, the effects of macroeconomic conditions, prevailing level of macroeconomic, business, and operational uncertainty may impact our ability to grow acquired entities, which could result in reduction of their valuations. In addition, geopolitical conflict, political instability, labor or trade disputes or similar events, may also result in further scrutiny and more complex approval processes over international transactions in countries where we operate. Furthermore, rapid technological changes such as GenAI that may affect the acquired technology and could result in reduction of value of such technologies. We cannot assure you that the acquisitions we have completed, or any future acquisitions that we may make, will enhance our products and services or strengthen our financial or competitive position. In addition, we cannot assure you that we would be successful in the integration of our acquisitions. Although we have completed, and continue to complete, numerous integrations, there is no assurance that we have identified, or will be able to identify the optimal integration structure, or all material issues related to the integration of our acquisitions. Such issues may include significant defects in the internal control policies of companies that we have acquired, acquisition of intellectual property maintained by our targets that may result in allegations or claims of infringement or which may not be adequately protected, or conflicting commitments among our and our target’s customers. Our acquisitions could lead to difficulties in integrating acquired personnel and operations and in retaining and motivating key personnel from these businesses. In some instances, we may need to depend on the seller of an acquired business to provide us with certain transition services in order to meet the needs of our customers. Any failure to recognize significant defects in the internal control policies of acquired companies or properly integrate and retain personnel, and any interruptions of transition services, may require a significant amount of time and resources to address. Acquisitions may disrupt our ongoing operations, expose us to potential identified or unknown security vulnerabilities, divert management from day-to-day responsibilities, increase our expenses and harm our results of operations or financial condition. 7 We are required to comply with stringent, complex and evolving laws, directives, regulations and standards in many jurisdictions, as well as contractual obligations, relating to the collection, use, retention, disclosure, security, transfer and other processing of personal data. Any actual or perceived failure to comply with these requirements could have a material adverse effect on our business. We are subject to laws, directives, regulations and standards relating to the collection, use, retention, disclosure, security, transfer and other processing of personal data. These laws, directives, regulations and standards and their interpretation and enforcement continue to evolve rapidly and may be inconsistent from jurisdiction to jurisdiction; we will need to expend time and resources to ensure compliance with these evolving laws, directives, regulations and standards, and failure to understand and comply with these laws, directives, regulations and standards can have an impact on our results of operations and financial condition. For example, the European Union (“EU”) General Data Protection Regulation (“GDPR”) regulates the processing of personal data originated in the European Economic Area (“EEA”) and its transfer out of the EEA. The GDPR applies globally to all of our activities conducted from an establishment in the EEA, to related products and services that we offer to EEA customers and to non-EEA customers which offer services in the EEA. The GDPR also affects our role as product developers, as we are required to adopt “privacy by design” principles in order to address our customers’ need to apply privacy adequate solutions when handling their subscribers’ data. The GDPR imposes substantial financial penalties for noncompliance, including possible fines of up to 4% of global annual revenues for the preceding financial year or €20 million (whichever is higher) for the most serious violations. The United Kingdom (“U.K.”) operates a separate but similar regime under a version of the GDPR as transposed into U.K. law, together with the amended U.K. Data Protection Act 2018 (collectively, the “UK GDPR”). While the GDPR and the UK GDPR remain substantially similar for the time being, the U.K. government has adopted reforms to its data protection legal framework in its Data Use and Access Act 2025, which became law on June 19, 2025 (phasing in between June 2025 and June 2026) and will introduce significant changes from the GDPR. This may lead to additional compliance costs and could increase overall risk exposure as businesses may no longer be able to take a unified approach across the EEA and the U.K., and may need to amend their processes and procedures to align with the new framework. Implementing mechanisms to endeavor to ensure compliance with the GPDR and the UK GDPR may be onerous and may expose businesses to divergent parallel regimes that may be subject to potentially different interpretations and enforcement actions for certain violations and related uncertainty. Further, we are subject to the Israeli Protection of Privacy Law 5741 ("PPL"), and the Privacy Protection Regulations (Data Security) 5777 (“PPR”). The PPL imposes certain obligations on the owners of databases containing personal data, including, among other things, a requirement to register databases with certain characteristics. The PPR, which became effective concurrently with the GDPR, impose comprehensive data security requirements on the processing of personal data. The PPL was recently amended and now imposes substantial financial penalties for noncompliance with the PPL and/or the PPR. The PPL amendment came into effect on August 14, 2025. Additionally, local privacy laws have been introduced or enacted in other jurisdictions as part of an overall trend, including in Brazil, Canada, Guernsey, India and Singapore. For example, the Indian Parliament passed the Digital Personal Data Protection (DPDP) Act in August 2023 – the first comprehensive cross-sectoral law on personal data protection in India – which will have phased-in effective dates for different provisions to be determined by India’s central government. In the United States, there are numerous federal, state and local data privacy and security laws, rules and regulations. For example, at the federal level, we are subject to the rules and regulations promulgated under the authority of the U.S. Federal Trade Commission, which regulates unfair or deceptive acts or practices (including with respect to data privacy and security). The U.S. Congress also has considered, is currently considering, and may in the future consider, various proposals for comprehensive federal data privacy and security legislation, to which we may become subject if passed. At the state level, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”) provides California residents with certain individual privacy rights and imposes data privacy obligations on covered businesses. A growing number of other states have enacted, or are considering enacting, their own comprehensive data privacy laws. In addition, laws in all 50 U.S. states require businesses to provide notice under certain circumstances to consumers whose personal information has been disclosed as a result of a data breach. Noncompliance with our legal obligations relating to privacy and data protection could result in penalties, fines, legal proceedings by governmental entities or others, loss of reputation, legal claims by individuals and customers and significant legal and financial exposure, and could affect our ability to retain and attract customers. If we are unable to protect our proprietary technology from infringement or misappropriation or enforce our intellectual property rights, our business may be harmed. Any infringement or misappropriation of our technology or the development of competitive technology could seriously harm our business. Our software and software systems are largely developed or acquired by us, and we regard such software and software systems as proprietary. We rely upon a combination of trademarks, patents, contractual rights, trade secret law, copyrights, non-disclosure agreements and other methods to protect our proprietary rights, all of which provide only limited protection. We enter into non-disclosure and confidentiality agreements with our customers, workforce and marketing representatives and with certain contractors with access to sensitive information, and we also limit customer access to the source codes of our software and our software systems. We have undertaken, and will continue to undertake, appropriate actions to protect our technology. The ability to develop and use our software and software systems requires knowledge and professional experience that we believe is unique to us 8 and would be very difficult for others to independently obtain. However, our competitors may independently develop technologies that are substantially equivalent or superior to ours. Intellectual property laws are complex and subject to change, and existing trade secret, copyright, trademark and patent laws offer only limited protection. For example, there is uncertainty concerning the scope of patent, copyright and other intellectual property protection, including for GenAI, software and business methods. Even where we obtain intellectual property protection, the steps we have taken to protect our intellectual property and other proprietary rights may be inadequate, and our intellectual property and other proprietary rights may be held invalid or unenforceable. If so, we might not be able to prevent others from using what we regard as our technology to compete with us. In addition, the laws of some foreign countries do not protect our proprietary technology or allow enforcement of confidentiality covenants to the same extent as the laws of the United States. Any of the foregoing risks may be heightened by our use of AI and Related Tools (For more information on risks related to AI and Related Tools, please see “Risk Factors — Our use of AI and Related Tools may adversely impact our business and subject us to possible litigation.”) We may not be effective in policing unauthorized use of our intellectual property and other proprietary rights, and even if we do detect violations, litigation may be necessary to enforce our intellectual property and other proprietary rights. If we have to resort to legal proceedings to enforce our intellectual property and other proprietary rights, the proceedings may not be successful, could be burdensome, protracted and expensive and could involve a high degree of risk, including the risk of counterclaims that allege that we infringe, misappropriate or otherwise violate the intellectual property or other proprietary rights of another party and the risk of a holding, decision or other outcome that invalidates or narrows the scope of our rights, in whole or in part. We may be required to increase or decrease the scope of our operations in response to changes in the demand for our products and services, and if we fail to successfully plan and manage changes in the size of our operations, our business will suffer. In the past, we have both grown and contracted our operations, in some cases rapidly, in order to profitably offer our products and services in a continuously changing market. If we are unable to manage these changes and plan and manage any future changes in the size and scope of our operations, our business will suffer. Restructurings and cost reduction measures that we have implemented and which are currently ongoing, and which may continue to be implemented from time to time, may reduce the size of our operations and workforce. Reductions in personnel can result in significant severance, administrative and legal expenses and may also adversely affect or delay various sales, marketing and product development programs and activities. These cost reduction measures have included, and may in the future include, employee separation costs and consolidating and/or relocating certain of our operations to different geographic locations. Acquisitions, organic growth and absorption of significant numbers of customers’ employees in connection with managed services engagements have, from time to time, increased our headcount. During periods of expansion, we may need to serve several new customers or implement several new large-scale projects in short periods of time. This may require us to attract and train additional technology professionals at a rapid rate, as well as quickly expand our facilities, which we may have difficulties doing successfully. The timing and amount of costs related to our business optimization actions and the nature and extent of benefits realized from such actions are subject to uncertainties and other factors, including local regulations, and may differ from our expectations. We may not receive significant revenues from our current research and development efforts for several years, if at all. Developing software and digital products is expensive and the investment in the development of these products often involves a long return on investment cycle. An important element of our corporate strategy is to continue to make significant investments in research and development and related products and service opportunities both through internal investments and the acquisition of intellectual property, including from companies that we have acquired. Accelerated products and service introductions and short software and hardware life cycles require high levels of expenditures for research and development that could adversely affect our operating results if not offset by revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, we cannot guarantee that we will receive significant revenues from these investments for several years, if at all. We seek to enter into new strategic partnerships and alliances, and cannot assure you that these activities will materialize as expected, enhance our products and services, and they may adversely affect our results of operations. It is a part of our business strategy to pursue new strategic partnerships and alliances in order to offer new products or services or to otherwise enhance our market position and customer reach. Consistent with this strategy, we have entered into partnerships and collaborations and continue to review potential new opportunities. For example, in connection with our focus on domains, such as B2B and the cloud, and the adoption of technologies such as GenAI, we have retained existing and entered into new partnerships as well as expanded upon our existing partnerships with NVIDIA, Microsoft, Amazon Web Services, Oracle Cloud and Google Cloud. We expect to continue to build on these partnerships and others to update, enhance and build our offerings and customer base. However, we may face difficulty finding partners that enhance our offerings and brand, in particular if we simultaneously compete with such partners in other industries and markets. We may be limited in the scope of the partnership which may hinder the success of any ventures we enter into with such partners. We also may not be able to realize the business objectives and targets set for those 9 partnerships as a result of, among other things, organizational culture differences, difficulty or unwillingness to share certain information between partners, technology misalignment, business model misalignment or our ability to properly motivate disparate sales forces. Additionally, our customers may not favorably view our partnership offerings and may choose to not adopt such offerings. Changes in our partner's strategy may also adversely impact our ability to continue to make partnership offerings available in the future. Due to the multiple risks and difficulties associated with such activities, there can be no assurance that we will be successful in achieving our expected strategic, operating, and financial goals for any such partnership or alliance. Our international presence exposes us to risks associated with varied and changing political, cultural, legal, compliance and economic conditions worldwide. We are affected by risks associated with conducting business internationally. We maintain strategic development centers in Israel, Cyprus and India. We also have regional development centers in Brazil, Canada, Mexico, the Philippines, the United Kingdom and the United States, and have operations in North America, Europe, Eurasia, Latin America, Africa and the Asia-Pacific region. Although a substantial majority of our revenue is derived from customers in North America, we obtain significant revenue from customers in Europe, the Asia-Pacific region and Latin America. Our strategy is to continue to broaden our North American and European and Asia-Pacific customer bases and to continue to expand into international markets, including emerging markets, such as those in Latin America, Africa, Eurasia, India, Southeast Asia and the Middle East. Conducting business internationally exposes us to certain risks inherent in doing business in numerous markets, including: •lack of acceptance of non-localized products or services and other related services; •difficulties in complying with varied legal and regulatory requirements across jurisdictions, including those applicable to employees and the terms of employment; •difficulties in staffing and managing foreign operations; •longer payment cycles; •difficulties in collecting accounts receivable, converting local currencies or withholding taxes; •capital restrictions that limit the repatriation of earnings; •increases in procurement costs, including as a result of ongoing trade tensions and imposition of tariffs; •challenges in complying with complex foreign and U.S. laws and regulations and interpretations thereof, including communication laws, trade sanctions, export controls, and privacy regulations; •differences in business and social culture; •health emergencies or pandemics; •political instability, political or civil violence and threats of terrorism, including the geopolitical conflict between Russia and Ukraine, the recent conflict between India and Pakistan, as well as the conflict in the Middle East; •currency exchange rate fluctuations; •hyper inflation; •foreign ownership restrictions; •regulations on the transfer of funds to and from foreign countries; •the lack of well-established or reliable legal systems in some countries; •variations in effective income tax rates and tax policies among countries where we conduct business; and •climate change, extreme weather and the related political and economic effects. One or more of these factors could have a material adverse effect on our operations, which could harm our results of operations and financial condition. As we continue our efforts to expand our business internationally, including in emerging markets such as those in Latin America, Africa, Eurasia, India, Southeast Asia and the Middle East, we face a number of challenges specific to those regions, including more volatile economic conditions, competition from companies that are already present in the market, the need to identify correctly and leverage appropriate opportunities for sales and marketing, poor protection of intellectual property, inadequate protection against crime (including counterfeiting, corruption and fraud), lack of due process, political instability and corruption, inadvertent breaches of local laws or regulations and difficulties in recruiting sufficient personnel with appropriate skills and experience. Local business practices in jurisdictions in which we operate, and particularly in emerging markets, may be inconsistent with international regulatory requirements, such as anti-corruption and anti-bribery laws and regulations (including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act) to which we are subject. It is possible that some of our employees, subcontractors, agents or partners may violate such legal and regulatory requirements, which may expose us to criminal or civil enforcement actions, including penalties and suspension or disqualification from U.S. federal procurement contracting. If we fail to comply with such legal and regulatory requirements, our business and reputation may be harmed. We are subject to numerous, changing and sometimes conflicting legal regimes on various matters, including sanctions and trade control regulations in the United States, Europe and other countries, including as a result of rapidly evolving technology and increased government regulation of AI, GenAI, and cloud service solutions. The sanctions environment has 10 resulted in new sanctions and trade restrictions, such as in response to the invasion of Ukraine by Russia, among others, which may impair trade with certain sanctioned individuals and countries, and negatively impact regional trade ecosystems among our clients and us, including business operations in impacted territories. In addition, the ability of foreign nationals to work in the United States, Europe and other regions in which we have customers depends on their and our ability to obtain the necessary visas and work permits for our personnel who need to travel internationally. If we are unable to obtain such visas or work permits, or if their issuance is delayed or if their length is shortened, this may impact our ability to provide services to our customers in a timely and cost-effective manner. Immigration and work permit laws and regulations in the countries in which we have customers are subject to legislative and administrative changes as well as changes in the application of standards and enforcement. In addition, our brand and reputation are also associated with our public commitments to various environmental, social and governance (ESG) initiatives, including our goals and targets for sustainability and inclusion and diversity. Our goals and targets are set to multiple time frames extending out through 2040, and our disclosures on these matters and any failure to achieve our goals and targets whether in the short-term, mid-term or long-term, could harm our reputation and adversely affect our customer relationships or our recruitment and retention efforts. In addition, positions we take or do not take on social issues, or our ESG initiatives in general, may be unpopular with some of our employees, existing or potential customers, legislators or government regulators, advocacy groups or other stakeholders, who may hold divergent or conflicting views on ESG, which may impact our ability to attract or retain employees or customers, or subject us to negative scrutiny. Increasing focus on ESG matters has resulted in, and is expected to continue to result in, the adoption of legal and regulatory requirements, including those requiring climate, human rights and supply chain-related disclosures. New laws, regulations, policies and international accords relating to ESG matters are being developed and formalized in the U.S., Europe and elsewhere, including certain laws regulations and policies aimed at restricting or discouraging the consideration of ESG factors by companies. If new laws or, regulations, policies or accords are more stringent than, or conflict with, current requirements, we may experience increased compliance burdens and costs to meet such obligations or become exposed to legal, financial and reputational risks. Political, civil and national conditions in the Middle East and other countries may adversely affect our business. Of the development centers we maintain worldwide, two of our largest development centers are located in India and one in Israel. In Israel, our facilities are located in several different cities, with our main facility in the center of the country. Less than 15% of our workforce is located in Israel, with revenue from customers in Israel comprising less than 1% of total revenue. As a result, we are directly influenced by the political, economic and military conditions affecting Israel and its neighboring regions. Any major hostilities involving Israel could have a material adverse effect on our business. We maintain contingency plans to provide ongoing services to our customers in the event that escalated political or military conditions disrupt our normal operations. These plans include the transfer of some development operations within Israel to several of our other sites both within and outside of Israel. Implementation of these plans could disrupt our operations and cause us to incur significant additional expenditures, which could adversely affect our business and results of operations. Conflicts in North Africa and the Middle East, including with countries which border Israel, have historically resulted in continued political uncertainty and violence in the region. Relations between Israel and Iran have been seriously strained and continue to deteriorate, especially with regard to Iran’s nuclear program and its support of various terrorist organizations and involvement in the current conflict. In addition, efforts to improve Israel’s relationship with the Palestinian Authority have failed to result in a permanent solution in the past, and there have been numerous periods of hostility in recent years. On October 7, 2023, Hamas launched a terrorist attack on Israel, which has further evolved into an ongoing war with Hamas, and later on with additional terrorist organizations in the north of Israel. This has resulted in certain of our workforce shifting to remote work and some military reserve service call ups in Israel. Although a ceasefire agreement between Israel and Hamas was reached in October 2025, the situation continues to be volatile and could lead to additional hostilities in Israel and the Middle East, which might require additional business or operational adjustments, and may result in additional costs and potential disruptions to our operations. Globally, rising racial, ethnic and religious intolerance, as well as threats of terrorism, increases in hateful and nationalistic rhetoric, political violence and anti-social behavior, present challenges which may result in disruptions to our business operations or the loss of revenue which could adversely affect our business and results of operations. Terrorist activity in India and Pakistan has contributed to tensions between those countries and our operations in India may be adversely affected by future political and other events in the region. Our international operations expose us to risks associated with fluctuations in foreign currency exchange rates that could adversely affect our business. Although we have operations throughout the world, approximately 70% to 80% of our revenue and approximately 50% to 60% of our operating costs are denominated in, or linked to, the U.S. dollar. Accordingly, we consider the U.S. dollar to be our functional currency. As we conduct business internationally, fluctuations in exchange rates between the U.S. dollar and the currencies not 11 denominated in, or linked to, the U.S. dollar in which revenues are earned or costs are incurred may have a material adverse effect on our results of operations and financial condition. From time to time, we may experience increases in the costs of our operations outside the United States, as expressed in dollars, as well as decreases in revenue not denominated in, or linked to, the U.S. dollar, each of which could have a material adverse effect on our results of operations and financial condition. As a result of macroeconomic conditions, including as a result of geopolitical events or other global or regional events such as pandemics, political instability or conflicts and threats and acts of terrorism, as well as the current inflationary environment, foreign exchange rates fluctuation may continue to present challenges in future periods should significant increases in volatility in foreign exchange markets occur. Due to volatility in foreign exchange rates, particularly during periods of economic instability such as during the height of the financial crisis in fiscal year 2008 or the recent recessionary periods, for example, we may recognize higher than usual foreign exchange losses under interest and other expense, net, mainly due to the significant revaluation of assets and liabilities denominated in other currencies attributable to the rapid and significant foreign exchange rate changes associated with the global economic turbulence. Although we utilize hedging strategies to prevent significant impacts to our financial results, we believe that foreign exchange rates may continue to present challenges in future periods should significant increases in volatility in foreign exchange markets occur. Our policy is to hedge significant net exposures in the major foreign currencies in which we operate, and we generally hedge our net currency exposure with respect to expected revenue and operating costs and certain balance sheet items. We do not hedge all of our currency exposure, including for currencies for which the cost of hedging is prohibitively expensive. We cannot assure you that we will be able to effectively limit all of our exposure to foreign exchange rate fluctuations. The imposition of exchange or price controls, devaluation policies, restrictions on withdrawal of foreign exchange, other restrictions on the conversion of foreign currencies or foreign government initiatives to manage local economic conditions, including changes to or cessation of any such initiatives, could also have a material adverse effect on our business, results of operations and financial condition. Claims by others that we infringe their proprietary technology and trade secrets could harm our business and subject us to potentially burdensome litigation. Our software and software systems are the results of long and complex development processes, and although our technology is not significantly dependent on patents or licenses from third parties, certain aspects of our products make use of software components that we license from third parties or are assigned to us from our employees and contractors. As a developer of complex software systems, third parties may claim that portions of our systems violate their intellectual property rights. Our customers and software developers, including us, have been and are becoming increasingly subject to infringement claims as the number of products and competitors providing software and services to the communications industry increases and overlaps occur. In addition, patent infringement claims are increasingly being asserted by patent holding companies, which do not use the technology subject to their patents, and whose sole business is to enforce patents against companies, such as us and our customers, for monetary gain. Any claim of infringement by a third party could cause us to incur substantial costs defending against the claim and could distract our management from our business. Furthermore, a party making such a claim, if successful, could secure a judgment that requires us to pay substantial damages. A judgment could also include an injunction or other court order that could prevent us from selling our products or offering our services, or prevent a customer from continuing to use our products. We also support service providers and media companies with respect to digital content services, which could subject us to claims related to such services. Our digital content services and offerings may also subject us to possible claims of infringement of the ownership rights to media content, for example, as well as to direct legal claims from retail consumers arising from the delivery of such services. Any of the foregoing risks may be heightened by our use of AI and Related Tools (For more information on risks related to AI and Related Tools, please see “Risk Factors — Our use of AI and Related Tools may adversely impact our business and subject us to possible litigation.”) If anyone asserts a claim against us or one of our indemnitees relating to proprietary technology or information, we might seek to license their intellectual property. We might not, however, be able to obtain a license on commercially reasonable terms or on any terms. In addition, any efforts to develop non-infringing technology could be unsuccessful. Our failure to obtain the necessary licenses or other rights or to develop non-infringing technology could prevent us from selling our products and could therefore seriously harm our business. Our use of “open source” software could adversely affect our ability to sell our services and subject us to possible litigation. We use open source software in providing our solutions, and we may use additional open source software in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses. Under such licenses, if we engage in certain defined manners of use, we may be subject to certain conditions, including requirements that we offer our solutions that incorporate the open source software for no cost; that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software; and/or that we license such modifications or derivative works under the terms of the particular open source license. In addition, if a third-party software provider has incorporated open source software into software that we license from such provider in a manner that triggers one or more of the above requirements, we could be required to disclose any of our source code that incorporates or is a modification of such licensed software. If an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of 12 these licenses, we could be required to incur significant legal expenses defending such allegations and could be subject to significant damages, enjoined from the sale of our solutions that contained the open source software, and required to comply with the foregoing conditions, which could disrupt the distribution and sale of some of our solutions. The terms of many open source licenses have not been interpreted by U.S. courts, and there is a risk that these licenses could be construed in ways that could impose unanticipated conditions or restrictions on our ability to commercialize products and subscriptions incorporating such software. In addition, generally open source software licenses do not contain any warranties and may not have available support from the authors or third parties from whom we license it. If such open source software contains prior defects, security vulnerabilities or infringes any third party right or we are unable to obtain or provide necessary support, we could be exposed to legal claims and significant legal expenses without the ability to seek contribution from the authors or third parties from whom we license open source software. If open source software that we utilize is no longer maintained, developed or enhanced by the relevant authors or third parties, our ability to develop new solutions, enhance our existing solutions or otherwise meet customer requirements for innovation, quality and price may be impaired. System disruptions and failures may result in customer dissatisfaction, customer loss or both, which could materially and adversely affect our reputation and business. Our systems are an integral part of our customers’ business operations. The continued and uninterrupted performance of these systems for our customers is critical to our success. Customers may become dissatisfied by any system failure that interrupts our ability to provide services to them. Our ability to serve our customers depends on our ability to protect our systems and infrastructure against damage from fire, power loss, water damage, telecommunications and technology failure, cyberattacks, earthquake, severe weather conditions, terrorist attacks, vandalism and other similar unexpected adverse events. We also depend on various cloud providers, co-location data center providers and other third parties which provide us environments, tools and applications on which we provide our products. These environments, tools and applications may be unavailable on commercially reasonable terms or at all. Moreover, we do not control the operation of these third parties, and they may suffer interruptions in service from events beyond our control. In addition, we have experienced systems outages and service interruptions in the past, none of which has had a material adverse effect on us. However, a prolonged system-wide outage or frequent outages for our infrastructure or our cloud providers’ infrastructure could cause harm to our customers and to our reputation and reduce the attractiveness of our services significantly, which could result in decreased demand for our products and services and could cause our customers to make claims against us for damages allegedly resulting from an outage or interruption. Any damage or failure that interrupts or delays our operations could result in material harm to our business and expose us to material liabilities. Product defects, software errors, or service failures could adversely affect our business. Design defects or software errors may cause delays in product introductions and project implementations and damage customer satisfaction and may have a material adverse effect on our business, results of operations and financial condition, which may not be fully cured by our subsequent remediation efforts. Our software products are highly complex and may, from time to time, contain design defects or software errors that may be difficult to detect and correct. Because our products are generally used by our customers to perform critical business functions, design defects, software errors, misuse of our products, incorrect data from external sources, failures to comply with our service obligations or other potential problems within or outside of our control may arise during implementation or from the use of our products and services, and may result in financial or other damages to our customers, for which we may be held responsible. Although we have license and service agreements with our customers that contain provisions designed to limit our exposure to potential claims and liabilities arising from customer problems, these provisions may not effectively protect us against such claims in all cases and in all jurisdictions. In addition, as a result of business and other considerations, we may undertake to compensate our customers for damages caused to them arising from the use of our products and services, even if our liability is limited by a license or other agreement. Claims and liabilities arising from customer problems could also damage our reputation, adversely affecting our business, results of operations and financial condition and the ability to obtain “Errors and Omissions” insurance. Our insurance coverage may not be adequate to protect us against all potential losses to which we may be subject, and this may have a material adverse effect on our business. We maintain various insurance policies including, but not limited to, directors’ and officers’ liability insurance, worker’s compensation insurance, errors and omissions insurance, cyber insurance, property damage and business interruption insurance and representation and warranties insurance in certain acquisitions. We maintain insurance in amounts believed to be consistent with our business and operations and industry practices, but we are not fully insured against all risks. Notwithstanding the insurance coverage that we carry, the occurrence of an event that causes losses in excess of the limits specified in our policies, or losses arising from events not covered by insurance policies, could materially harm our financial condition and future operating results. There can be no assurance that any claims filed under our insurance policies will be honored fully or timely. Also, our financial condition may be affected to the extent we suffer any loss or damage that is not covered by insurance or which exceeds our insurance coverage. 13 Changes in the tax legislation policies and regulations imposed by the jurisdictions in which we operate, the termination or reduction of certain government programs and tax benefits, or challenges by tax authorities of our tax positions could adversely affect our overall effective tax rate. There can be no assurance that our effective tax rate of 18.1% for the year ended September 30, 2025 will not change over time as a result of changes in corporate income tax rates or other changes in the tax laws of Guernsey, the jurisdiction in which our holding company is organized, or of the various countries in which we operate. Any changes in tax laws could have an adverse impact on our financial results. In addition, there has been a general expectation of increased audits of multinational groups by tax authorities in various jurisdictions. There is no guarantee that our effective tax rate will not be adversely affected as a result of any such activity. In October 2015, the Organization for Economic Co-operation and Development ("OECD") published its final package of measures for reform of the international tax rules as a product of its Base Erosion and Profit Shifting ("BEPS") initiative, which was endorsed by the G20 finance ministers. Many of the initiatives in the BEPS package required and resulted in specific amendments to the domestic tax legislation of various jurisdictions and to existing tax treaties. We continuously monitor these developments. In January 2019 the OECD announced further work in continuation of the BEPS project, focusing on two “pillars.” The first pillar (“Pillar 1”) is focused on the allocation of taxing rights between countries for in-scope multinational enterprises that sell goods and services into countries with little or no local physical presence. Based on the guidelines published to date, the Company does not expect to fall within the scope of the rules of Pillar 1. The second pillar (“Pillar 2”) is focused on developing a global minimum tax rate of at least 15 percent (measured on a country by country basis) applicable to multinational groups with consolidated revenue over €750 million. Guernsey, as well as other jurisdictions where we operate, are included in the more than 140 countries which have agreed to enact legislation to implement the global minimum tax rate. Certain of the Pillar 2 rules are already in effect in some countries in which we conduct our business, and have applied to our business in such countries for fiscal periods beginning on or after January 1, 2024, i.e., in our case - for the fiscal year beginning on October 1, 2024. The Pillar 2 rules have come into effect in additional jurisdictions where we operate, and are expected to come into effect in some other countries in which we conduct our business (including Guernsey) for fiscal periods beginning on or after January 1, 2025 or for fiscal periods beginning on or after January 1, 2026 in other cases (including Israel). The Company is continuing to evaluate the potential impact on future periods of the Pillar 2 rules. It is difficult to assess at the present time to what extent such changes, if and when they are finally adopted, might adversely impact our effective tax rate. In addition, following the screening by the EU Code of Conduct Group on Business Taxation (“COCG”) of third-country jurisdictions to assess their compliance for tax purposes, Guernsey was found to be a co-operative jurisdiction. However, the COCG has requested that Guernsey, along with a number of other jurisdictions, take further steps to ensure that its tax system does not facilitate offshore structures which attract profits without real economic activity. Legislation introducing economic substance requirements for companies in the Crown Dependencies was approved by the respective parliaments in December 2018 and amended and updated with effect from June 30, 2021. The legislation applied initially to all companies resident for tax purposes in the Crown Dependencies and was effective for accounting periods commencing on or after January 1, 2019. The most recent amendments extended the legislation to include partnerships but did not make material changes to the substance requirements applicable to Guernsey tax resident companies. The regulations require entities, including companies and partnerships, to demonstrate that they have sufficient substance in Guernsey via a series of requirements, or tests. We are monitoring the developments closely to ensure that the Company is continuously compliant with the various requirements. We rely on third-party vendor relationships to deliver our business, may expose us to supply disruptions, cost increases, security vulnerabilities and cyberattacks. We are reliant on third-party vendors in the provision of our product and service offerings, including our expanding cloud services and use of AI and Related Tools, as well as for our own internal operations. Failure by any of our third-party vendors could interrupt our operations and the delivery of our product and service offerings, and/or significantly increase costs as we transition to a new vendor. Similarly, if any of these third-party vendors decide to significantly increase costs, it could have an adverse financial impact on our business, as it may require us to shift to a competing solution or redesign our solutions which might take considerable time, effort and money. Further, if a third party were to experience a material breach of its information technology systems which results in the unauthorized access, theft, use, destruction, or disclosure of customers’ or employees’ data or confidential information of the Company stored in such systems, the introduction of security vulnerabilities into the Company's systems or products or service offerings, including through cyberattacks or other external or internal methods, or the failure, disruption, delay or other compromise of the Company's operations, it could result in a material loss of revenues from the potential adverse impact on our reputation, our ability to retain or attract new customers, potential disruption or loss of services from the vendor and disruption to our business. Such a breach could also result in contractual claims or investigations by regulatory authorities and could lead to our being named as a party in consumer litigation brought by or on behalf of impacted individuals. For more information on risks related to cybersecurity and data privacy, please see “Risk Factors — If our security measures for our software, hardware, services or cloud offerings are compromised, and as a result, our data, our customers’ data, our IT systems, or our customers’ IT systems are accessed improperly, made unavailable, or improperly modified, our products and services are vulnerable and it may materially affect our business and result in potential legal liability.” 14 In addition, IT hardware suppliers face shortages that are otherwise caused or exacerbated by the macroeconomic and geopolitical environment and/or global technology changes. As such, we may need to incur higher expenses when purchasing certain IT hardware and could face shortages of equipment and components that we and our employees rely upon in the conduct of our business and our operations and sales could be adversely impacted by such supply interruptions. Although we have not experienced material adverse impacts to date, additional or prolonged supplier shortages that have occurred or were exacerbated because of the macroeconomic and geopolitical environment and/or global technology changes could adversely impact our operations and the solutions that we offer. Volatility and turmoil in the world’s capital markets may adversely affect our investment portfolio and other financial assets. Our cash, cash equivalents and short-term interest-bearing investments totaled $325 million, as of September 30, 2025. Our short-term investments, if applicable, consist primarily of bank deposits, money market funds, corporate bonds, U.S. government treasuries and supranational and sovereign debt. Although we believe that we generally adhere to conservative investment guidelines, adverse market conditions have resulted in immaterial impairments of the carrying value of certain of our investment assets in recent fiscal years, and future adverse market conditions may lead to additional impairments. Realized or unrealized losses in our investments or in our other financial assets may adversely affect our financial condition, including by reducing the capital available for our business and requiring us to seek additional capital, which may not be available on favorable terms. Declines in the financial condition of banks or other global financial institutions may adversely affect our normal financial operations. For example, in March 2023, failures of certain financial institutions created additional volatility in the banking sector. While we have not experienced any material impacts from such events, further failures, a lack of trust in the banking industry or material impacts on our customers from such failures could adversely affect our business. We may be exposed to the credit risk of customers that have been adversely affected by adverse business conditions. We typically sell our software and related services as part of long-term projects and arrangements. During the life of a project or arrangement, a customer’s budgeting constraints or other financial difficulties can impact the scope of such project or arrangement as well as the customer’s requirements and ability to make payments or comply with other obligations with respect to such project or arrangement. In addition, adverse general business conditions, as well as the risk that some of our customers may be highly leveraged and exposed to the recent rising in the costs of funding given increasing interest rates, may adversely affect our customers or degrade the creditworthiness of our customers over time, and we can be adversely affected by bankruptcies, incapability by our customers to raise sufficient funding for their operations or other business failures. For example, there has been recent turmoil in the global banking system and, while the volatility and the subsequent bank failures did not have a material direct impact on our business, such failures could materially affect our customers, resulting in their inability to meet their obligations under our agreements, which may in turn adversely impact our business and financial condition. Our quarterly operating results may fluctuate, and a decline in revenue in any quarter could result in lower profitability for that quarter and fluctuations in the market price of our ordinary shares. At times, we have experienced fluctuations in our quarterly operating results and anticipate that such movements may continue to occur. Fluctuations may result from many factors, including: •the size, timing and pace of progress of significant customer projects, license and service fees, and sales of partners’ software and hardware; •delays in or cancellations of significant projects and activities by customers; •changes in our customers investment priorities; •changes in operating expenses; •increased competition; •changes in our strategy; •personnel changes; •foreign currency exchange rate fluctuations; •penetration of new markets, regions, customers and domains; and •general economic and political conditions, including the current macroeconomic uncertainty. Generally, our revenue relating to software licenses that require significant customization, modification, implementation and integration is satisfied over time as work progresses. Given our reliance on a limited number of significant customers, our quarterly results may be significantly affected by the size and timing of customer projects and our progress in completing such projects. We believe that the placement of customer orders may be concentrated in specific quarterly periods due to the time requirements and budgetary constraints of our customers. Although we recognize a significant portion of our revenue as projects are performed, progress may vary significantly from project to project, and we believe that variations in quarterly revenue are sometimes attributable to the timing of initial order placements. Due to the relatively fixed nature of certain of our costs, a decline of revenue in any quarter could result in lower profitability for that quarter. In addition, fluctuations in our quarterly operating results could cause significant fluctuations in the market price of our ordinary shares. 15 Risks Related to Our Indebtedness There are risks associated with our outstanding and future indebtedness. As of September 30, 2025, we had an aggregate of $650 million of outstanding indebtedness and we may incur additional indebtedness in the future. Our ability to pay interest and repay the principal for our indebtedness is dependent upon our ability to manage our business operations, generate sufficient cash flows to service such debt and the other factors discussed in this section, including macroeconomic factors such as rising interest rates. There can be no assurance that we will be able to manage any of these risks successfully. We may also need to refinance a portion of our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing may not be as favorable as the terms of our existing debt. Furthermore, if prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase. In addition, changes by any rating agency to our outlook or credit rating could negatively affect the value of both our debt and equity securities and increase the interest amounts we pay on certain outstanding or future debt. These risks could adversely affect our financial condition and results of operations. Risks Related to Ownership of Our Ordinary Shares The market price of our ordinary shares has and may continue to fluctuate widely. The market price of our ordinary shares has from time to time fluctuated widely and may continue to do so. Many factors could cause the market price of our ordinary shares to rise and fall, including: •market conditions in the industry and the economy as a whole, including the current trends in the global markets; •global or local geopolitical developments in the territories where we operate; •variations in our quarterly operating results; •changes in our backlog levels; •announcements of technological innovations by us or our competitors; •announcements by any of our key customers; •introductions of new products and services or new pricing policies or the discontinuation of products, services or business activities by us or our competitors; •trends in the communications, media or software industries, including industry consolidation; •acquisitions or strategic alliances by us or others in our industry; •changes in estimates of our performance or recommendations by financial analysts, institutions and other market professionals; and •changes in our shareholder base. In addition, the stock market frequently experiences significant price and volume fluctuations. In the past, market fluctuations have, from time to time, particularly affected the market prices of the securities of many high technology companies. These broad market fluctuations could adversely affect the market price of our ordinary shares. It may be difficult for our shareholders to enforce any judgment obtained in the United States against us or our affiliates. We are incorporated under the laws of the Island of Guernsey and a majority of our directors and executive officers are not citizens or residents of the United States. A significant portion of our assets and the assets of those persons are located outside the United States. As a result, it may not be possible for investors to effect service of process upon us within the United States or upon such persons outside their jurisdiction of residence. Also, we have been advised that there is doubt as to the enforceability in Guernsey of judgments of the United States courts of civil liabilities predicated solely upon the laws of the United States, including the federal securities laws.