The Company is engaged in operating and financing activities that generate risk in three primary areas: 47 Foreign Exchange The Company is exposed to foreign exchange risk as a result of transactions in currencies other than its functional currency, the U.S. dollar. The majority of the Company’s revenue in the first quarter of fiscal 2027 was transacted in U.S. dollars. Portions of the revenue were denominated in Canadian dollars, euros and British pounds. Expenses, consisting mainly of salaries and certain other operating costs, were incurred primarily in Canadian dollars, but were also incurred in U.S. dollars, euros and British pounds. At May 31, 2026, approximately 15% of cash and cash equivalents, 38% of accounts receivables and 66% of accounts payable were denominated in foreign currencies (February 28, 2026 – 15.0%, 22% and 46%, respectively). These foreign currencies primarily include the Canadian dollar, euro and British pound. As part of its risk management strategy, the Company maintains net monetary asset and/or liability balances in foreign currencies and engages in foreign currency hedging activities using derivative financial instruments, including currency forward contracts and currency options. The Company does not use derivative instruments for speculative purposes. If overall foreign currency exchange rates to the U.S. dollar uniformly weakened or strengthened by 10% related to the Company’s net monetary asset or liability balances in foreign currencies at May 31, 2026 (after hedging activities), the impact to the Company would be immaterial. The Company regularly reviews its currency forward and option positions, both on a stand-alone basis and in conjunction with its underlying foreign currency exposures. Given the effective horizons of the Company’s risk management activities and the anticipatory nature of the exposures, there can be no assurance these positions will offset more than a portion of the financial impact resulting from movements in currency exchange rates. Further, the recognition of the gains and losses related to these instruments may not coincide with the timing of gains and losses related to the underlying economic exposures and, therefore, may adversely affect the Company’s financial condition and operating results. Interest Rate Cash and cash equivalents and investments are invested in certain instruments with fixed interest rates of varying maturities. Consequently, the Company is exposed to interest rate risk as a result of holding investments of varying maturities and the significant financing components within certain revenue contracts with customers. The fair value of investments, as well as the investment income derived from the investment portfolio, will fluctuate with changes in prevailing interest rates. The Company also has significant financing components within certain revenue contracts with customers and is exposed to interest rate risk as a result of discounting the future payments from customers with a fixed interest rate. The Company also has outstanding Notes with a fixed interest rate, as described in Note 5 to the Consolidated Financial Statements. The Company is exposed to interest rate risk as a result of the Notes. The Company does not currently utilize interest rate derivative instruments. Credit and Customer Concentration The Company, in the normal course of business, monitors the financial condition of its customers and reviews the credit history of each new customer. The Company establishes an allowance for credit losses (“ACL”) that corresponds to the specific credit risk of its customers, historical trends and economic circumstances. The ACL as at May 31, 2026 was $3.6 million (February 28, 2026 - $3.4 million). There were two customers that comprised more than 10% of accounts receivable as at May 31, 2026 (February 28, 2026 - two customers that comprised more than 10%). During the first quarter of fiscal 2027, the percentage of the Company’s receivable balance that was past due increased by 3.1% compared to the fourth quarter of fiscal 2026. Although the Company actively monitors and attempts to collect on its receivables as they become due, the risk of further delays or challenges in obtaining timely payments of receivables from resellers and other distribution partners exists. The occurrence of such delays or challenges in obtaining timely payments could negatively impact the Company’s liquidity and financial condition. There was one customer that comprised 13% of the Company’s revenue in the three months ended May 31, 2026, respectively (three months ended May 31, 2025 - one customer that comprised 13% of the Company’s revenue). Market values are determined for each individual security in the investment portfolio. The Company assesses declines in the value of individual investments for impairment. The Company makes this assessment by considering available evidence including changes in general market conditions, specific industry and individual company data, the length of time and the extent to which the fair value has been less than cost, the financial condition, the near-term prospects of the individual investment and the Company’s ability and intent to hold the debt securities to maturity. Equity Investments Risk The Company holds non-marketable equity investments in privately-held companies in which the Company does not own a controlling interest or have significant influence. The Company's equity investments in privately-held companies are subject to a wide variety of market-related risks that could substantially reduce or increase the fair value of its holdings. The Company's equity investments in privately-held companies are recorded using the measurement alternative and are assessed each reporting period for observable price changes and impairments, which may involve estimates and judgments given the lack of readily available market data. Certain equity investments in privately-held companies are in the early stages of development and are inherently risky due to their lack of operational history. The Company has a high concentration of risk associated with a small 48 number of non-marketable equity investments that are impacted by fluctuations in their fair values or by observable changes or impairments.