There are no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors,” of our 2025 Annual Report, except as set forth below: The failure of third-party vendors or partners to perform as we expect or appropriately manage risks, or our failure to adequately monitor third-party performance, could result in harm to our reputation and ability to generate revenue. We engage with third-party vendors and partners in a variety of ways, including strategic collaborations and the development and delivery of applications, employing key internal operational processes and critical client systems. In many instances, these third parties are in direct contact with our agents and customers to deliver services on our behalf or to fulfill their role in the applicable collaboration. In some instances, these third parties may be in possession of personal information of our customers, agents or employees or other commercially sensitive business information. In other instances, these third parties may play a critical role in developing products and services central to our business strategy or in implementing information technology transformation. Our third-party partners may encounter difficulties in the provision of required deliverables or may fail to provide us with timely services, which may delay us, and also may make decisions that may harm us or that are contrary to our best interests, including by pursuing opportunities outside of the applicable Company project or program, to the detriment of such project or program. If our third-party partners or vendors (or their respective vendors) were to fail to perform as we expect, fail to appropriately manage risks, provide diminished or delayed services to us or our customers or face cybersecurity breaches of their information technology systems, or if we fail to adequately monitor their performance, our operations and reputation could be materially adversely affected, in particular if any such failures related to the development of key products or the transformation of our information technology infrastructure. Depending on the function involved, vendor or third-party application failure or error may lead to increased costs, business disruption, distraction to management, processing inefficiencies, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, effects on financial reporting, loss of customers, damage to our reputation, or litigation, regulatory claims and/or remediation costs (including claims based on theories of breach of contract, vicarious liability, negligence or failure to comply with laws and regulations). Third-party vendors and partners (or their respective vendors) may also fail to maintain or keep adequate levels of insurance, which could result in a loss to us or expose us to litigation. The actions of our third-party vendors and unaffiliated third-party developers are beyond our control. We face the same risks with respect to subcontractors that might be engaged by our third-party vendors and partners or their subcontractors. 39 The use of technology that incorporates AI presents various operational, regulatory and reputational risks and may lead to changes in our industry. If we fail to implement AI technology successfully or if any of such risks materialize, it may adversely affect our business and results of operations. We have integrated, and plan to further integrate, AI technologies in our business, including the launch of our proprietary intelligence business, Elius, and our adoption of Google Cloud technology. We expect these initiatives to improve our productivity and operating efficiency, reduce costs and create potential new revenue opportunities. However, as with many technological innovations, AI presents great promise but also risks and challenges that could adversely affect our business. There can be no assurance that our implementation of AI technology will be successful or that we will realize the desired or anticipated benefits from AI technology. These benefits are based on assumptions and expectations that are inherently uncertain. We may not implement these initiatives on the anticipated timetables, and such initiatives may not achieve sufficient adoption by our employees, agents or clients. In addition, such technologies developed or deployed through these initiatives may also not perform as expected, may become obsolete, or may not generate the anticipated efficiencies, revenues or cost and productivity improvements. Also, capital expenditures and other costs associated with the initiatives may exceed our expectations or be incurred before, or without, the realization of corresponding benefits. We may also need to attract and retain personnel with specialized skills and expertise to support our AI technology initiatives. As we integrate, use and apply AI technologies of third parties, we are dependent in part on the manner in which those third parties develop such AI technologies. Failures or changes in these systems, including errors, unreliable performance, cybersecurity incidents, changes to terms of use or unfavorable changes to contractual or pricing terms, could adversely affect our use and ability to obtain the expected benefits of AI technologies, as well as our business. We may also become dependent on particular providers or technologies, which could limit our ability to transition to alternative providers, negotiate favorable terms or adapt to technological or regulatory changes. Moreover, we may have limited visibility into how third-party AI models are trained, the integrity of their underlying datasets, and the adequacy of embedded controls. Sensitive, proprietary, or confidential information of Douglas Elliman, our clients, employees, agents and business partners could be leaked, disclosed, or revealed as a result of or in connection with the use of AI technologies by our clients, employees or agents. Any such information input into a third-party generative AI or machine learning platform could be revealed to others, including if information is used to train the third party's generative AI or machine learning models. Additionally, where a generative AI or machine learning model ingests personal information and makes connections using such data, those technologies may reveal other sensitive, proprietary, or confidential information generated by the model. Moreover, generative AI or machine learning models may create incomplete, inaccurate, or otherwise flawed outputs, which may appear correct, as well as unintentionally biased outputs, which may implicate fair housing and anti-discrimination laws. AI technologies are also known to exhibit “hallucinatory behavior” and may produce unexpected results and behave in unpredictable ways, including by generating irrelevant, nonsensical or factually incorrect content. Due to these issues, these models could lead us to make flawed decisions that could result in adverse consequences to us, including exposure to reputational and competitive harm, customer loss, and legal liability. In addition, uncertainty in the legal and regulatory regime relating to AI technologies may require significant resources to modify and maintain business practices to comply with applicable law, the nature of which cannot be determined at this time. Several jurisdictions have already proposed or enacted laws governing AI and may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. These obligations may prevent or limit our ability to use AI technologies in our business, lead to regulatory fines or penalties, or require us to change our business practices. If we cannot use AI technologies, or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage. Any of these factors could adversely affect our business, financial condition, and results of operations. If our competitors or new market entrants deploy AI technologies more quickly, more effectively or at a lower cost than us, have access to superior AI technologies or achieve higher acceptance of their AI technologies, our business may be adversely affected. Further, the development and use of AI technologies may enable consumers to search for, buy or sell homes independently, which may lead to a decline in the demand for full-service real estate professionals. To be successful and remain competitive, we must be able to adapt to changes in a timely and effective manner, and if we fail to do so, our business and results of operations may be adversely affected.