Filing Compare · MOMENTIVE GLOBAL INC.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-38664

Momentive Global Inc.

(Exact name of registrant as specified in its charter)

Delaware

80-0765058

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

One Curiosity Way

San Mateo, California, 94403

(650) 543-8400

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value 
$0.00001 per share

MNTV

The Nasdaq Stock Market LLC
(The Nasdaq Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☐
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of registrant’s common stock outstanding as of ~~October~~April 28, ~~2022~~2023 was: ~~148~~150,~~662~~689,~~603~~947.

Momentive Global Inc.

Quarterly Report on Form 10-Q

For the quarterly period ended ~~September~~March 3031, ~~2022~~2023

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3835
Item 4.	Controls and Procedures	3936
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	4037
Item 1A.	Risk Factors	4037
Item 2.	Unregistered Sales of Equity Securities	72
Item 6.	Exhibits	73
	Signatures

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

our pending merger with an investor consortium led by STG Partners, LLC (“STG”), including expected benefits and estimated timing and completion;

•

our ability to attract new users or convert registered users to paying users;

•

our ability to retain paying users;

•

our ability to convert organizations, including enterprise customers, who purchase solely through our self-serve channel to sales-assisted relationships;

•

our ability to maintain and improve our products, including our enterprise-grade product offerings;

•

our ability to upsell and cross-sell within our existing customer and user base;

•

our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, capital expenditures and paying users;

•

possible harm caused by significant disruption of service, or loss of, or unauthorized access to users’ data, or cyberattacks or other malicious activity on our technology systems;

•

our expectations regarding the potential impacts on our business, ~~and~~including ~~real~~shifting ~~estate~~to ~~needs~~a hybrid work model, as a result of the COVID-19 pandemic ~~and related public health measures~~;

•

the effect of general economic and political conditions, including a downturn or recession, inflationary pressures, rising interest rates, fluctuations in foreign currency exchange risks and Russia’s invasion of Ukraine;

•

our ability to prevent serious errors or defects in our products;

•

our ability to respond to rapid technological changes;

•

our ability to compete successfully;

•

our ability to protect our brand and risks related to our rebranding;

•

the demand for our survey platform or for survey software solutions in general;

•

our expectations and management of future growth;

•

our ability to accelerate growth with ~~the~~our ~~introduction~~investments ~~and~~in ~~scaling~~sales ofand amarketing ~~significant outbound salesforce~~activities;

•

our ability to attract large organizations as users;

•

our ability to attract and retain key personnel and highly qualified personnel;

•

our ability to manage our international expansion;

•

our ability to ~~obtain~~manage ~~adequate~~ commercial space asto ~~our~~support ~~workforce~~the ~~grows~~needs of our business;

•

our ability to maintain, protect and enhance our intellectual property;

•

our ability to effectively integrate our products and solutions with others;

•

our ability to achieve or maintain profitability;

•

our ability to successfully implement any restructuring of our operations and to capture expected efficiencies;

•

our ability to manage our outstanding indebtedness;

•

our ability to manage trading activity under our ~~stock~~share repurchase program;

•

our ability to successfully identify, acquire and integrate companies and assets; and

•

our ability to offer high-quality customer support.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MOMENTIVE GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except par value)	~~September~~March 3031, ~~2022~~2023			December 31, ~~2021~~2022
Assets
Current assets:
Cash and cash equivalents	$	~~193~~199,~~096~~080		$	~~305~~202,~~525~~816
Accounts receivable, net of allowance of $1,857 and $894		30,869			32,489
Accounts receivable, net of allowance of $1,020 and $1,121		31,760			33,656
Deferred commissions, current		9,~~483~~965			79,~~945~~775
Prepaid expenses and other current assets		1115,~~886~~769			1117,~~363~~207
Total current assets		~~245~~256,~~334~~574			~~357~~263,~~322~~454
Property and equipment, net		~~1,457~~630			51,~~442~~006
Operating lease right-of-use assets		3331,~~561~~232			5232,~~232~~252
Capitalized internal-use software, net		29,~~326~~942			2829,~~158~~595
Acquisition intangible assets, net		54,~~661~~785			105,~~773~~156
Goodwill		~~454~~460,~~841~~979			~~463~~459,~~736~~817
Deferred commissions, non-current		1413,~~629~~595			1314,~~200~~307
Other assets		84,~~336~~459			94,~~061~~568
Total assets	$	~~793~~802,~~145~~196		$	~~939~~810,~~924~~155
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	119,~~156~~688		$	716,~~204~~418
Accrued expenses and other current liabilities		2126,~~529~~759			3024,~~725~~969
Accrued compensation		4023,~~336~~605			4531,~~873~~893
Deferred revenue, current		~~212~~215,~~880~~865			~~200~~206,~~658~~728
Operating lease liabilities, current		78,~~951~~033			98,~~587~~046
Debt, current		1,900			1,900
Total current liabilities		~~295~~285,~~752~~850			~~295~~289,~~947~~954
Deferred revenue, non-current		~~669~~641			~~1,165~~719
Deferred tax liabilities		6,~~190~~641			56,~~701~~337
Debt, non-current		~~183~~182,~~391~~441			~~209~~182,~~816~~916
Operating lease liabilities, non-current		4137,~~536~~874			6639,~~938~~584
Other non-current liabilities		53,~~225~~890			53,~~883~~885
Total liabilities		~~532~~517,~~763~~337			~~585~~523,~~450~~395
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock ($0.00001 par value; 100,000 shares authorized; no shares issued and outstanding)		—			—
Common stock ($0.00001 par value; 800,000 shares authorized; 148,436 and 150,398 shares issued and outstanding)		1			2
Common stock ($0.00001 par value; 800,000 shares authorized; 150,690 and 149,711 shares issued and outstanding)		2			1
Additional paid-in capital		~~971~~1,~~779~~018,529			~~971~~997,~~604~~621
Accumulated other comprehensive income (loss)		(7,594	)		414
Accumulated other comprehensive loss		(2,420	)		(3,425	)
Accumulated deficit		(~~703~~731,~~804~~252	)		(~~617~~707,~~546~~437	)
Total stockholders’ equity		~~260~~284,~~382~~859			~~354~~286,~~474~~760
Total liabilities and stockholders’ equity	$	~~793~~802,~~145~~196		$	~~939~~810,~~924~~155

See accompanying Notes to Condensed Consolidated Financial Statements.

MOMENTIVE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share amounts)

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Revenue

~~121~~118,~~375~~821

~~114~~116,~~754~~986

~~358,524~~

~~326,444~~

Cost of revenue(1)(2)(3)

2120,~~256~~557

22,~~161~~903

~~66,650~~

~~64,621~~

Gross profit

~~100~~98,~~119~~264

9294,~~593~~083

~~291,874~~

~~261,823~~

Operating expenses:

Research and development(1)(3)

3532,~~074~~665

3336,~~671~~716

~~107,420~~

~~100,879~~

Sales and marketing (1)(2)(3)

5447,~~976~~919

5459,~~118~~636

~~175,910~~

~~162,179~~

General and administrative(1)(3)

2531,~~929~~737

2427,~~466~~917

~~83,383~~

~~71,958~~

Restructuring(1)(2)

~~422~~7,197

—4,883

~~1,982~~

—

Total operating expenses

~~116~~119,~~401~~518

~~112~~129,~~255~~152

~~368,695~~

~~335,016~~

Loss from operations

(1621,~~282~~254

)

(1935,~~662~~069

)

~~(76,821~~

)

~~(73,193~~

)

Interest expense

34,~~092~~148

2,~~337~~226

~~7,696~~

~~6,940~~

Other non-operating expense, net

685

543

614

739

Other non-operating income, net

(2,038

)

(134

)

Loss before income taxes

(2023,~~059~~364

)

(2237,~~542~~161

)

~~(85,131~~

)

~~(80,872~~

)

Provision for income taxes

~~271~~451

~~361~~216

~~1,127~~

~~915~~

Net loss

(2023,~~330~~815

)

(2237,~~903~~377

)

~~(86,258~~

)

~~(81,787~~

)

Net loss per share, basic and diluted

(0.1416

)

(0.1525

)

~~(0.58~~

)

~~(0.56~~

)

Weighted-average shares used in computing basic and diluted net loss per share

~~146~~149,~~953~~345

~~147~~150,~~877~~262

~~148,620~~

~~146,270~~

(1) Includes stock-based compensation, net of amounts capitalized as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Cost of revenue

1,~~580~~241

1,~~639~~409

~~4,613~~

~~4,701~~

Research and development

87,~~770~~734

108,~~081~~644

~~26,117~~

~~29,891~~

Sales and marketing

54,~~874~~075

56,~~672~~065

~~18,297~~

~~17,864~~

General and administrative

87,~~087~~352

7,~~202~~375

~~24,367~~

~~21,310~~

Restructuring

—

—2,761

~~2,761~~

—

Stock-based compensation, net of amounts capitalized

2420,~~311~~402

2426,~~594~~254

~~76,155~~

~~73,766~~

(2) Includes amortization of acquisition intangible assets as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Cost of revenue

~~328~~—

1,~~465~~414

~~2,234~~

~~4,432~~

Sales and marketing

~~459~~371

1,~~035~~452

~~2,546~~

~~3,285~~

Restructuring

~~135~~—

—45

~~315~~

—

Amortization of acquisition intangible assets

~~922~~371

2,~~500~~911

~~5,095~~

~~7,717~~

(3) Includes transaction expenses associated with the ~~terminated~~pending merger with ~~Zendesk~~an investor consortium led by STG during the three months ended March 31, 2023. See Note 1 for additional information. Also includes transaction expenses associated with the terminated merger with Zendesk, Inc. (“Zendesk”) during the three months ended March 31, 2022:


	Three Months Ended March 31,
(in thousands)	2023		2022
Cost of revenue	$	10	$	318
Research and development		47		1,770
Sales and marketing		23		1,679
General and administrative		7,381		2,733
Acquisition-related transaction costs	$	7,461	$	6,500

See accompanying Notes to Condensed Consolidated Financial Statements.

MOMENTIVE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in thousands)	~~2022~~2023			~~2021~~2022			~~2022~~			~~2021~~
Net loss	$	(2023,~~330~~815	)	$	(2237,~~903~~377	)	$	~~(86,258~~	)	$	~~(81,787~~	)
Other comprehensive loss:
Other comprehensive income (loss):
Foreign currency translation adjustment(1)		(31,~~365~~005	)		(~~1,708~~947	)		~~(8,008~~	)		~~(3,570~~	)
Total other comprehensive loss(1)		(3,365	)		(1,708	)		(8,008	)		(3,570	)
Total other comprehensive income (loss)(1)		1,005			(947	)
Total comprehensive loss	$	(2322,~~695~~810	)	$	(2438,~~611~~324	)	$	~~(94,266~~	)	$	~~(85,357~~	)

(1) Net of tax effect which was not material.

See accompanying Notes to Condensed Consolidated Financial Statements.

MOMENTIVE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited)

For the three months ended ~~September~~March 3031, ~~2022~~2023

	Common Stock
(in thousands)	Shares			Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
June 30, 2022		149,233		$	1	$	961,978		$	(4,229	)	$	(683,474	)	$	274,276
December 31, 2022		149,711		$	1	$	997,621		$	(3,425	)	$	(707,437	)	$	286,760
Common stock issued upon vesting of restricted stock units		~~1,047~~979			—1		—			—			—			—1
Repurchases of common stock		(1,617	)		—		(14,990	)		—			—			(14,990	)
Stock-based compensation expense		—			—		20,908			—			—			20,908
Cancellation of restricted stock awards		(227	)		—		—			—			—			—
Comprehensive income		—			—		—			1,005			—			1,005
Stock-based compensation expense		—			—		24,791			—			—			24,791
Net loss		—			—		—			—			(23,815	)		(23,815	)
Comprehensive loss		—			—		—			(3,365	)		—			(3,365	)
March 31, 2023		150,690			2		1,018,529			(2,420	)		(731,252	)		284,859
Net loss		—			—		—			—			(20,330	)		(20,330	)
September 30, 2022		148,436		$	1	$	971,779		$	(7,594	)	$	(703,804	)	$	260,382

For the three months ended ~~September~~March 3031, ~~2021~~2022

	Common Stock
(in thousands)	Shares			Amount		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
June 30, 2021		147,498		$	1	$	907,383		$	3,346		$	(553,181	)	$	357,549
December 31, 2021		150,398		$	2	$	971,604		$	414		$	(617,546	)	$	354,474
Common stock issued upon vesting of restricted stock units		~~931~~877			—		—			—			—			—
Common stock issued upon stock option exercise		~~315~~164			—		32,~~773~~273			—			—			32,~~773~~273
Issuance of restricted stock awards		551,031			—		—			—			—			—
Stock-based compensation expense		—			—		25,124			—			—			25,124
Issuance of performance stock awards		361			—		—			—			—			—
Comprehensive loss		—			—		—			(1,708	)		—			(1,708	)
Repurchases of common stock		(2,411	)		—		(36,376	)		—			—			(36,376	)
Net loss		—			—		—			—			(22,903	)		(22,903	)
Stock-based compensation expense		—			—		26,973			—			—			26,973
September 30, 2021		148,799		$	1	$	936,280		$	1,638		$	(576,084	)	$	361,835
Comprehensive loss		—			—		—			(947	)		—			(947	)
Net loss		—			—		—			—			(37,377	)		(37,377	)
March 31, 2022		150,420		$	2	$	964,474		$	(533	)	$	(654,923	)	$	309,020

For the nine months ended September 30, 2022

	Common Stock
(in thousands)	Shares			Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
December 31, 2021		150,398		$	2		$	971,604		$	414		$	(617,546	)	$	354,474
Common stock issued upon vesting of restricted stock units		2,995			—			—			—			—			—
Common stock issued upon stock option exercise		206			—			2,827			—			—			2,827
Common stock issued under employee stock purchase plan		268			—			2,751			—			—			2,751
Issuance of restricted stock awards		1,031			—			—			—			—			—
Issuance of performance stock awards		361			—			—			—			—			—
Repurchases of common stock		(6,596	)		(1	)		(83,486	)		—			—			(83,487	)
Cancellation of restricted stock awards		(227	)		—			—			—			—			—
Stock-based compensation expense		—			—			78,083			—			—			78,083
Comprehensive loss		—			—			—			(8,008	)		—			(8,008	)
Net loss		—			—			—			—			(86,258	)		(86,258	)
September 30, 2022		148,436		$	1		$	971,779		$	(7,594	)	$	(703,804	)	$	260,382

For the nine months ended September 30, 2021

	Common Stock
(in thousands)	Shares			Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
December 31, 2020		143,820		$	1	$	835,444	$	5,208		$	(494,297	)	$	346,356
Common stock issued upon vesting of restricted stock units		2,924			—		—		—			—			—
Common stock issued upon stock option exercise		1,544			—		21,531		—			—			21,531
Issuance of restricted stock awards		329			—		—		—			—			—
Cancellation of restricted stock awards		(64	)		—		—		—			—			—
Common stock issued under employee stock purchase plan		246			—		3,873		—			—			3,873
Stock-based compensation expense		—			—		75,432		—			—			75,432
Comprehensive loss		—			—		—		(3,570	)		—			(3,570	)
Net loss		—			—		—		—			(81,787	)		(81,787	)
September 30, 2021		148,799		$	1	$	936,280	$	1,638		$	(576,084	)	$	361,835

See accompanying Notes to Condensed Consolidated Financial Statements.

MOMENTIVE GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
(in thousands)	~~2022~~2023			~~2021~~2022
Cash flows from operating activities
Net loss	$	(8623,~~258~~815	)	$	(8137,~~787~~377	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		235,~~094~~710			329,~~349~~354
Non-cash leases expense		82,~~510~~182			93,~~824~~202
Gain on lease modification		(6,370	)		—
Stock-based compensation expense, net of amounts capitalized		20,402			26,254
Stock-based compensation expense, net of amounts capitalized		76,155			73,766
Deferred income taxes		304			217
Deferred income taxes		489			293
Bad debt expense		497			644
Bad debt expense		2,273			898
Unrealized foreign currency (gains) losses, net and other		(195	)		727
Impairment of property and equipment		1,411			—
Unrealized foreign currency (gains) losses, net and other		2,821			1,048
Changes in assets and liabilities:
Accounts receivable		(1,~~897~~334	)		(21,~~654~~047	)
Prepaid expenses and other assets		(127,~~326~~090	)		(98,~~872~~117	)
Accounts payable and accrued liabilities		(45,~~077~~024	)		13(2,~~585~~341	)
Accrued compensation		(48,~~711~~368	)		7(6,~~089~~898	)
Deferred revenue		119,~~709~~033			2714,~~013~~283
Operating lease liabilities		(102,~~172~~897	)		(113,~~244~~801	)
Net cash provided by operating activities		651			60,308
Net cash used in operating activities		(7,927	)		(4,900	)
Cash flows from investing activities
Purchases of property and equipment		(~~449~~15	)		(~~387~~441	)
Capitalized internal-use software		(62,~~679~~079	)		(62,~~450~~565	)
Proceeds from sale of property and equipment		—			85
Proceeds from sale of a private company investment		6,753			—
Net cash used in investing activities		(7,128	)		(6,752	)
Net cash provided by (used in) investing activities		4,659			(3,006	)
Cash flows from financing activities
Proceeds from stock option exercises		~~2,827~~—			212,~~334~~273
Proceeds from employee stock purchase plan		2,751			3,873
Payments to repurchase common stock		—			(36,376	)
Payments to repurchase common stock		(83,487	)		—
Repayment of debt		(550	)		(25,550	)
Repayment of debt		(26,650	)		(1,650	)
Net cash used in financing activities		(550	)		(59,653	)
Net cash provided by (used in) financing activities		(104,559	)		23,557
Effect of exchange rate changes on cash		213			393
Effect of exchange rate changes on cash		(1,493	)		(293	)
Net decrease in cash, cash equivalents and restricted cash		(3,605	)		(67,166	)
Net increase (decrease) in cash, cash equivalents and restricted cash		(112,529	)		76,820
Cash, cash equivalents and restricted cash at beginning of period		203,258			306,121
Cash, cash equivalents and restricted cash at beginning of period		306,121			224,614
Cash, cash equivalents and restricted cash at end of period	$	199,653		$	238,955
Cash, cash equivalents and restricted cash at end of period	$	193,592		$	301,434
Supplemental cash flow data:
Interest paid for term debt	$	73,~~116~~967		$	62,~~416~~009
Income taxes paid	$	564		$	732
Non-cash investing and financing transaction:
Non-cash investing and financing transactions:
Stock compensation included in capitalized software costs	$	506		$	719
Stock compensation included in capitalized software costs	$	1,928		$	1,666
Lease liabilities arising from obtaining right-of-use assets, net of terminations and modifications	$	(13,620	)	$	2,676

See accompanying Notes to Condensed Consolidated Financial Statements.

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. Company Overview and Basis of Presentation

Business

Momentive Global Inc. (the “Company”) provides Software-as-a-Service (“SaaS”) solutions that enable organizations to collect and analyze market, customer and employee sentiment data quickly and at scale. The Company offers ~~artificial~~three ~~intelligence~~product ~~powered solutions across five major~~ categories:, 1)Surveys, ~~Market Insights; 2) Brand Insights; 3)~~ Customer Experience;, ~~4) Employee Experience;~~ and 5)Insights ~~Product Experience~~Solutions, ~~and~~that ~~delivers~~address ~~these~~three ~~solutions~~major ~~across~~business ~~three~~use ~~major~~cases: ~~product~~(i) ~~categories—Surveys~~building market leadership, ~~Customer~~(ii) ~~Experience~~delighting customers, and ~~Market~~(iii) ~~Research~~engaging employees. The Company was incorporated in 2011 as SVMK Inc., a Delaware corporation, and is the successor to operations originally started in 1999. In June 2021, SVMK Inc. was rebranded and changed its legal name to Momentive Global Inc. As a result, its common stock began trading under the ticker symbol “MNTV” instead of “SVMK” on The Nasdaq Global Select Market. In February 2022, the company announced plans to consolidate its product portfolio under two brands and web surfaces—Momentive and SurveyMonkey. The Momentive brand ~~will~~represents ~~represent~~ the Company's suite of upmarket solutions, while SurveyMonkey ~~will~~represents ~~support~~ the Company's complementary products for value-oriented customers who prioritize speed and ease of use. The Company’s headquarters are located in the United States and its international operations are primarily based in Ireland, Canada and the Netherlands.

~~Termination~~Pending ~~of Proposed~~ Merger with ~~Zendesk~~an investor consortium led by STG

On ~~February~~March 2513, ~~2022~~2023, the Company entered into the Agreement and Plan of Merger (the “Merger Agreement”), ~~the~~by ~~Company~~and ~~entered~~among ~~into~~the ~~with~~Company, ~~Zendesk~~STG ~~Inc. (“Zendesk”)~~ and ~~Milky~~Mercury ~~Way~~Merger ~~Acquisition~~Sub, ~~Corp~~Inc. (“Merger Sub”). onPursuant ~~October~~to ~~28,~~the ~~2021~~Merger ~~was~~Agreement, ~~terminated~~and ~~due~~upon tothe ~~Zendesk~~terms ~~stockholders’~~and ~~failure~~subject to ~~approve~~ the ~~issuance~~conditions oftherein, ~~Zendesk~~Merger ~~shares~~Sub inwill ~~connection~~merge with ~~the~~and ~~proposed~~into ~~merger~~the Company (the “Merger”)., ~~None~~with of the Company, ~~Zendesk~~surviving orthe Merger ~~Sub~~as ~~are~~a ~~expected~~wholly toowned ~~have~~subsidiary ~~any~~of ~~further liability under the Merger Agreement, subject to its terms~~STG. The Company’s ~~incurred~~board ~~transaction~~of ~~expenses~~directors ~~related to employee retention bonuses, legal, accounting, financial advisory,~~ and ~~other costs associated with~~ the ~~Merger.~~board ~~For the nine months ended September 30, 2022, transaction expenses amounted to $11.9 million,~~ of ~~which,~~directors ~~$0.6 million is included in cost~~ of ~~revenue,~~STG ~~$3.4~~have ~~million~~approved isthe ~~included~~Merger inAgreement ~~research~~ and ~~development, $3.1 million is included in sales and marketing, and $4.8 million is included in general and administrative expenses in~~ the ~~accompanying~~transactions ~~condensed~~contemplated ~~consolidated~~by ~~statement of operations. The employee retention bonuses granted in connection with~~ the ~~transaction~~Merger ~~were subject to the employee's continued service through June 30, 2022 and paid in July 2022~~Agreement.

~~Principles~~Pursuant to the Merger Agreement, at the effective time of ~~Consolidation~~the Merger, each issued and ~~Basis~~outstanding share of ~~Presentation~~the Company’s common stock (except for certain shares of the Company’s common stock specified in the Merger Agreement) will be canceled and automatically converted into the right to receive cash in an amount equal to $9.46 per share, without interest.

~~The~~Under ~~accompanying~~the ~~interim~~terms ~~condensed consolidated balance sheet as~~ of ~~September~~the ~~30,~~Merger ~~2022~~Agreement, the ~~statements~~completion of ~~operations, comprehensive loss and stockholders’ equity for~~ the ~~three~~Merger ~~and~~is ~~nine~~subject ~~months~~to ~~ended~~certain ~~September~~customary 30closing conditions, ~~2022 and 2021~~including, ~~and~~among ~~cash~~others: ~~flows~~(i) ~~for~~ the ~~nine~~adoption ~~months~~of ~~ended~~the ~~September~~Merger ~~30,~~Agreement ~~2022~~by ~~and~~the ~~2021~~holders ~~are~~of ~~unaudited.~~a ~~Such~~majority ~~condensed~~of ~~consolidated~~the ~~financial~~outstanding ~~statements~~shares ~~are~~of ~~prepared~~the inCompany’s ~~accordance~~common ~~with~~stock; ~~U.S. generally accepted accounting principles~~ (~~“GAAP”~~ii) ~~and~~the ~~applicable~~expiration ~~rules~~or ~~and~~early ~~regulations~~termination of the ~~U.S.~~applicable ~~Securities~~waiting ~~and~~period ~~Exchange~~under ~~Commission~~the ~~(“SEC”)~~Hart-Scott-Rodino ~~regarding~~Antitrust ~~interim~~Improvements ~~financial~~Act ~~reporting.~~of ~~These~~1976, ~~condensed~~as ~~consolidated~~amended, ~~financial~~and ~~statements include~~ the ~~results~~receipt of ~~operations~~certain ~~of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated. Certain~~ other ~~prior~~specified ~~year~~regulatory ~~balances~~approvals; ~~have~~and ~~been~~(iii) ~~reclassified to conform to~~ the ~~current~~absence ~~year presentation. Such reclassifications did not affect our results~~ of ~~operations~~an order or ~~operating,~~law ~~investing~~preventing ~~and~~the ~~financing cash flows~~Merger.

~~These~~Each ~~condensed~~of ~~consolidated~~STG ~~financial~~and ~~statements~~the doCompany ~~not~~may ~~include~~terminate ~~all~~the ~~disclosures~~Merger ~~normally~~Agreement ~~required~~under incertain ~~annual~~specified ~~consolidated~~circumstances, ~~financial~~including ~~statements~~but ~~prepared~~not inlimited ~~accordance~~to, ~~with~~(i) ~~GAAP.~~if Inthe ~~management’s~~Merger ~~opinion,~~is ~~the~~not ~~condensed~~consummated ~~consolidated~~by ~~financial~~11:59 ~~statements~~p.m. ~~have~~(California ~~been~~time) ~~prepared~~ on ~~the~~September ~~same~~13, ~~basis~~2023, as(ii) ~~the~~a ~~annual~~governmental ~~financial~~authority ~~statements~~of ~~and~~competent ~~include~~jurisdiction ~~all~~has ~~normal~~issued ~~recurring~~a ~~adjustments~~final ~~necessary~~non-appealable ~~for~~governmental ~~the~~order ~~fair~~preventing, ~~presentation~~materially ofrestraining, ~~the~~or ~~Company’s~~materially ~~financial~~impairing ~~position~~the asconsummation of ~~September~~the 30Merger, ~~2022,~~or (iii) if the ~~results~~required approval of ~~operations~~the ~~for~~Company’s ~~the~~stockholders ~~three~~is ~~and~~not ~~nine~~obtained. ~~months~~STG ~~ended~~may ~~September~~also ~~30,~~terminate ~~2022~~the ~~and~~Merger ~~2021,~~Agreement ~~and~~in ~~cash~~certain ~~flows~~additional ~~for~~limited circumstances, including if the ~~nine~~Company’s ~~months~~board ~~ended~~of ~~September~~directors ~~30,~~changes ~~2022~~its ~~and~~recommendation ~~2021.~~to ~~The~~the ~~results~~Company’s ofstockholders ~~operations~~to ~~for~~vote ~~the~~in ~~three~~favor ~~and~~of ~~nine~~the ~~months~~adoption ~~ended~~of ~~September~~the ~~30,~~Merger ~~2022~~Agreement. ~~are~~If ~~not~~the ~~necessarily~~Merger ~~indicative~~Agreement ofis terminated, the ~~results~~Company tomay be ~~expected~~required ~~for~~to ~~the~~pay ~~full~~STG ~~year~~a ortermination ~~any~~fee ~~other~~of ~~future~~up ~~interim~~to or$52.0 ~~annual~~million ~~periods~~under certain circumstances.

The foregoing summary of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) on March 14, 2023.

Other than transaction expenses related to legal, accounting, financial advisory, employee retention and other costs associated with the pending Merger of $7.5 million for the three months ended March 31, 2023, the terms of the Merger Agreement did not impact the Company's condensed consolidated financial statements.

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~These~~Principles ~~condensed~~of ~~consolidated~~Consolidation ~~financial statements should be read in conjunction with the audited consolidated financial statements~~ and ~~notes~~Basis ~~thereto~~of ~~included in the Company’s Form 10-K filed with the SEC on February 14, 2022.~~Presentation

The accompanying interim condensed consolidated balance sheet as of March 31, 2023, the statements of operations, comprehensive loss, stockholders’ equity and cash flows for the three months ended March 31, 2023 and 2022 are unaudited. Such condensed consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. These condensed consolidated financial statements include the results of operations of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated. Certain other prior year balances have been reclassified to conform to the current year presentation. Such reclassifications did not affect our results of operations or operating, investing and financing cash flows.

These condensed consolidated financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. In management’s opinion, the condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and include all normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of March 31, 2023, the results of operations and cash flows for the three months ended March 31, 2023 and 2022. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year or any other future interim or annual periods.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K filed with the SEC on February 17, 2023.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods covered by the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates due to a variety of factors~~, including the unforeseen impacts from the ongoing COVID-19 pandemic, general macroeconomic conditions and inflationary pressures on the Company’s business and financial results~~. The Company is not aware of any specific event or circumstances that would require an update to its estimates, judgments or assumptions or a revision to the carrying value of its assets or liabilities as of the date of issuance of its financial statements. These estimates, judgments and assumptions may change in the future, as new events occur or additional information is obtained. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable. The Company’s most significant ~~estimate~~estimates and use of judgment ~~involves~~involve the determination of distinct performance obligations in enterprise customer contracts, the valuation of acquired goodwill and intangibles from acquisitions and the fair value of goodwill, right-of-use assets and other long-lived assets when evaluating for impairments.

Segment Information

The Company operates as a single operating segment. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews the Company’s operating results on a consolidated basis in order to make decisions about allocating resources and assessing performance for the entire company. The CODM uses one measure of profitability and does not segment the Company’s business for internal reporting. See Note 4 for additional information regarding the Company’s revenue by geographic area.

Related Party Transactions

Certain members of the Company’s board of directors serve as board members, are executive officers of and/or (in some cases) are investors in companies that are customers and/or vendors of the Company. The Company incurred related party expenses of $0.97 million and $20.9 million ~~for~~during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$0.6 million and $2.4 million during the three and nine months ended September 30~~2022, ~~2021,~~ respectively.

2. Summary of Significant Accounting Policies

There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2021.

Restructuring

From time to time, the Company may implement a management-approved restructuring plan to improve efficiencies across the organization, reduce its cost structure, and/or better align its resources with the Company’s strategy. Restructuring charges can include severance costs to eliminate a specified number of employees, expenses to vacate real estate and consolidate operations, contract cancellation costs, impairment of certain assets, and other related costs.

Costs associated with a restructuring plan are recognized and measured at fair value in the condensed consolidated statement of operations in the period in which the liability is incurred. These restructuring initiatives may require the Company to make estimates in several areas including: (i) expenses for employee severance and other separation costs; and (ii) realizable values of assets made redundant, obsolete, or excessive.

Other Non-Operating (Income) Expense

Other non-operating (income) expense, net consists primarily of interest income, net foreign currency exchange (gains) losses, net realized gains and losses related to investments, and other (income) expense. The components of other non-operating (income) expense recognized in the condensed consolidated financial statements is as follows:

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Interest income	$	(946	)	$	(142	)	$	(1,555	)	$	(405	)
Foreign currency (gains) losses, net		1,633			289			2,279			738
Other (income) expense, net		(2	)		396			(110	)		406
Other non-operating expense, net	$	685		$	543		$	614		$	739

2. Summary of Significant Accounting Policies

~~Accounting~~There ~~Pronouncement~~have ~~Not~~been ~~Yet~~no ~~Adopted~~material changes in our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2022.

~~Reference~~Other ~~Rate Reform: In March 2020, the FASB issued ASU 2020~~Non-~~04,~~Operating ~~Reference Rate Reform~~ (~~Topic 848~~Income): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company does not expect this update will have a material impact on its condensed consolidated financial statements and related disclosures.Expense


	Three Months Ended March 31,
(in thousands)	2023			2022
Interest income	$	(2,141	)	$	(165	)
Foreign currency (gains) losses, net		130			127
Other income, net		(27	)		(96	)
Other non-operating income, net	$	(2,038	)	$	(134	)

Accounting Pronouncement Recently Adopted

Reference Rate Reform: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 is intended to provide temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This guidance is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2024. The Company adopted this guidance in the first quarter of fiscal 2023. On March 1, 2023, the Company amended the Refinancing Facility Agreement entered into in October 2018 (the “2018 Credit Facility”) by changing the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”) and elected to apply the practical expedient provided in Topic 848 to account for the modification as if it was not substantial. The adoption of this ASU did not have a material impact on the Company's condensed consolidated financial statements.

3. Revenue and Deferred Revenue

Disaggregated revenue

Revenue by sales channel was as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Self-serve revenue

7472,~~629~~099

7775,~~134~~803

~~226,488~~

~~223,708~~

Sales-assisted revenue

46,~~746~~722

3741,~~620~~183

~~132,036~~

~~102,736~~

Revenue

~~121~~118,~~375~~821

~~114~~116,~~754~~986

~~358,524~~

~~326,444~~

Self-serve revenues are generated from products purchased independently through our website.

Sales-assisted revenues are generated from products sold to organizations through our sales team.

In addition, see Note 4 for information regarding the Company’s revenue by geographic area.

Deferred revenue

The Company recognized into revenue $9692.59 million and $~~185~~88.6 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$86.7 million and $156.6 million during the three and nine months ended September 30~~2022, ~~2021,~~ respectively, that was included in the deferred revenue balances at the beginning of each respective period.

Transaction price allocated to the remaining performance obligations

As of September 30, 2022, future estimated revenue related to non-cancelable performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period was $244.5 million. The substantial majority of the unsatisfied performance obligations will be satisfied over the next twelve months.

4. Geographical Information

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~paying~~Transaction ~~user,~~price ~~multiple~~allocated ~~paying~~to ~~users within an organization or~~ the ~~organization~~remaining ~~itself.~~performance ~~The following table sets forth the percentage of revenue by geographic area:~~obligations

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
United States		65	%		64	%		65	%		64	%
Rest of world		35	%		36	%		35	%		36	%

As of March 31, 2023, future estimated revenue related to non-cancelable performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period was $245.5 million. The substantial majority of the unsatisfied performance obligations will be satisfied over the next twelve months.

No4. ~~other~~Geographical ~~country outside of the United States comprised 10% or greater of the Company’s revenue for each of the three and nine months ended September 30, 2022 and 2021, respectively.~~Information

Revenue by geography is generally based on the billing address of the customer. For purposes of its geographic revenue disclosure, the Company defines a customer as an organization. An organization may consist of an individual paying user, multiple paying users within an organization or the organization itself. The following table sets forth the percentage of revenue by geographic area:

No other country outside of the United States comprised 10% or greater of the Company’s revenue for each of the three months ended March 31, 2023 and 2022, respectively.

5. Cash and Cash Equivalents

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, the following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the total of ~~the same~~ such amounts shown in the condensed consolidated statements of cash flows:

(in thousands)	~~September~~March 3031, ~~2022~~2023		December 31, ~~2021~~2022
Cash and cash equivalents	$	~~193~~199,~~096~~080	$	~~305~~202,~~525~~816
Restricted cash included in prepaid expenses and other current assets		~~496~~573		~~271~~442
Restricted cash included in other assets		—		325
Total cash, cash equivalents and restricted cash	$	199,653	$	203,258
Total cash, cash equivalents and restricted cash	$	193,592	$	306,121

Included in cash and cash equivalents are cash in transit from payment processors for credit and debit card transactions of $2.32 million and $1.1 million as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, respectively.

6. Fair Value Measurements

Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based on the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which directly relate to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1 – Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of the Company’s financial instruments, which generally include cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short maturities. Based on borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the fair value of the Company’s debt was approximately $180.6 million and $211.8 million as of September 30, 2022 and December 31, 2021, respectively.

As of September 30, 2022 and December 31, 2021, respectively, the Company did not have any significant financial instruments accounted for pursuant to ASC 820, Fair Value Measurement.

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The carrying amounts of the Company’s financial instruments, which generally include cash equivalents, accounts receivable and accounts payable, approximate their fair values due to their short maturities. Based on borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the fair value of the Company’s debt was approximately $181.9 million and $180.1 million as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023 and December 31, 2022, respectively, the Company did not have any significant financial instruments accounted for pursuant to ASC 820, Fair Value Measurement.

7. Property and Equipment

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, property and equipment consisted of the following:

(in thousands)	~~September~~March 3031, ~~2022~~2023			December 31, ~~2021~~2022
Computer equipment	$	7,~~754~~422		$	87,~~017~~492
Leasehold improvements		2344,~~728~~623			5445,~~500~~710
Furniture, fixtures and other assets		7,~~547~~584			107,~~577~~565
Gross property and equipment		3959,~~029~~629			7360,~~094~~767
Less: Accumulated depreciation		(3758,~~572~~999	)		(6759,~~652~~761	)
Property and equipment, net	$	~~1,457~~630		$	51,~~442~~006

Depreciation expense was $0.74 million and $3.1.4 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$3.3 million and $10.3 million during the three and nine months ended September 30~~2022, ~~2021,~~ respectively.

In May 2022, in connection with the March 2022 Restructuring Plan, the Company executed a partial termination to reduce the leased space for its San Mateo, CA headquarters. As a result, the Company impaired certain leasehold improvements associated with the vacated space, which is included in restructuring in the condensed consolidated statement of operations for the nine months ended September 30, 2022. See Note 15 for additional information.

8. Intangible Assets and Goodwill

Acquisition intangible assets, net

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, intangible assets, net consisted of the following:

	September 30, 2022							December 31, 2021
	March 31, 2023							December 31, 2022
(in thousands)	GrossCarryingAmount		AccumulatedAmortization			NetCarryingAmount		GrossCarryingAmount		AccumulatedAmortization			NetCarryingAmount
Customer relationships	$	2010,~~095~~100	$	(145,~~569~~315	)	$	54,~~526~~785	$	2010,~~426~~100	$	(124,~~927~~944	)	$	75,~~499~~156
Trade name		~~1,958~~900		(~~1,823~~900	)		~~135~~—		~~2,125~~900		(~~1,094~~900	)		~~1,031~~—
Developed technology		15,551		(15,551	)		—		17,074		(14,831	)		2,243
Acquisition intangible assets, net	$	11,000	$	(6,215	)	$	4,785	$	11,000	$	(5,844	)	$	5,156
Acquisition intangible assets, net	$	37,604	$	(31,943	)	$	5,661	$	39,625	$	(28,852	)	$	10,773

Amortization expense was $0.94 million and $52.19 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$2.5 million and $7.7 million during the three and nine months ended September 30~~2022, ~~2021,~~ respectively.

In connection with the March 2022 Restructuring Plan, the Company simplified its brand positioning. As a result, the Company concluded that the acquired trade name from a prior acquisition had no future economic benefit beyond that date and has accelerated the amortization of the related intangible, which is included in restructuring in the condensed consolidated statement of operations. See Note 15 for additional information.

Goodwill

The changes in the carrying amount of goodwill were as follows (in thousands):

Balance as of December 31, 2021	$	463,736
Balance as of December 31, 2022	$	459,817
Foreign currency translation		(81,~~895~~162	)
Balance as of September 30, 2022	$	454,841
Balance as of March 31, 2023	$	460,979

Capitalized internal-use software

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, capitalized internal-use software consisted of the following:

(in thousands)	~~September~~March 3031, ~~2022~~2023			December 31, ~~2021~~2022
Gross capitalized internal-use software	$	6045,~~115~~078		$	5162,~~395~~249
Less: Accumulated amortization		(3015,~~789~~136	)		(2332,~~237~~654	)
Capitalized internal-use software, net	$	29,~~326~~942		$	2829,~~158~~595

Amortization expense related to capitalized internal-use software was $2.01 million and $72.58 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$3.1 million and $8.9 million during the three and nine months ended September 30~~2022, ~~2021,~~ respectively, and is included in cost of revenue in the condensed consolidated statements of operations.

The decrease in gross capitalized internal-use software is due to the removal of $19.6 million of fully amortized capitalized internal-use software during the first quarter of 2023, offset by current quarter additions.

Future amortization expense

As of ~~September~~March 3031, ~~2022~~2023, future amortization expense by year is expected to be as follows:

(in thousands)	Capitalizedinternal-usesoftware, net		Acquisitionintangibleassets, net
Remainder of 2022	$	1,865	$	506
Remainder of 2023	$	5,085	$	1,113
2023		4,735		1,483
2024		4,964		1,483
2024		2,203		1,483
2025		3,458		1,389
2025		697		1,389
2026		279		800
2026		—		800
Total amortization expense	$	13,786	$	4,785
Total amortization expense	$	9,500	$	5,661

Future capitalized internal-use software amortization excludes $1916.82 million of costs which are currently in the development phase.

9. Stockholders' Equity and Employee Benefit Plans

Common Stock Repurchases

On February 26, 2022, the Company's board of directors authorized a ~~stock~~share repurchase program to repurchase up to $200.0 million of the Company’s common stock in the open market or in privately negotiated transactions (through 10b5-1 trading plans or otherwise). The ~~stock~~share repurchase program does not obligate the Company to acquire any particular amount of common stock and may be suspended at any time at the Company’s discretion, and the ~~stock~~share repurchase program does not have an expiration date. The actual timing, number and value of shares repurchased ~~will~~is be determined by management at its discretion and ~~will~~depends ~~depend~~ on a number of factors, including the market price of the Company’s stock, general business and market conditions, and other investment opportunities.

~~During~~There ~~the~~were ~~three~~no ~~months~~share ~~ended~~repurchases ~~September~~for ~~30, 2022,~~ the ~~Company~~three ~~repurchased~~months ~~approximately~~ended ~~1.6~~March ~~million~~31, ~~shares of common stock for approximately $15~~2023.0 ~~million.~~ During the ~~nine~~three months ended ~~September~~March 3031, 2022, the Company repurchased approximately 62.64 million shares of common stock for approximately $8336.54 million.

As of ~~September~~March 3031, ~~2022~~2023, the Company’s remaining share repurchase authorization was approximately $116.5 million.

Equity Incentive Plans

The Company sponsors the 2018 Equity Incentive Plan (the “2018 Plan”), which was approved by stockholders on September 5, 2018. The purpose of the 2018 Plan is to promote the long-term growth and profitability of the Company by (i) providing employees with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

and reward the best‑ available persons. The options granted under the 2018 Plan, may be granted at a price not less than the fair market value on the grant date.

The board of directors, or a committee of the board of directors, has granted options with an exercise price at fair value on the grant date. Grants of time-based awards generally vest over a four-year period for new hires and over a three-year period for subsequent grants to existing employees. Options expire as determined by the board of directors, or committee of the board of directors, but not more than ten years after the date of the grant.

As of ~~September~~March 3031, ~~2022~~2023, 1728,~~857~~741,~~376~~857 shares of common stock remain available for grant under the 2018 Plan.

The following is a summary of restricted stock units for the current year period:

	Restricted Stock Units
	Number ofShares			Weighted AverageGrant-DateFair Value		Weighted AverageRemainingContractual Term(in years)
Unvested at December 31, 2021		5,996,059		$	21.33		1.1
Unvested at December 31, 2022		8,023,173		$	15.07		1.2
Granted		7563,~~735,288~~320		$	148.2624
Vested		(2979,~~994,628~~131	)	$	1917.2252
Forfeited/cancelled		(1,896,~~968~~761	)	$	1914.0256
Unvested at September 30, 2022		8,839,751		$	16.36		1.2
Unvested at March 31, 2023		6,710,601		$	14.21		1.2

The following is a summary of stock option activity for the current year period:

	Stock Options
	Number ofShares			Weighted AverageExercise Price		AggregateIntrinsic Value(in thousands)		Weighted AverageRemaining Contractual Term (in years)
Outstanding at December 31, 2021		14,527,520		$	17.11	$	61,227		6.3
Outstanding at December 31, 2022		13,133,446		$	16.24	$	—		4.2
Granted		~~940,000~~—		$	~~7.14~~—
Exercised		~~(206,132~~—	)	$	~~13.71~~—
Forfeited		(~~597~~22,~~459~~001	)	$	20.0918
Expired		(~~797~~2,~~944~~325,356	)	$	1816.3161
Outstanding, vested and expected to vest at September 30, 2022		13,865,985		$	16.29	$	2		4.9
Outstanding, vested and expected to vest at March 31, 2023		10,786,089		$	16.15	$	1,918		4.7
Vested and exercisable at September 30, 2022		11,152,332		$	16.39	$	2		4.7
Vested and exercisable at March 31, 2023		8,770,544		$	16.59	$	—		4.7

The following is a summary of restricted stock awards for the current year period:

	Restricted Stock Awards
	Number ofShares			Weighted AverageGrant-DateFair Value		Weighted AverageRemainingContractual Term(in years)
Unvested at December 31, 2021		241,765		$	24.17		2.0
Unvested at December 31, 2022		890,219		$	17.43		1.9
Granted		~~1,392,871~~—		$	~~16.72~~—
Vested		(~~272~~80,~~214~~905	)	$	1817.5438
Forfeited/cancelled		~~(226,818~~—	)	$	~~16.93~~—
Unvested at September 30, 2022		1,135,604		$	17.83		2.2
Unvested at March 31, 2023		809,314		$	17.43		1.8

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

On March 13, 2022, the Company granted performance-based restricted stock awards (“Executive RSA Grant”) to its Chief Executive Officer whereby the number of shares that become eligible to vest under the performance-based Executive RSA Grant is based on a market condition of the Company's relative total shareholder return (“TSR”) performance as compared to the TSR of the S&P Software & Services Select Industry Index over the scheduled performance period. The performance period commenced on the grant date and will end on December 31, 2024 (the “Three-Year Performance Period”), with additional performance periods that commenced on the grant date and (i) will end on December 31, 2022 (the “One-Year Performance Period”), and (ii) will end on December 31, 2023 (the “Two-Year Performance Period”). For purposes of measuring TSR, the starting value of the Company's common stock is its average closing price for the 60 trading days immediately following the grant date and the ending values for the One, Two and Three-Year Performance Periods is its average closing price for the 60 trading days immediately preceding the end of each of the performance periods. The potential payouts under the performance-based Executive RSA Grant vary from zero for performance below the threshold performance metric to 200% of the target performance-based Executive RSA Grant for performance above the maximum performance metric.

The grant-date fair value of the award is $3.4 million, which will be recognized using the accelerated attribution method over the performance period. The grant-date fair value was determined using the Monte Carlo valuation method, which incorporates various assumptions including expected stock price volatility, contractual term, dividend yield, and stock price at grant date. During the three and nine months ended September 30, 2022, the Company recognized $0.5 million and $1.1 million, respectively, of stock-based compensation expense related to this award, which is included in general and administrative expense in the condensed consolidated statement of operations.

Fair Value of Stock Options

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of stock options granted using the following weighted-average assumptions:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Expected life (in years)	2.0	5.7	2.0	5.8
Risk-free interest rate	3.4%	0.9%	3.4%	0.8%
Volatility	53%	50%	53%	52%
Dividend yield	—%	—%	—%	—%
Fair value of common stock	$7.14	$20.05	$7.14	$21.51

2018 Employee Stock Purchase Plan, As Amended

The Company sponsors the 2018 Employee Stock Purchase Plan, as amended (the “ESPP”), which was approved by stockholders on September 5, 2018. The ESPP provides for 24-month offering periods beginning May 22 and November 22 of each year, and each offering period will consist of four six-month purchase periods, subject to a reset provision. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s common stock on the offering date, or (2) the fair market value of its common stock on the purchase date.

~~Under~~As ~~the reset provision, if the closing stock price on the purchase date falls below the closing stock price on the offering date~~ of anMarch ~~ongoing offering period~~31, the ongoing offering terminates immediately following the purchase of ESPP shares on the purchase date and participants in the terminated offering are automatically enrolled in the new offering period (“ESPP reset”)2023, ~~resulting in a modification charge to be recognized over the new offering period. During the nine months ended September 30~~7, ~~2022~~481,519 ~~there~~shares ~~was an ESPP reset that resulted in a modification charge~~ of ~~$5.8~~common ~~million,~~stock ~~which~~remain isavailable ~~being~~for ~~recognized~~issuance ~~over~~under the ~~new offering period ending in May 2024~~ESPP.

During the nine months ended September 30, 2022, the Company’s employees purchased 267,715 shares of its common stock under the ESPP with a weighted average purchase price of $10.28 per share and aggregate proceeds to the Company of $2.8 million. During the nine months ended September 30, 2021, the Company’s employees

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

purchased 245,914 shares of its common stock under the ESPP with a weighted average purchase price of $15.75 per share and aggregate proceeds to the Company of $3.9 million.

As of September 30, 2022, 6,428,467 shares of common stock remain available for issuance under the ESPP.

The Company used the Black-Scholes-Merton option pricing model to estimate the fair value of ESPP purchase rights granted using the following weighted-average assumptions:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2021	2022	2021
Expected life (in years)	n/a	n/a	1.3	1.3
Risk-free interest rate	n/a	n/a	2.2%	0.1%
Volatility	n/a	n/a	53%	53%
Dividend yield	n/a	n/a	—%	—%
Fair value of common stock	n/a	n/a	$12.09	$19.12

Stock-Based Compensation Expense

Stock-based compensation expense recognized in the condensed consolidated financial statements is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

~~2022~~2023

~~2021~~2022

~~2022~~

~~2021~~

Cost of revenue

1,~~580~~241

1,~~639~~409

~~4,613~~

~~4,701~~

Research and development

87,~~770~~734

108,~~081~~644

~~26,117~~

~~29,891~~

Sales and marketing

54,~~874~~075

56,~~672~~065

~~18,297~~

~~17,864~~

General and administrative

87,~~087~~352

7,~~202~~375

~~24,367~~

~~21,310~~

Restructuring

—

—2,761

~~2,761~~

—

Stock-based compensation expense, net of amounts capitalized

2420,~~311~~402

2426,~~594~~254

~~76,155~~

~~73,766~~

Capitalized stock-based compensation expense

~~480~~506

~~530~~719

~~1,928~~

~~1,666~~

Total stock-based compensation expense

24,791

25,124

78,083

75,432

Stock-based compensation expense

20,908

26,973

~~During~~As ~~the first quarter~~ of ~~2022, the Company modified the terms of approximately 1.2 million stock options and 0.1 million restricted stock units and awards in connection with the~~ March ~~2022~~31, ~~Restructuring~~2023, ~~Plan~~unamortized ~~(see Note 15 for additional discussion). The modification resulted in additional~~ stock-based compensation ~~expense of $2.8 million which~~ was ~~fully recognized at the modification date~~ as ~~restructuring costs in the condensed consolidated statement of operations for the nine months ended September 30, 2022.~~follows:

As of September 30, 2022, unamortized stock-based compensation was as follows:


	Unrecognized stock-based compensation (in thousands)		Weighted average recognition period (in years)
Restricted stock units	$	86,935		2.0
Stock options		6,052		1.0
Restricted stock awards		8,407		1.8
ESPP		10,981		1.6
Total unrecognized stock-based compensation	$	112,375

	Unrecognizedstock-basedcompensation(in thousands)		Weightedaveragerecognitionperiod(in years)
Restricted stock units	$	133,221		2.2
Stock options		12,510		1.4
Restricted stock awards		13,985		2.3
ESPP		8,628		1.6
Total unrecognized stock-based compensation	$	168,344

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

401(k) Plan

In the United States, the Company offers its employees a defined contribution plan that qualifies as a deferred salary arrangement under Section 401 of the U.S. Internal Revenue Code (“401(k) Plan”). Under the 401(k) Plan, participating employees may defer a portion of their pretax earnings not to exceed the maximum amount allowed by the Internal Revenue Service. The Company currently provides a matching contribution of 25% of deferrals for eligible employees. Compensation expense for the Company's matching contributions was $1.17 million and $41.39 million during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$1.2 million and $3.8 million during the three and nine months ended September 30~~2022, ~~2021,~~ respectively.

10. Leases

The Company leases certain equipment and facilities under operating leases which expire at various dates through 2028. The Company’s operating lease costs were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2022		2021		2022		2021
Operating lease cost (gross lease expense)	$	2,334	$	3,249	$	8,527	$	9,892
Variable lease costs		1,093		1,339		3,563		3,491
Sublease income (including reimbursed expenses)		473		1,218		1,780		3,782

During each of the three and nine months ended September 30, 2022 and 2021, the Company’s short-term lease costs were nominal.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The weighted average remaining operating lease term was 6.0 years and 6.7 years as of September 30, 2022 and December 31, 2021, respectively.

The weighted average discount rate used to estimate operating lease liabilities was 7.0% and 7.5% as of September 30, 2022 and December 31, 2021, respectively.

In May 2022, in connection with the March 2022 Restructuring Plan, the Company executed a partial termination to reduce the leased space for its San Mateo, CA headquarters. The amendment resulted in the reduction in total future undiscounted fixed minimum lease cost payments and associated right-of-use assets. See Note 15 for additional information.

As of September 30, 2022, maturities of operating lease liabilities and sublease income, by year are as follows:

(in thousands)	Operating Lease Payments		SubleaseIncome
Remainder of 2022	$	2,813	$	(458	)
2023		11,074		(1,781	)
2024		9,579		(372	)
2025		9,233		—
2026		9,505		—
Thereafter		19,140		—
Gross lease payments (income)	$	61,344	$	(2,611	)
Less: Imputed interest		11,445
Less: Tenant improvement receivables		412
Total operating lease liabilities	$	49,487

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


	Three Months Ended March 31,
(in thousands)	2023		2022
Operating lease cost (gross lease expense)	$	2,273	$	3,204
Variable lease costs		958		1,330
Sublease income (including reimbursed expenses)		491		846

During each of the three months ended March 31, 2023 and 2022, the Company’s short-term lease costs were nominal.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The weighted average remaining operating lease term was 5.5 years and 5.7 years as of March 31, 2023 and December 31, 2022, respectively.

The weighted average discount rate used to estimate operating lease liabilities was 7.1% as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023, maturities of operating lease liabilities and sublease income, by year are as follows:


(in thousands)	Operating Lease Payments		Sublease Income
Remainder of 2023	$	8,400	$	(1,318	)
2024		9,753		(372	)
2025		9,307		—
2026		9,516		—
2027		9,788		—
Thereafter		9,363		—
Gross lease payments (income)	$	56,127	$	(1,690	)
Less: Imputed interest		9,802
Less: Tenant improvement receivables		418
Total operating lease liabilities	$	45,907

11. Commitments and Contingencies

Non-Cancelable Purchase Commitments

The Company enters into commitments under non-cancelable purchase orders for the procurement of goods and services in the ordinary course of business. As of ~~September~~March 3031, ~~2022~~2023, expected payments under such commitments are as follows (in thousands):

Remainder of 2022	$	3,870
Remainder of 2023	$	12,531
2023		15,844
2024		8,082
2024		4,546
2025		1,946
2025		61
2026		49
2026		46
2027		1
Total purchase commitments	$	2422,~~367~~609

Letters of Credit

As of ~~September~~March 3031, ~~2022~~2023, the Company had a standby letter of credit for $21.50 million which was issued in connection with the San Mateo headquarters.

Legal Matters

From time to time, the Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business, which may include, but are not limited to, patent and privacy matters, labor and employment claims, class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Periodically, the Company evaluates developments in its legal matters and records a liability when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of, a loss related to such matters, and the Company's judgment may be incorrect.17

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company is party to lawsuits filed in connection with the Merger, and more may be filed. On April 21, 2023, a purported Momentive stockholder filed a complaint in the U.S. District Court for the Southern District of New York against Momentive and the Momentive board of directors, captioned O’Dell v. Momentive Global, Inc., et al. Case No. 23-cv-3360 (S.D.N.Y.) (the “O’Dell Complaint”), and a purported Momentive stockholder filed a complaint in the U.S. District Court for the Northern District of California against Momentive and the Momentive board of directors, captioned Renfer v. Momentive Global, Inc., et al. Case No. 3:23-cv-01936-TLT (N.D. Cal.) (the “Renfer Complaint”). On April 24, 2023, a purported Momentive stockholder filed a complaint in the U.S. District Court for the Southern District of New York against Momentive and the Momentive board of directors, captioned Wang v. Momentive Global, Inc., et al. Case No. 1:23-cv-03408 (S.D.N.Y.) (the “Wang Complaint”). On April 26, 2023, a purported Momentive stockholder filed a complaint in the U.S. District Court for the Northern District of California against Momentive and the Momentive board of directors, captioned DeVay v. Momentive Global, Inc., et al. Case No. 3:23-cv-02032 (N.D. Cal.) (the “DeVey Complaint”). On April 28, 2023, a purported Momentive stockholder filed a complaint in the U.S. District Court for the Northern District of California against Momentive and the Momentive board of directors, captioned Bushansky v. Momentive Global, Inc., et al. Case No. 3:23-cv-02068 (N.D. Cal.) (the “Bushansky Complaint”), and together with the O’Dell Complaint, the Renfer Complaint, the Wang Complaint and the DeVey Complaint, the “Momentive Complaints”). The Momentive Complaints assert claims against certain defendants under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder for allegedly false and misleading statements in the proxy statement and against certain defendants under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such allegedly false and misleading statements. Each complaint seeks, among other relief, an order enjoining the Merger and an award for plaintiffs’ fees and costs. The Company believes the allegations in the Momentive Complaints are without merit.

Momentive stockholders may file additional lawsuits challenging the Merger, which may name the Company, members of the Company’s board of directors and/or other defendants. No assurance can be made as to the outcome of such lawsuits or the Momentive Complaints, including the amount of costs associated with defending against, or any other liabilities that may be incurred in connection with the litigation of, such claims.

In addition, from time to time, the Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business, which may include, but are not limited to, patent and privacy matters, labor and employment claims, class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Periodically, the Company evaluates developments in its legal matters and records a liability when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both the likelihood of there being, and the estimated amount of, a loss related to such matters, and the Company's judgment may be incorrect.

There are currently no legal matters or claims that have arisen from the normal course of business that the Company believes would have a material impact on the Company’s financial position, results of operations or cash flows.

Warranties and Indemnification

The Company’s subscription services are generally warranted to perform materially in accordance with the Company’s online help documentation under normal use and circumstances. Additionally, the Company’s arrangements generally include provisions for indemnifying customers against liabilities if its subscription services infringe a third party’s intellectual property rights. Furthermore, the Company may also incur liabilities if it breaches the security or confidentiality obligations in its arrangements. To date, the Company has not incurred significant costs and has not accrued a liability in the accompanying condensed consolidated financial statements as a result of these obligations.

1918

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

12. Debt

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022 the carrying values of debt were as follows:

			September 30, 2022			December 31, 2021
			March 31, 2023			December 31, 2022
	Issuancedate	Maturitydate	Amount(in thousands)		EffectiveInterest Rate	Amount(in thousands)		EffectiveInterest Rate
2018 Refinancing Facility Agreement	October 2018	October 2025	$	186,200	3.9% - 6.9%	$	212,850	3.8% - 3.9%
2018 Credit Facility	October 2018	October 2025	$	185,100	8.1% - 8.7%	$	185,650	3.9% - 8.1%
Less: Unamortized issuance discount and issuance costs, net				~~909~~759			~~1,134~~834
Less: Debt, current				1,900			1,900
Debt, non-current			$	~~183~~182,~~391~~441		$	~~209~~182,~~816~~916

In October 2018, the Company entered into athe ~~Refinancing Facility Agreement (“~~2018 Credit Facility”), comprising a $220.0 million term loan (the “Term Loan”) and $75.0 million revolving credit facility. ~~Loans~~Effective ~~under~~March 1, 2023, the Company entered into an amendment to the 2018 Credit Facility to amend the alternate base interest rate (“ABR”) from the LIBOR (as defined in the 2018 Credit Facility) to the SOFR and to make such other related changes. Loans under the amendment effective March 1, 2023 accrue interest based upon, at the Company’s option, either at an ~~alternate base interest rate (“~~ABR”) or aan ~~Eurocurrency~~adjusted ~~rate~~term SOFR Rate, in each case, ~~plus~~ an applicable margin. The applicable margin for the Term Loan is 2.75% in the case of a ABR loan and 3.75% in the case of a ~~Eurocurrency~~Term Benchmark loan, and the applicable margin for the revolving loan ranges from 0.75% to 1.50% in the case of a ABR loan and 1.75% to 2.50% in the case of a ~~Eurocurrency~~Term Benchmark loan, and is based on the Company’s leverage ratio. The Company will make quarterly principal payments of $550,000 on the Term Loan with any remaining principal amounts due on October 10, 2025. The principal amount on the revolving credit facility is due and all revolver commitments terminate on October 10, 2023.

OnAs of March 231, ~~2022~~2023, the Company ~~repaid~~had $2574.0 million of ~~principal~~borrowing available under the ~~Term~~line ~~Loan,~~of ~~which~~credit ~~was~~portion ~~in accordance with the prepayment terms~~ of the 2018 Credit Facility.

AsThe Company’s obligations under the 2018 Credit Facility are guaranteed by certain of ~~September~~its 30subsidiaries and secured by liens on substantially all of the assets of the Company and such subsidiaries. The 2018 Credit Facility contains financial, ~~2022~~affirmative and negative covenants that, if violated, may require the Company ~~had~~to ~~$72~~pay down the loans earlier than the stated maturity dates with higher interest rates.5 ~~million~~As of ~~borrowing~~March ~~available~~31, ~~under~~2023, the ~~line~~Company ofwas ~~credit~~compliant ~~portion~~with all of its debt covenant requirements in the 2018 Credit Facility. The Company believes that it will continue to comply with the terms of the loan agreements through the stated maturity dates. However, if the Company’s projections do not materialize, the Company may require additional equity or debt financing. There can be no assurance that additional financing, if required, will be available on terms satisfactory to the Company.

The Company’s obligations under the 2018 Credit Facility are guaranteed by certain of its subsidiaries and secured by liens on substantially all of the assets of the Company and such subsidiaries. The 2018 Credit Facility contains financial, affirmative and negative covenants that, if violated, may require the Company to pay down the loans earlier than the stated maturity dates with higher interest rates. As of ~~September~~March 3031, ~~2022~~2023, ~~the~~future ~~Company~~minimum ~~was~~payment ~~compliant~~obligations ~~with all~~ of ~~its~~principal ~~debt~~amounts ~~covenant~~due ~~requirements~~by inyear under the 2018 Credit Facility. ~~The~~were ~~Company~~as ~~believes~~follows ~~that~~(in it will continue to comply with the terms of the loan agreements through the stated maturity dates. However, if the Company’s projections do not materialize, the Company may require additional equity or debt financing. There can be no assurance that additional financing, if required, will be available on terms satisfactory to the Company.thousands):

Principal and interest payments are due quarterly. As of September 30, 2022, future minimum payment obligations of principal amounts due by year under the 2018 Credit Facility were as follows (in thousands):


Remainder of 2023	$	1,650
2024		2,200
2025		181,250
Total principal outstanding	$	185,100

Remainder of 2022	$	550
2023		2,200
2024		2,200
2025		181,250
Total principal outstanding	$	186,200

13. Income Taxes

The Company recorded an income tax provision of $0.35 million and $10.12 million for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022,~~2023 ~~respectively,~~ and ~~$0.4 million and $0.9 million for the three and nine months ended September 30~~2022, ~~2021,~~ respectively. The ~~decrease~~increase in the Company’s income tax expense for the three months ended ~~September~~March 3031, ~~2022~~2023, relative to the prior year period, was primarily due to an estimated increase in ~~foreign~~U.S. ~~research~~state income taxes resulting from capitalization of certain expenses under Section 174.

20The Company regularly evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on several factors, including the

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~credits.~~likelihood ~~The~~and ~~increase~~amount, inif ~~the~~any, ~~Company’s~~of future taxable income ~~tax~~in ~~expense~~relevant ~~for~~jurisdictions ~~the~~during ~~nine~~periods ~~months~~in ~~ended~~which ~~September~~those ~~30,~~temporary ~~2022,~~differences ~~relative~~become todeductible. ~~the~~As ~~prior~~of ~~year~~March ~~period~~31, ~~was~~2023, ~~primarily~~the ~~due~~Company continues to maintain a ~~change~~valuation allowance on certain deferred tax assets in the ~~state~~United ~~blended~~States ~~tax~~and ~~rate~~certain foreign jurisdictions that are not realizable on ~~amortization~~a ofmore ~~intangible~~likely ~~assets~~than not basis.

The Company ~~regularly~~believes ~~evaluates~~that ~~the~~it ~~realizability~~has ofprovided ~~its~~adequate ~~net~~reserves ~~deferred~~for ~~tax~~its ~~assets~~income ~~based~~tax onuncertainties in all ~~available~~open ~~evidence,~~tax ~~both positive and negative~~years. ~~The~~As ~~realization~~the outcome of ~~net~~the ~~deferred~~audits ~~tax~~cannot ~~assets~~be ispredicted ~~dependent~~with ~~on several factors~~certainty, ~~including~~if ~~the~~any ~~likelihood~~issues ~~and~~addressed ~~amount,~~in ifthe ~~any,~~Company's oftax ~~future~~audits ~~taxable~~are ~~income~~resolved in ~~relevant~~a ~~jurisdictions~~manner ~~during~~inconsistent ~~periods~~with inmanagement's ~~which~~expectations, ~~those~~the ~~temporary~~Company ~~differences~~could ~~become~~be ~~deductible.~~required Asto ofadjust ~~September~~its ~~30,~~provision ~~2022,~~for ~~the~~income ~~Company~~taxes ~~continues~~in tothe ~~maintain~~period asuch ~~valuation~~resolution ~~allowance~~occurs. onThere ~~certain~~were ~~deferred~~no ~~tax~~material ~~assets~~changes in ~~the~~gross ~~United~~unrecognized ~~States~~tax ~~and~~benefits ~~certain~~during ~~foreign~~each ~~jurisdictions~~of ~~that~~the ~~are~~three ~~not~~months ~~realizable~~ended onMarch a31, ~~more~~2023 ~~likely~~and ~~than not basis~~2022.

The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the audits cannot be predicted with certainty, if any issues addressed in the Company's tax audits are resolved in a manner inconsistent with management's expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs. There were no material changes in gross unrecognized tax benefits during each of the three and nine months ended September 30, 2022 and 2021.

14. Net Loss Per Share

Basic earnings per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period which includes potential dilutive common shares assuming the dilutive effect of outstanding restricted stock units, stock options, restricted stock awards, and shares issuable under the ESPP calculated using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share:

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
(in thousands, except per share amounts)	~~2022~~2023			~~2021~~2022			~~2022~~			~~2021~~
Numerator:
Net loss	$	(2023,~~330~~815	)	$	(2237,~~903~~377	)	$	~~(86,258~~	)	$	~~(81,787~~	)
Denominator:
Weighted-average shares outstanding - basic and diluted		~~146~~149,~~953~~345			~~147~~150,~~877~~262			~~148,620~~			~~146,270~~
Net loss per common share - basic and diluted:	$	(0.1416	)	$	(0.1525	)	$	~~(0.58~~	)	$	~~(0.56~~	)

The Company was in a loss position for the periods presented. Accordingly, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive. Prior to application of the treasury stock method, share equivalents (comprising of restricted stock units, stock options, restricted stock awards, and shares issuable under the ESPP) excluded from the calculations of diluted net loss per share were 2520.2 million ~~for the three~~ and ~~nine months ended September 30, 2022, and 23~~26.03 million for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2021~~2023 and 2022, respectively.

15. Restructuring Costs

InA ~~March~~description 2022, the Company implemented a restructuring plan (the “March 2022 Restructuring Plan”) to streamline its business, increase operating efficiency, and reduce costs over the long-term after the termination of ~~its proposed merger with Zendesk. During~~ the ~~three and nine months ended September 30, 2022, the~~ Company had incurred costs of approximately $0.4 million and $2.0 million, respectively, associated with the March 2022 Restructuring Plan, which are primarily comprised of employee severance, stock-based compensation expense, the partial termination of its San Mateo, CA headquarters lease and related leasehold improvement impairment costs, and other contract termination costs related to the Company's ~~decision~~restructuring ~~to abandon its future office expansion plans. Additionally, the Company has streamlined its brand positioning~~ and ~~will~~other ~~focus~~activities ~~on the SurveyMonkey~~ and ~~Momentive~~their ~~brands. As such, it has determined that its brand-~~related ~~intangibles~~costs ~~from~~is aprovided ~~prior acquisition has no future economic~~ below.

21February 2023 Restructuring Plan

In February 2023, the Company committed to a restructuring plan (the "February 2023 Restructuring Plan") that is designed to improve operating margin. The February 2023 Restructuring plan resulted in a reduction of the Company's workforce by approximately 14%. The total estimated restructuring costs was approximately $7.2 million, consisting of cash expenditures for employee severance, employee benefits, and related facilitation costs, and was substantially recognized during the first quarter of 2023.

October 2022 Restructuring Plan

In October 2022, the Company committed to a plan designed to improve operating margin and create efficiencies in its go-to-market motion and in other areas throughout the Company (the “October 2022 Restructuring Plan”). The October 2022 Restructuring Plan resulted in a reduction of the Company’s workforce by approximately 11%. The Company incurred total charges of approximately $4.2 million, consisting of cash expenditures for employee

MOMENTIVE GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

~~benefit~~severance, ~~and~~employee ~~has~~benefits, ~~accelerated~~and ~~the~~related ~~amortization~~facilitation ofcosts, ~~such~~and ~~through~~was ~~the~~substantially ~~end~~recognized ofduring ~~2022, when~~ the ~~Company~~fourth ~~plans~~quarter toof ~~discontinue those brand names~~2022.

AsMarch part of the restructuring plan, the Company partially terminated the lease for its San Mateo, CA headquarters, which resulted in an estimated reduction in total future undiscounted fixed lease cost payments of approximately $26.9 million as of the lease amendment date in May 2022. ~~The~~Restructuring ~~Company also recorded leasehold improvement impairment costs as the Company estimates that the leasehold improvements at the vacated headquarters would not be recoverable.~~ Plan

~~The~~In ~~Company~~March ~~may~~2022, ~~incur~~the ~~additional~~Company ~~restructuring~~implemented ~~charges~~a ~~related~~restructuring toplan (the “March 2022 Restructuring Plan”) to streamline its business, increase operating efficiency, and reduce costs over the long-term after the termination of its proposed merger with Zendesk. In ~~particular~~connection with the March 2022 Restructuring Plan, the Company isincurred ~~continuing~~total charges of approximately $2.4 million, which are primarily comprised of employee severance, stock-based compensation expense, gain on lease modification due to ~~evaluate~~the partial termination of its ~~real~~San ~~estate~~Mateo, ~~needs~~CA headquarters lease and ~~has~~related ~~actively~~leasehold ~~marketed~~improvement ~~for~~impairment ~~sublease~~costs, ~~several~~and ofother contract termination costs related to the Company's decision to abandon its ~~leases~~future office expansion plans. ~~The~~Additionally, the Company ~~expects~~has streamlined its brand positioning and accelerated the ~~actions~~amortization of the brand-related intangibles that were discontinued. Substantially all of the costs related to the March 2022 Restructuring Plan tohas bebeen ~~substantially~~recognized ~~complete~~as byof the ~~end~~fourth quarter of 2022.

The ~~March~~restructuring ~~2022~~plans ~~Restructuring~~were ~~Plan was~~ subject to applicable laws and consultation processes as part of the Company's strategic plan to reduce costs and improve efficiencies. In connection with ~~this~~these ~~action~~actions, the Company incurred the following pre-tax costs for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 ~~(in~~and ~~thousands)~~2022:

(in thousands)	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
	Three Months Ended March 31,
Employee severance	$	286	$	2,778
(in thousands)	2023		2022
Gain on lease modification		—		(6,370	)
Employee severance	$	7,197	$	822
Impairment of property and equipment		—		838
Stock-based compensation		—		2,761
Contract termination and other costs		1—		1,~~660~~255
Amortization of intangible assets		~~135~~—		~~315~~45
Total restructuring costs	$	~~422~~7,197	$	14,~~982~~883

Restructuring costs included $02.60 million recorded in accrued ~~compensation and accrued~~ expenses and other current liabilities ~~lines~~line in the condensed consolidated balance sheet as of ~~September~~March 3031, ~~2022~~2023. The majority of the amounts accrued pertain to severance costs which will be paid through ~~2022~~the second quarter of 2023.

~~16. Subsequent Events~~21

On October 10, 2022, the Company committed to a plan designed to improve operating margin and create efficiencies in its go-to-market motion and in other areas throughout the Company (the “October 2022 Restructuring Plan”). The October 2022 Restructuring Plan involves a reduction of the Company’s workforce by approximately 11%.

The Company estimates that it will incur approximately $4.0 million to $5.0 million in charges in connection with the October 2022 Restructuring Plan, consisting of cash expenditures for employee severance, employee benefits, and related facilitation costs. The Company expects that the majority of these costs will be incurred and paid during the fourth quarter of 2022, and that execution of the plan will be substantially complete by the end of 2022.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. As discussed in the section titled “Forward-Looking Statements,”, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Additionally, our unaudited results for the interim periods presented may not be indicative of the results to be expected for any full year period. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q.

Overview

We were founded under the name “SurveyMonkey” in 1999 and provide SaaS solutions that ~~enable~~help ~~organizations~~businesses to collect and analyze ~~market,~~stakeholder ~~customer and employee~~ sentiment ~~data quickly and~~ at scale. ~~Our~~We ~~artificial~~believe ~~intelligence~~the ~~powered~~business insights our solutions ~~help~~deliver enable more than ~~345~~330,000 organizations worldwide to build market leadership, delight their customers, and engage their employees. Our solutions are powered by a platform that combines audience panels, artificial intelligence, and advanced analytics capabilities that help make our products easy-to-use, yet powerful, to deliver speed-to-insights for our customers.

We ~~deliver~~offer ~~these~~products ~~solutions~~that ~~through~~address three major ~~product~~business ~~categories: Surveys, Customer Experience, and Market Research. We believe our solutions are competitively differentiated through their ease of~~ use ~~and~~cases: ~~flexibility,~~(i) ~~speed~~building inmarket ~~delivering sentiment data-driven insights and ability to share insights across an organization through integrations with leading business intelligence~~leadership, ~~collaboration,~~(ii) ~~and~~delighting ~~customer relationship management platforms. Our solutions are powered by a technology stack that simplifies the processes for creating surveys~~customers, ~~collecting high quality data,~~ and ~~surfacing~~(iii) ~~and~~engaging ~~sharing insights across an organization to drive action~~employees.

We believe our products are competitively differentiated through their ease-of-use, speed to insight, price relative to alternatives, and ability to share insights across an organization through integrations with leading business intelligence, collaboration, and customer relationship management platforms. Our solutions are powered by a technology stack that simplifies the processes for creating surveys, collecting high quality data, and surfacing and sharing insights across an organization to drive action. We have transformed from our roots as a provider of digital survey tools sold through the Internet to an enterprise SaaS company that leverages both product-led and sales-led go-to-market motions. To help us engage more deeply with enterprise customers, we rebranded ourselves as “Momentive” in June 2021, and changed our legal name from “SVMK Inc.” to “Momentive Global Inc.” In February 2022, we announced plans to consolidate our product portfolio under ~~two~~the ~~brands~~Momentive and ~~web~~SurveyMonkey ~~surfaces—Momentive~~brands and ~~SurveyMonkey~~web surfaces. The Momentive brand ~~will~~represents ~~represent~~ our suite of upmarket solutions, ~~while~~sold ~~SurveyMonkey~~primarily ~~will~~through ~~support~~ our ~~complementary~~sales ~~products~~force, ~~for~~while ~~value-oriented~~the ~~customers~~SurveyMonkey ~~who~~brand ~~prioritize~~represents ~~speed~~our forms and ~~ease~~survey ofproducts ~~use~~sold primarily through our website.

We are executing on a two-part growth strategy. First, we are delivering new features and product tiers that capitalize on the virality of our core platform and the scale of business to drive overall platform usage and increase the conversion of free users to paid subscribers in our self-serve channel. Second, we are investing further in product innovation and go-to-market initiatives to expand the percentage of our revenue generated through our sales-assisted channel. Specifically, our sales-assisted go-to-market motion focuses on converting existing self-serve subscribers to sales-assisted customers, selling directly to new customers, and expanding our relationships with existing customers. As we execute on this strategy and sell more of our products into enterprises directly, we believe we can accelerate our revenue growth profile and increase our customer retention rates over time. We believe our existing user base represents a significant opportunity to expand our business and increase our revenue. During the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30~~2023, ~~2022,~~ approximately 3739% of our total revenue was generated from customers who purchased software through our sales-assisted channel, up from 3135% in the first ~~nine~~quarter ~~months~~ of ~~2021~~2022.

Our core survey platform is inherently viral, as existing users send surveys and share survey results that introduce potential new users and customers to our products. This virality, combined with the ease-of-use and price-disruptive nature of our products and the strength of our brands, has enabled us to build an efficient, online self-serve channel for selling versions of our survey products, which we are enhancing with our sales-assisted go-to-market motion. We have a broad and diverse customer base and no customer represented more than 10% of our revenue in any of the periods presented.

We operate as a single operating segment. Our ~~chief operating decision maker (“~~CODM”) is our Chief Executive Officer, who reviews our operating results on a consolidated basis in order to make decisions about allocating resources and assessing performance for ~~the entire company. Our CODM uses one measure of profitability and does not segment our business for internal reporting.~~

2322

~~Impact~~the entire company. Our CODM uses one measure of ~~COVID-19~~profitability and does not segment our business for internal reporting.

~~The~~Pending ~~COVID-19~~Merger ~~pandemic~~with ~~has~~an ~~caused~~investor ~~economic~~consortium ~~instability~~led and global uncertainty. As a result of the COVID-19 pandemic, we modified certain aspects of our business, including transitioning to a hybrid work model where most of our employees have the flexibility to determine the amount of time they work from home and in our offices, and transitioning our employee onboarding and training processes to remote or online programs, among other modifications. We continue to actively monitor and evaluate the situation and may take further actions that alter our business operations as may be required by federal, state, or local authorities or that we determine are in the best interests of our employees, customers, partners, and stockholders. The effects of these operational modifications are unknown and may not be realized until further reporting periods as we continue to evaluate and refine our hybrid work model and real estate needs.STG

~~Although~~On ~~many~~March ~~jurisdictions have relaxed their guidelines and restrictions~~13, ~~in some cases~~2023, ~~these~~we ~~have~~entered ~~been,~~into ~~or may in~~ the ~~future~~Merger ~~be,~~Agreement ~~reinstated.~~with ~~The~~STG ~~full impact of the rapidly changing market~~ and ~~economic~~Merger ~~conditions~~Sub. ~~due~~Pursuant to the ~~COVID-19~~Merger ~~pandemic~~Agreement, isand ~~uncertain~~upon as the ~~businesses~~terms ~~of our customers~~ and ~~partners~~subject ~~have been, and in some cases continue~~ to ~~be, disrupted. While we have not experienced significant disruptions from~~ the ~~COVID-19~~conditions ~~pandemic thus far~~therein, weMerger ~~are~~Sub ~~unable to accurately predict the full impact that the COVID-19 pandemic~~ will ~~have~~merge ~~due~~with ~~to numerous uncertainties, including the severity~~ and ~~spread~~into ~~of new or existing variants of the virus between regions~~us, ~~changes~~with inour ~~infection~~company ~~and~~surviving ~~vaccination rates in each region,~~ the ~~duration~~merger ofas ~~the~~a ~~pandemic~~wholly ~~globally~~owned ~~and~~subsidiary ~~regionally, additional actions that may be taken by governmental authorities, the impact to the businesses~~ of our customers and partners, individuals’ and companies’ risk tolerance regarding health matters going forward, and other factors identified in Part I, Item 1A “Risk Factors” in this Quarterly Report on Form 10-QSTG. ~~The~~Our ~~extent~~board ~~to which the COVID-19 pandemic may materially impact our financial condition, liquidity, or results~~ of ~~operations~~directors ~~is uncertain,~~ and the ~~effect~~board of ~~the~~directors ~~COVID-19 pandemic may not be fully reflected in our results~~ of ~~operations~~STG ~~until~~have ~~future~~each ~~periods,~~approved ~~even after~~ the ~~COVID-19~~Merger ~~pandemic~~Agreement ~~has subsided. We are continuously evaluating the nature~~ and ~~extent of~~ the ~~impact to our business, including our real estate needs, consolidated results of operations, and financial condition~~Merger.

Under the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each issued and outstanding share of our common stock (except for certain shares of our common stock specified in the Merger Agreement) will be canceled and automatically converted into the right to receive cash in an amount equal to $9.46 per share, without interest.

The completion of the Merger is subject to customary closing conditions, including the approval of our stockholders. For further information on the Merger and the Merger Agreement, see Note 1 of the Notes to Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q, as well as the definitive proxy statement filed by us on April 27, 2023 and first mailed to our stockholders on the same date.

Upon consummation of the Merger, we will cease to be a publicly traded company and our common stock will be delisted from the Nasdaq Global Select Market.

Impact of COVID-19 and other Macroeconomic Factors on our Business

The COVID-19 pandemic has caused economic instability and global uncertainty. As a result of the COVID-19 pandemic, we transitioned to a hybrid work model where most of our employees have the flexibility to determine the amount of time they work from home and in our offices. We continue to actively monitor and evaluate the situation and may take further actions that alter our business operations as may be required by federal, state, or local authorities or that we determine are in the best interests of our employees, customers, partners, and stockholders. The effects of these operational modifications are unknown and may not be realized until further reporting periods as we continue to evaluate and refine our hybrid work model and real estate needs.

In addition, our overall performance depends in part on worldwide economic and geopolitical conditions and their impact on consumer and customer behavior. Worsening economic conditions, including inflation, higher interest rates, volatility in the global financial markets, slower growth, the stronger dollar versus foreign currencies, particularly the Euro, the British Pound Sterling, the Australian dollar, and the Canadian dollar, and other changes in economic conditions, may adversely affect our results of operations and financial performance.

Our Products

~~Our~~We offer products that address three major business use cases, ~~across~~(i) ~~five~~building ~~major~~market ~~categories:~~leadership, 1(ii) ~~Market~~delighting ~~Insights;~~customers, 2and (iii) ~~Brand~~engaging ~~Insights;~~employees. 3)We ~~Customer~~generate ~~Experience;~~revenue 4)either ~~Employee~~on ~~Experience;~~a ~~and~~subscription 5)or ~~Product~~transactional ~~Experience~~basis, depending on the product.

•

WeSurveys: ~~generate~~Our ~~revenue~~leading ~~either~~survey onsoftware products enable a ~~subscription~~wide orrange ~~transactional~~of ~~basis~~customers to collect, ~~depending~~analyze and act on stakeholder sentiments across a broad number of business use cases. We have designed products that optimize the ~~product~~quality of feedback and maximize response rates to help our customers improve customer experiences, develop and retain a diverse and high-performing workforce, and grow their business. We offer our basic survey plan to individuals at no charge. We also offer multiple tiers of subscriptions to individual paying users, with pricing based on volume of data collected and functionality, including advanced survey logic; branding and customization tools; analysis features; and support options. We offer SurveyMonkey team plans for small teams and departments that need to collaborate on survey projects. In addition to the features available in paid plans for individuals, SurveyMonkey team plans provide advanced collaboration features for survey creation and analysis, centralized team administration, and a team library for survey themes, templates, and brand assets. Team plans start at three ~~major~~users ~~product~~per ~~categories—Surveys~~team, ~~Customer~~billed ~~Experience~~annually on a subscription basis, and ~~Market~~include ~~Research~~flexible roles and pricing for survey creators and analysts. For organizations, we offer SurveyMonkey Enterprise, an AI powered enterprise feedback management platform that extends SurveyMonkey with enterprise-grade security and an enhanced set of capabilities (including managed user accounts, customized company branding, collaboration capabilities, and deep

Surveys: Our leading survey software products enable a wide range of customers to collect, analyze and take action on stakeholder sentiments. We have designed products that optimize the quality of stakeholder feedback and maximize response rates to help organizations improve customer experiences, develop and retain a diverse and high-performing workforce, and grow their business. We offer our basic survey plan to individuals at no charge. We also offer multiple tiers of subscriptions to individual paying users, with pricing based on functionality, including advanced survey logic; branding and customization tools; analysis features; and support options. We offer SurveyMonkey team plans for small teams and departments that need to collaborate on survey projects. In addition to the features available in paid plans for individuals, SurveyMonkey team plans provide advanced collaboration features for survey creation and analysis, centralized team administration, and a team library for survey themes, templates, and brand assets. Team plans start at three users per team, billed annually on a subscription basis, and include flexible roles and pricing for survey creators and analysts. For organizations, we offer SurveyMonkey Enterprise, which extends our survey platform with enterprise-grade security and an enhanced set of capabilities (including managed user accounts, customized company branding, collaboration capabilities, and deep integrations with a broad set of leading software applications) that enable users to support multiple, advanced feedback use cases across the organization. Revenue from Surveys is generated primarily on a subscription basis.23

~~Customer~~integrations ~~Experience:~~with ~~Our~~a ~~Customer~~broad ~~Experience~~set ~~offering~~of ~~enables~~leading ~~companies~~enterprise tosoftware ~~leverage~~applications) ~~in-the-moment customer feedback to deliver exceptional experiences~~ that ~~engage~~enable ~~and~~users ~~retain their customers. Our Customer Experience offering simplifies customer feedback collection and analysis through its integration with customer relationship management (“CRM”) data~~ to ~~help~~support ~~companies better understand key customer segments~~multiple, ~~and~~advanced ~~its~~feedback ~~accessibility within the systems companies already~~ use tocases ~~help~~across ~~them~~the ~~take~~organization. ~~action~~Revenue ~~quickly~~from inSurveys ~~service~~is ofgenerated ~~their~~primarily ~~customers.~~on ~~Our Customer Experience offering captures~~ a ~~company’s~~subscription ~~customer feedback~~ basis.

•

24Customer Experience: Our purpose-built Customer Experience solution is sold under the GetFeedback brand and enables companies to leverage in-the-moment customer feedback to deliver experiences that engage and retain their customers. Our Customer Experience solution simplifies customer feedback collection and analysis through its integration with customer relationship management (“CRM”) and customer support data to help companies better understand key customer segments, and its accessibility within the systems companies already use to help them take action quickly in service of their customers. Our Customer Experience solution captures a company’s customer feedback from across key digital channels and within offline or proprietary business systems, combines this feedback with operational customer data to build a deeper understanding of their customers and their preferences, and automates feedback-based actions through integrations with that company’s existing system of record and other key business systems. Our Customer Experience solution is sold through our sales-assisted channel. Revenue from Customer Experience is generated primarily on a subscription basis. Beginning in 2023, we shifted the focus of our Customer Experience product strategy to make SurveyMonkey Enterprise our core Customer Experience offering. This will enable us to innovate on one core platform and improve our ability to expand with existing SurveyMonkey Enterprise customers. GetFeedback, which is built on a separate technology stack, will be moved into maintenance mode. We will no longer develop new features for GetFeedback or market GetFeedback to new customers.

•

~~from~~Insights ~~across~~Solutions: ~~key~~Formerly ~~digital~~known ~~channels~~as ~~and~~Market ~~within~~Research, ~~offline~~our orInsights ~~proprietary~~Solutions ~~business~~products ~~systems,~~enable ~~combines~~customers ~~this~~to ~~feedback~~quickly ~~with~~collect ~~operational~~and ~~customer~~analyze ~~data~~actionable toinsights ~~build~~from a ~~deeper~~targeted ~~understanding~~audience on a number of ~~their~~market ~~customers~~research ~~and~~needs, ~~their~~including ~~preferences~~analyzing market opportunities, ~~and~~measuring ~~automates~~brand ~~feedback-based~~and ~~actions~~campaign ~~through~~effectiveness, ~~integrations~~and ~~with~~gaining ~~that~~insights ~~company’s~~on existing ~~system~~and offuture ~~record~~product ~~and~~lines. ~~other~~Our ~~key~~Insights ~~business~~Solutions ~~systems.~~is Wesold ~~differentiate~~through our ~~Customer~~sales-assisted ~~Experience~~channel. ~~offering~~Revenue infrom ~~the~~Insights ~~market~~Solutions ~~based~~has historically been generated primarily on a transactional basis, with our ~~software’s~~customers ~~ease-of-implementation~~having ~~and~~the ~~use,~~option ~~time-~~to~~-value~~ ~~relative~~preload credits that can be used to ~~alternative~~pay for projects, solutions, and ~~rich~~services ~~integration~~throughout ~~across~~a ~~the~~12-month ~~Salesforce ecosystem~~term. ~~Our~~In ~~Customer~~the ~~Experience~~third ~~offering~~quarter isof ~~sold~~2022, ~~through~~we ~~our~~launched ~~sales-assisted~~a ~~channel.~~program ~~Revenue~~to ~~from~~price ~~Customer~~certain ~~Experience~~Insights isSolutions ~~generated primarily~~ on a subscription basis for new customers.

•

~~Market~~Professional ~~Research~~Services: ~~Our~~For ~~Market~~customers ~~Research~~who ~~solutions~~need ~~are~~assistance ~~the~~with ~~underlying~~optimizing ~~software products powering~~ the ~~Market~~use ~~Insights, Brand Insights, and Product Experience categories~~ of solutions. Our market research offerings enable customers to quickly collect and analyze actionable insights from a targeted audience on a number of market research needs, including analyzing market opportunities, measuring brand and campaign effectiveness, and gaining insights on existing and future product lines. Our Market Research solutions are sold through our ~~sales-assisted channel. Revenue from Market Research is generated primarily on a transactional basis~~products, ~~with~~we ~~our~~offer ~~customers having~~ the ~~option~~following tocategories ~~preload~~of ~~Market~~professional ~~Research Credits that can be used to pay for projects~~services, ~~solutions, and services throughout a 12-month term.~~including:

Professional Services: For customers who need assistance with implementing and optimizing the use of our products, we offer the following categories of professional services, including:

Survey: survey design, programming, language translation, and results analysis;

Customer Experience: customer journey mapping, customer experience key metrics, measurement and planning, ~~return-on-investment (“ROI”) impact~~ of CSAT and NPS programs, analytics and customer experience related workshops; and

~~Market~~Insights ~~Research~~Solutions: program methodology consulting, survey programming and language translation, brand tracking program development and execution, product concept testing, due diligence analysis, and custom reporting and analytics.

Revenue from professional services engagements is generated primarily on a transactional basis.

•

Other Purpose-Built Solutions: In addition to our three major product categories, we offer other products such as:

Customer Advocacy: TechValidate is our ~~marketing~~customer ~~content~~advocacy automation solution. TechValidate collects customer feedback at scale, automatically converting it into validated marketing content, including statistics, charts, testimonials, and case studies. In 2023, we stopped developing new features for TechValidate and marketing TechValidate to new customers.

Grant Application Management: SurveyMonkey Apply is our application management solution that is primarily used by educational institutions and non-profits seeking to allocate scholarships and grants; and

Forms: Wufoo is our easy-to-use form builder that helps users create web and mobile forms, collect file uploads and receive online payments.

We offer certain tiers of our Survey and Market Research product categories on a self-serve basis through our website, and we offer a suite of enterprise-grade experience management solutions from all three primary product categories through our direct sales force. 24

We offer certain tiers of our Survey and Insights Solutions product categories on a self-serve basis through our website, and we offer a suite of enterprise-grade experience management solutions from all three primary product categories through our direct sales force.

As of December 31, 2022, we had over 14 million active users. As of March 31, 2023 and 2022, we had approximately 878,600 and 894,400 paying users, respectively, which we define as an individual customer of our survey platform or form-based application, a seat within a SurveyMonkey Enterprise deployment or a subscription to one of our purpose-built solutions. Of our paying users as of March 31, 2023 and 2022, we had approximately 13,200 and 13,700 customers, respectively, who purchased our software through our sales-assisted channel. Our average revenue per paying user (“ARPU”) was $546 and $535 for the three months ended March 31, 2023 and 2022, respectively. We calculate ARPU as revenue during a given period divided by the average number of paying users during that period. We calculate the average number of paying users by adding the number of paying users as of the end of the prior period to the number of paying users as of the end of the current period, and then dividing by two. For interim periods, we use annualized revenue which is calculated by dividing the revenue for the period by the number of days in that period and multiplying this value by 365 days.

As of March 31, 2023, over 90% of our trailing 12-month bookings were from organizational domain-based customers, which are customers who register with us using an email account with an organizational domain name, such as @momentive.ai, but excludes customers with email addresses hosted on widely used domains such as @gmail, @outlook or @yahoo. As of March 31, 2023, our dollar-based net retention rate for organizational domain-based customers was over 90%. We calculate bookings as the sum of the monthly and annual contract values for contracts sold during a period for our monthly and annual customers, respectively. We calculate organizational dollar-based net retention rate as of a period end by starting with the trailing 12 months of bookings from the cohort of all domain-based customers as of the 12 months prior to such period end (“Prior Period Bookings”). We then calculate the trailing 12 months of bookings from these same customers as of the current period end (“Current Period Bookings”). Current Period Bookings includes any upsells and is net of contraction or attrition, but excludes bookings from new domain-based customers in the current period. We then divide the total Current Period Bookings by the total Prior Period Bookings to arrive at the organizational dollar-based net retention rate.

As of December 31, 2021, we had over 17 million active users. As of September 30, 2022 and 2021, we had approximately 897,500 and 877,100 paying users, respectively, which we define as an individual customer of our survey platform or form-based application, a seat within a SurveyMonkey Enterprise deployment or a subscription to one of our purpose-built solutions. Of our paying users as of September 30, 2022 and 2021, we had approximately 15,400 and 10,500 customers, respectively, who purchased our software through our sales-assisted channel. Our average revenue per paying user (“ARPU”) was $533 and $539 for the three and nine months ended September 30, 2022, respectively, and $524 and $514 for the three and nine months ended September 30, 2021, respectively. We calculate ARPU as revenue during a given period divided by the average number of paying users during that period. We calculate the average number of paying users by adding the number of paying users as of the end of the prior period to the number of paying users as of the end of the current period, and then dividing by two. For interim periods, we use annualized revenue which is calculated by dividing the revenue for the period by the number of days in that period and multiplying this value by 365 days.

As of September 30, 2022, over 90% of our trailing 12-month bookings were from organizational domain-based customers, which are customers who register with us using an email account with an organizational domain name, such as @momentive.ai, but excludes customers with email addresses hosted on widely used domains such as @gmail, @outlook or @yahoo. As of September 30, 2022, our dollar-based net retention rate for organizational domain-based customers was over 95%. We calculate bookings as the sum of the monthly and annual contract values for contracts sold during a period for our monthly and annual customers, respectively. We calculate organizational dollar-based net retention rate as of a period end by starting with the trailing 12 months of bookings from the cohort of all domain-based customers as of the 12 months prior to such period end (“Prior Period Bookings”). We then calculate the trailing 12 months of bookings from these same customers as of the current period end (“Current Period Bookings”). Current Period Bookings includes any upsells and is net of contraction or attrition, but excludes bookings from new domain-based customers in the current period. We then divide the total Current Period Bookings by the total Prior Period Bookings to arrive at the organizational dollar-based net retention rate.

Key Business Metrics

We review a number of operating and financial metrics, including the following key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate our business plan and make strategic decisions. As our business continues to evolve, we may choose to report new or additional metrics that are more closely tied to key business drivers or stop reporting metrics that are no longer relevant.

Remaining Performance ~~Obligations~~Obligation

	As of September 30,
	As of March 31,
(in thousands)	~~2022~~2023		~~2021~~2022
Remaining performance obligations ("RPO")	$	244,493	$	222,553
Remaining performance obligation (“RPO”)	$	245,500	$	245,394

~~We define~~ RPO asis the amount of consideration allocated to unsatisfied performance obligations related to non-cancelable contracts, which include both the deferred revenue balance and amounts that will be invoiced and recognized as revenue in future periods, as of the end of the reporting period. For subscription products, we provide customers with the option of monthly, annual or multi-year contractual terms. In general, our customers elect annual contractual terms and we generally invoice 1 year in advance. Our contracts are generally non-cancelable and without refund rights. Billed contractual amounts are reported as deferred revenue in our condensed consolidated financial statements. Unbilled contractual amounts are part of RPO and are not included in our condensed consolidated financial statements.

RPO is intended to provide visibility into future revenue streams. Several factors may contribute to the fluctuation of RPO including timing and frequency of invoicing, number of multi-year non-cancelable contracts, and dollar amount of customer contracts ~~(including changes that we may see to customer contracts as a result of the COVID-19 pandemic)~~.

Non-GAAP Financial ~~Measure~~Measures

We believe that, in addition to our results determined in accordance with GAAP, non-GAAP measures, specifically free cash flow, aand non-GAAP ~~financial~~(loss) ~~measure~~income from operations, isare useful in evaluating our business, results of operations and financial condition. We use these non-GAAP measures to compare and evaluate our operating results across periods in order to manage our business, for purposes of determining executive and senior management incentive compensation, and for budgeting and developing our strategic operating plans. We believe that these non-GAAP measures provide useful information about our operating results, enhance the overall understanding of our past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by our management in evaluating our financial performance and for operational decision making, but they are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. Our definitions for free cash flow and non-GAAP (loss) income from operations used are provided below; however, a limitation of non-GAAP financial measures is that they do not have uniform definitions. Accordingly, our definitions below will likely differ from similarly titled non-GAAP measures used by other companies thereby limiting comparability.

Free cash flow

We define free cash flow as GAAP net cash provided by operating activities less purchases of property and equipment, and capitalized internal-use software. We consider free cash flow to be an important measure because it measures our liquidity after deducting capital expenditures for purchases of property and equipment and capitalized software development costs, which we believe provides a more accurate view of our cash generation and cash available to grow our business. We expect to generate positive free cash flow over the long term. Free cash flow has limitations as an analytical tool, and it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by or used in operating activities. Some of the limitations of free cash flow are that free cash flow does not reflect our future contractual commitments and may be calculated differently by other companies in our industry, limiting its usefulness as a comparative measure.

The following is a reconciliation of free cash flow to the most comparable GAAP measure, net cash provided by or used in operating activities:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2022			2021			2022			2021
Net cash provided by operating activities	$	1,901		$	16,747		$	651		$	60,308
Purchases of property and equipment		—			(65	)		(449	)		(387	)
Capitalized internal-use software		(1,724	)		(2,032	)		(6,679	)		(6,450	)
Free cash flow	$	177		$	14,650		$	(6,477	)	$	53,471


	Three Months Ended March 31,
(in thousands)	2023			2022
Net cash used in operating activities	$	(7,927	)	$	(4,900	)
Purchases of property and equipment		(15	)		(441	)
Capitalized internal-use software		(2,079	)		(2,565	)
Free cash flow	$	(10,021	)	$	(7,906	)

Free cash flow is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP.

27Non-GAAP (loss) income from operations

We define non-GAAP (loss) income from operations as GAAP loss from operations excluding stock-based compensation, net, amortization of acquisition intangible assets, acquisition-related transaction costs, and restructuring.

The following is a reconciliation of our GAAP loss from operations to non-GAAP (loss) income from operations:


	Three Months Ended March 31,
(in thousands)	2023			2022
GAAP loss from operations	$	(21,254	)	$	(35,069	)
Stock-based compensation, net		20,402			26,254
Acquisition-related transaction costs(1)		7,461			6,500
Restructuring(2)		7,197			2,077
Amortization of acquisition intangible assets		371			2,911
Non-GAAP income from operations	$	14,177		$	2,673

(1) Includes transaction expenses associated with the pending merger with an investor consortium led by STG during the three months ended March 31, 2023. See Note 1 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for additional information. Also includes transaction expenses associated with the terminated merger with Zendesk during the three months ended March 31, 2022.

(2) For the three months ended March 31, 2022, restructuring-related charges for stock-based compensation expense of $2.8 million and amortization of acquisition intangibles of $45,000 were included in the respective line items.

Components of Results of Operations

Revenue

We derive a ~~substantial~~ majority of our revenue from sales of subscriptions to our software products in the survey and customer experience categories. We also generate a small portion of our revenue from sales of insight/market research solutions.

We recognize subscription revenue ratably over the subscription term, generally ~~ranging from~~ one ~~month to one~~ year, as long as all other revenue recognition criteria have been met. Our contracts are generally non-cancellable and do not contain refund provisions. ~~Subscription~~Subscriptions ~~fees~~sold through our self-serve channel are collected primarily from credit cards through our website at the beginning of the subscription period. Subscriptions sold through our sales-assisted channel are generally billed annually in advance.

Cost of Revenue and Operating Expenses

We allocate shared costs, such as depreciation on equipment shared by all departments, facilities (including rent and utilities), employee benefit costs and information technology costs to all departments based on headcount. As such, allocated shared costs are reflected in each cost of revenue and operating expense category, other than restructuring.

Cost of Revenue. Our cost of revenue consists primarily of expenses associated with the delivery and distribution of our products to our users. These expenses generally consist of infrastructure costs, personnel costs and other related costs. Infrastructure costs generally include expenses related to website hosting costs, amortization of capitalized software, payment processing fees, external sample costs and charitable donations associated with SurveyMonkey Audience, our market research panel solution. Personnel costs include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses for employees whose primary responsibilities relate to supporting our infrastructure and delivering user support. Other related costs include amortization of acquired developed technology intangible assets and allocated overhead. We plan to continue investing in additional resources to enhance the capability and reliability of our infrastructure to support user growth and increased use of our products. We expect that cost of revenue will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue in the near term. We expect that cost of revenue will decrease as a percentage of revenue in the long term.

Audience, our market research panel solution. Personnel costs include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses for employees whose primary responsibilities relate to supporting our infrastructure and delivering user support. Other related costs include amortization of acquired developed technology intangible assets and allocated overhead. We plan to continue investing in additional resources to enhance the capability and reliability of our infrastructure to support user growth and increased use of our products. We expect that cost of revenue will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue in the near term. We expect that cost of revenue will decrease as a percentage of revenue in the long term.

Research and Development. Research and development expenses primarily include personnel costs, costs for third-party consultants, depreciation of equipment used in research and development activities and allocated overhead. Personnel costs for our research and development organization include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses. Our research and development efforts focus on maintaining and enhancing existing products and adding new products. Except for costs associated with the application development phase of internal-use software, research and development costs are expensed as incurred. We expect that research and development expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue in the near term. We expect that research and development expenses will remain relatively constant as a percentage of revenue in the long term.

Sales and Marketing. Sales and marketing expenses primarily include personnel costs, costs related to brand campaigns, paid marketing, amortization of acquired trade name and customer relationship intangible assets and allocated overhead. Personnel costs for our sales and marketing organization include salaries, bonuses, sales commissions, stock-based compensation, other employee benefits and travel-related expenses. Sales commissions earned by our sales personnel, including any related payroll taxes, that are considered to be incremental and recoverable costs of obtaining a customer contract are deferred and amortized over an estimated period of benefit of generally four years. We expect that sales and marketing expenses will increase in absolute dollars in future periods and increase as a percentage of revenue in the near term. We expect that sales and marketing expenses will vary from period to period in the long term.

General and Administrative. General and administrative expenses primarily include personnel costs for legal, finance, human resources and other administrative functions, as well as certain executives. Personnel costs for our general and administrative staff include salaries, bonuses, stock-based compensation, other employee benefits and travel-related expenses. In addition, general and administrative expenses include outside legal, accounting and other professional fees, non-income-based taxes and allocated overhead. We expect that general and administrative expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue in the near term. We expect that general and administrative expenses will decrease as a percentage of revenue in the long term.

in the near term. We expect that general and administrative expenses will decrease as a percentage of revenue in the long term.

Restructuring. Restructuring expenses primarily include personnel costs, other contract termination costs, and impairment of certain assets. Personnel costs include severance payments, stock-based compensation and other benefits. Other contract termination expenses related to restructuring include amortization of intangibles without future economic benefit, infrastructure write-offs and lease modifications associated with vacated facilities.

Interest Expense

Interest expense consists of interest on our credit facilities. For additional information regarding our credit facilities, see Note 12 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Other Non-Operating (Income) Expense, Net

Other non-operating (income) expense, net consists primarily of interest income, net foreign currency exchange gains and losses, ~~and~~net ~~other~~realized gains and losses related to investments, and other (income) expense.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business. We maintain a valuation allowance against deferred tax assets in the United States and certain foreign jurisdictions that we have determined are not realizable on a more likely than ~~not basis. For additional information regarding our income taxes, see Note 13 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.~~

not basis. For additional information regarding our income taxes, see Note 13 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

The following tables set forth our results of operations for the periods presented and as a percentage of our revenue for those periods. Percentages presented in the following tables may not sum due to rounding.

	Three Months Ended September 30,												Nine Months Ended September 30,
	Three Months Ended March 31,
(in thousands)	~~2022~~2023			% of Revenue			~~2021~~2022			% of Revenue			~~2022~~			~~% of Revenue~~			~~2021~~			~~% of Revenue~~
Revenue	$	~~121~~118,~~375~~821			100	%	$	~~114~~116,~~754~~986			100	%	$	~~358,524~~			~~100~~	%	$	~~326,444~~			~~100~~	%
Cost of revenue(1)(2)(3)		2120,~~256~~557			1817	%		22,~~161~~903			1920	%		~~66,650~~			19	%		~~64,621~~			20	%
Gross profit		~~100~~98,~~119~~264			8283	%		9294,~~593~~083			8180	%		~~291,874~~			81	%		~~261,823~~			80	%
Operating expenses:
Research and development(1)(3)		3532,~~074~~665			2927	%		3336,~~671~~716			2931	%		~~107,420~~			30	%		~~100,879~~			31	%
Sales and marketing (1)(2)(3)		5447,~~976~~919			4540	%		5459,~~118~~636			4751	%		~~175,910~~			49	%		~~162,179~~			50	%
General and administrative(1)(3)		2531,~~929~~737			2127	%		2427,~~466~~917			2124	%		~~83,383~~			23	%		~~71,958~~			22	%
Restructuring(1)(2)		~~422~~7,197			—6	%		—4,883			—4	%		~~1,982~~			1	%		—			—
Total operating expenses		~~116~~119,~~401~~518			96101	%		~~112~~129,~~255~~152			98110	%		~~368,695~~			~~103~~	%		~~335,016~~			~~103~~	%
Loss from operations		(1621,~~282~~254	)		(1318	)%		(1935,~~662~~069	)		(1730	)%		~~(76,821~~	)		~~(21~~	)%		~~(73,193~~	)		~~(22~~	)%
Interest expense		34,~~092~~148			3	%		2,~~337~~226			2	%		~~7,696~~			2	%		~~6,940~~			2	%
Other non-operating expense, net		685			1	%		543			—	%		614			—	%		739			—	%
Other non-operating income, net		(2,038	)		(2	)%		(134	)		—	%
Loss before income taxes		(2023,~~059~~364	)		(1720	)%		(2237,~~542~~161	)		(2032	)%		~~(85,131~~	)		~~(24~~	)%		~~(80,872~~	)		~~(25~~	)%
Provision for income taxes		~~271~~451			—	%		~~361~~216			—	%		~~1,127~~			—	%		~~915~~			—	%
Net loss	$	(2023,~~330~~815	)		(1720	)%	$	(2237,~~903~~377	)		(2032	)%	$	~~(86,258~~	)		~~(24~~	)%	$	~~(81,787~~	)		~~(25~~	)%

(1) Includes stock-based compensation, net of amounts capitalized as follows:


	Three Months Ended March 31,
(in thousands)	2023		% of Revenue			2022		% of Revenue
Cost of revenue	$	1,241		1	%	$	1,409		1	%
Research and development		7,734		7	%		8,644		7	%
Sales and marketing		4,075		3	%		6,065		5	%
General and administrative		7,352		6	%		7,375		6	%
Restructuring		—		—	%		2,761		2	%
Stock-based compensation, net of amounts capitalized	$	20,402		17	%	$	26,254		22	%

	Three Months Ended September 30,										Nine Months Ended September 30,
(in thousands)	2022		% of Revenue			2021		% of Revenue			2022		% of Revenue			2021		% of Revenue
Cost of revenue	$	1,580		1	%	$	1,639		1	%	$	4,613		1	%	$	4,701		1	%
Research and development		8,770		7	%		10,081		9	%		26,117		7	%		29,891		9	%
Sales and marketing		5,874		5	%		5,672		5	%		18,297		5	%		17,864		5	%
General and administrative		8,087		7	%		7,202		6	%		24,367		7	%		21,310		7	%
Restructuring		—		—	%		—		—	%		2,761		1	%		—		—	%
Stock-based compensation, net of amounts capitalized	$	24,311		20	%	$	24,594		21	%	$	76,155		21	%	$	73,766		23	%

(2) Includes amortization of acquisition intangible assets as follows:

	Three Months Ended September 30,										Nine Months Ended September 30,
	Three Months Ended March 31,
(in thousands)	~~2022~~2023		% of Revenue			~~2021~~2022		% of Revenue			~~2022~~		~~% of Revenue~~			~~2021~~		~~% of Revenue~~
Cost of revenue	$	~~328~~—		—	%	$	1,~~465~~414		1	%	$	~~2,234~~		1	%	$	~~4,432~~		1	%
Sales and marketing		~~459~~371		—	%		1,~~035~~452		1	%		~~2,546~~		1	%		~~3,285~~		1	%
Restructuring		~~135~~—		—	%		—45		—	%		~~315~~		—	%		—		—	%
Amortization of acquisition intangible assets	$	~~922~~371		1—	%	$	2,~~500~~911		2	%	$	~~5,095~~		1	%	$	~~7,717~~		2	%

(3) Includes transaction expenses associated with the ~~terminated~~pending merger with ~~Zendesk.~~an ~~See~~investor ~~Note~~consortium 1led ofby STG during the ~~Notes~~three tomonths ~~Condensed~~ended ~~Consolidated~~March ~~Financial~~31, ~~Statements~~2023 ~~included~~and ~~elsewhere~~with inthe ~~this~~terminated ~~Quarterly~~merger ~~Report~~with onZendesk ~~Form~~during ~~10-Q~~the ~~for~~three ~~additional~~months ~~information.~~ended March 31, 2022:

Comparison of the Three Months Ended September 30, 2022 and 2021


	Three Months Ended March 31,
(in thousands)	2023		% of Revenue			2022		% of Revenue
Cost of revenue	$	10		—	%	$	318		—	%
Research and development		47		—	%		1,770		2	%
Sales and marketing		23		—	%		1,679		1	%
General and administrative		7,381		6	%		2,733		2	%
Acquisition-related transaction costs	$	7,461		6	%	$	6,500		6	%

Comparison of the Three Months Ended March 31, 2023 and 2022

Revenue and cost of revenue

	Three Months Ended September 30,
	Three Months Ended March 31,
(dollars in thousands)	~~2022~~2023			~~2021~~2022			$ Change			% Change
Revenue	$	~~121~~118,~~375~~821		$	~~114~~116,~~754~~986		$	61,~~621~~835			62	%
Cost of revenue		2120,~~256~~557			22,~~161~~903			(~~905~~2,346	)		(410	)%
Gross profit	$	~~100~~98,~~119~~264		$	9294,~~593~~083		$	74,~~526~~181			84	%
Gross margin		8283	%		8180	%

Revenue increased for the three months ended ~~September~~March 3031, ~~2022~~2023 compared to the three months ended ~~September~~March 3031, ~~2021~~2022. Our ~~number~~ARPU ~~of paying users~~ increased 2% from ~~approximately~~$535 ~~877,100~~for asthe ofthree ~~September~~months 30ended March 31, ~~2021~~2022 to ~~approximately~~$546 ~~897,500~~for asthe ofthree ~~September~~months 30ended March 31, ~~2022~~2023, ~~and~~while ~~ARPU~~our ~~increased~~number of paying users slightly decreased 2% from ~~$524~~approximately ~~for~~894,400 ~~the~~as ~~three~~of ~~months~~March ~~ended September 30~~31, ~~2021~~2022 to ~~$533~~approximately ~~for~~878,600 ~~the~~as ~~three~~of ~~months~~March ~~ended September 30~~31, ~~2022~~2023.

Revenue growth was driven by an increase of $95.15 million, or 2413%, in our sales-assisted channel, as a result of the ongoing refinement of our pricing and packaging that has driven an increase in customer upgrades and expansion, which was slightly offset by a decrease of $23.57 million, or (3)5%), in our self-serve channel. Revenue from our sales-assisted channel accounted for 39% and 3335% of revenue for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively.

Cost of revenue decreased for the three months ended ~~September~~March 3031, ~~2022~~2023 compared to the three months ended ~~September~~March 3031, ~~2021~~2022, primarily due to a $2.21 million decrease in the amortization of capitalized software and intangible assets related to our prior acquisitions, ~~offset~~and by a $0.79 million ~~increase~~decrease in ~~web~~personnel ~~hosting~~ costs ~~and~~due ~~payment~~to ~~processing~~headcount ~~fees,~~reduction afrom ~~$0.4~~our ~~million~~restructuring ~~increase in personnel costs~~activities, ~~and~~offset by a $0.27 million increase in ~~external~~web ~~sample~~hosting costs and ~~charitable~~payment ~~donations~~processing ~~associated with SurveyMonkey Audience, our market research panel solution~~fees.

Our gross margin increased for the three months ended ~~September~~March 3031, ~~2022~~2023 as compared to the three months ended ~~September~~March 3031, ~~2021~~2022, ~~primarily~~ due to the slight increase in revenue, combined with the decrease in our cost of revenue.

Research and development

Three Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

~~2022~~2023

~~2021~~2022

$ Change

% Change

Research and development

3532,~~074~~665

3336,~~671~~716

1(4,~~403~~051

)

4(11

Research and development expenses ~~increased~~decreased for the three months ended ~~September~~March 3031, ~~2022~~2023 compared to the three months ended ~~September~~March 3031, ~~2021~~2022, primarily due to a $0.4.7 million ~~increase~~decrease in personnel related costs. Indue ~~addition,~~to ~~there~~headcount ~~were~~reduction ~~increases~~from inour ~~professional~~restructuring ~~services~~activities, IToffset ~~costs~~by ~~and~~a ~~capitalized~~decrease in software development costs ofthat ~~about~~qualified ~~$0.8~~for ~~million~~capitalization.

Sales and marketing

Three Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

~~2022~~2023

~~2021~~2022

$ Change

% Change

Sales and marketing

5447,~~976~~919

5459,~~118~~636

~~858~~(11,717

)

2(20

Sales and marketing expenses ~~increased~~decreased for the three months ended ~~September~~March 3031, ~~2022~~2023 compared to the three months ended ~~September~~March 3031, ~~2021~~2022, primarily due to a $19.42 million ~~increase~~decrease in personnel related costs, ~~which~~due ~~were~~to ~~partially~~headcount ~~offset~~reduction byfrom our restructuring activities, as well as a decrease of $1.1 million in ~~facility~~amortization ~~costs~~of intangible assets related to our prior acquisitions.

General and administrative

Three Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

~~2022~~2023

~~2021~~2022

$ Change

% Change

General and administrative

2531,~~929~~737

2427,~~466~~917

13,~~463~~820

614

~~General and administrative expenses increased for the three months ended September~~ 30~~, 2022 compared to the three months ended September 30, 2021, primarily due to a $1.7 million increase in personnel related costs, which were partially offset by a decrease in facility costs.~~

General and administrative expenses increased for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to a $4.6 million increase in transaction costs associated with the pending merger with STG compared to the terminated merger in the prior period, offset by a decrease in personnel related costs due to headcount reduction from our restructuring activities.

Restructuring

Three Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

~~2022~~2023

~~2021~~2022

$ Change

% Change

Restructuring

~~422~~7,197

—4,883

~~422~~2,314

~~100~~47

Restructuring expenses recorded for the three months ended ~~September~~March 3031, ~~2022~~2023 were primarily due to ~~the~~employee severance, employee benefits, and related facilitation costs as a result of our February 2023 restructuring plan. ~~implemented~~Restructuring inexpenses recorded for the three months ended March 31, 2022 were primarily due to employee severance, stock-based compensation expense, and contract termination costs as a result of our March 2022 restructuring plan. For additional information regarding our restructuring activities, see Note 15 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Interest expense

Three Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

~~2022~~2023

~~2021~~2022

$ Change

% Change

Interest expense

34,~~092~~148

2,~~337~~226

~~755~~1,922

3286

Interest expense increased for the three months ended ~~September~~March 3031, ~~2022~~2023 compared to the three months ended ~~September~~March 3031, ~~2021~~2022, primarily due to a significantly higher average interest rate offset by a decrease in average debt balances as a result of our repayment of principal under the Term Loan. For additional information regarding our credit facilities, see Note 12 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

31Other non-operating income, net

Other non-operating expense, net


	Three Months Ended March 31,
(dollars in thousands)	2023			2022			$ Change			% Change
Other non-operating income, net	$	(2,038	)	$	(134	)	$	(1,904	)		1421	%

	Three Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change		% Change
Other non-operating expense, net	$	685	$	543	$	142		26	%

Other non-operating income, net for the three months ended March 31, 2023 increased compared to the three months ended March 31, 2022, primarily due to an increase in interest income due to a higher average interest rate.

Other non-operating expense, net for the three months ended September 30, 2022 increased compared to the three months ended September 30, 2021, primarily due to fluctuations in foreign currency exchange rates, offset by an increase in interest income due to a higher average interest rate.

Provision for income taxes

	Three Months Ended September 30,
	Three Months Ended March 31,
(dollars in thousands)	~~2022~~2023			~~2021~~2022			$ Change			% Change
Provision for income taxes	$	~~271~~451		$	~~361~~216		$	~~(90~~235	)		~~(25~~109	)%
Effective tax rate		(12	)%		(21	)%

The provision for income taxes ~~decreased~~increased for the three months ended ~~September~~March 3031, ~~2022~~2023 compared to the three months ended ~~September~~March 3031, ~~2021~~2022, primarily due to an estimated increase in ~~foreign~~U.S. ~~research~~state ~~credits~~income taxes resulting from capitalization of certain expenses under Section 174.

~~Comparison of the Nine Months Ended September 30, 2022 and 2021~~31

Revenue and cost of revenue

	Nine Months Ended September 30,
(dollars in thousands)	2022			2021			$ Change		% Change
Revenue	$	358,524		$	326,444		$	32,080		10	%
Cost of revenue		66,650			64,621			2,029		3	%
Gross profit	$	291,874		$	261,823		$	30,051		11	%
Gross margin		81	%		80	%

Revenue increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Our number of paying users increased 2% from approximately 877,100 as of September 30, 2021 to approximately 897,500 as of September 30, 2022 and ARPU increased 5% from $514 for the nine months ended September 30, 2021 to $539 for the nine months ended September 30, 2022.

Revenue growth was driven by an increase of $2.8 million, or 1%, in our self-serve channel, as well as an increase of $29.3 million, or 29%, in our sales-assisted channel, a result of the ongoing refinement of our pricing and packaging that has driven an increase in customer upgrades and expansion. Revenue from our sales-assisted channel accounted for 37% and 31% of revenue for the nine months ended September 30, 2022 and 2021, respectively.

Cost of revenue increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to a $2.6 million increase in personnel costs, a $1.9 million increase in web hosting costs and payment processing fees, and a $1.2 million increase in external sample costs and charitable donations associated with SurveyMonkey Audience, our market research panel solution, which were offset by a $3.6 million decrease in the amortization of capitalized software and intangible assets related to our prior acquisitions. The increase in personnel costs was primarily due to $2.1 million increase in employee-related expenses due to headcount growth and $0.5 million of employee retention bonuses related to the Merger.

Our gross margin increased for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021 primarily due to the increase in revenue.

Research and development

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change		% Change
Research and development	$	107,420	$	100,879	$	6,541		6	%

Research and development expenses increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to a $4.9 million increase in personnel related costs, including a $1.9 million increase in employee-related expenses due to headcount growth and $3.0 million of employee retention bonuses related to the Merger. In addition, there were increases in professional services and IT costs.

Sales and marketing

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change		% Change
Sales and marketing	$	175,910	$	162,179	$	13,731		8	%

Sales and marketing expenses increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to a $12.4 million increase in personnel related costs and an increase of $3.9 million in costs related to brand campaigns and paid marketing, which were partially offset by a decrease in professional service cost related to the company rebranding in the prior year and a decrease in facility costs. The increase in personnel costs was primarily due to a $9.4 million increase in employee-related expenses due to headcount growth and $3.0 million of employee retention bonuses related to the Merger.

General and administrative

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change		% Change
General and administrative	$	83,383	$	71,958	$	11,425		16	%

General and administrative expenses increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to a $10.0 million increase in personnel related costs and a $2.9 million increase in office expense due to the reopening of our offices, which were partially offset by a $1.3 million decrease in depreciation expense due to the impairment of leasehold costs in the San Mateo, CA headquarters. The increase in personnel costs was primarily due to a $6.9 million increase in employee-related expenses due to headcount growth and $3.1 million of employee retention bonuses related to the Merger.

Restructuring

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change		% Change
Restructuring	$	1,982	$	—	$	1,982		100	%

Restructuring expenses recorded for the nine months ended September 30, 2022 were primarily due the restructuring plan implemented in March 2022. For additional information regarding our restructuring activities, see Note 15 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Interest expense

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change		% Change
Interest expense	$	7,696	$	6,940	$	756		11	%

Interest expense increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to a higher average interest rate offset by a decrease in average debt balances as a result of our repayment of principal under the Term Loan. For additional information regarding our credit facilities, see Note 12 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Other non-operating expense, net

	Nine Months Ended September 30,
(dollars in thousands)	2022		2021		$ Change			% Change
Other non-operating expense, net	$	614	$	739	$	(125	)		(17	)%

Other non-operating expense, net for the nine months ended September 30, 2022 decreased compared to the nine months ended September 30, 2021, primarily due to fluctuations in foreign currency exchange rates and an increase in interest income due to a higher average interest rate.

Provision for income taxes

	Nine Months Ended September 30,
(dollars in thousands)	2022			2021			$ Change		% Change
Provision for income taxes	$	1,127		$	915		$	212		23	%
Effective tax rate		(1	)%		(1	)%

The provision for income taxes increased for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to a change in the state blended tax rate on amortization of intangible assets.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, our principal sources of liquidity were cash and cash equivalents totaling $~~193~~199.1 million and $~~305~~202.58 million, respectively, all of which were bank deposits as well as cash to be received from customers and cash available under our credit facilities.

~~Since~~We ~~our inception, we~~ have historically financed our operations primarily through payments received from our customers, and borrowings under credit facilities and lines of credit~~, and our initial public offering in 2018~~.

On February 26, 2022, our board of directors authorized a ~~stock~~share repurchase program to repurchase up to $200.0 million of our common stock in the open market or in privately negotiated transactions (through 10b5-1 trading plans or otherwise). The ~~stock~~share repurchase program does not obligate us to acquire any particular amount of common stock and may be suspended at any time at our discretion, and the repurchase program does not have an expiration date. The actual timing, number and value of shares repurchased ~~will~~is be determined by our management at its discretion and ~~will~~depends ~~depend~~ on a number of factors, including the market price of our stock, general business and market conditions, and other investment opportunities. ~~During~~There were no share repurchases for the three months ended ~~September~~March 3031, ~~2022, we repurchased approximately 1~~2023.6 ~~million shares of common stock for approximately $15.0 million.~~ During the ~~nine~~three months ended ~~September~~March 3031, 2022, we repurchased approximately 62.64 million shares of common stock for approximately $8336.54 million. As of ~~September~~March 3031, ~~2022~~2023, our remaining share repurchase authorization was approximately $116.5 million.

OnWe ~~March~~believe 2,our ~~2022~~existing cash and cash equivalents, weour ~~repaid~~credit ~~$25~~facilities and cash provided by sales of our products will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.0 ~~million~~Our long-term future capital requirements will depend on many factors, including the timing and amount of ~~principal~~cash ~~under~~received from customers, the ~~Term~~timing ~~Loan~~and extent of spending to support research and development efforts, ~~which~~the ~~was~~expansion of sales and marketing activities, the introduction of new and enhanced product offerings and the continuing market adoption of our products. We may in ~~accordance~~the ~~with~~future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the ~~prepayment~~event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations. Ongoing worldwide business and economic disruptions could materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization, and capital investments. In the ~~2018~~event ~~Credit~~of ~~Facility~~a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.

WeA ~~believe~~significant majority of our ~~existing~~customers ~~cash~~pay ~~and~~in ~~cash~~advance ~~equivalents~~for annual subscriptions, ~~our~~which ~~credit~~is ~~facilities~~a ~~and~~substantial source of cash. ~~provided~~Deferred byrevenue ~~sales~~consists of ~~our~~the ~~products~~unearned ~~will~~portion beof ~~sufficient~~billed tofees ~~meet~~for our ~~working~~subscriptions, ~~capital~~which ~~and~~we ~~capital~~recognized ~~expenditure~~as ~~needs~~revenue ~~for~~in ataccordance ~~least~~with ~~the~~our ~~next~~revenue 12recognition ~~months~~policy. ~~Our~~As ~~future~~of ~~capital~~March ~~requirements~~31, ~~will~~2023 ~~depend~~and onDecember ~~many~~31, ~~factors~~2022, ~~including~~we ~~the~~had ~~timing~~deferred ~~and~~revenue ~~amount~~ of ~~cash~~$216.5 ~~received~~million ~~from~~and ~~customers~~$207.4 million, ~~the~~respectively, ~~timing~~a ~~and~~substantial ~~extent~~majority of ~~spending~~which we expect to ~~support~~record ~~research~~as ~~and~~revenue ~~development~~in ~~efforts~~the next 12 months, ~~the~~provided ~~expansion~~all ofother ~~sales~~revenue recognition criteria have been met.

34Under the terms of the Merger Agreement, we have agreed to various covenants and agreements, including, among others, agreements to conduct our business in the ordinary course during the period between the execution of the Merger Agreement and the Effective Time of the Merger or the valid termination of the Merger Agreement pursuant to its terms. Outside of certain limited exceptions, we may not take or agree to take certain actions without STG’s consent, including: acquiring businesses, entering into certain specified contracts, making capital expenditures in excess of those as set forth in a capital budget provided to STG in connection with the execution of the Merger Agreement or in excess of certain specified amounts, issuing additional capital stock or securities convertible into capital stock, or incurring additional indebtedness. We do not believe these restrictions will prevent us from meeting our ongoing operating expenses, working capital needs, or capital expenditure requirements.

and marketing activities, the introduction of new and enhanced product offerings and the continuing market adoption of our products. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations. Additionally, we believe that our financial resources will allow us to manage the potential impacts of COVID-19 on our business operations for the foreseeable future, which could include reductions in revenue and delays in payments from customers and partners. We will continue to assess our liquidity needs as the impact of the COVID-19 pandemic on the economy and our operations continues to evolve. Ongoing worldwide business and economic disruptions could materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization, and capital investments. In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.32

A significant majority of our customers pay in advance for annual subscriptions, which is a substantial source of cash. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which we recognized as revenue in accordance with our revenue recognition policy. As of September 30, 2022 and December 31, 2021, we had deferred revenue of $213.5 million and $201.8 million, respectively, a substantial majority of which we expect to record as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

	Nine Months Ended September 30,
	Three Months Ended March 31,
(in thousands)	~~2022~~2023			~~2021~~2022
Net cash provided by operating activities	$	651		$	60,308
Net cash used in operating activities	$	(7,927	)	$	(4,900	)
Net cash used in investing activities		(7,128	)		(6,752	)
Net cash provided by (used in) investing activities		4,659			(3,006	)
Net cash provided by (used in) financing activities		(104,559	)		23,557
Net cash used in financing activities		(550	)		(59,653	)
Effects of exchange rate changes on cash		~~(1,493~~213	)		~~(293~~393	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(112,529	)	$	76,820
Net decrease in cash, cash equivalents and restricted cash	$	(3,605	)	$	(67,166	)

Cash Flows from Operating Activities

Our largest source of operating cash is cash collections from our customers for subscriptions to our products. Our primary uses of cash in operating activities are for employee-related expenditures, marketing expenses and third-party hosting costs. Historically, we have generated positive cash flows from operating activities. Net cash provided by operating activities is impacted by our net loss adjusted for certain non-cash items, including depreciation and amortization expenses, stock-based compensation, non-cash lease expense, bad debt expense, deferred income taxes and other non-cash adjustments, as well as the effect of changes in operating assets and liabilities.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, cash ~~provided~~used byin operating activities was $0.7.9 million, primarily due to our net loss of $8623.38 million, adjusted for non-cash charges of $~~108~~28.49 million and net cash outflows of $2113.40 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization, stock-based compensation, non-cash lease expense, ~~gains on lease modifications, impairment of property and equipment,~~ bad debt expense, deferred income taxes and net unrealized foreign currency (gains) losses. The primary drivers of the changes in operating assets and liabilities ~~related~~are ~~to cash provided by~~ a $~~11.~~7 ~~million increase in deferred revenue, offset by a $12~~.31 million increase in prepaid expenses and other assets, a $15.90 million ~~increase in accounts receivable, a $4.1 million~~ decrease in accounts payable and accrued liabilities, a $48.73 million decrease in accrued compensation, and cash used for operating lease liabilities of $102.9 million, offset by cash inflows from a $9.0 million increase in deferred revenue and a $1.3 million decrease in accounts receivable.

During the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, cash ~~provided~~used byin operating activities was $604.39 million, primarily due to our net loss of $8137.84 million, adjusted for non-cash charges of $~~118~~40.24 million and net cash ~~inflows~~outflows of $237.9 million provided by changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization, stock-based compensation, non-cash lease expense, bad debt expense and deferred income taxes. The primary drivers of the changes in operating assets and liabilities are an increase in prepaid expenses and other assets of $8.2 million, a $6.9 million decrease in accrued compensation, a $2.3 million decrease in accounts payable and accrued liabilities, a $1.0 million increase in accounts receivable, and cash used for operating lease liabilities of $3.8 million, offset by cash inflows from a $14.3 million increase in deferred revenue.

income taxes and net unrealized foreign currency (gains) losses. The primary drivers of the changes in operating assets and liabilities related to cash provided by a $27.0 million increase in deferred revenue, a $13.6 million increase in accounts payable and accrued liabilities, and a $7.1 million increase in accrued compensation, partially offset by cash used for operating lease liabilities of $11.2 million, prepaid expenses and other assets of $9.9 million, and a $2.7 million increase in accounts receivable.

Cash Flows from Investing Activities

Our primary investing activities have consisted of capital expenditures to purchase equipment necessary to support our network and other operations and capitalization of internal-use software necessary to deliver significant new features and functionality in our survey platform which provides value to our customers. As our business ~~grows~~expands, we expect our capital expenditures to continue to increase.

Net cash ~~used~~provided inby investing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 of $74.17 million was primarily attributable to cash ~~used~~received ~~for~~from the ~~development~~sale of ~~internal-use~~a ~~software~~private company investment of $6.78 million, ~~that~~offset isby ~~capitalized~~cash ~~and~~used ~~purchases~~for ofthe ~~property~~development ~~and~~of ~~equipment~~internal-use software of $02.41 million that is capitalized.

Net cash used in investing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 of $63.80 million was primarily attributable to cash used for the development of internal-use software of $62.46 million that is capitalized and purchases of property and equipment of $0.4 million.

Cash Flows from Financing Activities

Net cash used in financing activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 of $~~104~~0.6 million was ~~primarily~~due ~~attributable~~ to ~~payments for share repurchases of $83.5 million and~~ principal payments made on our credit facilities ~~of $26~~.7 ~~million, partially offset by proceeds from the exercise of stock options of $2.8 million and shares purchased under our employee stock purchase plan of $2.8 million.~~

Net cash provided by financing activities during the nine months ended September 30, 2021 of $23.5 million was primarily attributable to proceeds from the exercise of stock options of $21.3 million and shares purchased under our employee stock purchase plan of $3.9 million, partially offset by the principal payments on our credit facilities of $1.7 million.33

Net cash provided by financing activities during the three months ended March 31, 2022 of $59.7 million was primarily attributable to payments for share repurchases of $36.4 million and principal payments made on our credit facilities of $25.6 million, partially offset by proceeds from the exercise of stock options of $2.3 million.

Contractual Obligations

Our material cash requirements and principal commitments consist of obligations under our credit facilities and leases for office space. As of ~~September~~March 3031, ~~2022~~2023, the future non-cancelable minimum payments under these commitments were as follows:

Payments Due by Period

(in thousands)

Total

Remainder of ~~2022~~2023

~~2023~~2024

~~2024~~2025

~~2025~~2026

~~2026~~2027

Thereafter

Credit facilities(1)

~~186~~185,~~200~~100

~~550~~1,650

2,200

2181,~~200~~250

~~181,250~~—

—

Interest payments on credit facilities(1)

3840,~~654~~639

312,~~269~~136

1216,~~873~~188

12,~~755~~315

~~9,757~~—

—

Operating leases(2)

6156,~~344~~127

28,~~813~~400

119,~~074~~753

9,~~579~~307

9,~~233~~516

9,~~505~~788

199,~~140~~363

Purchase commitments(3)

2422,~~367~~609

312,~~870~~531

158,~~844~~082

41,~~546~~946

6149

461

—

Total contractual obligations

~~310~~304,~~565~~475

1034,~~502~~717

4136,~~991~~223

29204,~~080~~818

~~200~~9,~~301~~565

9,~~551~~789

199,~~140~~363

(1)

Represents the principal balances and related interest payments to be paid in connection with our 2018 Credit Facility. Interest payments on our 2018 Credit Facility are based upon the applicable interest rates as of ~~September~~March 3031, ~~2022~~2023 and are subject to change in future periods. For additional information regarding our credit facilities, see Note 12 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

(2)

Primarily consists of future non-cancelable minimum rental payments under operating leases for our corporate headquarters and our other facilities. The amounts above exclude expected sublease payments to be received of approximately $21.67 million. For additional information regarding our operating lease obligations, see Note 10 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

(3)

Primarily consists of open non-cancellable purchase orders for data center hosting services and the procurement of goods and services in the ordinary course of business.

Off-Balance Sheet Arrangements

As of ~~September~~March 3031, ~~2022~~2023, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in accordance with GAAP. In the preparation of these condensed consolidated financial statements, we are required to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. To the extent that there are material differences between these judgements, estimates and actual results, our financial condition or results of operations would be affected. We base our judgements and estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting judgements and estimates of this type as critical accounting policies and estimates~~, which we discuss below~~. There have been no material changes to our critical accounting policies and estimates for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023, as compared to those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022.

Recent Accounting Pronouncements

See Note 2 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for discussion of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.

3734

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks include primarily interest rate, inflation and foreign currency exchange risks.

Foreign Currency Exchange Risk

Where the functional currency of our ~~foreign~~ subsidiaries is ~~generally~~ the U.S. dollar, monetary assets and liabilities are remeasured using foreign currency exchange rates at the end of the period, and non-monetary assets are remeasured based on historical exchange rates. Gains and losses due to foreign currency are the result of ~~either~~remeasurements ~~the remeasurement~~ of ~~subsidiary balances or~~ transactions denominated in ~~currencies other than the~~ foreign ~~subsidiaries’~~currencies ~~functional currency~~ and are included in other non-operating (income) expense, net in the condensed consolidated statements of operations.

Where the functional currency of our foreign subsidiaries is the local currency, the assets and liabilities of those foreign subsidiaries are translated from their respective functional currencies into U.S. dollars at the rates in effect at the balance sheet date and revenue and expense amounts are translated at a rate approximating the average exchange rate for the period. Foreign currency translation gains and losses are recorded to accumulated other comprehensive income (loss).

We have foreign currency exchange risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, principally the Euro, the British Pound Sterling, the Australian dollar, and the Canadian dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. We have experienced and will continue to experience fluctuations in foreign exchange gains (losses) related to changes in foreign currency exchange rates. In the event our foreign currency denominated assets, liabilities, sales or expenses increase, our operating results may be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business.

From time to time, we may enter into foreign currency derivative contracts to reduce the risk that our cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. ~~To date, we have not entered into any material derivative financial instruments.~~ During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, we did not have any material amount of derivative financial instruments. A hypothetical 10% change in foreign currency exchange rates for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 applicable to our business would not have had a material impact on our condensed consolidated financial statements.

Interest Rate Risk

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, we had cash and cash equivalents of $~~193~~199.1 million and $~~305~~202.58 million, respectively, which consisted primarily of bank deposits. Interest-earning instruments carry a degree of interest rate risk. However, our historical interest income has not fluctuated significantly. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023, a hypothetical 10% change in interest rates would not have had a material impact on our condensed consolidated financial statements.

As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, we had borrowings under our credit facilities comprising of $~~186~~185.21 million and $~~212~~185.97 million aggregate principal value, respectively. Loans under the credit facilities accrue interest based upon, atvariable ~~our~~rates ~~option,~~of ~~either at an ABR or a Eurocurrency rate~~interest, ~~in each case plus an applicable margin,~~ which exposes us to interest rate risk. Additionally, in March 2021, relevant regulators confirmed that the publication of the one-week and two-month U.S. dollar London Interbank Offered Rate (“LIBOR”) would cease after December 31, 2021, and all remaining U.S. dollar LIBOR tenors would cease after June 30, 2023. Our ~~credit~~future ~~facilities~~interest ~~provide~~obligations ~~that we~~ may ~~borrow~~increase atand ~~LIBOR~~adversely orimpact ~~LIBOR-successor benchmark-based rates of interest that vary depending on~~ our ~~credit~~results ~~ratings and prevailing market conventions. The planned phase out~~ of ~~LIBOR as a benchmark may also result in an increase on our future interest obligations~~operations. As of ~~September~~March 3031, ~~2022~~2023, a hypothetical 10% increase in the ~~ABR~~reference interest rates would result in an increase in future interest payments on our debt of $12.83 million.

38Inflation Risk

While the historical impact of inflation is difficult to accurately measure due to the imprecise nature of the estimates required, we do not believe the effects of inflation on our results of operations and financial condition have been material. However, there can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future, including by heightened levels of inflation currently experienced globally. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations or financial condition.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer ~~has~~have concluded that as of such date, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. In addition, our ability to maintain an effective internal control environment has not been impacted by ~~the~~our ~~COVID-19~~shift ~~pandemic.~~to Wea ~~continue~~hybrid towork ~~monitor~~model ~~the~~brought ~~impact~~about ofby the COVID-19 pandemic. onWe continue to monitor the design and operating effectiveness of our controls and, despite our employees working remotely, have not experienced any changes that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Disclosure Controls and Procedures

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

3936

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we are subject to legal proceedings, claims and litigation arising in the ordinary course of business, which may include, but are not limited to, patent and privacy matters, labor and employment claims, class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Periodically, we evaluate developments in our legal matters and record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss related to such matters, and our judgment may be incorrect.

We are party to lawsuits filed in connection with the Merger, and more may be filed. As of the date of this Quarterly Report on Form 10-Q, 5 complaints have been filed by purported Momentive stockholders, each of which seeks to enjoin the Merger and other relief. The complaints assert claims against certain defendants under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder for allegedly false and misleading statements in the proxy statement and against certain defendants under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such allegedly false and misleading statements. We believe the allegations in the complaints are without merit. See “Legal Matters” under “Commitments and Contingencies” in Note 11 of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. We will defend against the lawsuits filed, but might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on the business, results of operation or financial position of Momentive or the combined company, including through the possible diversion of our resources or distraction of key personnel.

Furthermore, one of the conditions to the completion of the Merger is that no injunction by any governmental body of competent jurisdiction will be in effect that prevents the consummation of the Merger. As such, if any of the plaintiffs are successful in obtaining an injunction preventing the consummation of the Merger, that injunction may prevent the Merger from becoming effective or from becoming effective within the expected timeframe.

There are currently no legal matters or claims that have arisen from the normal course of business that we believe would have a material impact on our financial position, results of operations or cash flows.

Future litigation may be necessary, among other things, to defend ourselves or our users by determining the scope, enforceability and validity of third-party proprietary rights or to establish our proprietary rights. The results of any litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our unaudited condensed consolidated financial statements and related notes, before making a decision to invest in our common stock. Our business, results of operations, financial condition or prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of the risks actually occur, our business, results of operations and financial condition could be adversely affected. In that event, the market price of our common stock could decline, and you could lose all or part of your investment. In addition, the ongoing impacts of COVID-19 and any worsening of the economic environment may exacerbate the risks described below, any of which could have a material impact on us. This situation is changing rapidly, and additional impacts may arise that we are not currently aware of.

Summary Risk Factors

The following summarizes the most material risks that make an investment in our securities risky or speculative. If any of the following risks occur or persist, our business, financial condition, results of operations and prospects could be materially harmed and the market price of our common stock could significantly decline:

Pending Merger with an investor consortium led by STG

•

The announcement and pendency of the pending Merger (as defined below) may have an adverse effect on our business, results of operations, and financial condition, whether or not the Merger is completed and our failure to complete the Merger could have an adverse effect on our business, results of operation, financial condition, and stock price;

•

as a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company. As a result, key employees may depart because of issues relating to such uncertainty or a desire not to remain with STG following the completion of the Merger;

•

the consummation of the Merger is contingent upon the satisfaction of a number of conditions, including stockholder and regulatory approvals, that may be outside of our or STG’s control and that we and STG may be unable to satisfy or obtain or which may delay the consummation of the Merger or result in the imposition of conditions that could reduce the anticipated benefits from the Merger or cause the parties to abandon the Merger;

•

while the Merger is pending, we are subject to business uncertainties and contractual restrictions that could harm our business relationships, results of operations, financial condition, and business;

•

the Merger Agreement contains provisions that could discourage or deter a potential competing acquirer that might be willing to pay more to effect a business combination with us;

•

litigation has arisen, and more could arise, in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management’s attention and otherwise materially harm our business;

Business and Operations

•

the COVID-19 pandemic has caused economic instability and global uncertainty, and the extent to which it will impact our business, financial condition and results of operations is uncertain and difficult to predict;

our financial results depend on our ability to attract and retain customers, convert unpaid users to customers, and develop and expand relationships with organizational customers;

•

our revenue growth rate has fluctuated in recent periods and may slow in the future;

•

our business depends on a strong and trusted brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our customer and user base, our market share and our ability to attract and retain employees;

•

as a substantial portion of our ~~sales~~revenue-generating efforts are increasingly targeted at winning sales-assisted customers, we may not succeed in building aan ~~significant~~efficient and effective salesforce or managing our sales channels effectively, our sales cycle has and may become lengthier and more expensive, we may encounter greater pricing pressure and our customers may be displeased with our support and services;

•

our inability to successfully retain our existing senior management and other key personnel or to attract and retain new qualified personnel could materially and adversely impact our ability to operate, develop or ~~grow~~manage our business;

•

40general global economic conditions (including the COVID-19 pandemic, Russia's invasion of Ukraine, inflationary pressures, rising interest rates, volatility in the global financial markets, and the impact of climate change) and our inability to compete successfully in our markets may materially and adversely affect demand for our products, services and solutions;

general global economic conditions (including Russia's invasion of Ukraine, inflationary pressures and the impact of climate change) and our inability to compete successfully in our markets may materially and adversely affect demand for our products, services and solutions;

Information Technology and Cybersecurity

•

we have experienced, and may in the future experience, interruptions in the performance of our network infrastructure, websites, other systems and those of third-party service providers, including server failures that temporarily impair or disable the performance of our websites due to a variety of factors, such as infrastructure changes, human or software errors, capacity constraints and denial of service or fraud or security attacks;

•

we are vulnerable to software bugs, computer viruses, break-ins, ransomware or phishing attacks, employee errors or malfeasance, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems, any of which could lead to ~~interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or confidential information;~~

interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or confidential information;

•

if we experienced a widespread security breach or other incident that impacted a significant number of our customers to whom we owe indemnity obligations, we could be subject to indemnity claims or other damages that exceed our insurance coverage;

•

the introduction of new products and solutions by competitors or the development of entirely new technologies to replace existing offerings could make our survey platform and other solutions obsolete or adversely affect our business;

•

a disruption in the continuous and reliable operation of our information technology systems and digital monitoring technologies may materially and adversely affect our operations and result in loss of revenue, data breaches, remediation costs, increased cybersecurity costs or non-compliance with certain laws and regulations, which may result in litigation or reputational damage;

Financial or Operating Results

•

we have substantial indebtedness and lease obligations, which reduce our capability to withstand adverse developments or business conditions;

•

we may have difficulty operating or integrating any acquired businesses, assets or product lines profitably due to our failure to manage the growth effectively, the interruption of, or delays in, the operation of our existing business or other factors within or beyond our control;

•

our international sales and operations may present additional risks, including, but not limited to, changes to trade protection measures, taxation policies or other laws and regulations, currency exchange rate fluctuations, restrictions on currency repatriation, labor disturbances and political instability;

•

we cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value and repurchases could increase the volatility of the trading price of our stock and will diminish our cash reserves;

Regulatory and Tax Compliance

•

there has been increased uncertainty around the legality of various mechanisms for personal data transfers from the European Union to the United States and other countries outside the European Union and if the mechanisms on which we rely for the transfer of data are found to be invalid or are modified or replaced, our business could be substantially and materially impacted;

•

any failure or perceived failure by us to comply with our privacy or data protection policies or legal obligations to customers, respondents, users or other third parties, or any compromise of security that results in the unauthorized disclosure, transfer or use of personal or other information, may result in governmental enforcement actions, litigation or public statements critical of us by consumer advocacy groups, competitors, the media or others and could cause our users to lose trust in our offerings; and

•

our inability to adequately protect our intellectual property from third‑party infringement, or claims that we are infringing on a third party’s intellectual property rights, may result in competitive harm, the expenditure of significant time and resources enforcing our rights or defending against such claims, or restrictions on our sale of products or services.

Risks Related to Our Pending Merger with an investor consortium led by STG

The announcement and pendency of the pending Merger may have an adverse effect on our business, results of operations, and financial condition, whether or not the Merger is completed and our failure to complete the Merger could have an adverse effect on our business, results of operation, financial condition, and stock price.

On March 14, 2023, we announced that we had entered into the Merger Agreement, by and among the Company, STG and Merger Sub. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a

wholly owned subsidiary of STG. Uncertainty about the effect of the Merger on our customers, employees, partners, and other parties may adversely affect our business, results of operations, and financial condition. In response to the announcement of the Merger, our existing or prospective clients and business partners may:

•

delay, defer, or cease purchasing our products, or additional seats or features from, or providing products or services to, us;

•

terminate their relationships with us;

•

delay or defer other decisions concerning us; or

•

seek to change the terms on which they do business with us.

Any such delays or changes to terms could materially harm our business. Losses of clients, business partners, employees or other important strategic relationships could have a material adverse effect on our business, results of operations, and financial condition. Such adverse effects could also be exacerbated by a delay in the completion of the Merger for any reason, including delays associated with obtaining requisite regulatory approvals or the approval of our stockholders.

If the Merger does not close, we may suffer other consequences that could adversely affect our business, results of operations, financial condition, and stock price, and our stockholders would be exposed to additional risks, including:

•

to the extent that the current market price of our common stock reflects an assumption that the Merger will be completed, the market price of our common stock could decrease if the Merger is not completed;

•

investor confidence in us could decline, stockholder litigation could be brought against us, we may be unable to retain key personnel, and our results of operations may be adversely impacted due to costs incurred in connection with the Merger;

•

any disruptions to our business resulting from the announcement and pendency of the Merger, including adverse changes in our relationships with customers, employees, partners, and other parties may continue or intensify in the event the Merger is not consummated or is significantly delayed;

•

the risks related to the diversion of attention of our management or employees during the pendency of the Merger; and

•

the requirement that we pay STG a termination fee of up to $52.0 million under certain circumstances that give rise to the termination of the Merger Agreement.

Even if successfully completed, there are certain risks to our stockholders from the Merger, including:

•

the amount of cash to be paid under the Merger Agreement is fixed and will not be adjusted for changes in our business, assets, liabilities, prospects, outlook, results of operations, or financial condition;

•

results or in the event of any change in the market price of, analyst estimates of, or projections relating to, our common stock;

•

receipt of the all-cash per share Merger consideration under the Merger Agreement is taxable to stockholders that are treated as U.S. holders for U.S. federal income tax purposes; and

•

our stockholders will forego the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent company.

As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company. As a result, key employees may depart because of issues relating to such uncertainty or a desire not to remain with STG following the completion of the Merger.

As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company, or decide that they do not want to continue their employment with the combined company. As a result, key employees may depart because of issues relating to such uncertainty or a desire not to remain with STG following the completion of the Merger. Losses of officers, key employees or other employees could materially harm our business, results of operations, and financial condition. Such adverse effects could also be exacerbated by a delay in the completion of the Merger for any reason, including delays associated with obtaining

requisite regulatory approvals or the approval of our stockholders. We may also experience challenges in hiring new employees during the pendency of the Merger, or if the Merger Agreement is terminated, which could harm our ability to grow our business, execute on our business plans or enhance our operations.

The consummation of the Merger is contingent upon the satisfaction of a number of conditions, including stockholder and regulatory approvals, that may be outside of our or STG’s control and that we and STG may be unable to satisfy or obtain or which may delay the consummation of the Merger or result in the imposition of conditions that could reduce the anticipated benefits from the Merger or cause the parties to abandon the Merger.

Consummation of the Merger is contingent upon the satisfaction of a number of conditions, some of which are beyond our and STG's control, including, among others:

•

the adoption of the Merger Agreement by the holders of a majority of outstanding shares of our common stock;

•

the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of certain other specified regulatory approvals; and

•

the absence of an order or law preventing the Merger.

Each party's obligation to complete the Merger is also subject to certain additional customary conditions, including:

•

subject to certain exceptions, the accuracy of the representations and warranties of the other party; and

•

performance in all material respects by the other party of its obligations under the Merger Agreement.

These conditions to the closing of the Merger may not be fulfilled in a timely manner or at all, and, accordingly, the Merger may not be completed. In addition, each of we and STG may terminate the Merger Agreement under certain specified circumstances, including but not limited to, (i) if the Merger is not consummated by 11:59 p.m. (California time) on September 13, 2023, (ii) a governmental authority of competent jurisdiction has issued a final non-appealable governmental order preventing, materially restraining or materially impairing the consummation of the Merger, or (iii) if the required approval of our stockholders is not obtained. STG may also terminate the Merger Agreement in certain additional limited circumstances, including if our board of directors changes its recommendation to our stockholders to vote in favor of the adoption of the Merger Agreement. If the Merger Agreement is terminated, we may be required to pay STG a termination fee of up to $52.0 million under certain circumstances.

We and STG may also be subject to lawsuits challenging the Merger, and adverse rulings in these lawsuits may delay or prevent the Merger from being completed or require us or STG to incur significant costs to defend or settle these lawsuits. Any delay in completing the Merger could cause us not to realize, or to be delayed in realizing, some or all of the benefits that we expect to achieve if the Merger is successfully completed within its expected time frame.

While the Merger is pending, we are subject to business uncertainties and contractual restrictions that could harm our business relationships, results of operations, financial condition, and business.

Pursuant to the terms of the Merger Agreement, we are subject to certain restrictions on the conduct of our business. These restrictions subject us to a variety of specified limitations, including limiting our ability, in certain cases, to enter into material contracts, acquire or dispose of assets, incur indebtedness, or incur capital expenditures, until the Merger becomes effective or the Merger Agreement is terminated. These restrictions may inhibit our ability to take actions that we may consider advantageous, and may limit our ability to respond to future business opportunities and industry developments that may arise. The pendency of the Merger has diverted, and may continue to divert, management’s attention and our resources from our ongoing business and operations. If any of these effects were to occur, it could materially and adversely impact our business, cash flow, financial condition, or results of operations, as well as the market price of our common stock and our perceived value, regardless of whether the Merger is completed. In addition, whether or not the Merger is completed, while the Merger Agreement is in effect we will continue to incur costs, fees, expenses and charges related to the Merger, which may adversely affect our financial condition.

The Merger Agreement contains provisions that could discourage or deter a potential competing acquirer that might be willing to pay more to effect a business combination with us.

We are not permitted to solicit proposals for certain alternative business combination transactions and, subject to certain exceptions, we are not permitted to engage in discussions or negotiations regarding an alternative business combination transaction. We are required to hold a meeting of our stockholders to vote on the adoption of the Merger Agreement. In addition, if we terminate the Merger Agreement, we may be required to pay a termination fee. Such restrictions could discourage or deter a third party that may be willing to pay more than STG for our outstanding common stock from considering or proposing such an acquisition of our company.

Litigation has arisen, and more could arise, in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management’s attention and otherwise materially harm our business.

As of the date of this Quarterly Report on Form 10-Q, 5 complaints have been filed by purported Momentive stockholders, each of which seeks to enjoin the Merger and other relief. The complaints assert claims against certain defendants under Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder for allegedly false and misleading statements in the proxy statement and against certain defendants under Section 20(a) of the Exchange Act for alleged “control person” liability with respect to such allegedly false and misleading statements. We believe the allegations in the complaints are without merit. See “Legal Matters” under “Commitments and Contingencies” in Note 11 of the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Regardless of the outcome of any litigation related to the Merger, such litigation may be time-consuming and expensive and may distract our management from running the day-to-day operations of our business. The litigation costs and diversion of management’s attention and resources to address the claims and counterclaims in any litigation related to the Merger may materially adversely affect our business, results of operations, prospects, and financial condition. If the Merger is not consummated for any reason, litigation could be filed in connection with the failure to consummate the Merger. Any litigation related to the Merger may result in negative publicity or an unfavorable impression of us, which could adversely affect the price of our common stock, impair our ability to recruit or retain employees, damage our relationships with our customers, suppliers, and other business partners, or otherwise materially harm our operations and financial performance.

Risks Related to Our Business and Operations

Our business depends on our ability to retain, upsell and cross-sell customers, and any decline in renewals, upsells or cross-sells could adversely affect our business, results of operations and financial condition.

Our business depends upon our ability to maintain and expand our relationships with our users. Customers can choose between monthly or annual subscriptions, and customers are not obligated to and may not renew their paid subscriptions after their existing plans expire. As a result, we cannot assure that customers will renew their paid plans utilizing the same tier of our products and solutions or upgrade to our premium products or solutions. Renewals of paid plans may decline or fluctuate because of several factors, such as dissatisfaction with our products, solutions or support, a user no longer having a need for our products or reducing IT spending, such as in response to current or future economic and global market uncertainties or downturns, or the perception that competitive products are better or less expensive options. As our customer base continues to grow, even if our customer retention rates remain the same on a percentage basis, the absolute number of customers we lose each month will increase. We must continually add new customers to replace customers whose accounts are closed and to grow our business beyond our current user base, which may involve significantly higher marketing expenses than we currently anticipate.

We invest in new features and improvements to our product functionality as well as targeted marketing campaigns to drive conversion of unpaid users to paying users. Individual users often bring us into their organization for business purposes, and from there we seek to establish an organizational relationship through the deployment of our enterprise solutions. As we scale within organizations, we seek to further grow the business relationship by cross-selling purpose-built solutions. If our customers do not renew or cancel their subscriptions, or if we fail to upsell our customers to higher tier individual subscriptions or to enterprise solutions, or if we fail to cross-sell additional products and services to our customers, our business, results of operations and financial condition may be harmed.

Additionally, many of our users initially register to use our free basic survey product. We strive to demonstrate the value of our products to our registered users, thereby encouraging them to convert to paying users through end-of-survey marketing. As of December 31, 2021, we had over 17 million active users, of which approximately 894,400 were paying users. The actual number of unique users may be lower than we report as one person could count as multiple, active users or paying users. For example, if an individual paying user also had a designated seat in a SurveyMonkey Enterprise deployment, we would count that person as two paying users. As a result, we may have fewer unique users that we may be able to convert, upsell or cross-sell. Our inability to determine the number of our unique users is a limitation in the data that we measure and may adversely affect our understanding of certain aspects of our business and make it more challenging to manage our business. Most of our active users never convert to a paying user, and if we are unable to convert free users to paying users, our business, results of operations and financial condition could suffer.

Our revenue growth rate has fluctuated in recent periods and may slow in the future.

We have a history of delivering revenue growth and positive cash flow from operations. However, our rates of revenue growth have fluctuated, and may slow in the future. Many factors may contribute to declines in our growth rates, including higher market penetration, increased competition, slowing demand for our survey platform, a failure by us to continue capitalizing on growth opportunities, the maturation of our business, and impacts resulting from general macroeconomic conditions or the COVID-19 pandemic, among others. It can be difficult to predict customer demand, especially as their priorities, resources and economic outlook change, along with other shifting market conditions. These shifts have occurred and may in the future occur more quickly than we anticipate. If we are unable to respond quickly to rapidly changing market conditions and shifts in customer behavior, our business and results of operation could be harmed, and the trading price of our common stock could be adversely affected. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. If our growth rates decline, investors’ perceptions of our business and the trading price of our common stock could be adversely affected.

end-of-survey marketing. As of December 31, 2022, we had over 14 million active users, of which approximately 887,400 were paying users. The actual number of unique users may be lower than we report as one person could count as multiple, active users or paying users. For example, if an individual paying user also had a designated seat in a SurveyMonkey Enterprise deployment, we would count that person as two paying users. As a result, we may have fewer unique users that we may be able to convert, upsell or cross-sell. Our inability to determine the number of our unique users is a limitation in the data that we measure and may adversely affect our understanding of certain aspects of our business and make it more challenging to manage our business. Most of our active users never convert to a paying user, and if we are unable to convert free users to paying users, our business, results of operations and financial condition could suffer.

Our revenue growth rate has fluctuated in recent periods and may slow in the future.

We have a history of delivering revenue growth and positive cash flow from operations. However, our rates of revenue growth have fluctuated, and may slow in the future. Many factors may contribute to declines in our growth rates, including higher market penetration, increased competition, slowing demand for our survey platform, a failure by us to continue capitalizing on growth opportunities, the maturation of our business, and impacts resulting from general macroeconomic conditions, including volatility in the global financial markets, or the COVID-19 pandemic, among others. It can be difficult to predict customer demand, especially as their priorities, resources and economic outlook change, along with other shifting market conditions. These shifts have occurred and may in the future occur more quickly than we anticipate. If we are unable to respond quickly to rapidly changing market conditions and shifts in customer behavior, our business and results of operation could be harmed, and the trading price of our common stock could be adversely affected. You should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future performance. If our growth rates decline, investors’ perceptions of our business and the trading price of our common stock could be adversely affected.

Our business depends on a strong and trusted brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our customer and user base, our market share and our ability to attract and retain employees.

We have developed a strong and trusted brand of “SurveyMonkey” that we believe has contributed significantly to the success of our business. In June 2021, we rebranded and changed our name from SVMK Inc. to Momentive Global Inc. We may not be able to maintain or benefit from name recognition or status under the “Momentive” brand as we did using the “SurveyMonkey” brand, as investors may not understand or appreciate our rebranding efforts. We believe that enhancing and maintaining awareness of all of our brands, including “Momentive” and “SurveyMonkey”, in a cost-effective manner is critical to our goal of achieving widespread acceptance of our existing and future products, attracting new customers and attracting and retaining top talent. Furthermore, we receive a high degree of media coverage around the world, and we believe that the importance of brand recognition will increase as competition in our industry increases. Successful promotion of our brands will depend largely on the effectiveness of our marketing and media partnership efforts and the effectiveness and affordability of our products for our target customer demographic. Such brand promotion activities may not yield increased revenue and, even if they do, any revenue increases may not offset the expenses we incur to promote our brand. Unfavorable publicity regarding, for example, our privacy or data protection practices, terms of service, service quality, the launch of “Momentive” as our parent brand, litigation, regulatory activity or the perception of inaccurate poll data from properly or improperly drafted surveys by third parties using our survey platform, the actions of our partners and customers or the actions of other companies that provide similar products and solutions to ours, could adversely affect our reputation, brand, the size and engagement of our user base and our ability to attract and retain users. If we fail to promote and maintain our brands successfully, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brands, we may lose our existing customers to our competitors or be unable to attract new customers or employees, which could harm our business, results of operations and financial condition.

As a substantial portion of our ~~sales~~revenue-generating efforts are increasingly targeted at winning sales-assisted customers, our sales cycle has and may become lengthier and more expensive, we may encounter greater pricing pressure and our customers may be displeased with our customer support, all of which could harm our business and results of operations.

As a substantial portion of our ~~sales~~revenue-generating efforts are increasingly targeted at prospective sales-assisted customers, we face greater costs, longer sales cycles and less predictability in the completion of some of our sales. In this market, the customer’s decision to use our products may be an enterprise-wide decision, in which case these types of sales require us to provide greater levels of customer education to familiarize these customers with the uses, features and benefits of our products and purpose-built solutions, as well as education regarding our security and governance practices and compliance with privacy and data protection laws and regulations, especially for those customers in more heavily-regulated industries. In addition, larger enterprises may demand more support services and features, which puts additional pressure on our support and success organizations to satisfy the increased support required for our customers. Further, as we continue to grow our operations and support our global user base, we need to be able to continue to provide efficient customer support that meets our customers’ needs globally at scale. As a result of these factors, these sales opportunities may require us to devote greater sales support and professional survey platform resources to paying users in order to familiarize these new customers with our value proposition, or require us to hire additional support personnel, which could increase our costs, lengthen our sales cycle and divert our own sales and professional services resources to a smaller number of larger customers, while potentially requiring us to delay revenue recognition on some of these transactions. These significant expenditures in time and money may not result in a sale. Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of our products and solutions to our customers. If a customer is not satisfied with the quality or interoperability of our products and solutions with their own IT environment, we could incur additional costs to address the situation, which could adversely affect our margins. Moreover, any customer dissatisfaction with our products and solutions, or a failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could damage our ability to encourage broader adoption of our products by that customer and generate positive recommendations to other potential users. In addition, any negative publicity resulting from such situations, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.

WeIn this market, the customer’s decision to use our products may ~~not~~be ~~succeed~~an enterprise-wide decision, in ~~building~~which acase ~~significant~~these types of sales require us to provide greater levels of customer education to familiarize these customers with the uses, features and ~~effective~~benefits ~~salesforce~~of our products and purpose-built solutions, as well as education regarding our security and governance practices and compliance with privacy and data protection laws and regulations, especially for those customers in more heavily-regulated industries. In addition, larger enterprises may demand more support services and features, which puts additional pressure on our support and success organizations to satisfy the increased support required for our customers. Further, as we continue to grow our operations and support our global user base, we need to be able to continue to provide efficient customer support that meets our customers’ needs globally at scale. As a result of these factors, these sales opportunities may ~~fail~~require us to ~~manage~~devote greater sales support and professional survey platform resources to paying users in order to familiarize these new customers with our value proposition, or require us to hire additional support personnel, which could increase our costs, further lengthen our sales ~~channels~~cycle ~~effectively~~and divert our own sales and professional services resources to a smaller number of larger customers, while potentially requiring us to delay revenue recognition on some of these transactions. These significant expenditures in time and money may not result in a sale. If a customer is not satisfied with the quality or interoperability of our products and solutions with their own IT environment, we could incur additional costs to address the situation, which could adversely affect our margins. Moreover, any customer dissatisfaction with our products and solutions, or a failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could damage our ability to encourage broader adoption of our products by that customer and generate positive recommendations to other potential users. In addition, any negative publicity resulting from such situations, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current and prospective customers.

~~While~~We amay ~~growing~~not ~~portion~~succeed ~~of our revenue~~ in ~~recent periods has been derived from our sales efforts, we are investing in~~ building ~~and~~an ~~developing~~efficient ~~a larger~~ and ~~more~~effective ~~robust~~ salesforce, ~~particularly~~and ~~internationally where our brand is less well known, but~~ we may ~~not~~fail ~~be as successful as we anticipate. Our limited experience selling directly~~ to ~~small, medium and large organizations through our salesforce may impede our future growth. Further, our ability to~~ manage a larger direct salesforce is uncertain. Identifying and recruiting additional qualified sales personnel and training them requires significant time, expense and attention. In addition, many organizations undertake a significant evaluation and negotiation process, which can lengthen our sales ~~cycle,~~channels ~~and some organizations demand more specialized features on our survey platform~~effectively. We may spend substantial time, effort and money on sales efforts without any assurance that our efforts will produce any sales. As a result, our sales efforts may lead to greater unpredictability in our business, results of operations and financial condition.

While a growing portion of our revenue in recent periods has been derived from our sales efforts, we are investing in strategically developing an efficient, effective and robust salesforce, particularly internationally where our brand is less well known, but we may not be as successful as we anticipate. Our limited experience selling directly to small, medium and large organizations through our salesforce may impede our future growth. Further, our ability to manage a larger direct salesforce is uncertain and we have faced challenges, including reducing the size and adjusting the composition of our sales team in 2022. Identifying and recruiting additional qualified sales personnel and training them requires significant time, expense and attention. In addition, many organizations undertake a significant evaluation and negotiation process, which can lengthen our sales cycle, and some organizations demand more specialized features on our survey platform. We may spend substantial time, effort and money on sales efforts without any assurance that our efforts will produce any sales. As a result, our sales efforts may lead to greater unpredictability in our business, results of operations and financial condition.

Additionally, we have global partners who broaden the scope of our market research solutions by providing access to additional panelists around the world. Our partners are generally in nonexclusive agreements with us, are not subject to minimum obligations and may be terminated at any time without cause. If we fail to manage our sales efforts successfully or they otherwise fail to perform as we anticipate, it could reduce our sales and increase our expenses, as well as weaken our competitive position.

Our industry is intensely competitive, and competitors may succeed in reducing our sales.

Our products face intense competition from many different companies, including but not limited to:

•

Qualtrics, Alchemer (formerly SurveyGizmo), Typeform, Google and Microsoft in Surveys;

•

Medallia, InMoment, Qualtrics and Salesforce Surveys in Customer Experience; and

•

Nielsen, Kantar, Qualtrics and YouGov in ~~Market~~Insights ~~Research~~Solutions.

These competitors vary in size, and many have significantly greater financial, marketing and product development resources than we have, larger sales and marketing budgets and resources, broader distribution or established relationships or lower labor and research and development costs. We also compete with offline methods of information collection, such as pen-and-paper surveys, telephone surveys, forms and applications and less-automated methods such as email. Our competitors may devote greater resources and time on developing and testing products and solutions, undertake more extensive marketing campaigns and partnerships, adopt more aggressive pricing policies or otherwise develop more commercially successful products and solutions than we do. Our competitors may have preexisting relationships which required significant upfront investment by the customer, and these customers may prefer to continue existing and established relationships rather than adopt our survey platform. We cannot assure that we will be able to increase or maintain the large user base that we currently enjoy.

Our competitors may have preexisting relationships which required significant upfront investment by the customer, and these customers may prefer to continue existing and established relationships rather than adopt our survey platform. We cannot assure that we will be able to increase or maintain the large user base that we currently enjoy.

There are relatively low barriers to entry into our business. As a result, we are likely to face additional and intense competition from new entrants into the market in the future. There can be no assurance that existing or future competitors will not develop or offer products that provide significant performance, price, speed, creative or other advantages over those offered by us, and this could have an adverse effect on our business. We also operate in a highly fragmented market, and consolidation of our competitors or customers may also adversely affect our business. In addition, historically, our business has enjoyed relatively high margins and growth, which may attract new competition into our markets, including competition from companies employing alternate business models. Loss of existing or future market share to current or new competitors and increased price competition could substantially harm our business, results of operations and financial condition.

Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture and our business may be harmed.

We have worked to develop a strong culture around our team, which is built on four key pillars of celebrating curiosity, maintaining a diverse, collaborative and inclusive work environment, seeking to positively influence our industry and community, and delivering value to our customers. We believe that our culture has been and will continue to be a critical contributor to our success. We expect to continue to hire strategically as weneeded ~~expand~~in alignment with our business strategy, and we believe our corporate culture has been crucial in our success and our ability to attract highly skilled personnel. If we do not continue to develop our corporate culture or maintain and preserve our core values as we grow and evolve both in the United States and internationally, we may be unable to foster the innovation, curiosity, creativity, focus on execution, teamwork and the facilitation of critical knowledge transfer and knowledge sharing we believe we need to support our growth. Preservation of our corporate culture is also made more difficult due to restructuring initiatives we have executed that have resulted in changes throughout our business, including the implementation of the workforce reduction from restructuring plans, and due to our shift to a hybrid work model, where most of our employees have the flexibility to determine the amount of time they work from home or in our offices, each of which may present operational challenges and risks, including negative employee morale and productivity, failure to attract and retain qualified employees, and increased compliance and tax obligations in a number of jurisdictions. If we fail to manage our anticipated growth or restructuring initiatives in a manner that preserves the key aspects of our corporate culture, our employee retention may suffer, which could harm our business.

44We depend on our talent to develop, manage and operate our business, and if we are unable to hire, integrate, develop, motivate and retain our personnel, we may not be able to manage our business effectively.

~~execution~~Our future success depends, ~~teamwork~~in ~~and~~part, ~~the~~on ~~facilitation~~our ofability ~~critical~~to ~~knowledge~~identify, ~~transfer~~hire, integrate, develop, motivate and ~~knowledge~~retain ~~sharing~~top wetalent, ~~believe~~including wesenior ~~need~~management, toengineers, ~~support~~designers, ~~our~~product ~~growth~~managers, sales representatives and customer support representatives. ~~Preservation~~Our ability to execute efficiently is dependent upon contributions from all of our ~~corporate~~employees, ~~culture~~in isparticular ~~also~~our ~~made~~senior ~~more~~management ~~difficult~~team. ~~due~~As our business continues to ~~restructuring~~develop ~~initiatives~~and evolve, we ~~have~~cannot ~~executed~~guarantee ~~that~~we ~~have~~will ~~resulted~~continue into ~~changes~~attract ~~throughout~~new ~~our~~employees ~~business,~~or ~~including~~retain the ~~implementation~~personnel ofwe ~~the~~need ~~workforce~~to ~~reduction~~maintain ~~from~~our ~~restructuring~~competitive ~~plans~~position, and ~~due~~this risk may be exacerbated by factors related to restructuring initiatives, the volatility of our ~~shift~~stock toprice aand ~~hybrid~~increased ~~work~~recruiting ~~model~~efforts by other companies. Competition for these resources, ~~where~~particularly ~~most~~for engineers, is intense. We may need to invest significant amounts of ~~our~~cash and equity for new and existing employees and have ~~the~~invested ~~flexibility~~heavily in our facilities to ~~determine~~accommodate ~~the~~our ~~amount~~employees, ofand ~~time~~we ~~they~~may ~~work~~never ~~from~~realize ~~home~~returns oron inthese investments. In addition, our ~~offices~~restructuring initiatives, ~~each~~including the implementation of ~~which~~the ~~may~~workforce ~~present~~reduction ~~operational~~from ~~challenges~~restructuring plans, and ~~risks~~any future restructuring initiatives could have an adverse effect on our business, including negative employee morale and ~~productivity,~~the failure to ~~attract~~meet operational targets due to the loss of employees. If we are not able to effectively increase and retain ~~qualified~~our ~~employees~~talent, ~~and~~our ~~increased~~ability ~~compliance~~to ~~and~~achieve ~~tax~~our ~~obligations~~strategic inobjectives awill ~~number~~be ofadversely ~~jurisdictions~~impacted, and our business will be harmed. IfEmployees wemay ~~fail~~be more likely to ~~manage~~resign ~~our~~if ~~anticipated~~the ~~growth~~shares they own or ~~restructuring~~the ~~initiatives~~shares inunderlying atheir ~~manner~~equity ~~that~~incentive ~~preserves~~awards ~~the~~have ~~key~~significantly ~~aspects~~appreciated ofor ~~our~~significantly ~~corporate~~reduced ~~culture~~in value, or the trading price of our ~~employee~~common ~~retention~~stock ~~may~~continues ~~suffer~~to be volatile, ~~which~~including ~~could~~the ~~harm~~recent volatility in our ~~business~~trading price.

WeIn ~~depend~~addition, our future also depends on the continued contributions of our ~~talent~~senior tomanagement ~~grow~~team and ~~operate~~other ~~our~~key ~~business~~personnel, ~~and~~each ifof wewhom ~~are~~would ~~unable~~be difficult to ~~hire,~~replace. ~~integrate,~~The ~~develop,~~loss ~~motivate~~of ~~and~~one ~~retain~~or ~~our~~more ~~personnel,~~of weour ~~may~~key ~~not~~employees, beand ~~able~~any tofailure ~~grow effectively.~~

Our future success depends, in part, on our ability to identify, hire, integrate, develop, motivate and retain top talent, including senior management, engineers, designers, product managers, sales representatives and customer support representatives. Our ability to execute efficiently is dependent upon contributions from all of our employees, in particular our senior management team. As we continue to grow, we cannot guarantee we will continue to attract new employees or retain the personnel we need to maintain our competitive position, and this risk may be exacerbated by factors related to restructuring initiatives, the volatility of our stock price and increased recruiting efforts by other companies. Competition for these resources, particularly for engineers, is intense. We may need to invest significant amounts of cash and equity for new and existing employees and have invested heavily in our facilities to accommodate our employees, and we may never realize returns on these investments. In addition, our restructuring initiatives, including the implementation of the workforce reduction from restructuring plans, and any future restructuring initiatives could have an adverse effect on our business, including negative employee morale and the failure to meet operational targets due to the loss of employees. If we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed. Employees may be more likely to resign if the shares they own or the shares underlying their equity incentive awards have significantly appreciated or significantly reduced in value, or the trading price of our common stock continues to be volatile, including the recent volatility in our trading price.45

~~In addition, our future also depends on the continued contributions of our senior management team and other key personnel, each of whom would be difficult~~ to ~~replace. The loss of one or more of our key employees, and any failure to~~ have in place and execute an effective succession plan for key executives, or to find a suitable replacement for key executives on a timely basis, on competitive terms, or at all, could seriously harm our business. Although we have entered into employment agreements or offer letters with our key employees, these agreements have no specific duration and constitute at-will employment, and we do not maintain key person life insurance for any employee. In addition, from time to time, there may be changes in our senior management team, including through restructuring initiatives, that may be disruptive to our business. If our senior management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business, results of operations and financial condition could be harmed.

Risks Related to Information Technology and Cybersecurity

Any significant disruption in service or security on our websites or in our systems could result in a loss of users, damage to our reputation and harm to our business.

Our brand, reputation and ability to attract and retain users and customers depend in part upon the reliable performance of our network infrastructure, websites, other systems and those of third-party service providers. We have experienced, and may in the future experience, interruptions in these systems, including server failures that temporarily impair or disable the performance of our websites due to a variety of factors, such as infrastructure changes, human or software errors, capacity constraints and denial of service or fraud or security attacks. In some instances, we may not be able to rectify or even identify the cause or causes of these site performance problems within an acceptable period of time. As our solutions become more complex and our user traffic increases, we expect that it will become increasingly challenging to maintain and improve the performance of our products and solutions, especially during peak usage times. If our products are unavailable to users or fail to function as quickly as users expect, it could result in reduced customer satisfaction and reduced attractiveness of our products to customers. This in turn could lead to decreased sales to new customers, harm our ability to retain existing customers and the issuance of service credits or refunds, any of which could hurt our business, results of operations and financial condition.

This in turn could lead to decreased sales to new customers, harm our ability to retain existing customers and the issuance of service credits or refunds, any of which could hurt our business, results of operations and financial condition.

We expect to continue to make significant investments to build new products and enhance the features and functionality of our existing products and solutions. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed. Further, even if we are able to upgrade our systems, any such expansion will be expensive and complex, requiring management time and attention. Additionally, problems with the reliability or security of our systems, including unauthorized access to, or improper use of, the information of our users, could result in the loss of intellectual property, the introduction of malicious code to our applications, or harm to our reputation and negatively affect our business. Affected users could also initiate legal or regulatory action against us in connection with such incidents, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices.

We may not timely and effectively scale and adapt our existing technology and network infrastructure to rapid technological changes, enhance our existing products and solutions or develop new products.

The industry in which we compete is characterized by rapid technological change and frequent introductions of new products and solutions, as well as changing customer needs, requirements and preferences. Our ability to grow our user base and increase revenue from existing customers will depend heavily on our ability to enhance the features and functionality of our products and solutions, introduce new products and solutions, anticipate and respond effectively to these changes on a timely basis and interoperate across an increasing range of devices, operating systems and third-party applications. The success of our products depends on our continued investment in our research and development organization to increase the accessibility, ease-of-use and interoperability of our existing solutions and the development of features and functionality that users may require.

The introduction of new products and solutions by competitors or the development of entirely new technologies to replace existing offerings could make our survey platform and other solutions obsolete or adversely affect our business, results of operations and financial condition. We may experience difficulties with software development, design or marketing that could delay or prevent our development, introduction or implementation of our product experiences, features or capabilities. We have in the past experienced delays in our internally planned release dates of new features and capabilities, and we cannot assure you that new product experiences, features or capabilities will be released according to schedule. If users do not widely adopt our survey platform or purchase our products and services, we may not be able to realize a return on our investment. If we do not accurately anticipate user demand or we are unable to develop, license or acquire new features and capabilities on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, it could result in adverse publicity, loss of revenue or market acceptance or claims by users brought against us, each of which could have a material and adverse effect on our reputation, business, results of operations and financial condition.

If our security measures are compromised, or if our websites are subject to attacks that degrade or deny the ability of users and respondents to access our products, or if our customer or respondent data are compromised, users may curtail or stop use of our survey platform.

Our products collect, process, store, share, disclose and use customers’ and respondents’ information and communications, some of which may be private. We also work with third-party vendors to process credit card payments by our customers and are thus subject to payment card association operating rules, and rely on the availability and certain security measures of our third-party payment processors. We also process and retain sensitive information and other data relating to our business, such as employees’ personal information and our confidential information. We anticipate continuing to expend significant amounts in an effort to reduce the risk of security breaches and other security incidents. We are vulnerable to software bugs, computer viruses, break-ins, ransomware or phishing attacks, employee errors or malfeasance, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems, any of which could lead to interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or confidential information. It is virtually impossible for us to entirely mitigate the risk of breaches of our survey platform or other security incidents affecting our products, internal systems, networks or

~~data. In addition~~experiences, ~~the~~features ~~functionality of our products may be disrupted by third parties, including disgruntled employees, former employees~~ or ~~contractors~~capabilities. ~~The~~We ~~security~~have ~~measures~~in wethe ~~use~~past ~~internally,~~experienced ~~and~~delays ~~have~~in ~~integrated into~~ our ~~products,~~internally ~~which~~planned ~~are~~release ~~designed~~dates toof ~~detect~~new ~~unauthorized~~features ~~activity~~ and ~~prevent or minimize security breaches~~capabilities, ~~may~~and ~~not~~we ~~function~~cannot asassure ~~expected~~you orthat ~~may~~new ~~not~~product ~~be sufficient to protect against certain attacks. Additionally~~experiences, wefeatures ~~may~~or ~~face~~capabilities ~~delays~~will inbe ~~identifying~~released oraccording ~~responding~~ to ~~security breaches or other security incidents~~schedule. ~~With~~If ~~the~~users ~~increase~~do innot ~~personnel~~widely ~~working~~adopt ~~remotely during the COVID-19 pandemic, we and~~ our ~~service~~survey ~~providers~~platform ~~are~~or atpurchase ~~increased risk for security breaches. We are taking steps to monitor and enhance the security of~~ our ~~platform,~~products ~~systems, IT infrastructure, networks,~~ and ~~data; however~~services, ~~the~~we ~~unprecedented scale of remote work~~ may ~~require~~not ~~additional personnel and resources, which nevertheless cannot~~ be ~~guaranteed~~able to ~~fully~~realize ~~safeguard~~a ~~our~~return ~~platform~~on orour ~~any systems, IT infrastructure, networks, or data upon which we rely~~investment. If we ordo ~~any~~not ofaccurately ~~our~~anticipate ~~vendors~~user ~~experience~~demand or we are ~~believed~~unable to ~~have~~develop, ~~experienced~~license ~~any~~or ~~compromises~~acquire tonew ~~security~~features ~~that~~and ~~result~~capabilities inon ~~site~~a ~~performance~~timely orand ~~availability~~cost-effective ~~problems~~basis, ~~the complete shutdown of our websites~~ or ~~the~~if ~~actual~~such orenhancements ~~perceived~~do ~~loss~~not orachieve ~~unauthorized~~market ~~disclosure or use of confidential information~~acceptance, ~~such~~it ascould ~~credit~~result ~~card~~in ~~information,~~adverse ~~personal health information~~publicity, ~~trade~~loss ~~secrets~~of revenue or ~~other~~market ~~proprietary~~acceptance ~~information,~~or ~~our~~claims by users ~~may~~brought beagainst ~~harmed~~us, oreach ~~lose~~of ~~trust~~which ~~and~~could ~~confidence~~have ina usmaterial and ~~choose~~adverse toeffect ~~decrease~~on ~~the use of~~ our ~~products~~reputation, ~~which~~business, ~~would~~results ~~cause~~of usoperations ~~to suffer reputational~~ and financial ~~harm~~condition.

AnIf ~~increasing~~our number of organizations, including large online and off-line merchants and businesses, other large Internet companies, financial institutions, and government institutions, have disclosed breaches of their information security ~~systems~~measures ~~and~~are ~~other information security incidents~~compromised, ~~some~~or ofif ~~which have involved sophisticated and highly targeted attacks. In addition, these incidents can originate on~~ our ~~vendors’~~ websites, ~~which~~are ~~can~~subject ~~then be leveraged~~ to ~~access~~attacks ~~our~~that ~~website,~~degrade ~~further~~or ~~preventing~~deny ~~our~~the ability toof ~~successfully~~users ~~identify~~ and ~~mitigate~~respondents the attack. For example, in December 2021, the Apache Software Foundation publicly disclosed a remote code execution vulnerability in its Log4j2 product, an open-source component widely used in Java-based software applications to ~~log~~access ~~and~~our ~~track error messages~~products, ~~that resulted in potential opportunities for unauthorized disclosure~~ or ~~use~~if ~~of personally identifiable or confidential information, installation of malware, or unauthorized control of the target's system. To date, we have not detected any successful exploit attempts on~~ our ~~systems,~~customer ~~and this incident has not resulted in a material loss of revenue~~ or ~~the~~respondent ~~incurrence~~data ~~of material expenses. We~~ are ~~actively monitoring the situation and have established an inventory of all applications and systems running Log4j~~compromised, ~~and~~users ~~patched,~~may ~~upgraded,~~curtail or ~~configured~~stop ~~them~~use to prevent and detect any malicious activity related to the vulnerability. We are also working closely with third parties and vendors to ensure that they are addressing this vulnerability. We cannot assure you that all potential causes of the incident have been identified and remediated and we expect the risk of additional vulnerabilities and potential attacks to continue given the complexity and widespread nature of the incident. While we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot assure you that our ~~insurance~~survey ~~will be adequate to cover costs and liabilities related to this incident~~platform.

InOur ~~addition~~products collect, weprocess, store, share, disclose and use customers’ and respondents’ information and communications, some of which may be ~~subject~~private. We also work with third-party vendors to ~~regulatory~~process ~~investigations~~credit orcard ~~litigation~~payments inby ~~connection~~our ~~with~~customers aand ~~security~~are ~~breach~~thus orsubject ~~related~~to ~~issues~~payment card association operating rules, and werely ~~could~~on ~~also~~the beavailability ~~liable~~and tocertain ~~third~~security ~~parties~~measures ~~for~~of ~~these~~our ~~types~~third-party ofpayment ~~breaches~~processors. ~~Such~~We ~~litigation~~also process and retain sensitive information and other data relating to our business, ~~regulatory~~such ~~investigations~~as employees’ personal information and our ~~technical~~confidential ~~activities~~information. ~~intended~~We anticipate continuing to ~~prevent~~expend ~~future~~significant ~~security~~amounts ~~breaches~~in ~~are~~an ~~likely~~effort to ~~require~~reduce ~~additional~~the ~~management~~risk ~~resources~~of ~~and~~security ~~expenditures.~~breaches Ifand ~~our~~other security ~~measures~~incidents. ~~fail~~We are vulnerable to ~~protect~~software ~~this~~bugs, ~~information~~computer ~~adequately~~viruses, break-ins, ransomware or wephishing ~~fail~~attacks, employee errors or malfeasance, attempts to ~~comply~~overload our servers with denial-of-service or other ~~rules~~attacks and ~~regulations~~similar disruptions from unauthorized use of our computer systems, ~~such~~any asof ~~the~~which ~~Health~~could ~~Insurance~~lead ~~Portability~~to ~~and~~interruptions, ~~Accountability~~delays ~~Act~~or website shutdowns, causing loss of critical data or the ~~GDPR~~unauthorized disclosure or use of personally identifiable or confidential information. It is virtually impossible for us to entirely mitigate the risk of breaches of our survey platform or other security incidents affecting our products, ~~California~~internal ~~Consumer~~systems, ~~Privacy~~networks ~~Act~~or ~~2018~~data. ~~("CCPA")~~In addition, the ~~EU-U~~functionality of our products may be disrupted by third parties, including disgruntled employees, former employees or contractors.S. The security measures we use internally, and ~~Swiss-U.S.~~have ~~Privacy~~integrated ~~Shield~~into ~~Framework~~our products, which are designed to detect unauthorized activity and ~~Principles~~prevent or ~~applicable~~minimize ~~credit~~security ~~card~~breaches, ~~association~~may ~~operating~~not ~~rules~~function as expected or may not be sufficient to protect against certain attacks. Additionally, we ~~could~~may beface ~~liable~~delays in identifying or responding to ~~both~~security breaches or other security incidents. With the increase in personnel working remotely during the COVID-19 pandemic, we and our ~~users~~service providers are at increased risk for ~~their~~security ~~losses,~~breaches. asWe ~~well~~are astaking steps to monitor and enhance the ~~vendors~~security ~~under~~of our ~~agreements~~platform, ~~with~~systems, ~~them~~IT infrastructure, wenetworks, ~~could~~and data; however, the unprecedented scale of remote work may require additional personnel and resources, which nevertheless cannot be ~~subject~~guaranteed to ~~fines~~fully ~~and~~safeguard ~~higher~~our ~~transaction~~platform ~~fees~~or any systems, IT infrastructure, networks, or data upon which we ~~could~~rely. ~~face~~If ~~regulatory~~we ~~action~~or any of our vendors experience or are believed to have experienced any compromises to security that result in site performance or availability problems, ~~and~~the complete shutdown of our websites or the actual or perceived loss or unauthorized disclosure or use of confidential information, such as credit card information, personal health information, trade secrets or other proprietary information, our users ~~and~~may ~~vendors~~be ~~could~~harmed ~~end~~or ~~their~~lose ~~relationships~~trust ~~with~~and confidence in us, ~~any~~and ofchoose ~~which~~to ~~could~~decrease ~~harm~~the use of our ~~business~~products, ~~results~~which ofwould ~~operations~~cause us to suffer reputational and financial ~~condition~~harm.

~~Our~~An ~~internal~~increasing ~~systems~~number ~~are~~of ~~exposed~~organizations, toincluding ~~the~~large ~~same~~online ~~cybersecurity~~and ~~risks~~off-line merchants and ~~consequences~~businesses, ofother alarge ~~breach~~Internet ascompanies, ~~our~~financial ~~customers~~institutions, and government institutions, have disclosed breaches of their information security systems and other ~~enterprises.~~information ~~However~~security incidents, ~~since~~some ~~our~~of ~~business~~which ishave ~~focused~~involved sophisticated and highly targeted attacks. In addition, these incidents can originate on ~~providing~~our ~~reliably~~vendors’ ~~secure~~websites, ~~products~~which can then be leveraged to access our ~~customers~~website, wefurther ~~believe~~preventing ~~that~~our ability to successfully identify and mitigate the attack. For example, in December 2021, the Apache Software Foundation publicly disclosed a remote code execution vulnerability in its Log4j2 product, an ~~actual~~open-source component widely used in Java-based software applications to log and track error messages, that resulted in potential opportunities for unauthorized disclosure or ~~perceived~~use ~~breach~~of personally identifiable or confidential information, installation of malware, or ~~security~~unauthorized ~~incident~~control ~~affecting,~~of ~~our~~the ~~internal~~target's ~~networks~~system. To date, ~~systems~~we orhave ~~data~~not ~~could~~detected beany ~~especially~~successful ~~detrimental~~exploit toattempts on our ~~reputation~~systems, ~~customer~~and ~~confidence~~this incident has not resulted in ~~our~~a ~~products~~material loss of revenue or the incurrence of material expenses. We are actively monitoring the situation and ~~solutions~~have established an inventory of all applications and ~~our~~systems ~~business~~running Log4j, and patched, upgraded, or configured them to prevent and detect any malicious activity related to the vulnerability. We are also working closely with third parties and vendors to ensure that they are addressing this vulnerability. We cannot assure you that all potential causes of the incident have been identified and remediated and we expect the risk of additional vulnerabilities and potential attacks to

~~cannot~~continue begiven ~~certain~~the ~~that~~complexity ~~our~~and ~~insurance~~widespread ~~coverage~~nature ~~will~~of bethe ~~adequate~~incident. ~~for~~While ~~data~~we ~~handling~~maintain orcyber ~~data security liabilities actually incurred, that~~ insurance ~~will continue to be available to us on economically reasonable terms, or at all, or~~ that ~~any~~may ~~insurer~~help ~~will~~provide ~~not deny~~ coverage asfor tothese ~~any~~types ~~future claim. The successful assertion~~ of ~~one~~incidents, orwe ~~more~~cannot ~~large~~assure ~~claims~~you ~~against us~~ that ~~exceed available insurance coverage, or the occurrence of changes in~~ our insurance ~~policies,~~will ~~including~~be ~~premium~~adequate ~~increases~~to orcover ~~the~~costs ~~imposition~~and ofliabilities ~~large~~related ~~deductible~~to orthis ~~co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation~~incident.

In addition, we may be subject to regulatory investigations or litigation in connection with a security breach or related issues, and we could also be liable to third parties for these types of breaches. Such litigation, regulatory investigations and our technical activities intended to prevent future security breaches are likely to require additional management resources and expenditures. If our security measures fail to protect this information adequately or we fail to comply with other rules and regulations, such as the Health Insurance Portability and Accountability Act, the GDPR, California Consumer Privacy Act 2018 (“CCPA”), the EU-U.S. and Swiss-U.S. Privacy Shield Framework and Principles or applicable credit card association operating rules, we could be liable to both our users for their losses, as well as the vendors under our agreements with them, we could be subject to fines and higher transaction fees, we could face regulatory action, and our users and vendors could end their relationships with us, any of which could harm our business, results of operations and financial condition.

Our internal systems are exposed to the same cybersecurity risks and consequences of a breach as our customers and other enterprises. However, since our business is focused on providing reliably secure products to our customers, we believe that an actual or perceived breach of, or security incident affecting, our internal networks, systems or data could be especially detrimental to our reputation, customer confidence in our products and solutions and our business.

While our insurance policies include liability coverage for certain of these matters, if we experienced a widespread security breach or other incident that impacted a significant number of our customers to whom we owe indemnity obligations, we could be subject to indemnity claims or other damages that exceed our insurance coverage. We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.

Our products and solutions and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.

Our products and solutions and internal systems rely on software that is highly technical and complex. In addition, our products and solutions and internal systems depend on the ability of our software to store, retrieve, process and manage immense amounts of data. Our software has contained, and may now or in the future contain, undetected errors, bugs or vulnerabilities. Some errors in our software may only be discovered after the code has been released for external or internal use. Errors or other design defects within our software may result in a negative experience for our users, delay product introductions or enhancements or result in measurement or other errors. We also rely on third-party software that may contain errors or bugs. Any actual or perceived errors, failures, vulnerabilities, bugs or defects discovered in our software or third-party software we use could result in damage to our reputation, cause a reduction in revenue or delay in market acceptance of our products, require us to issue refunds to our customers or expose us to claims for damages, cause us to lose existing users or make it more difficult to attract new users, divert our development resources or require us to make extensive changes to our survey platform, any of which could adversely affect our business, results of operations and financial condition. The costs incurred in correcting such defects or errors may be substantial and could harm our results of operations and financial condition. Moreover, the harm to our reputation and legal liability related to such errors or defects may be substantial and could harm our business.

We depend on third-party data centers and any disruption in the operation of these facilities or failure to renew the services could impair the delivery of our products and solutions and adversely affect our business.

We currently deploy our products and solutions and serve all of our users using third-party data center services such as Amazon Web Services. We have no physical access or control over the services provided by Amazon Web Services. Consequently, we may be subject to misconduct or unauthorized data access by such third-party service providers or service disruptions, including those that are directly or indirectly attributable to the COVID-19 pandemic, as well as failures to provide adequate services for reasons that are outside our direct control.

Data center leases and agreements with the providers of data center services expire at various times. The owners of these data centers and providers of these data center services may have no obligation to renew their agreements with us on commercially reasonable terms or at all. Problems faced by data centers, with our third-party data center service providers, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their users, including us, could adversely affect the experience of our users. Our third-party data center operators could decide to close their facilities or cease providing services without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our third-party data centers operators or any of the service providers with whom we or they contract may have negative effects on our business, the nature and extent of which are difficult to predict. In addition, these facilities may be located in areas prone to natural disasters, the effects of climate change and pandemics, and may experience events such as earthquakes, floods, fires, power loss, telecommunication failures and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct. Any damage to, or failure of, our systems generally, or those of the third-party providers, could result in interruptions in use of our products that may reduce our revenue, cause us to issue credits or pay penalties, cause customers to terminate their services with us and adversely affect our ability to attract new customers and retain existing customers.

~~capacity,~~or weservice ~~may experience delays and additional expenses in arranging new data centers~~disruptions, ~~and~~including ~~our~~those ~~users could experience service outages~~ that ~~may~~are ~~subject~~directly ~~us to financial liabilities, result in customer losses and harm our business. Any changes in third-party service levels at data centers~~ or ~~any~~indirectly ~~real~~attributable ~~or perceived errors, defects, disruptions or other performance problems with our products and solutions could harm our reputation and may result in damage~~ to, orthe ~~loss~~COVID-19 ~~or compromise of~~pandemic, ~~our~~as ~~users’~~well ~~content.~~as ~~Interruptions~~failures ~~in our products and solutions might, among other things, reduce our revenue, cause us~~ to ~~issue~~provide ~~refunds~~adequate toservices ~~users,~~for ~~subject~~reasons usthat toare ~~potential~~outside ~~liability, harm~~ our ~~reputation~~direct ~~or our ability to retain customers~~control.

If the data centers and service providers that we use are unable to keep up with our growing needs for capacity, or if we are unable to renew our agreements with data centers and service providers on commercially reasonable terms, we may be required to transfer servers or content to new data centers or engage new service providers, and we may incur significant costs and possible service interruption in connection with doing so. In addition, if we do not accurately plan for our data center capacity requirements and we experience significant strains on our data center capacity, we may experience delays and additional expenses in arranging new data centers, and our users could experience service outages that may subject us to financial liabilities, result in customer losses and harm our business. Any changes in third-party service levels at data centers or any real or perceived errors, defects, disruptions or other performance problems with our products and solutions could harm our reputation and may result in damage to, or loss or compromise of, our users’ content. Interruptions in our products and solutions might, among other things, reduce our revenue, cause us to issue refunds to users, subject us to potential liability, harm our reputation or our ability to retain customers.

Risks Related to Financial or Operating Results

Our business, results of operations and financial condition may fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors.

Our operating results have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which are outside of our control. Any of these events could cause the market price of our common stock to fluctuate. Factors that may contribute to the variability of our operating results include:

•

our ability to attract new users to our survey platform;

•

our ability to convert users of our free basic survey product to paying users;

•

our ability to retain paying users;

•

our ability to prevent account sharing and software piracy;

•

our ability to maintain and improve our products;

•

shifts in the way customers, respondents and users access our websites and products from personal computers to mobile devices;

•

the effectiveness of our rebranding, which launched in June 2021;

•

the effectiveness of our marketing campaigns, including old strategies that may cease to be effective and the failure of new efforts;

•

disruptions or outages in the availability of our websites or products, actual or perceived breaches of privacy and compromises of our customer or respondent data;

•

changes in our pricing policies or those of our competitors;

•

our ability to increase sales of our products and solutions to new customers and expand sales of additional products and solutions to our existing customers;

•

the size and seasonal variability of our customers’ research and marketing and budgets;

•

the extent to which existing customers renew their agreements with us and the timing and terms of those renewals;

•

our ability to successfully implement any restructuring of our operations~~, including the October 2022 Restructuring Plan~~;

•

general industry, market and macroeconomic conditions, including the impacts associated with the COVID-19 pandemic, inflationary pressures, rising interest rates, an economic downturn or recession, volatility in the global financial markets, and war;

•

the timing and cost of investing in our technology infrastructure, product initiatives, facilities and international expansion may be greater than we anticipate;

•

our needs related to facilities and data centers may change over time and vary from our original forecasts, and the value of the property that we lease or own may fluctuate;

•

expenses related to hiring, incentivizing and retaining employees;

•

the timing and costs ofassociated ~~expanding~~with investing in our sales organization and delays or inability in achieving expected productivity;

•

the timing of certain expenditures, including capital expenditures;

•

the entrance of new competitors in our market whether by established companies or the entrance of new companies;

•

currency exchange rate fluctuations;

•

our ability to integrate acquisitions and realize the expected benefit of such acquisitions in a timely manner or at all;

•

changes in the price of our subscription plans; and

•

changing tax laws and regulations.

Our historical operating results may not be indicative of our future operating results. In addition, global economic concerns, including those caused by the COVID-19 pandemic, inflationary pressures, rising interest rates, volatility in the global financial markets, general economic uncertainty and the Russian invasion of Ukraine, continue to create uncertainty and unpredictability and add risk to our future outlook. AnIf ~~economic~~banks ~~downturn~~and infinancial ~~any~~institutions ~~particular~~enter ~~region~~receivership ~~in which we do business~~ or ~~globally~~become ~~could~~insolvent ~~result~~ in ~~reductions~~response into ~~sales~~financial ofconditions ~~our~~affecting ~~products,~~the ~~decreased~~banking ~~renewals~~system ~~of existing arrangements~~ and ~~other adverse effects that could harm our business, results of operations and~~ financial ~~condition. In addition~~markets, ~~borrowings under~~ our ~~credit~~ability ~~facilities are at variable rates of interest and expose us~~ to ~~interest~~access ~~rate~~our ~~risk.~~existing ~~In March 2021~~cash, ~~relevant~~cash ~~regulators~~equivalents ~~confirmed that the publication of the one-week~~ and ~~two-month~~investments ~~U.S.~~may ~~dollar~~be ~~LIBOR would cease after December 31~~threatened, ~~2021,~~ and ~~all~~it ~~remaining~~could ~~U.S.~~have ~~dollar~~an ~~LIBOR~~adverse ~~tenors~~impact ~~would~~on cease after June 30, 2023. Recent proposals for LIBOR reforms may result in the establishment of new methods of calculating LIBOR or the establishment of one or more alternative benchmark rates. Although our ~~existing~~customers’ ~~credit~~ability ~~facilities provide for application of successor rates based on prevailing market conditions, it is not currently possible~~ to ~~predict~~pay ~~the~~their ~~effect~~current ~~of any establishment of alternative reference rates~~ and/or ~~any~~future ~~other~~debts ~~reforms~~ to ~~LIBOR that may be enacted in~~ the ~~United~~Company, ~~Kingdom~~which orcould ~~elsewhere.~~have As a ~~result,~~material ~~our~~adverse ~~future~~effect ~~interest~~on ~~obligations~~our ~~may~~business ~~increase~~ and ~~adversely~~financial ~~impact our results of operations~~condition.

An economic downturn in any particular region in which we do business or globally could result in reductions in sales of our products, decreased renewals of existing arrangements and other adverse effects that could harm our business, results of operations and financial condition. In addition, borrowings under our credit facilities are at variable rates of interest and expose us to interest rate risk.

We have substantial indebtedness and lease obligations, which reduce our capability to withstand adverse developments or business conditions.

We have incurred substantial indebtedness, and as of ~~September~~March 3031, ~~2022~~2023, our total aggregate indebtedness was approximately $~~186~~185.21 million of principal outstanding. We also have, and will continue to have, significant lease obligations. As of ~~September~~March 3031, ~~2022~~2023, our total aggregate obligations under our long-term leases was $6156.31 million. Our payments on our outstanding indebtedness and lease obligations are significant in relation to our revenue and cash flow, which exposes us to significant risk in the event of downturns in our businesses (whether through competitive pressures or otherwise), our industry or the economy generally, including the global economic uncertainties and downturns as a result of the COVID-19 pandemic, inflationary pressures ~~or the Russian invasion of Ukraine~~, ~~since~~rising ~~our~~interest ~~cash~~rates ~~flows~~or ~~would decrease but our required payments under our indebtedness and lease obligations would not. Economic downturns may impact our ability to comply with~~ the ~~covenants~~Russian ~~and~~invasion restrictions in our credit facilities and agreements governing our other indebtedness and lease obligations and may impact our ability to pay or refinance our indebtedness or lease obligations as they come due, which would adversely affect our business, results of operations and financial condition.

of Ukraine, since our cash flows would decrease but our required payments under our indebtedness and lease obligations would not. Economic downturns may impact our ability to comply with the covenants and restrictions in our credit facilities and agreements governing our other indebtedness and lease obligations and may impact our ability to pay or refinance our indebtedness or lease obligations as they come due, which would adversely affect our business, results of operations and financial condition.

Our overall leverage and the terms of our financing arrangements could also:

•

make it more difficult for us to satisfy obligations under our outstanding indebtedness;

•

limit our ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions;

•

limit our ability to refinance our indebtedness on terms acceptable to us or at all;

•

limit our ability to adapt to changing market conditions;

•

limit our ability to execute our share repurchase program;

•

restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;

•

require us to dedicate a significant portion of our cash flow from operations to paying the principal and interest on our indebtedness, thereby limiting the availability of our cash flow to fund future capital expenditures, working capital and other corporate purposes;

•

limit our flexibility in planning for, or reacting to, changes in our business and in our industry generally; and

•

place us at a competitive disadvantage compared with competitors that have a less significant debt burden.

We may be required to delay recognition of some of our revenue, which may harm our financial results in any given period.

We may be required to delay recognition of revenue for a significant period of time after entering into an agreement due to a variety of factors, including, among other things, whether:

•

the transaction involves both current products and products that are under development;

•

the customer requires significant modifications, configurations or complex interfaces that could delay delivery or acceptance of our products;

•

the transaction involves acceptance criteria or other terms that may delay revenue recognition; or

•

the transaction involves performance milestones or payment terms that depend upon contingencies.

Because of these factors and other specific revenue recognition requirements under ~~generally~~US ~~accepted accounting principles in the United States (“~~GAAP”), we must have very precise terms in our contracts to recognize revenue when we initially provide access to our survey platform or other products. Although we strive to enter into agreements that meet the criteria under GAAP for current revenue recognition on delivered performance obligations, our agreements are often subject to negotiation and revision based on the demands of our customers. The final terms of our agreements sometimes result in delayed revenue recognition, which may adversely affect our financial results in any given period. In addition, more customers may require extended payment terms, shorter term contracts or alternative licensing arrangements that could reduce the amount of revenue we recognize upon delivery of our other products and could adversely affect our short-term financial results.

Furthermore, the presentation of our financial results requires us to make estimates and assumptions that may affect revenue recognition. In some instances, we could reasonably use different estimates and assumptions, and changes in estimates are likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates.

Our results of operations may not immediately reflect downturns or upturns in sales because we recognize revenue from our users over the term of their paid subscriptions with us.

We recognize revenue from paid subscriptions to our products and solutions over the terms of the subscription period. Paying users can choose between monthly or annual subscriptions, and customers of SurveyMonkey Enterprise make a minimum one-year subscription commitment and are increasingly purchasing multi-year subscriptions. Amounts that have been billed are initially recorded as deferred revenue until the revenue is recognized. As a result, a large portion of our revenue for each quarter reflects deferred revenue from paid subscriptions entered into during previous quarters, and downturns or upturns in subscription sales, or renewals and potential changes in our pricing policies may not be reflected in our results of operations until later periods. Our paid subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as paid subscription revenue from new users is recognized over the applicable subscription term.

If we fail to effectively manage our growth, our business and results of operations could be harmed.

The scope and complexity of our business have also increased significantly. The growth, expansion and evolution of our business create significant challenges for our management, operational and financial resources. In the event of continued growth of our operations or in the number of our third-party relationships, our information technology systems and our internal controls and procedures may not be adequate to support our operations. To effectively manage our growth, we must continue to improve our operational, financial and management processes and systems and to effectively expand, train and manage our employee base, and do so in a hybrid work environment where some of our employees are working in the office and others are working remotely. This hybrid work model may present operational challenges and risks, including negative employee morale and productivity, low employee retention, and increased compliance and tax obligations in a number of jurisdictions. As our organization continues to grow and evolve and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products and solutions. This could negatively affect our business performance.

Changes in growth in our headcount and operations will continue to place significant demands on our management and our operational and financial infrastructure. As of September 30, 2022, 28% of our employees had been with us

~~for less than one year~~ and ~~25%~~potential ~~for~~changes ~~more~~in ~~than~~our ~~one~~pricing ~~year~~policies ~~but~~may ~~less~~not ~~than~~be ~~two~~reflected ~~years.~~in ~~As we continue to grow and evolve, we must effectively integrate, develop and motivate~~ our ~~current~~results ~~employees and new employees, and we must maintain the beneficial aspects~~ of ~~our~~operations ~~corporate~~until ~~culture.~~later ~~To attract top talent, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees~~periods. InOur ~~addition,~~paid ~~fluctuations~~subscription inmodel ~~the~~also ~~price~~makes ~~of our common stock may make~~ it ~~more~~ difficult orfor ~~costly~~us to ~~use~~rapidly ~~equity~~increase ~~compensation to motivate, incentivize and retain~~ our ~~employees.~~revenue Wethrough ~~face~~additional ~~significant~~sales ~~competition~~in ~~for~~any ~~talent from other internet~~period, ~~software~~as ~~and~~paid ~~high-growth~~subscription ~~companies,~~revenue ~~which~~from ~~include~~new ~~both~~users ~~publicly~~is ~~traded~~recognized ~~and privately-held companies. The risks of~~ over~~-compensating~~ ~~employees and~~ the ~~challenges~~applicable ofsubscription ~~integrating a growing employee base into our corporate culture are exacerbated by our international expansion~~term. Additionally, because of our growth, we have expanded our operating and financing lease obligations and purchase commitments, which have increased our expenses. We may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs, successfully integrate our new hires and retain current employees in a hybrid work environment, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business, results of operations and financial condition could be adversely affected.

~~Additionally,~~If if we dofail ~~not~~to effectively manage ~~the~~our growth ~~of our business~~ and ~~operations~~evolution, ~~including the implementation of restructuring initiatives, the quality of~~ our ~~products~~business and ~~solutions could suffer, which could negatively affect our brand,~~ results of operations ~~and~~could ~~overall business. Actions we have taken (including the implementation of restructuring plans) or that we may decide to take in the future in our attempt to achieve profitability, may not~~ be ~~successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business~~harmed. Implementation of a go-forward plan and any other cost-saving initiatives, including possible future restructuring efforts, may be costly and disruptive to our business, have adverse impacts on employee morale and retention, result in expected costs and charges that are greater than forecasted, and result in estimated cost savings that are lower than forecasted. Further, we have made changes in the past, and will likely make changes in the future, to our products that our customers may not like, find useful or agree with. We may also decide to discontinue certain features, products or solutions or charge for certain features, products or solutions that are currently free or increase fees for any of our features, products or solutions. If users are unhappy with these changes, they may decrease their usage of our products or stop using them generally, and in the past we have experienced a decrease in our number of paying users as a result of pricing changes. In addition, they may choose to take other types of action against us, such as organizing petitions or boycotts focused on our company, our website or our products and services, filing claims with the government or other regulatory bodies or filing lawsuits against us. Any of these actions could negatively impact our growth and brand, which would harm our business.

IfThe ~~currency~~scope ~~exchange~~and ~~rates~~complexity ~~fluctuate~~of ~~substantially~~our inbusiness ~~the~~have ~~future~~also increased significantly. The evolution of our business creates significant challenges for our management, operational and financial resources. In the ~~results~~event of continued expansion of our operations or in the number of our third-party relationships, ~~which~~our information technology systems and our internal controls and procedures may not be adequate to support our operations. To effectively manage our development and evolution, we must continue to improve our operational, financial and management processes and systems and to train and manage our employee base, and expand as needed, and do so in a hybrid work environment where some of our employees are ~~reported~~working in Uthe office and others are working remotely.S This hybrid work model may present operational challenges and risks, including negative employee morale and productivity, low employee retention, and increased compliance and tax obligations in a number of jurisdictions. ~~dollars~~As our organization continues to evolve and we are required to implement more complex organizational management structures, we may find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products and solutions. This could benegatively ~~adversely~~affect ~~affected~~our business performance.

WeChanges ~~conduct~~in ~~our~~growth ~~business~~in ~~around~~our ~~the~~headcount ~~world~~ and aoperations ~~significant~~will ~~portion~~continue ofto ~~our~~place ~~transactions~~significant ~~outside~~demands ofon ~~the~~our ~~United~~management ~~States~~and ~~are~~our ~~denominated~~operational inand ~~foreign~~financial ~~currencies~~infrastructure. As weof ~~continue~~March to31, ~~expand our international operations~~2023, we16% ~~become~~of ~~more~~our ~~exposed~~employees tohad ~~the~~been ~~effects~~with ofus ~~fluctuations~~for inless ~~currency~~than ~~exchange~~one ~~rates.~~year Weand ~~incur~~28% ~~expenses~~ for ~~employee~~more ~~compensation~~than ~~and~~one ~~other~~year ~~operating~~but ~~expenses~~less atthan ~~our~~two ~~non-U~~years.S. ~~locations~~As inwe ~~the~~continue ~~local~~to ~~currency,~~grow and ~~accept~~evolve, ~~payment~~we ~~from~~must ~~customers~~effectively inintegrate, ~~currencies~~develop ~~other~~and ~~than~~motivate ~~the~~our ~~U.S.~~current ~~dollar.~~employees ~~Since~~and wenew ~~conduct~~employees, ~~business~~and inwe ~~currencies~~must ~~other~~maintain ~~than~~the ~~U.S.~~beneficial ~~dollars~~aspects ~~but~~of ~~report~~ our ~~financial~~corporate ~~results~~culture. inTo ~~U.S.~~attract ~~dollars~~top talent, we ~~face~~have ~~exposure~~had to ~~fluctuations~~offer, ~~in currency exchange rates~~ and ~~any~~believe ~~increase~~we inwill ~~the~~need ~~value~~to ofcontinue ~~the~~to ~~U.S.~~offer, ~~dollar~~highly ~~against~~competitive ~~these~~compensation ~~foreign~~packages ~~currencies~~before ~~could~~we ~~cause~~can ~~our~~validate ~~revenue~~the toproductivity ~~decline~~of ~~relative~~those toemployees. ~~our~~In ~~costs~~addition, ~~thereby~~fluctuations ~~decreasing~~in ~~our~~the ~~operating~~price ~~margins.~~of ~~Exchange~~our ~~rate~~common ~~fluctuations~~stock ~~between~~may ~~the~~make ~~U.S.~~it ~~dollar~~more ~~and~~difficult ~~other~~or ~~currencies~~costly ~~could~~to ~~have~~use aequity ~~material~~compensation ~~impact~~to onmotivate, ~~our~~incentivize ~~profitability~~ and ~~hinder~~retain our ~~ability~~employees. toWe ~~predict~~face ~~our~~significant ~~future~~competition ~~results~~for ~~and~~talent ~~earnings.~~from ~~For~~other ~~example~~internet, ~~because~~software weand ~~recognize~~high-growth ~~revenue over time~~companies, ~~exchange~~which ~~rate~~include ~~fluctuations~~both atpublicly ~~one~~traded ~~point~~and inprivately-held ~~time~~companies. ~~may~~The ~~have~~risks aof ~~negative~~over-compensating ~~impact~~employees inand ~~future~~the ~~quarters.~~challenges ~~There~~of ~~can~~integrating bea nogrowing ~~assurance~~employee ~~that~~base weinto ~~will be successful in managing~~ our ~~exposure~~corporate toculture ~~currency~~are ~~exchange~~exacerbated ~~rate~~by ~~risks,~~our ~~which~~international ~~may~~expansion. ~~adversely affect our business~~Additionally, ~~results~~during periods of ~~operations and financial condition. Additionally~~growth, ~~because~~ we ~~conduct~~expanded ~~business~~our inoperating ~~currencies~~and ~~other~~financing ~~than~~lease ~~U.S.~~obligations ~~dollars,~~and ~~but~~purchase ~~report~~commitments, ~~our~~which ~~results~~have ofincreased ~~operations~~our ~~in U~~expenses.S. ~~dollars,~~If we ~~also~~fail ~~face remeasurement exposure~~ to ~~fluctuations~~effectively inmanage ~~currency~~our ~~exchange~~hiring ~~rates~~needs, ~~which~~including ~~could~~in ~~hinder~~connection ~~our~~with ~~ability~~the toMerger, ~~predict~~successfully integrate our ~~future~~new ~~results~~hires and ~~earnings~~retain ~~and~~current ~~could~~employees ~~materially~~in ~~impact~~a ~~our~~hybrid ~~results~~work ~~of operations. From time to time~~environment, weour ~~may~~efficiency ~~enter~~and ~~into~~ability ~~foreign currency derivative contracts~~ to ~~reduce~~meet ~~the risk that~~ our ~~cash~~forecasts ~~flows~~ and ~~earnings~~our ~~will~~employee bemorale, ~~adversely~~productivity ~~affected by foreign currency exchange rate fluctuations. During the three~~ and ~~nine~~retention ~~months~~could ~~ended September 30~~suffer, ~~2022~~ and ~~2021~~our business, weresults ~~did~~of ~~not~~operations ~~have~~and ~~any~~financial ~~material~~condition ~~amount~~could ofbe ~~derivative~~adversely ~~financial instruments~~affected.

Additionally, if we do not effectively manage the development and evolution of our business and operations, including in connection with the Merger and the implementation of restructuring initiatives, the quality of our products and solutions could suffer, which could negatively affect our brand, results of operations and overall business. Actions we have taken (including the implementation of restructuring plans) or that we may decide to take in the future in our attempt to achieve profitability, may not be successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business. Implementation of a go-forward plan and any other cost-saving initiatives, including possible future restructuring efforts, may be costly and disruptive to our business, have adverse impacts on employee morale and retention, result in expected costs and charges that are greater than forecasted, and result in estimated cost savings that are lower than forecasted. Further, we have made changes in the past, and will likely make changes in the future, to our products that our customers may not like, find useful or agree with. We may also decide to discontinue certain features, products or solutions or charge for certain features, products or solutions that are currently free or increase fees for any of our features, products or solutions. If users are unhappy with these changes, they may decrease their usage of our products or stop using them generally, and in the past we have experienced a decrease in our number of paying users as a result of pricing changes. In addition, they may choose to take other types of action against us, such as organizing petitions or boycotts focused on our company, our website or our products and services, filing claims with the government or other regulatory bodies or filing lawsuits against us. Any of these actions could negatively impact our growth and brand, which would harm our business.

~~Expansion~~We ~~into~~are ~~international~~exposed ~~markets~~to isfluctuations ~~important~~in ~~for~~currency ~~our~~exchange ~~growth~~rates, ~~and as we expand internationally, we will face additional business, political, regulatory, operational, financial and economic risks, any of~~ which could ~~increase~~adversely affect our ~~costs~~operating ~~and~~results ~~hinder~~or ~~such~~financial ~~growth~~position.

~~Continuing~~We toconduct ~~expand~~ our business toaround ~~attract users in countries other than~~ the ~~United~~world ~~States~~and is a ~~critical~~significant ~~element~~portion of our ~~business~~transactions ~~strategy.~~outside ~~An important part~~ of ~~targeting~~the ~~international~~United ~~markets~~States isare ~~increasing~~denominated ~~our~~in ~~brand~~foreign ~~awareness~~currencies. ~~and~~As ~~developing~~we ~~offerings~~continue ~~that~~to ~~are~~invest ~~localized and customized for the users~~ in ~~those~~our ~~markets.~~international Weoperations, ~~have~~we abecome ~~limited~~more ~~operating~~exposed ~~history~~to asthe aeffects ~~company~~of ~~outside~~fluctuations ofin ~~the~~currency ~~United~~exchange ~~States~~rates. We ~~expect~~incur toexpenses ~~continue~~for toemployee ~~devote~~compensation ~~significant~~and ~~resources~~other tooperating ~~international~~expenses ~~expansion~~at ~~through~~our ~~acquisitions~~non-U.S. ~~and~~locations ~~partnerships,~~in the ~~establishment~~local ofcurrency, ~~additional offices~~ and ~~increasing~~accept ~~our~~payment ~~foreign~~from ~~language~~customers ~~offerings.~~in ~~Our~~currencies ~~ability~~other tothan ~~expand~~the ~~our~~U.S. ~~business~~dollar. ~~and~~Since towe ~~attract~~conduct ~~talented~~business ~~employees~~in ~~and~~currencies ~~users~~other inthan anU.S. ~~increasing~~dollars ~~number~~but ofreport ~~international~~our ~~markets~~financial ~~will~~results ~~require~~in ~~considerable~~U.S. ~~management~~dollars, ~~attention~~we ~~and~~have ~~resources~~faced, and ismay ~~subject~~face toin the ~~particular~~future, ~~challenges~~exposure ofto ~~supporting~~fluctuations ~~a rapidly growing business~~ in ancurrency ~~environment~~exchange ofrates ~~multiple~~and ~~languages,~~remeasurement ~~cultures~~exposure, ~~customs,~~and ~~legal~~any ~~systems,~~increase ~~alternative~~in ~~dispute~~the ~~resolution~~value ~~systems,~~of ~~regulatory~~the ~~systems~~U.S. ~~and~~dollar ~~commercial~~against ~~infrastructures.~~these ~~Expanding~~foreign ~~our~~currencies ~~international~~could ~~focus~~cause ~~may~~our ~~subject~~revenue us to ~~risks~~decline ~~that~~relative weto ~~have~~our ~~not faced before or increase risks that we currently face~~costs, ~~including~~which ~~but~~could ~~not~~lead ~~limited~~ to ~~risks~~a ~~associated~~decrease ~~with~~in ~~recruiting~~our ~~and~~operating ~~retaining~~margins. ~~talented~~Exchange ~~and~~rate ~~capable~~fluctuations ~~management~~between ~~and~~the ~~employees~~U.S. indollar ~~foreign~~and ~~countries;~~other ~~challenges~~currencies ~~caused~~could byhave ~~distance,~~a ~~time~~material ~~zone,~~impact ~~language~~on ~~and~~our ~~cultural~~profitability ~~differences; developing~~ and ~~customizing~~hinder ~~products~~our ~~and~~ability ~~solutions~~to ~~that~~predict ~~appeal~~our tofuture ~~the~~results ~~tastes~~ and ~~preferences~~earnings. ofFor ~~users~~example, inbecause ~~international~~we ~~markets;~~recognize ~~competition~~revenue ~~from~~over ~~local~~time, ~~survey~~exchange ~~providers~~rate ~~with~~fluctuations ~~significant~~at ~~market~~one ~~share~~point in ~~those~~time ~~markets~~may ~~and~~have ~~with~~ a ~~better~~negative ~~understanding~~impact ofin ~~user~~future ~~preferences;~~quarters. ~~reliance~~There oncan ~~third~~be ~~parties~~no ~~and~~assurance ~~partnerships~~that towe ~~provide~~will ~~product~~be ~~support~~successful ~~and~~in ~~services~~managing ~~that~~our weexposure doto ~~not~~currency ~~resource~~exchange ~~directly~~rate ~~outside of the United States~~risks, ~~such~~which asmay ~~panelists~~adversely ~~for~~affect our ~~SurveyMonkey~~business, ~~Audience~~results ~~solution;~~of ~~protecting~~operations and ~~enforcing~~financial ~~our~~condition. ~~intellectual~~From ~~property~~time ~~rights; the inability~~ to ~~extend proprietary rights in our brand~~time, ~~content~~we ormay ~~technology~~enter into ~~new jurisdictions; compliance with applicable~~ foreign ~~laws~~currency ~~and~~derivative ~~regulations,~~contracts ~~including privacy and data protection laws and laws relating~~ to ~~content;~~reduce ~~credit~~the risk ~~and~~that ~~higher~~our ~~levels~~cash offlows ~~payment fraud; currency exchange rate fluctuations; protectionist laws~~ and ~~business~~earnings ~~practices~~will ~~that~~be ~~favor~~adversely ~~local~~affected ~~businesses~~by ~~in some countries;~~ foreign ~~tax~~currency ~~consequences; foreign~~ exchange ~~controls~~rate ~~or U~~fluctuations.S. ~~tax~~During ~~restrictions~~the ~~that~~three ~~might~~months ~~restrict~~ended orMarch ~~prevent~~31, us2023 ~~from~~and ~~repatriating income earned in countries outside of the United States; political~~2022, ~~economic~~we ~~and~~did ~~social~~not ~~instability~~have ~~(including~~any ~~Russia's~~material ~~invasion~~amount of ~~Ukraine);~~derivative ~~higher~~financial ~~costs associated with doing business internationally; export or import regulations; and trade and tariff restrictions~~instruments.

Strategic investments in international markets is important for our growth, and as we continue to invest internationally, we will face additional business, political, regulatory, operational, financial and economic risks, any of which could increase our costs and hinder such growth.

Continuing to invest in our business to attract users in countries other than the United States is a critical element of our business strategy. An important part of targeting international markets is increasing our brand awareness and developing offerings that are localized and customized for the users in those markets. We have a limited operating history as a company outside of the United States. We expect to continue to strategically invest resources to our international expansion efforts through acquisitions and partnerships, the establishment of additional offices and increasing our foreign language offerings. Our ability to grow our business and to attract talented employees and users in an increasing number of international markets will require considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute resolution systems, regulatory systems and commercial infrastructures. Expanding our international focus may subject us to risks that we have not faced before or increase risks that we currently face, including but not limited to risks associated with recruiting and retaining talented and capable management and employees in foreign countries; challenges caused by distance, time zone, language and cultural differences; developing and customizing products and solutions that appeal to the tastes and preferences of users in international markets; competition from local survey providers with significant market share in those markets and with a better understanding of user preferences; reliance on third parties and partnerships to provide product support and services that we do not resource directly outside of the United States, such as panelists for our SurveyMonkey Audience solution; protecting and enforcing our intellectual property rights; the inability to extend proprietary rights in our brand, content or technology into new jurisdictions; compliance with applicable foreign laws and regulations, including privacy and data protection laws and laws relating to content; credit risk and higher levels of payment fraud; currency exchange rate fluctuations; protectionist laws and business practices that favor local businesses in some countries; foreign tax consequences; foreign exchange controls or U.S. tax restrictions that might restrict or prevent us from repatriating income earned in countries outside of the United States; political, economic and social instability (including Russia's invasion of Ukraine); higher costs associated with doing business internationally; export or import regulations; and trade and tariff restrictions.

Entering new international markets will be expensive, our ability to successfully gain market acceptance in any particular market is uncertain and the distraction of our senior management team could harm our business, results of operations and financial condition.

We derive, and expect to continue to derive, a substantial majority of our revenue from a limited number of software products.

We derive, and expect to continue to derive, a substantial majority of our revenue from our paid individual and enterprise subscription offerings to our survey platform. As such, the market acceptance of our survey platform is critical to our success. Demand for subscription access to our survey platform and for our other products and solutions is affected by a number of factors, many of which are beyond our control, such as continued market acceptance of our survey platform by customers for existing and new use cases, the timing of development and release of new products, solutions, features and functionality that are lower cost alternatives introduced by us or our competitors, technological changes and developments within the markets we serve, growth or contraction in our addressable markets, and general macroeconomic conditions, including the effects of a general slowdown in the global economy and inflationary pressures. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of our survey platform, our business, results of operations and financial condition could be harmed.

Risks Related to Regulatory and Tax Compliance

We collect, process, store, share, disclose and use personal information and other data, which subjects us to governmental regulations and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business.

We collect, process, store, share, disclose and use information from and about our customers, respondents, users, sales leads and prospects, including personal information and other data. There are numerous laws around the world regarding privacy, data protection and security, including laws regarding the collection, processing, storage, sharing, disclosure, use and security of personal information and other data from and about our customers, respondents, users, sales leads and prospects. The scope of these laws is changing, subject to differing interpretations, may be costly to comply with, and may be inconsistent among countries and jurisdictions or conflict with other rules.

regarding privacy, data protection and security, including laws regarding the collection, processing, storage, sharing, disclosure, use and security of personal information and other data from and about our customers, respondents, users, sales leads and prospects. The scope of these laws is changing, subject to differing interpretations, may be costly to comply with, and may be inconsistent among countries and jurisdictions or conflict with other rules.

We strive to comply with applicable laws, policies and legal obligations relating to privacy, data protection and security and are subject to the terms of our privacy notices and privacy-related obligations to third parties. However, these obligations may be interpreted and applied in new ways and/or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Data privacy, data protection and security are active areas, and new laws and regulations are likely to be enacted.

Any failure or perceived failure by us to comply with our privacy or data protection policies, our privacy- or data protection-related obligations to customers, respondents, users or other third parties, our data disclosure and consent obligations or our privacy-, data protection- or security-related legal and regulatory obligations, or any compromise of security that results in the unauthorized disclosure, transfer or use of personal or other information, which may include personally identifiable information or other data, may result in governmental enforcement actions, litigation or public statements critical of us by consumer advocacy groups, competitors, the media or others and could cause our users to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties we work with, such as customers, partners, vendors or developers, violate applicable laws, our policies or other privacy-, data protection- or security-related obligations, such violations may also put our users’ information at risk and could in turn have an adverse effect on our business. Governmental agencies may also request or take user or customer data for national security or informational purposes, and can also make data requests in connection with criminal or civil investigations or other matters, which could harm our reputation and our business or be in contravention of our contractual obligations. Additionally, our compliance with the laws of one jurisdiction may be in contravention to laws or regulations that we are subject to in other jurisdictions.

In addition, there has been increased uncertainty around the legality of various mechanisms for personal data transfers from the European Union to the United States, the United Kingdom, and other countries outside the European Union, which may have a significant impact on the transfer of data from the European Union to companies in the United States or other jurisdictions, including us. For example, we may have to require some of our vendors who process personal data to take on additional privacy, data protection and security obligations, and some may refuse, causing us to incur potential disruption and expense related to our business processes. We may also have to substantially reorganize our infrastructure to meet local requirements regarding data storage, access and transfer which also has the potential to adversely impact our business and cause significant additional expense. If our policies and practices, or those of our vendors, are, or are perceived to be, insufficient or if our users and customers have concerns regarding the transfer of data from the European Union to the United States, we could be subject to orders to suspend our services, enforcement actions or investigations by the Federal Trade Commission, Attorney General of California or other states, individual EU Data Protection Authorities or lawsuits by private parties, use of our products could decline and our business could be negatively impacted. There is also uncertainty as to whether certain legal mechanisms for the lawful transfer of data from the European Union to the United States or other jurisdictions will withstand legal challenges, and such legal mechanisms may be modified or replaced. If the mechanisms on which we rely for the transfer of data are found to be invalid or are modified or replaced, our business would be substantially impacted, as key agreements may need to be renegotiated, customers may lose confidence in our ability to transfer data legally from the European Union to the United States or other jurisdictions and we may be subject to orders to suspend our services, enforcement actions or investigations by the Federal Trade Commission, Attorney General of California or other states, or EU Data Protection Authorities or other regulatory authorities in other jurisdictions.

which also has the potential to adversely impact our business and cause significant additional expense. If our policies and practices, or those of our vendors, are, or are perceived to be, insufficient or if our users and customers have concerns regarding the transfer of data from the European Union to the United States, we could be subject to orders to suspend our services, enforcement actions or investigations by the Federal Trade Commission, Attorney General of California or other states, individual EU Data Protection Authorities or lawsuits by private parties, use of our products could decline and our business could be negatively impacted. There is also uncertainty as to whether certain legal mechanisms for the lawful transfer of data from the European Union to the United States or other jurisdictions will withstand legal challenges, and such legal mechanisms may be modified or replaced. If the mechanisms on which we rely for the transfer of data are found to be invalid or are modified or replaced, our business would be substantially impacted, as key agreements may need to be renegotiated, customers may lose confidence in our ability to transfer data legally from the European Union to the United States or other jurisdictions and we may be subject to orders to suspend our services, enforcement actions or investigations by the Federal Trade Commission, Attorney General of California or other states, or EU Data Protection Authorities or other regulatory authorities in other jurisdictions.

Public scrutiny of internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our products to our customers, thereby harming our business.

The regulatory framework for privacy and security issues worldwide is evolving and is likely to remain in flux for the foreseeable future. Various government and consumer agencies have also called for new regulation and changes in industry practices. Practices regarding the registration, collection, processing, storage, sharing, disclosure, use and security of personal and other information by companies offering an online service like our survey platform and other solutions have recently come under increased public scrutiny.

For example, the European Union has enacted the GDPR, which became effective in May 2018 and the State of California has enacted the CCPA which became effective on January 1, 2020. AThe ~~new ballot initiative, the~~ California Privacy Rights Act 2020 (“CPRA”), was also passed in November 2020 and ~~becomes~~became effective on January 1, 2023. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States. Additionally, the current data protection legislation in the United Kingdom substantially mirrors the GDPR, but there is uncertainty with regard to how the United Kingdom data protection regime will evolve now that it has left the European Union. These laws require greater compliance efforts for companies with users or operations in the European Union, United Kingdom and/or California and provides for fines of: in the case of the GDPR, up to the greater of €20,000,000 or 4% of global annual revenue for noncompliance; or in the case of the CCPA, up to $2,500 per violation or $7,500 for each intentional violation, as well as a private right of action for certain failures to implement and maintain reasonable security measures.

In the United States, the federal government and many state governments have reviewed and are reviewing the need for greater regulation of the collection, processing, storage, sharing, disclosure, use and security of information concerning consumer behavior with respect to online services, including regulations aimed at restricting certain targeted advertising practices and collection and use of data from mobile devices. This review may result in new laws or the promulgation of new regulations or guidelines. For example, the State of California and other states have passed laws relating to disclosure of companies’ practices with regard to Do-Not-Track signals from internet browsers, the ability to delete information of minors and new data breach notification requirements. California has also adopted privacy guidelines with respect to mobile applications and in 2018 enacted the CCPA. The CCPA requires covered companies to provide new disclosures to California consumers, and affords such consumers rights to access and delete personal information and new abilities to opt-out of certain sales of personal information, among other things. The CCPA became enforceable on July 1, 2020. Laws similar to the CCPA have also been proposed in other states, and some states, including Nevada, Virginia, ~~and~~ Colorado, Utah and Connecticut have implemented laws imposing obligations similar to the CCPA. Additionally, the CPRA, as currently drafted, would significantly modify the CCPA, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses. We cannot yet predict the full impact of the CCPA, CPRA, or other similar laws or regulations on our business or operations, but they may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

In June 2016, the United Kingdom voted to leave the European Union, commonly referred to as “Brexit,” which could also lead to further legislative and regulatory changes. The United Kingdom left the European Union on January 31, 2020 with a transition period through December 31, 2021. The risks are yet undetermined depending on the outcomes of negotiations that could arise during this time period and beyond. A Data Protection Act has been enacted that substantially implements GDPR, which became law in May 2018. It remains unclear, however, how United Kingdom data protection laws or regulations and enforcement strategies will develop in the medium to longer term and how data transfers to and from the United Kingdom will be regulated.

~~requiring~~2020 adwith ~~hoc~~a ~~verification~~transition ~~of,~~period ~~transfers~~through ofDecember ~~personal~~31, ~~data~~2021. ~~from~~Certain ~~Europe~~risks continue to ~~the~~exist ~~United~~depending ~~States~~on orthe ~~may~~outcomes ~~result~~of inany ~~those~~re-negotiation ~~transfers~~of ~~being deemed unlawful. Additionally,~~ the ~~SCCs~~Brexit ~~were~~Withdrawal ~~updated~~Agreement. inA ~~June~~Data ~~2021.~~Protection WeAct ~~are~~has ~~analyzing~~been ~~the~~enacted ~~impacts~~that ofsubstantially ~~this~~implements ~~decision~~GDPR, ~~and~~which ~~resulting~~became ~~recommendations~~law ~~from~~in ~~the~~May ~~European~~2018. ~~Data~~It ~~Protection~~remains ~~Board~~unclear, ashowever, ~~well~~how asUnited ~~individual~~Kingdom data protection ~~authorities~~laws or regulations and ~~the~~enforcement ~~updated~~strategies ~~SCCs,~~will ~~and~~develop wein ~~may~~the ~~find~~medium itto ~~necessary~~longer orterm. ~~appropriate~~The toEuropean ~~take~~Union ~~different~~and orthe ~~additional~~United ~~steps~~Kingdom ~~with~~have ~~respect~~reached toagreement on transfers of personal data, between the regions which ~~may~~provides ~~result~~that inthe ~~significant~~United ~~increased~~Kingdom ~~costs~~has ofadequate ~~compliance~~measures ~~and~~in ~~limitations~~place onto ~~our~~protect ~~customers~~data ~~and~~subjects, ~~us.~~however, Wefuture ~~may~~changes beto ~~unsuccessful~~UK inprivacy ~~maintaining~~laws ~~legitimate~~could ~~means~~place ~~for~~this ~~our~~adequacy ~~transfer~~in jeopardy and ~~receipt~~there ofis ~~personal~~some ~~data~~uncertainty ~~from~~about the ~~EEA~~sustainability orof ~~Switzerland~~that agreement. WeThe ~~may~~United ~~experience~~Kingdom ~~reluctance~~has oralso ~~refusal~~introduced byits ~~current~~own orcontractual ~~prospective~~data ~~European~~transfer ~~customers~~mechanisms tofor ~~use~~transfers ~~our~~of ~~survey~~personal ~~platform~~data orto other ~~solutions,~~regions ~~and~~outside wethe ~~and~~United ~~our~~Kingdom ~~customers~~(the ~~may~~“IDTA”). ~~face~~The aeffectiveness ~~risk~~ of ~~orders~~this tonew ~~suspend~~contractual ~~our~~data ~~services~~transfer ormechanism ~~enforcement~~has ~~actions~~not bybeen ~~data~~legally ~~protection~~tested ~~authorities~~as inyet ~~the~~and ~~EEA~~accordingly, ~~relating~~there tois ~~personal~~still ~~data~~uncertainty ~~transfers~~about tothe uslegality ~~and~~of bypersonal usdata ~~from~~transfers ~~the~~to ~~EEA.~~some ~~Any~~jurisdictions ~~such~~utilizing ~~actions~~the ~~could~~new ~~result~~IDTA ~~in substantial costs~~ and ~~diversion~~in ~~of resources~~general, ~~distract~~UK ~~management~~customers ~~and~~continue ~~technical~~to ~~personnel~~favor ~~and~~data ~~negatively~~storage ~~affect~~in ~~our~~the ~~business,~~United ~~operating~~Kingdom ~~results~~or ~~and~~European ~~financial condition~~Union.

Additionally, we historically have participated in the EU-U.S. Privacy Shield and a related program, the Swiss-U.S. Privacy Shield, and made use of certain model clauses approved by the European Commission (the “SCCs”), with regard to certain transfers of personal data from the European Economic Area (“EEA”) to the United States. Both the EU-U.S. Privacy Shield Framework and SCCs have been subject to legal challenge, however, and on July 16, 2020, the Court of Justice of the European Union (“CJEU”) issued a decision that invalidated the EU-U.S. Privacy Shield and imposed additional obligations on companies when relying on the SCCs. On September 8, 2020, the Swiss Federal Data Protection and Information Commissioner also issued an opinion concluding that the Swiss-U.S. Privacy Shield Framework does not provide an adequate level of protection for data transfers from Switzerland to the United States. These decisions are resulting in European data protection regulators applying differing standards for, and requiring ad hoc verification of, transfers of personal data from Europe to the United States. This results in those transfers being deemed unlawful. We may be required to take additional steps to legitimize any personal data transfers impacted by these developments and be subject to increasing costs of compliance and limitations on our customers and us. We have analyzed the impact of the decisions, applicable guidance, recommendations, updated SCCs and new IDTA and have implemented a program for compliance. Because the interpretation and application of these laws and regulations relating to privacy, data protection and information security, along with industry standards, are uncertain, it is possible that relevant laws, regulations, or standards may be interpreted and applied in manners that are, or are alleged to be, inconsistent with our data management practices or the features of our products. We may find it necessary or appropriate to take different or additional steps with respect to transfers of personal data, which may result in significant increased costs of compliance and limitations on our customers and us. We may be unsuccessful in maintaining legitimate means for our transfer and receipt of personal data from the EEA, the United Kingdom or Switzerland. We may experience reluctance or refusal by current or prospective customers in the European Union, the United Kingdom, Iceland, Liechtenstein, Norway and Switzerland (the “impacted jurisdictions”) to use our survey platform or other solutions, and we and our customers may face a risk of orders to suspend our services or enforcement actions by data protection authorities in these impacted jurisdictions or other countries relating to personal data transfers to us and by us from these locations. Any such actions could result in substantial costs and diversion of resources, distract management and technical personnel and negatively affect our business, operating results and financial condition.

Outside the European Union and the United States, a number of countries have adopted or are considering privacy laws and regulations, including laws and regulations requiring local storage and processing of data, that may result in greater compliance efforts. In addition, government agencies and regulators have reviewed, are reviewing and will continue to review the personal data practices of certain online companies. If we are unable to comply with any such reviews or decrees that result in recommendations or binding changes, or if the recommended changes result in degradation of our products, our business could be harmed.

Our business, including our ability to operate and expand internationally, could be adversely affected if legislation or regulations are adopted, interpreted or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile applications, survey platform, solutions, features or our privacy policies. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly gather and use data from data subjects and help our customers collect and analyze data from survey respondents. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry standards or practices regarding the storage, use or disclosure of data our customers or respondents share with us, or regarding the manner in which the express or implied consent of consumers for such collection, analysis and disclosure is obtained. Such changes may require us to modify our survey platform, features and other products, possibly in a material manner, and may limit our ability to develop new products, solutions and features that make use of the data that we collect.

Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.

We are subject to a variety of laws in the United States and abroad, including laws regarding privacy, data protection, data security, data retention and consumer protection, accessibility, sending and storing of electronic messages (and related traffic data where applicable), human resource services, employment and labor laws, workplace safety, intellectual property and the provision of online payment services, including credit card processing, consumer protection laws, anti-bribery and anti-corruption laws, import and export controls, federal securities laws and tax regulations, which are continuously evolving and developing. The scope and interpretation of the laws and other obligations that are or may be applicable to us, our vendors or partners or certain groups of our users are often uncertain and may be conflicting, particularly laws and other obligations outside of the United States. For example, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement and other theories based on the nature and content of the materials searched, the advertisements posted or the content provided by users.

~~abuse~~implied orconsent ~~misuse~~of ~~our~~consumers ~~survey~~for ~~platform~~such ~~and~~collection, ~~other~~analysis ~~products~~and indisclosure ~~ways~~is ~~that~~obtained. ~~violate~~Such ~~laws~~changes ormay ~~cause~~require ~~damage~~us to modify our ~~business.~~survey Itplatform, isfeatures ~~difficult~~and toother ~~predict~~products, ~~how~~possibly ~~existing~~in ~~laws~~a ~~will~~material bemanner, ~~applied~~and tomay limit our ~~business~~ability ~~and~~to ~~whether~~develop wenew ~~will~~products, ~~become~~solutions ~~subject~~and tofeatures ~~new~~that ~~laws~~make oruse ~~legal~~of ~~obligations~~the data that ~~will~~we ~~impact our business~~collect.

Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.

We are subject to a variety of laws in the United States, Europe and elsewhere, including laws regarding privacy, data protection, data security, data retention and consumer protection, accessibility, sending and storing of electronic messages (and related traffic data where applicable), human resource services, employment and labor laws, workplace safety, intellectual property and the provision of online payment services, including credit card processing, consumer protection laws, anti-bribery and anti-corruption laws, import and export controls, federal securities laws and tax regulations, which are continuously evolving and developing. The scope and interpretation of the laws and other obligations that are or may be applicable to us, our vendors or partners or certain groups of our users are often uncertain and may be conflicting, particularly laws and other obligations outside of the United States. For example, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement and other theories based on the nature and content of the materials searched, the advertisements posted or the content provided by users.

In addition, regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning privacy, spam, data storage, data protection, local storage or processing of data, content regulation, cybersecurity, artificial intelligence, intellectual property infringement, consumer rights, government access to personal information and other matters that may be applicable to our business. For example, the European Union has recently been developing new requirements related to the use of data, artificial intelligence, and consumer protection, including the Digital Services Act, the Digital Markets Act, the Data Governance Act, the Data Act, the Artificial Intelligence Act, and the Omnibus Directive. These new regulations will add additional rules and restrictions on the use of data in our products and services and may reduce demand for and sales of our offerings, which would adversely impact our financial results. In addition, compliance with these laws may require substantial investment, provide technical challenges for our business, or divert engineering resources from other projects. More countries are enacting and enforcing laws related to the appropriateness of content and enforcing those and other laws by blocking access to services that are found to be out of compliance. It is also likely that as our business grows, evolves and an increasing portion of our business shifts to mobile and our solutions are used in a greater number of countries and additional groups, we will become subject to laws and regulations in additional jurisdictions. Users of our site and our solutions could also abuse or misuse our survey platform and other products in ways that violate laws or cause damage to our business. It is difficult to predict how existing laws will be applied to our business and whether we will become subject to new laws or legal obligations that will impact our business.

If we are not able to comply with these laws or other legal obligations, or if we or our vendors or users become liable under these laws or legal obligations, or if our products or services are suspended or blocked, we could be directly harmed, and we may be forced to implement new measures to reduce exposure to this liability. This may require us to expend substantial resources or to discontinue certain solutions, which would negatively affect our business, results of operations and financial condition. We could also be subject to investigations, enforcement actions and sanctions, mandatory changes to our products and solutions, disgorgement of profits, fines and damages, civil and criminal penalties or injunctions, claims for damages, termination of contracts and loss of intellectual property rights. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business, results of operations and financial condition.

We are subject to export and import control laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate such laws and regulations.

We are subject to U.S. export controls and sanctions regulations that prohibit the shipment or provision of certain products and solutions to certain countries, governments and persons targeted by U.S. sanctions. While we take precautions to prevent our products and services from being exported or used in violation of these laws, including implementing IP address blocking, we cannot guarantee that the precautions we take will prevent violations of export control and sanctions regulations. If we are found to be in violation of U.S. sanctions or export control laws, it could result in substantial fines and penalties for us and for the individuals working for us.

For example, following Russia’s invasion of Ukraine, the United States and other countries imposed economic sanctions and severe export control restrictions against Russia and Belarus and could impose wider sanctions and export restrictions and take other actions should the conflict continue to escalate. While we currently do not have any significant exposure, any exports or sales of our software or services into Russia and Belarus may be impacted by these restrictions. Monitoring and ensuring compliance with these complex U.S. export control laws is particularly challenging because our offerings are widely distributed throughout the world. Even though we take precautions to ensure that we and our partners comply with all relevant export control laws and regulations, any failure by us or our partners to comply with such laws and regulations could have negative consequences for us, including reputational harm, government investigations, and penalties.

In addition, various countries regulate the import and export of certain encryption and other technology, including import and export permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our products or could limit our users’ ability to access our survey platform in those countries. Changes in our products, or future changes in export and import regulations, may prevent our users with international operations from deploying our products globally or, in some cases, prevent the export or import of our products to certain countries, governments or persons altogether. Any change in export or import regulations, economic sanctions or related legislation or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell subscriptions to our products to, existing or potential users with international operations. Any decreased use of our survey platform or limitation on our ability to export or sell our products would likely adversely affect our business, results of operations and financial condition.

Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act and other anti-corruption, anti-bribery and anti-money laundering laws in various jurisdictions both domestic and abroad. These laws generally prohibit us and our employees from improperly influencing government officials or commercial parties in order to obtain or retain business, direct business to any person or gain any advantage. The FCPA, U.K. Bribery Act and similar applicable anti-bribery and anti-corruption laws also prohibit our third-party business partners, representatives and agents from engaging in corruption and bribery. We may be held liable for the acts of recently acquired companies, our third-party business partners, representatives and agents. To that end, in addition to our own salesforce, we leverage third parties to sell our products and conduct our business abroad. We and our third-party business partners, representatives and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners and agents, even if we do not explicitly authorize such activities. While we have policies and procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible. Any violation of the FCPA or other applicable anti-bribery, anti-corruption laws and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S. government contracts, substantial diversion of management’s attention, drop in stock price or overall adverse consequences to our business, all of which may have an adverse effect on our reputation, business, results of operations and financial condition.

5758

We and our third-party business partners, representatives and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries, our employees, representatives, contractors, channel partners and agents, even if we do not explicitly authorize such activities. While we have policies and procedures to address compliance with such laws, we cannot assure you that our employees and agents will not take actions in violation of our policies or applicable law, for which we may be ultimately held responsible. Any violation of the FCPA or other applicable anti-bribery, anti-corruption laws and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, severe criminal or civil sanctions or suspension or debarment from U.S. government contracts, substantial diversion of management’s attention, drop in stock price or overall adverse consequences to our business, all of which may have an adverse effect on our reputation, business, results of operations and financial condition.

Our international operations involve risks that could increase our expenses, adversely affect our operating results and require increased time and attention of our management.

We derive a portion of our revenue from customers located outside of the United States and we have significant operations outside of the United States, including engineering, sales and customer support. We plan to ~~expand~~strategically invest in our international operations, but such ~~expansion~~investment is contingent upon the financial performance of our existing international operations as well as our identification of growth opportunities.

Our international operations are subject to risks in addition to those our domestic operations face, including:

•

potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced;

•

requirements of foreign laws and other governmental controls, including laws related to privacy, data protection and transfer, trade and labor restrictions and related laws that reduce the flexibility of our business operations;

•

local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the FCPA, U.K. Bribery Act and other anti-corruption laws and regulations;

•

restrictions on our ability to repatriate cash from our international subsidiaries or to exchange cash in international subsidiaries into cash available for use in the United States;

•

fluctuations in currency exchange rates, economic instability and inflationary pressures could reduce our customers’ ability to obtain financing for software products and solutions or that could make our survey platform and solutions more expensive or could increase our costs of doing business in certain countries;

•

limitations on future growth or inability to maintain current levels of revenue from international sales if we do not invest sufficiently in our international operations, or execute properly on such investments;

•

difficulties in staffing, managing and operating our international operations, including difficulties related to administering our equity incentive plan in some foreign countries;

•

difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations;

•

seasonal reductions in business activity in the summer months in Europe and in other periods in other countries;

•

costs and delays associated with developing software and providing support in multiple languages; and

•

political unrest, war (including Russia's invasion of Ukraine) or terrorism, or regional natural disasters, effects of climate change or pandemics (including the COVID-19 pandemic), particularly in areas in which we have facilities.

The level of corporate tax from sales to our non-U.S. customers is generally less than the level of tax from sales to our U.S. customers. This benefit is contingent upon existing tax regulations in the U.S and in the countries in which our international operations are located. Future changes in domestic or international tax regulations could adversely affect our ability to continue to realize these tax benefits.

58The intended tax efficiency of our corporate structure and intercompany arrangements depends on the interpretation and application of the tax laws of various jurisdictions and on how we operate our business; changes to our effective tax rate could adversely impact our results.

~~The~~Our ~~intended~~corporate ~~tax~~structure ~~efficiency~~and ofintercompany arrangements, including the manner in which we develop and use our ~~corporate~~intellectual ~~structure~~property and the transfer pricing of our intercompany ~~arrangements~~transactions, ~~depend~~are onintended ~~the~~to ~~interpretation~~optimize ~~and~~business ~~application~~efficiency ofas ~~the~~well as reduce our worldwide effective tax rate. The tax laws of various jurisdictions, including the United States and onthe ~~how~~other jurisdictions in which we operate, are subject to change, and their application to our international business, activities is subject to interpretation and ~~changes~~depends on our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology or for transfer pricing on intercompany arrangements, or they may make a determination that the manner in which we operate results in our business not achieving the intended tax consequences. This could increase our worldwide effective tax rate and harm our results of operations and financial condition. Our effective tax rate could be adversely ~~impact~~affected by several other factors, many of which are outside of our ~~results.~~control, such as: increases in expenses that are not

Our corporate structure and intercompany arrangements, including the manner in which we develop and use our intellectual property and the transfer pricing of our intercompany transactions, are intended to optimize business efficiency as well as reduce our worldwide effective tax rate. The tax laws of various jurisdictions, including the United States and the other jurisdictions in which we operate, are subject to change, and their application to our international business activities is subject to interpretation and depends on our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology or for transfer pricing on intercompany arrangements, or they may make a determination that the manner in which we operate results in our business not achieving the intended tax consequences. This could increase our worldwide effective tax rate and harm our results of operations and financial condition. Our effective tax rate could be adversely affected by several other factors, many of which are outside of our control, such as: increases in expenses that are not deductible for tax purposes, the tax effects of restructuring charges or purchase accounting for acquisitions, increases in withholding taxes, changes related to our ability to ultimately realize future benefits attributed to our deferred tax assets, including those related to other-than-temporary impairment, and a change in our decision to indefinitely reinvest foreign earnings. Further, we periodically undergo review and audit by both domestic and foreign tax authorities and expect such actions to continue in the future. Any adverse outcome of such a review or audit could have a negative effect on our results of operations and financial condition.59

deductible for tax purposes, the tax effects of restructuring charges or purchase accounting for acquisitions, increases in withholding taxes, changes related to our ability to ultimately realize future benefits attributed to our deferred tax assets, including those related to other-than-temporary impairment, and a change in our decision to indefinitely reinvest foreign earnings. Further, we periodically undergo review and audit by both domestic and foreign tax authorities and expect such actions to continue in the future. Any adverse outcome of such a review or audit could have a negative effect on our results of operations and financial condition.

The enactment of legislation implementing changes in the U.S. taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in jurisdictions outside of the United States could materially impact our results of operations and financial condition.

Changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. tax laws that may be enacted in the future, could impact the tax treatment of our domestic and foreign earnings and adversely impact our effective tax rate. For example, in August 2022, the United States enacted the Inflation Reduction Act of 2022 which imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations, as well as a one percent excise tax on corporate stock repurchases by publicly traded companies. This act, as well as any other changes to tax laws that are enacted, could adversely affect our tax liability. The same is true for changes to tax laws in the other countries in which we operate. Due to the expanding scale of our international business activities, any changes in the U.S. or international taxation of such activities may increase our worldwide effective tax rate and harm our business, results of operations and financial condition.

Our operating results may be harmed if we are required to collect sales or other related taxes on subscriptions to our products in jurisdictions where we have not historically done so.

We collect sales, use, value-added and other transaction taxes as part of our subscription agreements in a number of jurisdictions. One or more states or countries may seek to impose incremental or new sales, use, value added or other tax collection obligations on us, including for past sales by us or our resellers and other partners. A successful assertion by a state, country or other jurisdiction that we should have been or should be collecting additional sales, use, value added or other taxes on our products could, among other things, result in substantial tax liabilities, discourage users from utilizing our products or otherwise harm our business, results of operations and financial condition.

We have a history of net losses, ~~we anticipate increasing expenses in the future~~ and we may not be able to achieve or maintain profitability.

We have incurred net losses on an annual basis since our reincorporation. We incurred net losses of approximately $2023.38 million and $8637.34 million during the three ~~and nine~~ months ended ~~September~~March 3031, 2023 and 2022, respectively, and ~~$22.9~~we ~~million~~had ~~and~~an accumulated deficit of approximately $81731.83 million ~~during~~as ~~the~~of ~~three~~March ~~and~~31, ~~nine~~2023. ~~months~~These ~~ended~~losses ~~September~~reflect, 30among other things, ~~2021~~significant investments we made to grow our business, ~~respectively~~particularly to scale our business. We ~~had~~expect anto ~~accumulated~~continue ~~deficit~~to ofmake ~~approximately~~future ~~$703.8~~investments ~~million~~and asexpenditures related to the growth of ~~September~~our 30business, ~~2022.~~including Asstrategic weinvestments ~~strive~~in our sales and marketing activities, hiring employees necessary to ~~grow~~meet our ~~business~~needs, weinvestments ~~expect~~in ~~expenses~~technical infrastructure to ~~increase~~continue into satisfy the ~~near~~needs ~~term~~of our user base, ~~particularly~~and ascontinued investments in research and development to support these efforts. In addition, we will continue to ~~make~~incur ~~investments~~additional general and administrative expenses to ~~scale~~support both our ~~business~~growth as well as our operations as a publicly traded company. ~~For~~These ~~example,~~investments wemay ~~are~~not ~~actively~~result ~~investing~~in increased revenue or growth in our ~~sales~~business. ~~team~~We may encounter unforeseen or unpredictable factors, ~~and~~including weunforeseen ~~will~~operating ~~need~~expenses, ancomplications ~~increasing~~or ~~amount~~delays, ofwhich ~~technical~~may ~~infrastructure~~result toin ~~continue~~increased costs. Furthermore, it is difficult to ~~satisfy~~predict the ~~needs~~size and growth rate of our market, user ~~base~~demand for our survey platform, the entry of competitive survey platforms or other products or the success of existing competitive products and solutions. WeAs ~~also~~a ~~expect~~result, we may not achieve or maintain profitability in future periods. If we fail to grow our ~~research~~revenue sufficiently to keep pace with our investments and ~~development~~other expenses, our business, results of operations and financial condition would be adversely affected.

expenses to increase as we continue to hire employees for our engineering, product and design teams to support these efforts. In addition, we will incur additional general and administrative expenses to support both our growth as well as our operations as a publicly traded company. These investments may not result in increased revenue or growth in our business. We may encounter unforeseen or unpredictable factors, including unforeseen operating expenses, complications or delays, which may result in increased costs. Furthermore, it is difficult to predict the size and growth rate of our market, user demand for our survey platform, the entry of competitive survey platforms or other products or the success of existing competitive products and solutions. As a result, we may not achieve or maintain profitability in future periods. If we fail to grow our revenue sufficiently to keep pace with our investments and other expenses, our business, results of operations and financial condition would be adversely affected.

Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, ~~2021~~2022, we had $~~349~~353.81 million of federal and $~~208~~215.07 million of state net operating loss carryforwards available to reduce future taxable income, ~~which~~some ~~began~~of towhich will expire during ~~2020~~2023. As of December 31, ~~2021~~2022, we had federal research and development credits of $2827.25 million which will begin to expire in ~~2032~~2034; state research and development credits of $23.06 million which will carryforward indefinitely; and foreign research and development credits of $2.0 million which will begin to expire in 2037. Under Sections 382 and 383 of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Based on analysis performed, we have concluded that approximately $47.1 million of net operating loss carryforwards from companies we have previously acquired are subject to limitation under Section 382 of the Code. At this time, for our non-acquired net operating losses, we have not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since our formation. We may have experienced various ownership changes, as defined by the Code, as a result of past financing transactions (or other activities), and we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control. Accordingly, our ability to utilize the aforementioned carryforwards may be limited.

development credits of $2.1 million which will begin to expire in 2039. Under Sections 382 and 383 of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Based on analysis performed, we have concluded that approximately $45.1 million of net operating loss carryforwards from companies we have previously acquired are subject to limitation under Section 382 of the Code. At this time, for our non-acquired net operating losses, we have not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since our formation. We may have experienced various ownership changes, as defined by the Code, as a result of past financing transactions (or other activities), and we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, some of which may be outside of our control. Accordingly, our ability to utilize the aforementioned carryforwards may be limited.

General Risks

If internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, use and engagement by users could decline.

We depend in part on various internet search engines to direct a significant portion of our traffic to our websites. Similarly, we depend on providers of mobile application “store fronts” to allow users to locate and download our mobile applications that enable our product. Our ability to maintain the number of visitors directed to our websites and users of our survey platform is not entirely within our control. Our competitors’ search engine optimization ("“SEO"”) efforts may result in their websites receiving a higher search engine results page ranking than ours, or internet search engines could revise their methodologies in an attempt to improve their search results, which could adversely affect the placement of our search result page ranking. If search engine companies modify their search algorithms in ways that are detrimental to our new user growth or in ways that make it harder for our users to use our website, if we fail to successfully manage changes in SEO and social media traffic or if our competitors’ SEO efforts are more successful than ours, overall growth in our user base could slow, user engagement could decrease and we could lose existing users. These modifications may be prompted by search engine companies entering the online survey market or aligning with competitors. Additionally, our competitors may adopt search engine marketing tactics such as bidding on our terms in order to drive up our costs. This could make it more expensive to acquire new customers using our current marketing methods. Our websites have experienced fluctuations in search engine results page rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of users directed to our websites would harm our business, results of operations and financial condition.

Our business depends on continued and unimpeded access to the internet and mobile networks by us and our users on personal computers and mobile devices.

Our survey platform and solutions depend on the ability of our customers, respondents and users to access our products through their personal computers and mobile devices. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies and government-owned service providers, any of whom could take actions that degrade, disrupt or increase the cost of user access to our products, which would, in turn, negatively impact our business. In addition, internet or network access could be disrupted by other third parties. Further, the adoption of any laws or regulations that adversely affect the growth, popularity or use of the internet and mobile networks, including laws limiting internet neutrality, could decrease the demand for our paid subscription offerings or the usage of our survey platform and increase our cost of doing business.

If we are unable to effectively operate on mobile devices, our business could be adversely affected.

Our customers and respondents are increasingly accessing our products on mobile devices. We are devoting valuable resources to solutions related to monetization of mobile usage, and cannot assure you that these solutions will be successful. If the mobile solutions we have developed do not meet the needs of current prospective customers or respondents, or if our solutions are difficult to access, they may reduce their usage of our products or cease using our products altogether and our business could suffer. Additionally, we are dependent on the interoperability of our products with popular mobile operating systems, networks and standards that we do not control, such as Android and iOS operating systems, and any changes in such systems and terms of service that degrade our solutions’ functionality or give preferential treatment to competitive products could adversely affect traffic and monetization on mobile devices. We may not be successful in maintaining and developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks or standards. Each manufacturer or distributor may establish unique technical standards for its devices, and our products may not work or be easily accessible or viewable on these devices as a result. Some manufacturers may also elect not to include our products on their devices, or we may have difficulty preparing or loading our applications in app stores. As new devices and products are continually being released, it is difficult to predict the challenges we may encounter in developing versions of our solutions for use on these alternative devices. If we are unable to successfully implement monetization strategies for our solutions on mobile devices, or if these strategies are not as successful as our offerings for personal computers or if we incur excessive expenses in this effort, our business, results of operations and financial condition would be negatively affected.

products with popular mobile operating systems, networks and standards that we do not control, such as Android and iOS operating systems, and any changes in such systems and terms of service that degrade our solutions’ functionality or give preferential treatment to competitive products could adversely affect traffic and monetization on mobile devices. We may not be successful in maintaining and developing relationships with key participants in the mobile industry or in developing products that operate effectively with these technologies, systems, networks or standards. Each manufacturer or distributor may establish unique technical standards for its devices, and our products may not work or be easily accessible or viewable on these devices as a result. Some manufacturers may also elect not to include our products on their devices, or we may have difficulty preparing or loading our applications in app stores. As new devices and products are continually being released, it is difficult to predict the challenges we may encounter in developing versions of our solutions for use on these alternative devices. If we are unable to successfully implement monetization strategies for our solutions on mobile devices, or if these strategies are not as successful as our offerings for personal computers or if we incur excessive expenses in this effort, our business, results of operations and financial condition would be negatively affected.

If we are unable to successfully implement monetization strategies for our solutions on mobile devices, or these strategies are not as successful as our offerings for personal computers, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.

Failure to protect or enforce our intellectual property rights could harm our business and results of operations.

We regard the protection of our trade secrets, copyrights, trademarks, trade dress, databases, domain names and patents as critical to our success. We strive to protect our intellectual property rights by relying on federal, state and common law rights and other rights provided under foreign laws. These laws are subject to change at any time and could further restrict our ability to protect our intellectual property rights. In addition, the existing laws of certain foreign countries in which we operate may not protect our intellectual property rights to the same extent as do the laws of the United States. We also have a practice of entering into confidentiality and invention assignment agreements with our employees and contractors, and often enter into confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. In addition, from time to time we make our technology available to others under license agreements, including open source license agreements. However, these contractual arrangements and the other steps we have taken to protect our intellectual property rights may not prevent the misappropriation of our proprietary information, infringement of our intellectual property rights or deter independent development of similar or competing technologies by others and may not provide an adequate remedy in the event of such misappropriation or infringement.

We believe it is important to maintain, protect and enhance our brands. Obtaining and maintaining effective intellectual property rights is expensive, including the costs of defending our rights. We are seeking to protect certain of our intellectual property rights through filing applications for copyrights, trademarks, service marks, patents and domain names in the United States and many locations outside of the United States, a process that is expensive and may not be successful in all jurisdictions. Even where we have such rights, they may later be found to be unenforceable or have a limited scope of enforceability. In addition, we may not seek to pursue such protection in every location. We have already and may, over time, increase our investment in protecting innovations through investments in patents and similar rights, and this process is expensive and time-consuming.

may not be successful in all jurisdictions. Even where we have such rights, they may later be found to be unenforceable or have a limited scope of enforceability. In addition, we may not seek to pursue such protection in every location. We have already and may, over time, increase our investment in protecting innovations through investments in patents and similar rights, and this process is expensive and time-consuming.

Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and results of operations. We may also incur significant costs in enforcing our trademarks against those who attempt to imitate our “Momentive” and “SurveyMonkey” brands and other valuable trademarks and service marks.

In addition, we have chosen to make certain of our technology available under open source licenses that allow others to use the technology without payment to us. While we hope to benefit from these activities by having access to others’ useful technology under open source licenses, there is no assurance that we will receive the business benefits we expect.

If we fail to maintain, protect and enhance our intellectual property rights, our business, results of operations and financial condition may be harmed and the market price of our common stock could decline.

We have relationships with third parties to provide, develop and create applications that integrate with our products, and our business could be harmed if we are not able to continue these relationships.

We use software and services licensed and procured from third parties to develop and offer our survey platform and other products. We may need to obtain future licenses and services from third parties to use intellectual property and technology associated with the development of our products, which might not be available to us on acceptable terms or at all. Any loss of the right to use any software or services required for the development and maintenance of our products could result in delays in the provision of our products until equivalent technology is either developed by us or, if available from others, is identified, obtained and integrated, which could harm our business. Any errors or defects in third-party software or services could result in errors or a failure of our products, which could harm our business, results of operations and financial condition.

We also depend on our ecosystem of developers to create applications that will integrate with our survey platform. We offer prebuilt integrations, data portability and single sign-on identity with applications, such as those offered by Salesforce, Marketo, Tableau, Microsoft, and Oracle, as well as open APIs and configurable integrations. Our competitors may be effective in providing incentives to third parties to favor their survey platform, or to prevent or reduce subscriptions to our survey platform. Our reliance on this ecosystem of developers creates certain business risks relating to the quality of the applications built using our application programming interface, including product interruptions of our survey platform from these applications, lack of product support for these applications, our reputation being harmed if the applications do not function as intended and possession of intellectual property rights associated with these applications. We may not have the ability to control or prevent these risks. As a result, issues relating to these applications could adversely affect our brand, reputation, business, results of operations and financial condition.

If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our results of operations may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our products or increased revenue.

Our use of open source software could negatively affect our ability to offer and sell subscriptions to our products and subject us to possible litigation.

A portion of the technologies we use incorporates open source software, and we may incorporate open source software in the future. Open source software is generally licensed by its authors or other third parties under open source licenses. The terms of many open source licenses have not been interpreted by U.S. or other courts, and these licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. These licenses may require us to offer our products that incorporate such open source software for no cost, that we make publicly 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. We may face claims from others claiming ownership of open source software or patents related to that software, rights to our intellectual property or breach of open source license terms, including a demand for release of material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation, which could be costly to defend, require us to purchase a costly license, require us to establish additional specific open source compliance procedures, or require us to devote additional research and development resources to remove open source elements from or otherwise change our solutions, any of which would have a negative effect on our business and results of operations. In addition, if we were to combine our own software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of some software that would be valuable to keep as a trade secret and/or not make available for use by others. Any of the foregoing could disrupt and harm our business, results of operations and financial condition.

derivative works under the terms of the particular open source license. We may face claims from others claiming ownership of open source software or patents related to that software, rights to our intellectual property or breach of open source license terms, including a demand for release of material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation, which could be costly to defend, require us to purchase a costly license, require us to establish additional specific open source compliance procedures, or require us to devote additional research and development resources to remove open source elements from or otherwise change our solutions, any of which would have a negative effect on our business and results of operations. In addition, if we were to combine our own software with open source software in a certain manner, we could, under certain open source licenses, be required to release the source code of some software that would be valuable to keep as a trade secret and/or not make available for use by others. Any of the foregoing could disrupt and harm our business, results of operations and financial condition.

We may be subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and results of operations.

We may be party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We may face allegations, lawsuits and regulatory inquiries, audits and investigations regarding data privacy, security, labor and employment, consumer protection and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights and other rights. We may also face allegations, lawsuits and regulatory inquiries, audits and investigations related to our acquisitions, securities issuances or our business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the patent infringement and class action matters we could face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or require us to stop offering certain features, all of which could negatively impact our user and revenue growth. We may also become subject to periodic audits, which would likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.

other rights. We may also face allegations, lawsuits and regulatory inquiries, audits and investigations related to our acquisitions, securities issuances or our business practices, including public disclosures about our business. Litigation and regulatory proceedings, and particularly the patent infringement and class action matters we could face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products or require us to stop offering certain features, all of which could negatively impact our user and revenue growth. We may also become subject to periodic audits, which would likely increase our regulatory compliance costs and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time-consuming and diverts management’s attention from our business.

The results of regulatory proceedings, litigation, claims and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our reputation, business, results of operations, financial condition and the market price of our common stock.

The COVID-19 pandemic has caused economic instability and global uncertainty, and the extent to which it will impact our business and results of operations is uncertain and difficult to predict.

The ~~COVID-19~~severity ~~pandemic has caused economic instability~~ and ~~global~~spread ~~uncertainty.~~of Asnew aor ~~result~~existing variants of the COVID-19 ~~pandemic,~~virus weand ~~transitioned~~changes toin ainfection ~~hybrid~~rates ~~work~~may ~~environment~~impact ~~where most of our employees have~~ the ~~flexibility~~health toand ~~determine~~productivity ~~the amount~~ of ~~time they work from home and in~~ our ~~offices. We continue to evaluate and refine our hybrid~~ workforce and ~~real~~may ~~estate~~disrupt ~~needs.~~the ~~Although~~operations ~~many~~of ~~jurisdictions~~our ~~have~~customers, ~~relaxed~~partners ~~their guidelines~~ and ~~restrictions,~~other inthird-party ~~some~~providers ~~cases,~~for ~~these~~an ~~have~~indefinite ~~been,~~period orof ~~may in the future be, reinstated~~time. ~~The~~ ~~extent~~As toa ~~which~~result ~~adverse~~of ~~economic impacts arising from~~ the COVID-19 pandemic, ~~could~~we ~~negatively~~transitioned ~~affect~~to ~~our~~a ~~business~~hybrid iswork ~~uncertain~~environment ~~and~~where ~~difficult~~most ~~to predict, and any~~ of ~~such negative impacts could harm~~ our ~~business,~~employees ~~results~~have ofthe ~~operations~~flexibility ~~and~~to ~~financial~~determine ~~condition. In addition,~~ the ~~severity~~amount ~~and spread~~ of ~~new~~time orthey ~~existing~~work ~~variants~~from ofhome ~~the virus~~ and ~~changes~~ in ~~infection~~our ~~rates~~offices. ~~may~~We ~~impact~~will ~~the~~continue ~~health~~to ~~and~~evaluate ~~productivity of our workforce~~ and ~~may~~refine ~~disrupt the operations of~~ our ~~customers,~~hybrid ~~partners~~workforce and ~~other~~real ~~third-party~~estate ~~providers for an indefinite period of time~~needs. It is not possible at this time to estimate the impact that the COVID-19 pandemic could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

Our business could be disrupted by catastrophic events and man-made problems, such as power disruptions, data security breaches, war and terrorism.

Our systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, which could be exacerbated by climate change, including earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunction, ~~cyber-attack~~cyberattack, war, terrorist attack, incident of mass violence or pandemics (including the COVID-19 pandemic), which could result in lengthy interruptions in the use of our products. In particular, our U.S. headquarters and certain of the facilities we lease to house our computer and telecommunications equipment are located in the San Francisco Bay Area, a region known for seismic activity and that has experienced and may continue to experience, climate-related events at an increasing rate, including drought and water scarcity, warmer temperatures, wildfires and air quality impacts and power shut-offs associated with wildfire prevention, and our insurance coverage may not compensate us for losses that may occur in the event of an earthquake, wildfire or other significant natural disaster. In addition, acts of terrorism, including malicious internet-based activity, could cause disruptions to the Internet or the economy as a whole. ~~Even~~Our ~~with the~~ disaster recovery ~~arrangements~~plan ~~we've~~may ~~implemented~~not be sufficient to address all aspects or any unanticipated consequence or incident, and use of our products could be interrupted. If our systems were to fail or be negatively impacted as a result of a natural disaster, climate change, pandemic, or other event, our ability to deliver products and solutions to our users would be impaired or we could lose critical data. If we are unable to develop adequate plans to ensure that our business functions continue to operate during and after a disaster, and successfully execute on those plans in the event of a disaster or emergency, our business, results of operations, financial condition and reputation would be harmed.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to our business, results of operations and financial condition that may result from interruptions in our product use as a result of system failures.

Our operations are subject to the effects of a rising rate of inflation.

The United States has recently experienced historically high levels of inflation. According to the U.S. Department of Labor, the annual inflation rate for the United States was approximately 7.0% for 2021. If the inflation rate continues to increase, such as increases in the costs of labor, it will likely affect all of our expenses, especially employee compensation expenses. Additionally, the United States is experiencing an acute workforce shortage, which in turn, has created a hyper-competitive wage environment that may increase our operating costs. To the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our consolidated financial condition and results of operations. 64

The United States has recently experienced historically high levels of inflation. According to the U.S. Department of Labor, the annual inflation rate for the United States was approximately 6.5% for 2022. If the inflation rate continues to increase, such as increases in the costs of labor, it will likely affect all of our expenses, especially employee compensation expenses. Additionally, the United States is experiencing an acute workforce shortage, which in turn, has created a hyper-competitive wage environment that may increase our operating costs. To the extent inflation results in rising interest rates and has other adverse effects on the market, it may adversely affect our consolidated financial condition and results of operations.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features, products and solutions, or enhance our existing survey platform, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we have engaged and may continue to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

Acquisitions and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact our business, results of operations and financial condition.

We have acquired a number of companies in the past and may make additional acquisitions in the future to add employees, complementary companies, products, solutions, technologies or revenue. Future acquisitions could be material to our results of operations and financial condition. We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The identification of suitable acquisition candidates and negotiations of these transactions can be difficult, time-consuming and costly, and we may not be able to complete acquisitions on favorable terms, if at all. The process of integrating an acquired company, business or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

•

loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful;

•

diversion of management time and focus from operating our business to addressing acquisition integration challenges;

•

implementation or remediation of controls, procedures and policies at the acquired company;

•

integration of the acquired company’s accounting, human resource and other administrative systems, and coordination of product, engineering and sales and marketing function;

•

assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;

•

failure to successfully further develop the acquired technology or realize our intended business strategy;

•

failure to find commercial success with the products or services of the acquired company;

•

difficulty of transitioning the acquired technology onto our existing survey platforms and maintaining the security standards for such technology consistent with our other products and solutions;

•

failure to successfully onboard customers or maintain brand quality of acquired companies;

•

liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

•

failure to generate the expected financial results related to an acquisition on a timely manner or at all; and

•

failure to accurately forecast the impact of an acquisition transaction.

These risks or other problems encountered in connection with our acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities and adversely affect our business generally.

Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, amortization expenses or write-offs of goodwill, any of which could harm our financial condition. In addition, any acquisitions we announce could be viewed negatively by users, marketers, developers, partners or investors.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing our Consolidated Financial Statements include those related to deferred commissions, stock-based compensation, business combination valuation of goodwill and acquired intangible assets, and incremental borrowing rate for leases. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.

The tracking of certain of our user metrics is done with internal tools and is not independently verified. Certain of our user metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.

We track certain user metrics with internal tools, which are not independently verified by any third party. Our internal tools have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our user metrics, including the metrics we report. If the internal tools we use to track these metrics undercount or overcount performance or contain algorithm or other technical errors, the data we report may not be accurate. For example, we track the number of individual users and organizational domains but cannot determine the number of unique users or unique organizations in which we have paying customers with certainty, and our inability to determine the number of our unique users and unique organizations in which we have paying customers may adversely affect our understanding of certain aspects of our business and make it more challenging to manage our business. In addition, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our longer-term strategies. Additionally, regulatory changes could affect requirements related to data we track related to our metrics, and those changes could impact how we continue to measure and compare data over time. If our performance metrics are not accurate representations of our business, if we discover material inaccuracies in our metrics or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, our reputation may be harmed and our business, results of operations and financial condition could be adversely affected, causing our stock price to decline.

Certain of our growth expectations and key business metrics included in this Quarterly Report on Form 10-Q could prove to be inaccurate, and any real or perceived inaccuracies may harm our reputation and negatively affect our business.

Growth expectations are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. We also rely on assumptions and estimates to calculate certain of our key business metrics, such as paying users. We regularly review and may adjust our processes for calculating our key business metrics to improve their accuracy. Our key business metrics may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology. If investors or analysts do not perceive our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations and financial condition would be harmed.

our metrics to be accurate representations of our business, or if we discover material inaccuracies in our metrics, our reputation, business, results of operations and financial condition would be harmed.

If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations of the applicable listing standards of The Nasdaq Stock Market LLC. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources.

Three Months Ended March 31,

United States

Rest of world