Risk Factors Update Summary

• Added financial loss due to disruptions to business operations, including unauthorized access, leading to loss of intellectual property.
• Risks Relating to Regulation expanded to include oversight by multiple authorities and governing bodies in multiple countries.
• Net revenue decreased to $676.2 million in 2023 from $748.2 million in 2022.
• Insurance coverage for potential claims may not be adequate, exposing us to liability.
• Significant net losses incurred since inception, with accumulated deficit of $825.2 million in 2023.
• Increased compliance costs and potential harm to business and financial condition due to uncertain interpretation of regulations.
• Total net revenue decreased by 10% in 2023 and increased by 45% in 2022.
• Increased risk due to inability to track and manage hardware and software assets, potentially affecting business and financial condition.
• The number of shares beneficially owned by affiliates increased from 50% to 52%.
• Equity awards granted to employees and directors may dilute ownership as they vest.
• Enhanced risk from cybersecurity breaches, with potential liabilities exceeding insurance coverage for privacy, information security, and data protection.
• Concentration risk: Block accounted for 68% of net revenue in 2023, down from 71% in 2022.
• TPV increased to $222.3 billion in 2023 from $166.3 billion in 2022, a 34% increase.
• Potential impact on business due to changes in Interchange Fees, with a significant portion of net revenue derived from them.
• Net losses were $223.0 million in 2023, $184.8 million in 2022, and $163.9 million in 2021.
• A $200 million share repurchase program was approved, impacting share value and liquidity.
• Performance incidents may continue, impacting operations and customer trust, requiring remediation.
• Risks related to intellectual property expanded to include potential infringement accusations and challenges related to open source software.
• Added risk from successful large claims exceeding available insurance coverage, impacting business and financial condition.
• Potential impact on net revenue due to changes in tax laws, with recent proposed legislation affecting deductions.
• New risk related to changes in insurance policies, premiums, and deductibles affecting business and financial condition.
• Increased risk from potential disruptions in credit markets affecting labor expenses and availability of qualified personnel.
• Risks related to compliance with laws and regulations, including privacy, data protection, and information security, could adversely affect business operations.
• Risks related to failure to comply with internal control requirements, including material weaknesses identified in accounting and IT controls.
• Added risk from potential losses related to settlement of payment transactions and fraudulent use of payment cards.