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We maintain a network of different types of partners, some of whom create integrations with our products. For example, we partner with Microsoft Corporation to offer Microsoft 365 email and related productivity tools. We also work to make certain of our products interoperable with services such as Yelp, Google, Amazon, WhatsApp and Instagram. In addition, we provide payment options for customers' websites through providers such as PayPal, Stripe, Block and Mercado Libre. We have invested and will continue to invest in partner programs our partnerships to provide new these product offerings and tools to our customers, to assist us in expanding the suite of solutions and tools we can offer to our customers and to help us attract additional new customers and retain and grow our existing customers. However, Despite these investments, our relationships with our partners partnerships may not be as successful in retaining or generating new customers as we anticipate, which could adversely affect our ability to increase retain our current customers or grow our total customers. customers, and could materially adversely affect our business and financial results. Further, these integrated products could require substantial investment while providing no assurance of return or incremental revenue. We also rely on some of our partners to create integrations with third-party applications and platforms used by our customers, If a key partner, such as the email encryption service provided by Proofpoint, Inc., email backup Microsoft, were to terminate its relationship with us, materially limit our or our customers' access to its products and migration services provided by SkyKick and email archiving services provided by Barracuda. If our partners services, fail to create such operable integrations, fail to perform as expected, or if they change the features features, availability or pricing of their applications or alter the terms governing our or our customers' use of their applications in an adverse manner, demand for their products, and as a result our products could decrease, we could be required to transition customers to alternative solutions, which may not be available on comparable terms, may be operationally complex and could result in service disruptions, increased costs or loss of customers, all of which would harm our business and operating results. If In addition, if our relationships with our partners deteriorate or we are unable to maintain our contractual relationships with our existing partners or establish new contractual relationships with potential partners, we may not be able to offer the products and related functionality our customers expect, we may experience delays and increased costs in adding providing for our customers or attracting new customers, and we may lose existing customers. Any ineffectiveness of our partner programs could materially adversely affect our business and results of operations and may cause reputational harm. In addition, our partners may increase the fees they charge us or offer their services on terms that are less than favorable to us, including in connection with renewal negotiations. Such increased costs or less than favorable terms could result in increased costs to customers and potential loss of customers, which could have an adverse impact on our results of operations.

As described below, on January 1, 2024, we completed The $316.5 million, or 184.5%, change in benefit (provision) for income taxes was primarily due to the completion of the DNC Restructure Restructure, as defined and further discussed in Note 15 to our financial statements, which resulted in the conversion of Desert Newco was converted from a partnership to a disregarded entity for U.S. income tax purposes, which and resulted in a one-time non-cash income tax benefit in the first quarter of 2024 of $267.4 million. During 2023, we released Additionally, income before income taxes increased $254.6 million year over year, contributing to a majority higher income tax provision in the current period. This increase was partially offset by a $34.6 million income tax benefit recognized during the first quarter of our domestic valuation allowance on a portion 2025 related to the recognition of our deferred an uncertain tax assets resulting position in a $1,014.0 million non-cash income foreign jurisdiction as a result of a favorable tax benefit. This release was related to our U.S. federal and state domestic NOLs, credit carryforwards and other deferred tax assets (DTAs). court ruling.

On June 7, 2022, IBEW Local Union 481 Defined Contribution Plan and Trust, a purported shareholder (IBEW), filed a shareholder derivative complaint in the Delaware Court of Chancery against certain current and former officers and directors of the company and the company as a nominal defendant. The complaint asserts claims of breach of fiduciary duty and corporate waste relating to the approval of certain settlement and release agreements we the company entered into with respect to certain Tax Receivable Agreements (TRAs) entered into with our its pre-IPO owners. The complaint seeks monetary damages and restitution from the defendants on behalf of the company, an order directing the company to implement changes to its corporate governance and internal procedures, and an award of attorneys’ attorneys' fees and costs. The Plaintiff IBEW filed an amended complaint in lieu of opposing the company's initial motion on November 4, 2022. The company filed a motion to dismiss the amended complaint on January 6, 2023; briefing was completed on April 27, 2023. On August 24, 2023, the Court court denied the company's motion to dismiss the amended complaint. On September 21, 2023, the company's board of directors resolved to form a Special Litigation Committee (the SLC) vested with the full authority of the board of directors, to take any such action with respect to the litigation that the SLC, in its sole discretion, deems to be in the best interests of the company. The SLC completed its investigation and concluded, in the exercise of its business judgment, that dismissal of the action with prejudice would be in the best interests of the company and its shareholders. On December 13, 2024, the SLC moved to terminate the action. On September 4, 2025, the SLC filed its opening brief in support of its motion to terminate the action. On September 19, 2025, the SLC filed a motion for a briefing schedule on its motion to terminate, which the court resolved on October 13, 2025 by ordering the parties to meet and confer regarding further discovery and briefing deadlines. Discovery is ongoing. The motion is pending further proceedings before the court.

We hold certain assets and liabilities required to be measured at fair value on a recurring basis. These include time deposits and money market funds, notice deposits, which we classify within Level 1 because we use quoted market prices to determine their fair value. Level 2 assets and liabilities include commercial paper and derivative financial instruments associated with hedging activity, as further discussed in Note 11. Derivative financial instruments are measured at fair value on the contract date and are subsequently remeasured each reporting period using inputs such as spot rates, discount rates and forward rates. There are no active markets for the hedge contracts themselves; however, the inputs used to calculate the fair value of the instruments are tied to active markets.