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We also may be required to protect our proprietary technology and content in an increasing number of jurisdictions, a process that is expensive and may not be
successful, or which we may not pursue in every location. In addition, effective intellectual property protection may not be available to us in every country, and the
laws of some foreign countries may not be as protective of intellectual property rights as those in the United States. Additional uncertainty may result from changes
to intellectual property legislation enacted in the United States and elsewhere, and from interpretations of intellectual property laws by applicable courts and
agencies. Accordingly, despite our efforts, we may be unable to obtain and maintain the intellectual property rights necessary to provide us with a competitive
advantage.
Because our long-term growth strategy involves further expansion outside the United States, our business will be susceptible to risks associated with
international operations.
An important component of our growth strategy involves the further expansion of our operations and customer base internationally. We have formed several
subsidiaries outside the United States, including a Romanian subsidiary that contributes significantly to our research and development efforts. We have also
acquired two UK-based companies - DXI in May 2015 and Voicenet in November 2013. The risks and challenges associated with sales and other operations
outside North America are different in some ways from those associated with our operations in North America, and we have a limited history addressing those
risks and meeting those challenges. Our current international operations and future initiatives will involve a variety of risks, including:
localization of our services, including translation into foreign languages and associated expenses;
unexpected changes in a specific country or region's regulatory requirements, taxes, trade laws, or political or economic conditions;
more stringent regulations relating to data security and the unauthorized use of, or access to, commercial and personal information, particularly in the
European Union;
differing labor regulations, especially in the European Union, where labor laws are generally more advantageous to employees as compared to the United
States, including deemed hourly wage and overtime regulations in these locations;
challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement
appropriate systems, policies, benefits and compliance programs;
difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory
systems;
increased travel, real estate, infrastructure and legal compliance costs associated with international operations;
different pricing environments, longer sales cycles, longer accounts receivable payment cycles and other collection difficulties;
currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we
chose to do so in the future;
limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries;
laws and business practices favoring local competitors or general preferences for local vendors;
limited or insufficient intellectual property protection;
political instability or terrorist activities;
exposure to liabilities under anti-corruption and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act and similar laws and
regulations in other jurisdictions; and
adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
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