1042431--3/14/2008--INTERWOVEN

related topics

{customer, product, revenue}

{system, service, information}

{product, market, service}

{operation, international, foreign}

{condition, economic, financial}

{tax, income, asset}

{financial, litigation, operation}

{gas, price, oil}

{regulation, change, law}

{property, intellectual, protect}

{personnel, key, retain}

{cost, operation, labor}

{acquisition, growth, future}

{stock, price, operating}

{loan, real, estate}

Sales cycles for our products are generally long and unpredictable, so it is difficult to forecast our future results. Contractual terms or issues that arise during the negotiation process may delay anticipated transactions and revenue. Adverse changes in general economic or political conditions could adversely affect our operating results. Our revenues depend on a small number of products and markets, so our results are vulnerable to shifts in demand. Support and service revenues have represented a large percentage of our total revenues. Our support and service revenues are vulnerable to reduced demand and increased competition. Our international operations have a significant impact on our overall operating results. Fluctuations in the exchange rates of foreign currency, particularly in Euro, British Pound and Australian Dollar and the various other local currencies of Europe and Asia, may harm our business. The timing of large customer orders may have a significant impact on our consolidated financial results from period to period. We must attract and retain qualified personnel to be successful and competition for qualified personnel is increasing in our market. We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt our business and management. Economic conditions and significant world events have harmed and could continue to negatively affect our revenues and results of operations. Increasing competition could cause us to reduce our prices and result in lower gross margins or loss of market share. Our future revenues depend in part on our installed customer base continuing to license additional products, renew customer support agreements and purchase additional services. Because a significant portion of our revenues are influenced by referrals from strategic partners and, in some cases, sold through resellers, our future success depends in part on those partners, but their interests may differ from ours. Our stock price may be volatile, and your investment in our common stock could suffer a decline in value. We may be named in lawsuits related to the Audit Committee review our historical stock option practices and resulting restatement in December 2007. Any such litigation could become time consuming and expensive and could result in the payment of significant judgments and settlements, which could have a material adverse effect on our financial condition and results of operations. Our failure to deliver defect-free software could result in losses and harmful publicity. If our products cannot scale to meet the demands of thousands of concurrent users, our targeted customers may not license our software, which will cause our revenues to decline. If our products do not operate with a wide variety of hardware, software and operating systems used by our customers, our revenues would be harmed. Our products may lack essential functionality if we are unable to obtain and maintain licenses to third-party software and applications. Our ability to use net operating losses to offset future taxable income may be subject to certain limitations. Difficulties in introducing new products and product upgrades and integrating new products with our existing products in a timely manner will make market acceptance of our products less likely. We might not be able to protect and enforce our intellectual property rights, a loss of which could harm our business. Our cash and investments are subject to risks which may cause losses and affect the liquidity of these investments. Our results of operations could be materially impacted if there are changes in our accounting estimates used in the determination of stock compensation expense.

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1042431--3/14/2008--INTERWOVEN_INC