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Our future growth and the success of our expansion plans depend on a number of factors that are beyond our control.
−Removed: We have grown our business considerably over the last several years.
−Removed: We cannot guarantee that we will be able to maintain our growth or that we will choose to target the same pace of growth in the future.
+Added: We have grown our business considerably since inception, and cannot guarantee we will be able to maintain or choose to target the same pace of growth in the future.
Our success in achieving continued growth depends upon several factors including:
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• the pricing structure under which we will be able to purchase services required to serve our customers;
−Removed: • our ability to introduce new service offerings and maintain or enhance existing offerings;
+Added: • our ability to successfully introduce new service offerings and maintain or enhance existing offerings;
• the availability to us of technologies needed to remain competitive;
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In addition, we are vulnerable to changes in market preferences or other market changes, such as general economic conditions, recession and fears of recession, interest rates, tax rates and policies, and inflation.
−Removed: is currently experiencing higher rates of inflation than in previous years, and we may experience a compression in our gross margins as a result.
−Removed: These inflationary pressures could affect wages, the cost of and our ability to obtain
−Removed: components, the price of our products and services, our ability to meet customer demand, and our gross margins and operating profit.
+Added: In recent years, the United States has experienced higher rates of inflation and as a result, we may experience a compression in our gross margins.
+Added: These inflationary pressures could affect wages, the cost of and our ability to obtain components, the price of our products and services, our ability to meet customer demand, and our gross margins and operating profit.
Inflation may further exacerbate other risks discussed in this “Risk Factors” section, such as risks related to our sales and marketing efforts and our ability to attract, motivate and retain sales, engineering and other key personnel.
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Transitioning to new vendors also may result in the loss of the value of assets associated with our integration of third-party services into our network or service offerings.
+Added: Approximately half of our operating cash is maintained in deposit accounts with various financial institutions and is not insured by the FDIC.
+Added: Approximately half of our operating cash is maintained in deposit accounts at various financial institutions and is not insured by the FDIC.
+Added: We believe we employ a reasonable strategy to diversify our cash deposits among financial institutions.
+Added: However, if any of the institutions into which our funds are deposited experience limited liquidity or otherwise defaults or does not perform its obligations to depositors, we may not be able to access those funds in a timely manner, or at all, which could adversely affect our business, financial condition or results of operations, and our prospects.
The market in which we participate is highly competitive, and if we do not compete effectively, our business, results of operations and financial condition could be adversely affected.
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• network service providers that offer limited developer functionality on top of their own networks and physical infrastructure.
−Removed: Some of our competitors and potential competitors are larger and have greater name recognition, longer operating histories, more established customer relationships, a larger global reach, larger budgets and significantly greater resources than we do.
+Added: Some of our competitors and potential competitors are larger and have greater name recognition, longer operating histories, more established customer relationships, greater penetration into the enterprise space, a larger global reach, larger budgets and significantly greater resources than we do.
In addition, they have the operating flexibility to bundle competing products and services at little or no incremental cost, including offering them at a lower price as part of a larger sales transaction.
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In addition, some competitors may offer services that address one or a limited number of functions at lower prices, with greater depth than our services or in different geographies.
−Removed: Our current and potential competitors may develop and market new services with comparable functionality to our services, and this could lead to us having to decrease prices in order to remain competitive.
−Removed: addition, some of our competitors have lower list prices than us, which may be attractive to certain customers even if those services have different or lesser functionality.
−Removed: If we are unable to maintain our current pricing due to competitive pressures, our revenue and margins will be reduced and our business, results of operations and financial condition would be adversely affected.
+Added: Our current and potential competitors may develop and market new services with comparable functionality to our services, which may force us to compete on price in order to remain competitive.
+Added: In addition, some of our competitors have lower list prices than us, which may be attractive to certain customers even if those services have different or lesser functionality.
+Added: If we are unable to maintain our current pricing due to competitive pressures, our revenue and margins will be reduced and our business, results of operations and financial condition will be adversely affected.
Customers utilize our services in many ways and use varying levels of functionality that our services offer or are capable of supporting or enabling within their applications.
−Removed: Customers that use many of the features of our services or use our services to support or enable core functionality for their applications may have difficulty or find it impractical to replace our services with a competitor’s services, while customers that use only limited functionality may be able to more easily replace our services with competitive offerings.
+Added: Customers using only limited functionality may be able to more easily replace our services with competitive offerings.
+Added: By contrast, customers using many of the features of our services or using our services to support or enable core functionality for their applications may have difficulty or find it impractical to replace our services with a competitor’s services.
With the introduction of new services and new market entrants, we expect competition to intensify in the future.
−Removed: In addition, some of our customers choose to use our services and our competitors’ services at the same time in order to provide redundancy in their ability to deliver their own product offerings.
+Added: In addition, some of our customers choose to use both our services and our competitors’ services in order to provide redundancy in their ability to deliver their own product offerings.
Moreover, as we expand the scope of our services, we may face additional competition.
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In addition, pricing pressures and increased competition generally could result in reduced revenue, reduced margins, increased losses or the failure of our services to achieve or maintain widespread market acceptance, any of which could harm our business, results of operations and financial condition.
−Removed: Our current and potential competitors have developed and may develop in the future service offerings that are available internationally, as well as domestically.
−Removed: To the extent that customers seek service offerings that include support and scaling internationally, they may choose to use other service providers to fill their communication service needs before we can fully develop and integrate our international offerings.
−Removed: Each of these factors could lead to reduced revenue, slower growth and lower brand name recognition amongst our industry competitors, any or all of which could harm our business, results of operations and financial condition.
+Added: Our current and potential competitors have developed and may develop in the future service offerings that are available internationally.
+Added: To the extent that customers seek service offerings that include support and scaling internationally, they may choose to use other service providers to fill their communication service needs before we have fully expanded and scaled our international offerings.
+Added: Each of these factors could lead to reduced revenue, slower growth and lower international brand name recognition amongst our industry competitors, any or all of which could harm our business, results of operations and financial condition.
If we are unable to attract new customers in a cost-effective manner, then our business, results of operations and financial condition would be adversely affected.
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As we add to or change the mix of our marketing strategies, we may need to expand into more expensive channels than those we are currently in, which could adversely affect our business, results of operations and financial condition.
−Removed: We will incur marketing expenses before we are able to recognize any revenue that the marketing initiatives may generate, and these expenses may not result in increased revenue or brand awareness.
+Added: We will incur marketing expenses before we are able to recognize any revenue that the
+Added: marketing initiatives may generate, and these expenses may not result in increased revenue or brand awareness.
We have made in the past, and may make in the future, significant expenditures and investments in new marketing campaigns.
We cannot assure you that any new investments in sales and marketing, including any increased focus on enterprise sales efforts, will lead to the cost-effective acquisition of additional customers or increased sales or that our sales and marketing efficiency will be consistent with prior periods.
−Removed: If we are unable to maintain effective marketing programs, then our ability to attract new customers could be materially and adversely affected, our advertising and marketing expenses could increase substantially and our results of operations may suffer.
+Added: If we are unable to maintain effective marketing programs, then our ability to attract new customers could be materially and adversely affected.
The market for some of our services is new and unproven, may decline or experience limited growth and is dependent in part on enterprises and developers continuing to adopt our platform and use our services.
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We believe that our future success will depend in large part on the growth, if any, of this market.
−Removed: For example, the utilization of software APIs by
−Removed: developers and organizations to build communications functionality into their applications is still relatively new, and developers and organizations may not recognize the need for, or benefits of, our services and platform.
−Removed: If they do not recognize the need for and benefits of our services and platform, they may decide to adopt alternative services and/or develop the necessary services in-house to satisfy their business needs.
+Added: For example, the utilization of software APIs by developers and organizations to build communications functionality into their applications is still relatively new, and developers and organizations may not recognize the need for, or benefits of, our services and platform.
+Added: And even if they recognize the need for and benefits of our services and platform, they may decide to adopt alternative services and/or develop the necessary services in-house to satisfy their business needs.
In order to grow our business and expand our market position, we intend to focus on educating enterprise customers about the benefits of our services and platform, expanding the functionality of our services, and bringing new technologies to market to increase market acceptance and use of our platform.
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Most of our customers do not have long-term contractual financial commitments to us and, therefore, most of our customers may reduce or cease their use of our services at any time without penalty or termination charges.
−Removed: We cannot accurately predict customers’ usage levels , and the loss of customers or reductions in their usage levels of our services may each have a negative impact on our business, results of operations and financial condition and may cause our dollar-based net retention rate to decline in the future if our customers are not satisfied with our services.
−Removed: If a significant number of customers cease using, or reduce their usage of, our services, then we may be required to spend significantly more on sales and marketing than we currently plan to spend in order to maintain or increase revenue from customers.
+Added: We cannot accurately predict customers’ usage levels , and the loss of customers or reductions in their usage levels of our services may each have a negative impact on our business, results of operations and financial condition and may cause our net retention rate to decline in the future.
+Added: If a significant number of customers cease using, or reduce their usage of, our services, we may be required to spend significantly more than planned on sales and marketing efforts to maintain or increase revenue from customers.
Such additional sales and marketing expenditures could adversely affect our business, results of operations and financial condition.
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• we do not develop and maintain relationships with new large enterprise customers;
−Removed: • our customers choose to obtain these services from either their own network or from one of our competitors,
+Added: • our customers choose to obtain these services from one of our competitors or develop similar capabilities in-house,
then we may be unable to increase or maintain our revenue at acceptable margins.
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Our ability to expand our sales to enterprise customers will depend, in part, on our ability to effectively organize, focus and train our sales and marketing personnel and to attract and retain sales personnel with experience selling to enterprises.
−Removed: We believe that there is significant competition for experienced sales professionals with the skills and technical knowledge that we require.
+Added: We believe there is significant competition for experienced sales professionals with the skills and technical knowledge our business requires.
Our ability to achieve significant revenue growth in the future will depend, in part, on our ability to recruit, train and retain a sufficient number of experienced sales professionals, particularly those with experience selling to enterprises.
In addition, even if we are successful in hiring qualified sales personnel, new hires require significant training and experience before they achieve full productivity, particularly for sales efforts targeted at enterprises and new territories.
−Removed: Our recent hires and planned hires may not
−Removed: become as productive as quickly as we expect and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business.
−Removed: With respect to enterprise customers, the decision to adopt our services may require the approval of multiple technical and business decision makers, including security, compliance, procurement, operations and IT.
−Removed: In addition, while enterprise customers may quickly deploy our services on a limited basis, before they will commit to deploying our services at scale, they often require extensive education about our services and significant customer support time, engage in protracted pricing negotiations and seek to secure readily available development resources.
−Removed: In addition, sales cycles for enterprises are inherently complex and lengthy, and some enterprise customers may not generate revenue that justifies the cost to obtain such customers.
−Removed: In addition, these complex and resource-intensive sales efforts could place additional strain on our limited product and engineering resources.
−Removed: Further, enterprises, including some of our customers, may choose to develop their own solutions that do not include our services.
+Added: Our recent hires and planned hires may not become as productive as quickly as we expect and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business.
+Added: The sales cycle for typical enterprise customers is lengthy and complex.
+Added: The adoption and implementation of our enterprise service offerings are often considered a strategic purchasing decision, and may require the approval of multiple executive-level technical and business decision makers, including security, compliance, procurement, operations and IT.
+Added: In addition, enterprise customers often require extensive education about our services and significant customer support time, engage in protracted pricing negotiations, and seek to secure readily available development resources.
+Added: Enterprise customers may also require deployment of our services on a limited basis prior to making a commitment to deploy our services more broadly over a contracted period of time.
+Added: These complex and resource-intensive sales efforts could place outsized strain on our limited product and engineering resources.
+Added: Further, enterprise customers, including some of our customers, may choose to develop their own solutions in-house that do not include our services.
They also may demand reductions in pricing as their usage of our services increases, which could have an adverse impact on our gross margin.
−Removed: Our efforts to sell to these potential customers may not be successful.
−Removed: If we are unable to increase the revenue that we derive from enterprises, then our business, results of operations and financial condition may be adversely affected.
+Added: We may not be successful in our efforts to grow our enterprise customer base, and if we are unable to increase the revenue we derive from enterprises, then our business, results of operations and financial condition may be adversely affected.
If we do not develop enhancements to our services and introduce new services that achieve market acceptance, our business, results of operations and financial condition could be adversely affected.
−Removed: Our ability to attract new customers and increase revenue from existing customers depends in part on our ability to enhance and improve our existing services, increase adoption and usage of our services and introduce new services.
+Added: Our ability to attract new customers and increase revenue from existing customers depends in part on our ability to increase adoption and usage of our services, enhance and improve functionality of our existing services, and introduce new services.
The success of any enhancements or new services depends on several factors, including timely completion, adequate quality testing, actual performance quality, market-accepted pricing levels and overall market acceptance.
Enhancements and new services that we develop may not be introduced in a timely or cost-effective manner, may contain errors or defects, may have interoperability difficulties with our communications platform, network or other services, or may not achieve the broad market acceptance necessary to generate significant revenue.
−Removed: We also must integrate with a variety of network, hardware, mobile and software platforms and technologies, which requires us to enhance and modify our products and our communications platform to adapt to changes and innovation in these technologies.
−Removed: Wireline and wireless telephone providers or cell-phone operating system providers such as Apple and Google have developed and may in the future develop new applications, functions or technologies intended to filter illegal robocalls or other unwanted phone calls or messages.
+Added: We also must integrate with a variety of network, hardware, mobile and software platforms and technologies, which requires us to adapt our communications platform and product offerings to changes and innovation in these technologies.
+Added: Wireline and wireless telephone providers, as well as cell-phone operating system providers such as Apple and Google, have developed, and may in the future develop, new applications, functions or technologies intended to filter illegal robocalls or other unwanted phone calls or messages.
Such applications, functions or technologies may inadvertently filter legal and desired calls or messages to or from our customers.
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If we cannot respond to these changes in a cost-effective manner, our services may become less competitive or obsolete, and our business, results of operations and financial condition could be adversely affected.
−Removed: To the extent that upgrades of existing products, services and technology are required for the introduction of new services, the success of these upgrades also may be dependent on reaching mutually acceptable terms with vendors and on vendors meeting their obligations in a timely manner.
+Added: To the extent that upgrades of existing products, services and technology are required for the introduction of new
+Added: services, the success of these upgrades also may be dependent on reaching mutually acceptable terms with vendors and on vendors meeting their obligations in a timely manner.
Furthermore, our ability to increase the usage of our services depends, in part, on the development of new use cases for our services, which may be outside of our control.
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If we are unable to successfully enhance our existing services to meet evolving customer requirements, increase adoption and usage of our services or develop new services, or if our efforts to increase the usage of our services are more expensive than we expect, then our business, results of operations and financial condition would be adversely affected.
+Added: We use AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.
+Added: We use AI in our business, and we continue to expand our research into and continued development of such capabilities.
+Added: We offer our customers the ability to integrate certain AI technologies developed by third parties into certain of our offerings, and this integration capability is a prominent feature of our Maestro offering.
+Added: Certain other features of our products are also supported by third-party AI technologies.
+Added: In addition, we are exploring the use of AI to potentially improve our internal functions and operations.
+Added: Our competitors or other third parties may incorporate AI into their products and offerings, or use AI to gain internal efficiencies, more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our business, reputation and results of operations.
+Added: As with many developing technologies, AI presents risks and challenges, and may result in unintended consequences that could affect its further development, adoption, and use, and therefore our business.
+Added: Deficiencies or other failures of AI systems could subject us to competitive harm, cybersecurity events, regulatory action, penalties, legal liability, or brand or reputational harm.
+Added: Further, our customers may fail to provide adequate notice, collect consent, or otherwise fail to comply with applicable legal frameworks in their use of our products and services, or integrated AI products and services, which may subject us to regulatory action, private rights of action, legal liability, or brand or reputational harm.
+Added: AI is an emerging technology for which the legal and regulatory landscape is not fully developed, including laws and regulations around potential liability for breaching intellectual property or privacy regulations.
+Added: Laws and regulations applicable to AI are emerging and evolving, and the ultimate legal framework remains uncertain and may be inconsistent from jurisdiction to jurisdiction, including internationally.
+Added: We may not always be able to anticipate how to respond to these legal frameworks, and our obligation to comply with the laws and regulations could entail significant costs, negatively affect our business, or entirely limit our ability to incorporate certain AI capabilities into our offerings.
As we continue to expand geographically and otherwise, we may experience difficulties in maintaining our corporate culture, operational infrastructure and management, and our business, results of operations and financial condition could be adversely affected.
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In addition, our organizational structure has become more complex.
−Removed: In order to manage these increasing complexities, we will need to continue to scale and adapt the way in which we are organized, our operational, financial and management controls, and our reporting systems and procedures.
+Added: In order to manage these increasing complexities, we will need to continue to scale and adapt our operational, financial and management controls, and our reporting systems and procedures.
The expansion of our systems and infrastructure will require us to commit substantial financial, operational and management resources before our revenue increases and without any assurances that our revenue will increase.
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If we are not able to maintain and enhance our brand and increase market awareness of our company and services, then our business, results of operations and financial condition may be adversely affected.
−Removed: We believe that maintaining and enhancing our brand identity and increasing market awareness of our company and services are critical to achieving widespread acceptance of our company and our communications platform, as well as to strengthen our relationships with our existing customers and to our ability to attract new customers.
−Removed: The successful promotion of our brand will depend largely on our continued marketing efforts, our ability to continue to offer high quality services that meet the evolving needs of our existing and prospective customers and our ability to successfully differentiate our services from competing products and services.
+Added: We believe that maintaining and enhancing our brand identity and increasing market awareness of our company and services are critical to achieving widespread acceptance of our company and our communications platform, strengthening our relationships with our existing customers, and attracting new customers.
+Added: The successful promotion of our brand depends largely on our continued marketing efforts, our ability to continue to offer high quality services meeting the evolving needs of existing and prospective customers, and our ability to successfully
+Added: differentiate our services from competing products and services.
Our brand promotion activities may not be successful or yield increased revenue.
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If these reviews are negative or not as strong as reviews of our competitors’ services, then our brand may be harmed.
−Removed: From time to time, our customers have complained about our services, such as complaints about our pricing and customer support.
−Removed: Additionally, we sometimes experience customer complaints relating to disruption to, or outage of, our services.
+Added: From time to time, we have received customer complaints about our services, including with respect to pricing, customer support, and disruption to, or outage of, our services.
If we do not handle customer complaints effectively, then our brand and reputation may suffer, our customers may lose confidence in us and they may reduce or cease their use of our services.
−Removed: In addition, many of our customers post and discuss on social media about products and services, including our services and our communications platform.
−Removed: Our success depends, in part, on our ability to generate positive customer feedback and minimize negative feedback on social media channels where existing and potential customers seek and share information.
−Removed: If actions we take or changes we make to our services or our communications platform upset these customers, then their online commentary could negatively affect our brand and reputation.
+Added: In addition, social media has become a widespread method by which consumers communicate about products and services they purchase, including our services and communications platform.
+Added: Our ability to generate positive customer feedback and minimize negative feedback on social media channels where existing and potential customers seek and share information is important to our brand and reputation.
Complaints or negative publicity about us, our services or our communications platform could materially and adversely affect our ability to attract and retain customers, our business, results of operations and financial condition.
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To the extent that these activities increase revenue, this revenue still may not be enough to offset the increased expenses we incur.
−Removed: In addition, due to restrictions on travel and in-person meetings resulting from COVID-19, we have attended planned customer and industry events as virtual-only experiences and cancelled others.
−Removed: We may alter, postpone or cancel other events in the future.
−Removed: Virtual meetings, events and interactions may not be as successful and may constrain our marketing, promotional and sales activity.
If we do not successfully maintain and enhance our brand, then our business may not grow, we may see our pricing power reduced relative to competitors and we may lose customers, all of which would adversely affect our business, results of operations and financial condition.
Any failure to deliver and maintain high-quality customer support may adversely affect our relationships with our customers and prospective customers, and could adversely affect our reputation, business, results of operations and financial condition.
−Removed: Many of our customers depend on our customer support team to assist them in deploying or using our services effectively, to help them resolve post-deployment issues quickly and to provide ongoing support.
−Removed: If we do not devote sufficient resources or are otherwise unsuccessful in assisting our customers effectively, it could adversely affect our ability to retain existing customers and could prevent prospective customers from adopting our services.
+Added: Many of our customers depend on our customer support team to help them deploy or use our services effectively, to help them resolve post-deployment issues quickly and to provide ongoing support.
+Added: If we do not devote sufficient resources to, or are otherwise unsuccessful in, assisting our customers effectively, it could adversely affect our ability to retain existing customers and could prevent prospective customers from adopting our services.
We may be unable to respond quickly enough to accommodate short-term increases in demand for customer support.
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In addition, we face risks in doing business internationally that could adversely affect our business, including:
−Removed: • exposure to political developments in the United Kingdom (“U.K.”) as a result of the January 2020 departure of the U.K.
−Removed: from the European Union (“EU”), which has created an uncertain political and economic environment, instability for businesses and volatility in global financial markets and the value of foreign currencies, all of which could disrupt trade, the sale of our services and the mobility of our employees and contractors between the U.K., EU and other jurisdictions;
+Added: • exposure to international political developments that may cause instability for businesses and volatility in global financial markets and the value of foreign currencies, any of which could disrupt trade and the sale of our services in international markets;
• difficulties in managing and staffing international operations, including difficulties related to the increased operations, travel, infrastructure, employee attrition and legal compliance costs associated with numerous international locations;
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• the need to adapt and localize our products for specific countries;
−Removed: • challenges in understanding and complying with local laws, regulations and customs in foreign jurisdictions, particularly in the areas of telecommunications, data privacy and security;
−Removed: • complexities related to differing technical standards, data privacy and telecommunications regulations and certification requirements outside the United States, which could prevent customers from deploying our products or limit their usage;
+Added: • challenges in understanding and complying with local laws, regulations and customs in multiple foreign jurisdictions, particularly in the areas of telecommunications and data privacy and security;
+Added: • complexities related to differing technical standards, certification requirements and audit requirements outside the United States, which could prevent customers from deploying our products or limit their usage;
• export controls and economic sanctions administered by the Bureau of Industry and Security of the U.S.
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The military conflict between Russia and Ukraine, and the global response to this conflict, may adversely affect our business and results of operations.
−Removed: In response to the military conflict between Russia and Ukraine, the U.S., U.K., EU and others have imposed significant new sanctions and export controls against Russia and certain Russian individuals and entities.
−Removed: This conflict has also resulted in significant volatility and disruptions to the global markets.
−Removed: It is not possible to predict the short- or long-term implications of this conflict, which could include but are not limited to further sanctions, uncertainty about economic and political stability, increases in inflation rates and energy prices, supply chain challenges and adverse effects on currency exchange rates and financial markets.
−Removed: In addition, the U.S government has reported that U.S.
−Removed: sanctions against Russia in response to the conflict could lead to an increased threat of cyberattacks against U.S.
−Removed: These increased threats could pose risks to the security of our information technology systems, our network and our service offerings, as well as the confidentiality, availability and integrity of our data.
+Added: In response to the military conflict between Russia and Ukraine, the U.S., U.K., EU and others imposed significant additional sanctions and export controls against Russia and certain Russian individuals and entities, and we terminated our service offerings in Russia and Belarus.
We have operations, as well as current and potential new customers, in several locations in Europe, including an office in Romania.
If the conflict extends beyond Ukraine or further intensifies, it could have an adverse impact on our operations in Romania or other affected areas.
−Removed: Due to the complexity and operational burden required to provide services in compliance with imposed sanctions related to the conflict, we terminated our service offerings in Russia and Belarus.
Although neither Russia nor Belarus constituted a material portion of our business, a significant escalation or further expansion of the conflict’s current scope or related disruptions to the global markets could have a material adverse effect on our results of operations.
And while we do not offer any services in Ukraine, we continue to monitor the situation in that country and globally, and assess the military conflict’s potential impact on our business.
−Removed: If the COVID-19 infection rate returns to pandemic levels, it may harm our business and results of operations.
−Removed: The global spread of novel coronavirus disease (“COVID-19”) and efforts to manage its impact created significant volatility, uncertainty and economic disruption in locations where we, our customers, suppliers and third-party business partners conduct business.
−Removed: COVID-19 is generally believed to have reduced to endemic levels globally, and its persistent nature has diminished in the present period.
−Removed: However, a return of COVID-19 infection rates to pandemic levels could result in decreased business spending by our customers and prospective customers, lower renewal rates by our customers, longer or delayed sales cycles, or reduced budgets or minimum commitments for the services that we offer, any of which could have an adverse impact on our financial condition and results of operations.
−Removed: Specifically, we may experience impact from enterprises reducing usage of our services or delaying decisions to implement our services.
−Removed: We cannot predict whether and to what extent COVID-19 infection rates may
−Removed: increase in the future, or what the short- or long-term impact of any such increase might be on our business, financial condition or results of operations.
Some of our revenue is concentrated in a limited number of customers.
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We depend upon our IT systems to conduct virtually all of our business operations, ranging from our internal operations and R&D activities to our marketing and sales efforts and communications with our customers and business partners.
−Removed: Cyber-attacks, including through the use of malware, computer viruses, distributed denial of services (“DDoS”) attacks, credential harvesting and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service providers, could cause harm to our business, including by misappropriating our proprietary information or that of our customers, employees and business partners or to cause interruptions of our services and our communications platform.
+Added: Cyber-attacks, including through the use of malware, computer viruses, distributed denial of service (“DDoS”) attacks, credential harvesting and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service providers, could cause harm to our business, including by misappropriating our proprietary information or that of our customers, employees and business partners or to cause interruptions of our services and our communications platform.
Cyber-attacks may cause service degradation or outages, equipment failures, loss of information, including sensitive personal information of customers or employees or valuable technical and marketing information, as well as disruptions to our or our customers’ operations.
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These attacks may be committed by company employees or external actors operating in any geography, including jurisdictions where law enforcement measures to address such attacks are unavailable or ineffective, and may even be launched by or at the behest of nation states.
−Removed: Despite our efforts to reduce the risks associated with cyber-attacks, including the implementation of a number of defensive measures and protocols designed to protect our systems and networks, such efforts may be insufficient to repel or mitigate the effects of a major cyber-attack.
−Removed: Cybersecurity events, like the DDoS attack we experienced in late 2021 (discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—DDoS Attack” in this Annual Report on Form 10-K), may have cascading effects that unfold over time and result in additional costs, including costs associated with defensive measures, investigations, contractual claims, performance penalties, litigation, the loss of future business and other losses and liabilities that may be difficult to foresee.
−Removed: Any perception by existing and prospective customers that our network and systems are not secure could result in a material loss of business and revenue and damage our reputation.
+Added: Despite our efforts to reduce the risks associated with cyber-attacks, including the implementation of a number of defensive measures and protocols designed to protect our systems and networks, there can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information, and such efforts may be insufficient to repel or mitigate the effects of a major cyber-attack.
+Added: Cybersecurity events, like the DDoS attack we experienced in late 2021, may have cascading effects that unfold over time and result in additional costs, including costs associated with defensive measures, investigations, contractual claims, performance penalties, litigation, the loss of future business and other losses and liabilities that may be difficult to foresee.
+Added: Any perception by existing and prospective customers that our network and systems are not secure could result in a
+Added: material loss of business and revenue and damage our reputation.
We will continue to deploy security enhancements in an effort to further secure our network.
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We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or in amounts sufficient to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage of any future claim.
−Removed: At least one prominent global insurance carrier has announced that, beginning in 2023, it will exclude from its cyber insurance policies coverage for attacks carried out by nation-states.
+Added: Many global insurance carriers now exclude coverage for attacks carried out by nation-states from their cyber insurance policies.
Accordingly, if our cybersecurity measures and those of our service providers fail to protect against unauthorized access, attacks (which may include sophisticated cyber-attacks) and the mishandling of data by our employees and contractors, then our reputation, business, results of operations and financial condition could be adversely affected.
1 unchanged sentence
We, along with many other telecommunications companies and similar service providers, currently are subject to litigation regarding our billing, collection and remittance of non-income-based taxes and other similar charges regarding 911 services alleged to apply in certain states, counties, and municipalities located in California, Illinois and New York.
−Removed: See “Part II, Item 3.
+Added: See “Part I, Item 3.
Legal Proceedings,” in this Annual Report on Form 10-K.
2 unchanged sentences
Tax assessments, penalties and interest or future requirements arising from these lawsuits, the settlement of any such lawsuit or any other lawsuits that may arise in other jurisdictions, may adversely affect our business, results of operations and financial condition.
−Removed: We face a risk of litigation resulting from customer misuse of our services and software to make or send unauthorized and/or unsolicited calls and/or messages, including those in violation of the Telephone Consumer Protection Act.
−Removed: Customer misuse of our services and software also could damage our reputation.
−Removed: Calls and/or text messages originated or passed to us by our customers may subject us to potential risks, including litigation, regulatory enforcement, fines, and reputational damage.
−Removed: For example, the Telephone Consumer Protection Act of 1991 (the “TCPA”) restricts telemarketing and the use of technologies that enable automatic calling and/or messaging without proper customer consent.
−Removed: This may result in civil claims against us, including those arising due to our customers’ use of our platform, and requests for information through third-party subpoenas or regulatory investigations.
+Added: We face a risk of litigation and/or regulatory enforcement actions resulting from customer or end user misuse of our services and software to make or send unauthorized and/or unsolicited calls and/or messages, including those in violation of the TCPA, the TSR, and other state and federal laws.
+Added: Customer or end user misuse of our services and software also could damage our reputation.
+Added: Calls and/or text messages originated or passed to us by our customers may subject us to potential risks, including litigation, civil liability, regulatory enforcement actions, fines, and reputational damage.
+Added: For example, the TCPA restricts telemarketing and the use of technologies that enable automatic calling and/or messaging without proper customer consent.
+Added: In addition, the TSR prohibits deceptive and abusive telemarketing practices.
+Added: The TSR, which is enforced by the FTC, makes it unlawful for any person or entity to “provide substantial assistance or support to any seller or telemarketer when that person knows or consciously avoids knowing that the seller or telemarketer is engaged in any act or practice” that violates the TSR.
+Added: The misuse of our offerings by our customers, or customers of our customers, may result in civil claims and/or enforcement actions against us, including those arising due to misuse of our platform or offerings, and
+Added: requests for information through third-party subpoenas or regulatory investigations.
+Added: For example, we have received correspondence from the FTC relating to customers using our network to transit “robocall” traffic.
+Added: We have received similar correspondence from the FCC relating to our role as a gateway provider.
Internationally, we also may become subject to similar laws imposing limitations on marketing calls to wireline and wireless numbers.
1 unchanged sentence
If we do not comply with these laws or regulations or if we become liable under these laws or regulations due to the failure of our customers to comply with these laws by taking mandatory actions such as obtaining proper customer consent, we could become subject to lawsuits, fines, civil penalties, potentially significant statutory damages, consent decrees, injunctions, adverse publicity, loss of user confidence in our services, loss of users and other adverse consequences, which could materially harm our business.
−Removed: Some of our customers may use our platform to transmit illegal, offensive, unsolicited and/or unauthorized calls and messages, including spam, phishing scams, and links to harmful applications.
+Added: Some of our customers, or customers of our customers, may use our platform to transmit illegal, offensive, unsolicited and/or unauthorized calls and messages, including spam, phishing scams, and links to harmful applications.
Some of our customers also may reproduce and distribute copyrighted material or the trademarks of others without permission.
5 unchanged sentences
Our substantial efforts will not prevent all illegal robocalls and other fraudulent activity.
−Removed: The unlawful or fraudulent use of our platform could subject us to
−Removed: claims for damages, copyright or trademark infringement, regulatory enforcement, fraud, or negligence or damage our reputation.
+Added: The unlawful or fraudulent use of our platform could subject us to claims for damages, copyright or trademark infringement, regulatory enforcement, fraud, or negligence or damage our reputation.
Even if claims asserted against us do not result in liability, we may incur substantial costs to investigate and defend such claims.
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We cannot be certain that the outcome of current or future litigation will not have a material adverse impact on our business and results of operations.
+Added: See “Part I, Item 3.
+Added: Legal Proceedings,” in this Annual Report on Form 10-K.
The communications industry faces significant regulatory uncertainties and the resolution of these uncertainties could harm our business, results of operations and financial condition.
If current or future regulations change, the Federal Communications Commission (the “FCC”), state regulators or regulators in other jurisdictions may not grant us required regulatory authorizations or may take action against us if we are found to have provided services without obtaining the necessary authorizations, or to have violated other requirements of their rules and orders.
−Removed: Delays in receiving required regulatory approvals or the enactment of new adverse regulation or regulatory requirements may slow our growth and have a material adverse effect on our business, results of operations and financial condition.
+Added: Delays in receiving required regulatory approvals or the
+Added: enactment of new adverse regulation or regulatory requirements may slow our growth and have a material adverse effect on our business, results of operations and financial condition.
Proceedings before the FCC or regulators from international jurisdictions could limit our access to various network services or further increase the rates we must pay for such services.
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Other state proceedings could limit our pricing and billing flexibility.
−Removed: Our business would be substantially impaired if the FCC, the courts or state commissions eliminated our access to the facilities and services we use to serve our customers, substantially increased the rates we pay for facilities and services, increased the costs or complexity associated with providing emergency 911 services or adversely affected the revenue we receive from other carriers or our customers.
−Removed: In addition, congressional legislative efforts to rewrite the Telecommunications Act of 1996 or enact other telecommunications legislation, as well as various state legislative initiatives, may cause major industry and regulatory changes.
+Added: Our business would be substantially impaired if the FCC, the courts, state commissions, or interconnected carriers eliminated our access to the facilities and services we use to serve our customers, substantially increased the rates we pay for facilities and services, increased the costs or complexity associated with providing emergency 911 services or adversely affected the revenue we receive from other carriers or our customers.
+Added: In addition, congressional legislative efforts to rewrite the Telecommunications Act of 1996 or enact other telecommunications legislation such as the TRACED Act, as well as various state legislative initiatives, may cause major industry and regulatory changes.
We cannot predict the outcome of these proceedings or legislative initiatives or the effects, if any, that these proceedings or legislative initiatives may have on our business and operations.
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While additional countries have adopted or are expected to adopt the STIR/SHAKEN framework, other countries may seek to impose alternative regulatory obligations in an effort to mitigate illegal robocalling.
−Removed: Noncompliance with applicable FCC or other regulations or requirements could subject us to investigations, sanctions, enforcement actions, fines, consent decrees or other collateral consequences.
−Removed: If any governmental sanctions or fines are imposed, our business, results of operations, and financial condition could be materially adversely affected.
+Added: Noncompliance with applicable FCC, FTC, state public utility corporations, or other regulations or requirements could subject us to investigations, sanctions, enforcement actions, fines, consent decrees or other collateral consequences.
+Added: If any governmental sanctions or fines are imposed, our business, results of operations, and
+Added: financial condition could be materially adversely affected.
In addition, responding to any governmental action will likely result in a diversion of management’s attention and resources and an increase in professional fees.
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Our inability or failure to comply with telecommunications and other laws and regulations could cause the temporary or permanent suspension of our operations.
−Removed: In addition, if we cannot provide emergency calling functionality through our communications platform to meet any applicable federal, state or international
−Removed: requirements, the competitive advantages that we have may not persist, adversely affecting our ability to obtain and to retain enterprise customers which could have an adverse impact on our business.
−Removed: We are subject to telecommunications laws and regulations in the non-U.S.
+Added: For example, we have received correspondence from the FCC relating to traffic transmitted by us as a gateway provider on behalf of overseas providers.
+Added: Under FCC rules, gateway providers must take reasonable and effective steps to ensure that any foreign originating or intermediate providers are not using a gateway provider to carry or process a high volume of illegal traffic onto U.S.
+Added: Any failure to abide by these rules may result in enforcement action, up to and including an order from the FCC directing voice providers to block traffic from an identified gateway provider.
+Added: In addition, if we cannot provide emergency calling functionality through our communications platform to meet any applicable federal, state or international requirements, the competitive advantages that we have may not persist, adversely affecting our ability to obtain and to retain enterprise customers which could have an adverse impact on our business.
+Added: We are subject to communications laws and regulations in the non-U.S.
countries where we offer our services.
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For example, several European countries have adopted “know your customer” requirements regarding end users and have mandated the real-time provisioning of data to national law enforcement authorities’ systems.
−Removed: In January 2018, the FCC repealed its Network Neutrality Rules.
+Added: In January 2018, the FCC released an order that repealed its previous Network Neutrality Rules.
Our business could suffer with respect to the quality of the services we offer, our ability to maintain our internet-based services and our services offered through our communications platform, a reduction in our profitability or an increase in the price of our services making our offerings less competitive in the marketplace.
−Removed: In January 2018, the FCC adopted an order largely repealing its network neutrality rules (the “Order”).
+Added: In January 2018, the FCC released an order largely repealing its network neutrality rules (the “Order”).
Among other things, the pre-existing network neutrality rules prevented providers of broadband internet access services—like cable and telephone companies—from blocking, impairing and degrading service offerings from non-affiliated third parties like us.
In 2019, the U.S.
−Removed: Court of Appeals for the District of Columbia Circuit largely affirmed the Order, but vacated the portion of the Order that would bar states from imposing any rule or requirement inconsistent with the FCC’s order.
+Added: Court of Appeals for the District of Columbia Circuit largely
+Added: affirmed the Order, but vacated the portion of the Order that would bar states from imposing any rule or requirement inconsistent with the FCC’s order.
In April 2022, after losing an appeal before the U.S.
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Our business is subject to complex and evolving laws and regulations, commercial standards, contractual obligations and other requirements related to information collection.
−Removed: We are subject to various federal, state, local and foreign laws and regulations, contractual commitments and industry standards that create obligations and impose restrictions with respect to the collection, storage, retention, use, processing, transmission, sharing, disclosure and protection of personal data and other customer data, including “customer proprietary network information” under applicable U.S.
+Added: We are subject to various federal, state, local and foreign laws and regulations, contractual commitments and industry standards that create obligations and impose restrictions with respect to the collection, storage, retention, use, processing, transmission, sharing, disclosure and protection of personal data and other customer data, including “customer proprietary network information” as defined in applicable U.S.
We must comply with these obligations and restrictions and may be subject to significant consequences, including penalties and fines, if we fail to comply.
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These obligations and restrictions may limit our ability to collect, store, process, use, transmit and share data with our customers, employees, consultants and third-party providers, which may result in our inability in certain cases to provide services to our customers or to offer a global customer experience.
−Removed: These obligations may also limit the ability of our customers to collect, store, retain, protect, use, process, transmit, share and disclose data
−Removed: with others through our services.
+Added: These obligations may also limit the ability of our customers to collect, store, retain, protect, use, process, transmit, share and disclose data with others through our services.
Compliance with, and other burdens imposed by, such obligations and restrictions could increase the cost of our operations and adversely impact our business.
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From time to time, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning data-protection issues.
−Removed: For example, certain laws or regulations may mandate disclosure of customer information to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with customers and may not always provide a level of protection for such information that is required by other laws or regulations.
+Added: For example, certain laws or regulations may mandate disclosure of customer information to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with customers and may not always provide a level of
+Added: protection for such information that is required by other laws or regulations.
In other cases, some countries may limit the transfer of personal data or require that that personal data regarding customers in their country be maintained solely in their country.
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In addition, in order to procure, distribute and retain telephone numbers in certain foreign jurisdictions, we will be required to register with the local telecommunications regulatory authorities, some of which have been increasingly monitoring and regulating the categories of phone numbers that are eligible for provisioning to our customers, including geographical, regional, local and toll-free phone numbers.
−Removed: We have obtained licenses or are
−Removed: obtaining licenses in various countries in which we do business, but in some countries, the regulatory regime around provisioning of phone numbers is unclear, subject to change, and may conflict from jurisdiction to jurisdiction.
+Added: We have obtained licenses or are obtaining licenses in various countries in which we do business, but in some countries, the regulatory regime around provisioning of phone numbers is unclear, subject to change, and may conflict from jurisdiction to jurisdiction.
Furthermore, these regulations and governments’ approach to their enforcement, as well as our products and services, are evolving and we may be unable to maintain compliance with applicable regulations, or enforce compliance by our customers, on a timely basis or without significant cost.
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Bribery Act and other laws that prohibit improper payments or offers of payments to foreign governments and their officials, political parties, and/or private parties by persons and entities for the purpose of obtaining or retaining business.
−Removed: Our international activities create the risk of unauthorized payments or offers of payments by one of our employees or consultants, even though these parties are not always subject to our control.
+Added: Our international activities create the risk of unauthorized payments or offers of payments by one of our employees or consultants, even though
+Added: these parties are not always subject to our control.
Our policies prohibit these practices by our employees and consultants, although our existing safeguards and any future improvements may prove to be less than effective, and our employees or consultants may engage in conduct for which we might be held responsible.
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If we fail to comply with open source licenses, we may be subject to certain requirements, including requirements that we offer our services that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms of applicable open source licenses.
−Removed: If an author or other third-party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from generating revenue from customers using services that contained the open source software and required to comply with onerous conditions or restrictions on these services.
+Added: If an author or other third-party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations and could
+Added: be subject to significant damages, enjoined from generating revenue from customers using services that contained the open source software and required to comply with onerous conditions or restrictions on these services.
In any of these events, we and our customers could be required to seek licenses from third parties in order to continue offering our services and to re-engineer our services or discontinue offering our services to customers in the event re-engineering cannot be accomplished on a timely basis.
11 unchanged sentences
To date, we have relied on patent, copyright and trade secret laws, as well as confidentiality procedures and licensing arrangements, to establish and protect our rights to our technology.
−Removed: While we typically
−Removed: enter into confidentiality agreements with our employees, consultants, customers, and vendors in an effort to control access to and distribution of technology, software, documentation and other information, these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
+Added: While we typically enter into confidentiality agreements with our employees, consultants, customers, and vendors in an effort to control access to and distribution of technology, software, documentation and other information, these agreements may not effectively prevent disclosure of confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information.
Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our technology without authorization.
11 unchanged sentences
Although we anticipate that we would be given an opportunity to respond to any such rejections, we may be unable to overcome any such rejections.
−Removed: In addition, in proceedings before the U.S.
+Added: In addition, in
+Added: proceedings before the U.S.
Patent and Trademark Office third parties are given an opportunity to oppose pending trademark applications and seek to cancel registered trademarks.
38 unchanged sentences
Because many of our services are critical to the businesses or daily lives of many of our customers or our customers’ end users, any significant interruption or degradation in service also could result in lost profits or other losses to customers.
−Removed: Although our service agreements generally limit our liability for service failures and generally exclude
−Removed: any liability for “consequential” damages such as lost profits, a court might not enforce these limitations on liability, which could expose us to financial loss.
+Added: Although our service agreements generally limit our liability for service failures and generally exclude any liability for “consequential” damages such as lost profits, a court might not enforce these limitations on liability, which could expose us to financial loss.
We also sometimes provide our customers with committed service levels.
24 unchanged sentences
For example, to provide the emergency calling services required by the FCC’s rules to our IP telephony consumers, we may use components of both the wireline and wireless infrastructure in unique ways that can result in failed connections and calls routed to incorrect emergency call centers.
−Removed: Routing emergency calls through the Internet may be adversely affected by
−Removed: power outages and network congestion that may not occur for users of traditional telephony services.
+Added: Routing emergency calls through the Internet may be adversely affected by power outages and network congestion that may not occur for users of traditional telephony services.
Emergency call centers may not be equipped with appropriate hardware or software to accurately process and respond to emergency calls initiated by consumers of our IP telephony services, and calls routed to the incorrect emergency call center can significantly delay response times for first responders.
6 unchanged sentences
Similar obligations apply to local emergency services provided outside the United States.
−Removed: Failure to comply with these requirements, or failure of our communications platform such that 911 and other emergency calls did not complete or were misrouted, may result in FCC, foreign regulatory or other enforcement action, state attorneys’ general investigations, potential exposure to significant monetary penalties, cease and desist orders, civil liability to our users and their customers, loss of user confidence in our services, loss of users, and other adverse consequences, which could materially harm our business.
+Added: Failure to comply with these requirements, or failure of our communications platform such that 911 and other emergency calls did not complete or were misrouted, may result in FCC, foreign regulatory or other enforcement action, state attorneys’ general investigations, potential exposure to significant monetary penalties, cease and desist orders, civil liability to our
+Added: users and their customers, loss of user confidence in our services, loss of users, and other adverse consequences, which could materially harm our business.
National regulations, including the FCC’s rules, also require that we timely report certain 911 and other emergency service outages.
9 unchanged sentences
Many of our third-party suppliers do not have long-term committed contracts with us and may interrupt services or terminate their agreements with us without notice or by providing 30 days prior written notice.
−Removed: Although we expect that we could receive similar services from other third-party suppliers, if any of our arrangements with
−Removed: our third-party suppliers are terminated or interrupted, we could experience interruptions in our ability to make our services available to customers, as well as delays and additional expenses in arranging alternative providers.
+Added: Although we expect that we could receive similar services from other third-party suppliers, if any of our arrangements with our third-party suppliers are terminated or interrupted, we could experience interruptions in our ability to make our services available to customers, as well as delays and additional expenses in arranging alternative providers.
If a significant portion of our third-party suppliers fail to provide these services to us on a cost-effective basis or otherwise terminate or interrupt these services, the delay caused by qualifying and switching to other providers could be time consuming and costly and could adversely affect our business, results of operations and financial condition.
1 unchanged sentence
Customer churn occurs when a customer reduces usage or discontinues service with us, whether voluntarily or involuntarily, such as a customer switching some or all of its usage to a competitor or going out of business.
−Removed: Changes in the economy, increased competition from other providers, cyber incidents such as the 2021 DDoS attack or issues with the quality of service we deliver can impact our customer churn rate.
+Added: Changes in the economy, increased competition from other providers, cyber incidents such as the DDoS attack we experienced in late 2021, or issues with the quality of service we deliver can impact our customer churn rate.
We cannot predict future pricing by our competitors, but we anticipate that price competition will continue.
2 unchanged sentences
Higher customer churn rates could adversely affect our revenue growth.
−Removed: Higher customer churn rates could cause our dollar-based net retention rate to decline.
+Added: Higher customer churn rates could cause our net retention rate to decline.
A sustained and significant growth in the churn rate could have a material adverse effect on our business.
19 unchanged sentences
In some jurisdictions, we rely on third party access and networks for local connectivity.
−Removed: We are not always able to secure this access and local
−Removed: connectivity on favorable terms.
+Added: We are not always able to secure this access and local connectivity on favorable terms.
Costs of obtaining service from other communications carriers comprise a significant proportion of the operating expenses of long distance carriers.
5 unchanged sentences
For example, the major U.S.
−Removed: cellular carriers and their intermediaries have added a variety of fees that are applied to Application to Person (“A2P”) messages delivered to their subscribers.
+Added: cellular carriers and their intermediaries have added a variety of fees that are applied to A2P messages delivered to their subscribers.
While we may be able to negotiate with network providers, absorb the increased costs, or charge these costs to our customers, we cannot assure you that we will be able to do so.
2 unchanged sentences
However, these changes may still have a negative impact on our gross margins mathematically.
−Removed: We also may not be able to effectively respond to any new fees if all network providers in a particular market impose equivalent fee structures, if the magnitude of the fees is disproportionately large when compared to the underlying prices paid by our customers, or if market conditions limit our ability to increase the prices we charge our customers.
+Added: We also may not be able to effectively respond to any new fees if all network providers in a particular market impose equivalent fee
+Added: structures, if the magnitude of the fees is disproportionately large when compared to the underlying prices paid by our customers, or if market conditions limit our ability to increase the prices we charge our customers.
In connection with the delivery of text messages to customers of mobile carriers in the U.S., and in certain other instances, our customers’ traffic must be routed through intermediaries who have direct access to network service providers.
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Many key individual contributors, particularly in software development, sales and cloud computing and telecommunications infrastructure, are critical to our success and can attract very significant compensation packages.
−Removed: In addition, we believe that there is, and will continue to be, intense
−Removed: competition for highly skilled management, technical, sales and other personnel with experience in our industry in the Raleigh, North Carolina area, where our headquarters are located, and in other geographic locations where we maintain offices.
+Added: In addition, we believe that there is, and will continue to be, intense competition for highly skilled management, technical, sales and other personnel with experience in our industry in the Raleigh, North Carolina area, where our corporate headquarters are located, and in other geographic locations where we maintain offices.
We have experienced and may continue to experience difficulties attracting, hiring and retaining highly-skilled personnel with appropriate qualifications, and may not be able to fill positions in desired geographic areas or at all.
5 unchanged sentences
Volatility or declines in our stock price may also affect our ability to attract and retain key personnel.
−Removed: Employees may be more likely to terminate their employment with us if the shares they own or the shares underlying any restricted stock units have not significantly appreciated in value, or if the value of the shares underlying restricted stock units they hold has depreciated significantly.
+Added: Employees may be more likely to terminate their employment with us if the shares they own or the shares underlying any restricted stock units have not significantly appreciated in value, or if the value of the shares
+Added: underlying restricted stock units they hold has depreciated significantly.
If we are unable to retain our employees, our business, results of operations and financial condition could be adversely affected.
3 unchanged sentences
This could negatively affect our ability to retain and recruit personnel who are essential to our future success, and could ultimately have a negative impact on our ability to innovate our technology and our business.
−Removed: Since 2020, we have experienced and may continue to face higher than usual employee turnover rates, and as of December 31, 2022, approximately 24.8% of our employees have been employed by us for a year or less.
−Removed: As a result, we must be able to effectively integrate, develop and motivate a large number of new employees, while maintaining the effectiveness of our business execution and the beneficial aspects of our corporate culture.
We could be subject to additional tax liabilities for historic and future sales, use and similar taxes, which could adversely affect our results of operations.
6 unchanged sentences
Historically, we have not billed or collected certain of these taxes and, in accordance with GAAP, we have recorded a provision for our tax exposure in these jurisdictions when it is both probable that a liability has been incurred and the amount of the exposure can be reasonably estimated.
−Removed: These estimates include several key assumptions including, but not limited to, the taxability of our services, the
−Removed: jurisdictions in which we believe we have nexus, and the sourcing of revenue to those jurisdictions.
+Added: These estimates include several key assumptions including, but not limited to, the taxability of our services, the jurisdictions in which we believe we have nexus, and the sourcing of revenue to those jurisdictions.
In the event these jurisdictions challenge our assumptions and analysis, our actual exposure could differ materially from our current estimates.
9 unchanged sentences
The relevant revenue and taxing authorities may disagree with positions we have taken generally, or our determinations as to income and expenses attributable to specific jurisdictions.
−Removed: If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in additional tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations.
+Added: If such a disagreement were to occur, and our position were not sustained, we could be
+Added: required to pay additional taxes, interest and penalties, which could result in additional tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations.
We are unable to predict what global or U.S.
11 unchanged sentences
As a result of these developments, the tax laws of certain countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes could increase our liabilities for taxes, interest and penalties, and therefore could harm our business, cash flows, results of operations and financial position.
−Removed: The governments of countries in which we operate and other governmental bodies could make unprecedented assertions about how taxation is determined in their jurisdictions that are contrary to the way in which we have interpreted and historically applied the rules and regulations in our tax returns filed in such
−Removed: jurisdictions.
+Added: The governments of countries in which we operate and other governmental bodies could make unprecedented assertions about how taxation is determined in their jurisdictions that are contrary to the way in which we have interpreted and historically applied the rules and regulations in our tax returns filed in such jurisdictions.
New laws could significantly increase our tax obligations in the countries in which we do business or require us to change the way we operate our business.
13 unchanged sentences
federal income tax-related liabilities with respect to our prior distribution of all of the issued and outstanding shares of the common stock of Relay, Inc.
−Removed: (f/k/a Republic Wireless, Inc.) (“Relay”), our former subsidiary, to our stockholders as of and on November 30, 2016 (the “Spin-Off”), if there is a determination that the Spin-Off is taxable for U.S.
+Added: (f/k/a Republic Wireless,
+Added: Inc.) (“Relay”), our former subsidiary, to our stockholders as of and on November 30, 2016 (the “Spin-Off”), if there is a determination that the Spin-Off is taxable for U.S.
federal income tax purposes.
28 unchanged sentences
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: Our disclosure controls and other procedures are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal
−Removed: executive and financial officers, and we continue to evaluate how to improve controls.
+Added: Our disclosure controls and other procedures are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers, and we continue to evaluate how to improve controls.
We are also continuing to improve our internal control over financial reporting.
7 unchanged sentences
Our independent registered public accounting firm is required to attest to the effectiveness of our internal control over financial reporting.
−Removed: Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
+Added: Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is
+Added: documented, designed or operating.
Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business, results of operations and financial condition and could cause a decline in the trading price of our Class A common stock.
18 unchanged sentences
Such foreign currency exchange rate fluctuations could make it more difficult to detect underlying trends in our business and results of operations.
−Removed: The trading price of our Class A common stock also could be
−Removed: adversely affected if fluctuations in currency exchange rates cause our results of operations to differ from our expectations or the expectations of our investors and securities analysts who follow our stock.
+Added: The trading price of our Class A common stock also could be adversely affected if fluctuations in currency exchange rates cause our results of operations to differ from our expectations or the expectations of our investors and securities analysts who follow our stock.
We do not currently maintain a program to hedge transactional exposures in foreign currencies.
3 unchanged sentences
Earthquakes, hurricanes, fires, floods, pandemics, power outages, terrorist attacks, acts of war, civilian unrest and other significant events could disrupt our business and ability to serve our clients.
−Removed: A significant event, such as an earthquake, hurricane, a fire, a flood, a pandemic, a power outage, terrorist attack, act of war or civilian unrest could have a material adverse effect on our business, results of operations or financial condition.
−Removed: For example, the rapid and global spread of COVID-19 disrupted businesses and increased travel restrictions globally.
+Added: A significant event, such as an earthquake, hurricane, a fire, a flood, a pandemic, such as COVID-19, a power outage, terrorist attack, act of war, such as the ongoing Russia-Ukraine conflict or the Israel-Hamas conflict, or civilian unrest could have a material adverse effect on our business, results of operations or financial condition.
Health concerns or governmental, legal, political or regulatory developments in the United States or other countries in which we or our customers, partners and service providers operate could cause economic, labor or social instability and could materially adversely affect our business and our results of operations and financial condition.
3 unchanged sentences
While our network is designed to withstand the loss of any one data center at any point in time, the simultaneous failure of multiple data centers could disrupt our ability to serve our clients.
−Removed: Additionally, certain of our capabilities cannot be made redundant feasibly or cost-effectively.
+Added: Additionally, certain of our capabilities cannot be
+Added: made redundant feasibly or cost-effectively.
Acts of physical or cyber terrorism or other geopolitical unrest, including acts of war, also could cause disruptions in our business.
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In addition, we cannot predict market reactions to any acquisitions we may make or to any failure to announce any future acquisitions.
−Removed: While we would conduct due diligence in connection with any acquisition opportunities, there may be risks or liabilities that such due diligence efforts fail to discover, that are not disclosed to us or that we inadequately
+Added: While we would conduct due diligence in connection with any acquisition opportunities, there may be risks or liabilities that such due diligence efforts fail to discover, that are not disclosed to us or that we inadequately assess.
The failure to timely identify any material liabilities associated with any acquisitions could adversely affect our business, results of operations, and financial condition.
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A default under the indentures governing the Convertible Notes or the fundamental change itself may also lead to a default under agreements governing our existing or future indebtedness, which may result in such existing or future indebtedness becoming immediately payable in full.
−Removed: We may not have sufficient funds to satisfy all amounts due under such
−Removed: existing or future indebtedness and repurchase the Convertible Notes or make cash payments upon conversions thereof.
+Added: We may not have sufficient funds to satisfy all amounts due under such existing or future indebtedness and repurchase the Convertible Notes or make cash payments upon conversions thereof.
The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
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The Capped Calls may affect the value of the Convertible Notes and our Class A common stock.
−Removed: In connection with the pricing of the Company’s 0.25% Convertible Notes due March 1, 2026 (the “ 2026 Convertible Notes”) and 0.50% Convertible Notes due April 1, 2028 (the “ 2028 Convertible Notes” and, together with the 2026 Convertible Notes, the “Convertible Notes”), we entered into privately negotiated capped call transactions (the “2026 Capped Calls” and the “2028 Capped Calls,” respectively and, collectively, the “Capped Calls”) with certain financial institutions (the “option counterparties”).
−Removed: The Capped Calls are expected generally to reduce the potential dilution upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap.
+Added: In connection with the pricing of our 0.25% Convertible Notes due March 1, 2026 (the “2026 Convertible Notes”) and 0.50% Convertible Notes due April 1, 2028 (the “2028 Convertible Notes” and, together with the 2026 Convertible Notes, the “Convertible Notes”), we entered into privately negotiated capped call transactions (the “2026 Capped Calls” and the “2028 Capped Calls,” respectively and, collectively, the “Capped Calls”) with certain financial institutions (the “option counterparties”).
+Added: The Capped Calls are expected generally to reduce the potential dilution upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in
+Added: excess of the principal amount of converted Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap.
We have been advised that, in connection with establishing their initial hedges of the Capped Calls, the option counterparties or their respective affiliates entered into various derivative transactions with respect to our Class A common stock concurrently with or shortly after the pricing of the Convertible Notes.
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If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty.
−Removed: Our exposure will depend on many factors
−Removed: but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our Class A common stock.
+Added: Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our Class A common stock.
In addition, upon a default by an option counterparty, we may suffer more dilution than we currently anticipate with respect to our Class A common stock.
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The market price of our Class A common stock could decline as a result of substantial sales of our Class A common stock, particularly sales by our directors, executive officers and significant stockholders, or the perception in the market that holders of a large number of shares intend to sell their shares.
−Removed: Additionally, the shares of Class A common stock subject to outstanding options and restricted stock unit awards under our equity incentive plans and the shares reserved for future issuance under our equity incentive plans will become eligible for sale in the public market upon issuance.
+Added: Additionally, we rely on equity-based compensation as an important tool in attracting, retaining and motivating our employees.
+Added: Shares of Class A common stock issued upon the exercise of outstanding options and upon the vesting of restricted stock unit awards under our equity incentive plans, and the shares reserved for future issuance under our equity incentive plans, will become eligible for sale in the public market upon issuance and will
+Added: result in dilution to existing holders of our Class A common stock.
Certain holders of our Class A common stock have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for our stockholders or ourselves.
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As a result, our Class A common stock will likely not be eligible for these stock indices.
−Removed: Many investment funds are precluded from investing in companies that are not included in such indices, and these funds would be unable to purchase our Class
−Removed: A common stock if we were not included in such indices.
+Added: Many investment funds are precluded from investing in companies that are not included in such indices, and these funds would be unable to purchase our Class A common stock if we were not included in such indices.
We cannot assure you that other stock indices will not take a similar approach to S&P Dow Jones in the future.
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If any analyst who covers us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the trading price of our Class A common stock or trading volume to decline.
−Removed: Anti-takeover provisions contained in our second amended and restated certificate of incorporation and second amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
−Removed: Our second amended and restated certificate of incorporation, second amended and restated bylaws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors.
−Removed: Among other things, our second amended and restated certificate of incorporation and second amended and restated bylaws include provisions:
+Added: Anti-takeover provisions contained in our second amended and restated certificate of incorporation and third amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
+Added: Our second amended and restated certificate of incorporation, third amended and restated bylaws and Delaware law contain provisions which could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors.
+Added: Among other things, our second amended and restated certificate of incorporation and third amended and restated bylaws include provisions:
• authorizing “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our Class A and Class B common stock;
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• prohibiting stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
−Removed: • requiring super-majority voting to amend some provisions in our second amended and restated certificate of incorporation and second amended and restated bylaws;
+Added: • requiring super-majority voting to amend some provisions in our second amended and restated certificate of incorporation and third amended and restated bylaws;
• requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
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As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which prevents certain stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of at least two-thirds of our outstanding common stock not held by such 15% or greater stockholder.
−Removed: Any provision of our second amended and restated certificate of incorporation, second amended and restated bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.
−Removed: Our second amended and restated certificate of incorporation and our second amended and restated bylaws include super-majority voting provisions that will limit your ability to influence corporate matters.
−Removed: Our second amended and restated certificate of incorporation and our second amended and restated bylaws include provisions that require the affirmative vote of two-thirds of all of the outstanding shares of our capital stock entitled to vote to effect certain changes.
−Removed: These changes include amending or repealing our second amended and restated bylaws or second amended and restated certificate of incorporation or removing a director from office for cause.
+Added: Any provision of our second amended and restated certificate of incorporation, third amended and restated bylaws or Delaware law that has the effect of delaying, preventing or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock and could also affect the price that some investors are willing to pay for our Class A common stock.
+Added: Our second amended and restated certificate of incorporation and our third amended and restated bylaws include super-majority voting provisions that will limit your ability to influence corporate matters.
+Added: Our second amended and restated certificate of incorporation and our third amended and restated bylaws include provisions that require the affirmative vote of two-thirds of all of the outstanding shares of our capital stock entitled to vote to effect certain changes.
+Added: These changes include amending or repealing our third amended and restated bylaws or second amended and restated certificate of incorporation or removing a director from office for cause.
If all or substantially all of the holders of our Class B common stock convert their shares into Class A common stock voluntarily or otherwise, Mr.
Morken may control the majority of the voting power of our outstanding capital stock, and therefore he may have the ability to prevent any such changes, which will limit a stockholder’s ability to influence corporate matters.
−Removed: Our second amended and restated bylaws provide, subject to certain exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
−Removed: Our second amended and restated bylaws provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf;
+Added: Our third amended and restated bylaws provide, subject to certain exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.
+Added: Our third amended and restated bylaws provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf;
(ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholder to us or our stockholders;
(iii) any action asserting a claim against us that is governed by the internal affairs doctrine;
−Removed: or (iv) any action arising pursuant to any provision of the Delaware General Corporation Law, our second amended and restated certificate of incorporation or our second amended and restated bylaws.
+Added: or (iv) any action arising pursuant to any provision of the Delaware General Corporation Law, our second amended and restated certificate of incorporation or our third amended and restated bylaws.
This exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act, which provides for exclusive jurisdiction of the federal courts.
−Removed: It could apply, however, to a suit that asserts claims under the Securities Act and falls within one or more of the categories enumerated in our choice of forum provision, inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the
−Removed: Securities Act or the rules and regulations thereunder.
+Added: It could apply, however, to a suit that asserts claims under the Securities Act and falls within one or more of the categories enumerated in our choice of forum provision, inasmuch as Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
There is uncertainty as to whether a court would enforce such provision with respect to claims under the Securities Act, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
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While Delaware courts have determined that choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than that designated in our exclusive forum provision.
−Removed: In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provision of our second amended and restated bylaws.
−Removed: Alternatively, if a court were to find the choice of forum provision contained in our second amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations.
+Added: In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provision of our third amended and restated bylaws.
+Added: Alternatively, if a court were to find the choice of forum provision contained in our third amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations.
We may need additional capital in the future and such capital may be limited or unavailable.
Failure to raise capital when needed could prevent us from growing in accordance with our plans.
−Removed: We may require more capital in the future from equity or debt financings to fund our operations, finance investments in equipment and infrastructure, acquire complementary businesses and technologies, and respond to competitive pressures and potential strategic opportunities.
+Added: We may require more capital in the future from equity or debt financings to fund our operations, finance investments in equipment and infrastructure, acquire complementary businesses and technologies, and respond to
+Added: competitive pressures and potential strategic opportunities.
If we are required to raise additional funds through further issuances of equity or other securities convertible into equity, our existing stockholders could suffer significant dilution, and any new shares we issue could have rights, preferences or privileges senior to those of the holders of our Class A common stock.
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In addition, these sales could impair our ability to raise capital through the sale of additional Class A common stock in the capital markets.
−Removed: Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.