6 unchanged sentences
Our business and operations have experienced rapid growth, and if we do not appropriately manage future growth, if any, or are unable to improve our systems, processes and controls, our business, financial condition, results of operations, and prospects will be adversely affected.
−Removed: We have experienced rapid growth and increased demand for our products.
+Added: We have experienced rapid growth, both in terms of employee headcount and customer growth, as well as increased demand for our products.
Our total number of Base Customers has grown to 7,002 as of January 31, 2023 from 4,593 as of January 31, 2022 .
−Removed: Our team member headcount has also increased significantly, and we expect to continue to grow our headcount over the next year.
The growth and expansion of our business places a continuous significant strain on our management and operational and financial resources.
In addition, as customers adopt our products for an increasing number of use cases, we have had to support more complex commercial relationships.
−Removed: We must continue to improve and expand our information technology and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with various partners and other third parties, and our ability to manage headcount and processes in an efficient manner to manage our growth effectively.
+Added: To effectively manage and capitalize on our growth periods, we need to manage headcount capital and processes efficiently, while continuing to make investments to improve and expand our information technology and financial infrastructure, our security and compliance requirements, our operating and administrative systems, our relationships with various partners and other third parties.
We may not be able to sustain the pace of improvements to our products successfully or implement systems, processes, and controls in an efficient or timely manner or in a manner that does not negatively affect our results of operations.
7 unchanged sentences
Further, in future periods, our revenue could decline or our revenue growth rate could slow.
−Removed: Many factors may contribute to this decline, including changes to technology, increased competition, slowing demand for The DevOps Platform, the maturation of our business, a failure by us to continue capitalizing on growth opportunities, our failure, for any reason, to continue to take advantage of growth opportunities and a global economic downturn, among others.
+Added: Many factors may contribute to this decline, including changes to technology, increased competition, slowing demand for The DevSecOps Platform, the maturation of our business, a failure by us to continue capitalizing on growth opportunities, our failure, for any reason, to continue to take advantage of growth opportunities and a global economic downturn, among others.
If our growth rate declines, investors’ perceptions of our business and the market price of our Class A common stock could be adversely affected.
−Removed: In addition, we expect to continue to expend substantial financial and other resources on:
−Removed: • expansion and enablement of our sales, services, and marketing organization to increase brand awareness and drive adoption of The DevOps Platform;
−Removed: • product development, including investments in our product development team and the development of new features and functionality for The DevOps Platform;
+Added: In addition, we expect to continue to responsibly expend financial and other resources to align with our:
+Added: • expansion and enablement of our sales, services, and marketing organization to increase brand awareness and drive adoption of The DevSecOps Platform;
+Added: • product development, including investments in our product development team and the development of new features and functionality for The DevSecOps Platform;
• technology and sales channel partnerships;
10 unchanged sentences
If we cannot achieve and sustain profitability, our business, financial condition, and operating results may be adversely affected.
−Removed: We have incurred losses in each year since our inception, including net losses of approximately $192.2 million and $155.1 million in fiscal 2021 and fiscal 2022, respectively.
+Added: We have incurred losses in each year since our inception, including net losses of approximately $192.2 million, $155.1 million and $172.3 million in fiscal 2021, fiscal 2022 and fiscal 2023, respectively.
As of January 31, 2023, we had an accumulated deficit of approximately $725.6 million.
While we have experienced significant growth in revenue in recent periods, we cannot assure you that we will achieve profitability in future periods or that, if at any time we are profitable, we will sustain profitability.
−Removed: We also expect our operating and other expenses to increase in the foreseeable future as we continue to invest in our future growth, including expanding our research and development function to drive further development of The DevOps Platform, expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations, which will negatively affect our operating results if our total revenue does not increase.
−Removed: In addition to the anticipated costs to grow our business, we also expect to incur significant additional legal, accounting, and other expenses as a newly public company.
−Removed: These efforts and additional expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses.
−Removed: Our revenue growth may slow or our revenue may decline for a number of reasons, including reduced demand for The DevOps Platform, increased competition, an increased use of our free product offerings, a decrease in the growth or reduction in size of our overall market, or any inability on our part to capitalize on growth opportunities.
−Removed: Further, as our SaaS offering makes up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and managing costs, which may adversely impact our gross margins.
−Removed: Any failure to increase our revenue or to manage our costs as we continue to grow and invest in our business would prevent us from achieving or maintaining profitability or
−Removed: maintaining positive operating cash flow at all or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.
−Removed: As we continue to invest in infrastructure, develop our services and features, increase our headcount and expand our sales and marketing activity, we may continue to have losses in future periods and these may increase significantly.
+Added: We also expect our operating and other expenses to increase in the foreseeable future as we continue to invest in our future growth, including expanding our research and development function to drive further development of The DevSecOps Platform, expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers in new geographic locations, which will negatively affect our operating results if our total revenue does not increase.
+Added: While we consistently evaluate opportunities to reduce our operating costs and optimize efficiencies, including, for example, through our workforce reduction in February 2023, we cannot guarantee that these efforts will be successful or that we will not re-accelerate operating expenditures in the future in order to capitalize on growth opportunities.
+Added: In addition to the anticipated costs to grow our business, we also expect to continue to incur significant legal, accounting, and other expenses as a public company.
+Added: These efforts and expenses may be more costly than we expect, and we cannot guarantee that we will be able to increase our revenue to offset our operating expenses.
+Added: Our revenue growth may slow or our revenue may decline for a number of reasons, including reduced demand for The DevSecOps Platform, increased competition, an increased use of our free product offerings, a decrease in the growth or reduction in size of our overall market, or any inability on our part to capitalize on growth opportunities.
+Added: Further, as our SaaS offering
+Added: makes up an increasing percentage of our total revenue, we expect to see increased associated cloud-related costs, such as hosting and managing costs, which may adversely impact our gross margins.
+Added: Any failure to increase our revenue or to manage our costs as we continue to grow and invest in our business would prevent us from achieving or maintaining profitability or achieving or maintaining positive operating cash flow at all or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.
+Added: As we continue to invest in infrastructure, develop our services and features, responsibly manage our headcount and expand our sales and marketing activity, we may continue to have losses in future periods and these may increase significantly.
As a result, our losses in future periods may be significantly greater than the losses we would incur if we developed our business more slowly.
−Removed: In addition, we may find that these efforts require greater investment of time, human and capital resources than we currently anticipate and/or that they may not result in increases in our revenues or billings.
+Added: In addition, we may find that these efforts require greater investment of time and human and capital resources than we currently anticipate and/or that they may not result in increases in our revenues or billings.
Any failure by us to achieve and sustain profitability on a consistent basis could cause the value of our Class A common stock to decline.
2 unchanged sentences
Competition presents an ongoing threat to the success of our business.
−Removed: We expect competition in the software business generally, and in web-based code hosting and collaboration services, in particular, to continue to increase.
+Added: We expect competition in the software business generally, and in all of the stages of the software development lifecycle that our product covers, in particular, to continue to increase.
We expect to continue to face intense competition from current competitors, as well as from new entrants into the market.
1 unchanged sentence
We face competition in several areas due to the nature of our product.
−Removed: Our product offering is broad across ten stages of the software development lifecycle which has us competing with many providers with offerings from one to all ten stages.
+Added: Our product offering is broad across all stages of the software development lifecycle which has us competing with many providers with offerings across all stages.
We compete with well-established providers such as Atlassian and Microsoft as well as other companies with offerings in fewer stages including with respect to both code hosting and code collaboration services, as well as file storage and distribution services.
1 unchanged sentence
We believe that our ability to compete depends upon many factors both within and beyond our control, including the following:
−Removed: • ability of our products or of those of our competitors to deliver the positive business outcomes prioritized and valued by our customers and prospects;
−Removed: • our ability to price our products competitively, including our ability to transition users of our free product offering to a paying version of The DevOps Platform;
−Removed: • the amount and quality of communications, postings, and sharing by our users on public forums, which can promote improvements on The DevOps Platform but may also lead to disclosure of commercially sensitive details;
+Added: • the ability of our products or of those of our competitors to deliver the positive business outcomes prioritized and valued by our customers and prospects;
+Added: • our ability to price our products competitively, including our ability to transition users of our free product offering to a paid version of The DevSecOps Platform;
+Added: • the amount and quality of communications, postings, and sharing by our users on public forums, which can promote improvements on The DevSecOps Platform but may also lead to disclosure of commercially sensitive details;
• the timing and market acceptance of services, including the developments and enhancements to those services offered by us or our competitors;
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If our competitors’ products, platforms, services or technologies maintain or achieve greater market acceptance than ours, if they are successful in bringing their products or services to market earlier than ours, or if their products, platforms or services are more technologically capable than ours, then our revenues could be adversely affected.
−Removed: In addition, some of our competitors may offer their products and services at a lower price.
+Added: In addition, some of our competitors may offer their products and services at a lower price or for free, or may offer a competing product with other services or products that together result in offering the competing product for free.
If we are unable to achieve our target pricing levels, our operating results would be negatively affected.
Pricing pressures and increased competition could result in reduced sales, reduced margins, losses or a failure to maintain or improve our competitive market position, any of which could adversely affect our business.
−Removed: The market for our services is new and unproven and may not grow, which would adversely affect our future results and the trading price of our Class A common stock.
+Added: The market for our services is relatively new and unproven and may not grow, which would adversely affect our future results and the trading price of our Class A common stock.
Because the market for our services is relatively new and rapidly evolving, it is difficult to predict customer adoption, customer demand for our services, the size and growth rate of this market, the entry of competitive products or the success of existing competitive services.
1 unchanged sentence
Further, even if the overall market for the type of services we provide continues to grow, we face intense competition from larger and more well-established providers and we may not be able to compete effectively or achieve market acceptance of our products.
−Removed: If we or other software and SaaS providers experience security incidents, loss of customer data, or disruptions in delivery or service, the market for these applications as a whole, including The DevOps Platform and products, may be negatively affected.
−Removed: If the market for our services does not achieve widespread adoption, we do not compete effectively in this market, or there is a reduction in demand for our software or our services in our market caused by a lack of customer acceptance, implementation challenges for deployment, technological challenges, lack of accessible data, competing technologies and services, decreases in corporate spending, including as a result of the COVID-19 pandemic, weakening economic conditions, or otherwise, it could result in reduced customer orders and decreased revenues, which would adversely affect our business operations and financial results.
+Added: If we or other software and SaaS providers experience security incidents, loss of customer data, or disruptions in delivery or service, the market for these applications as a whole, including The DevSecOps Platform and products, may be negatively affected.
+Added: If the market for our services does not achieve widespread adoption, we do not compete effectively in this market, or there is a reduction in demand for our software or our services in our market
+Added: caused by a lack of customer acceptance, implementation challenges for deployment, technological challenges, lack of accessible data, competing technologies and services, decreases in corporate spending, including as a result of global business or macroeconomic conditions, including inflation, rising interest rates, volatility of the global debt and equity markets, or otherwise, it could result in reduced customer orders and decreased revenues, which could require slowing our rate of headcount growth and would adversely affect our business operations and financial results.
We are dependent on sales and marketing strategies to drive our growth in our revenue.
1 unchanged sentence
Any decline in our customer renewals and expansions could harm our future operating results.
−Removed: Our business model depends on generating and maintaining a large user base that is extremely satisfied with The DevOps Platform.
+Added: Our business model depends on generating and maintaining a large user base that is extremely satisfied with The DevSecOps Platform.
We rely on satisfied customers to expand their footprint by buying new products and services and onboarding additional users.
−Removed: The model is dependent on converting non-paying users to paying users.
+Added: The model is based on the assumption that we will convert non-paying users to paying users.
We have limited historical data with respect to the number of current and previous free users and the rates in which customers convert to paying customers, so we may not accurately predict future customer purchasing trends.
−Removed: In future periods, our growth could slow or our profits could decline for several reasons, including decreased demand for our product offerings and our professional services, increased competition, a decrease in the growth of our overall market, a decrease in corporate spending, or our failure, for any reason, to continue to capitalize on growth opportunities.
+Added: In future periods, our growth could slow or our profits could decline for several reasons, including decreased demand for our product offerings and our professional services, increased competition, a decrease in the growth of our overall market, a decrease in corporate spending, including as a result of global business or macroeconomic conditions, including inflation, rising interest rates, or otherwise, or our failure, for any reason, to continue to capitalize on growth opportunities.
We may be forced to change or abandon our subscription based revenue model in order to compete with our competitors’ offerings.
2 unchanged sentences
Our future success also depends in part on our ability to sell more subscriptions and additional services to our current customers.
+Added: Even if customers choose to renew their current subscriptions with us, they may decline to purchase additional services or they may choose to downtier or otherwise decrease the number of seats in their subscription.
If our customers do not purchase additional subscriptions and services from us, our revenue may decline and our operating results may be harmed.
−Removed: Paying customers may decline or fluctuate as a result of a number of factors, including their satisfaction with our services and our end-customer support, the frequency and severity of product outages, our product uptime or latency, their satisfaction with the speed of delivering new features, and the pricing of our, or competing, services.
+Added: Paying customers may decline or fluctuate as a result of a number of factors, including their satisfaction with our services and our end-customer support, the frequency and severity of product outages, our product uptime or latency, their satisfaction with the speed of delivering new features, the pricing of our, or competing, services, and the impact of macroeconomic conditions on our customers and their corporate spending.
We have limited historical data with respect to rates of paying customers buying more seats, uptiering, downtiering and churning, so we may not accurately predict future customer trends.
−Removed: Our customer expansions and renewals may decline or fluctuate as a result of a number of factors, including:
−Removed: quality of our sales efforts customer usage, customer satisfaction with our services and customer support, our prices, the prices of competing services, mergers and acquisitions affecting our customer base, the effects of global economic conditions, or reductions in our customers’ spending levels generally.
−Removed: Further, we have discontinued our starter and bronze tier product offerings, and users of these products will be required to upgrade to our paid offerings, switch to our free product or discontinue using our products.
+Added: Our customer expansions and renewals may decline or fluctuate, and conversely, contractions and downtiers may increase, or fluctuate, as a result of a number of factors, including:
+Added: quality of our sales efforts, customer usage, customer satisfaction with our services and customer support, our prices (including price increases for our Premium tier that we announced in the first quarter of fiscal year 2024 and which are generally effective in the same fiscal quarter depending on whether it is a new or existing customer), the prices of competing services, mergers and acquisitions affecting our customer base, the effects of global economic conditions, including increased interest rates and inflation, or reductions in our customers’ spending levels generally (including, our customers that have or may have to downsize their operations or headcount).
+Added: If we cannot use our marketing strategies in a cost-effective manner or if we fail to promote our services efficiently and effectively, our ability to acquire new customers or expand the services of our existing customers may suffer.
+Added: In addition, an increase in the use of online and social media for product promotion and marketing may increase the burden on us to monitor compliance of such
+Added: materials and increase the risk that such materials could contain problematic product or marketing claims in violation of applicable regulations.
+Added: Further, we have discontinued our starter and bronze tier product offerings, and users of these products will be required to switch to another paid offering, switch to our free product or discontinue using our products.
+Added: Additionally, in the first quarter of fiscal year 2023, we announced a user limit for our SaaS Free tier, which is expected to be implemented in fiscal year 2024 followed by storage and transfer limitations.
+Added: We also announced in the first quarter of fiscal year 2023 storage and transfer limitations, the extent and implementation of which varies depending on the tier.
We cannot assure you that our customers will purchase our products, and if our end customers do not purchase our products, our revenues may grow more slowly than expected or decline.
+Added: Our operating results may fluctuate significantly, which could make our future results difficult to predict and could adversely affect the trading price of our Class A common stock.
+Added: Our operating results may vary significantly from period to period, which could adversely affect our business, operating results and financial condition.
+Added: Our operating results have varied significantly from period to period in the past, and we expect that our operating results will continue to vary significantly in the future such that period-to-period comparisons of our operating results may not be meaningful.
+Added: Accordingly, our financial results in any one quarter or fiscal year should not be relied upon as indicative of future performance.
+Added: Our quarterly or annual financial results may fluctuate as a result of several factors, many of which are outside of our control and may be difficult to predict, including:
+Added: • our ability to attract and retain new customers;
+Added: • the addition or loss of material customers, including through acquisitions or consolidations;
+Added: • the timing of recognition of revenues;
+Added: • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
+Added: • general economic, industry and market conditions, in both domestic and our foreign markets, including increasing interest rates and inflation, the potential effects of health pandemics or epidemics global events, including the ongoing armed conflict in Ukraine;
+Added: • customer renewal rates;
+Added: • our ability to convert users of our free product offerings into subscribing customers;
+Added: • increases or decreases in the number of elements of our services or pricing changes upon any renewals of customer agreements;
+Added: • software development allocation decisions by customers;
+Added: • seasonal variations in sales of our products;
+Added: • the timing and success of new service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners;
+Added: • decisions by potential customers to use products of our competitors;
+Added: • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies;
+Added: • extraordinary expenses such as litigation or other dispute-related settlement payments or outcomes;
+Added: • future accounting pronouncements or changes in our accounting policies or practices;
+Added: • negative media coverage or publicity;
+Added: • political events;
+Added: • the amount and timing of operating costs and capital expenditures related to the expansion of our business, in the U.S.
+Added: and foreign markets;
+Added: • the cost to develop and upgrade The DevSecOps Platform to incorporate new technologies;
+Added: • increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates.
+Added: In addition, we experience seasonal fluctuations in our financial results as we typically receive a higher percentage of our annual orders from new customers, as well as renewal orders from existing customers, in our last two fiscal quarters as compared to the first two fiscal quarters due to the annual budget approval process of many of our customers, the timing of our customers’ decisions to make a purchase, changes our customers experienced, or may experience, in their businesses, and other variables some of which are outside of our and our customers’ control, such as macroeconomic and general economic conditions, including inflation and increased interest rates.
+Added: Any of the above factors, individually or in the aggregate, may result in significant fluctuations in our financial and other operating results from period to period.
+Added: As a result of this variability, our historical operating results should not be relied upon as an indication of future performance.
+Added: Moreover, this variability and unpredictability could result in our failure to meet our operating plan or the expectations of investors or analysts for any period.
+Added: If we fail to meet such expectations for the reasons described above or any other reasons, our stock price could fall substantially.
+Added: We have experienced rapid growth in recent periods.
+Added: If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges.
+Added: We have experienced a period of rapid growth in our operations and headcount.
+Added: We anticipate that we will continue to expand our operations and responsibly grow our headcount in the near term.
+Added: This growth has placed, and future growth will place, a significant strain on our management and administrative, operational and financial infrastructure.
+Added: Our success will depend in part on our ability to manage this growth effectively.
+Added: To manage the responsible growth of our operations, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures.
+Added: Failure to effectively manage growth could result in difficulty or delays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.
+Added: Furthermore, there is no assurance that our rate of growth will continue at its current pace, if at all.
+Added: Our rate of growth may also be impacted as a result of global business or macroeconomic conditions, including inflation and rising interest rates, and investment decisions by our customers.
+Added: We do not have an adequate history with our subscription or pricing models to accurately predict the long-term rate of customer subscription renewals or adoption, or the impact these renewals and adoption will have on our revenues or operating results.
+Added: We have limited experience with respect to determining the optimal prices for our services.
+Added: As the markets for our services mature, or as new competitors introduce new products or services that are similar to or compete with ours, we may be unable to attract new customers at the same price or based on the same pricing model as we have used historically.
+Added: Moreover, some customers may demand greater price concessions or additional functionality at the same price levels.
+Added: As a result, in the future we may be
+Added: required to reduce our prices or provide more features without corresponding increases in price, which could adversely affect our revenues, gross margin, profitability, financial position and cash flow.
+Added: In addition, our customers have no obligation to renew their subscriptions for our services after the expiration of the initial subscription period.
+Added: A majority of our subscriptions are on a one-year period.
+Added: Our customers may renew for fewer elements of our services or negotiate for different pricing terms.
+Added: We have limited historical data with respect to rates of customer subscription renewals, so we cannot accurately predict customer renewal rates.
+Added: Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their dissatisfaction with our pricing or our services, their ability to continue their operations and spending levels, and changes in other technology components used within the customer’s organization.
+Added: Changes in product packaging, pricing strategy, or product offerings, or the implementation or execution of the foregoing, may not be seen favorably by our customers and may have an adverse effect on our ability to retain our current customers and acquire new ones.
+Added: For example, we have discontinued our starter and bronze tier product offerings, and we recently announced a price increase in our Premium tier product offering, which may cause customers who previously used these tiers to opt for our free version or to cease using our products completely.
+Added: We may also decide to raise the prices of our product offerings in the future.
+Added: If our customers do not renew their subscriptions on similar pricing terms, our revenues may decline, and our business could suffer.
+Added: In addition, over time the average term of our contracts could change based on renewal rates or for other reasons.
Transparency is one of our core values.
5 unchanged sentences
While we will continue to emphasize transparency, we also promote and educate our team members about responsible internal and external transparency, as openly sharing certain types of information can potentially lead to unintended, and sometimes negative, consequences.
−Removed: As a result of our transparency, our competitors and other outside parties may have access to certain information that is often kept confidential or internal at other companies through our Handbook, our team
−Removed: members’ open and public use of The DevOps Platform to run our business, and other avenues of communication we commonly use.
+Added: As a result of our transparency, our competitors and other outside parties may have access to certain information that is often kept confidential or internal at other companies through our Handbook, our team members’ open and public use of The DevSecOps Platform to run our business, and other avenues of communication we commonly use.
The public availability of this information may allow our competitors to take advantage of certain of our innovations, and may allow parties to take other actions, including litigation, that may have an adverse impact on our operating results or cause reputational harm, which in turn may have a negative economic impact.
5 unchanged sentences
Although we aim to keep the Handbook updated, the information in the Handbook may not be up to date at all times.
−Removed: Also, because any of our team members can contribute to the Handbook, the information in the Handbook may not be accurate.
+Added: Also, because any of our team members can contribute to the Handbook, the information in
+Added: the Handbook may not be accurate.
We have implemented disclosure controls and procedures, including internal controls over financial reporting, that comply with the U.S.
2 unchanged sentences
Security and privacy breaches may hurt our business.
−Removed: The DevOps Platform processes, stores, and transmits our customers’ proprietary and sensitive data, including personal information, and financial data.
+Added: The DevSecOps Platform processes, stores, and transmits our customers’ proprietary and sensitive data, including personal information, and financial data.
We also use third-party service providers and sub-processors to help us deliver services to our customers and their end-users.
2 unchanged sentences
While we, our third-party cloud providers, our third-party processors, and our customers have implemented security measures designed to protect against security breaches, these measures could fail or may be insufficient, resulting in the unauthorized access or disclosure, modification, misuse, destruction, or loss of our or our customers’ data or other sensitive information.
−Removed: Any security breach of The DevOps Platform, our operational systems, physical facilities, or the systems of our third-party processors, or the perception that a breach has occurred, could result in litigation, indemnity obligations, regulatory enforcement actions, investigations, compulsory audits, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to our business.
−Removed: Even though we do not control the security measures of our customers and other third parties, we may be responsible for any breach of such measures or suffer reputational harm even where we do not have recourse to the third party that caused the breach.
+Added: Any security breach of The DevSecOps Platform, our operational systems, physical facilities, or the systems of our third-party processors, or the perception that a breach has occurred, could result in litigation, indemnity obligations, regulatory enforcement actions, investigations, compulsory audits, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to our business.
+Added: Even though we do not control the security measures of our customers and other third parties, we may be considered responsible for any breach of such measures or suffer reputational harm even where we do not have recourse to the third party that caused the breach, if it is found that GitLab failed to conduct comprehensive third party risk due diligence.
In addition, any failure by our vendors to comply with applicable law or regulations could result in proceedings against us by governmental entities or others.
−Removed: Security incidents compromising the confidentiality, integrity, and availability of our confidential or personal information and our and our third-party service providers’ information technology systems could result from cyber-attacks, including denial-of-service attacks, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including phishing), which are prevalent in our industry and our customers’ industries.
−Removed: Any security breach or disruption could result in the loss or destruction of or unauthorized access to, or use, alteration, disclosure, or acquisition of
−Removed: confidential and personal information, which may result in damage to our reputation, early termination of our contracts, litigation, regulatory investigations or other liabilities.
−Removed: If our, our customers’, or our partners’ security measures are breached as a result of third-party action, team member error, malfeasance or otherwise and, as a result, someone obtains unauthorized access to the GitLab application or data, including personal and/or confidential information of our customers, our reputation will be damaged, our business may suffer loss of current customers and future opportunities and we could incur significant financial liability including fines, cost of recovery, and costs related to remediation measures.
+Added: Security incidents compromising the confidentiality, integrity, and availability of our confidential or personal information and our third-party service providers’ information technology systems could result from cyber-attacks, including denial-of-service attacks, web scraping, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including phishing), which are prevalent in our industry and our customers’ industries.
+Added: Any security breach or disruption could result in the loss or destruction of or unauthorized access to, or use, alteration, disclosure, or acquisition of confidential and personal information, which may result in damage to our reputation, early termination of our contracts, litigation, regulatory investigations or other liabilities.
+Added: If our, our customers’, or our partners’ security measures are breached as a result of third-party action, team member error, misconfiguration, malfeasance (including bribery) or otherwise and, as a result, someone obtains unauthorized access to the GitLab application or data, including personal and/or confidential information of our customers, our reputation could be damaged, our business may suffer loss of current customers and future opportunities and we could incur significant financial liability including fines, cost of recovery, and costs related to remediation measures.
Techniques used to obtain unauthorized access or to sabotage systems change frequently.
14 unchanged sentences
Litigation resulting from security breaches may adversely affect our business.
−Removed: Unauthorized access to The DevOps Platform, systems, networks, or physical facilities could result in litigation with our customers, our customers’ end-users, or other relevant stakeholders.
+Added: Unauthorized access to The DevSecOps Platform, systems, networks, or physical facilities could result in litigation with our customers, our customers’ end-users, or other relevant stakeholders.
These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business, or adversely affect our reputation.
−Removed: We could be required to fundamentally change our business activities and practices or modify The DevOps Platform capabilities in response to such litigation, which could have an adverse effect on our business.
−Removed: If a security breach were to occur, and the confidentiality, integrity or availability of our data or the data of our partners, our customers or our customers’ end-users was disrupted, we could incur significant liability, or The DevOps Platform, systems, or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.
−Removed: If we fail to detect or remediate a security breach in a timely manner, or a breach otherwise affects a large amount of data of one or more customers, or if we suffer a cyber-attack that impacts our ability to operate The DevOps Platform, we may suffer material damage to our reputation, business, financial condition, and results of operations.
+Added: We could be required to fundamentally change our business activities and practices or modify The DevSecOps Platform capabilities in response to such litigation, which could have an adverse effect on our business.
+Added: If a security breach were to occur, and the confidentiality, integrity or availability of our data or the data of our partners, our customers or our customers’ end-users was disrupted, we could incur significant liability, or The DevSecOps Platform, systems, or networks may be perceived as less desirable, which could negatively affect our business and damage our reputation.
+Added: If we fail to detect or remediate a security breach in a timely manner, or a breach otherwise affects a large amount of data of one or more customers, or if we suffer a cyber-attack that impacts our ability to operate The DevSecOps Platform, we may suffer material damage to our reputation, business, financial condition, and results of operations.
Further, while we maintain cyber insurance that may provide coverage for these types of incidents, such coverage may not be adequate to cover the costs and other liabilities related to these incidents.
−Removed: In addition, we cannot be sure that our existing insurance coverage
−Removed: and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
−Removed: Our risks are likely to increase as we continue to expand The DevOps Platform, grow our customer base, and process, store, and transmit increasingly large amounts of proprietary and sensitive data.
+Added: In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
+Added: Our risks are likely to increase as we continue to expand The DevSecOps Platform, grow our customer base, and process, store, and transmit increasingly large amounts of proprietary and confidential data.
We face heightened risk of security breaches because we use third-party open source technologies and incorporate a substantial amount of open source code in our products.
−Removed: The DevOps Platform is built using open-source technology.
+Added: The DevSecOps Platform is built using open-source technology.
Using or incorporating any third-party technology can become a vector for supply-chain cyber-attacks, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including phishing) attacks.
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If we are the target of cyber-attacks as a result of our use of open source code, it may substantially damage our reputation and adversely impact our results of operations and financial condition.
−Removed: Customers may choose to stay on our free product offering instead of converting into a paying customer.
−Removed: Our future success depends, in part, on our ability to convert users of our free product offering into paying customers by selling additional products, and by upselling additional subscription services.
−Removed: This may require increasingly sophisticated and costly sales efforts and may not result in additional sales.
−Removed: In addition, the rate at which our end-customers purchase additional products and services depends on a number of factors, including the perceived need for additional products and services as well as general economic conditions.
+Added: Customers may choose to stay on our self-managed or SaaS product offerings instead of converting into a paying customer.
+Added: Our future success depends, in part, on our ability to convert users of our free self-managed or SaaS product offerings into paying customers by selling additional products, and by upselling additional subscription services.
+Added: The total number of users of our free product may decline as a result of, or due to, the limitations on the number of users for a product and limitations on storage and transfers applicable to the free product offering (all of which were announced in the first quarter of fiscal year 2023 and is expected to be implemented in fiscal year 2024).
+Added: As a result of our investment in new capabilities and improvements to our free product offering, users of our free product may decline to purchase additional products or subscription services if they perceive the free product to be more attractive as compared to our paid offerings.
+Added: Converting users of our free product offering may require increasingly sophisticated and costly sales efforts and may not result in additional sales.
+Added: In addition, the rate at which our end-customers purchase additional products and services depends on a number of factors, including the perceived need for additional products and services, the limitations on the number of users and limitations on storage and transfers applicable to the free product offering as well as general economic conditions.
If our efforts to sell additional products and services to our end-customers are not successful, our business may suffer.
−Removed: Our operating results may fluctuate significantly, which could make our future results difficult to predict and could adversely affect the trading price of our Class A common stock.
−Removed: Our operating results may vary significantly from period to period, which could adversely affect our business, operating results and financial condition.
−Removed: Our operating results have varied significantly from period to period in the past, and we expect that our operating results will continue to vary significantly in the future such that period-to-period comparisons of our operating results may not be meaningful.
−Removed: Accordingly, our financial results in any one quarter or fiscal year should not be relied upon as indicative of future performance.
−Removed: Our quarterly or annual financial results may fluctuate as a result of several factors, many of which are outside of our control and may be difficult to predict, including:
−Removed: • our ability to attract and retain new customers;
−Removed: • the addition or loss of material customers, including through acquisitions or consolidations;
−Removed: • the timing of recognition of revenues;
−Removed: • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure;
−Removed: • general economic, industry and market conditions, including the potential effects of the current COVID-19 pandemic and other global events, including the recent and developing armed conflict in Ukraine;
−Removed: • customer renewal rates;
−Removed: • our ability to convert users of our free product offerings into subscribing customers;
−Removed: • increases or decreases in the number of elements of our services or pricing changes upon any renewals of customer agreements;
−Removed: • seasonal variations in sales of our products;
−Removed: • the timing and success of new service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers or strategic partners;
−Removed: • decisions by potential customers to use products of our competitors;
−Removed: • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies;
−Removed: • extraordinary expenses such as litigation or other dispute-related settlement payments or outcomes;
−Removed: • general economic, industry, and market conditions, in both domestic and our foreign markets;
−Removed: • future accounting pronouncements or changes in our accounting policies or practices;
−Removed: • negative media coverage or publicity;
−Removed: • political events;
−Removed: • the amount and timing of operating costs and capital expenditures related to the expansion of our business, in the U.S.
−Removed: and foreign markets;
−Removed: • the cost to develop and upgrade The DevOps Platform to incorporate new technologies;
−Removed: • increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates.
−Removed: In addition, we experience seasonal fluctuations in our financial results as we typically receive a higher percentage of our annual orders from new customers, as well as renewal orders from existing customers, in our fourth fiscal quarter as compared to other quarters due to the annual budget approval process of many of our customers.
−Removed: Any of the above factors, individually or in the aggregate, may result in significant fluctuations in our financial and other operating results from period to period.
−Removed: As a result of this variability, our historical operating results should not be relied upon as an indication of future performance.
−Removed: Moreover, this variability and unpredictability could result in our failure to meet our operating plan or the expectations of investors or analysts for any period.
−Removed: If we fail to meet such expectations for the reasons described above or any other reasons, our stock price could fall substantially.
−Removed: We have a limited operating history, which makes it difficult to evaluate our current business and future prospects and may increase the risks associated with your investment.
−Removed: We were formed in September 2014, and have a limited operating history for our current business upon which our operations and future prospects may be evaluated.
−Removed: As a result of our limited operating history, our ability to forecast our future operating results is limited and subject to a number of uncertainties, including our ability to plan for and model future growth.
−Removed: We also have operating plans that may or may not be achieved and prior achievement of our operating plans is not an indication of future achievement.
−Removed: We have further streamlined our business by reducing the tiers of The DevOps Platform available to purchase from three to two, which may reduce our ability to forecast expected future growth.
−Removed: We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described herein.
−Removed: If our assumptions regarding these risks and uncertainties (which we use to plan our business and
−Removed: operations) are incorrect or change due to changes in our markets, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.
−Removed: We cannot provide assurance that we will be successful in addressing these and other challenges we may face in the future.
−Removed: We have experienced rapid growth in recent periods.
−Removed: If we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service, or adequately address competitive challenges.
−Removed: We have experienced a period of rapid growth in our headcount and operations.
−Removed: We anticipate that we will continue to expand our headcount and operations in the near term.
−Removed: This growth has placed, and future growth will place, a significant strain on our management and administrative, operational and financial infrastructure.
−Removed: Our success will depend in part on our ability to manage this growth effectively.
−Removed: To manage the expected growth of our operations and talent, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures.
−Removed: Failure to effectively manage growth could result in difficulty or delays in deploying customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features or other operational difficulties, and any of these difficulties could adversely impact our business performance and results of operations.
−Removed: Furthermore, there is no assurance that our rate of growth will continue at its current pace, if at all.
We may not be able to respond to rapid technological changes with new solutions, which could have a material adverse effect on our operating results.
−Removed: The DevOps market is characterized by rapid technological change, fluctuating price points, and frequent new product and service introductions.
+Added: The DevSecOps market is characterized by rapid technological change, fluctuating price points, and frequent new product and service introductions.
Our ability to increase our user base and increase revenue from existing customers will depend heavily on our ability to enhance and improve our existing solutions, introduce new features and products, both independently and in conjunction with third-party developers, reach new platforms and sell into new markets.
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If we are unable to develop, license, or acquire enhancements to our existing solutions on a timely and cost-effective basis, or if such enhancements do not achieve market acceptance, our business, operating results, and financial condition may be adversely affected.
−Removed: We do not have an adequate history with our subscription or pricing models to accurately predict the long-term rate of customer subscription renewals or adoption, or the impact these renewals and adoption will have on our revenues or operating results.
−Removed: We have limited experience with respect to determining the optimal prices for our services.
−Removed: As the markets for our services mature, or as new competitors introduce new products or services that are similar to or compete with ours, we may be unable to attract new customers at the same price or based on the same pricing model as we have used historically.
−Removed: Moreover, some customers may demand greater price concessions or additional functionality at the same price levels.
−Removed: As a result, in the future we may be required to reduce our prices or provide more features without corresponding increases in price, which could adversely affect our revenues, gross margin, profitability, financial position and cash flow.
−Removed: In addition, our customers have no obligation to renew their subscriptions for our services after the expiration of the initial subscription period.
−Removed: A majority of our subscriptions are on a one-year period.
−Removed: Our customers may renew for fewer elements of our services or negotiate for different pricing terms.
−Removed: We have limited historical data with respect to rates of customer subscription renewals, so we cannot accurately predict customer renewal rates.
−Removed: Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their dissatisfaction with our pricing or our services, their ability to continue their operations and spending levels, and changes in other technology components used within the customer’s organization, such as recruitment, advertising, and applicant tracking system capabilities.
−Removed: Changes in product packaging, pricing strategy or product offerings may not be seen favorably by our customers and may have an adverse effect on our ability to retain our current customers and acquire new ones.
−Removed: For example, we have discontinued our starter and bronze tier product offerings, which may cause customers who previously used these tiers to opt for our free version or to cease using our products completely.
−Removed: If our customers do not renew their subscriptions on similar pricing terms, our revenues may decline, and our business could suffer.
−Removed: In addition, over time the average term of our contracts could change based on renewal rates or for other reasons.
−Removed: If we are not able to provide successful enhancements, new products, services, and features, our business could be adversely affected.
−Removed: If we are unable to provide enhancements and new features for our existing services or new services that achieve market acceptance or that keep pace with rapid technological developments and the competitive landscape, our business could be adversely affected.
−Removed: The success of new services and enhancements depends on several factors, including the timely delivery, introduction and market acceptance of such services.
−Removed: Failure in this regard may significantly impair our revenue growth.
−Removed: In addition, because our services are designed to operate on a variety of systems and platforms, some controlled by third parties including competitors, we will need to continuously modify and enhance them to keep pace with changes in Internet-related hardware, operating systems, cloud computing infrastructure, and other software, communication, browser and open source technologies.
−Removed: We may not be successful in either developing these modifications and enhancements or in bringing them to market in a timely fashion.
−Removed: Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or technologies, could increase our research and development expenses.
−Removed: Any failure of our services to operate effectively with future network platforms and technologies could reduce the demand for our services, result in customer dissatisfaction, and adversely affect our business.
Failure to effectively expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our services.
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We plan to continue expanding our sales force.
−Removed: We also plan to dedicate significant and increasing resources to sales and marketing programs.
+Added: We also plan to dedicate significant and increasing resources
+Added: to sales and marketing programs.
We are expanding our marketing and sales capabilities to target additional potential customers, including some larger organizations, but there is no guarantee that we will be successful attracting and maintaining these businesses as customers, and even if we are successful, these efforts may divert our resources away from and negatively impact our ability to attract and maintain our current customer base.
All of these efforts will require us to invest significant financial and other resources.
−Removed: If we are unable to find efficient ways to deploy our marketing spend or to hire, develop, and
−Removed: retain talent in numbers required to maintain and support our growth, if our new sales talent are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective, our ability to increase our customer base and achieve broader market acceptance of our services could be harmed.
+Added: If we are unable to find efficient ways to deploy our marketing spend or to hire, develop, and retain talent in numbers required to maintain and support our growth, if our new sales talent are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective, our ability to increase our customer base and achieve broader market acceptance of our services could be harmed.
Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and our financial results.
−Removed: Once our products are deployed, our customers depend on our technical support organization to assist customers with service customization and optimization and resolve technical issues.
+Added: Once our products are deployed, our customers depend on our technical support organization to resolve technical issues.
We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services.
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Our industry is subject to rapid technological change, evolving industry standards and practices, and changing customer needs, requirements, and preferences.
−Removed: The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis.
+Added: The success of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis, including our ability to provide enhancements and new features for our existing services or new services that achieve market acceptance or that keep pace with rapid technological developments and the competitive landscape.
+Added: The success of new services and enhancements depends on several factors, including the timely delivery, introduction, and market acceptance of such services.
If we are unable to develop and sell new services that satisfy our customers and provide enhancements and new features for our existing services that keep pace with rapid technological and industry change, our revenue and operating results could be adversely affected.
If new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently, or more securely, such technologies could adversely impact our ability to compete.
−Removed: Our services must also integrate with a variety of network, hardware, mobile, cloud, and software platforms and technologies, and we need to continuously modify and enhance our services to adapt to changes and innovation in these technologies.
+Added: Our services must also integrate with a variety of network, hardware, mobile, cloud, and software platforms and technologies, and we need to continuously modify and enhance our services to adapt to
+Added: changes and innovation in these technologies, including changes in internet-related hardware, operating systems, cloud computing infrastructure, and other software, communication, browser and open source technologies.
If developers widely adopt new software platforms, we would have to develop new versions of our products to work with those new platforms.
This development effort may require significant engineering, marketing, and sales resources, all of which would affect our business and operating results.
−Removed: Any failure of our services to operate effectively with future infrastructure platforms and technologies could reduce the demand for our products.
−Removed: If we are unable to respond to these changes in a cost-effective manner, our services may become less marketable and less competitive or obsolete, and our operating results may be negatively affected.
+Added: Any failure of our services to operate effectively with future infrastructure platforms and technologies could reduce the demand for our products and significantly impair our revenue growth.
+Added: We may not be successful in either developing these modifications and enhancements or in bringing them to market in a timely fashion.
+Added: Furthermore, uncertainties about the timing and nature of new network platforms or technologies, or modifications to existing platforms or technologies, could increase our research and development expenses.
+Added: If we are unable to respond to these changes in a timely or cost-effective manner, our services may become less marketable and less competitive or obsolete, which may result in customer dissatisfaction, and adversely affect our business.
If our services fail to perform properly, whether due to material defects with the software or external issues, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims.
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• loss or delayed market acceptance and sales;
+Added: • loss of data;
• breach of warranty claims;
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• diversion of development and customer service resources;
+Added: • loss of operational time;
• injury to our reputation.
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In addition, we may have to upgrade our existing information technology systems or choose to incorporate new technology systems from time to time in order for such systems to support the increasing needs of our expanding business.
−Removed: Costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations.
+Added: Costs and potential problems and interruptions associated with the implementation
+Added: of new or upgraded systems and technology or with maintenance or adequate support of existing systems could disrupt or reduce the efficiency of our operations.
We may also encounter service interruptions due to issues interfacing with our customers’ IT systems, including stack misconfigurations or improper environment scaling, or due to cyber security attacks on ours or our customers’ IT systems.
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For example, our customers access our products through their internet service providers.
−Removed: If a service provider fails to provide sufficient capacity to support our products, otherwise experiences service outages, or intentionally or unintentionally restricts or limits our ability to send, deliver, or receive electronic
−Removed: communications or provide services, such failure could interrupt our customers’ access to our products, adversely affect their perception of our products’ reliability and reduce our revenues.
+Added: If a service provider fails to provide sufficient capacity to support our products, otherwise experiences service outages, or intentionally or unintentionally restricts or limits our ability to send, deliver, or receive electronic communications or provide services, such failure could interrupt our customers’ access to our products, adversely affect their perception of our products’ reliability and reduce our revenues.
In addition to potential liability, if we experience interruptions in the availability of our products or services, our reputation could be adversely affected and we could lose customers.
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We cannot be certain that we will be able to identify suitable indirect sales channel partners.
−Removed: To the extent we do identify such partners, we will need to negotiate the terms of a commercial agreement with them under which the partner would distribute The DevOps Platform.
+Added: To the extent we do identify such partners, we will need to negotiate the terms of a commercial agreement with them under which the partner would distribute The DevSecOps Platform.
We cannot be certain that we will be able to negotiate commercially-attractive terms with any channel partner, if at all.
−Removed: In addition, all channel partners must be trained to distribute The DevOps Platform.
+Added: In addition, all channel partners must be trained to distribute The DevSecOps Platform.
In order to develop and expand our distribution channel, we must develop and improve our processes for channel partner introduction and training.
If we do not succeed in identifying suitable indirect sales channel partners, our business, operating results, and financial condition may be adversely affected.
−Removed: We also cannot be certain that we will be able to maintain successful relationships with any channel partners and, to the extent that our channel partners are unsuccessful in selling our products, our ability to sell our products and our business, operating results, and financial condition could be adversely affected.
+Added: We also cannot be certain that we will be able to maintain successful relationships with any channel partners and, to the extent that our channel partners are unsuccessful in selling our products, our ability
+Added: to sell our products and our business, operating results, and financial condition could be adversely affected.
Our channel partners may offer customers the products and services of several different companies, including products and services that compete with our products.
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We track certain performance metrics with internal tools and data models and do not independently verify such metrics.
−Removed: Certain of our performance metrics are subject to inherent
−Removed: challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
+Added: Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
Our internal tools and data models have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we report.
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We rely to a significant degree on a number of independent open source contributors, to develop and enhance the open source technologies we use to provide our products and services.
−Removed: In our development process we rely upon numerous open source software programs which are outside of our direct control.
+Added: In our development process we rely upon numerous open core software programs which are outside of our direct control.
Members of corresponding leadership committees and core teams, many of whom are not employed by us, are primarily responsible for the oversight and evolution of the codebases of these open source technologies.
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In either event, our development expenses could be increased, and our technology release and upgrade schedules could be delayed.
−Removed: Delays in developing, completing, or delivering new or enhanced offerings could cause our offerings to be less competitive, impair customer acceptance of our offerings and result in delayed or reduced revenue for our offerings.
+Added: Delays in developing, completing, or delivering new or enhanced offerings
+Added: could cause our offerings to be less competitive, impair customer acceptance of our offerings and result in delayed or reduced revenue for our offerings.
Our failure or inability to protect our intellectual property rights, or claims by others that we are infringing upon or unlawfully using their intellectual property, could diminish the value of our brand and weaken our competitive position, and adversely affect our business, financial condition, operating results, and prospects.
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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.
−Removed: We cannot be certain that the steps taken by us to protect our intellectual property rights will be adequate to prevent infringement of such rights by
+Added: We cannot be certain that the steps taken by us to protect our intellectual property rights will be adequate to prevent infringement of such rights by others.
Additionally, the process of obtaining patent or trademark protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications or apply for all necessary or desirable trademark applications at a reasonable cost or in a timely manner.
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Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and our failure or inability to obtain or maintain trade secret protection or otherwise protect our proprietary rights could adversely affect our business.
−Removed: We may in the future be subject to patent infringement and trademark claims and lawsuits in various jurisdictions, and we cannot be certain that our products or activities do not violate the patents, trademarks, or other intellectual property rights of third-party claimants.
+Added: We may in the future be subject to intellectual property infringement claims and lawsuits in various jurisdictions, and although we are diligent in our efforts to protect our intellectual property we cannot be certain that our products or activities do not violate the patents, trademarks, or other intellectual property rights of third-party claimants.
Companies in the technology industry and other patent, copyright, and trademark holders seeking to profit from royalties in connection with grants of licenses own large numbers of patents, copyrights, trademarks, domain names, and trade secrets and frequently commence litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights.
−Removed: As we face increasing competition and gain an increasingly high profile, the intellectual property rights claims against us have grown and will likely continue to grow.
+Added: As we face increasing competition and gain an increasingly high profile, the likelihood of intellectual property rights claims against us may grow.
Further, from time to time, we may receive letters from third parties alleging that we are infringing upon their intellectual property rights or inviting us to license their intellectual property rights.
−Removed: Our technologies and other intellectual property may not be able to withstand such third-party claims, and successful infringement claims against us could result in significant monetary liability, prevent us from selling some of our products and services, or require us to change our branding.
+Added: Our technologies and other intellectual property may be found to infringe upon such third-party rights, and such successful claims against us could result in significant monetary liability, prevent us from selling some of our products and services, or require us to change our branding.
In addition, resolution of claims may require us to redesign our products, license rights from third parties at a significant expense, or cease using those rights altogether.
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Patent infringement, trademark infringement, trade secret misappropriation, and other intellectual property claims and proceedings brought against us or brought by us, whether successful or not, could require significant attention of our management and resources and have in the past and could further result in substantial costs, harm to our brand, and have an adverse effect on our business.
+Added: Our open source and source code-available business model makes our software vulnerable to authorized and unauthorized distribution and sale.
+Added: We license many significant components of our software under permissive open source software licenses which grant licensees broad permissions to use, copy, modify, and distribute the covered software.
+Added: Under these licenses, third parties are entitled to distribute and sell the covered software without payment to us.
+Added: Features available on our paid tiers are source code-available subject to a proprietary software license.
+Added: This proprietary license prohibits, amongst other things, distribution and sale of the covered software.
+Added: Notwithstanding these prohibitions, by virtue of the source code’s being publicly available, the covered software is vulnerable to unauthorized distribution and sale by third parties.
We are or may be the defendant in lawsuits or other claims that could cause us to incur substantial liabilities.
−Removed: We have from time to time been, and are likely to in the future become, defendants in actual or threatened lawsuits brought by or on behalf of our current and former team members, competitors, governmental or regulatory bodies, or third parties who use The DevOps Platform.
+Added: We have from time to time been, and are likely to in the future become, defendants in actual or threatened lawsuits brought by or on behalf of our current and former team members, competitors, governmental or regulatory bodies, or third parties who use The DevSecOps Platform.
The various claims in such lawsuits may include, among other things, negligence or misconduct in the operation of our business and provision of services, intellectual property infringement, unfair competition, or violation of employment or privacy laws or regulations.
−Removed: Such suits may seek, as applicable, direct, indirect, consequential, punitive or other penalties or damages, injunctive relief, and/or attorneys’ fees.
−Removed: It is not possible to predict the outcome of any such lawsuits, individually or in the aggregate.
+Added: Such suits may seek, as applicable, direct, indirect, consequential, punitive or other penalties or monetary damages, injunctive relief, and/or attorneys’ fees.
+Added: Litigation is inherently unpredictable, and it is not possible to predict the outcome of any such lawsuits, individually or in the aggregate.
However, these lawsuits may consume substantial amounts of our financial and managerial resources and might result in adverse publicity, regardless of the ultimate outcome of the lawsuits.
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We may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition or joint venture, each of which could affect our financial condition or the value of our capital stock and could result in dilution to our stockholders.
−Removed: If we incur more debt it would result in increased fixed obligations and could also subject us to covenants or other restrictions that would impede or may be beyond our ability to manage our operations.
+Added: If we incur more debt it would result in increased fixed obligations and could also subject us to covenants or
+Added: other restrictions that would impede or may be beyond our ability to manage our operations.
Additionally, we may receive indications of interest from other parties interested in acquiring some or all of our business.
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The application of federal, state, local, and international tax laws to services provided electronically is evolving.
−Removed: New income, sales, use, or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time (possibly with retroactive effect), and could be applied solely or disproportionately to services provided over the Internet.
−Removed: These enactments could adversely affect our sales activity due to the inherent cost increase the taxes would represent and ultimately result in a negative impact on our operating results and cash flows.
−Removed: In addition, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us (possibly with retroactive effect), which could require us or our customers to pay additional tax amounts, as well as require us or our customers to pay fines or penalties and interest for past amounts.
+Added: New sales, use, value-added tax, digital service or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time (possibly with retroactive effect), and could be applied solely or disproportionately to services provided over the internet.
If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, thereby adversely impacting our operating results and cash flows.
−Removed: Furthermore, OECD Transfer Pricing Guidelines require us to analyze the functions performed by our entities, the risks incurred and the assets owned.
−Removed: This functional analysis is a control to sustain the operating margins of our entities and confirm arm’s length pricing for intercompany transactions.
−Removed: Competent authorities could interpret, change, modify or apply adversely, existing tax laws, statutes, rules, regulations or ordinances to us (possibly with retroactive effect);
−Removed: which could require us to make transfer pricing corrections or fines, penalties or interest for past amounts.
−Removed: We could be held liable for such costs, thereby adversely impacting our operating results and cash flows.
+Added: Moreover, we are subject to the examination of our sales, use, and value-added tax returns by U.S.
+Added: state and foreign tax authorities.
+Added: We regularly assess the likelihood of outcomes resulting from these examinations and have reserved for potential adjustments that may result from these examinations.
+Added: We cannot provide assurance that the final determination of these examinations will not have an adverse effect on our financial position and results of operations.
The termination of our relationship with our payment solutions providers could have a severe, negative impact on our ability to collect revenue from customers.
−Removed: Most of our paying customers purchase our solutions using online payment solutions such as credit cards, and our business depends upon our ability to offer such payment options.
+Added: All web direct customers purchase our solution using online payment solutions such as credit cards, which represent the majority of the payment transactions we receive, and our business depends upon our ability to offer such payment options.
The termination of our ability to process payments on any material payment option would significantly impair our ability to operate our business and significantly increase our administrative costs related to customer payment processing.
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maintain a record of data processing;
−Removed: and comply with
−Removed: the principle of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.
+Added: and comply with the principle of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit.
Where we act as a processor and process personal data on behalf of our customers, we are required to execute mandatory data processing clauses with those customers and maintain a record of data processing, among other requirements under the GDPR and U.K.
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Use of the data transfer mechanisms must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals, and additional measures and/or contractual provisions may need to be put in place.
−Removed: The European Data Protection Board issued additional guidance regarding the CJEU’s decision in November 2020, which imposes higher burdens on the use of data transfer mechanisms, such as the Standard Contractual Clauses, for cross-border data transfers.
+Added: The European Data Protection Board issued additional guidance regarding the
+Added: CJEU’s decision in November 2020, which imposes higher burdens on the use of data transfer mechanisms, such as the Standard Contractual Clauses, for cross-border data transfers.
The CJEU also stated that if a competent supervisory authority believes that the standard contractual clauses cannot be complied with in the destination country and that the required level of protection cannot be secured by other means, such supervisory authority is under an obligation to suspend or prohibit that transfer.
37 unchanged sentences
While the text of the ePrivacy Regulation is still under development, a recent European court decision and regulators’ recent guidance are driving increased attention to cookies and tracking technologies.
−Removed: If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
+Added: If regulators start to enforce the strict approach in recent guidance, this could lead to substantial costs, limit the effectiveness of our marketing activities, divert the attention of our technology
+Added: personnel, adversely affect our margins, increase costs and subject us to additional liabilities.
Regulation of cookies and similar technologies, and any decline of cookies or similar online tracking technologies as a means to identify and potentially target users, may lead to broader restrictions and impairments on our marketing and personalization activities and may negatively impact our efforts to understand users.
8 unchanged sentences
The CCPA requires covered companies to, among other things, provide new disclosures to California consumers and affords such consumers new privacy rights such as the ability to opt out of certain sales of personal information and expanded rights to access and require deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is collected, used and shared.
−Removed: CCPA provides for civil penalties for violations, as well as a private right of action for security breaches that may increase the likelihood of, and the risks associated with, security breach litigation.
+Added: The CCPA provides for civil penalties for violations, as well as a private right of action for security breaches that may increase the likelihood of, and the risks associated with, security breach litigation.
Additionally, in November 2020, California passed the California Privacy Rights Act, or the CPRA, which expands the CCPA significantly, including by expanding consumers’ rights with respect to certain personal information and creating a new state agency to oversee implementation and enforcement efforts, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.
−Removed: Many of the CPRA’s provisions will become effective on January 1, 2023.
−Removed: Further, Virginia enacted the Virginia Consumer Data Protection Act, or the CDPA, another comprehensive state privacy law, that will also be effective January 1, 2023.
−Removed: The CCPA, CPRA, and CDPA may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, the results of our operations or prospects.
+Added: Many of the CPRA’s provisions have become effective on January 1, 2023.
+Added: Further, Virginia enacted the Virginia Consumer Data Protection Act, or the VCDPA, another comprehensive state privacy law, that has become effective January 1, 2023.
+Added: Similarly, three other states have enacted comprehensive state privacy laws:
+Added: Connecticut enacted the Connecticut Data Privacy Act, or the CTDPA, effective July 1, 2023;
+Added: Colorado enacted the Colorado Privacy Act, or the CPA, effective July 1, 2023;
+Added: Utah enacted the Utah Consumer Privacy Act, or the UCPA, effective December 31, 2023.
+Added: The CCPA, CPRA, VCDPA, CTDPA, CPA and UCPA may increase our compliance costs and potential liability, particularly in the event of a data breach, and could have a material adverse effect on our business, including how we use personal information, our financial condition, the results of our operations or prospects.
The CCPA has also prompted a number of proposals for new federal and state privacy legislation that, if passed, could increase our potential liability, increase our compliance costs and adversely affect our business.
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In particular, the law is intended to protect the rights and interests of individuals, to regulate personal information processing activities, to safeguard the lawful and “orderly flow” of data, and to facilitate reasonable use of personal information.
−Removed: Our failure to comply with the PIPL may result in enforcement action against us, including fines, and damage to our reputation, any of which may have an adverse effect on our business and operating results.
−Removed: GitLab is in the process of transitioning all users who are resident in China to our JiHu entity which will minimize the applicability of the PIPL.
+Added: Our failure to comply with the PIPL may result in enforcement action against us,
+Added: including fines, and damage to our reputation, any of which may have an adverse effect on our business and operating results.
+Added: Also, the Cyberspace Administration of China has begun to develop measures to govern cross-border transfers of personal information, such as security assessments, certifications, and standard contractual clauses, all of which may impact our ability to transact with customers with operations in China.
+Added: To reduce the impact of PIPL, we are in the process of transitioning certain users who are resident in China to our JiHu entity.
Further, we are subject to Payment Card Industry Data Security Standard, or PCI-DSS, a security standard applicable to companies that collect, store or transmit certain data regarding credit and debit cards, holders and transactions.
We rely on vendors to handle PCI-DSS matters and to ensure PCI-DSS compliance.
−Removed: Despite our compliance efforts, we may become subject to claims that we have violated the PCIDSS based on past, present, and future business practices.
+Added: Despite our compliance efforts, we may become subject to claims that we have violated the PCI-DSS based on past, present, and future business practices.
Our actual or perceived failure to comply with the PCI-DSS can subject us to fines, termination of banking relationships, and increased transaction fees.
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As such, a license may be required to export or re-export our products, or provide related services, to certain countries and end-users, and for certain end-uses.
+Added: For example, the recent Trade Controls targeting Russia and Belarus, impose a license requirement for the export of our product to those countries and have sanctioned various entities and individuals located there.
+Added: Those Trade Controls, which are unprecedented and expansive, continue to evolve and further restrict our ability to do business in that region.
+Added: Processing payments from those customers, even when legally permissible, has become very
+Added: difficult, in part because most U.S.
+Added: banks are unwilling to facilitate those transactions.
Further, our products incorporating encryption functionality may be subject to special controls applying to encryption items and/or certain reporting requirements.
−Removed: We have procedures in place designed to ensure our compliance with Trade Controls.
−Removed: We are currently working to enhance these procedures, with which failure to comply could subject us to both civil and criminal penalties, including substantial fines, possible incarceration of responsible individuals for willful violations, possible loss of our export or import privileges, and reputational harm.
−Removed: Further, the process for obtaining necessary licenses may be time-consuming or unsuccessful, potentially causing delays in sales or losses of sales opportunities.
+Added: We have procedures in place designed to ensure our compliance with Trade Controls, with which failure to comply could subject us to both civil and criminal penalties, including substantial fines, possible incarceration of responsible individuals for willful violations, possible loss of our export or import privileges, and reputational harm.
+Added: We are currently working to enhance these procedures.
Trade Controls are complex and dynamic regimes, and monitoring and ensuring compliance can be challenging, particularly given that our products are widely distributed throughout the world and are available for download without registration.
−Removed: We have in the past, and may in the future, fail to comply with Trade Controls.
−Removed: For example, the recent sanctions imposed on Russia and Belarus, including related governmental organizations, non-governmental organizations and individuals, are unprecedented, expansive and rapidly evolving.
−Removed: Any future failure by us or our partners to comply with applicable laws and regulations would have negative consequences for us, including reputational harm, government investigations, and penalties.
−Removed: Prior to implementing these control procedures, we inadvertently exported our software to entities located in embargoed countries and listed on denied parties’ lists administered by the U.S.
+Added: Prior to implementing certain control procedures, we inadvertently exported our software to entities located in embargoed countries and listed on denied parties lists administered by the U.S.
Department of Commerce’s Bureau of Industry and Security, or BIS, and OFAC.
−Removed: In March 2020, we disclosed these apparent violations to BIS and OFAC, which resulted in a BIS Warning Letter and an OFAC Cautionary Letter.
+Added: In September 2019, we disclosed these apparent violations to BIS and OFAC, which resulted in a BIS Warning Letter and an OFAC Cautionary Letter, in January and February 2020, respectively.
While BIS and OFAC did not assess any penalties, we understand that BIS and OFAC may consider our regulatory history, including these prior disclosures and warning/cautionary letters, if the company is involved in a future enforcement case for failure to comply with export control laws and regulations.
+Added: Any future failure by us or our partners to comply with applicable laws and regulations would have negative consequences for us, including reputational harm, government investigations, and penalties.
In addition, various countries regulate the import of certain encryption technology, including through import permit and license requirements, and have enacted laws that could limit our ability to distribute our products or could limit our end-customers’ ability to implement our products in those countries.
Changes in our products or changes in export and import regulations in such countries may create delays in the introduction of our products into international markets, prevent our end-customers with international operations from deploying our products globally or, in some cases, prevent or delay the export or import of our products to certain countries, governments, or persons altogether.
−Removed: Any change in export or import laws or regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing export, import or sanctions laws or regulations, or change in the countries, governments, persons, or technologies targeted by such export, import or sanctions laws or regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential
−Removed: end-customers with international operations.
+Added: Any change in export or import laws or regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing export, import or sanctions laws or regulations, or change in the countries, governments, persons, or technologies targeted by such export, import or sanctions laws or regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential end-customers with international operations.
Any decreased use of our products or limitation on our ability to export to or sell our products in international markets could adversely affect our business, financial condition, and results of operations.
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Additionally, we rely on certain partners to provide technical support services to certain of our government entity customers to resolve any issues relating to our products.
−Removed: If our partners do not effectively assist our government entity customers in deploying our products, succeed in helping our government entity customers quickly resolve post-deployment issues, or provide effective ongoing
−Removed: support, our ability to sell additional products to new and existing government entity customers would be adversely affected and our reputation could be damaged.
+Added: If our partners do not effectively assist our government entity customers in deploying our products, succeed in helping our government entity customers quickly resolve post-deployment issues, or provide effective ongoing support, our ability to sell additional products to new and existing government entity customers would be adversely affected and our reputation could be damaged.
Government entities may have statutory, contractual, or other legal rights to terminate contracts with us for convenience or due to a default, and any such termination may adversely affect our future results of operations.
Governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our subscriptions, a reduction of revenue, or fines or civil or criminal liability if the audit uncovers improper or illegal activities, which could adversely affect our results of operations in a material way.
−Removed: Our success depends on our ability to provide users of our products and services with access to an abundance of useful, efficient, high-quality code which in turn depends on the quality and volume of code contributed by our users.
+Added: Our success depends on our ability to provide users of our products and services with access to an abundance of useful, efficient, high-quality code which in turn depends on the quality and volume of code contributed by our open source contributors.
We believe that one of our competitive advantages is the quality, quantity and collaborative nature of the code on GitLab, and that access to open source code is one of the main reasons users visit GitLab.
−Removed: We seek to foster a broad and engaged user community, and we encourage individuals, companies, governments, and institutions to use our products and services to learn, code and work.
−Removed: If users, including influential users, do not continue to contribute code, our user base and user engagement may decline.
−Removed: Additionally, if we are not able to address user concerns regarding the safety and security of our products and services or if we are unable to successfully prevent abusive or other hostile behavior on The DevOps Platform, the size of our user base and user engagement may decline.
−Removed: We rely on the sale of online services for a substantial portion of our revenue and if there is a decline in the number of users, user growth rate, or user engagement, including as a result of the loss of influential users and companies who provide innovative code on GitLab, paying users of our online services may be deterred from using our products or services or reduce their spending with us or cease doing business with us, which would harm our business and operating results.
+Added: In furtherance of the foregoing competitive advantages and access, we seek to foster a broad and engaged contributor community, and we encourage individuals, companies, governments, and institutions to use our products and services to learn, code and work.
+Added: If contributors, including influential contributors, do not continue to contribute code, our customer base and contributor engagement may decline.
+Added: Additionally, if we are not able to address user concerns regarding the safety and security of our products and services or if we are unable to successfully prevent abusive or other hostile behavior on The DevSecOps Platform, the size of our customer base and contributor engagement may decline.
+Added: If there is a decline in the number of contributors, customer or contributor growth rate or engagement, including as a result of the loss of influential contributors and companies who provide innovative code on GitLab, paying customers
+Added: of our online services may be deterred from using our products or services or reduce their spending with us or cease doing business with us, which would harm our business and operating results.
Seasonality may cause fluctuations in our sales and results of operations.
−Removed: Historically, we have experienced seasonality in new customer contracts, as we typically enter into a higher percentage of subscription agreements with new customers and renewals with existing customers in the third and fourth quarters of each year.
−Removed: We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers.
−Removed: We expect that this seasonality will continue to affect our bookings, deferred revenue, and our results of operations in the future and might become more pronounced as we continue to target larger enterprise customers.
+Added: Historically, we have experienced seasonality in new customer contracts, as we typically enter into a higher percentage of subscription agreements with new customers and renewals with existing customers in the last two fiscal quarters of each year.
+Added: We believe that this results from the procurement, budgeting, and deployment cycles of many of our customers, particularly our enterprise customers, along with variables outside of our and our customers' control, such as macroeconomic and general economic conditions, including inflation and increased interest rates.
+Added: We expect that this seasonality, which can itself at times be unpredictable, will continue to affect our bookings, deferred revenue, and our results of operations in the future and might become more pronounced as we continue to target larger enterprise customers.
We recognize a significant portion of revenue from subscriptions over the term of the relevant subscription period, and as a result, downturns or upturns in sales are not immediately reflected in our results of operations.
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Our results of operations may fluctuate, in part, because of the length and variability of the sales cycle of our subscriptions and the difficulty in making short-term adjustments to our operating expenses.
+Added: The length of our sales cycle, from initial contact from a prospective customer to contractually committing to our paid subscriptions can vary substantially from customer to customer based on deal complexity as well as whether a sale is made directly by us.
+Added: It is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers, the timing of our customers’ decisions to make a purchase, greater deal scrutiny by our customers, changes our customers experienced, or may experience, in their businesses, and other variables some of which are outside of our and our customers’ control, such as macroeconomic and general economic conditions, including inflation and increased interest rates.
Our results of operations depend in part on sales to new large customers and increasing sales to existing customers.
−Removed: The length of our sales cycle, from initial contact from a prospective customer to contractually committing to our paid subscriptions can vary substantia lly from customer to customer based on deal complexity as well as whether a sale is made directly by us.
−Removed: For example, in fiscal 2022, our average
−Removed: sales cycle for enterprise customers was 96 days, while the average sales cycle for small and medium sized organizations was 20 days.
−Removed: It is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customer s.
−Removed: As a result, large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all.
+Added: As a result, in particular, large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all.
Because a substantial proportion of our expenses are relatively fixed in the short term, our results of operations will suffer if revenue falls below our expectations in a particular quarter, which could cause the price of our Class A common stock to decline.
Risks Related to our People and Culture
−Removed: We engage our team members in various ways, including direct hires, through PEOs and as independent contractors.
−Removed: As a result of these methods of engagement, we face certain challenges and risks that can affect our business, operating results, and financial condition.
−Removed: In the locations where we directly hire our team members into one of our entities, we must ensure that we are compliant with the applicable local laws governing team members in those jurisdictions, including local employment and tax laws.
−Removed: In the locations where we utilize PEOs, we contract with the PEO for it to serve as “Employer of Record” for those team members engaged through the PEO in each applicable location.
−Removed: Under this model, team members are employed by the PEO but provide services to GitLab.
−Removed: We also engage team members through a PEO self-employed model in certain jurisdictions where we contract with the PEO, which in turn contracts with individual team members as independent contractors.
−Removed: In all locations where we utilize PEOs, we rely on those PEOs to comply with local employment laws and regulations.
−Removed: We also issue equity to a substantial portion of our team members, including team members engaged through PEOs and independent contractors, and must ensure we remain compliant with securities laws of the applicable jurisdiction where such team members are located.
−Removed: Additionally, in some cases, we contract directly with team members who are independent contractors.
−Removed: When we engage team members through a PEO or independent contractor model, we may not be utilizing the appropriate hiring model needed to be compliant with local laws or the PEO may not be complying with local regulations.
−Removed: Additionally, the agreements executed between PEOs and our team members or between us and team members engaged under the independent contractor model, may not be enforceable depending on the local laws because of the indirect relationship created through these engagement models.
−Removed: Accordingly, as a result of our engagement of team members through PEOs, and of our relationship with independent contractors, our business, financial condition and results of operations could be materially and adversely affected.
−Removed: Furthermore, litigation related to our model of engaging team members, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business.
We rely on our management team and other key team members and will need additional personnel to grow our business, and the loss of one or more key team members or our inability to hire, integrate, train and retain qualified personnel, could harm our business.
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The loss of key personnel, including key members of our management team, as well as certain of our key marketing, sales, finance, support, product development, human resources, or technology personnel, could disrupt our operations and have an adverse effect on our ability to grow our business.
−Removed: In particular, we are highly dependent on the services of Sytse Sijbrandij, our co-founder, Chairman of the Board of Directors and Chief Executive Officer, who is critical to the development of our technology, services, future vision and strategic direction.
+Added: In particular, we are highly dependent on the services of Sytse Sijbrandij, our co-founder, Chair of the Board of
+Added: Directors and Chief Executive Officer, who is critical to the development of our technology, services, future vision and strategic direction.
+Added: In March 2023, Mr.
+Added: Sijbrandij announced that he has been diagnosed with cancer and was undergoing treatment, including chemotherapy.
+Added: Sijbrandij plans to continue in his role as Chief Executive Officer and Chair of the Board of Directors during his treatment period and to work closely with our Board of Directors and management team to execute on our business priorities.
+Added: However, his condition may change and prevent him from continuing to perform his role.
+Added: In the event that Mr.
+Added: Sijbrandij is no longer able to perform his duties as Chief Executive Officer, we will be required to identify, recruit and hire a new Chief Executive Officer.
+Added: While our Board of Directors has reviewed and continues to review potential interim and longer-term contingency plans that could be activated as needed to minimize business disruption and to ensure the continued execution of our business priorities, the recruitment of a new Chief Executive Officer can be lengthy and distracting.
+Added: In addition, we may be required to implement temporary or interim executive management to support the leadership of our company during a transition period.
+Added: A change in the leadership of the company is a significant event and may result in additional volatility in our stock price.
Competition for highly skilled personnel in our industry is intense, and we may not be successful in hiring or retaining qualified personnel to fulfill our current or future needs.
−Removed: We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled team
−Removed: members with appropriate qualifications.
+Added: We have, from time to time, experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled team members with appropriate qualifications.
+Added: In February 2023, we announced a reduction in workforce by approximately 7% across all areas of our business.
+Added: While we conducted this spending reprioritization to align with the economic conditions, this cost savings plan may be disruptive to our operations and could yield unanticipated consequences, such as attrition beyond planned staff reductions, or disruptions in our day-to-day operations.
+Added: Our workforce reduction could also harm our ability to attract and retain qualified management, technology software professionals or other personnel who are critical to our business.
For example, in recent years, recruiting, hiring, and retaining team members with expertise in the technology software industry has become increasingly difficult as the demand for technology software professionals has continued to increase.
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If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be severely harmed.
−Removed: If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be severely harmed.
+Added: We engage our team members in various ways, including direct hires, through PEOs and as independent contractors.
+Added: As a result of these methods of engagement, we face certain challenges and risks that can affect our business, operating results, and financial condition.
+Added: In the locations where we directly hire our team members into one of our entities, we must ensure that we are compliant with the applicable local laws governing team members in those jurisdictions, including local employment and tax laws.
+Added: In the locations where we utilize PEOs, we contract with the PEO for it to serve as “Employer of Record” for those team members engaged through the PEO in each applicable location.
+Added: Under this model, team members are employed by the PEO but provide services to GitLab.
+Added: We also engage team members through a PEO self-employed model in certain jurisdictions where we contract with the PEO, which in turn contracts with individual team members as independent
+Added: In all locations where we utilize PEOs, we rely on those PEOs to comply with local employment laws and regulations.
+Added: We also issue equity to a substantial portion of our team members, including team members engaged through PEOs and to independent contractors, and must ensure we remain compliant with securities laws of the applicable jurisdiction where such team members are located.
+Added: Additionally, in some cases, we contract directly with team members who are independent contractors.
+Added: When we engage team members through a PEO or independent contractor model, we may not be utilizing the appropriate hiring model needed to be compliant with local laws or the PEO may not be complying with local regulations.
+Added: Additionally, the agreements executed between PEOs and our team members or between us and team members engaged under the independent contractor model, may not be enforceable depending on the local laws because of the indirect relationship created through these engagement models.
+Added: Accordingly, as a result of our engagement of team members through PEOs, and of our relationship with independent contractors, our business, financial condition and results of operations could be materially and adversely affected.
+Added: Furthermore, litigation related to our model of engaging team members, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business.
If we do not effectively hire, integrate, and train additional sales personnel, and expand our sales and marketing capabilities, we may be unable to increase our customer base and increase sales to our existing customers.
−Removed: Our ability to increase our customer base and achieve broader market adoption of The DevOps Platform will depend to a significant extent on our ability to continue to expand our sales and marketing operations.
+Added: Our ability to increase our customer base and achieve broader market adoption of The DevSecOps Platform will depend to a significant extent on our ability to continue to expand our sales and marketing operations.
We plan to dedicate significant resources to sales and marketing programs and to expand our sales and marketing capabilities to target additional potential customers, but there is no guarantee that we will be successful in attracting and maintaining additional customers.
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Additionally, we are increasingly dependent on technology as a remote-only company and if we experience problems with the operation of our current IT systems or the technology systems of third parties on which we rely, that could adversely affect, or even temporarily disrupt, all or a portion of our operations until resolved.
−Removed: In addition, in a remote-only company, it may be difficult for us to develop and preserve our corporate culture and our team members may have decreased opportunities to
−Removed: collaborate in meaningful ways.
−Removed: Any impediments to preserving our corporate culture and fostering collaboration could harm our future success, including our ability to retain and recruit personnel, innovate and operate effectively, and execute on our business strategy.
+Added: In addition, in a remote-only company, it may be difficult for us to develop and preserve our corporate culture and our team members may have decreased opportunities to collaborate in meaningful ways.
+Added: Any impediments to preserving our corporate culture and fostering
+Added: collaboration could harm our future success, including our ability to retain and recruit personnel, innovate and operate effectively, and execute on our business strategy.
Unfavorable media coverage could negatively impact our business.
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Outside of the United States, we currently have direct and indirect subsidiaries in the United Kingdom, Netherlands, Germany, France, Ireland, Japan, South Korea, Canada, Singapore, and Australia and have team members in over 60 countries.
−Removed: We also recently established a joint venture in China.
+Added: We also have a joint venture in China.
There are significant costs and risks inherent in conducting business in international markets, including:
11 unchanged sentences
• complexity and other risks associated with current and future foreign legal requirements, including legal requirements related to data privacy frameworks, such as the GDPR and U.K.
−Removed: • currency exchange rate fluctuations and related effects on our operating results;
−Removed: • economic and political instability in some countries, including the potential effects of the COVID-19 pandemic and the recent and developing armed conflict in Ukraine;
+Added: • currency exchange rate fluctuations or limitations and related effects on our operating results;
+Added: • economic and political instability in some countries, including the potential effects of health pandemics or epidemics and the war in Ukraine;
• the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad;
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JiHu, pronounced Gee Who) which was formed to specifically serve the Chinese market.
−Removed: This new company offers a dedicated distribution of The DevOps Platform available as both a self-managed and SaaS offering (GitLab.cn) that will only be available in mainland China, Hong Kong and Macau.
+Added: This company offers a dedicated distribution of The DevSecOps Platform available as both a self-managed and SaaS that is only available in mainland China, Hong Kong and Macau.
The autonomous company has its own governance structure, management team, and business support functions including Engineering, Sales, Marketing, Finance, Legal, Human Relations and Customer Support.
Our participation in this joint venture in China is subject to general, as well as industry-specific, economic, political and legal developments and risks in China.
−Removed: The Chinese government exercises significant control over the Chinese economy, including but not limited to controlling capital investments, allocating resources, setting monetary policy, controlling and monitoring foreign exchange rates, implementing and overseeing tax regulations, providing preferential treatment to certain industry
−Removed: segments or companies and issuing necessary licenses to conduct business.
−Removed: In addition, we could face additional risks resulting from changes in China’s data privacy and cybersecurity requirements, including China’s recent adoption of the Personal Information Protection Law, or PIPL, which went into effect on November 1, 2021.
+Added: The Chinese government exercises significant control over the Chinese economy, including but not limited to controlling capital investments, allocating resources, setting monetary policy, controlling and monitoring foreign exchange rates, implementing and overseeing tax regulations, providing preferential treatment to certain industry segments or companies and issuing necessary licenses to conduct business.
+Added: In addition, we could face additional risks resulting from changes in China’s data privacy and cybersecurity requirements, including China’s adoption of the Personal Information Protection Law, or PIPL, which went into effect on
+Added: November 1, 2021.
The PIPL shares similarities with the GDPR, including extraterritorial application, data minimization, data localization, and purpose limitation requirements, and obligations to provide certain notices and rights to citizens of China.
3 unchanged sentences
Unauthorized use of our technologies and intellectual property rights by Chinese partners or competitors may dilute or undermine the strength of our brands.
−Removed: If we cannot adequately monitor the use of our technologies and products, or enforce our intellectual property rights in China or contractual restrictions relating to use of our intellectual property by Chinese companies, our revenue could be adversely affected.
+Added: If we cannot adequately monitor the use of our technologies and products, or enforce our intellectual property rights in China or contractual restrictions relating to use of our intellectual property by Chinese companies, our revenue from JiHu could be adversely affected.
Our joint venture is subject to laws and regulations applicable to foreign investment in China.
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Additionally, under U.S.
−Removed: GAAP, we currently consolidate the joint venture’s financials within our own.
+Added: GAAP, we currently consolidate the joint venture’s financials within our own and rely on the joint venture’s management for accurate and timely delivery of the joint venture’s financials.
Therefore, we face reputational and brand risk as a result of any negative publicity faced by the joint venture entity.
1 unchanged sentence
We are exposed to fluctuations in currency exchange rates and interest rates, which could negatively affect our results of operations and our ability to invest and hold our cash.
−Removed: Revenue generated is billed in U.S.
+Added: Revenue generated is primarily billed in U.S.
dollars while expenses incurred by our international subsidiaries and activities are often denominated in the currencies of the local countries.
3 unchanged sentences
To date, we have not engaged in currency hedging activities to limit the risk of exchange fluctuations and, as a result, our financial condition and operating results could be adversely affected by such fluctuations.
+Added: Our fixed-income investment portfolio is subject to fluctuations in fair value due to change in interest rates, which could adversely affect our results of operations due to a rise in interest rates in the future.
Risks Related to Financial and Accounting Matters
−Removed: We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors.
−Removed: We are an “emerging growth company” as defined in the JOBS Act.
−Removed: For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the independent auditor attestation requirements of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compen sation in our periodic reports and proxy statements and the required number of years of audited financial statements, and (iii)
−Removed: exemptions from the requirements of holding non-binding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not approved previously.
−Removed: In addition, as an emerging growth company, we are only required to provide two years of audited financial statements.
−Removed: We could be an emerging growth company for up to five fiscal years following the completion of our initial public offering.
−Removed: However, certain circumstances could cause us to lose that status earlier, including the date on which we are deemed to be a “large accelerated filer” under applicable SEC rules, if we have total annual gross revenue of $1.07 billion or more, or if we issue more than $1.0 billion in non-conv ertible debt during any three-year period before that time.
−Removed: Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.
−Removed: We have elected to take advantage of the benefits of this extended transition period.
−Removed: Accordingly, our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
−Removed: Until the date that we are no longer an “emerging growth company” or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act, upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which adoption is required for non-emerging growth companies and the date on which we will adopt the recently issued accounting standard.
−Removed: Investors may find our Class A common stock less attractive because we may rely on certain of these exemptions.
−Removed: If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and the price of our Class A common stock may be more volatile and may decline.
−Removed: We have identified a material weakness in our internal controls over financial reporting and if our remediation of such material weakness is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
+Added: We have identified material weaknesses in our internal controls over financial reporting and if our remediation of such material weaknesses is not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the applicable listing standards of the Nasdaq Global Select Market.
−Removed: We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: We are continuing to develop and refine our disclosure controls, internal control over financial reporting and other procedures that are designed to ensure information required to be disclosed by us in our financial statements and 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 information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
In order to maintain and improve the effectiveness of our internal controls and procedures, we have expended, and anticipate that we will continue to expend, significant resources, including accounting related costs and significant management oversight.
−Removed: As disclosed in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2021, w e identified a material weakness in our internal controls over financial reporting.
−Removed: A material weakness is a deficiency, or combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.
−Removed: This material weakness is related to us not having properly
−Removed: designed internal controls over the preparation of our financial statements insofar as it relates to appropriately performing effective and timely review of the accounting for and disclosure of non-routine transactions.
−Removed: To address our material weakness, we have taken certain steps to enhance our internal control environment and remediate this material weakness, including the formalization of accounting policies and designing and implementing improved processes and internal controls.
−Removed: However, our new and enhanced controls have not operated for a sufficient amount of time to conclude that the material weakness has been remediated.
−Removed: We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to a material weakness in our internal controls over financial reporting or that they will prevent or avoid potential future material weaknesses.
−Removed: Our current controls and any new controls we develop may become inadequate because of changes in conditions in our business.
+Added: We have identified material weaknesses in our internal control over financial reporting.
+Added: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
+Added: As of January 31, 2023 , we determined that the following material weaknesses exist due to a lack of policies and procedures related to the operation of control activities and inadequate communication of information to control owners and operators related to the objectives and responsibilities for internal control in a manner which supports the internal control environment at the company.
+Added: As a result, the following material weaknesses exist:
+Added: • We did not design and maintain effective controls over certain information technology, or IT, general controls for information systems that are relevant to the preparation of our consolidated financial statements.
+Added: In particular, we did not design and maintain effective (i) program change management controls to ensure that IT programs, data changes and migrations affecting financial IT applications and underlying records are identified, tested, authorized and implemented appropriately and (ii) user access controls to ensure appropriate segregation of duties, restricted user and privileged access to our financial applications, data and programs to the appropriate personnel.
+Added: The ineffective design and operation of IT general controls resulted in the ineffective operation of automated controls and manual controls using reports and information from the impacted information systems used in all financial reporting processes,
+Added: • We did not retain sufficient contemporaneous documentation to demonstrate the operation of controls over manual journal entries,
+Added: • We did not retain sufficient contemporaneous documentation to demonstrate the operation of review controls over stock-based compensation at a sufficient level of precision and such controls relied on reports, and
+Added: • As previously reported, we did not design and maintain effective and timely review procedures over the accounting for and disclosure of non-routine transactions.
+Added: This material weakness has not been remediated, as the new controls designed rely on reports and information adversely impacted by the IT general control deficiencies.
+Added: The aforementioned material weaknesses did not result in a material misstatement to our annual or interim financial statements, however, the deficiencies, when aggregated, could result in misstatements potentially impacting all financial statements accounts and disclosures that would not be prevented or detected.
+Added: Therefore we concluded that the deficiencies represent material weaknesses in the Company’s internal control over financial reporting and our internal control over financial reporting was not effective as of January 31, 2023.
+Added: Our independent registered public accounting firm, KPMG LLP, who audited the consolidated financial statements included in this Annual Report on Form 10-K, issued an adverse opinion on the effectiveness of the Company’s internal control over financial reporting for the year ended January 31, 2023.
+Added: To address our material weaknesses, we have commenced certain steps to enhance our internal control environment and remediate these material weaknesses.
+Added: See the section entitled “Controls and Procedures—Remediation Plan for Material Weaknesses” below for additional information.
+Added: However, we cannot guarantee that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to our material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses.
+Added: Our current controls and any new controls we develop may become inadequate because of
+Added: changes in conditions in our business.
Further, additional weaknesses in our internal controls may be discovered in the future.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results, may result in a restatement of our financial statements for prior periods, cause us to fail to meet our reporting obligations, and could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in the periodic reports we will file with the SEC.
−Removed: However, while we remain an “emerging growth company,” we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
−Removed: Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our Class A common stock.
−Removed: We are not currently required to comply with the SEC rules that implement Sections 302 and 404 of the Sarbanes-Oxley Act, and we are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.
−Removed: Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act.
−Removed: At such time, 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.
−Removed: Any failure to maintain effective disclosure controls and internal control over financial reporting could have an adverse effect on our business and results of operations and could cause a decline in the price of our Class A common stock.
−Removed: As a public company, and particularly after we are no longer an “emerging growth company,” significant resources and management oversight will be required.
+Added: Because we are a large accelerated filer as of January 31, 2023, our independent registered public accounting firm is required to annually audit the effectiveness of our internal control over financial reporting commencing with the year ended January 31, 2023, which has, and will continue to, require increased costs, expenses, and management resources.
+Added: Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.
+Added: We are also required to disclose changes made in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting on a quarterly basis.
+Added: To comply with the requirements of being a public company, we have undertaken, and may need to further undertake in the future, various actions, such as implementing new internal controls and procedures and hiring additional accounting staff.
+Added: As a public company, significant resources and management oversight are required.
As a result, management’s attention may be diverted from other business concerns, which could harm our business, financial condition and operating results.
−Removed: We will incur significant increased costs and devote increased management resources as a result of operating as a public company.
−Removed: As a public company, we will incur significant legal, accounting, compliance and other expenses that we did not incur as a private company and these expenses will increase even more after we are no longer an “emerging growth company.” Our management and other personnel will need to devote a substantial amount of time and incur significant expense in connection with compliance initiatives.
−Removed: As a public company, we will bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.
−Removed: In addition, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act, and the related rules and regulations implemented by the SEC, have
−Removed: increased legal and financial compliance costs and will make some compliance activities more time consuming.
−Removed: We intend to invest resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from our other business activities.
+Added: We incur significant increased costs and devote increased management resources as a result of operating as a public company.
+Added: As a public company, we incur and, particularly now that we are no longer an emerging growth company, will further incur significant legal, accounting, compliance and other expenses that we did not incur as a private company.
+Added: Our management and other personnel devote a substantial amount of time and incur significant expense in connection with compliance initiatives.
+Added: As a public company, we bear all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under the securities laws.
+Added: In addition, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act, and the related rules and regulations implemented by the SEC, have increased legal and financial compliance costs and will make some compliance activities more time consuming.
+Added: Moreover, since we ceased to be an “emerging growth company” on January 31, 2023, we may no longer take advantage of certain exemptions from various reporting requirements that are applicable to public companies.
+Added: This increase in reporting requirements will further increase our compliance burden.
+Added: We intend to continue to invest resources to comply with evolving laws, regulations and standards, and this investment will result in increased general and administrative expenses and may divert management’s time and attention from our other business activities.
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.
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These factors would also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation and leadership development committee, and qualified executive officers.
−Removed: We may need to raise additional capital to grow our business, and we may not be able to raise capital on terms acceptable to us or at all.
+Added: We may in the future need to raise additional capital to grow our business, and we may not be able to raise capital on terms acceptable to us or at all.
In addition, any inability to generate or obtain such capital may adversely affect our operating results and financial condition.
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As a result, we may need to engage in additional equity or debt financings to provide the funds required for these investments and other business endeavors.
−Removed: We may not be able to raise needed cash on terms acceptable to us or at all.
+Added: If we need to engage in such additional equity or debt financings, we may not be able to raise needed cash on terms acceptable to us or at all.
Financing may be on terms that are dilutive or potentially dilutive to our stockholders, and the prices at which new investors would be willing to purchase our securities may be significantly lower than the current price per share of our Class A common stock.
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Such terms may involve restrictive covenants making it difficult to engage in capital raising activities and pursue business opportunities, including potential acquisitions.
−Removed: The trading prices of technology companies have been highly volatile as a result of the COVID-19 pandemic and other global events, including the recent armed conflict in Ukraine, which may reduce our ability to access capital on favorable terms or at all.
−Removed: In addition, a recession, depression, or other sustained adverse market event resulting from the spread of the COVID-19 pandemic or other global events could adversely affect our business and the value of our Class A common stock.
+Added: The trading prices of technology companies have been highly volatile as a result of recent global events, including increasing interest rates and inflation and the recent armed conflict in Ukraine, which may reduce our ability to access capital on favorable terms or at all.
+Added: In addition, a recession, depression, or other sustained adverse market event resulting from such global events could adversely affect our business and the value of our Class A common stock.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired and our business may be adversely affected, requiring us to delay, reduce, or eliminate some or all of our operations.
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We may not be able to find suitable acquisition candidates, and we may not be able to complete such acquisitions on favorable terms, if at all.
−Removed: If we do complete acquisitions, we may not
−Removed: ultimately strengthen our competitive position or ability to achieve our business objectives, and any acquisitions we complete could be viewed negatively by our end customers or investors.
+Added: If we do complete acquisitions, we may not ultimately strengthen our competitive position or ability to achieve our business objectives, and any acquisitions we complete could be viewed negatively by our end customers or investors.
In addition, if we are unsuccessful at integrating such acquisitions, or the technologies associated with such acquisitions, into our company, the revenue and operating results of the combined company could be adversely affected.
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Our failure to address these risks or other problems encountered in connection with acquisitions and investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally.
−Removed: Changes in tax laws or tax rulings could adversely affect our effective tax rates, financial condition and results of operations.
−Removed: The tax regimes we are subject to or operate under are unsettled and may be subject to significant change.
−Removed: This challenge is increased by the global nature of our operations.
−Removed: Changes in tax laws (including in response to the COVID-19 pandemic) or tax rulings, or changes in interpretations of existing laws, could cause us to be subject to additional income-based taxes and non-income taxes, including payroll, sales, use, value-added, digital tax, net worth, property and goods and services taxes, which in turn could adversely affect our financial condition and results of operations.
−Removed: For example, in December 2017, the U.S.
+Added: Changes in tax laws or other tax guidance could adversely affect our effective tax rates, financial condition and results of operations.
+Added: We are a U.S.-based multinational company subject to taxes in multiple U.S.
+Added: and foreign tax jurisdictions.
+Added: In the United States and other countries where we conduct business and in jurisdictions in which we are subject to taxes, including those covered by governing bodies that enact tax laws applicable to us, such as the European Commission of the European Union, we are subject to potential changes in relevant tax, accounting and other laws, regulations, guidance, and interpretations, including changes to tax laws applicable to corporate multinationals such as GitLab.
+Added: These countries, governmental bodies, and intergovernmental economic organizations such as the Organization for Economic Cooperation and Development, have or 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 described above in such jurisdictions.
+Added: In the current global tax policy environment, any changes in laws, regulations, guidance and/or interpretations related to these assertions could adversely affect our effective tax rates, cause us to respond by making changes to our business structure, or result in other costs to us which could adversely affect our operations and financial results.
+Added: In December 2017, the U.S.
federal government enacted the tax reform legislation known as the Tax Cuts and Jobs Act, or the 2017 Tax Act.
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corporate income tax laws by, among other things, lowering the U.S.
−Removed: corporate tax rate, implementing a partially territorial tax system, and imposing a one-time deemed repatriation tax on certain post-1986 foreign earnings.
−Removed: In addition, many countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, have recently proposed or recommended changes to existing tax laws or have enacted new laws that could impact our tax obligations.
−Removed: Some of these or other new rules could result in double taxation.
−Removed: Any significant changes to our future effective tax rate could adversely affect our business, financial condition and results of operations.
+Added: corporate tax rate, implementing a
+Added: partially territorial tax system, and imposing a one-time deemed repatriation tax on certain post-1986 foreign earnings.
+Added: Recently the U.S.
+Added: Treasury Department issued regulations aimed principally at disallowing foreign tax credits for taxes which are dissimilar to income taxes.
+Added: Also, the Inflation Reduction Act of 2022 (the “IRA”), enacted on August 16, 2022, further amended the U.S.
+Added: federal tax code, imposing a 15% minimum tax on “adjusted financial statement income” of certain corporations as well as an excise tax on the repurchase or redemption of stock by certain corporations, beginning in the 2023 tax year.
+Added: Over the last several years, the Organization for Economic Cooperation and Development has been working on a Base Erosion and Profit Shifting Project that, if implemented, would change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business.
+Added: In 2021, more than 140 countries tentatively signed on to a framework that imposes a minimum tax rate of 15%, among other provisions.
+Added: As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain.
+Added: Similarly, the European Commission and several countries have issued proposals that would apply to various aspects of the current tax framework under which we are taxed.
+Added: These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes, including taxes based on a percentage of revenue.
+Added: For example, several jurisdictions have proposed or enacted taxes applicable to digital services, which include business activities on digital advertising and online marketplaces, and which apply to our business.
+Added: The European Commission has conducted investigations in multiple countries focusing on whether local country tax rulings or tax legislation provides preferential tax treatment that violates E.U state aid rules and concluded that certain member states, including Ireland, have provided illegal state aid in certain cases.
+Added: These investigations may result in changes to the tax treatment of our foreign operations.
+Added: Due to the large and expanding scale of our international business activities, many of these types of changes to the taxation of our activities described above could increase our worldwide effective tax rate, increase the amount of non-income taxes imposed on our business, and harm our financial position, results of operations, and cash flows.
+Added: Such changes may also apply retroactively to our historical operations and result in taxes greater than the amounts estimated and recorded in our financial statements.
+Added: There can be no assurance that future tax law changes will not increase the rate of the corporate income tax, impose new limitations on deductions, credits or other tax benefits, or make other changes that may adversely affect our business, cash flows or financial performance.
+Added: Among other considerations, the applicability and impact of these tax provisions, and of other U.S.
+Added: or international tax law changes could adversely affect our effective income tax rate and cash flows in future years.
We may have exposure to greater than anticipated tax liabilities.
−Removed: The tax laws applicable to our business, including the laws of the United States and other jurisdictions, are subject to interpretation and certain jurisdictions are aggressively interpreting their laws in new ways in an effort to raise additional tax revenue.
−Removed: Our existing corporate structure has been implemented in a manner we believe is in compliance with current prevailing tax laws.
−Removed: However, the taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology or intercompany arrangements, which could impact our worldwide effective tax rate and adversely affect our financial condition and results of operations.
+Added: The tax laws applicable to our business, including the laws of the United States and other jurisdictions, are subject to interpretation and certain jurisdictions are aggressively interpreting their laws in new ways.
+Added: Our existing corporate structure has been implemented in a manner we believe is in compliance with current tax laws.
+Added: However, the taxing authorities of the jurisdictions in which we operate may challenge our methodologies, including for valuing developed technology or intercompany arrangements, which could impact our worldwide effective tax rate and adversely affect our financial condition and results of operations, possibly with retroactive effect.
Moreover, changes to our corporate structure could impact our worldwide effective tax rate and adversely affect our financial condition and results of operations.
−Removed: In addition, we are subject to federal, state and local taxes in the United States and numerous foreign jurisdictions.
+Added: Furthermore, U.S.
+Added: and OECD Transfer Pricing Guidelines require us to analyze the functions performed by our entities, the risks incurred, and the assets owned.
+Added: This functional analysis is a control to sustain the operating margins of our entities and confirm arm’s length pricing for intercompany transactions.
+Added: Competent authorities could interpret, change, modify or apply adversely, existing tax laws, statutes, rules, regulations or ordinances to us (possibly with retroactive effect);
+Added: which could require us to
+Added: make transfer pricing corrections or to pay fines, penalties or interest for past amounts.
+Added: If we are unable to make corresponding adjustments with our related entities, we would effectively be liable for additional tax, thereby adversely impacting our operating results and cash flows.
Significant judgment is required in evaluating our tax positions and our worldwide provision for taxes.
During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain.
−Removed: Our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus, by our earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates.
+Added: Our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus.
The relevant taxing authorities may disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
If such a disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our business, with some changes possibly affecting our tax obligations in future or past years.
−Removed: We believe that our financial statements reflect adequate reserves to cover such a contingency, but there can be no assurances in that regard.
−Removed: Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and any such assessments could adversely affect our business, financial condition and results of operations.
−Removed: Sales and use, value added and similar tax laws and rates vary greatly by jurisdiction.
−Removed: Certain jurisdictions in which we do not collect such taxes may assert that such taxes are applicable or that our presence in such jurisdictions is sufficient to require us to collect taxes, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future.
−Removed: assessments, penalties and interest or future requirements may adversely affect our financial condition and results of operations.
−Removed: Further, in June 2018, the Supreme Court of the United States held in South Dakota v.
−Removed: Wayfair, Inc.
−Removed: that states could impose sales tax collection obligations on out-of-state sellers even if those sellers lack any physical presence within the states imposing the sales taxes.
−Removed: Under the Wayfair decision, a person requires only a “substantial nexus” with the taxing state before the state may subject the person to sales tax collection obligations therein.
−Removed: An increasing number of states (both before and after the publication of the Wayfair decision) have considered or adopted laws that attempt to impose sales tax collection obligations on out-of-state sellers.
−Removed: The Supreme Court’s Wayfair decision has removed a significant impediment to the enactment and enforcement of these laws, and it is possible that states may seek to tax out-of-state sellers on sales that occurred in prior tax years, which could create additional administrative burdens for us, put us at a competitive disadvantage if such states do not impose similar obligations on our competitors, and decrease our future sales, which could adversely affect our business, financial condition, and results of operations.
+Added: We regularly assess the likelihood of outcomes resulting from possible examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result from these examinations.
+Added: We cannot provide assurance that the final determination of any of these examinations will not have an adverse effect on our financial position and results of operations.
+Added: Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.
+Added: We regularly maintain cash balances at third-party financial institutions in excess of the FDIC insurance limit and similar regulatory insurance limits outside the United States.
+Added: If a depository institution where we maintain deposits fails or is subject to adverse conditions in the financial or credit markets, we may not be able to recover all, if any, of our deposits, which could adversely impact our operating liquidity and financial performance.
Risks Related to Ownership of Our Class A Common Stock
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• any major changes in our management or our board of directors;
−Removed: • effects of public health crises, pandemics, and epidemics, such as the COVID-19 pandemic;
−Removed: • general economic conditions and slow or negative growth of our markets;
−Removed: • other events or factors, including those resulting from war, incidents of terrorism or responses to these events, including those related to the recent and developing armed conflict in Ukraine.
+Added: • effects of public health crises, pandemics, and epidemics;
+Added: • general economic conditions, changes in the capital markets generally, inflation and slow or negative growth of our markets;
+Added: • other events or factors, including those resulting from war, incidents of terrorism or responses to these events, including those related to the ongoing armed conflict in Ukraine.
In addition, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies.
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Securities litigation, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business.
−Removed: This could have an adverse effect on our business, operating re sults and financial condition.
+Added: This could have an adverse effect on our business, operating results and financial condition.
Sales of substantial amounts of our Class A common stock in the public markets, or the perception that they might occur, could cause the market price of our Class A common stock to decline.
Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers, and greater than 5% stockholders, or the perception that these sales might occur, could cause the market price of our Class A common stock to decline or make it more difficult for you to sell your Class A common stock at a time and price that you deem appropriate.
−Removed: In connection with our initial public offering, or IPO, our officer, directors and certain other stockholders entered into lockup agreements with the underwriters for the IPO.
−Removed: These lockups expired as of March 16, 2022 and as a result, all such shares are now freely tradable without restrictions or further registration under the Securities Act, subject to certain restrictions and limitations under the Securities Act on shares held by our affiliates.
Moreover, the holders of a significant portion of shares of our capital stock also have rights, subject to some conditions, to require us to file registration statements for the public resale of such capital stock or to include such shares in registration statements that we may file for us or other stockholders.
We may also issue our shares of our capital stock or securities convertible into shares of our capital stock from time to time in connection with a financing, acquisition, investment, or otherwise.
−Removed: The dual class structure of our common stock will have t he effect of concentrating voting control with those stockholders who hold our Class B capital stock, including our directors, executive officers, and beneficial owners of 5% or greater of our outstanding capital stock who hold in the aggregate 65.8% of the voting power of our capital stock, which will limit or preclude your ability to
−Removed: influence corporate matters, including the election of directors and the approval of any change of control transaction.
+Added: The dual class structure of our common stock will have the effect of concentrating voting control with those stockholders who hold our Class B capital stock, including our directors, executive officers, and beneficial owners of 5% or greater of our outstanding capital stock who hold in the aggregate 65.8% of the voting power of our capital stock, which will limit or preclude your ability to influence corporate matters, including the election of directors and the approval of any change of control transaction.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share.
−Removed: As of January 31, 2022, the holders of our outstanding Class B common stock hold approximately 98% of the voting power of our outstanding capital stock, with our directors, executive officers, and holders of more than 5% of our common stock, and their respective affiliates, holding in the aggregate approximately 65.8% of the voting power of our capital stock.
+Added: As of January 31, 2023, the holders of our outstanding Class B common stock hold a substantial majority of the voting power of our outstanding capital stock, with our directors, executive officers, and holders of more than 5% of our common stock, and their respective affiliates, holding a majority of the voting power of our capital stock.
Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock and therefore will be able to control all matters submitted to our stockholders for approval until the earlier of (i) October 14, 2031, (ii) the death or disability, as defined in our restated certificate of incorporation, of Sytse Sijbrandij, (iii) the date specified by a vote of the holders of two-thirds of the then outstanding shares of Class B common stock and (iv) the first date on which the number of shares of outstanding Class B common stock (including shares of Class B common stock subject to outstanding stock options) is less than 5% of the aggregate number of shares of outstanding common stock.
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Any actions or publications by stockholder advisory firms or institutional investors critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.
−Removed: If industry or financial analysts do not publish research or reports about our business, or if they issue inaccurate or unfavorable research regarding our Class A common stock, our stock price and trading volume could decline.
+Added: If industry or financial analysts do not continue to publish research or reports about our business, or if they issue inaccurate or unfavorable research regarding our Class A common stock, our stock price and trading volume could decline.
The trading market for our Class A common stock will depend in part on the research and reports that industry or financial analysts publish about us or our business.
We do not control these analysts or the content and opinions included in their reports.
−Removed: As a new public company, we may be slow to attract research coverage and the analysts who publish information about our Class A common stock will have had relatively little experience with our company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates.
+Added: As a new public company, the analysts who publish information about our Class A common stock will have had relatively little experience with our company, which could affect their ability to accurately forecast our results and make it more likely that we fail to meet their estimates.
If any of the analysts who cover us issues an inaccurate or unfavorable opinion regarding our stock price, our stock price may decline.
−Removed: In addition, the stock prices of many companies in the technology industry have declined significantly after
−Removed: those companies have failed to meet, or exceed, the financial guidance publicly announced by the companies or the expectations of analysts.
+Added: In addition, the stock prices of many companies in the technology industry have declined significantly after those companies have failed to meet, or exceed, the financial guidance publicly announced by the companies or the expectations of analysts.
If our financial results fail to meet, or exceed, our announced guidance or the expectations of analysts or public investors, analysts could downgrade our Class A common stock or publish unfavorable research about us.
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Any determination to pay dividends in the future will be at the discretion of our board of directors.
−Removed: Additionally, our ability to pay dividends is limited by restrictions on our ability to pay dividends or make distributions under the terms of our loan and security agreement.
−Removed: Accordingly, investors must for the for eseeable future rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
+Added: Accordingly, investors must for the foreseeable future rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.
Provisions in our organizational documents and under Delaware law could make an acquisition of us, which could be beneficial to our stockholders, more difficult and may limit attempts by our stockholders to replace or remove our current management.
−Removed: Provisions in our restated certificate of incorporation and restated bylaws may have the effect of delaying or preventing a merger, acquisition or other change of control of our company that our stockholders may consider favorable.
+Added: Provisions in our restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a merger, acquisition or other change of control of our company that our stockholders may consider favorable.
In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
−Removed: Among other things, our restated certificate of incorporation and restated bylaws include provisions that:
+Added: Among other things, our restated certificate of incorporation and amended and restated bylaws include provisions that:
• provide that our board of directors is classified into three classes of directors with staggered three-year terms;
• permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships;
−Removed: • require supermajority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;
+Added: • require supermajority voting to amend some provisions in our restated certificate of incorporation and amended and restated bylaws;
• authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
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• provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;
−Removed: • provide for a dual class common stock structure in which holders of our Class B common stock may have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our common stock, including
−Removed: the election of directors and other significant corporate transactions, such as a merger or other sale of our company or its assets;
+Added: • provide for a dual class common stock structure in which holders of our Class B common stock may have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our common stock, including the election of directors and other significant corporate transactions, such as a merger or other sale of our company or its assets;
• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
−Removed: • provide that our board of directors is expressly authorized to make, alter, or repeal our restated bylaws;
+Added: • provide that our board of directors is expressly authorized to make, alter, or repeal our amended and restated bylaws;
• establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
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Section 203 imposes certain restrictions on mergers, business combinations, and other transactions between us and holders of 15% or more of our common stock.
−Removed: Our re stated certificate of incorporation and restated bylaws contain exclusive forum provisions for certain claims, which may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or team members.
−Removed: Our restated certificate of incorporation provides that the Cour t of Chancery of the State of Delaware, to the fullest extent permitted by law, will be the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our restated certificate of incorporation, or our restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
+Added: Our restated certificate of incorporation and amended and restated bylaws contain exclusive forum provisions for certain claims, which may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or team members.
+Added: Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware, to the fullest extent permitted by law, will be the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the DGCL, our restated certificate of incorporation, or our amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
Moreover, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
−Removed: Our restated certificate of incorporation and restated bylaws provide that the federal district courts of the United States will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, such provision, the Federal Forum Provision.
+Added: Our restated certificate of incorporation and amended and restated bylaws provide that the federal district courts of the United States will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, such provision, the Federal Forum Provision.
Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law.
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These provisions may limit a stockholders’ ability to bring a claim in a judicial forum of their choosing for disputes with us or our directors, officers, or team members, which may discourage lawsuits against us and our directors, officers, and team members.
−Removed: Alternatively, if a court were to find the choice of forum provisions contained in our restated certificate of incorporation or restated bylaws to be
−Removed: inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, financial condition, and operating results.
+Added: Alternatively, if a court were to find the choice of forum provisions contained in our restated certificate of incorporation or 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 harm our business, financial condition, and operating results.
General Risk Factors
We may be adversely affected by natural disasters, pandemics and other catastrophic events, and by man-made problems such as acts of war, terrorism, that could disrupt our business operations and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
−Removed: Natural disasters, pandemics, such as the COVID-19 pandemic, and epidemics, or other catastrophic events such as fire or power shortages, along with man-made problems such as acts of war and terrorism, including the recent and developing armed conflict in Ukraine, and other events beyond our control may cause damage or disruption to our operations, international commerce, and the global economy, and could have an adverse effect on our business, operating results, and financial condition.
−Removed: While we do not have a corporate headquarters, we have team members around the world, and any such catastrophic event could occur in areas where signific ant portions of our team members are located.
−Removed: For example, changes in how we and companies worldwide conduct business due to the COVID-19 pandemic, including but not limited to restrictions on travel and in-person meetings, could affect services delivery, delay implementations, and interrupt sales activity for our products.
−Removed: In response to the COVID-19 pandemic, we have shifted certain of our customer events, such as GitLab Contribute, GitLab Commit, GitLab Sales Kick-Off and many field marketing events, to virtual-only experiences and we may deem it advisable to similarly alter, postpone or cancel entirely additional customer, team member or industry events in the future.
+Added: Natural disasters, pandemics, and epidemics, or other catastrophic events such as fire or power shortages, along with man-made problems such as acts of war and terrorism, including the war in Ukraine, and other events beyond our control may cause damage or disruption to our operations, international commerce, and the global economy, and could have an adverse effect on our business, operating results, and financial condition.
+Added: While we do not have a corporate headquarters, we have team members around the world, and any such catastrophic event could occur in areas where significant portions of our team members are located.
Moreover, these conditions can affect the rate of software development operations solutions spending and could adversely affect our customers’ ability or willingness to attend our events or to purchase our services, delay prospective customers’ purchasing decisions or project implementation timing, reduce the value or duration of their subscription contracts, affect attrition rates, or result in requests from customers for payment or pricing concessions, all of which could adversely affect our future sales and operating results.
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our demand generation activities, and the efficiency and effect of those activities, may be negatively affected.
−Removed: Moreover, it has been and, until the COVID-19 pandemic is contained, will continue to be more difficult for us to forecast our operating results.
−Removed: The COVID-19 pandemic has, and may continue to, put pressure on global economic conditions and overall spending for our products and services, and may cause our customers to modify spending priorities or delay or abandon purchasing decisions, thereby lengthening sales cycles, and may make it difficult for us to forecast our sales and operating results and to make decisions about future investments.
−Removed: These and other potential effects on our business due to the COVID-19 pandemic may be significant and could materially harm our business, operating results and financial condition.
+Added: Recent macroeconomic conditions, including inflation and rising interest rates, have, and may continue to, put pressure on overall spending for our products and services, and may cause our customers to modify spending priorities or delay or abandon purchasing decisions, thereby lengthening sales cycles, and may make it difficult for us to forecast our sales and operating results and to make decisions about future investments.
+Added: These and other potential effects on our business may be significant and could materially harm our business, operating results and financial condition.
In the event of a natural disaster, including a major earthquake, blizzard, or hurricane, or a catastrophic event such as a fire, power loss, or telecommunications failure, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in development of our solutions, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our future operating results.
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This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which could adversely affect our business, operating results, or financial condition.
−Removed: Additionally, the dramatic increase
−Removed: in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs.
+Added: Additionally, the dramatic increase in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or
+Added: to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements, and damages awarded to plaintiffs.
UNRESOLVED STAFF COMMENTS
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Accordingly, we do not maintain a headquarters.
−Removed: We lease small sales offices in China for our Variable Interest Entity, or VIE, JiHu.
+Added: Our China entity (JiHu) leases small sales offices.
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.