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We anticipate that we will continue to expand our operations and responsibly grow our headcount in the near term, and our success will depend in part on our ability to manage that growth effectively, although there is no assurance that our rate of growth will continue at its current pace.
−Removed: Our total number of Base Customers has grown to 8,602 as of January 31, 2024 from 7,002 as of January 31, 2023.
+Added: Our total number of Base Customers has gro wn to 9,893 as of January 31, 2025 from 8,602 as of January 31, 2024.
The growth and expansion of our business places a continuous significant strain on our management and operational and financial resources.
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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.
−Removed: Our rate of growth may also be impacted as a result of global business or macroeconomic conditions, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, and investment decisions by our customers.
+Added: Our rate of growth may also be impacted as a result of global business or macroeconomic conditions, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, and investment decisions by our customers.
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.
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Our growth also makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
−Removed: Our total revenue for the years ended January 31, 2024 and 2023 was $579.9 million and $424.3 million, respectively, representing a growth rate of 37%.
+Added: Our total revenue for the years ended January 31, 2025 and 2024 w as $759.2 million and $579.9 million, respectively, representing a growth rate of 31%.
You should not rely on the revenue growth of any prior quarter or annual period as an indication of our future performance.
−Removed: As a result of our limited history operating as a public company, our ability to accurately forecast our future results of operations is limited
+Added: As a resu lt of our limited history operating as a public company, our ability to accurately forecast our future results of operations is limited
and subject to a number of uncertainties, including our ability to plan for and model future growth.
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• expansion and enablement of our sales, services, and marketing organization to increase brand awareness and drive adoption of The DevSecOps platform;
−Removed: • product development, including investments in our product development team and the development of new features and functionality for 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, including those related to artificial intelligence, or AI;
• technology and sales channel partnerships;
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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 $155.1 million, $172.3 million and $424.2 million in fiscal 2022, fiscal 2023 and fiscal 2024, respectively.
−Removed: As of January 31, 2024, we had an accumulated deficit of approximately $1,149.8 million.
+Added: We have incurred losses in each year since our inception, including net losses of approximately $173.4 million, $425.7 million and $6.3 million in fiscal year 2023, 2024 and 2025, respectively.
+Added: As of January 31, 2025, we had an accumulated deficit of approximately $1.2 billion.
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 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.
−Removed: While we consistently
−Removed: 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.
−Removed: 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: 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 (including related to AI capabilities), expanding our sales and marketing activities, developing the functionality to expand into adjacent markets, and reaching customers
+Added: 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, 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 continue to grow our business, we also expect to continue to incur significant legal, accounting, and other expenses as a public company.
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.
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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 data and our third-party service providers’ information technology systems could result from artificial intelligence, or AI, related sensitive data exposure such as insufficient data anonymization during the training process, system misconfiguration, or from cyber-attacks, including denial-of-service attacks, reverse-engineering of AI algorithms, web scraping, ransomware attacks, business email compromises, computer malware, viruses, and social engineering (including phishing), which are prevalent in our
−Removed: industry and our customers’ industries.
+Added: Security incidents of ours or our third-party service provider’s information technology systems that compromise the confidentiality, integrity, and availability of our data could result from AI related sensitive data exposure such as insufficient data anonymization during the training process, system misconfiguration, or from cyber attacks, including, but not limited to, denial-of-service attacks, reverse-engineering of AI algorithms, web scraping, ransomware attacks, business email compromises, computer
+Added: malware, viruses, and social engineering (including phishing), which are prevalent in our industry and our customers’ industries.
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/or personal data, 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, 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.
+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 DevSecOps platform, 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.
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In addition, our agreements with certain customers and partners may require us to notify them in the event of a security breach.
−Removed: Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures, and require us to expend significant capital and other resources to respond to or alleviate problems caused by the actual or perceived security breach.
−Removed: In addition, in July 2023, the Securities and Exchange Commission, or the SEC, also adopted a new cybersecurity rule requiring companies subject to SEC reporting requirements to formally report material cyber security incidents, where failure to report may result in the SEC imposing injunctions, fines and other penalties.
+Added: Such mandatory disclosures are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures, and may require us to expend significant capital and other resources to respond to or alleviate problems caused by the actual or perceived security breach.
A security breach may cause us to breach customer contracts.
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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.
−Removed: If we fail to detect, contain, 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.
+Added: If we fail to detect, contain, 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,
+Added: 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.
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We have previously been, and may in the future become, the target of cyber attacks by third parties seeking unauthorized access to our or our customers’ data or to disrupt our operations or ability to provide our services.
−Removed: 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.
+Added: 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 affect our business, financial condition, and operating results.
We face intense competition and could lose market share to our competitors, which would adversely affect our business, operating results, and financial condition.
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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.
−Removed: 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 and artificial intelligence, or AI.
−Removed: Many of our competitors are significantly larger than we are and have more capital to invest in their businesses.
+Added: We compete with well-established providers such as Microsoft and Atlassian 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, distribution services, and AI.
We believe that our ability to compete depends upon many factors both within and beyond our control, including the following:
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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: Many of our users extend the functionality of The DevSecOps Platform using third-party code editors and integrated development environments (IDEs), including editors and IDEs developed by our competitors.
+Added: Many of our users extend the functionality of The DevSecOps platform using third-party code editors and integrated development environments, or IDEs, including editors and IDEs developed by our competitors.
Our development and distribution of integrations with such tools is subject to the integration policies and technical specifications imposed by the developer of the tool.
−Removed: A change to the policies and specifications pertaining to any of these third-party tools (including those developed by Microsoft), could
−Removed: cause GitLab to lose market share to competitors whose products and services continue to support integrations with such tools.
+Added: A change to the policies and specifications pertaining to any of these third-party tools (including those developed by Microsoft), could cause us to lose market share to competitors whose products and services continue to support integrations with such tools.
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.
The DevSecOps market is characterized by rapid technological change, fluctuating price points, and frequent new product and service introductions.
−Removed: 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 and technology partners, reach new platforms and sell into new markets.
+Added: Our ability to increase our user base and increase
+Added: 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 and technology partners, reach new platforms and sell into new markets.
Customers may require features and capabilities that our current solutions do not have.
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The operation, success and growth of our business (whether now or in the future) depends on streamlined processes made available through information systems, global communications, internet activity, and other network processes.
−Removed: The future operation, success and growth of our business depends on streamlined processes made available through information systems, global communications, internet activity, and other network processes.
+Added: The future operation, success and growth of our business depends
+Added: on streamlined processes made available through information systems, global communications, internet activity, and other network processes.
Our information technology systems may be subject to damage or interruption from telecommunications problems, data corruption, software errors, fire, flood, acts of terror and armed conflicts, global pandemics and natural disasters, power outages, systems disruptions, system conversions, and/or human error.
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Introduction of new technology, or upgrades and maintenance to our existing systems, could result in increased costs or unforeseen problems which may disrupt or reduce our operating efficacy.
−Removed: 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.
+Added: We may also encounter service interruptions, outage, or disruption due to issues interfacing with our customers’ IT systems, including stack misconfigurations or improper environment scaling, defective updates or upgrades, or due to cybersecurity attacks on ours or our customers’ IT systems.
Any such service interruption may have an adverse impact on our reputation and future operating results.
Because of the nature and importance of the data that our customers collect and manage by means of our services, it is possible that failures or errors in our systems could result in data loss or corruption, and/or cause the information that we or our customers collect to be incomplete or contain inaccuracies that our customers regard as material.
−Removed: Furthermore, the availability or performance of our products could be adversely affected by a number of factors, including customers’ inability to access the internet, the failure of our network or software systems, security breaches, or variability in user traffic for our services.
−Removed: We may be required to issue credits or refunds for prepaid amounts related to unused services or otherwise be liable to our customers for damages they may incur resulting from certain of these events.
−Removed: 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 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: Furthermore, the availability or performance of our products could be adversely affected by a number of factors, including:
+Added: customers’ inability to access the internet, the failure of our network or software systems, security breaches, or variability in user traffic for our services.
+Added: We may be required to issue credits or refunds for prepaid amounts related to unused services or otherwise be liable to our customers for damages they may incur resulting from certain events.
+Added: If a customer’s internet service provider fails to provide sufficient capacity to support our products, otherwise experiences service outages, interruption or disruption, 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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In addition, our policy may not cover all claims made against us and defending a suit, regardless of its merit, could be costly and divert management’s attention.
−Removed: 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.
+Added: The market for our services is relatively new and rapidly evolving with uncertain growth expectations 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.
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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 DevSecOps Platform and products, may be negatively affected.
+Added: If we or other software and SaaS providers
+Added: 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.
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 global business or macroeconomic conditions, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, actual or perceived instability in the global banking sector, 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.
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We rely on satisfied customers to expand their footprint by buying new products and services and onboarding additional users.
−Removed: While we have implemented user limits on our free SaaS product (and plan to implement in the future storage and transfer limitations on our free SaaS product), 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, including as a result of global business or macroeconomic conditions, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, actual or perceived instability in the global banking sector, or otherwise, or our failure, for any reason, to continue to capitalize on growth opportunities.
+Added: We have implemented user limits on our free SaaS product, and 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.
+Added: As a result, we may not accurately predict future customer purchasing trends.
+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, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, 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.
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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
−Removed: 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.
+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.
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:
−Removed: 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 were generally implemented in the first quarter of fiscal year 2024), the prices of competing services, mergers and acquisitions affecting our customer base, the effects of global economic conditions, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, or reductions in our customers’ spending levels generally (including, our customers that have or may have to downsize their operations or headcount).
+Added: quality of our sales efforts, customer usage, customer satisfaction with our services and customer support, our prices
+Added: (including price increases we have implemented in the past, the prices of competing services, mergers and acquisitions affecting our customer base, the effects of global economic conditions, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, or reductions in our customers’ spending levels generally (including, our customers that have or may have to downsize their operations or headcount).
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.
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Further, we have previously discontinued certain lower priced product offerings, requiring users of these products to switch to another paid offering, switch to our free product or discontinue using our products.
−Removed: Additionally, we have implemented user limits on our free SaaS product, and plan to implement in the future storage and transfer limitations on our free SaaS product offering.
−Removed: We also announced in the first quarter of fiscal year 2023 storage and transfer limitations on our paid product offerings, the extent and implementation of which varies depending on the tier.
+Added: Additionally, we have implemented user limits on our free SaaS product.
To the extent we discontinue or add additional limits on our free or lower-priced product offerings, 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.
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• 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, in both domestic and our foreign markets, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity
−Removed: markets, and actual or perceived instability in the global banking sector, the potential effects of health pandemics or epidemics and other global events, including ongoing armed conflicts in different regions of the world;
+Added: • general economic, industry and market conditions, in both domestic and our foreign markets, including inflation, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector, the potential effects of health pandemics or epidemics and other global events, including the impacts of the U.S.
+Added: presidential election and ongoing armed conflicts in different regions of the world;
• customer renewal rates;
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If we fail to meet such expectations for the reasons described above or any other reasons, our stock price could fall substantially.
−Removed: As our product offerings mature and expand our pricing and packaging for new products may result in existing customers purchasing new products on less favorable terms to us to replace the existing products they purchase or subscribe for from us.
+Added: As our product offerings mature and expand, our pricing and packaging for new products may result in existing customers purchasing new products on terms less favorable to us in order to replace the products they currently purchase or subscribe for from us.
As our product offerings and 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.
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Our customers may renew for fewer or other elements of our services or negotiate for different pricing terms.
−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.
+Added: Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their
+Added: 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.
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.
−Removed: For example, we have previously discontinued certain lower priced product offerings, and during fiscal year 2024 we implemented 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: For example, we have previously discontinued certain lower priced product offerings, and we have in the past implemented price increases, which may cause customers who previously used these tiers to opt for our free version or to cease using our products completely.
We may also decide to raise the prices of our product offerings in the future.
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The implementation of AI and machine learning technologies in our services may result in reputational harm, liability, increased expenditures, or other adverse consequences to our business operations.
−Removed: We are implementing AI features, including generative AI features, throughout our services.
−Removed: The technologies underpinning these features are in the early stages of commercial use and exist in a nascent regulatory environment which presents regulatory, litigation, ethical, reputational, and financial risks.
−Removed: Many states, regions, and supranational bodies, including the European Union, have proposed new regulations related to the use of AI and machine learning technologies.
−Removed: The final form of these may impose onerous obligations related to our, and our vendors’, development, offering, and use of AI technologies and expose us to an increased risk of regulatory enforcement and litigation.
−Removed: Additionally, issues relating to intellectual property rights in AI-generated content have not been fully addressed by the courts, laws, or regulations.
+Added: We have implemented AI capabilities throughout GitLab’s services, including as part of the GitLab Duo suite of AI features.
+Added: The technologies underpinning these features are in the early stages of commercial use and exist in a rapidly-evolving regulatory and commercial environment which presents regulatory, litigation, ethical, reputational, and financial risks.
+Added: Many states, regions, and supranational bodies have proposed or enacted regulations related to the use of AI and machine learning technologies, such as the E.U.
+Added: Artificial Intelligence Act, which came into effect on August 1, 2024.
+Added: These regulations may impose onerous obligations related to our, and our vendors’, development, offering, and use of AI technologies and expose us to an increased risk of regulatory enforcement and litigation.
+Added: Additionally, issues relating to intellectual property rights in AI-generated content have not been fully addressed by the courts, laws, or regulations and there has been an increase in litigation in this area.
Accordingly, the implementation of generative AI technologies into our services may result in exposure to claims related to copyright infringement or other intellectual property misappropriation.
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Customers may choose to stay on our free self-managed or SaaS product offerings instead of converting into a paying customer.
−Removed: 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
−Removed: subscription services.
−Removed: The total number of users of our free SaaS product may decline as a result of, or due to, our enforcement of user limits and our plan to implement in the future storage and transfer limits for our free SaaS product offering.
+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 SaaS product may decline as a result of, or due to, our enforcement of user limits.
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.
Converting users of our free product offering 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, 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.
+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
+Added: 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.
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If we are unable to find efficient ways to deploy our marketing spend or to hire, develop, and retain talent 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.
−Removed: Any failure to offer high-quality technical support services, including lifecycle services, or adequately sell such services, may adversely affect our relationships with our customers and our financial results.
+Added: Any failure to offer high-quality technical support services, including success plan services, or adequately sell such services, may adversely affect our relationships with our customers and our financial results.
Once our products are deployed, our customers depend on our technical support organization to resolve technical issues.
−Removed: We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services, and customers may not purchase the lifecycle services that we offer.
+Added: We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services, and customers may not purchase the success plan services that we offer.
We also may be unable to modify the format of our support services to compete with changes in support services provided by our competitors.
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Our current and future customers may demand more customized configuration and integration services, which increase our up-front investment in sales and deployment efforts, with no guarantee that these customers will increase the scope of their subscription.
−Removed: As a result of these factors, we may need to devote a significant amount of sales, support, and professional services resources to individual customers, increasing the cost and time required to complete sales.
+Added: As a result of these factors, we may need to devote a significant amount of sales, operations, engineering, support, and professional services resources to individual customers, increasing the cost and time required to complete sales.
If prospective customers require customized features or functions that we do not offer, and which would be difficult for them to deploy themselves, then the market for our applications will be more limited and our business could suffer.
1 unchanged sentence
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, including our ability to timely 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 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 timely provide enhancements and new features for our existing services or new services that
+Added: achieve market acceptance or that keep pace with rapid technological developments and the competitive landscape.
The success of new services and enhancements depends on several factors, including the timely delivery, introduction, and market acceptance of such services.
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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 DevSecOps Platform and must allocate appropriately
−Removed: skilled resources to the customers.
+Added: In addition, all channel partners must be trained to distribute The DevSecOps platform and must allocate appropriately skilled resources to the customers.
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 to sell our products and our business, operating results, and financial condition could be adversely
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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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.
−Removed: If the project committees and contributors fail to adequately further develop and enhance open source technologies, or if the leadership committees fail to oversee and guide the evolution of the open source technologies in the manner that we believe is appropriate to maximize the market potential of our offerings, then we would have to rely on other parties, or we would need to
−Removed: expend additional resources, to develop and enhance our offerings.
+Added: If the project committees and contributors fail to adequately further develop and enhance open source technologies, or if the leadership committees fail to oversee and guide the evolution of the open source technologies in the manner that we believe is appropriate to maximize the market potential of our offerings, then we would have to rely on other parties, or we would need to expend additional resources, to develop and enhance our offerings.
We also must devote adequate resources to our own internal contributors to support their continued development and enhancement of open source technologies, and if we do not do so, we may have to turn to third parties or experience delays in developing or enhancing 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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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.
−Removed: We may in the future bring claims against third parties for infringing our intellectual property rights.
+Added: And we may in the future bring claims against third parties for infringing our intellectual property rights.
Costs of supporting such litigation and disputes may be considerable, and there can be no assurances that a favorable outcome will be obtained.
−Removed: Patent infringement, trademark infringement, trade secret misappropriation, and other intellectual property claims and proceedings
−Removed: 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: 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.
Our open source and source code-available business model makes our software vulnerable to authorized and unauthorized distribution and sale.
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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, vendors, governmental or regulatory bodies, or third parties who use The DevSecOps 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, vendors, shareholders, governmental or regulatory bodies, or third parties who use The DevSecOps platform.
In addition, our agreements sometimes include indemnification provisions which can subject us to costs and damages in the event of a claim against an indemnified third party.
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GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
−Removed: We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included
−Removed: elsewhere in this Annual Report on Form 10-K .
+Added: We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K .
The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources.
−Removed: Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition, deferred contract acquisition costs, income taxes, business combination, stock-based compensation and common stock valuations.
+Added: Significant assumptions and estimates used in
+Added: preparing our consolidated financial statements include those related to revenue recognition, allowance for doubtful accounts, deferred contract acquisition costs, income taxes, business combinations, and impairment of goodwill.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in the price of our common stock.
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team members, contractors and other personnel, as well as for our customers’ and prospective customers’ personal data, such as contact and business information, we are subject to the E.U.
−Removed: General Data Protection Regulation, or the GDPR, and applicable national
−Removed: implementing legislation of the GDPR, and the U.K.
+Added: General Data Protection Regulation, or the GDPR, and applicable national implementing legislation of the GDPR, and the U.K.
General Data Protection Regulation and U.K.
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GDPR impose stringent data protection requirements and, where we are acting as a controller, includes requirements to:
−Removed: provide detailed disclosures about how personal data is collected and processed (in a concise, intelligible and easily accessible form);
+Added: provide detailed disclosures about how personal data is
+Added: collected and processed (in a concise, intelligible and easily accessible form);
demonstrate that an appropriate legal basis is in place or otherwise exists to justify data processing activities;
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data protection regulator, respectively, including the United States, if certain safeguards are taken to legitimize those data transfers.
−Removed: Recent legal developments in the E.U.
−Removed: have created complexity and uncertainty regarding such transfers.
−Removed: For example, on July 16, 2020, the European Court of Justice, or the CJEU, invalidated the E.U.-U.S.
−Removed: Privacy Shield framework, or the Privacy Shield.
−Removed: Further, the CJEU also advised that the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism and potential alternative to the Privacy Shield) were not alone sufficient to protect data transferred to the United States or other countries not deemed adequate.
−Removed: On July 10, 2023, the European Commission entered into force the E.U.-U.S.
−Removed: Data Privacy Framework, or the DPF, as a successor framework to the Privacy Shield.
−Removed: Under the DPF, certified U.S.-based organizations may receive transfers of personal data from the E.E.A.
−Removed: However, there are uncertainties regarding the long-term viability of the DPF due to proposed legal challenges to the framework before the CJEU.
−Removed: Thus, the Standard Contractual Clauses will remain an important data transfer mechanism for transfers to countries outside of the E.E.A.
+Added: Legal developments in the E.U.
+Added: have resulted in complexity and uncertainty regarding such transfers.
+Added: For example, the European Court of Justice, or the CJEU, has previously advised that the Standard Contractual Clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism) are not alone sufficient to protect data transferred to the United States or other countries not deemed adequate and the current E.U.-U.S.
+Added: Data Privacy Framework, or the DPF, which permits certified U.S.-based organizations to receive transfers of personal data from the E.E.A.
+Added: and the U.K, has been subject to proposed legal challenges before the CJEU.
+Added: Thus, the Standard Contractual Clauses remain an important data transfer mechanism for transfers to countries outside of the E.E.A.
and the U.K., but the use of Standard Contractual Clauses must still 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.
−Removed: 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.
−Removed: Since the decision by the CJEU, Supervisory Authorities, including the CNIL and the Austrian Data Protection Authority, are now looking at cross-border transfers more closely, and have publicly stated in January 2022 that the transfer of data to the United States using
−Removed: certain analytics tools is illegal.
+Added: The European Data Protection Board has also issued a decision imposing higher burdens on the use of data transfer mechanisms, such as the Standard Contractual Clauses, for cross-border data transfers and the CJEU has 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.
+Added: Since the decision by the CJEU, supervisory authorities, including the CNIL and the Austrian Data Protection Authority, are now looking at cross-border transfers more closely, and have publicly stated that the transfer of data to the United States using certain analytics tools is illegal.
While these decisions related specifically to analytics tools and may be inapplicable to organizations certified under the DPF, it has been suggested that it is far-reaching and applies to any transfer of E.U.
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We will continue to monitor this situation, and evaluate and utilize, where appropriate, all data transfer mechanisms available to us, but this may require the removal of tools from our services and websites where data is transferred from the E.U.
−Removed: to the U.S., or impact the manner in which we provide our services, which could adversely affect our business.
+Added: to the United States, or impact the manner in which we provide our services, which could adversely affect our business.
In addition, if participation in the DPF is deemed appropriate, then we would be required to update documentation and processes, which may result in further compliance costs.
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permitting data transfers from the E.U.
−Removed: However, this adequacy decision is subject to a four-year term, and the E.U.
+Added: However, this adequacy decision is subject to a four-year term set to expire in 2025, and the E.U.
could intervene during the term if it determines that the data protection laws in the U.K.
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privacy laws on cookies and e-marketing.
−Removed: and the U.K., regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive are highly likely to be replaced by an E.U.
−Removed: regulation known as the ePrivacy Regulation which will significantly increase fines for non-compliance.
+Added: and the U.K., regulators are increasingly focusing on compliance with requirements in the online behavioral advertising ecosystem, and current national laws that implement the ePrivacy Directive may increase fines for non-compliance.
and the U.K., informed consent is required for the placement of a cookie or similar technologies on a user’s device and for direct electronic marketing.
GDPR also imposes conditions on obtaining valid consent, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology.
−Removed: 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.
+Added: Further, a recent European court decision and regulators’ recent guidance are driving increased attention to cookies and tracking technologies.
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.
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There is no assurance that these contractual measures and our own privacy and security-related safeguards will protect us from the risks associated with the third-party processing, storage and transmission of such information.
−Removed: Any violation of data or
−Removed: security laws by our third-party processors could have a material adverse effect on our business and result in the fines and penalties under the GDPR and the U.K.
+Added: Any violation of data or security laws by our third-party processors could have a material adverse effect on our business and result in the fines and penalties under the GDPR and the U.K.
GDPR outlined above.
−Removed: Additionally, we are subject to the California Consumer Privacy Act, or the CCPA, which came into effect in 2020 and increases privacy rights for California consumers and imposes obligations on companies that process their personal data.
−Removed: 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 data and expanded rights to access and deletion of their personal data, opt out of certain personal data sharing, and receive detailed information about how their personal data is collected, used and shared.
−Removed: 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.
−Removed: 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 data 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 became effective on January 1, 2023.
+Added: Additionally, we are subject to the California Consumer Privacy Act, or the CCPA, as expanded by the California Privacy Rights Act, or the CPRA, which increases privacy rights for California consumers and imposes obligations on companies that process their personal data.
+Added: The CCPA, among other things, 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 data and expanded rights to access and deletion of their personal data, opt out of certain personal data sharing, and receive detailed information about how their personal data is collected, used and shared.
+Added: The CCPA provides for civil penalties for violations, as well as a private right of action for security
+Added: breaches that may increase the likelihood of, and the risks associated with, security breach litigation and the CPRA expanded consumers’ rights with respect to certain personal data and established a 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.
The CCPA has also prompted a number of passed laws and proposals for new federal and state privacy legislation that, if passed, could increase our potential liability and compliance costs, particularly in the event of a data breach, and adversely affect our business, including how we use personal data, our financial condition, and the results of our operations or prospects.
+Added: Compliance with privacy legislation adds complexity and has required and may in the future require investment in additional resources for compliance programs, thus potentially resulting in additional costs and expense of resources to maintain compliance.
Changing definitions of personal data and information may also limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing of data.
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However, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices.
−Removed: Any failure or perceived failure by us to comply with applicable privacy and data security laws and regulations, our privacy policies, or our privacy-related obligations to users or other third parties, or any compromise of
−Removed: security that results in the unauthorized release or transfer of personal data or other customer data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others and could cause our users to lose trust in us, which would have an adverse effect on our reputation and business.
+Added: Any failure or perceived failure by us to comply with applicable privacy and data security laws and regulations, our privacy policies, or our privacy-related obligations to users or other third parties, or any compromise of security that results in the unauthorized release or transfer of personal data or other customer data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others and could cause our users to lose trust in us, which would have an adverse effect on our reputation and business.
It is possible that a regulatory inquiry might result in changes to our policies or business practices.
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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.
−Removed: 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.
−Removed: Those Trade Controls, which are unprecedented and expansive, continue to evolve and further restrict our ability to do business in that region.
−Removed: Processing payments from those customers, even when legally permissible, has become very difficult, in part because most U.S.
−Removed: banks are unwilling to facilitate those transactions.
+Added: For example, 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, while recent sanctions restrict the provision of certain cloud services to Russia.
+Added: Those Trade Controls are unprecedented and expansive, and may continue to evolve.
Further, our products incorporating encryption functionality may be subject to special controls applying to encryption items and/or certain reporting requirements.
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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: 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
−Removed: products or could limit our end-customers’ ability to implement our products in those countries.
+Added: 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.
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§ 201, the U.S.
−Removed: Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act 2010 and possibly other anti-bribery and anti-money laundering laws in countries outside of the United States in which we conduct our activities.
+Added: Travel Act, the USA PATRIOT Act, the United Kingdom Bribery Act 2010 and other anti-bribery and anti-money laundering laws in countries outside of the United States in which we conduct our activities.
Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their team members, and their third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.
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As a general matter, investigations, enforcement actions and sanctions could harm our reputation, business, results of operations, and financial condition.
+Added: Further, in June 2024, the U.S.
+Added: Supreme Court reversed its longstanding approach under the Chevron doctrine, which provided for judicial deference to regulatory agencies.
+Added: As a result of this decision, we cannot be sure whether there will be increased challenges to existing agency regulations or how lower courts will apply the decision in the context of other regulatory schemes without more specific guidance from the U.S.
+Added: Supreme Court and/or federal appellate courts.
+Added: For example, the U.S.
+Added: Supreme Court’s decision could significantly impact consumer protection, advertising, privacy, artificial intelligence, anti-corruption and anti-money laundering practices and other regulatory regimes with which we are required to comply.
A portion of our revenue is generated by sales to government entities, which are subject to a number of challenges and risks.
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government sectors until we have attained the revised certification.
−Removed: Government demand and payment for our products may be affected by public sector budgetary cycles, funding authorizations, government shutdowns, and general political priorities, with funding reductions or
−Removed: delays adversely affecting public sector demand for our products.
+Added: Government demand and payment for our products may be affected by public sector budgetary cycles, funding authorizations, government shutdowns, and general political priorities and initiatives, with funding delays, or reductions or eliminations, adversely affecting public sector demand for our products.
Additionally, any actual or perceived privacy, data protection, or data security incident, or even any perceived defect with regard to our practices or measures in these areas, may negatively impact public sector demand for our products.
+Added: federal government and other government entities are in the
+Added: process of implementing specific policies and obligations relating to the use of AI, and we will need to continue to monitor these developments to ensure our products that we sell to government entities remain compliant with such applicable regulations.
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.
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.
−Removed: 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.
+Added: Government entities may have statutory, contractual, or other legal rights to terminate contracts with us for convenience, including in connection with political priorities or initiatives, 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.
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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.
−Removed: 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, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector.
+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, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector.
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.
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Further, we recognize a significant portion of our subscription revenue over the term of the relevant subscription period.
−Removed: As a result, much of the subscription revenue we report each fiscal quarter is the recognition of deferred revenue from subscription contracts entered into during previous
−Removed: fiscal quarters.
+Added: As a result, much of the subscription revenue we report each fiscal
+Added: quarter is the recognition of deferred revenue from subscription contracts entered into during previous fiscal quarters.
Consequently, a decline in new or renewed subscriptions in any one fiscal quarter will not be fully or immediately reflected in revenue in that fiscal quarter and will negatively affect our revenue in future fiscal quarters.
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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.
−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 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, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector.
+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, volatile interest rates, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, and volatility of the global debt and equity markets, and actual or perceived instability in the global banking sector.
Our results of operations depend in part on sales to new large customers and increasing sales to existing customers.
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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, Chair of the board of directors and Chief Executive Officer, who is critical to the development of our technology, services, future vision and strategic direction.
−Removed: In March 2023, Mr.
−Removed: Sijbrandij announced that he had been diagnosed with cancer and was undergoing treatment, including chemotherapy.
−Removed: Sijbrandij continued in his role as Chief Executive Officer and Chair of the board of directors throughout his treatment period.
−Removed: However, if he were to experience a recurrence, or his condition were to otherwise change, it may prevent him from continuing to perform his role.
−Removed: In the event that Mr.
−Removed: 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.
−Removed: While our board of directors regularly reviews 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.
−Removed: In addition, we may be required to implement temporary or interim executive management to support the leadership of our company during a transition period.
−Removed: A change in the leadership of the company is a significant event and may result in additional volatility in our stock price.
+Added: On December 5, 2024, Sytse Sijbrandij, our co-founder, resigned from his position as our Chief Executive Officer.
+Added: In connection with his resignation, Mr.
+Added: Sijbrandij was appointed as the Executive Chair of our board of directors.
+Added: On December 5, 2024, we also announced that William Staples had been appointed as our Chief Executive Officer.
+Added: While we conducted this transition in an orderly manner, any change in the leadership of the company is a significant event and may result in additional volatility in our stock price and could disrupt our operations and have an adverse effect on our ability to grow our business.
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 members with appropriate qualifications.
+Added: We have, from time to time, experienced, and we may experience in the future, difficulty in hiring and retaining highly skilled team members with appropriate qualifications.
In particular, recruiting and hiring senior product engineering personnel with AI and machine learning backgrounds has been, and we expect it to continue to be, challenging.
−Removed: In the first quarter of fiscal 2024, we conducted a reduction in workforce of approximately 7% across all areas of our business.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Further, unfavorable media coverage of us could significantly impact our ability to recruit and retain talent.
−Removed: Many of the companies with which we compete for experienced personnel have greater resources than we have.
−Removed: Our competitors also may be successful in recruiting and hiring members of our management team or other key team members, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all.
+Added: Further, many of the companies with which we compete for experienced personnel have greater resources than we have.
+Added: Our competitors also may be successful in recruiting and hiring members of our
+Added: management team or other key team members, and it may be difficult for us to find suitable replacements on a timely basis, on competitive terms, or at all.
We have in the past, and may in the future, be subject to allegations that team members we hire have been improperly solicited, or that they have divulged proprietary or other confidential information or that their former employers own such team member’s inventions or other work product, or that they have been hired in violation of non-compete provisions or non-solicitation provisions.
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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 to independent contractors, and must ensure we
−Removed: remain compliant with securities laws of the applicable jurisdiction where such team members are located.
+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.
Additionally, in some cases, we contract directly with team members who are independent contractors.
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We are a remote-only company, meaning that our team members work remotely which poses a number of risks and challenges that can affect our business, operating results, and financial condition.
−Removed: We are increasingly dependent on technology in our operations and if our technology fails, our business could be adversely affected.
+Added: We are highly dependent on technology in our operations and if our technology fails, our business could be adversely affected.
As a remote-only company, we face a number of unique operational risks.
For example, technologies in our team members’ homes may not be robust enough and could cause the networks, information systems, applications, and other tools available to team members and service providers to be limited, unreliable, or unsecure.
−Removed: 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.
+Added: Additionally, we are highly 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.
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.
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Our customers, partners, team members, contributors or the public at large may, from time to time, disagree with, or find objectionable, our policies and practices or organizational decisions that we make or with the actions of members of our management team.
−Removed: As a result of these disagreements and any negative publicity associated therewith, we could lose customers or partners, or we may have difficulty attracting or retaining team members or contributors and such disagreements may divert resources and the time and attention of management from our business.
+Added: As a result of these disagreements and any
+Added: negative publicity associated therewith, we could lose customers or partners, or we may have difficulty attracting or retaining team members or contributors and such disagreements may divert resources and the time and attention of management from our business.
Our culture of transparency may also result in customers, partners, team members, contributors or the public at large having greater insight into our policies and practices or organizational decisions.
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We plan to expand our operations internationally in the future.
−Removed: Outside of the United States, we currently have direct and indirect subsidiaries in Canada, Germany, France, Ireland, the Netherlands, Spain, the United Kingdom, Australia, India, Japan, South Korea, and Singapore, and have team members in over 60 countries.
+Added: Outside of the United States, we currently have direct and indirect subsidiaries in Canada, Germany, France, Ireland, Israel, the Netherlands, Spain, the United Kingdom, Australia, India, Japan, South Korea, and Singapore, and have team members in over 60 countries.
We also have a joint venture in China.
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• adapting to doing business in other languages and/or cultures;
−Removed: • compliance with the laws of numerous taxing jurisdictions where we conduct business, potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S.
+Added: • compliance with the laws of numerous taxing jurisdictions where we conduct business, potential double taxation of our international earnings, foreign tax withholding on intercompany transactions, and potentially adverse tax consequences due to U.S.
and foreign tax laws as they relate to our international operations;
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These factors and other factors could harm our international operations and, consequently, materially impact our business, operating results, and financial condition.
−Removed: Further, we may incur significant operating expenses as a result of our international expansion, and it may not be successful.
+Added: Further, we may incur significant operating expenses as a result of our international expansion, which may not be successful.
We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets.
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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
−Removed: contractual restrictions relating to use of our intellectual property by Chinese companies, our revenue from JiHu 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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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.
−Removed: Therefore, we face reputational and brand risk as a result of any negative publicity faced by the joint venture entity.
+Added: Therefore, we face reputational and brand
+Added: risk as a result of any negative publicity faced by the joint venture entity.
Any such reputational and brand risk can harm our business and operating results.
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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.
−Removed: 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.
+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 any rise in interest rates in the future.
Risks Related to Financial and Accounting Matters
−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: Failure to maintain effective systems of internal controls and disclosure controls could have a material adverse effect on our business, operating results, and financial condition.
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: The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: 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 Annual Report on Form 10-K for the year ended January 31, 2023 , we had identified material weaknesses in our internal control over financial reporting.
−Removed: 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
−Removed: prevented or detected on a timely basis.
−Removed: As of January 31, 2024 , while we had successfully remediated certain prior material weaknesses, we determined that the following material weakness continued to 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.
−Removed: As a result, the following material weakness exists as of January 31, 2024 :
+Added: The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting, or ICFR, and disclosure controls and procedures, or DC&P.
+Added: In order to maintain and improve the effectiveness of our ICFR and DC&P, we have expended, and anticipate that we will continue to expend, significant resources, including accounting related costs and significant management oversight.
+Added: As disclosed in our previously issued Annual Report on Form 10-K for the year ended January 31, 2024 , we had identified a material weakness in our ICFR.
+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: During fiscal year 2024, we determined that a material weakness exists 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: In particular:
• We did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems used in the financial reporting processes related to revenue.
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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 the financial reporting processes related to revenue.
−Removed: Although the aforementioned material weakness did not result in a material misstatement to our annual or interim financial statements, the deficiency could result in misstatements potentially impacting the financial reporting processes related to revenue and related disclosures that would not be prevented or detected.
−Removed: Therefore, we concluded that the deficiency represents a material weakness in our internal control over financial reporting and our internal control over financial reporting was not effective as of January 31, 2024.
−Removed: 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.
−Removed: KPMG LLP’s report appears in Item 8 of this Annual Report on Form 10-K.
−Removed: To address our material weakness, we have commenced certain steps to enhance our internal control environment and remediate these material weaknesses.
−Removed: See the section entitled “Controls and Procedures—Remediation Plan for Un-Remediated Material Weaknesses” for additional information.
−Removed: 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 weakness 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.
−Removed: Further, additional weaknesses in our internal controls may be discovered in the future.
−Removed: 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: Because we are a large accelerated filer, our independent registered public accounting firm is required to annually audit the effectiveness of our internal control over financial reporting, which has, and will continue to, require increased costs, expenses, and management resources.
−Removed: 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.
−Removed: 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.
−Removed: To comply with the requirements of being a public company, we have undertaken, and may need to further
−Removed: undertake in the future, various actions, such as implementing new internal controls and procedures and hiring additional accounting staff.
−Removed: As a public company, significant resources and management oversight are required.
−Removed: 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 incur significant increased costs and devote increased management resources as a result of operating as a public company.
−Removed: As a public company, we incur significant legal, accounting, compliance and other expenses that we did not incur as a private company.
+Added: We have remediated this material weakness during fiscal year 2025 through implemented actions that enhanced our control environment.
+Added: Our independent registered public accounting firm, KPMG LLP, who audited the consolidated financial statements included in this Annual Report on Form 10-K, has issued an unqualified opinion on the effectiveness of the Company’s ICFR as of January 31, 2025 .
+Added: Maintaining effective ICFR and DC&P requires ongoing attention and resources.
+Added: Our current controls may become inadequate because of changes in conditions in our business, personnel, IT systems and applications, or other factors.
+Added: If we identify additional material weaknesses or fail to maintain effective controls, it could adversely affect our operating results, cause us to fail to meet our reporting obligations, result in a restatement of our financial statements, or adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports.
+Added: As a public company that is a large accelerated filer, our independent registered public accounting firm is required to provide an annual attestation report on the effectiveness of our ICFR, which has required, and will continue to require, increased costs, expenses, and management resources.
+Added: We incur significant costs and devote management resources as a result of operating as a public company.
+Added: As a public company, we incur significant legal, accounting, compliance and other expenses.
Our management and other personnel devote a substantial amount of time and incur significant expense in connection with compliance initiatives.
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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.
−Removed: In connection with our initial public offering, we also increased our directors’ and officers’ insurance coverage, which increased our insurance cost.
−Removed: In the future, it may be more expensive or more difficult for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
+Added: While we believe we currently have sufficient directors’ and officers’ insurance coverage, it may in the future, be more expensive or more difficult for us to obtain director and officer liability insurance.
+Added: We may also be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
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.
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The holders of new debt or equity securities may also have rights, preferences, or privileges that are senior to those of existing holders of our common stock.
−Removed: If new sources of financing are required, but are insufficient or unavailable, we will be required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.
+Added: If new sources of financing are required, but are insufficient or unavailable, we will be
+Added: required to modify our growth and operating plans based on available funding, if any, which would harm our ability to grow our business.
If we raise additional funds through equity or convertible debt issuances, our existing stockholders may suffer significant dilution and these securities could have rights, preferences, and privileges that are superior to those of holders of our common stock.
If we obtain additional funds through debt financing, we may not be able to obtain such financing on terms favorable to us.
−Removed: Such terms may involve restrictive covenants making it difficult to engage in capital raising activities and pursue business opportunities,
−Removed: including potential acquisitions.
−Removed: 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 ongoing armed conflicts in different regions of the world, 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 such global events could adversely affect our business and the value of our Class A common stock.
+Added: Such terms may involve restrictive covenants making it difficult to engage in capital raising activities and pursue business opportunities, including potential acquisitions.
+Added: The trading prices of technology companies have been highly volatile as a result of recent global events, including volatile interest rates and inflation and the ongoing armed conflicts in different regions of the world, which may reduce our ability to access capital on favorable terms or at all.
+Added: In addition, a 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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Treasury Department issued regulations for the purpose of interpreting the 2017 Tax Act, including regulations disallowing foreign tax credits for taxes which are dissimilar to income taxes, limiting the deductibility of interest, and requiring the capitalization of research and development expenses.
−Removed: Also, the Inflation Reduction Act of 2022, enacted on August 16, 2022, further amended the U.S.
+Added: Due to the reconciliation process used to pass the 2017 Tax Act, many provisions are in the process of being phased out, and it is uncertain whether many of the provisions in the 2017 Tax Act will be restored.
+Added: The Inflation Reduction Act of 2022, enacted on August 16, 2022, further amended the U.S.
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.
1 unchanged sentence
The OECD has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January
−Removed: While it is uncertain whether the United States will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2.
+Added: While it is uncertain whether the United States will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation.
On December 15, 2022, the European Union member states agreed to implement the OECD’s global minimum tax rate of 15%.
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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.
−Removed: 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.
−Removed: state aid rules and concluded that certain member states have provided illegal state aid in certain cases.
−Removed: These investigations may result in changes to the tax treatment of our foreign operations.
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.
4 unchanged sentences
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.
+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 to expand the tax bases.
Our existing corporate structure has been implemented in a manner we believe is in compliance with current tax laws.
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• new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
−Removed: • the impact of interest rate increases on the overall stock market and the market for technology company stocks;
+Added: • the impact of interest rate volatility on the overall stock market and the market for technology company stocks;
• any major changes in our management or our board of directors;
• effects of public health crises, pandemics, and epidemics;
−Removed: • general economic conditions, changes in the capital markets generally, inflation, slow or negative growth of our markets and instability in the global banking sector;
−Removed: • other events or factors, including those resulting from political instability, war, incidents of terrorism or responses to these events, including those related to the ongoing armed conflicts in different regions of the world.
+Added: • general economic conditions, changes in the capital markets generally, inflation, and slow or negative growth of our markets and instability in the global banking sector;
+Added: • other events or factors, including those resulting from political instability, regulatory uncertainty, war, incidents of terrorism or responses to these events, including those related to the ongoing armed conflicts in different regions of the world.
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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We do not control these analysts or the content and opinions included in their reports.
−Removed: As a relatively 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 those companies have failed to meet, or exceed, the financial guidance publicly announced by the companies or the expectations of analysts.
−Removed: 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.
−Removed: If one or more of these analysts cease coverage of our Class A common stock or fail to publish reports on us regularly, our visibility in the financial markets could decrease, which in turn could cause our stock price or trading volume to decline.
+Added: In addition, 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.
We do not intend to pay dividends in the foreseeable future.
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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.
−Removed: Additionally, all of the aforementioned risks may be further increased if we do not implement a disaster recovery plan or the disaster recovery plans put in place by us or our partners prove to be inadequate.
−Removed: We could be subject to securities class action litigation.
−Removed: In the past, securities class action litigation has often been instituted against companies following periods of volatility in the market price of a company’s securities.
+Added: Additionally, all of the aforementioned risks may be further increased if we do not implement a disaster recovery plan or the disaster recovery plans we or our partners implement prove to be inadequate.
+Added: We are and could continue to be subject to securities class action litigation and shareholder derivative suits.
+Added: Securities class action litigation, and ensuing shareholder derivative suits, are often instituted against companies following periods of volatility in the market price of a company’s securities.
+Added: See Part I, Item 3 of this Form 10-K for additional information regarding our pending legal proceedings.
Such suits may seek, as applicable, direct, indirect, consequential, punitive or other penalties or monetary damages, injunctive relief, and/or attorneys’ fees.
−Removed: This type of litigation, if instituted, could result in substantial costs, adverse publicity, and a diversion of management’s attention and resources, which could adversely affect our business, operating results, or financial condition.
+Added: These types of litigation could result in substantial costs, adverse publicity, and a diversion of management’s attention and resources, which could adversely affect our business operating results, or financial condition.
Additionally, the cost of directors’ and officers’ liability insurance may increase, which 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.
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.