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Our business is also subject to general risks and uncertainties that affect many other companies.
−Removed: Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity, and financial condition.
+Added: Additional risks and uncertainties not currently known to us or that we currently believe are immaterial may also impair our business, including our results of operations, liquidity, and financial condition.
Because of the following factors, as well as other variables affecting our results of operations, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.
Risks Related to Our Business and Industry
−Removed: Our business and operations, and the operations of our customers, partners, and/or suppliers, may be adversely affected by epidemics and pandemics, such as the COVID-19 pandemic.
−Removed: The COVID-19 pandemic and future epidemics and pandemics risk disrupting and adversely affecting our business operations and financial results, as well as the markets and communities in which we and our customers, suppliers and other business partners operate.
−Removed: We face risks related to epidemics, pandemics, and other outbreaks of communicable diseases that adversely affect global commercial activity, economies, financial markets, and companies.
−Removed: The outbreak of COVID-19 was declared a "pandemic" by the World Health Organization on March 11, 2020.
−Removed: An epidemic or pandemic or other outbreak of communicable diseases, such as the current COVID-19 pandemic, poses the risk that we or our customers, suppliers, and other business partners may be disrupted or prevented from conducting normal business activities for certain periods of time, the durations of which are uncertain, and may otherwise experience significant impairments of business activities.
−Removed: In response to the COVID-19 pandemic, many state, local, and foreign governments have put in place, and others in the future may put in place or continue, quarantines, executive orders, shelter-in-place orders, and similar government orders and restrictions to reduce the rate of infection and control the spread of the disease.
−Removed: Such orders or restrictions, or the perception that such orders or restrictions could occur, may continue to result in business closures, work stoppages, slowdowns and delays, travel restrictions and cancellation of events, among other effects that could affect productivity and disrupt our operations and those of our suppliers, customers, and business partners.
−Removed: To protect our employees, contractors, customers, suppliers, and our local communities, and limit the effect of the COVID-19 pandemic on our operations, many of our employees at our locations globally have been working remotely for the past two years, with limited exceptions for site-essential personnel (with protective measures and protocols in place).
−Removed: Similar to other companies, we have begun allowing our employees to return to work on-sites, in accordance with federal, state, and local government guidelines, as well as in accordance with foreign government guidelines in the countries in which we operate.
−Removed: Furthermore, the processes that we have implemented to enable our employees to return to work on-site are in accordance with prevailing health and science guidance, and in a manner that seeks to protect our employees, contractors, customers, suppliers, and our local communities.
−Removed: We expect that on-site and work-from-home requirements and other restrictions on our employees, suppliers, customers, and business partners will change over time, whether becoming more or less restrictive, as the pandemic and global responses progress.
−Removed: We may take further actions that could alter our operations as may be required by federal, state, or local authorities, or by foreign governments in countries in which we operate, or which we determine are in the best interests of our employees, suppliers, customers, business partners, and stockholders.
−Removed: As part of our existing business continuity planning, we had established infrastructure and protocols to enable our employees to work from home.
−Removed: While we believe that the majority of our employees are able to and can continue to effectively work remotely, it is possible that disruptions to our business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs could affect our ability to develop and design our products and services in a timely manner or meet required milestones or customer commitments, and that this could have an adverse effect on our revenue and operating results.
−Removed: In addition, although we have been able to adequately staff our facilities with site-critical personnel with specific health and safety protocols, to satisfy our manufacturing and support obligations to our customers, it is possible that we or others may determine that it is necessary to direct that employees engaged in manufacturing and support refrain from working on-site for an indeterminate period of time, and that this could have an adverse effect on our revenue and operating results.
−Removed: Furthermore, global travel has been sharply curtailed, and in some cases prohibited.
−Removed: Our sales personnel often meet with customers or prospective customers in person to provide greater personalized service.
−Removed: While our employees and customers have adjusted to virtual meetings, the inability of our sales personnel to meet with customers or prospective customers at a customer facility could have an adverse effect on our revenue and operating results.
−Removed: In addition, we rely on third-party suppliers and manufacturers throughout the globe.
−Removed: The COVID-19 pandemic has resulted in the extended shutdown of certain businesses and the closure of international borders throughout the world, which may result in disruptions to our supply chain.
−Removed: These may include disruptions from temporary closure of third-party supplier and manufacturer facilities, interruptions in product supply or restrictions on the export or shipment of our products, as well as the import of products into countries in which we operate.
−Removed: Although we have attempted to minimize the effects of these disruptions,
−Removed: it is possible that these attempts will be insufficient, and that these disruptions could have an adverse effect on our revenues and operating results.
−Removed: To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this "Risk Factors" section, such as those relating to our quarterly revenue and operating results, the estimates made for our critical accounting policies, and the operation of internal controls over such estimates, as well as on our liquidity and on our ability to satisfy our indebtedness obligations, including the compliance with the covenants that apply to our indebtedness.
Unfavorable conditions in our industry or the global economy, or reductions in information technology spending, could limit our ability to grow our business and negatively affect our results of operations.
−Removed: Our results of operations may vary based on the impact of unfavorable changes in our industry or the global economy on us or our customers and potential customers.
−Removed: Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from financial and credit market fluctuations, elevated or prolonged inflation, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases, warfare and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on information technology, and negatively affect the growth of our business and our results of operations.
+Added: Unfavorable conditions in the economy both in the United States and abroad, including conditions resulting from financial and credit market fluctuations, increased interest rates, elevated or prolonged inflation, bank failures, international trade relations, political turmoil, natural catastrophes, outbreaks of contagious diseases, warfare, including in Ukraine, and terrorist attacks on the United States, Europe, the Asia Pacific region or elsewhere, could cause a decrease in business investments, including spending on information technology, and negatively affect the growth of our business and our results of operations.
+Added: Heightened inflation has also increased, and could continue to further increase, the cost of operating our business and impact our customers’ spending decisions, which could negatively affect our results of operations.
Our competitors, many of whom are larger and have greater financial resources than we do, may respond to challenging market conditions by lowering prices in an attempt to attract our customers and may be less dependent on key industry events to generate sales for their products.
−Removed: In addition, the increased pace of consolidation in certain industries may result in reduced overall spending on our products and solutions.
+Added: In addition, we serve certain industries that have historically been cyclical and have experienced periodic downturns that have had a material adverse impact on demand for the products, software, and services that we offer.
+Added: Many of our customers are concentrated in certain industries, including financial services, public sector, healthcare, and the service provider market.
+Added: Furthermore, the increased pace of consolidation in certain industries may result in reduced overall spending on our products and solutions.
We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or how any such event may impact our business.
Potential product vulnerabilities or critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services, or solutions could result in claims of liability against us, damage our reputation, or otherwise harm our business.
−Removed: The products and services we sell to customers, and our cloud-based solutions, may contain vulnerabilities or critical security defects which have not been identified or remedied.
−Removed: We may also make prioritization decisions in determining which vulnerabilities or security defects to fix, and the timing of these fixes, which could result in an exploit that compromises security.
+Added: The products and services we sell or license to customers, including our cloud-based solutions and our service offerings, may contain vulnerabilities or critical security defects which have not been identified or remedied.
+Added: We may also make prioritization decisions in determining which vulnerabilities or security defects to fix, and the timing of these fixes, which could result in exploitation that compromises security.
Customers also sometimes need to test security releases before they can be deployed, which can delay implementation.
In addition, we rely on third-party providers of software and cloud-based services, and we cannot control the rate at which they remedy vulnerabilities.
−Removed: Customers may also not deploy a security release or decide not to upgrade to the latest versions of our products, services, or cloud-based solutions containing the release, leaving them vulnerable.
−Removed: If we or the third parties who we work with or rely on experience a security incident, or the confidentiality, integrity, or availability of our information technology, software, services, communications or data is compromised, our business or platform may be perceived as not being secure, our reputation may be harmed, demand for our offering may be reduced, and we may incur significant liabilities.
−Removed: In the regular course of our business, we collect, use, store, transmit and process data, which can include information about our customers, employees, and others and which may be sensitive, proprietary, or confidential.
−Removed: Security incidents compromising the confidentiality, integrity, and availability of this information or our systems could result from a wide variety of cyberattacks, computer malware, viruses, social engineering (including phishing), ransomware, supply chain attacks, credential stuffing, efforts by individuals or groups of hackers and sophisticated organizations, errors or malfeasance of our personnel (such as theft or misuse), security vulnerabilities in the software or systems on which we rely, cyber extortion, and denial of service attacks.
−Removed: Such incidents have become more prevalent in our industry, and may in the future result in the unauthorized, unlawful, or inappropriate access to, inability to access, disclosure of, or loss of the sensitive, proprietary, and confidential information that we handle.
−Removed: Threat actors, nation-states, and nation-state-supported actors now engage, and are expected to continue to engage, in cyber-attacks, including for geopolitical reasons and in connection with military conflicts and operations.
−Removed: During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to heightened risk of these attacks, including cyber-attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
−Removed: Additionally, due to the ongoing COVID-19 pandemic, certain functional areas of our workforce remain in a remote work environment, which imposes additional risks to our business,
−Removed: including increased risk of industrial espionage, phishing, and other cybersecurity attacks, and unauthorized dissemination of sensitive, proprietary, or confidential information.
−Removed: We also rely on third parties to operate some of our business systems and process the sensitive, proprietary, and confidential information that we handle.
−Removed: These third parties may not have adequate security measures and could experience a security incident that compromises the confidentiality, integrity, or availability of the systems they operate for us or the information they process on our behalf.
−Removed: Cybercrime and hacking techniques are constantly evolving, and we or third parties who we work with may be unable to anticipate attempted security breaches, react in a timely manner, or implement adequate preventative measures, particularly given increasing use of hacking techniques designed to circumvent controls, avoid detection, and remove or hide forensic information.
−Removed: We cannot be certain that our applicable contracts with these third parties will adequately limit our data security-related liability to them or be sufficient to allow us to obtain indemnification or recovery from them for data security-related liabilities that they cause us to incur.
−Removed: Although we have multiple and layered controls and security measures in place designed to prevent cyberattacks, experienced computer hackers are increasingly organized and sophisticated and we cannot guarantee that our, or our third-party partners’ security measures will be sufficient to protect against unauthorized access to our IT networks, software and systems.
−Removed: Malicious attack efforts operate on a large-scale and sometimes offer targeted attacks as a paid-for service.
−Removed: In addition, the techniques used to obtain access or sabotage networks change frequently and we may be unable to anticipate such techniques, implement adequate preventative measures, or stop security breaches that may arise from such techniques.
−Removed: As a provider of security solutions, we may be a more attractive target for such attacks.
−Removed: Other individuals or entities, including personnel or vendors, may also intentionally or unintentionally provide unauthorized access to our IT environments.
−Removed: If we or the third-parties who we work with were to experience a security incident or other incident that results in the compromise of the confidentiality, integrity, or availability of our sensitive information or the sensitive, proprietary, or confidential information we process, we or our customers may experience system disruptions or slowdowns, security vulnerabilities of our products could be exploited, the information stored on our networks or those of our third-party service providers or partners could be accessed, publicly disclosed, misappropriated, deleted, altered, lost, or stolen, all of which could subject us to liability and cause us financial harm.
−Removed: Any actual, alleged or perceived security breach or incident affecting us, our partners or our industry as a whole could result in damage to our reputation, negative publicity, loss of partners, customers and sales, increased costs to remedy any problems and otherwise respond to any incident, regulatory investigations and enforcement actions, costly litigation, and other liability.
−Removed: In addition, we could incur substantial costs and liabilities, including but not limited to, expenses attributable to investigating, remediating and rectifying a security breach, cyberattack or other incident (including the cost of repairing any damage to our or our customers' systems, paying a ransom, or restoring data from backups), liability for stolen assets or information, lost revenue and income resulting from any system or product downtime, increased costs for cybersecurity protection, and costs to comply with any notification obligations resulting from any security incidents (including notifying affected individuals or relevant regulatory authorities).
−Removed: Such outcomes could damage our reputation, cause customers and possibly investors to lose confidence in us, and adversely affect our business or operating results.
−Removed: Additionally, efforts by hackers or others could cause interruptions, delays or cessation of our product licensing, or modification of our software, which could cause us to lose existing or potential customers.
−Removed: If these efforts are successful and a third party obtains unauthorized access to our or our customers' IT environments, our business operations, and those of our customers could be adversely affected, losses or theft of data could occur, our reputation and future sales could be harmed, governmental regulatory action or private or governmental litigation could be commenced against us and our business, and our financial condition, operating results and cash flows could be materially adversely affected.
−Removed: We are required to comply with laws, rules, industry standards, and regulations that require us to maintain the security of personal information.
−Removed: We may also have contractual and other legal obligations to notify relevant stakeholders of security incidents.
−Removed: Such notifications are costly, could lead to negative publicity, may cause our customers to lose confidence in the effectiveness of our security measures and not use our services, and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual, alleged or perceived security incident.
−Removed: Our ability to quickly and successfully recover from a disaster, public health crisis, or other business continuity event could affect our ability to deliver our products and negatively impact our business reputation.
−Removed: The occurrence of a natural disaster, public health crisis or an act of terrorism, or a decision or need to close any of our facilities without adequate notice or time for making alternative arrangements could result in interruptions in the delivery of our products and services.
−Removed: Our central business functions, including administration, human resources, finance services, legal, development, manufacturing and customer support depend on the proper functioning of our computer, telecommunication and other technology systems and operations, some of which are operated or hosted by third parties.
−Removed: While we have business continuity programs in place, a disruption or failure of these systems or operations because of a disaster, public health crisis or other business continuity event could cause data to be lost or otherwise delay our ability to complete sales and provide the highest level of service to our customers.
−Removed: In addition, we could have difficulty producing accurate financial statements on a timely basis, which could have an impact on our ability to make timely disclosures and could adversely affect the trading value of our stock.
−Removed: Although we endeavor to ensure there is redundancy in these systems and that they are regularly backed-up, there is no guarantee that data recovery in the event of a disaster would be effective or occur in an efficient manner.
−Removed: Our operations are dependent upon our ability to protect our technology infrastructure against damage from business continuity events that could have a significant disruptive effect on our operations.
−Removed: We could experience material adverse interruptions to our operations or delivery of services to our clients in a disaster recovery scenario.
+Added: Customers may also not deploy a security release or decide not to upgrade to the latest versions of our products or services leaving them vulnerable.
If our products contain errors or quality issues, such issues may be costly to correct, revenue may be delayed, we could be sued, and our reputation could be harmed.
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Any such errors, defects, or security vulnerabilities could also adversely affect the market's perception of our products and business.
+Added: If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;
+Added: fines and penalties;
+Added: disruptions of our business operations;
+Added: reputational harm;
+Added: loss of revenue or profits;
+Added: and other adverse consequences.
+Added: We and the third parties upon which we rely collect, receive, use, store, generate, transfer, dispose of, transmit, share, and process sensitive, proprietary, and confidential information, including personal information, business data, trade secrets, intellectual property, and confidential third-party data.
+Added: Cyber-attacks, malicious internet-based activity, online and offline fraud, and similar activities threaten the confidentiality, integrity, and availability of our sensitive, proprietary, or confidential information and information technology systems, and those of the third parties upon which we rely.
+Added: Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
+Added: Some actors now engage, and are expected to continue to engage, in cyber-attacks, including for geopolitical reasons and in conjunction with military conflicts and defense activities.
+Added: During times of war and other major conflicts, we and the third parties upon which we rely may be vulnerable to heightened risk of these attacks, including retaliatory cyber-attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
+Added: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, telecommunications failures, and other similar threats.
+Added: Severe ransomware attacks are also becoming increasingly prevalent and could lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.
+Added: In addition, our reliance on third-party service providers could introduce cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations.
+Added: For example, we rely on third parties to operate some of our business systems and process sensitive, proprietary, and confidential information in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, content delivery to customers, and other functions.
+Added: We also rely on third-party service providers to provide other products, services, parts, or otherwise to operate our business.
+Added: Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
+Added: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
+Added: While we may be entitled to damages if our third-party service providers fail to satisfy their data privacy or security-related obligations to us, we cannot be certain that our applicable contracts with these third parties will adequately limit our data security-related liability to them or others, be sufficient to allow us to obtain indemnification or recovery from them for data security-related liabilities that they cause us to incur, or be sufficient to cover our damages.
+Added: Although we have multiple and layered controls and security measures in place designed to prevent cyberattacks, experienced computer hackers are increasingly organized and sophisticated and we cannot guarantee that our, or our third-party partners’, security measures will be sufficient to protect against unauthorized access to our IT networks, software and systems.
+Added: Malicious attack efforts operate on a large-scale and sometimes offer targeted attacks as a paid-for service.
+Added: In addition, the techniques used to obtain access or sabotage networks change frequently, and we may be unable to anticipate such techniques, implement adequate preventative measures, or stop security breaches that may arise from such techniques.
+Added: As a provider of security solutions, we may be a more attractive target for such attacks.
+Added: Other individuals or entities, including personnel or vendors, may also intentionally or unintentionally provide unauthorized access to our IT environments.
+Added: Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive, proprietary, or confidential information or our information technology systems, or those of the third parties upon whom we rely.
+Added: A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our services.
+Added: While we have implemented significant and multi-layered security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
+Added: We take steps to detect and remediate vulnerabilities, but we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit the vulnerability change frequently and are often sophisticated in nature.
+Added: Therefore, such vulnerabilities could be exploited but may not be detected until after a security incident has occurred.
+Added: These vulnerabilities pose material risks to our business.
+Added: Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.
+Added: If we, or a third party upon whom we rely, experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions;
+Added: additional reporting, disclosure, notification and/or oversight requirements;
+Added: restrictions on processing sensitive data;
+Added: indemnification obligations;
+Added: negative publicity;
+Added: reputational harm;
+Added: monetary fund diversions;
+Added: interruptions in our operations (including availability of data);
+Added: financial loss;
+Added: and other similar harms.
+Added: Security incidents and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business.
+Added: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive, proprietary, or confidential information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
+Added: Our ability to quickly and successfully recover from a disaster, public health crisis, or other business continuity event could affect our ability to deliver our products and negatively impact our business reputation.
+Added: The occurrence of a natural disaster, public health crisis, or an act of terrorism, or a decision or need to close any of our facilities without adequate notice or time for making alternative arrangements could result in interruptions in the delivery of our products and services.
+Added: Our central business functions, including administration, human resources, finance services, legal, development, manufacturing and customer support depend on the proper functioning of our computer, telecommunication and other technology systems and operations, some of which are operated or hosted by third parties.
+Added: While we have business continuity programs in place, a disruption or failure of systems or operations because of a disaster, public health crisis or other business continuity event could cause data to be lost or otherwise delay our ability to complete sales and provide the highest level of service to our customers.
+Added: In addition, we could have difficulty producing accurate financial statements on a timely basis, which could have an impact on our ability to make timely disclosures and could adversely affect the trading value of our stock.
+Added: Although we endeavor to ensure there is redundancy in these systems and that they are regularly backed-up, there is no guarantee that data recovery in the event of a disaster would be effective or occur in an efficient manner.
+Added: Our operations are dependent upon our ability to protect our technology infrastructure against damage from business continuity events that could have a significant disruptive effect on our operations.
+Added: We could experience material adverse interruptions to our operations or delivery of services to our clients in a disaster recovery scenario.
If we fail to introduce new products and solutions or enhance our existing products and solutions to keep up with rapid technological change, demand for our products and solutions may decline.
The market for application and network performance management, service assurance, cybersecurity solutions, and business intelligence is highly competitive and characterized by rapid changes in technology, evolving industry standards, changes in customer requirements, a current high level of and increasing competition, and frequent product introductions and enhancements.
−Removed: Our success is dependent upon our ability to meet our customers' needs, which are driven by changes in technologies, new application technologies, new security risks and the emergence of new industry standards.
+Added: Our success is dependent upon our ability to meet our customers' needs, which are driven by changes in
+Added: technologies, new application technologies, new security risks and the emergence of new industry standards.
In addition, new technologies may shorten the life cycle for our products and solutions or could render our existing or planned products and services less competitive or obsolete.
−Removed: We must address demand from our customers for advancements in our products and services applications to support our customers' growing needs and requirements.
+Added: We must address demand from our customers for advancements in our products and services applications to support our customers' growing needs and requirements in complex networks.
To meet this challenge and remain competitive in the market, we must introduce new enhancements and additional form factors to our existing product lines and service offerings.
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If the introduction of these products and solutions is significantly delayed or if we are unsuccessful in bringing these products and solutions to market, our business, operating results, and financial condition could be materially and adversely impacted.
−Removed: We are developing and are already deploying a number of new products as well as enhancements to our existing products and offerings, including our new Omnis cybersecurity suite as well as software only solutions and products available in multiple form factors for most of our existing solutions.
+Added: We are developing and are already deploying a number of new products as well as enhancements to our existing products and offerings, including our new Omnis cybersecurity suite as well as additional software only solutions and products available in multiple form factors for most of our existing solutions.
We must invest in research and development to remain competitive in our industry.
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If we fail to develop and deploy new products and product enhancements on a timely basis, or if we fail to gain market acceptance of our new products, our revenues will likely decline, and we may lose market share to our competitors.
−Removed: Necessary licenses for third-party technology may not be available to us on commercially reasonable terms or at all.
−Removed: We currently and will in the future license technology from third parties that we use to produce or embed in our products.
−Removed: While we have generally been able to license required third-party technology to date, third-party licenses required in the future may not be available to us on commercially reasonable terms or at all.
−Removed: Third parties who hold exclusive rights to technology that we seek to license may include our competitors.
−Removed: If we are unable to obtain any necessary third-party licenses, we would be required to redesign our product or obtain substitute technology, which may not perform as well, be of lower quality or be more costly.
−Removed: The loss of these licenses or the inability to maintain any of them on commercially acceptable terms could delay development of future products or the enhancement of existing products.
−Removed: We may also choose to pay a premium price for such a license in certain circumstances where continuity of the licensed product would outweigh the premium cost of the license.
−Removed: The unavailability of these licenses or the necessity of agreeing to commercially unreasonable terms for such licenses could materially adversely affect our business, financial condition, operating results, and cash flows.
Our reliance on sole source suppliers could adversely impact our business.
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It is our practice to mitigate these risks by partnering with key suppliers, including distributors, to establish a variety of supply continuity practices.
−Removed: These practices may include, among other approaches, establishing buffer supply requiring suppliers to maintain adequate stocks of materials, bonding agreements with distributors, and use-based and kanban programs to set supply thresholds.
+Added: These practices may include, among other approaches, establishing buffer supply requiring suppliers to maintain adequate stocks of materials and use-based and kanban programs to set supply thresholds.
We also enter into escrow arrangements for certain technologies.
Where possible, we use widely available off the shelf hardware and work with large suppliers with multiple factories and other risk management practices.
−Removed: However, failure of supply or failure to execute effectively on any of these programs, including as a result of a public health crisis or geopolitical situation could result in our inability to obtain adequate deliveries or the occurrence of any other circumstance that would require us to seek alternative sources of supply for these components would impact our ability to ship our products on a timely basis.
+Added: However, failure of supply, including as a result of a public health crisis or geopolitical situation, or failure to execute effectively on any of these programs could result in our inability to obtain adequate supply or deliveries or to ship our products on a timely basis.
Moreover, if we are unable to continue to acquire from these suppliers on acceptable terms or should any of these suppliers cease to supply us with components for any reason, we may not be able to identify and integrate an alternative source of supply in a timely fashion or at the same costs.
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We offer technical support services with many of our products.
−Removed: We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services.
−Removed: We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors.
Our customers depend on our support organization to resolve issues relating to our products deployed on their networks.
A high level of support is critical for continued relationships with our customers.
−Removed: If we or our channel partners do not effectively assist our customers in deploying our products, succeed in helping our customers quickly resolve post-deployment issues, and provide effective ongoing support, it would adversely affect our ability to sell our products to existing customers and would harm our reputation with existing and potential customers.
+Added: If we or our channel partners do not effectively assist our customers in deploying our products, succeed in
+Added: helping our customers quickly resolve post-deployment issues, and provide effective ongoing support, it would adversely affect our ability to sell our products to existing customers and would harm our reputation with existing and potential customers.
Any failure to maintain high quality support and services would harm our operating results and reputation.
−Removed: Further, if customers demand these services, and we cannot adequately meet their demand, or if we cannot realize revenues in
−Removed: connection with our provision of services related to product support, it could have a material and adverse impact on our financial condition and results of operations.
+Added: Further, if customers demand these services, and we cannot adequately meet their demand, or if we cannot realize revenues in connection with our provision of services related to product support, it could have a material and adverse impact on our financial condition and results of operations.
The success of our business depends, in part, on the continued growth in the market for and the continued commercial demand for service delivery, service assurance and network security solutions.
We derive nearly all our revenue from the sale of products and services that are designed to allow our customers to assure the delivery of services through management of the performance and network security of applications across IP networks.
−Removed: We have actively expanded our operations in the past through acquisitions and organic growth and may continue to expand them in the future to gain share in the evolving market in which we operate.
+Added: We have actively expanded our operations in the past through acquisitions and organic growth and may continue to expand them in the future to gain share in the evolving markets in which we operate.
Therefore, we must be able to predict the appropriate features and prices for future products to address the market, the optimal distribution strategy, and the future changes to the competitive environment.
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To manage further growth effectively, we must hire, integrate, and retain highly skilled personnel qualified to manage our expanded operations.
−Removed: We will also need to continue to improve our financial and management controls, reporting systems, and procedures.
+Added: We will also need to maintain and continually improve our financial and management controls, reporting systems, and procedures as our business grows and evolves over time.
If we are unable to manage our growth effectively, our costs, the quality of our products, the effectiveness of our sales organization, attraction and retention of key personnel, our business, our operating results and financial condition could be materially and adversely impacted.
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Any disruptions or ineffectiveness relating to our systems implementations and enhancements could adversely affect our ability to process customer orders, ship products, provide services and support to our customers, bill and track our customers, fulfill contractual obligations, and otherwise run our business.
−Removed: Most of our employees are based outside of our headquarters.
−Removed: If we are unable to appropriately increase management depth and enhance succession planning, we may not be able to achieve our financial or operational goals.
+Added: Most of our employees are based outside of our headquarters and many of our employees work remotely, entirely or in part.
+Added: If we are unable to appropriately increase management depth and enhance succession planning, we may not be able to achieve our near- and long-term financial or operational goals.
It is also important to our continued success that we hire qualified employees, properly train them and manage out poorly performing personnel, all while maintaining our corporate culture and spirit of innovation.
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If the third parties we rely on for hosted data solutions for our internal network and information systems are subject to a security breach or otherwise suffer disruptions that impact the services we utilize, the integrity and availability of our internal information could be compromised causing the loss of confidential or proprietary information, damage to our reputation and economic loss.
−Removed: Our growth could suffer if the markets into which we sell our products and services experience cyclicality.
−Removed: Our growth will depend in part on the growth of the markets which we serve.
−Removed: We serve certain industries that have historically been cyclical and have experienced periodic downturns that have had a material adverse impact on demand for the products, software, and services that we offer.
−Removed: Any of these factors could adversely affect the business, financial condition, and results of operations of the company in any given period.
−Removed: For example, as a result of a significant downturn in domestic and
−Removed: global travel at the onset of the COVID-19 pandemic, our customers in the travel industry experienced decreases in revenue and, as a result, spent less on our products and our revenue in this sector declined.
−Removed: We or our suppliers may be affected by new regulations related to climate change and other environmental issues.
−Removed: We or our suppliers may become subject to new laws enacted with regards to climate change and other environmental issues.
+Added: We or our suppliers may be affected by new regulations related to climate change, sustainability, and other environmental issues.
+Added: We or our suppliers may become subject to new laws enacted with regards to climate change, sustainability, and other environmental issues.
If new laws are enacted, or current laws are modified in countries in which we or our suppliers operate, we could face increased costs to comply with these laws.
−Removed: These costs may be incurred across various levels of our supply chain to comply with new environmental regulations, as well as by us in connection with our manufacturing of products, including costs related to incorporation of substitute materials and other product re-design costs, as well as costs associated with product recalls.
−Removed: In addition, we may be unable to service existing products if certain materials are no longer compliant with new regulations, which could cause us to incur increased costs to satisfy service obligations to customers.
−Removed: Additionally, our flow of product may be impacted which could delay the recognition of revenue and have a materially adverse effect on our business.
+Added: These costs may be incurred across various levels of our supply chain to comply with new environmental regulations, as well as by us in connection with our design, manufacturing, and support of products, including costs related to incorporation of substitute materials and product re-design costs.
Our success depends, in part, on our ability to manage and leverage our distribution channels.
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Our channel partners have no obligation to purchase any products from us.
−Removed: Some of our distribution and channel partners also distribute and sell competitive products and services and the reduction in sales by these partners could materially reduce our revenues.
+Added: Some of our distribution and channel partners also distribute and sell competitive products and services and the reduction in sales of our products by these partners could materially reduce our revenues.
In addition, they could internally develop products that compete with our solutions or partner with our competitors and bundle or resell competitors' solutions, possibly at lower prices.
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Recruiting and retaining qualified channel partners and training them in the use of our technology and services and ensuring that they comply with our legal and ethical requirements requires significant time and resources throughout the relationship.
+Added: Our business and operations, and the operations of our customers, partners, and/or suppliers, may be adversely affected by epidemics and pandemics, such as the COVID-19 pandemic.
+Added: The COVID-19 pandemic and future epidemics and pandemics risk disrupting and adversely affecting our business operations and financial results, as well as the markets and communities in which we and our customers, suppliers and other business partners operate.
+Added: We face risks related to epidemics, pandemics, and other outbreaks of communicable diseases that adversely affect global commercial activity, economies, financial markets, and companies.
+Added: An epidemic or pandemic or other outbreak of communicable diseases, such as the COVID-19 pandemic, poses the risk that we or our customers, suppliers, and other business partners may be disrupted or prevented from conducting normal business activities for certain periods of time, the durations of which are uncertain, and may otherwise experience significant impairments of business activities.
+Added: For instance, as has been the case with the COVID-19 pandemic, federal, state, local, and foreign governments may put in place quarantines, executive orders, shelter-in-place orders, and similar government orders and restrictions to reduce the rate of infection and control the spread of the disease.
+Added: Such orders or restrictions, or the perception that such orders or restrictions could occur, may result in business closures, work stoppages, slowdowns and delays, travel restrictions and cancellation of events, among other effects that could affect productivity and disrupt our operations and those of our suppliers, customers, and business partners.
+Added: To protect our employees, contractors, customers, suppliers, and our local communities, and limit the effect of the COVID-19 pandemic on our operations, for a period of time many of our employees at our locations globally worked remotely, with exceptions for site-essential personnel (with protective measures and protocols in place).
+Added: On-site and work-from-home requirements and other restrictions on our employees, suppliers, customers, and business partners may change over time, whether becoming more or less restrictive, in light of the COVID-19 pandemic or other epidemics or pandemics and global responses thereto, and we may alter our operations as a result of requirements imposed by federal, state, or local authorities, or by foreign governments in countries in which we operate, or as we otherwise determine is in the best interests of our employees, suppliers, customers, business partners, and stockholders.
+Added: As part of our existing business continuity planning, we had established infrastructure and protocols to enable our employees to work from home during the pandemic.
+Added: However, future increases in the number of employees working remotely may cause disruptions to our business operations, including our ability to develop and design our products and services in a timely manner or meet required milestones or customer commitments, and this could have an adverse effect on our revenue and operating results.
+Added: In addition, we may determine that it is necessary to direct that employees engaged in manufacturing and support refrain from working on-site for an indeterminate period of time, and this could have an adverse effect on our revenue and operating results.
+Added: Furthermore, global travel was also sharply curtailed, and in some cases prohibited, as a result of the COVID-19 pandemic.
+Added: Our sales personnel often meet with customers or prospective customers in person to provide greater personalized service.
+Added: While our employees and customers adjusted to virtual meetings and have now resumed traveling at closer to normal levels, the inability of our sales personnel to meet with customers or prospective customers at a customer facility as a result of the COVID-19 pandemic or other epidemics or pandemics could have an adverse effect on our revenue and operating results.
+Added: In addition, we rely on third-party suppliers and manufacturers throughout the globe, which may be impacted by the COVID-19 pandemic or other epidemics or pandemics.
+Added: The COVID-19 pandemic has resulted in, and future epidemics or pandemics may result in, the extended shutdown of certain businesses and the closure of international borders throughout the world, which may result in disruptions to our supply chain, including from temporary closure of third-party supplier and manufacturer facilities, interruptions in product supply or restrictions on the export or shipment of our products, as well as the import of products into countries in which we operate.
+Added: These potential events could have an adverse effect on our revenues and operating results.
+Added: To the extent the COVID-19 pandemic or other future epidemic or pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this "Risk Factors" section, such as those relating to our quarterly revenue and operating results, the estimates made for our critical accounting policies, and the operation of internal controls over such estimates, as well as on our liquidity and on our ability to satisfy our indebtedness obligations and debt covenants.
Risks Related to Our Intellectual Property
+Added: Necessary licenses for third-party technology may not be available to us on commercially reasonable terms or at all.
+Added: We currently, and will in the future, license technology from third parties that we use to produce or embed in our products.
+Added: While we have generally been able to license required third-party technology to date, third-party licenses required in the future may not be available to us on commercially reasonable terms or at all.
+Added: If we are unable to obtain any necessary third-party licenses, we would be required to redesign our product or obtain substitute technology, which may not perform as well, be of lower quality or be more costly.
+Added: The loss of these licenses or the inability to maintain any of them on commercially acceptable terms could delay development of future products or the enhancement of existing products.
+Added: We may also choose to pay a premium price for such a license in certain circumstances where continuity of the licensed product would outweigh the premium cost of the license.
+Added: The unavailability of these licenses or the necessity of agreeing to commercially unreasonable terms for such licenses could materially adversely affect our business, financial condition, operating results, and cash flows.
Our success depends on our ability to protect our intellectual property rights.
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We are and may continue to be subject to claims by others, whether valid or not, that our products infringe on their intellectual property rights, patents, copyrights, or trademarks.
−Removed: These claims, whether or not valid, could require us to spend significant sums in litigation, pay damages or royalties, delay product shipments, reengineer our products, rename our products
−Removed: and rebuild name recognition or acquire licenses to such third-party intellectual property.
+Added: These claims, whether or not valid, could require us to spend significant sums in litigation, pay damages or royalties, delay product shipments, reengineer our products, rename our products and rebuild name recognition or acquire licenses to such third-party intellectual property.
We may not be able to secure any required licenses on commercially reasonable terms or secure them at all.
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If we take on additional indebtedness, the risks described above could increase.
−Removed: At our election, revolving loans under the Second Amended and Restated Credit Agreement bear interest at either (a) an Alternate Base Rate per annum equal to the greatest of (1) the Wall Street Journal prime rate;
−Removed: (2) the New York Federal Reserve Bank (NYFRB) rate plus 0.50% or (3) an adjusted one month LIBO rate plus 1%;
−Removed: or (b) a Term Benchmark Borrowing rate (for the interest period selected by us, subject to customary provisions regarding succession from LIBO rate to SOF rate in anticipation of the upcoming discontinuation of the LIBO rate), in each case plus an applicable margin.
−Removed: On July 27, 2017, the U.K.
−Removed: Financial Conduct Authority (FCA), which regulates LIBOR, announced that it will no longer require banks to submit rates for the calculation of LIBOR after 2021.
−Removed: Further, on March 5, 2021, the Intercontinental Exchange Benchmark Administration, the FCA-regulated and authorized administrator of LIBOR, announced, and the FCA confirmed, that one-week and two-month USD LIBOR settings would cease on December 31, 2021, and that the USD LIBOR panel for all other tenors will cease on June 30, 2023.
−Removed: There is no assurance that the administrator of LIBOR and/or regulators will not take further action that could impact the availability, composition or characteristics of LIBOR or the currencies and/or tenors for which LIBOR is published.
−Removed: There is uncertainty as to the performance of LIBOR during the transition period, the timing of the remaining transition from LIBOR and the performance of alternative interest rates.
−Removed: Such uncertainties could result in pricing, operational and legal implementation risks.
−Removed: In anticipation of the upcoming discontinuation of LIBOR, the Second Amended and Restated Credit Agreement includes customary provisions regarding succession from LIBOR to the Secured Overnight Financing Rate (SOFR) or certain other agreed upon replacement benchmark rates.
−Removed: Such provisions require the consent of certain parties, such as the administrative agent and the lenders, under certain circumstances.
−Removed: There is no guarantee that the necessary consents will be obtained.
−Removed: If such consents are not obtained, pricing, operational and legal implementation risks may also arise.
−Removed: If the methods of calculating a benchmark rate under the Second Amended and Restated Credit Agreement change from current methods for any reason, or if such benchmark rate ceases to perform as it historically has, or if we select an alternative benchmark rate, our interest expense and other costs associated with our outstanding indebtedness or any future indebtedness we incur under the Second Amended and Restated Credit Agreement may increase.
Any failure to meet our debt obligations could damage our business.
Our ability to meet our obligations under the Second Amended and Restated Credit Agreement will depend on market conditions and our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
−Removed: If we are unable to remain profitable, or if we use more cash than we generate in the future, our level of indebtedness at such time could adversely affect our operations by limiting or prohibiting our ability to obtain financing for additional capital expenditures, acquisitions and general corporate and other purposes.
+Added: If we are unable to remain profitable, or if we use more cash than we generate in the future, our level of indebtedness at such time could adversely affect our operations by limiting or prohibiting our ability to obtain financing for additional capital expenditures, acquisitions and general corporate purposes.
In addition, if we are unable to make payments as required under the Second Amended and Restated Credit Agreement, we would be in default under the terms of the loans, which could seriously harm our business.
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• obtaining lease financings.
−Removed: However, we may not be able to obtain additional capital when we want or need it, or capital may not be available on satisfactory terms.
−Removed: Furthermore, any additional capital may have terms and conditions that adversely affect our business, such as new financial or operating covenants, or that may result in dilution to our stockholders.
+Added: However, we may not be able to obtain additional capital when we want or need it, or capital may not be available on satisfactory terms, including in light of current macroeconomic conditions, such as heightened inflation and increasing interest rates, stock price volatility, bank failures and the risk of a potential recession.
+Added: Furthermore, any additional capital may have terms that adversely affect our business, such as new financial or operating covenants, or that may result in dilution to our stockholders.
We expect that existing cash, cash equivalents, marketable securities, cash provided from operations and our bank credit facilities will be sufficient to meet ongoing cash requirements.
However, our failure to generate sufficient cash as our debt becomes due or to renew credit lines prior to their expiration could materially adversely affect our business, financial condition, operating results, and cash flows.
−Removed: Risks Related to ESG Matters
+Added: Other Risks Related to Our Business
The failure to recruit and retain qualified personnel and plan for and manage the succession of key executives could hinder our ability to successfully manage our business, which could have a material adverse effect on our financial position and operating results.
−Removed: We operate in businesses where there is intense competition for experienced personnel in all our global markets and have, in some instances, experienced attrition of our employees to direct and indirect competitors.
+Added: We operate in businesses where there is intense competition for experienced personnel in all our global markets.
We depend on our ability to identify, recruit, hire, train, develop and retain qualified and effective professionals and to attract and retain talent needed to execute our business strategy.
Our future success depends in large part upon our ability to attract, train, motivate and retain highly skilled employees, particularly executives, sales and marketing personnel, software engineers, and technical support personnel.
−Removed: The complexity of our products, processing functionality, software systems and services require highly trained professionals.
+Added: The complexity of our products, software systems and services require highly trained professionals.
While we presently have a sophisticated, dedicated and experienced team of employees who have a deep understanding of our business lines, the labor market for these individuals has historically been very competitive due to the limited number of people available with the necessary technical skills and understanding.
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Our future success depends to a significant degree on the skills, experience and efforts of Anil Singhal, our President, Chief Executive Officer, and co-founder, and our other key executive officers and senior managers to work effectively as a team.
−Removed: Effective succession planning is also important for our
−Removed: long-term success.
+Added: Effective succession planning is also important for our long-term success.
Failure to ensure effective transfers of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.
The loss of one or more of our key personnel could have a material and adverse impact on our business, operating results, and financial condition.
−Removed: We must, therefore, plan for and manage the succession of key executives due to retirement, illness, or competitive offers elsewhere.
−Removed: Our disclosures, initiatives and goals related to ESG matters expose us to numerous risks, including risks to our reputation, business, financial performance and growth.
−Removed: As we identify ESG topics for voluntary disclosure, we have expanded and, in the future, may continue to expand our disclosures in these areas.
+Added: We must, therefore, plan for and manage the succession of key executives due to retirement, illness, or competitive offers.
+Added: Our disclosures, initiatives and goals related to environmental, social, and governance matters expose us to numerous risks, including risks to our reputation, business, financial performance and growth.
+Added: As we identify environmental, social, and governance (ESG) topics for voluntary disclosure, we have expanded, and, in the future, may continue to expand our disclosures in these areas.
Statements about our ESG initiatives and goals, and progress against those goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to our ESG goals on a timely basis, or at all, our reputation, business, financial performance and growth could be adversely affected.
−Removed: Other Risks Related to Our Business
We may not successfully complete acquisitions or integrate acquisitions we do make, which could impair our ability to compete and could harm our operating results.
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We compete with a large and growing number of providers of service assurance, application performance management solutions, network security offerings and network traffic analyzers and probes, as well as with providers of business intelligence services.
−Removed: In addition, leading network equipment, network security and service assurance and application technology vendors offer their own management solutions, including products which they license from other co mpetitors.
+Added: In addition, leading network equipment, network security and service assurance and application technology vendors offer their own management solutions, including products which they license from other competitors.
Some of our current and potential competitors have greater name recognition and substantially greater financial, management, marketing, service, support, technical, distribution and other resources than we do.
−Removed: In addition, some of our customers develop their own in-house solutions to meet their technologi cal needs.
+Added: In addition, some of our customers develop their own in-house solutions to meet their technological needs.
Further, in recent years some of our competitors have been acquired by larger companies that are seeking to enter or expand in the markets in which we operate.
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If we are unable to anticipate or react to these competitive challenges or if existing or new competitors gain market share in any of our markets, our competitive position could weaken and we could experience a decline in our sales that could adversely affect our business and operating results.
−Removed: This competition could result in increased pricing pressure, reduced profit margins, increased sales and marketing expenses, and failure to increase, or the loss of market share, any of which would likely have a material and adverse impact on our business, operating results and financial condition.
+Added: This competition could result in increased pricing pressure, reduced profit margins, increased sales and
+Added: marketing expenses, and failure to increase, or the loss of market share, any of which would likely have a material and adverse impact on our business, operating results and financial condition.
Uncertainties of regulation of the Internet and data traveling over the Internet could have a material and adverse impact on our financial condition and results of operations.
We could be materially adversely affected by increased regulation of the Internet and Internet commerce in any country where we operate, as well as access to or commerce conducted on the Internet.
−Removed: Further, governments may further regulate or restrict the sales, licensing, distribution, and export or import of certain technologies to certain countries.
+Added: Further, governments may change or increase regulation or restriction of sales, licensing, distribution, and exporting or importing of certain technologies to certain countries.
The adoption of additional regulation of the Internet and Internet commerce could decrease demand for our products, and, at the same time, increase the cost of selling our products, which could have a material and adverse effect on our financial condition and results of operations.
−Removed: We are subject to stringent and changing laws, regulations, standards, contractual obligations, and other obligations related to privacy, data protection, and data security.
−Removed: The actual, alleged, or perceived failure by us or the partners we work with to comply with such obligations could adversely affect our business, results of operations, and financial conditions.
−Removed: We are subject to numerous domestic and foreign laws and other obligations relating to privacy, data protection, and data security.
−Removed: The regulatory framework for privacy, data protection, and data security issues worldwide is rapidly evolving, and as a result, legal requirements and enforcement practices are likely to continue to evolve.
+Added: We are subject to stringent and evolving U.S.
+Added: state, local, and foreign laws, regulations, rules, contractual obligations, policies, and other obligations related to data privacy and security.
+Added: Our actual, or perceived failure to comply with such obligations could lead to regulatory investigations or actions;
+Added: fines and penalties;
+Added: disruptions of our business, results of operations;
+Added: reputational harm;
+Added: loss of revenue or profits;
+Added: and other adverse business consequences.
+Added: Our data processing activities may subject us to numerous data privacy and security obligations, such as various laws, regulations, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
+Added: The regulatory framework for data privacy and security issues worldwide is rapidly evolving, and as a result, legal requirements and enforcement practices are likely to continue to evolve.
In many jurisdictions, enforcement activities and consequences for noncompliance are rising.
−Removed: In the United States, these activities include enforcement actions in response to rules and regulations promulgated under the authority of federal agencies, state attorneys general, states' legislation, and consumer protection agencies.
−Removed: In addition, privacy advocates and industry groups in the United States have regularly proposed, and may propose in the future, self-regulatory security standards with which we may be required to comply.
−Removed: If we fail to follow these standards, we may incur significant fines or experience a significant increase in costs.
−Removed: Many states have enacted laws regulating the online collection, use, and disclosure of personal information and requiring that companies implement reasonable data security measures, such as the California Consumer Privacy Act of 2018.
−Removed: Virginia and Colorado also recently passed comprehensive privacy laws that take effect in 2023 and similar laws are being considered in other states and at the federal level.
+Added: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal information privacy laws, consumer protection laws, and other similar laws that in some instances are not consistent with laws of other jurisdictions.
Additionally, laws in all states and U.S.
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Compliance with these laws in the event of a widespread data breach is complex and costly and additional compliance measures will require investment and potential changes to our business process.
−Removed: The data protection landscape is also rapidly evolving internationally, and we expect there will continue to be new and proposed laws, regulations, and industry standards concerning privacy, data protection, and data security.
−Removed: We are subject to an increasing number of laws, regulations, and industry standards that apply to privacy and data security in other foreign jurisdictions in which we operate including the European Union’s General Data Protection Regulation, Brazil’s General Data Protection Law, Canada’s Personal Information Protection and Electronic Documents Act, and China’s Personal Information Protection Law, which all impose strict requirements for processing the personal data of individuals.
−Removed: Complying with foreign and domestic data protection laws may cause us to incur additional operational costs or require us to change our business practices.
−Removed: If we or the third parties we rely on to operate our business and deliver our services fail to comply, or are perceived as failing to comply, with our legal, contractual, or other obligations relating to privacy, data protection, or data security, or our policies and documentation relating to personal information, we could face governmental enforcement action;
−Removed: litigation with our customers, individuals or others, fines and civil or criminal penalties for us or company officials, obligations to cease offering our services or to substantially modify them in ways that make them less effective in certain jurisdictions, negative publicity and harm to our brand and reputation, and reduced overall demand for our services.
−Removed: Such developments could adversely affect our business, financial condition, and results of operations.
−Removed: Foreign currency exchange rates may adversely affect our financial statements.
−Removed: A material portion of our revenue is derived from international operations.
−Removed: Our consolidated financial results are reported in U.S.
−Removed: Most of the revenue and expenses of our foreign subsidiaries are denominated in local currencies.
−Removed: Given that cash is typically received over an extended period of time for many of our license agreements and given that a material and increasing portion of our revenue is generated outside of the United States, fluctuations in foreign exchange rates (including the Euro) against the U.S.
−Removed: dollar could result in substantial changes in reported revenues and operating results due to the foreign exchange impact upon translation of these transactions into U.S.
−Removed: In the normal course of business, we employ various hedging strategies to partially mitigate these risks, including the use of derivative instruments.
−Removed: These strategies may not be effective in fully protecting us against the effects of fluctuations from movements in foreign exchange rates, including the increased volatility in foreign exchange rates relating to the COVID-19 pandemic, the conflict between Russia and Ukraine and future global pandemics and other events.
−Removed: Fluctuations of the foreign exchange rates could materially adversely affect our business, financial condition, operating results, and cash flow.
−Removed: Additionally, sales and purchases in currencies other than the U.S.
−Removed: dollar expose us to fluctuations in foreign currencies relative to the U.S.
−Removed: dollar and may adversely affect our financial statements.
−Removed: Increased strength of the U.S.
−Removed: dollar increases the effective price of our products sold in U.S.
−Removed: dollars into other countries, which may require us to lower our prices or adversely affect sales to the extent we do not increase local currency prices.
−Removed: Decreased strength of the U.S.
−Removed: dollar could adversely affect the cost of materials, products, and services we purchase overseas.
−Removed: Sales and expenses of our non-U.S.
−Removed: businesses are also translated into U.S.
−Removed: dollars for reporting purposes and the strengthening or weakening of the U.S.
−Removed: dollar could result in unfavorable translation effects.
−Removed: In addition, we may invoice customers in a currency other than the functional currency of our business, and movements in the invoiced currency relative to the functional currency could also result in unfavorable translation effects.
−Removed: We also face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries.
+Added: Furthermore, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.
+Added: Our inability or failure to do so could result in adverse consequences.
+Added: Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security.
+Added: These obligations related to data privacy and security are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
+Added: Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
+Added: Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal information on our behalf.
+Added: In addition, we may be unable to transfer personal information from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.
+Added: Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal information to other countries.
+Added: In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal information to the United States and other countries whose data privacy and security laws it believes are inadequate.
+Added: Although there are currently various mechanisms that may be used to transfer personal information from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal information to the United States.
+Added: If there is no lawful manner for us to transfer personal information from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal information necessary to operate our business.
+Added: Additionally, companies that transfer personal information out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and industry groups.
+Added: In addition to data privacy and security laws, we are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
+Added: We publish privacy policies, marketing materials, and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
+Added: If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
+Added: If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:
+Added: government enforcement actions;
+Added: additional reporting requirements and/or oversight;
+Added: bans on processing personal information;
+Added: and orders to destroy or not use personal information.
+Added: Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to, loss of customers, inability to process personal information or to operate in certain jurisdictions, limited ability to develop or commercialize our products, expenditure of time and resources to defend any claim or inquiry, adverse publicity, or substantial changes to our business model or operations.
If we violate the U.S.
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export controls and government contracting laws, our business could be harmed.
−Removed: We earn a material portion of our total revenues from international sales.
−Removed: As a result, we must comply with complex foreign and U.S.
+Added: A material portion of our revenue is derived from international sales.
+Added: We must comply with foreign and U.S.
laws and regulations, such as the U.S.
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We are also subject to the U.K.
−Removed: Bribery Act and may be subject to certain anti-corruption laws of other countries in which we do business.
+Added: Bribery Act and may be subject to anti-corruption laws of other countries in which we do business.
In addition to anti-bribery and anti-corruption laws, we are also subject to the export and re-export control laws of the U.S., including the U.S.
−Removed: Export Administration Regulations (EAR) and the office of Foreign Asset Control (OFAC), as well as
+Added: Export Administration Regulations (EAR) and the office of Foreign Asset Control (OFAC), as well as to U.S.
government contracting laws, rules and regulations, and may be subject to government contracting laws of other countries in which we do business.
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Such violations could also adversely affect our reputation with existing and prospective customers, which could negatively impact our operating results and growth prospects.
−Removed: The current economic and geopolitical environment may impact some specific industries into which we sell and may lead our customers to delay or forgo technology investments and could have other impacts, any of which could materially adversely affect our business, financial condition, operating results and cash flows.
−Removed: Many of our customers are concentrated in certain industries, including financial services, public sector, healthcare, and the service provider market.
−Removed: Certain industries may be more acutely affected by economic, geopolitical, and other factors, including public heath crises, and changes in U.S.
−Removed: trade policy, than other sectors.
−Removed: Our public sector customers are affected by federal, state, and local budget decisions.
−Removed: To the extent that one or more of the sectors in which our customer base operates is adversely impacted, whether as a result of general conditions affecting all sectors or as a result of conditions affecting only those particular sectors, our business, financial condition and results of operations could be materially and adversely impacted.
−Removed: If companies in our target markets reduce capital expenditures, we may experience a reduction in sales, longer sales cycles, slower adoption of new technologies as well as downward pressure on the price of our products.
−Removed: There can be no assurance that any decrease in sales resulting from the COVID-19 pandemic will be offset by increased sales in subsequent periods.
−Removed: Although the magnitude of the impact of the COVID-19 pandemic on our business and operations remains uncertain, the continued spread of COVID-19 or the occurrence of other epidemics and the imposition of related public health measures and travel and business restrictions could adversely impact our business, financial condition, operating results and cash flows.
−Removed: International economic, political, legal, compliance and business factors could negatively affect our financial statements and growth.
−Removed: We expect to continue to develop our sales and presence outside the U.S.
−Removed: Our international business (and particularly our business in high-growth markets) is subject to risks that are customarily encountered in non-U.S.
−Removed: operations, any of which could negatively affect our business, financial condition, and results of operations.
General Risk Factors
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Actual results may vary from our guidance and the variations may be material.
−Removed: In light of the foregoing, investors are urged not to rely upon our guidance in making an investment decision regarding our common stock.
−Removed: Any failure to successfully implement our operating strategy or the occurrence of any of the events or circumstances set forth in this "Risk Factors" section in this report could result in the actual operating results being different from our guidance, and the differences may be adverse and material.
+Added: In light of the foregoing, investors are urged not to rely solely upon our guidance in making an investment decision regarding our common stock.
+Added: Any failure to successfully implement or execute our operating strategy or the occurrence of any of the events or circumstances set forth in this "Risk Factors" section in this report could result in the actual operating results being different from our guidance, and the differences may be adverse and material.
Our effective tax rate may fluctuate, which could increase our income tax expense and reduce our net income.
22 unchanged sentences
and other countries.
−Removed: Major developments in tax policy or trade relations, such as the imposition of unilateral tariffs on imported products, could have a material adverse effect on our results of operations, financial condition, and cash flows.
+Added: Major developments in tax policy or trade relations, such as the imposition of unilateral tariffs or international sanctions on imported products, could have a material adverse effect on our results of operations, financial condition, and cash flows.
+Added: Foreign currency exchange rates may adversely affect our financial statements.
+Added: A material portion of our revenue is derived from international operations.
+Added: Our consolidated financial results are reported in U.S.
+Added: Most of the revenue and expenses of our foreign subsidiaries are denominated in local currencies.
+Added: Given that cash is typically received over an extended period of time for many of our license and support agreements and given that a material portion of our revenue is generated outside of the United States, fluctuations in foreign exchange rates (including the Euro) against the U.S.
+Added: dollar could result in substantial changes in reported revenues and operating results due to the foreign exchange impact upon translation of these transactions into U.S.
+Added: In the normal course of business, we employ various hedging strategies to partially mitigate these risks, including the use of derivative instruments.
+Added: These strategies may not be effective in fully protecting us against the effects of fluctuations from movements in foreign exchange rates, including the increased volatility in foreign exchange rates relating to the COVID-19 pandemic, the war in Ukraine and future global pandemics and other events.
+Added: Fluctuations of the foreign exchange rates could materially adversely affect our business, financial condition, operating results, and cash flow.
+Added: Additionally, sales and purchases in currencies other than the U.S.
+Added: dollar expose us to fluctuations in foreign currencies relative to the U.S.
+Added: dollar and may adversely affect our financial statements.
+Added: Increased strength of the U.S.
+Added: dollar increases the effective price of our products sold in U.S.
+Added: dollars into other countries, which may require us to lower our prices or adversely affect sales.
+Added: Decreased strength of the U.S.
+Added: dollar could adversely affect the cost of materials, products, and services we purchase overseas.
+Added: Sales and expenses of our non-U.S.
+Added: businesses are also translated into U.S.
+Added: dollars for reporting purposes and the strengthening or weakening of the U.S.
+Added: dollar could result in unfavorable translation effects.
+Added: In addition, we may invoice customers in a currency other than the functional currency of our business, and movements in the invoiced currency relative to the functional currency could also result in unfavorable translation effects.
+Added: We also face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries.
Our estimates and judgments related to critical accounting policies could be inaccurate.
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• sales of shares of our common stock by us, our officers, directors, or other stockholders;
−Removed: • other events or factors, including those resulting from public health crises, war, incidents of terrorism, or responses to these events.
+Added: • other events or factors, including those resulting from global and macroeconomic conditions, including heightened inflation, rising interest rates, bank failures, and a potential recession, and speculation regarding the same, as well as public health crises, the war in Ukraine or other wars and related geopolitical tension, incidents of terrorism, or responses to these events.
In addition, the market for technology stocks and the stock markets in general have experienced extreme price and volume fluctuations.
5 unchanged sentences
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.