9 unchanged sentences
Risks Related to Our Business and Industry
−Removed: • our ability to achieve our business plans, vision, and objectives, including our growth and go-to-market strategies, successfully and in a timely manner;
−Removed: • macroeconomic or geopolitical conditions, industry trends, and technological developments, including disruptions and delays in global supply chains;
−Removed: • the competitive market, including our competitive position, advantages and ability to compete effectively, and ability to increase our market share;
−Removed: • our ability to capitalize on opportunities arising from Broadcom’s acquisition of VMware and related changes to its product portfolio and business model;
−Removed: • our ability to predict future financial performance from our historical financial performance;
−Removed: • our ability to address customer needs and expand or maintain our customer base;
−Removed: • our platform, solutions, products, services, and technology, including their interoperability and availability with and on third-party platforms and technologies, any undetected defects in our solutions, and current and future product roadmaps, including expanding our artificial intelligence-related capabilities;
−Removed: • our ability to form new or maintain and strengthen existing, strategic alliances and partnerships, as well as our ability to manage any changes thereto;
−Removed: • our reliance on key manufacturers, suppliers or other vendors;
−Removed: • any business model transitions.
+Added: • our ability to execute our business strategy, including our growth initiatives, go-to-market strategy, investments in new products and technologies, and efforts to expand our market opportunity;
+Added: • macroeconomic, geopolitical conditions, trade, supply-chain and other external conditions that may affect customer spending, demand for our products and services, and our operating results;
+Added: • competition, technological change and shifts in customer preferences, including developments relating to cloud computing, AI and virtualization technologies, and our ability to maintain or improve our competitive position and market share;
+Added: • our ability to capitalize on opportunities arising from changes within the VMware ecosystem following Broadcom’s acquisition of VMware;
+Added: • our ability to attract, retain and expand customers, maintain renewals and increase customer adoption of our platform, products and services;
+Added: • our ability to develop, enhance, support and maintain our platform, solutions, products, services, and technology, including interoperability with third-party technologies, the availability of third-party resources and technologies, and the successful execution of our product roadmaps, including expanding our AI-related capabilities;
+Added: • our dependence on channel, OEM, ecosystem, cloud, manufacturing and other strategic partners, suppliers and service providers;
+Added: • our international operations and ability to manage the operational, regulatory, legal, tax and staffing complexities associated with conducting business globally.
Risks Related to Cybersecurity and Intellectual Property
−Removed: • the occurrence of security breaches, improper access to or disclosure of our data or user data, and other cyber incidents or undesirable activity on our platform;
−Removed: • our ability to obtain, maintain, protect, and enforce our intellectual property rights.
+Added: • cybersecurity incidents, data breaches, malicious attacks, vulnerabilities, operational disruptions or other compromises affecting us, our products and services, our customers or third parties on which we rely;
+Added: • evolving privacy, data protection, cybersecurity and AI laws, regulations, contractual obligations and customer requirements;
+Added: • our ability to obtain, maintain, protect, enforce and defend our intellectual property rights, and claims alleging that our products, services or technologies infringe the intellectual property rights of others.
Risks Related to Employee Matters
−Removed: • our reliance on key personnel and ability to attract, train, incentivize, retain, and/or ramp to full productivity, qualified employees and key personnel.
+Added: • our ability to attract, integrate, develop, motivate and retain qualified employees, executives and other key personnel, and maintain an effective and productive workforce, including our sales organization.
Risks Related to Financial, Accounting, Regulatory, Tax, and Other Legal Matters
• our ability to maintain an effective system of internal controls;
−Removed: • any changes to, or failure to comply with, laws and regulations, as well as the impact of any regulatory investigations and enforcement actions and other legal proceedings;
−Removed: • complex and evolving U.S.
−Removed: and foreign privacy, data use and data protection, content, competition, consumer protection, and other laws and regulations.
+Added: • litigation, regulatory investigations, enforcement actions, and compliance with applicable laws and regulations, including those relating to anti-corruption, competition, government contracting, trade controls and sanctions;
+Added: • changes in tax laws, tax regulations and tax interpretations, including international tax developments, and our ability to manage related tax risks.
Risks Related to Our Convertible Senior Notes and Revolving Credit Facility
−Removed: • our ability to service and repay our outstanding convertible notes, including the sufficiency of our cash, or our ability to raise necessary funds, to settle conversions of the notes, repay the notes at maturity, or repurchase the notes upon a fundamental change;
−Removed: • our ability to comply with the covenants in and service any borrowings under our revolving credit facility;
−Removed: • the impact of certain provisions of our outstanding convertible notes on our financial condition and operating results, as well as the value of the notes and the price of our securities.
+Added: • our ability to service, refinance, repurchase or repay our indebtedness, including our outstanding convertible notes and any borrowings under our revolving credit facility;
+Added: • the potential liquidity, accounting, dilution and other impacts arising from conversion, repurchase or settlement of our convertible notes;
+Added: • restrictions and obligations contained in our revolving credit facility and other indebtedness.
Risks Related to Ownership of our Securities
−Removed: • any volatility and decline in the market price and/or trading volume of our securities, including as a result of financial or industry analyst reports or a lack thereof;
−Removed: • any dilutive impact of actual or perceived sales of substantial amounts of our securities in the public markets and/or the conversion of our outstanding convertible notes;
−Removed: • any limitations on the ability of holders of our securities to influence corporate matters due to certain provisions of our organizational documents or under Delaware law;
−Removed: • restrictions on our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees;
−Removed: • our plans regarding payment of any future dividends.
−Removed: General Risk Factors
−Removed: • investors’ and other stakeholders’ expectations of our performance relating to environmental, social and governance factors.
+Added: • volatility in the market price and trading volume of our securities, including due to changes in our operating performance, our ability to meet our publicly announced guidance and other investor expectations, analyst coverage and broader market conditions;
+Added: • dilution resulting from equity compensation, future equity issuances, sales of our securities, share-settled obligations and conversion of our outstanding convertible notes;
+Added: • provisions of our organizational documents or under Delaware law that may limit stockholder influence, delay changes in control or restrict stockholders' choice of forum;
+Added: • our share repurchase program and our current intention not to pay dividends.
+Added: General Risks
+Added: • natural disasters, extreme weather events, pandemics, geopolitical conflicts and other events outside of our control;
+Added: • acquisitions, investments, divestitures and other strategic transactions.
Risks Related to Our Business and Industry
−Removed: We have a history of losses, and we may not be able to maintain profitability on a GAAP or non-GAAP basis.
−Removed: We have incurred GAAP net losses in annual periods from our inception through fiscal 2024, including GAAP net losses of $254.6 million and $124.8 million for fiscal 2023 and 2024, respectively.
−Removed: While we generated GAAP net income in fiscal 2025 and non-GAAP net income in fiscal 2023, fiscal 2024, and fiscal 2025, we may not be able to sustain profitability in future periods.
−Removed: As of July 31, 2025, we had an accumulated deficit of $4.9 billion.
−Removed: We expect to continue making significant investments to grow our business.
−Removed: If we fail to grow our revenue or manage our operating expenses effectively, we may not be able to continue generating net income on a GAAP or non-GAAP basis.
−Removed: Our continued focus on growth may negatively impact our ability to achieve or maintain profitability in the near term.
−Removed: We intend to continue balancing our growth against our operating expenses.
−Removed: However, maintaining this balance may make it challenging to sustain profitability on a GAAP basis over time.
−Removed: Further, expenditures related to expanding our research and development efforts, sales and marketing efforts, infrastructure and other such investments may not ultimately grow our business, revenue or result in continued profitability.
−Removed: Although we achieved GAAP profitability in fiscal 2025, we did not do so in prior years, and there is no assurance that we will be able to maintain profitability in future periods.
−Removed: If we are ultimately unable to maintain profitability at the level anticipated by analysts and our stockholders, the price of our securities may decline, potentially significantly.
Adverse or uncertain macroeconomic or geopolitical conditions or reduced IT spending by our end customers may adversely impact our business, revenues and profitability.
−Removed: Our business, operations and performance are dependent in part on worldwide market, economic and financial conditions and events that may be outside of our control, such as global, regional, and local economic developments, fiscal, monetary and tax policies, high inflation, elevated interest rates, recessionary pressures, political and social unrest, geopolitical tensions, the evolving policy landscape following the 2024 U.S.
−Removed: elections and related shifts in domestic and international policy, terrorist attacks, hostilities or the perception that hostilities may be imminent, military conflict, war, including the ongoing military conflict in Ukraine and related sanctions, the continuing conflict in the Middle East, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events.
+Added: Our business, operations and performance are dependent in part on worldwide market, economic and financial conditions and events that may be outside of our control, such as global, regional, and local economic developments, fiscal, monetary and tax policies, high inflation, elevated interest rates, recessionary pressures, political and social unrest, geopolitical tensions, changes in domestic and international governmental policies and priorities, terrorist attacks, hostilities or the perception that hostilities may be imminent, military conflict, war, including the ongoing military conflict in Ukraine and related sanctions, continuing conflicts in the Middle East, including the conflict involving Iran, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events.
These conditions and events may adversely affect demand for enterprise computing infrastructure solutions and reduce the economic health and IT spending budgets of our current and prospective end customers.
5 unchanged sentences
The enterprise IT market is rapidly changing and expanding, and we expect competition to continue to intensify in the future from both established competitors and new market entrants.
−Removed: We operate in the intensely competitive cloud infrastructure and platform services markets and compete with a broad range of companies that sell software and hardware to build and operate private clouds, integrated systems and standalone storage and servers, as well as cloud services providers and managed service providers.
+Added: We operate in the intensely competitive cloud infrastructure, platform services and enterprise AI markets and compete with a broad range of companies that sell software and hardware to build and operate private clouds, integrated systems, standalone storage and servers, and platforms supporting modern and agentic AI workloads, as well as cloud services providers and managed service providers.
These markets are characterized by constant change, rapid innovation, and evolving licensing and consumption models.
−Removed: We face competition from a broad range of providers, including, among others:
−Removed: • software providers that offer virtualization, containerization, infrastructure and management products to build and operate enterprise and hybrid clouds, such as VMware by Broadcom, Microsoft, and Red Hat;
−Removed: • providers of public cloud infrastructure and SaaS-based offerings, such as AWS, Google Cloud, Oracle Cloud, and Azure;
−Removed: • traditional IT systems vendors, such as Dell, Fujitsu, HPE, Hitachi Vantara, Lenovo, Pure Storage, Inc., NetApp, Inc., and Huawei Technologies Co., Ltd., many of which offer integrated systems that bundle servers, storage and networking solutions, as well as standalone server and storage products.
Competition generally varies by workload and customer segment, and customers often evaluate multiple alternatives simultaneously.
1 unchanged sentence
As the market in which we compete continues to develop, we expect it will continue to attract new companies as well as existing larger vendors.
−Removed: Some of our competitors may also expand their product and service offerings, acquire or invest in competing businesses or emerging technologies, offer lower pricing or aggressive discounting, bundle their products with other products and capabilities (including artificial intelligence, machine learning, generative AI, and emerging agentic AI capabilities), provide closed technology platforms, partner with other companies to develop joint solutions, or otherwise leverage their scale, brand recognition or ecosystem relationships to gain a competitive advantage.
+Added: Some of our competitors may also expand their product and service offerings, acquire or invest in competing businesses or emerging technologies (including agentic AI and AI factories), offer lower pricing or aggressive discounting, bundle their products with other products and capabilities (including AI, machine learning, generative AI, and agentic AI capabilities), provide closed technology platforms, partner with other companies to develop joint solutions, or otherwise leverage their scale, brand recognition or ecosystem relationships to gain a competitive advantage.
Furthermore, as we expand our product offerings, we may expand into new markets, and we may encounter additional competitors in such markets.
10 unchanged sentences
As a result, we cannot assure you that our solutions will compete favorably, and any failure to do so could adversely affect our business, operating results and prospects.
−Removed: In addition, in recent years, an increasing number of customers have been allocating their IT spending toward artificial intelligence, machine learning, and generative AI capabilities.
−Removed: The IT infrastructure market for artificial intelligence, machine learning, and generative AI workloads is also expected to be an intensely competitive and rapidly evolving market.
−Removed: We may not be able to capitalize on opportunities arising from Broadcom’s acquisition of VMware and related changes to its product portfolio and business model.
−Removed: We believe that our opportunity to increase market share has grown since VMware (now known as VMware by Broadcom), one of our main competitors, was acquired by Broadcom in November 2023.
−Removed: Since the acquisition, Broadcom has made changes to VMware by Broadcom’s product portfolio, pricing, and partner programs, which we believe have led many VMware by Broadcom customers to explore alternatives to its virtualization and cloud infrastructure solutions.
−Removed: However, a variety of factors could adversely affect the timing and our ability to convert these opportunities.
−Removed: For example, many prospective customers may remain under multi-year VMware by Broadcom contracts or may defer migration until their next hardware or software refresh cycle.
−Removed: In addition, Broadcom may respond aggressively to our pursuit of these opportunities, and we may not be able to compete effectively across customer segments or geographies.
−Removed: Other factors that could limit our ability to capitalize on these opportunities include the length of enterprise sales cycles and customer evaluation of migration and interoperability considerations, and the availability of alternative solutions.
−Removed: Some customers may choose to remain with VMware by Broadcom due to existing investments, perceived switching risks, or contract obligations, while others may select competing vendors offering different architectures, pricing models, or cloud strategies.
−Removed: If we are unable to capitalize on these opportunities in a timely or cost-effective manner, our business and operating results could be materially and adversely affected.
−Removed: The markets in which we compete are rapidly evolving, which make it difficult to forecast end customer adoption rates and demand for our solutions.
+Added: In addition, in recent years, an increasing number of customers have been allocating their IT spending toward AI, machine learning, and agentic AI capabilities.
+Added: The IT infrastructure market for AI, machine learning, and agentic AI workloads is also expected to be an intensely competitive and rapidly evolving market.
+Added: If we fail to anticipate and respond to rapidly evolving technologies, customer requirements and spending priorities, including developments in public cloud, cloud-native and AI technologies, demand for our solutions and our competitive position could be adversely affected.
The markets in which we compete are rapidly evolving.
−Removed: Accordingly, our future financial performance will depend in large part on the allocation of spending in traditional IT markets and on our ability to adapt to new market demands.
−Removed: Currently, sales of our solutions are dependent in large part upon replacement of spending in traditional markets, including x86 servers, storage systems and virtualization software.
−Removed: In addition, as we continue to develop new solutions designed to address new market demands, sales of our solutions will in part depend on capturing new spending in these markets, including public cloud, hybrid cloud and cloud native services.
−Removed: Moreover, in recent years, an increasing number of customers have been allocating their IT spending toward artificial intelligence, machine learning, and generative AI capabilities.
−Removed: The IT infrastructure market supporting AI workloads is intensely competitive and rapidly evolving, and our ability to compete effectively in this space will depend on our ability to deliver differentiated, scalable, and AI-ready infrastructure solutions.
−Removed: If the markets in which we compete experience a shift in customer demand, or if customers in these markets focus their new spending on, or shift their existing spending to, public cloud solutions or other solutions that do not interoperate with our solutions more quickly or more extensively than expected, our solutions may not compete as effectively, if at all.
−Removed: It is also difficult to predict end customer demand or adoption rates for our solutions or the future growth of our market.
−Removed: In addition, we have estimated the size of our total addressable and serviceable available markets based on internally generated data and assumptions, as well as data published by third parties, which we have not independently verified.
+Added: Our performance depends in part on how customers allocate spending among traditional servers, storage and virtualization products;
+Added: private and hybrid cloud infrastructure;
+Added: public cloud services;
+Added: cloud-native technologies;
+Added: and AI infrastructure and services.
+Added: Customer demand and adoption rates in these markets are difficult to predict and may differ from our expectations.
+Added: We must continually develop, commercialize and support new and enhanced solutions that address changing customer requirements for performance, scalability, security, interoperability, application mobility, reliability and cost.
+Added: Our investments in new markets and technologies, including AI-related products and services, may not produce differentiated offerings, achieve broad market acceptance or generate anticipated returns.
+Added: Delays in introducing announced solutions, or a failure to anticipate technological changes or evolving industry standards, could harm our reputation, reduce demand and impair our competitive position.
+Added: If customers in these markets focus their new spending on, or shift their existing spending to, public cloud solutions or other solutions that do not interoperate with our solutions more quickly or more extensively than expected, our solutions may not compete as effectively, if at all.
+Added: Public cloud providers may become more competitive as a result of lower prices, improved interoperability, performance, security or application compatibility, or increased customer demand for AI capabilities available through public cloud services.
+Added: These developments could reduce demand for our solutions.
+Added: We have estimated the size of our total addressable and serviceable available markets based on internally generated data and assumptions, as well as data published by third parties, which we have not independently verified.
While we believe these estimates are reasonable, such information is inherently imprecise and subject to a high degree of uncertainty.
2 unchanged sentences
Even if our total addressable market meets our size estimates and experiences growth, we may not continue to grow our share of the market.
−Removed: If end customers do not adopt our solutions, our ability to grow our business and operating results may be adversely affected.
−Removed: Traditional IT infrastructure architecture is entrenched in the data centers of many of our end customers because of their historical financial investment in existing IT infrastructure architecture and the existing knowledge base and skill sets of their IT administrators.
−Removed: As a result, our sales and marketing efforts often involve extensive efforts to educate our end customers as to the benefits and capabilities of our solutions, particularly as we introduce new products and continue to pursue large organizations as end customers.
−Removed: If we fail to achieve market acceptance of our solutions, our ability to grow our business and our operating results will be adversely affected.
−Removed: As we target some of our sales efforts at larger enterprise customers, we may face greater costs, longer sales cycles, greater competition, increased pricing pressure, deployment and customization challenges, and less predictability in our ability to close sales, and we may have to delay revenue recognition for some complex transactions, all of which could harm our business and operating results.
+Added: We may not be able to capitalize on opportunities resulting from Broadcom’s changes to VMware's products, pricing, licensing, business practices and broader ecosystem.
+Added: We believe that our opportunity to increase market share has grown since VMware (now known as VMware by Broadcom), one of our main competitors, was acquired by Broadcom in November 2023.
+Added: Since the acquisition, Broadcom has made changes to VMware’s product portfolio, pricing, partner programs, support models, certification requirements and other aspects of the VMware ecosystem, which have led many VMware customers to evaluate, adopt or consider alternatives to VMware's virtualization and cloud infrastructure solutions.
+Added: However, a variety of factors could adversely affect our ability to convert these opportunities and the timing and extent to which we may realize benefits from them.
+Added: For example, some prospective customers may remain subject to multi-year contractual commitments, defer migration until their next hardware or software refresh cycle, or delay migration initiatives due to budgetary, operational or resource constraints, including the availability, cost and procurement lead times of server hardware and other infrastructure required to support a migration.
+Added: Because customers’ contract renewal, infrastructure refresh, procurement and migration timelines vary, these opportunities may arise in multiple waves over an extended period and may not result in customer commitments or revenue within the periods we anticipate.
+Added: In addition, customers evaluating alternative platforms may determine that the anticipated benefits of migration do not justify the associated costs, disruption, resource requirements or implementation risks and may elect to continue operating VMware environments rather than migrate to our platform.
+Added: Customers may also migrate only a portion of their workloads to our platform, retain existing infrastructure, deploy workloads in public clouds or select other solutions, which could limit our opportunity even where we are selected as a vendor.
+Added: Our ability to capitalize on these opportunities may also be limited by lengthy enterprise sales and evaluation cycles, the need to support customers’ existing infrastructure investments (including storage platforms and related technologies), hardware availability, the availability of qualified personnel and partner resources to plan and implement migrations, and customers’ prioritization of other technology initiatives.
+Added: In addition, Broadcom has implemented, and may continue to implement, changes to VMware products, pricing, licensing, support models, technical requirements, certification programs, partner programs, migration tools, interfaces, interoperability resources, commercial terms or other aspects of the VMware ecosystem that may increase migration complexity and costs, delay customer migration projects, influence customer platform decisions, or otherwise reduce our ability to capitalize on these opportunities.
+Added: Broadcom may continue to compete aggressively for these customers, and we may not be able to compete effectively for these opportunities across customer segments or geographies.
+Added: If we are unable to capitalize on these opportunities in a timely or cost-effective manner, or if the timing or magnitude of these opportunities differs from our expectations, our business and operating results could be materially and adversely affected.
+Added: Our focus on larger enterprise customers and transactions may result in longer and less predictable sales cycles, greater costs and pricing pressure, and increased variability in our operating results.
Over time, our sales pipeline has evolved to include a higher mix of larger deal opportunities.
Sales to these end customers involve risks that may not be present, or that are present to a lesser extent, with sales to smaller end customers.
−Removed: These risks include:
−Removed: • longer sales cycles and the associated risk that substantial time and resources may be spent on a potential end customer that elects not to purchase our solutions;
−Removed: • competition from companies that traditionally target larger enterprises, service providers and government entities and that may have pre-existing relationships or purchase commitments from such end customers;
−Removed: • increased purchasing power and leverage held by large end customers in negotiating contractual arrangements with us;
−Removed: • more stringent requirements in our support service contracts, including demand for quicker support response times and penalties for any failure to meet support requirements.
−Removed: Large organizations often undertake a significant evaluation process that results in a lengthy sales cycle.
+Added: Large enterprise transactions generally involve longer and less predictable sales cycles, greater competition, increased customer negotiating leverage, more demanding contractual, implementation, support and acceptance requirements, greater payment flexibility, and increased variability in transaction timing, structure and outcomes.
+Added: These factors may increase our costs of pursuing and supporting such opportunities and may delay revenue recognition or cash collections.
+Added: Large organizations often undertake a significant evaluation process, and customers may evaluate multiple vendors and consumption models simultaneously.
Although we have a channel sales model, our sales representatives typically engage in direct interaction with our prospective end customers as well as our distributors and resellers.
−Removed: We typically provide evaluation products to these end customers and may spend substantial time, effort and money in our sales efforts to these prospective end customers.
−Removed: In addition, product purchases by large organizations are frequently subject to budget constraints, multiple approvals and unanticipated administrative, processing and other delays.
−Removed: Finally, large organizations typically have longer implementation cycles, require greater product functionality and scalability, require a broader range of services, demand that vendors take on a larger share of risks, require acceptance provisions that can lead to a delay in revenue recognition, expect greater payment flexibility (which may delay cash collections and negatively impact our free cash flow), and may also have a greater ability to resist any attempts to pass on increases in our operating and procurement costs.
−Removed: Given these variables, it can be difficult for us to estimate when an expected sale from a large organization, service provider or government entity may occur, and our ability to accurately forecast our future operating results may be adversely affected.
+Added: We may provide evaluation products and spend substantial time, effort and money without assurance of a sale.
+Added: Such purchases may be delayed by budget constraints, multiple approvals, unanticipated administrative, processing and other delays, or customers' infrastructure refresh cycles.
+Added: In addition, large customers often require broader functionality and services, extensive contractual commitments and pricing concessions, which can further extend sales cycles and make it difficult to predict whether and when a transaction will close or when related revenue or cash flows will be recognized.
If we fail to realize an expected sale from a large end customer in a particular quarter or at all, our business and operating results could be adversely affected.
−Removed: All of these factors can add further risk to business conducted with these end customers.
Our sales of offerings that support external storage may negatively impact sales of our core HCI offering and alter customer purchasing behavior, which could negatively impact our results of operations.
−Removed: As part of our strategy to expand our addressable market and meet the needs of customers invested in legacy three-tier IT infrastructure, we recently expanded our offerings to include support for qualified third-party external storage platforms.
−Removed: While we believe this flexibility may facilitate customer adoption of our platform in brownfield environments and enable longer-term expansion opportunities, it may also negatively impact sales of our core HCI offering.
−Removed: In addition, support for external storage may increase the complexity of our offerings and require additional resources for integration, testing, and customer success.
+Added: As part of our strategy to expand our addressable market and meet the needs of customers invested in legacy three-tier IT infrastructure, we have expanded our offerings to include support for qualified third-party external storage platforms.
+Added: While we believe this flexibility may facilitate customer adoption of our platform in brownfield environments and enable longer-term expansion opportunities, it may change the mix, timing or economics of our sales, including by reducing sales of our core HCI offering.
+Added: Supporting external storage may increase the complexity of our offerings and require additional resources for integration, testing, and customer success.
It also increases our reliance on third-party technologies, over which we have limited control.
If these third-party platforms experience performance issues, customer dissatisfaction, or changes in strategic direction that affect interoperability with our solutions, our reputation and customer relationships could be negatively impacted.
−Removed: Furthermore, if customers adopt our solutions to support external storage as a permanent architecture rather than as a transitional step toward full HCI adoption, our investment in this capability may not yield the anticipated return, which could adversely affect our operating results.
−Removed: Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.
−Removed: As a result, it can be difficult for us to predict when, if ever, a particular customer will choose to purchase our solutions, which may cause our operating results to fluctuate significantly.
−Removed: Our sales efforts involve educating our end customers about the uses and benefits of our solutions, including their technical capabilities and cost saving potential.
−Removed: End customers often undertake an evaluation and testing process that can result in a lengthy sales cycle.
−Removed: Increasing competition and the availability or emergence of competing infrastructure, virtualization, and containerization solutions, as well as different consumption models, often result in customers evaluating multiple vendors at the same time, which can further lengthen the sales cycle.
−Removed: We spend substantial time and resources on our sales efforts without any assurance that our efforts will produce any sales.
−Removed: Platform purchases are frequently subject to budget constraints, multiple approvals and unanticipated administrative, processing and other delays.
−Removed: In addition, because our platform is deployed on a hardware platform and many prospective customers have invested in legacy three-tier infrastructures consisting of separate servers, storage systems, and storage area networks, customers may not be ready to consider adopting our platform unless and until they are due for a hardware refresh, which occurs at intervals.
−Removed: These factors and the legacy relationships that our end customers have with existing IT vendors sometimes lead to unpredictable sales cycles, which make it difficult for us to predict when end customers may purchase solutions from us.
−Removed: The unpredictable nature of our sales cycles may be increased in future periods as we continue to focus our sales efforts more heavily on major accounts and large deals.
−Removed: Our business and operating results will be significantly affected by the degree to which and speed with which organizations adopt our solutions.
−Removed: In addition, over time, our sales pipeline has evolved to include a higher mix of larger deal opportunities.
−Removed: Because larger deal opportunities often take longer to close and require more levels of review from the customer's executive team, involve greater competition, and have greater variability in timing, outcome and deal structure, this recent trend is expected to drive greater variability in our ability to land new end customers and expand sales to existing end customers, and our top-line results may be adversely affected.
−Removed: We have experienced significant growth in prior periods, and we may not be able to sustain or manage any future growth effectively.
+Added: If customer adoption or the resulting sales mix differs from our expectations, our investment in this capability may not yield the anticipated return, which could adversely affect our operating results.
+Added: If we do not effectively manage our operations, resources and investments as our business and product portfolio evolve, we may not achieve our strategic objectives.
We have expanded our overall business and operations significantly in prior periods.
−Removed: Our employee headcount has increased significantly since our inception.
−Removed: We anticipate that our operating expenses will increase in the long term as we scale our business, including in developing and improving our new and existing solutions, expanding our sales and marketing capabilities and global coverage, and in providing general and administrative resources to support our growth.
−Removed: In addition, as we continue to grow our business in the long term, we must effectively train, integrate, develop, motivate, and retain a large number of new employees, as well as existing employees who are promoted or moved into new roles, while maintaining the effectiveness of our business execution.
+Added: As our product portfolio, markets and operations evolve, we must appropriately allocate resources, manage organizational and operational changes, and align our personnel, systems and processes with our strategic priorities.
The failure to manage these changes could significantly delay the achievement of our strategic objectives.
−Removed: In particular, our success depends heavily on our ability to ramp new sales teams in a fast and effective manner and retain those sales teams.
−Removed: In recent years, we have also seen higher-than-normal attrition among our sales representatives and while we are actively recruiting additional sales representatives, it will take time to replace, train, and ramp them to full productivity, and if we are unable to do so, we may not be able to achieve our growth targets.
−Removed: We must also continue to improve and expand our IT and financial infrastructure, management systems and product management and sales processes.
−Removed: We expect that our future growth will continue to place a significant strain on our management, operational and financial resources, and we may not be able to sustain or manage any future growth effectively.
−Removed: We may make investments or otherwise incur costs associated with future growth that may not translate into revenues or otherwise result in the realization of their anticipated benefits within the expected timeframe or at all, and the return on these investments may be lower, if any, or may develop more slowly than we expect.
−Removed: If we are unable to sustain or manage our growth effectively, we may not be able to take advantage of market opportunities.
−Removed: We also may fail to satisfy end customers’ requirements, maintain product quality, execute on our business plan, or respond to competitive pressures, any of which could adversely affect our business, operating results, financial condition, and prospects.
−Removed: Our historical financial performance, including revenue growth, may not be indicative of our future performance.
−Removed: Our historical financial performance, including revenue growth, may not be indicative of our future performance.
−Removed: Over the years, we have undergone several business model transitions, including our transition to focus on software-only sales and our transition to a subscription-based business model.
−Removed: These transitions can make it difficult to compare our current results against our historical results.
−Removed: Operating under a subscription-based business model results in differences in revenue recognition compared to our previous life-of-device model.
−Removed: For example, subscription contracts typically have shorter durations than the assumed five-year duration of contracts under our previous life-of-device license model, which typically results in lower upfront revenue per transaction.
+Added: We must continue to improve our IT and financial infrastructure, management systems and product management and sales processes.
+Added: We may make investments or otherwise incur costs that may not result in anticipated benefits within the expected timeframe or at all.
+Added: If we are unable to manage our operations and resources effectively, we may not be able to take advantage of market opportunities, satisfy end customers’ requirements, maintain product quality, execute on our business plan, or respond to competitive pressures, any of which could adversely affect our business, operating results, financial condition, and prospects.
If other IT vendors do not cooperate with us to ensure that our solutions interoperate with their products, including by providing us with early access to their new products or information about their new products, our product development efforts may be delayed or impaired, our solutions could become less attractive to end customers and our business, operating results and prospects may be adversely affected.
−Removed: Our solutions provide a platform on which software applications and hypervisors from different software providers run.
−Removed: As a result, our solutions must interoperate with our end customers’ existing hardware and software infrastructure, specifically their networks, servers, software, and operating systems, as well as the applications that they run on this infrastructure, which may be manufactured and provided by a wide variety of vendors and OEMs.
+Added: Our solutions must interoperate with our end customers’ existing hardware and software infrastructure, specifically their networks, servers, software, and operating systems, as well as the applications that they run on this infrastructure, which may be manufactured and provided by a wide variety of vendors and OEMs.
In addition to ensuring that our solutions interoperate with these hardware and software products initially, we must regularly update our software to ensure that our solutions continue to interoperate with new or updated versions of these hardware and software products.
Current or future providers of hardware, software applications, hypervisors, or data management tools could make changes that would diminish the ability of our solutions to interoperate with them.
+Added: Such providers may also modify, limit, discontinue, or impose additional restrictions on access to software tools, interfaces, certifications, technical documentation, support arrangements, or other resources that are important to enabling interoperability with their products.
Significant additional time and effort may be necessary to ensure the continued compatibility of our solutions, which might not be possible at all.
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Vendors may not provide us with early or any access to their technology and products, assist us in these development efforts, certify our solutions, share with or sell to us any application programming interfaces ("APIs"), formats, or protocols we may need, or cooperate with us to support end customers.
+Added: Vendors may also impose commercial, technical, contractual, certification, licensing, support, or other requirements that increase the complexity, cost, or time required for us to maintain compatibility with their products or support mutual customers.
+Added: Such requirements may also adversely affect customer migration initiatives, increase switching costs, delay platform-transition decisions or otherwise reduce the attractiveness or practicality of alternative solutions.
If they do not provide us with the necessary access, assistance or proprietary technology on a timely basis or at all, we may experience product development delays or be unable to ensure the compatibility of our solutions with such new technology or products.
Some of these vendors also sell solutions that compete directly or indirectly with our solutions and therefore may not be incentivized to cooperate with us to ensure interoperability, certify our solutions, or support joint customers.
−Removed: To the extent that vendors develop products that compete with ours, they have in the past, and may again in the future, withhold their cooperation, decline to share access, certify our solutions or sell or make available to us their proprietary APIs, protocols or formats or engage in practices to actively limit the functionality, compatibility, certification, or support of our products.
+Added: To the extent that vendors develop products that compete with ours, they have in the past, and may again in the future, withhold their cooperation, decline to share access, certify our solutions or sell or make available to us their proprietary APIs, protocols or formats, limit access to interoperability tools or resources, or engage in practices to actively limit the functionality, compatibility, certification, or support of our products.
If any of the foregoing occurs, our product development efforts may be delayed or impaired, our solutions could become less attractive to end customers resulting in a decline in sales, which could reduce demand for our solutions, impair our competitive position, and adversely affect our business, operating results, and prospects.
−Removed: If we fail to successfully execute on our plan to sell more cloud services, which are sold on a ratable subscription-basis, our results of operations could be adversely affected.
−Removed: We have sold and anticipate selling more of our products and services as cloud-based offerings - which include offerings hosted on public cloud infrastructure as well as part of the Nutanix Cloud Platform - on a ratable subscription basis.
−Removed: While cloud-based offerings currently make up a small portion of our business, selling these offerings has required, and will continue to require, a considerable investment of resources and will continue to divert resources and increase costs, especially in cost of license and other revenues, in any given period.
−Removed: We have also made, and intend to continue to make, investments in the supporting infrastructure for such cloud-based offerings that we host and may not recoup the costs of such investments.
−Removed: Such investments of resources may also not improve our long-term growth and results of operations.
−Removed: Further, the increase in some costs associated with our cloud-based services may be difficult to predict over time, especially in light of our lack of historical experience with the costs of delivering cloud-based versions of our solutions.
−Removed: We believe our plan has certain advantages;
−Removed: however, it also presents a number of risks to us including, but not limited to, the following:
−Removed: • arrangements entered into on a ratable subscription basis may delay when we can recognize revenue, even when compared to similar term-based subscription sales, which we currently recognize upfront, and can require up-front costs, which may be significant;
−Removed: • since revenue is recognized ratably over the term of the customer agreement, any decrease in customer purchases of our ratable subscription-based products and services will not be fully reflected in our operating results until future periods.
−Removed: This will also make it difficult for us to increase our revenue through additional ratable subscription sales in any given period;
−Removed: • cloud-based ratable subscription arrangements are generally under short-term agreements.
−Removed: Accordingly, our customers generally have no long-term obligation to us and may cancel their subscription at any time, even if our customers are satisfied with our cloud-based subscription products;
−Removed: • there is no assurance that the cloud-based solutions we offer on a ratable subscription basis, including new products that we may introduce, will receive broad marketplace acceptance.
−Removed: If we fail to properly execute on our plan to sell more of our products and services as cloud-based offerings on a ratable subscription basis, our business and operating results would be adversely affected, and the price of our securities could decline.
−Removed: If we fail to develop or introduce new or enhanced solutions on a timely or cost-effective basis, our ability to attract and retain end customers could be impaired and our brand, reputation and competitive position could be harmed.
−Removed: We operate in a dynamic environment characterized by rapidly changing technologies, industry standards and technological obsolescence.
−Removed: We must continually create valuable software solutions and integrate these solutions across hardware platforms.
−Removed: To compete successfully, we must design, develop, market, and sell new or enhanced solutions that provide increasingly higher levels of performance, capacity, scalability, security, interoperability, application mobility, and reliability and meet the cost expectations of our end customers.
−Removed: The introduction of new products by our competitors, the market acceptance of products based on new or alternative technologies, including generative and agentic AI capabilities, or the emergence of new industry standards could render our existing or future solutions obsolete or less attractive to end customers.
−Removed: Any failure to anticipate or develop new or enhanced solutions or technologies in a timely or cost-effective manner in response to technological shifts, including those driven by AI, could result in decreased revenue and harm to our business and prospects.
−Removed: Any new feature or application that we develop or acquire may not be introduced in a timely or cost-effective manner and may not achieve broad market acceptance and investments in research and development or efforts to optimize our engineering cost structure may not be successful.
−Removed: In particular, if we fail to timely release new products, technology or services that we previously announced, our brand and reputation could be harmed.
−Removed: For example, in May 2023 we announced Project Beacon, our multi-year effort to deliver a portfolio of data-centric infrastructure-as-a-service and platform-as-a-service-level services available natively anywhere, including on the Nutanix Cloud Platform or on public clouds.
−Removed: In May 2025, we launched Cloud Native AOS, the first product from Project Beacon.
−Removed: If we fail to introduce new or enhanced solutions that meet the needs of our end customers, such as Project Beacon, or penetrate new markets in a timely fashion, we may lose market share, and our business, operating results, and prospects could be adversely affected.
−Removed: Developments or improvements in enterprise IT infrastructure technologies may materially and adversely affect the demand for our solutions.
−Removed: Significant developments in enterprise IT infrastructure technologies, such as advances in storage, virtualization, containers, networking, disaster recovery, edge computing, management software, and public cloud and hybrid cloud infrastructure solutions, may materially and adversely affect our business, operating results and prospects in ways we do not currently anticipate.
−Removed: Any failure by us to develop new or enhanced technologies or processes, to react to changes or advances in existing technologies or to correctly anticipate these changes or advances as we create and invest in our product roadmap, could materially delay our development and introduction of new solutions, which could result in the loss of competitiveness of our solutions, decreased revenue and a loss of market share to competitors.
−Removed: In addition, public cloud infrastructure offers alternatives to the on-premises infrastructure deployments that our platform currently primarily supports.
−Removed: Various factors could cause the rate of adoption of public cloud infrastructure to increase, including decreases in the price of public cloud offerings, increased interoperability with on-premises infrastructure solutions that compete with our solutions, and improvements in the ability of public cloud providers to deliver reliable performance, enhanced security, better application compatibility, and more precise infrastructure control.
−Removed: In addition, the rate of adoption of public cloud infrastructure could increase due to increased customer interest in artificial intelligence, machine learning, and generative AI capabilities that may be offered by public cloud providers.
−Removed: Any of these factors could make our platform less competitive as compared to the public cloud and could materially and adversely affect the demand for our solutions.
−Removed: Investing in our AI capabilities introduces risks, which, if realized, could adversely impact our business.
−Removed: We have made, and expect to continue making, investments in our AI capabilities across our business, products, and services, including efforts to position the Nutanix Cloud Platform as a preferred platform for running enterprise AI workloads.
−Removed: AI technologies are complex and rapidly evolving, and we face significant competition from other companies and are subject to an evolving regulatory landscape.
−Removed: The introduction of AI technologies into new or existing products and services may result in new or enhanced governmental or regulatory scrutiny, litigation, privacy, confidentiality or security risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation, or financial results.
−Removed: For example, the European Union has enacted the AI Act and in the United States, new AI-related laws and regulations are emerging such as the Colorado AI Act, the California AI Transparency Act, the Utah Artificial Intelligence Policy Act, and the Texas Responsible AI Governance Act, with numerous more being proposed at the federal, state, and local levels.
−Removed: These laws and regulations could require us to comply with various requirements depending on the nature and categorization of AI, and our role.
−Removed: This may result in expending resources and additional costs to comply with these requirements, change our business practices, or provide additional infrastructure, policies, safeguards, and personnel to support the ongoing governance and oversight of such AI technologies, including notice, transparency, and AI risk assessment and mitigation obligations.
−Removed: For example, in the United States, in 2025 the current presidential administration rescinded an executive order relating to the safe and secure development of AI technologies that was previously implemented by the former administration in 2023.
−Removed: The administration then issued a new executive order that, among other things, requires certain agencies to develop and submit to the president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded executive order.
−Removed: In July 2025, the current administration further issued America’s AI Action Plan, focusing on the three pillars of innovation, infrastructure, and international diplomacy and security in AI, and seven underlying principles.
−Removed: The current administration may continue to rescind other existing federal orders and/or administrative policies relating to AI technologies, or may implement new executive orders and/or other rule making relating to AI technologies in the future.
+Added: Our continued investment in and integration of our AI technologies and capabilities exposes us to operational, legal, and security risks, which, if realized, could adversely impact our business.
+Added: We have made, and expect to continue making, investments in our AI technologies and capabilities across our business, products, and services, including efforts to position the Nutanix Cloud Platform as a preferred platform for running enterprise AI workloads.
+Added: AI technologies are complex, rapidly evolving, and subject to significant uncertainty, including with respect to technical performance, reliability, customer adoption, competitive differentiation, and the legal and regulatory frameworks that may apply to their development, deployment, and use.
+Added: Our development, integration, offering or use of AI technologies, including with or in new or existing products and services, may result in new or enhanced governmental or regulatory scrutiny, litigation, privacy, data protection, confidentiality, intellectual property or cybersecurity risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation, or financial results.
+Added: As we integrate more agentic AI workflows into our platform, actions taken or suggested by AI-powered agents acting without human oversight could be incorrect, unintended, unauthorized, or harmful, which could expose us to contractual disputes, indemnity obligations, litigation, regulatory investigations, and reputational harm.
+Added: The use of generative AI by our workforce in our operations and code development processes poses ownership and security risks with respect to our codebase, given legal uncertainties surrounding AI-generated works and the potential for security flaws in output code, and may lead to errors in our decision-making and solution development.
+Added: Furthermore, our internal adoption of AI tools to optimize our own business processes may cause unforeseen operational disruptions, fail to deliver anticipated cost efficiencies, or introduce new vulnerabilities into our internal workflows.
+Added: The regulatory landscape governing AI technologies is rapidly evolving and increasingly fragmented across the United States, the European Union, and other jurisdictions and we are subject to an evolving and complicated legislative patchwork governing AI.
+Added: For example, the European Union has enacted the AI Act and a number of U.S.
+Added: states have enacted or proposed AI-related laws and regulations, including the Colorado AI Act, the California AI Transparency Act, the Utah Artificial Intelligence Policy Act, the Texas Responsible AI Governance Act, and other laws addressing automated decision-making, transparency, disclosure, risk management, and governance.
+Added: Additional AI-related laws, regulations, standards, and guidance may be adopted at the federal, state, local, and international levels.
+Added: These frameworks, laws, and regulations could require us to comply with various requirements depending on the purpose, functionality, and risk categorization of AI, the data processed, and our role.
+Added: These emerging, changing, or conflicting AI-related compliance obligations may result in expending significant resources and additional costs to comply, change our business practices, or provide additional infrastructure, policies, safeguards and operational controls and testing, and personnel to support the ongoing governance and oversight of such AI technologies, including notice, transparency, and AI risk assessment and mitigation obligations.
+Added: The current U.S.
+Added: presidential administration has, and may continue to, issue, modify or rescind existing federal orders and/or administrative policies relating to AI technologies in the future.
Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance with old frameworks or meet new obligations.
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AI technologies may use algorithms, datasets, or training methodologies that may be flawed or contain deficiencies that may be difficult to detect during testing.
−Removed: AI technologies, including generative AI, may create content that appears correct but is factually inaccurate, flawed, or biased.
+Added: AI technologies, including generative AI, may produce output or create content that appears correct but is factually inaccurate, flawed, biased, misleading, harmful, incomplete, or otherwise hallucinatory.
Use of such content may be to the detriment of the user, or it may lead to discriminatory or other adverse outcomes, which may expose us to brand or reputational harm, competitive harm, regulatory scrutiny and fines, and/or legal liability.
+Added: Our integration of third-party AI models introduces compounding uncertainties, as these providers may change model outputs, capabilities, accuracy, and behavior without advance notice, creating novel risks related to product reliability, data integrity, third-party claims, and regulatory compliance that we may not be able to anticipate or promptly mitigate.
Further, AI technologies may repurpose data beyond its original intent or without the consent of an individual where required, or involve unintended cross-border transfers, challenging privacy principles and potentially resulting in privacy-related claims, liability, or regulatory scrutiny.
−Removed: As we expand our use of AI technologies, we may be required to update our agreements, policies, and controls to address these risks and meet evolving customer and regulatory expectations.
−Removed: Our growth depends on our existing end customers renewing or upgrading their subscriptions and support and entitlement agreements and making additional purchases of software licenses and software upgrades, and the failure of our end customers to do so could harm our business and operating results.
−Removed: Our future success depends on our existing end customers renewing or upgrading their subscription and support and entitlement agreements and making additional purchases of software licenses and software upgrades.
−Removed: If our end customers do not renew or upgrade their subscription and support and entitlement agreements and/or purchase additional software licenses or software upgrades, our revenue may decline, and our operating results may be harmed.
−Removed: In order for us to maintain or improve our operating results, we depend on our existing end customers renewing their subscription agreements as well as their support and entitlement agreements or purchasing additional solutions.
−Removed: End customers may choose not to renew their subscription agreements or support and entitlement agreements, or purchase additional solutions, because of several factors, such as dissatisfaction with our platform, solutions, support, or prices (including relative to competitive offerings), reductions in our end customers’ spending levels or other causes outside of our control.
−Removed: If our existing end customers do not purchase new solutions or renew or upgrade their subscription agreements or support and entitlement agreements, our revenue may grow more slowly than expected or may decline, and our business and operating results may be adversely affected.
+Added: As we expand our use of AI technologies, we may be required to update our agreements, policies, disclosures, governance programs, controls, and risk management processes to address these risks and meet evolving customer, legal, regulatory, and market expectations.
+Added: We may not be able to do so in a timely, effective, or cost-efficient manner.
+Added: If any of the foregoing risks materialize, or if our AI-related practices are perceived as insufficient, unlawful, unreliable, insecure, or inconsistent with customer, regulatory, or public expectations, our business, operations, financial condition, reputation, and prospects could be adversely affected.
+Added: Because our business depends on manufacturers of hardware and physical components, including our OEM partners, to timely and cost-effectively produce and ship the hardware platforms on which our software runs, we are susceptible to supply chain disruptions, delays, quality events, and pricing fluctuations, which have adversely affected, and could further adversely affect, our business.
+Added: Our business depends on manufacturers (including Supermicro and our OEM partners) to assemble and/or produce the hardware platforms on which our software runs (including both the Nutanix-branded NX series hardware platforms and the various third-party hardware platforms that are included on our server hardware compatibility and validation list) as well as various products that are beyond our control or the control of such manufacturers.
+Added: This reliance exposes us to direct and indirect risks beyond our control, including reduced control over quality assurance, product costs, product availability, supply chain disruptions and delays, and potential reputational harm and brand damage.
+Added: We may not be able to discover, manage, and/or remediate such risks in a timely manner or at all.
+Added: Key components of the server hardware on which our software is validated to run, including those sourced from limited or single-source suppliers, have in the past been, and may in the future be, affected by supply shortages or delivery delays.
+Added: We generally acquire components only as needed and do not enter into long-term supply contracts for these components.
+Added: Consequently, if we or our suppliers inaccurately forecast demand for our solutions, our suppliers may have inadequate inventory, which could increase the prices we must pay for substitute components.
+Added: Our reliance on these suppliers exposes us to risks regarding production and component costs, timely delivery, and capacity constraints.
+Added: Furthermore, qualifying a new component or changing key suppliers can be expensive and time-consuming, and could cause disruptions.
+Added: In addition, increases in hardware platform prices, whether due to component shortages or other cost pressures, could reduce customer demand for our software if customers delay or scale back purchases of the hardware platforms that are validated to run our solutions.
+Added: Customers may also respond to rising hardware costs by reevaluating their overall IT budgets or seeking to reduce total solution costs, which could adversely affect demand for our software and put pressure on pricing and margins.
+Added: For example, beginning in the second quarter of fiscal 2026, we have faced constraints affecting the availability of certain hardware components at manufacturers.
+Added: These constraints have resulted in higher hardware pricing in the market and extended hardware lead times, which vary across hardware vendors.
+Added: Higher hardware pricing, together with extended hardware lead times, have impacted, and may continue to impact, customers' ability to deploy and consume our software, which may affect the timing of revenue recognition and cash flows from period to period and, in certain instances, may result in some customers delaying projects or otherwise seeking greater flexibility with licensing.
+Added: Our business and results of operations will be significantly affected by our success in leveraging our relationships with our channel and OEM partners and expanding our network of cloud and ecosystem partners.
+Added: Furthermore, fulfilling orders for the hardware platforms on which our software runs may not be a priority for such manufacturers in guiding their business decisions and operational commitments.
+Added: If we fail to manage our relationships with such manufacturers effectively, or if such manufacturers experience delays, disruptions or increased manufacturing lead times, component lead-time disruptions, capacity constraints, or quality control problems in their operations or are unable to address our or our end customers’ requirements for or concerns about timely delivery, our ability to sell our solutions to our end customers could be severely impaired due to the lack of availability of validated physical hardware platforms, and our customers' ability, or willingness, to consume our software may be materially impacted or delayed, which could adversely affect our business and operating results, competitive position, brand and reputation, as well as our relationships with affected customers.
+Added: In particular, we rely substantially on Supermicro to manufacture, assemble and test, the Nutanix-branded NX series hardware platforms.
+Added: Our agreement with Supermicro does not contain long-term manufacturing commitments or price assurances, and is subject to annual renewal and termination rights.
+Added: Increases in component costs, without a corresponding increase in the price of our NX series solutions, could require a reduction to the amount that an end customer pays for our software, thereby adversely affecting our revenue.
+Added: The inability of Supermicro or other OEM manufacturers to produce adequate supplies of hardware platforms could cause a delay in our customers’ ability to consume our software, adversely impacting our order fulfillment, business, operating results and prospects.
+Added: If we are required to change the manufacturer for the assembly and testing of our NX-branded hardware platforms, we may lose revenue, incur increased costs and damage our channel partner and end customer relationships.
+Added: We may also decide to switch or bring on additional hardware OEM manufacturers for the assembly and testing of our NX-branded hardware platforms in order to better meet our needs.
+Added: Switching to or bringing on a new OEM partner and commencing production can be expensive and time-consuming and may cause delays in order fulfillment at our existing OEM partners and contract manufacturer or cause other disruptions.
+Added: As of July 31, 2026, we had approximately $163.0 million in the form of guarantees to our contract manufacturer related to certain components.
+Added: We may not be able to sustain profitability on a GAAP or non-GAAP basis.
+Added: Although we generated GAAP net income in fiscal 2025 and 2026 and non-GAAP net income in fiscal 2024, fiscal 2025, and fiscal 2026, we may not be able to sustain profitability in future periods.
+Added: We intend to continue investing in growth opportunities, including research and development, sales and marketing initiatives, infrastructure and other areas of our business.
+Added: Balancing growth investments with operating discipline may make it challenging to sustain our current levels of profitability, operating margins, or cash generation over time.
+Added: These investments may increase our expenses before generating corresponding revenue and may not produce their anticipated benefits.
+Added: If we fail to grow our revenue, manage our operating expenses effectively, or realize the expected benefits of our investments, we may not be able to sustain profitability on a GAAP or non-GAAP basis.
+Added: If we are unable to sustain profitability at levels anticipated by analysts or investors, the market price of our securities could decline, potentially significantly.
+Added: Our growth depends on our existing end customers renewing or upgrading their subscriptions and support and maintenance agreements and making additional purchases of software licenses and software upgrades, and the failure of our end customers to do so could harm our business and operating results.
+Added: Our future success depends on our existing end customers renewing or upgrading their subscription and support and maintenance agreements and making additional purchases of software licenses and software upgrades.
+Added: If our end customers do not renew or upgrade their subscription and support and maintenance agreements and/or purchase additional software licenses or software upgrades, our revenue may decline, and our operating results may be harmed.
+Added: In order for us to maintain or improve our operating results, we depend on our existing end customers renewing their subscription agreements as well as their support and maintenance agreements or purchasing additional solutions.
+Added: End customers may choose not to renew their subscription agreements or support and maintenance agreements, or purchase additional solutions, because of several factors, such as dissatisfaction with our platform, solutions, support, or prices (including relative to competitive offerings), reductions in our end customers’ spending levels or other causes outside of our control.
+Added: If our existing end customers do not purchase new solutions or renew or upgrade their subscription agreements or support and maintenance agreements, our revenue may grow more slowly than expected or may decline, and our business and operating results may be adversely affected.
We rely primarily on indirect sales channels for the distribution of our solutions, and disruption within these channels or underperformance by our channel partners could adversely affect our business, operating results and cash flows.
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If we fail to devote sufficient resources to support and expand our network of channel partners, our business may be adversely affected.
−Removed: Maintaining strong indirect sales channels for our products and effectively leveraging our channel partners and OEMs is important to our growth strategy, and the failure to effectively manage these relationships may lead to higher costs and reduced revenue.
−Removed: Although we believe that this transition will make our sales channels more efficient and broader reaching in the long term in these markets, there is no guarantee that this new distribution model will increase our sales in the short term or allow us to sustain our gross margins.
−Removed: Any potential delays or confusion during the transition process to our new partners may negatively affect our relationship with our existing end customers and channel partners and may cause us to lose prospective end customers or additional business from existing end customers or cause a decline in renewal rates with existing end customers.
−Removed: Upon completion of the transition to the new sales model, we will be more reliant on fewer channel partners, which may reduce our contact with our end customers making it more difficult for us to establish brand awareness, ensure proper delivery and installation of our software, support ongoing end customer requirements, estimate end customer demand, respond to evolving end customer needs, and obtain subscription renewals from end customers.
+Added: Maintaining strong indirect sales channels for our products and effectively leveraging our channel partners and OEMs is important to our strategy, and the failure to effectively manage these relationships may lead to higher costs and reduced revenue.
+Added: Our reliance on channel partners also may reduce our direct contact with end customers, making it more difficult to forecast demand, understand and respond to customer requirements, support customers and obtain renewals.
Substantially all of our sales to government entities have been made indirectly through our channel partners.
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If our operating results or any of our key financial and performance metrics in any particular period fall below analyst or investor expectations, the market price of our securities would likely decline, potentially significantly.
−Removed: Factors that are difficult to predict and that could cause our operating results to fluctuate include, but are not limited to:
−Removed: • the timing and magnitude of bookings, and the license start dates of subscriptions in any quarter as well as the timing of ARR and/or GAAP revenue recognition associated with those transactions, which may diverge due to a variety of factors;
−Removed: • subscription renewal rates;
−Removed: • the timing of subscription renewals, such as subscription renewals that occur earlier than expected, which may have the effect of moving expected bookings and revenue from future periods to the current period;
−Removed: • our ability to attract new end customers and retain and increase sales to existing end customers;
−Removed: • disruptions in our sales channels or shifts in our relationships with important channel, OEM, ecosystem and cloud partners, and changes in their go-to-market priorities, incentive structures or terms;
−Removed: • the timing of revenue recognition for our sales;
−Removed: • reductions in end customers’ budgets for information technology purchases;
−Removed: • delays in end customers’ purchasing cycles or deferments of end customers’ purchases in anticipation of new products or updates from us or our competitors;
−Removed: • fluctuations in demand and competitive pricing pressures for our solutions;
−Removed: • the lengths of our contract durations;
−Removed: • the mix of solutions sold, and the mix of revenue between product and support, entitlements and other services;
−Removed: • our ability to develop, introduce and ship in a timely manner new solutions and product enhancements that meet customer requirements, and market acceptance of such new solutions and product enhancements;
−Removed: • the timing of product releases or upgrades or announcements by us or our competitors;
−Removed: • any change in the competitive dynamics of our markets, including consolidation or partnerships among our competitors or partners, new entrants, shifts in customer preferences, or discounting of prices;
−Removed: • the amount and timing of expenses to grow our business and the extent to which we are able to take advantage of economies of scale or to leverage our relationships with OEM or channel partners;
−Removed: • the costs associated with acquiring new businesses and technologies and the follow-on costs of integrating and consolidating the results of acquired businesses;
−Removed: • the amount and timing of stock-based compensation expenses incurred as a result of granting equity awards to attract, retain, and motivate employees and key personnel;
−Removed: • our ability to control the costs of our solutions and their key components, or to pass along any cost increases to our end customers;
−Removed: • general economic, industry and market conditions and other events that may be outside of our control, such as political and social unrest, terrorist attacks, hostilities, war, malicious human acts, climate change, natural disasters (including extreme weather), supply chain disruption or shortages, pandemics or other major public health concerns, and other similar events;
−Removed: • future accounting pronouncements, changes in accounting policies, and changes in how we define or calculate key performance metrics.
−Removed: The occurrence of any one of these risks could negatively affect our operating results in any particular quarter, which could cause the price of our securities to decline.
+Added: Our operating results may fluctuate as a result of the timing and magnitude of bookings, license start dates, renewals, contract durations, customer purchasing decisions and the related timing of ARR and revenue recognition, which may not coincide.
+Added: Demand for our solutions may be affected by customer budgets, purchasing cycles, transaction timing, competitive conditions, pricing pressures, changes in customer preferences and the pace of adoption of new and existing products and services.
+Added: Our operating results may also be affected by our ability to attract and retain customers, changes in our relationships with channel, OEM, ecosystem and cloud partners, the mix of products and services we sell, the amount and timing of investments, acquisitions, integration activities, stock-based compensation and other expenses, and broader macroeconomic, political, supply-chain, industry and market conditions.
+Added: In addition, future accounting pronouncements, changes in accounting policies, and changes in how we define or calculate key performance metrics may affect the comparability of our results between periods.
+Added: Any of these factors could negatively affect our operating results in a particular period and cause the price of our securities to decline.
Because a significant portion of our revenue is recognized ratably over the term of the contractual service period, downturns or upturns in sales are not immediately reflected in full in our results of operations.
Subscription revenue accounts for the substantial majority of our revenue, comprising 94%, 95%, and 95% of our total revenue for fiscal 2024, 2025, and 2026, respectively.
−Removed: A significant portion of our subscription revenue is revenue from software entitlement subscriptions, support subscriptions and SaaS offerings, which is recognized ratably over the contractual service period.
+Added: A significant portion of our subscription revenue is revenue from software maintenance subscriptions, support subscriptions and SaaS offerings, which is recognized ratably over the contractual service period.
As a result, a significant portion of our revenue that we report for each fiscal quarter represents the recognition of deferred revenue from subscription agreements entered into during previous fiscal quarters.
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However, any such decline will negatively affect our revenue for future quarters.
−Removed: Accordingly, the effect of significant downturns in sales, our failure to achieve our internal sales targets, a decline in the market acceptance of our services, or a decrease in retention rates may not be fully reflected in our operating results until future periods.
Our subscription model also makes it more difficult for us to rapidly increase our revenue through additional sales in any period, as a significant portion of our revenue from additional sales must be recognized over the applicable subscription duration.
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If we are unable to manage these factors effectively, our gross and operating margins may decline, and fluctuations in these metrics may make it difficult to manage our business and to maintain profitability, which could adversely affect our business and operating results.
−Removed: Because our business depends on manufacturers of hardware, including our OEM partners, to timely and cost-effectively produce and ship the hardware platforms on which our software runs, we are susceptible to supply chain disruptions, delays, quality events, and pricing fluctuations, which have adversely affected, and could further adversely affect, our business.
−Removed: Our business depends on manufacturers (including Supermicro and our OEM partners) to produce the hardware platforms on which our software runs (including both the Nutanix-branded NX series hardware platforms and the various third-party hardware platforms that are included on our hardware compatibility list) as well as various products that are beyond our control or the control of such manufacturers, which exposes us to direct and indirect risks beyond our control, including reduced control over quality assurance, product costs, product availability, supply chain disruptions and delays, and potential reputational harm and brand damage.
−Removed: We may not be able to discover, manage, and/or remediate such risks in a timely manner or at all.
−Removed: Key components of the servers on which our software runs have in the past been, and may in the future be, affected by chip shortages.
−Removed: In addition, increases in hardware prices, whether due to component shortages or other cost pressures, could reduce customer demand for our software if customers delay or scale back purchases of certified hardware platforms needed to run our solutions.
−Removed: Customers may also respond to rising hardware costs by reevaluating their overall IT budgets or seeking to reduce total solution costs, which could adversely affect demand for our software and put pressure on pricing and margins.
−Removed: Furthermore, fulfilling orders for NX series hardware platforms or other hardware platforms on which our software runs may not be a priority for such manufacturers in guiding their business decisions and operational commitments.
−Removed: If we fail to manage our relationships with such manufacturers effectively, or if such manufacturers experience delays, disruptions or increased manufacturing lead times, component lead-time disruptions, capacity constraints, or quality control problems in their operations or are unable to address our or our end customers’ requirements for or concerns about timely delivery, our ability to sell our solutions to our end customers could be severely impaired due to the lack of availability of certified hardware platforms, and our customers' ability, or willingness, to consume our software may be materially impacted or delayed, which could adversely affect our business and operating results, competitive position, brand and reputation, as well as our relationships with affected customers.
−Removed: In particular, we rely substantially on Supermicro to manufacture, as well as assemble and test, the Nutanix-branded NX series hardware platforms.
−Removed: Our agreement with Supermicro automatically renews for successive one-year periods, with the option to terminate upon each annual renewal, and does not contain any minimum long-term commitment to manufacture NX-branded hardware platforms.
−Removed: If we are required to change the manufacturer or contract manufacturers for the assembly and testing of our NX-branded hardware platforms, we may lose revenue, incur increased costs and damage our channel partner and end customer relationships.
−Removed: We may also decide to switch or bring on additional contract manufacturers for the assembly and testing of our NX-branded hardware platforms in order to better meet our needs.
−Removed: Switching to or bringing on a new OEM partner or contract manufacturer and commencing production can be expensive and time-consuming and may cause delays in order fulfillment at our existing OEM partners and contract manufacturers or cause other disruptions.
−Removed: Our agreement with Supermicro does not contain any price assurances, and increases in component costs, without a corresponding increase in the price of our NX series solutions, could reduce the amount that an end customer pays for our software, thereby adversely affecting our revenue.
−Removed: Furthermore, we may need to increase our component purchases, manufacturing capacity and internal test and quality functions if we experience increased demand.
−Removed: The inability of Supermicro or other manufacturers to produce adequate supplies of hardware platforms could cause a delay in customers’ ability to consume our software and our order fulfillment, and our business, operating results and prospects, would be adversely affected.
−Removed: As of July 31, 2025, we had approximately $106.9 million in the form of guarantees to our contract manufacturers related to certain components.
−Removed: There are a limited number of suppliers, and in some cases single-source suppliers, for several key components in our NX-branded hardware platforms as well as other hardware platforms that our software is certified to operate on (including hardware platforms from our OEM partners), and any delay or disruption in the availability or quality of these components could delay shipments of the NX-branded hardware platforms and damage our channel partner or end customer relationships, or cause our customers to delay purchasing our software.
−Removed: We rely on a limited number of suppliers, and in some cases single-source suppliers, for several key hardware components of the Nutanix-branded NX series hardware platforms.
−Removed: These components are generally purchased on a purchase order basis through Supermicro, and we do not have long-term supply contracts with these suppliers.
−Removed: This reliance on key suppliers exposes us to risks, including reduced control over product quality, production and component costs, timely delivery, and capacity.
−Removed: It also exposes us to the potential inability to obtain an adequate supply of required components because we do not have long-term supply commitments, and replacing some of these components would require a lengthy product qualification process.
−Removed: Furthermore, we extensively test and qualify the components that are used in NX-branded hardware platforms and other platforms on our hardware compatibility list, including hardware platforms from our OEM partners, to ensure that they meet certain quality and performance specifications.
−Removed: If the supply of certain components is disrupted or delayed, or if there is a need to replace existing suppliers on the qualified hardware configuration, there can be no assurance that additional supplies or components can serve as adequate replacements for the existing components, will be available when required or that supplies will be available on terms that are favorable, and it may require modifying our solutions to interoperate with the replacement components.
−Removed: Any of these developments could extend the lead times, increase the costs of the components or costs of product development, cause us to miss market windows for product launch and adversely affect our business, operating results and financial condition.
−Removed: We generally maintain minimal inventory for repairs and a number of evaluation and demonstration units, and generally acquire components only as needed.
−Removed: We do not enter into long-term supply contracts for these components.
−Removed: As a result, our ability to respond to channel partner or end customer orders efficiently may be constrained by the then-current availability, terms and pricing of these components.
−Removed: The technology industry has experienced component shortages and delivery delays in the past, including a global chip shortage, and there may be shortages or delays of critical components in the future as a result of strong demand in the industry, component availability constraints, or other factors.
−Removed: If we or our suppliers inaccurately forecast demand for our solutions or we ineffectively manage our enterprise resource planning processes, our suppliers may have inadequate inventory, which could increase the prices we must pay for substitute components or result in our inability to meet demand for our solutions, as well as damage our channel partner or end customer relationships.
−Removed: If the suppliers of the components of compatible hardware platforms increase prices of components, experience delays, disruptions, capacity constraints, quality control problems in their manufacturing operations or adverse changes to their financial condition, our ability to ship hardware platforms to our channel partners or end customers in a timely manner and at competitive prices could be impaired, and our customers' ability to acquire hardware on which to run our software could be impaired, and our competitive position, brand, reputation, and operating results could be adversely affected.
−Removed: Qualifying a new component can be expensive and time-consuming.
−Removed: If we are required to change key suppliers, we may lose revenue and damage our channel partner or end customer relationships which could adversely impact our revenue and operating results.
−Removed: We rely upon third parties for the warehousing and delivery of hardware platforms and replacement parts for support, and we therefore have less control over these functions than we otherwise would.
−Removed: We outsource the warehousing and delivery of hardware platforms and spare parts to a third-party logistics provider for spares and service parts fulfillment.
−Removed: In addition, some of our support offerings commit us to replace defective parts in our hardware platforms as quickly as four hours after the initial customer support call is received, which we satisfy by storing replacement parts inventory in various third-party supply depots in strategic worldwide locations.
−Removed: As a result of relying on third parties, we have reduced control over shipping and logistics transactions and costs, quality control, security, and the supply of replacement parts for support.
−Removed: Consequently, we may be subject to shipping disruptions and unanticipated costs as well as failures to provide adequate support for reasons that are outside of our direct control.
−Removed: If we are unable to have hardware platforms or replacement products shipped in a timely manner, end customers may seek to cancel their contracts with us, we may suffer reputational harm, and our business, operating results and prospects may be adversely affected.
Our ability to sell our solutions is dependent in part on ease of use and the quality of our technical support, and any failure to offer high-quality technical support would harm our business, operating results and financial condition.
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Our ability to provide effective support is largely dependent on our ability to attract, train and retain personnel who are not only qualified to support our solutions, but also well versed in some of the primary applications and hypervisors that our end customers run on our solutions.
−Removed: Furthermore, as we have international operations, our support organization faces additional challenges, including those associated with delivering support, training and documentation in languages other than English.
−Removed: In addition, as we continue to evolve our product portfolio, which may include additional solutions, our ability to provide high-quality support will become more difficult and will involve more complexity.
+Added: Our international operations and expanding product portfolio further increase the complexity of providing timely support.
Any failure to maintain high-quality installation and technical support, or a market perception that we do not maintain high-quality support, could harm our reputation and brand, adversely affect our ability to sell our solutions to existing and prospective end customers, and could harm our business, operating results and financial condition.
−Removed: Our solutions are highly technical and may contain undetected defects, which could cause data unavailability, unauthorized access to, loss, or corruption that might, in turn, result in liability to our end customers and harm to our reputation, brand and business.
+Added: While our support operations focus primarily on our software solutions, certain support offerings include the replacement of hardware parts.
+Added: We outsource the warehousing and delivery of these parts to third-party logistics providers, and any disruptions or failures by these providers could impact our ability to meet specific support commitments.
+Added: Our solutions are highly technical and may contain undetected defects, which could cause data unavailability, unauthorized access, disclosure, or loss of customer data, or corruption that might, in turn, result in liability to our end customers and harm to our reputation, brand and business.
Our solutions are highly technical and complex and are often used to store information critical to our end customers’ business operations.
−Removed: Our solutions may contain undetected errors, defects or security vulnerabilities that could result in data unavailability, unauthorized access to, loss, corruption, or other harm to our end customers’ data, including personal or identifying information regarding their employees, customers, and suppliers, as well as their finance and payroll data, and other sensitive business information.
−Removed: In addition, as we expand our platform and introduce new cloud-based products that may hold more of our customers’ data, any undetected or unresolved errors, defects or security vulnerabilities may result in data unavailability, unauthorized access to, loss, corruption, or other harm to our end-customers' data.
+Added: Our solutions may contain undetected errors, defects or security vulnerabilities that could result in data unavailability, unauthorized access to or disclosure of, loss, corruption, or other harm to our end customers’ data, including personal or identifying information regarding their employees, customers, and suppliers, as well as their finance and payroll data, and other sensitive business information.
+Added: As we expand our platform and introduce new cloud-based products that process greater amounts of customer data, the potential impact of any such errors, defects or security vulnerabilities may increase.
Some errors or defects in our solutions may only be discovered after they have been installed and used by end customers.
In addition, we may make certain commitments to our OEMs regarding the time frames within which we will correct any security vulnerabilities in our software.
−Removed: If any hardware or software errors, defects or security vulnerabilities are discovered in our solutions after commercial release, a number of negative effects in our business could result, including but not limited to:
−Removed: • lost revenue or lost OEM or other channel partners or end customers;
−Removed: • delays in developing and deploying patches and other remedial measures to adequately address vulnerabilities, if any;
−Removed: • increased costs, including warranty expense and costs associated with end customer support as well as development costs to remedy the errors or defects;
−Removed: • delays, cancellations, reductions, or rescheduling of orders or shipments;
−Removed: • product returns or discounts;
−Removed: • damage to our reputation and brand.
+Added: If hardware or software errors, defects or security vulnerabilities are discovered following commercial release, we may experience lost revenue, delays in developing and deploying corrective measures, increased warranty, support and remediation costs, delays, cancellations or reductions of customer orders, product returns or discounts, loss of customers, OEMs or other channel partners, and damage to our reputation and brand.
In addition, we could face legal claims for breach of contract, product liability, tort, or breach of warranty.
While many of our contracts with end customers contain provisions relating to warranty disclaimers and liability limitations, these provisions might not be upheld or might not provide adequate protection if we face such legal claims.
−Removed: Defending a lawsuit, regardless of its merit, could be costly and may divert management’s attention and adversely affect the market’s perception of us and our solutions.
−Removed: In addition, our business liability insurance coverage could prove inadequate with respect to a claim and future coverage may be unavailable on terms favorable or acceptable to us or at all.
−Removed: These product-related issues could result in claims against us and our business could be adversely impacted.
+Added: Defending such claims could be costly, divert management attention and adversely affect market perceptions of us and our solutions.
+Added: In addition, our insurance coverage may be inadequate to cover such claims or future coverage may be unavailable on acceptable terms.
+Added: Any of these events could adversely affect our business, operating results, financial condition and reputation.
Our business depends, in part, on sales to government organizations, and significant changes in the contracting or fiscal policies of such government organizations could have an adverse effect on our business and operating results.
We derive a portion of our revenue from contracts with federal, state, local, and foreign governments, and we believe that the success and growth of our business will continue to depend on our successful procurement of government contracts.
−Removed: Government contracts may require the maintenance of certain security clearances for facilities and employees.
−Removed: However, demand is often unpredictable from government organizations, and there can be no assurance that we will be able to maintain or grow our revenue from the public sector.
+Added: Certain government contracts and opportunities require us to maintain facility and personnel security clearances and comply with applicable industrial security requirements relating to the handling, safeguarding and protection of sensitive or classified information.
+Added: Failure to obtain, maintain, renew or comply with such requirements could limit our ability to compete for, perform, renew or expand certain government contracts and opportunities and could result in increased compliance costs, audits, investigations, contractual remedies, suspension of work, loss of contract opportunities or other adverse consequences.
+Added: However, demand from government organizations is often difficult to predict, and there can be no assurance that we will be able to maintain or grow our revenue from the public sector.
Government agencies are subject to budgetary processes and expenditure constraints that could lead to delays or decreased capital expenditures in IT spending, particularly in light of continued uncertainties about government spending levels, such as recent changes to, or failure to appoint new, government leaders.
We have also recently experienced longer sales cycles and increased variability in transactions involving federal government agencies, which we believe are due to internal personnel changes and more extensive procurement reviews within these organizations.
−Removed: The budget and approval process for government agencies also experiences a longer sales cycle relative to our other end customers, and it may be difficult for us to accurately forecast the impact of these contracts on our future operating results.
+Added: The budget and approval process for government agencies can be longer than for other end customers, and it may be difficult for us to accurately forecast the impact of these contracts on our future operating results.
If government organizations reduce or shift their capital spending patterns, our business, operating results and prospects may be harmed.
−Removed: Factors that could impede our ability to maintain or increase the amount of revenue derived from government contracts, include, but are not limited to:
−Removed: • the elimination of certain government agencies;
−Removed: • public sector budgetary cycles and funding authorizations;
−Removed: • changes in fiscal or contracting policies;
−Removed: • decreases in available government funding;
−Removed: • changes in government programs or applicable requirements;
−Removed: • the adoption of new laws or regulations or changes to existing laws or regulations;
−Removed: • potential delays or changes in the government appropriations or other funding authorization processes;
−Removed: • delays caused by reductions in force in government agencies;
−Removed: • higher expenses associated with, or delays caused by, diligence and qualifying or maintaining qualification as a government vendor.
−Removed: The occurrence of any of the foregoing could cause governments and governmental agencies to delay or refrain from purchasing our solutions in the future or otherwise have an adverse effect on our business, operating results and prospects.
+Added: Our ability to maintain or increase revenue from government customers may be adversely affected by changes in government funding levels, appropriations, budget priorities, fiscal or contracting policies, government programs, laws and regulations, agency staffing or organizational structures, or procurement practices.
+Added: Government customers are also subject to evolving requirements relating to software supply chain security, domestic sourcing, cybersecurity, AI and data handling, and compliance with these requirements may require significant resources and increase the cost and complexity of selling to government customers.
+Added: In addition, delays associated with procurement reviews, qualifying or maintaining status as a government vendor, or obtaining or maintaining required security clearances and authorizations may impair our ability to compete for or perform government contracts.
+Added: Any of these factors could cause government customers to delay, reduce or cancel purchases of our solutions, impair our ability to compete for or perform government contracts, and adversely affect our business, operating results and prospects.
Our international operations expose us to additional risks, and failure to manage those risks could adversely affect our business, operating results and cash flows.
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We derived approximately 45%, 44% and 46% of our total revenue from our international customers based on bill-to location for fiscal 2024, 2025, and 2026, respectively.
−Removed: We are continuing to adapt to and develop strategies to address international markets but there is no guarantee that such efforts will have the desired effect.
As of July 31, 2026, approximately 62% of our full-time employees were located outside of the United States.
−Removed: We expect that our international activities will continue to grow over the foreseeable future as we continue to pursue opportunities in existing and new international markets, which will require significant management attention and financial resources.
+Added: Operating internationally requires significant management attention and exposes us to additional operational, legal, regulatory and financial risks.
We are subject to risks associated with having significant worldwide operations, including, but not limited to:
−Removed: • business practices may differ from those in the United States and may require us in the future to include terms other than our standard terms in customer, channel partner, employee, consultant, and other contracts;
−Removed: • political, economic and social instability or uncertainty around the world, including the ongoing military conflict in Ukraine and continued instability in the Middle East;
−Removed: • potential changes in trade relations arising from policy initiatives implemented by, or statements made by, the U.S.
−Removed: government, including evolving trade policies and tariff regimes that may impact global supply chains and cross-border commerce;
−Removed: • the potential impact of tariffs or other trade restrictions imposed by, or threatened to be imposed by, the U.S.
−Removed: government, including newly introduced or adjusted tariffs under recent trade initiatives and reciprocal actions by other governments;
+Added: • business practices may differ from those in the United States and may require us to include terms other than our standard terms in customer, channel partner, employee, consultant, and other contracts;
+Added: • political, economic and social instability or uncertainty around the world, including the ongoing military conflict in Ukraine and continued instability in the Middle East, including the conflict involving Iran;
+Added: • changes in global trade policies, tariffs, sanctions, import and export restrictions, localization requirements and other regulatory requirements that may affect cross-border commerce, supply chains or our ability to sell and support our products internationally;
+Added: • requirements and costs associated with complying with foreign sustainability, ESG-related reporting and due diligence obligations, including requirements adopted in the European Union;
• greater difficulty in enforcing contracts, judgments and arbitration awards in international courts, and in collecting accounts receivable and longer payment and collection periods;
−Removed: • greater risk of unexpected changes in regulatory practices, tariffs and tax laws and treaties;
−Removed: • risks associated with trade restrictions and foreign legal requirements, including the importation, certification and localization of our solutions required in foreign countries;
• greater risk of a failure of foreign employees, partners, distributors, and resellers to comply with both U.S.
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• requirements to comply with foreign privacy, data protection and information security laws and regulations and the risks and costs of noncompliance, including new and evolving laws governing AI and data privacy, such as the European Union's AI Act;
−Removed: • increased expectations from foreign customers and other stakeholders about our performance relating to environmental, social and governance factors (such as climate-related performance), and requirements to comply with foreign sustainability standards or initiatives, including new sustainability standards and due diligence obligations in the European Union, such as the Corporate Sustainability Reporting Directive ("CSRD") and the Corporate Sustainability Due Diligence Directive ("CSDDD");
+Added: • increased expectations from customers and other stakeholders about our performance relating to environmental, social and governance factors (such as climate-related performance), and requirements to comply with sustainability standards or initiatives, including new sustainability standards and due diligence obligations in the European Union;
• reduced or uncertain protection for intellectual property rights in some countries;
• impediments to the flow of foreign exchange capital payments and receipts due to exchange controls instituted by certain foreign governments;
−Removed: • increased expenses incurred in establishing and maintaining corporate entities, office space and equipment for our international operations;
−Removed: • difficulties in managing and staffing international offices and increased travel, infrastructure and legal and regulatory compliance costs associated with multiple international locations, including costs related to additional regulatory reviews or audits, financial accounting and reporting obligations and international cybersecurity requirements;
−Removed: • greater difficulty in identifying, attracting and retaining local experienced personnel, and the costs and expenses associated with such activities;
−Removed: • the challenge of managing a development team in geographically disparate locations;
−Removed: • management communication and integration problems resulting from cultural and geographic dispersion;
−Removed: • differing employment practices and labor relations issues;
−Removed: • fluctuations in exchange rates between the U.S.
−Removed: dollar and foreign currencies in markets where we do business;
−Removed: • treatment of revenue from international sources for tax purposes and changes in tax laws, regulations or official interpretations, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions.
−Removed: As we expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these risks.
−Removed: These factors and other factors could harm our ability to gain future international revenue and, consequently, materially impact our business, operating results and financial condition.
−Removed: The entry into additional international markets will require significant management attention and financial resources.
−Removed: Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business.
+Added: • difficulties and costs associated with establishing and maintaining international operations, including managing geographically dispersed personnel, attracting and retaining talent, complying with local employment requirements, and coordinating operations across multiple jurisdictions;
+Added: • international tax laws, tax audits and changes in tax rules applicable to multinational businesses.
+Added: Our success will depend, in large part, on our ability to anticipate and effectively manage these risks.
+Added: These factors and other factors could harm our ability to maintain international operations and generate international sales and, consequently, materially impact our business, operating results and financial condition.
Risks Related to Cybersecurity and Intellectual Property
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We also continue to incorporate AI solutions and features into our platform, which may result in security incidents, jailbreaking, or otherwise increase cybersecurity risks.
−Removed: Additionally, artificial intelligence and machine learning may increase cybersecurity risks we face through, for example, being used to increase the prevalence or intensity of cyber attacks.
+Added: Additionally, AI and machine learning may increase the cybersecurity risks we face, including through unauthorized or misuse of public-facing AI features.
+Added: Threat actors may use generative AI and other AI capabilities to increase the prevalence, frequency, severity, and volume of cyber attacks, including by creating more sophisticated phishing and social engineering attacks (including through the use of impersonation technology), accelerating or automating vulnerability exploitation, and developing more sophisticated malware that can evade conventional detection tools or otherwise overwhelm protection systems faster than we can effectively respond.
+Added: As AI technologies evolve, we may not be able to recognize, anticipate, prevent, or timely respond to these emerging techniques, which could increase the likelihood and magnitude of harm from a cyber attack or other cybersecurity incident.
While we regularly face a wide variety of attempted attacks and other cybersecurity incidents, our preventative and detective security systems and controls have protected us to-date from any such attack or incident having a significant impact on our business.
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We may also experience security breaches that may remain undetected for an extended period.
−Removed: If any unauthorized access to, or security breach of, or other cybersecurity incident affecting, our solutions occurs, such an event could result in the loss of data, loss of intellectual property or trade secrets, loss of business, severe reputational or brand damage adversely affecting end customer or investor confidence, regulatory investigations and orders and other enforcement actions, litigation, indemnity obligations, damages for contract breach, and penalties for violation of privacy, data protection, artificial intelligence, and other applicable laws, regulations or contractual obligations.
+Added: If any unauthorized access to, or security breach of, or other cybersecurity incident affecting, our solutions occurs, such an event could result in the loss of data, loss of intellectual property or trade secrets, loss of business, severe reputational or brand damage adversely affecting end customer or investor confidence, regulatory investigations and orders and other enforcement actions, litigation, indemnity obligations, damages for contract breach, and penalties for violation of cybersecurity, privacy, data protection, AI, and other applicable laws, regulations or contractual obligations.
We may also be subject to potentially significant costs for remediation that may include liability for stolen assets or information and repair of system damage that may have been caused or incentives offered to end customers or other business partners in an effort to maintain business relationships after a breach and other liabilities.
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Furthermore, a high-profile security breach or incident suffered, or perceived to have been suffered, by an industry peer may entail a general loss of trust in our industry and thereby have a similar adverse impact on our business and financial performance as a direct breach suffered by us.
−Removed: We could be required to expend significant capital and other resources to alleviate problems caused by such actual or perceived breaches or incidents and to remediate our systems, we could be exposed to a risk of loss, litigation or regulatory action and possible liability, and our ability to operate our business may be impaired.
+Added: We could be required to expend significant capital and other resources to alleviate problems caused by such actual or perceived breaches or incidents and to remediate our systems, and comply with legal obligations.
+Added: We could be exposed to a risk of loss, litigation, regulatory actions or fines, or remediation costs associated with such an incident which may include forensic analysis, breach response, notification, and credit monitoring, and possible liability, and our ability to operate our business may be impaired.
In addition, if the security measures of our end customers, partners, vendors, or suppliers are compromised, even without any actual compromise of our own systems or of our solutions used by such end customers, partners, vendors, or suppliers, we may face negative publicity, reputational harm or brand damage if our end customers, partners, vendors, or suppliers or anyone else incorrectly attributes the blame for such incidents to us or our solutions.
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End customers’ concerns about security or privacy may deter them from using our solutions for activities that involve personal or other sensitive information, which may significantly affect our business and operating results.
−Removed: Moreover, we have acquired a number of companies, products, services, and technologies over the years.
−Removed: Although we devote significant resources to address any security issues with respect to such acquisitions, we may still inherit additional risks as we integrate these companies, products, services, and technologies into our business and solutions.
+Added: Moreover, to the extent we acquire or integrate companies, products, services, and technologies, we may be exposed to additional security vulnerabilities, compliance issues or other cybersecurity risks associated with such businesses or technologies.
+Added: Although we devote resources to identifying and addressing such risks, we may not discover or remediate all issues prior to or following integration, which could adversely affect our business.
Third-party claims that we are infringing intellectual property, whether successful or not, could subject us to costly and time-consuming litigation or expensive licenses, and our business could be harmed.
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District Court against Tessell, Inc.
−Removed: ("Tessell") alleging that Tessell engaged in willful copyright and patent infringement (including theft of our source code and intellectual property related to our database service offering) and commenced separate arbitration proceedings against Tessell’s founders.
+Added: ("Tessell") alleging that Tessell engaged in willful copyright and patent infringement (including theft of our source code and intellectual property related to our database service offering) and commenced separate arbitration proceedings against Tessell’s founders, and those proceedings remain ongoing.
Litigation and arbitration are unpredictable and we may not win a litigation or arbitration even if there is significant evidence supporting our claims and defenses.
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Attempts to enforce our rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in whole or in part.
−Removed: A number of our solutions incorporate or are based upon software that we obtained under open source licenses, some of which may restrict or impose certain obligations on how we use or distribute our solutions, subject us to various risks and challenges and could result in increased development expenses, delays or disruptions to the release or distribution of those solutions, an inability to protect our intellectual property rights, and increased competition.
−Removed: A number of our solutions incorporate or are based upon open source software, and we may incorporate or base our solutions on open source software in the future.
−Removed: Such open source software is generally licensed under “permissive” and “copyleft” open source licenses, such as the Apache License 2.0, BSD 2-Clause License, Eclipse Public License 2.0, GNU General Public License, GNU Lesser General Public License, MIT License, the Mozilla Public License 2.0, and other open source licenses.
−Removed: The use of open source software subjects us to a number of risks and challenges, including, but not limited to:
−Removed: • If open source software programmers, most of whom we do not employ, do not continue to develop and enhance open source technologies, our development expenses could increase and our product release and upgrade schedules could be delayed.
−Removed: • Open source software is open to further development or modification by anyone.
−Removed: As a result, others may develop such software to be competitive with our platform and may make such competitive software available as open source.
−Removed: It is also possible for competitors to develop their own solutions using open source software, potentially reducing the demand for, and putting price pressure on, our solutions.
−Removed: • The licenses under which we license certain open source software may require that, if we modify and distribute the open source software we receive, we are required to make such modifications and potentially related proprietary software of ours, available under the same open source license terms.
−Removed: In addition, some open source licenses treat provision of cloud services as triggering the requirement to make proprietary software publicly available.
−Removed: Sometimes, open source licensors may change their license in a way that may require us to change or eliminate the future use of such software, which may impact functionality and induce costs.
−Removed: Accordingly, we monitor our use of open source software in an effort to avoid subjecting our proprietary software to such conditions and others we do not intend.
−Removed: Although we believe that we have complied with our obligations under the various licenses for open source software that we use, our processes used to monitor how open source software is used and what license applies could be subject to error.
+Added: A number of our solutions incorporate, use, work with, or are based upon open source software and AI models that we obtained under open source licenses, some of which may restrict or impose certain obligations on how we use or distribute our solutions, subject us to various risks and challenges and could result in increased development expenses, delays or disruptions to the release or distribution of those solutions, an inability to protect our intellectual property rights, and increased competition.
+Added: A number of our solutions incorporate, use, work with, or are based upon open source software and AI models, and we may incorporate or base our solutions on them in the future.
+Added: Such open source software and AI models are generally licensed under "permissive" and "copyleft" open source licenses, such as the Apache License 2.0, BSD 2-Clause License, Eclipse Public License 2.0, GNU General Public License, GNU Lesser General Public License, MIT License, the Mozilla Public License 2.0, and other open source licenses.
+Added: The use of open source software and AI models subjects us to a number of risks and challenges, including, but not limited to:
+Added: • If open source programmers, most of whom we do not employ, do not continue to develop and enhance open source software and AI models, our development expenses could increase and our product release and upgrade schedules could be delayed.
+Added: • Open source software and AI models may be subject to further development or modification by anyone.
+Added: As a result, others may develop such open source software and AI models to be competitive with our platform and may make such competitive technologies available as open source.
+Added: It is also possible for competitors to develop their own solutions using open source software and AI models, potentially reducing the demand for, and putting price pressure on, our solutions.
+Added: • The licenses under which we license certain open source software and AI models may require that, if we modify and distribute such technology, we are required to make such modifications and potentially related proprietary software of ours, available under the same license terms.
+Added: In addition, some licenses treat provision of cloud services as triggering the requirement to make proprietary software publicly available.
+Added: Sometimes, open source licensors may change their license in a way that may require us to change or eliminate the future use of such technology, which may impact functionality and induce costs.
+Added: Accordingly, we monitor our use of open source software and AI models in an effort to avoid subjecting our proprietary software to such conditions and others we do not intend.
+Added: Although we believe that we have complied with our obligations under the various licenses for open source software and AI models that we use, our processes used to monitor how open source software and AI models are used and what license applies could be subject to error.
In addition, there is little or no legal precedent governing the interpretation of terms in most of these licenses and licensors sometimes change their license terms.
−Removed: Therefore, any improper or unintended usage of open source software, including a failure to identify changes in license terms, could result in unanticipated obligations regarding our solutions and technologies, which could have an adverse impact on our intellectual property rights and our ability to derive revenue from solutions incorporating the open source software.
−Removed: • If an author or other third party who distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur legal expenses defending against such allegations, or engineering expenses in developing a substitute solution.
−Removed: If we are unable to effectively manage our compliance obligations for open source software use, our business and operating results could be adversely affected and our development costs may increase.
+Added: Therefore, any improper or unintended usage of open source software and AI models, including a failure to identify changes in license terms, could result in unanticipated obligations regarding our solutions and technologies, which could have an adverse impact on our intellectual property rights and our ability to derive revenue from solutions incorporating or using the open source software and AI models.
+Added: • If an author or other third party who distributes such open source software or AI models were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur legal expenses defending against such allegations, or engineering expenses in developing a substitute solution.
+Added: If we are unable to effectively manage our compliance obligations for open source software and AI model use, our business and operating results could be adversely affected and our development costs may increase.
Risks Related to Employee Matters
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This competition for highly skilled personnel results in increased costs in the form of cash and stock-based compensation.
−Removed: Furthermore, the industry in which we operate generally experiences high employee attrition.
+Added: Furthermore, the industry in which we operate generally experiences periods of high employee attrition.
Although we have entered into employment offer letters with some of our key personnel, these agreements generally do not have a fixed duration or term.
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An inability to maintain our company culture could adversely affect our ability to attract and retain employees, continue to perform at current levels, or execute on our business strategy.
−Removed: If we do not effectively expand, train, motivate, and retain our sales force, we may be unable to add new end customers or increase sales to our existing end customers and our business will be adversely affected.
+Added: If we do not effectively structure, compensate, train and motivate our sales force, we may be unable to add new end customers or increase sales to our existing end customers and our business will be adversely affected.
Although we have a channel sales model, our sales representatives typically engage in direct interaction with our prospective end customers.
Therefore, we continue to be substantially dependent on our sales force to obtain new end customers and sell additional solutions to our existing end customers.
−Removed: There is significant competition for sales personnel with the skills and technical knowledge that we require.
−Removed: Our ability to achieve revenue growth will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of sales personnel to support our growth.
+Added: Our growth depends in large part on our ability to structure our sales force and compensation plans in a way that aligns with our strategic priorities, particularly our focus on driving large orders from major enterprise accounts.
+Added: We have made, and may continue to make, changes to our sales processes, segmentation, and leadership structures to drive this alignment, but these changes may take longer than anticipated to implement successfully or fail to yield the expected benefits.
+Added: There is significant competition for sales personnel with the skills and technical knowledge that we require, especially those experienced in targeting and penetrating large enterprise accounts.
+Added: Our ability to increase sales will depend, in large part, on our success in structuring, compensating, training and motivating sales personnel.
New hires require significant training and may take significant time before they achieve full productivity;
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Hiring sales personnel in new countries also requires additional set up, upfront and ongoing costs that we may not recover if the sales personnel fail to achieve full productivity.
−Removed: In addition, as a result of our rapid growth, a large percentage of our sales force is new to our company and our solutions and therefore less effective than our more seasoned employees.
−Removed: If our new sales employees, particularly those focused on sales of our solutions to new and existing large enterprises, service providers and government entities, do not become fully productive on the timelines that we have projected, or if we are unable to ensure that our seasoned sales employees remain productive, our revenue will not increase at anticipated levels and our ability to achieve long-term projections may be negatively impacted.
−Removed: If we are unable to hire, train and maintain sufficient numbers of effective sales personnel, or our new or existing sales personnel are not successful in obtaining new end customers, convincing existing customers to renew their subscription-based purchases, or increasing sales to our existing customer base generally, our business, operating results and prospects will be adversely affected.
−Removed: If we do not effectively develop, structure and compensate our sales force to focus on the end customers and activities that will primarily drive our growth strategy, our business will be adversely affected.
−Removed: As indicated above, our growth is dependent in large part on the success of our sales force and in particular our ability to structure our sales force and sales compensation structure in a way that aligns with our growth strategy.
−Removed: As part of our efforts to appropriately structure and compensate our sales force such that their incentives are properly aligned with our growth strategy, we have made changes to our sales processes, sales segmentation, and leadership structures for our global sales teams and may need to make additional changes in the future.
−Removed: Such changes may take longer than anticipated to successfully implement, and we may not be able to realize the full benefits thereof, which may have a material adverse impact on our sales productivity as well as our business and operational results generally.
−Removed: In particular, as indicated above, our growth continues to be substantially dependent on our ability to increase our sales to large enterprises, particularly when those sales result in large orders for our solutions.
−Removed: Competition for sales employees who have the knowledge and experience necessary to effectively penetrate major enterprise accounts is fierce, and we may not be successful in hiring such employees, or hiring them on the timelines we anticipate, which will negatively impact our ability to target and penetrate major enterprise accounts.
+Added: If our new sales employees, particularly those focused on sales of our solutions to new and existing large enterprises, service providers and government entities, do not become fully productive on the timelines that we have projected, or if we are unable to ensure that our seasoned sales employees remain productive and appropriately incentivized, our sales will not increase at anticipated levels and our ability to achieve long-term projections may be negatively impacted.
+Added: If we are unable to structure, compensate, train and maintain sufficient numbers of effective sales personnel, or our new or existing sales personnel are not successful in obtaining new end customers, convincing existing customers to renew their subscription-based purchases, or increasing sales to our existing customer base generally, our business, operating results and prospects will be adversely affected.
Risks Related to Financial, Accounting, Regulatory, Tax, and Other Legal Matters
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In addition, if we are unable to continue to meet these requirements, we may not be able to maintain our listing on the Nasdaq Global Select Market.
−Removed: Any legal proceedings or claims we may be involved in, including securities class action litigation that could result from volatility in our stock price, could be costly and time-consuming to defend and could harm our reputation regardless of their outcome.
+Added: Any legal proceedings or claims we may be involved in could be costly and time-consuming to defend and could harm our reputation regardless of their outcome.
We are, and may in the future become, involved in various legal proceedings and claims, including cases involving our IP rights and those of others, commercial matters, employee-related claims, and other actions, including actions that arise in the ordinary course of business.
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For example, the U.S.
−Removed: Department of Justice ("DOJ") has recently identified procurement fraud as an enforcement priority, indicating an ongoing commitment to aggressive enforcement under the False Claims Act and other applicable laws.
+Added: Department of Justice ("DOJ") has identified procurement fraud as an enforcement priority, indicating an ongoing commitment to aggressive enforcement under the False Claims Act and other applicable laws.
Violations of certain regulatory and contractual requirements could also result in us being suspended or debarred from future government contracting.
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Any such damages, penalties, disruptions, or limitations in our ability to do business with the public sector could have an adverse effect on our business and operating results.
−Removed: We are subject to stringent and rapidly changing laws, regulations, industry standards and frameworks, and other obligations related to privacy, artificial intelligence, data protection, and information security, and our actual or perceived failure to comply with such obligations could adversely affect our business and operating results.
−Removed: Any inability to comply with such obligations could also impair our efforts to maintain and expand our customer base, and thereby decrease our revenue.
−Removed: Privacy, artificial intelligence, data protection, and information security are significant issues in the United States and the other jurisdictions where we offer our solutions.
−Removed: The regulatory framework for privacy, artificial intelligence, and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.
−Removed: Our handling of data is subject to a variety of global laws and regulations, including regulation by various government agencies, including the U.S.
+Added: We are subject to stringent and rapidly changing laws, regulations, industry standards and frameworks, contractual requirements, and other obligations related to privacy, artificial intelligence, data protection, and information security, and our actual or perceived failure to comply with such obligations could adversely affect our business and operating results.
+Added: Any inability to comply with such obligations could also impair our efforts to maintain and expand our customer base, lengthen sales cycles, increase costs, and thereby decrease our revenue.
+Added: Privacy, AI, data protection, and information security are significant issues in the United States and the other jurisdictions where we offer our solutions.
+Added: The regulatory framework for privacy, AI, and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.
+Added: Our handling of data, including customer data, personal data, support data, telemetry, employee data, and other information processed in connection with our products, services, operations, and go-to-market activities, is subject to a variety of global laws and regulations, including regulation by various government agencies, including the U.S.
Federal Trade Commission ("FTC") and various state, local and foreign bodies, data protection authorities, and agencies.
−Removed: federal and various state and foreign governments have adopted or proposed limitations on the collection, use, storage, disclosure, and transfer of personal information of individuals, including end customers and employees.
−Removed: In the United States, the FTC and many state attorneys general are applying federal and state consumer protection laws to the online collection, use and dissemination of data.
−Removed: Additionally, many foreign countries and governmental bodies, including in Australia, Brazil, the European Economic Area ("EEA"), the UK, Switzerland, India, Japan, China, and numerous other jurisdictions in which we operate or conduct our business, have laws and regulations concerning the collection and use of personal information obtained from their residents or by businesses operating within their jurisdiction.
+Added: federal and various state and foreign governments have adopted or proposed limitations on the collection, use, storage, retention, security, disclosure, sale, sharing, and transfer, localization, and deletion of personal information of individuals, including end customers and their personnel, partners, prospects, and employees.
+Added: In the United States, the FTC, other federal agencies, and many state attorneys general are applying evolving federal and state laws and regulations governing consumer protection, privacy, cybersecurity, and unfair and deceptive trade practices to the online collection, use and dissemination of data, including restrictions on transfers of certain data categories with countries of concern.
+Added: Additionally, many foreign countries and governmental bodies, including in Australia, Brazil, the European Economic Area ("EEA"), the UK, Switzerland, India, Japan, China, and numerous other jurisdictions in which we operate or conduct our business, have laws and regulations concerning the collection, use, transfer, storage, security, and deletion of personal information obtained from their residents or by businesses operating within their jurisdiction.
These laws and regulations often are more restrictive than those in the United States.
For example, the General Data Protection Regulation ("GDPR") the UK General Data Protection Regulation, and Brazil’s Lei Geral de Protecao de Dados ("LGPD"), impose more stringent data protection requirements, provide an enforcement authority which substantially increases compliance costs, and impose large penalties for noncompliance.
−Removed: Such laws and regulations may require companies to implement new privacy and security policies, conduct transfer and privacy impact assessments, permit individuals to access, correct and delete personal information stored or maintained by such companies, inform individuals of security breaches that affect their personal information, and, among others, obtain individuals’ consent to use personal information for certain purposes.
−Removed: In addition, some countries have enacted, or are currently considering, legislation that requires local storage and processing of data to avoid any form of transfer to a third country, or other restrictions on transfer and disclosure of personal data outside of that country which may impact our compliance obligations, potentially exposing us to liability, and increase the cost and complexity of delivering our products and services.
−Removed: We also expect that there will continue to be new proposed laws, regulations, industry standards, and case law concerning privacy, data protection and information security in the United States, the EEA and other jurisdictions, and we cannot yet determine the impact these developments may have on our business.
−Removed: This increases uncertainty and may require us to change our data practices and/or change our technology solutions, business model or processes, which may in turn adversely affect demand for our products.
−Removed: Additionally, our sales cycles may lengthen due to increasingly rigorous and complex customer-driven security, artificial intelligence, and privacy assessments as part of customers’ purchasing decisions.
+Added: Such laws and regulations may require companies to implement new privacy, security, retention, data governance and AI policies;
+Added: conduct privacy, transfer, security, data protection, and AI impact assessments;
+Added: respond to requests from individuals to access, correct, delete, restrict, port, or opt out of certain uses of personal information;
+Added: notify individuals, customers, regulators, or other parties of security incidents or personal data breaches;
+Added: impose restrictions on automated decision-making, profiling or certain AI-enabled uses;
+Added: and, among others, obtain individuals’ consent or provide opt-out rights to use personal information for certain purposes.
+Added: In addition, some countries have enacted, or are currently considering, legislation that requires local storage and processing of data to avoid any form of transfer to a third country, or impose sector-specific requirements for regulated industries and public sector customers, or other restrictions on transfer and disclosure of personal data outside of that country which may impact our compliance obligations, potentially exposing us to liability, require changes to our product architecture or service delivery model, and increase the cost and complexity of delivering our products and services.
+Added: In addition to comprehensive data protection and privacy laws, we are subject, or may become subject, to a growing number of cybersecurity, digital resilience, and product security regulations globally, including the European Union's Network and Information Security Directive ("NIS2"), Cyber Resilience Act ("CRA"), and, indirectly through our customers and business partners, the Digital Operational Resilience Act ("DORA").
+Added: Compliance with these requirements may require significant operational, technical, and administrative efforts and could increase our costs and legal obligations.
+Added: These regulatory frameworks continue to evolve, and their interpretation, implementation, and enforcement remain uncertain, which may create additional compliance risks and challenges.
+Added: We also expect that there will continue to be new proposed laws, regulations, enforcement actions, regulatory guidance, industry standards, and case law concerning privacy, AI, data protection, and information security in the United States, the EEA and other jurisdictions, and we cannot yet determine the impact these developments may have on our business.
+Added: This includes laws and regulatory frameworks governing AI system development, deployment, transparency, governance, accuracy, bias, explainability, human oversight, prohibited or high-risk AI practices, cybersecurity, critical infrastructure, digital operational resilience, software supply chain security and the handling of sensitive data.
+Added: These developments increase uncertainty and may require us to change our data and AI internal operations, security controls, and practices and/or change our technology solutions, business model or processes, which may in turn adversely affect demand for our products and services.
+Added: Additionally, our sales cycles may lengthen due to increasingly rigorous and complex customer-driven security, AI, and privacy assessments as part of customers’ purchasing decisions.
While the EU-U.S.
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DPF) provides us with a transfer mechanism for data from the EEA, data transfers continue to be scrutinized by regulators in the EEA, the UK and other countries with similar transfer restrictions requiring organizations to ensure that the data is protected to a standard that is "essentially equivalent" to that under the GDPR, UK GDPR, Swiss Federal Data Protection Act, and/or other applicable laws and to document this.
−Removed: As a result of these and future data transfer developments, we may experience a reluctance from current or prospective customers in the EEA, the UK, Switzerland, and other similar countries to use our products and may find it necessary to make changes to our data transfer mechanisms and handling of personal data, including with respect to the provision of our products and services.
−Removed: This may adversely impact our business, financial condition, and operating results.
+Added: As a result of these and future data transfer, localization, and sovereignty developments, we may experience a reluctance from current or prospective customers in the EEA, the UK, Switzerland, and other and jurisdictions with similar transfer restrictions to use our products and services, particularly where customer data, support data, telemetry, logs, metadata or other regulated data may be accessed, transferred, hosted or processed outside the customer’s preferred jurisdiction.
+Added: We may find it necessary to make changes to our data transfer mechanisms and handling of personal data, including with respect to the provision of our products and services.
+Added: Such changes may require additional engineering, operational, legal and compliance resources, may limit certain product capabilities or service models, and may adversely impact our business, financial condition, and operating results.
In the United States, more states are adopting their own data protection legislation, creating a complex privacy landscape from state to state.
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The California Privacy Rights Act ("CPRA") generally expanded consumers’ privacy rights and protections with respect to their personal information.
−Removed: Colorado, Virginia, Connecticut, Utah, Florida, Montana, Oregon, Texas, Iowa, Delaware, Indiana, Kentucky, Maryland, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, Rhode Island, and Tennessee all have passed privacy legislation now in effect.
+Added: states have passed privacy legislation now in effect.
We cannot yet predict the full impact of these laws on our business or operations, but it may continue to require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
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We also expect to incur additional costs to comply with the requirements of these laws.
−Removed: As we begin to offer more cloud-based services, we will increasingly be positioned as a data processor, which imposes additional obligations under the foregoing and other laws and regulations relating to privacy and data protection and may increase our liability exposure by operation of law, contract, or penalties for noncompliance.
+Added: We are positioned as a data processor with respect to the cloud-based services we offer and, as we expand our support offerings, professional services, telemetry-enabled features, and AI-enabled capabilities, we may increasingly act as a data processor, service provider, contractor, subprocessor, or similar regulated role.
+Added: These roles impose additional obligations under the foregoing and other laws and regulations relating to privacy, cybersecurity, AI and data protection and may increase our compliance burden and liability exposure by operation of law, contract (including contracts with customers in regulated industries), or penalties for noncompliance.
Additionally, we expect that existing laws, regulations and standards may be interpreted in new ways in the future.
−Removed: Current or future laws, regulations, standards, and other obligations, as well as changes in the interpretation of existing laws, regulations, standards, and other obligations could impair our or our customers’ ability to collect, use or disclose information relating to individuals, which could decrease demand for our solutions, require us to restrict our business operations, increase our costs, and impair our ability to maintain and grow our customer base and increase our revenue.
−Removed: Although we are working to comply with federal, state and foreign laws and regulations, industry standards, contractual obligations, and other legal obligations that apply to us, those laws, regulations, standards, and obligations are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, our practices or the features of our solutions.
+Added: Current or future laws, regulations, standards, and other obligations, as well as changes in the interpretation of existing laws, regulations, standards, and other obligations could impair our or our customers’ ability to collect, use, disclose, retain, analyze, transfer, or otherwise process information relating to individuals, which could decrease demand for our solutions, require us to restrict our business operations, increase our costs, delay product development or deployment, and impair our ability to maintain and grow our customer base and increase our revenue.
+Added: Although we are working to comply with federal, state and foreign laws and regulations, industry standards, contractual obligations, and other legal obligations that apply to us, those laws, regulations, standards, and obligations are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another, other requirements or legal obligations, our practices or the product features, our use of third-party providers, or the design and operation of our solutions.
As such, we cannot assure ongoing compliance with all such laws or regulations, industry standards, contractual obligations, and other legal obligations.
−Removed: Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, industry standards, contractual obligations, or other legal obligations, or any actual or suspected security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personal information or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties, or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation, brand and business.
−Removed: Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations could result in additional cost and liability to us, damage our reputation and brand, inhibit sales, and adversely affect our business and operating results.
+Added: Any failure or perceived failure by us or by our vendors, subprocessors, partners, or other third parties to comply with federal, state or foreign laws or regulations, industry standards, contractual obligations, or other legal obligations, or any actual or suspected cyberattack, security vulnerability, ransomware event, supply chain compromise, or other security incident, whether or not resulting in unauthorized access to, or acquisition, release or transfer of personal information, customer data, confidential information, intellectual property, telemetry, logs, metadata, or other data, may result in governmental enforcement actions and prosecutions, private litigation, fines and penalties, or adverse publicity and could cause our customers to lose trust in us, which could have an adverse effect on our reputation, brand and business.
+Added: Any inability to adequately address privacy, data protection, AI, and security concerns, even if unfounded, or comply with applicable laws, regulations, policies, industry standards, contractual obligations, or other legal obligations could result in additional cost and liability to us, damage our reputation and brand, inhibit sales, delay or prevent deployments, and adversely affect our business and operating results.
Failure to comply with anti-corruption and anti-money laundering laws, including the U.S.
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In addition, responding to any enforcement action may result in a materially significant diversion of management’s attention and resources and significant defense costs and other third-party professional fees.
−Removed: We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
+Added: We are subject to governmental export and import controls and other trade restrictions that could impair our ability to compete in international markets or subject us to liability if violated.
Our solutions are subject to U.S.
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These encryption products and the underlying technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception or other appropriate government authorizations.
−Removed: Furthermore, our activities are subject to the U.S.
−Removed: economic sanctions laws and regulations that prohibit the export of certain products and services without the required export authorizations, including to countries, governments and persons targeted by U.S.
−Removed: embargoes or sanctions.
+Added: Changes in export controls, sanctions, and related regulations, including emerging restrictions targeting AI technologies, may increase compliance costs, restrict access to technologies and AI hardware, or adversely affect our operations.
+Added: Furthermore, our activities are subject to U.S.
+Added: and foreign economic sanctions laws and regulations that prohibit the export of certain products and services without the required export authorizations, including to countries, governments and persons targeted by U.S.
+Added: or foreign embargoes or sanctions.
Additionally, the U.S.
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Violations of U.S.
−Removed: sanctions or export control laws can result in significant fines or penalties and possible incarceration for responsible employees and managers could be imposed for criminal violations of these laws.
−Removed: We also note that if our channel, alliance and OEM partners fail to obtain appropriate import, export or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties.
+Added: or foreign sanctions or export control laws can result in significant fines or penalties.
+Added: In addition, trade restrictions, new or increased tariffs (or the threat thereof), or disruptions affecting suppliers, OEM partners, or logistics providers could increase costs or delay product availability.
+Added: For example, imports of foreign-origin hardware products into the United States may be subject to new or increased tariffs recently imposed by the U.S.
+Added: In response to these new, increased, or threatened U.S.
+Added: tariffs, foreign countries may impose retaliatory tariffs on U.S.-origin goods in response, which could also affect our products or business operations.
+Added: If we fail to comply with applicable tariff laws, we may be subject to monetary fines, denial of import privileges, increased scrutiny, and other penalties.
+Added: If our channel, alliance and OEM partners fail to obtain appropriate import, export or re-export licenses or permits, or fail to comply with applicable import and export control laws and regulations, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties.
We presently incorporate export control compliance requirements into our relevant partner agreements;
−Removed: however, no assurance can be given that our partners will be able to comply with such requirements.
+Added: however, no assurance can be given that our partners will, or will be able to, comply with such requirements.
Also, various countries, in addition to the United States, regulate the import and export of certain encryption and other technology, including import and export licensing requirements, and have enacted laws that could limit our ability to distribute our solutions or could limit our end customers’ ability to implement our solutions in those countries.
−Removed: Changes in our solutions or future changes in export and import regulations may create delays in the introduction of our solutions in international markets, prevent our end customers with international operations from deploying our solutions globally or, in some cases, prevent the export or import of our solutions to certain countries, governments, or persons altogether.
+Added: Changes in our solutions or future changes in export and import regulations may create delays in the introduction of our solutions in international markets, result in increased licensing requirements, prevent our end customers with international operations from deploying our solutions globally or, in some cases, prevent the export or import of our solutions to certain countries, governments, or persons altogether.
From time to time, various governmental agencies have proposed additional regulation of encryption technology, including the escrow and government recovery of private encryption keys.
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If we are unsuccessful in collecting such taxes from our end customers, we could be held liable for such costs, which may adversely affect our operating results.
+Added: The application of tax laws to services provided electronically is evolving.
+Added: New sales and use, value added or similar tax laws, statutes, rules, regulations, or ordinances could be enacted at any time.
+Added: For example, California has recently amended its tax laws to subject certain retail sales of digital prewritten software, cloud-based applications, and software services to sales tax in California, effective January 1, 2027, which may increase the cost to our California-based customers of purchasing our products, and similarly may increase the costs to us of purchasing software products we use in our business.
Our international operations may subject us to potential adverse tax consequences.
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Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how we comply with the law, which could affect our results of operations in the period issued.
−Removed: The Organisation for Economic Cooperation and Development reached agreement among various countries to implement a global minimum tax framework, commonly referred to as Pillar Two, which imposes a minimum effective tax rate of 15% on certain multinational enterprises.
−Removed: Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two proposals.
−Removed: The potential effects of Pillar Two may vary depending on specific provisions and rules implemented by each country that adopts Pillar Two.
−Removed: These changes may increase our tax obligations in these countries.
+Added: The Organisation for Economic Cooperation and Development ("OECD") reached agreement among various countries to implement a global minimum tax framework, commonly referred to as Pillar Two, which imposes a minimum effective tax rate of 15% on certain multinational enterprises.
+Added: On January 5, 2026, the OECD announced a side-by-side elective safe harbor that would exempt electing U.S.-parented multinationals from certain provisions of Pillar Two for fiscal years beginning on or after January 1, 2026, but does not provide an exemption from the "qualified domestic minimum top-up taxes" that many countries have enacted or begun the process of enacting laws based on Pillar Two proposals.
+Added: The safe harbor must be adopted into the domestic laws of the relevant jurisdictions and the timing and the degree of adoption may vary by jurisdiction.
In addition, several countries have proposed or enacted digital services taxes, many of which would apply to revenues derived from digital services.
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We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership.
−Removed: In addition, at the state level, there may be periods during which the use of net operating losses is suspended or otherwise limited.
+Added: In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited.
Risks Related to Our Convertible Notes and Credit Facility
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As of July 31, 2026, we had outstanding $500.0 million aggregate principal amount of 2027 Notes and $862.5 million aggregate principal amount of 2029 Notes.
−Removed: The 2027 Notes bear interest at a rate of 0.25% per annum (with such interest payable semi-annually in arrears on each April 1 and October 1), and the 2029 Notes bear interest at a rate of 0.50% per annum (with such interest payable semi-annually in arrears on each June 15 and December 15).
−Removed: In addition, any borrowings under the Revolver will bear interest at a base rate, a term Secured Overnight Financing Rate or an alternative currency term rate, plus, in each case, an applicable margin based upon our total leverage ratio, payable at regular intervals as set forth in the Revolver.
Our ability to make scheduled payments in respect of, or to refinance, our indebtedness may depend on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
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If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as obtaining additional debt financing or equity capital on terms that may be onerous or highly dilutive, restructuring debt, or selling assets.
−Removed: Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
−Removed: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
−Removed: Higher prevailing interest rates and/or a tightening supply of credit would adversely affect the terms upon which we would be able to refinance our indebtedness, if at all.
−Removed: As a result, we may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
+Added: Any such financing or refinancing may not be available on acceptable terms, or at all, particularly during periods of higher interest rates, reduced credit availability or adverse market conditions.
In addition, the Revolver contains restrictive covenants that limit us, and any of our future debt agreements may contain restrictive covenants that may limit or prohibit us, in each case, from adopting any of these alternatives.
Our failure to comply with these covenants could result in an event of default, which could result in the acceleration of our debt.
−Removed: In addition, our indebtedness, combined with our other financial obligations and contractual commitments, could have other important consequences.
−Removed: For example, it could:
−Removed: • make us more vulnerable to adverse changes in general U.S.
−Removed: and worldwide economic, industry, and competitive conditions and adverse changes in government regulation;
−Removed: • limit our flexibility in planning for, or reacting to, changes in our business and our industry;
−Removed: • place us at a disadvantage compared to our competitors who have less debt;
−Removed: • limit our ability to borrow additional amounts to fund acquisitions, for working capital and for other general corporate purposes;
−Removed: • subject us to risks associated with variable interest rates to the extent applicable to such indebtedness;
−Removed: • make an acquisition of our company less attractive or more difficult.
+Added: Our indebtedness could make us more vulnerable to adverse economic, industry and regulatory developments, limit our flexibility in planning for or responding to changes in our business, restrict our ability to obtain additional financing for working capital, acquisitions or other corporate purposes, expose us to interest-rate risks to the extent applicable, place us at a competitive disadvantage relative to less leveraged competitors, and make an acquisition of our company more difficult.
Any of these factors could harm our business, results of operations, and financial condition.
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Risks Related to Ownership of Our Securities
−Removed: The market price of our securities may be volatile and may decline.
−Removed: The market price of our securities has fluctuated and may continue to fluctuate substantially.
−Removed: The market price of our securities depends on a number of factors, including those described in this "Risk Factors" section, many of which are beyond our control and may not be related to our operating performance.
−Removed: These fluctuations could cause you to lose all or part of your investment in our securities.
−Removed: Factors that could cause fluctuations in the market price of our securities include the following:
−Removed: • price and volume fluctuations in the overall stock market from time to time;
−Removed: • volatility in the market prices and trading volumes of high technology stocks;
+Added: The market price of our securities may be volatile and may decline, including if we fail to meet our publicly announced financial guidance or other expectations.
+Added: The market price of our securities has fluctuated and may continue to fluctuate substantially in response to a number of factors, including those described in this "Risk Factors" section, many of which are beyond our control and may be unrelated to our operating performance.
+Added: Factors that could cause fluctuations in the market price of our securities include:
+Added: • price and volume fluctuations in the overall stock market or volatility in the market prices and trading volumes of technology companies;
• changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
−Removed: • changes in financial estimates by any analysts who follow our company, including as a result of any current and future business model transitions, or our failure to meet these estimates or the expectations of investors;
−Removed: • the financial projections we may provide to the public, any changes in these projections, or any failure to meet or exceed these projections;
−Removed: • announcements by us or our competitors of new products and solutions or new or terminated significant contracts, commercial relationships or capital commitments;
+Added: • changes in financial estimates by any analysts who follow our company or our failure to meet these estimates or the expectations of investors;
+Added: • announcements regarding actual or anticipated significant business developments by us or our competitors, including new products and solutions, technologies, new or terminated significant contracts, strategic relationships, acquisitions, investments, capital commitments, or other changes in the competitive landscape;
• public analyst or investor reaction to our press releases, other public announcements and filings with the Securities and Exchange Commission;
• rumors and market speculation involving us or other companies in our industry;
−Removed: • actual or anticipated changes or fluctuations in our operating results;
−Removed: • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;
+Added: • actual or anticipated changes in our operating results, financial condition, business performance, or growth prospects;
• actual or threatened litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
• developments or disputes concerning our intellectual property or our solutions, or third-party proprietary rights;
−Removed: • rumored, announced or completed acquisitions of businesses or technologies of or by us or our competitors;
• new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
• changes in accounting standards, policies, guidelines, interpretations, or principles;
−Removed: • any major changes in our management or our Board of Directors;
+Added: • actual or anticipated changes in our management or our board of directors ("Board of Directors" or "Board");
• general economic conditions and slow or negative growth of our markets;
• other events or factors which may be outside of our control, such as political and social unrest, terrorist attacks, hostilities, war, malicious human acts, climate change, natural disasters (including extreme weather), pandemics or other major public health concerns, and other similar events, or responses to these events.
−Removed: 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.
+Added: We periodically provide financial guidance and other expectations regarding our future performance that represents our management’s assumptions and estimates as of the date of release.
+Added: Some of those key assumptions relate to the macroeconomic environment, including supply chain and military conflicts, which are inherently difficult to predict.
+Added: Other assumptions relate to the timing and structure of customer billings and payments.
+Added: We may offer customers increased flexibility in payment arrangements, including annual payment schedules, financing arrangements or other payment alternatives.
+Added: Changes in the mix of annual versus multi-year billings, customer payment preferences, financing arrangements, or other commercial terms could affect billings, deferred revenue, operating cash flow and free cash flow and may make forecasting such metrics more difficult.
+Added: While presented with numerical specificity, our guidance is inherently speculative and subject to significant uncertainties and changing business assumptions beyond our control, which may cause actual results to vary materially from our projections.
+Added: Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a consensus about our future performance.
+Added: Our actual business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside of our control, including those described in this "Risk Factors" section, any of which or combination thereof could materially and adversely affect our business and future operating results.
+Added: Certain financial and operating metrics, including billings, deferred revenue, operating cash flow and free cash flow, may be more sensitive to changes in customer billing and payment structures than revenue.
+Added: Furthermore, if we make downward revisions to our previously announced guidance, if we withdraw our previously announced guidance, or if our publicly announced guidance regarding future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our securities would decline.
+Added: In addition, the trading market for technology companies has experienced extreme price and volume volatility that have often been unrelated or disproportionate to the operating performance of those companies.
Broad market and industry factors may seriously affect the market price of our securities, regardless of our actual operating performance.
+Added: Furthermore, securities analysts may publish reports, forecasts, or recommendations regarding our business, and changes in analyst expectations regarding us or our industry could adversely affect the market price or trading volume of our securities.
+Added: These fluctuations and conditions could cause you to lose all or part of your investment in our securities.
Sales of substantial amounts of our Class A common stock in the public markets, or the perception that they might occur, could reduce the price that our securities might otherwise attain and may dilute your voting power and your ownership interest in us.
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Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our Class A common stock to decline.
−Removed: We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which would cause the price of our securities to decline.
−Removed: From time to time, we release financial guidance in our earnings conference calls, earnings releases, investor presentations, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release.
−Removed: This guidance includes forward-looking statements based on projections prepared by our management.
−Removed: Projections are based upon a number of assumptions and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies on our business, many of which are beyond our control and are based upon specific assumptions with respect to future business decisions, some of which will change.
−Removed: Some of those key assumptions relate to the macroeconomic environment, including inflation and interest rates, which are inherently difficult to predict.
−Removed: Other assumptions relate to the timing and structure of customer payments.
−Removed: For example, while we typically invoice customers upfront for multi-year subscriptions, any change to this practice could affect the timing of our free cash flow.
−Removed: We generally state possible outcomes as high and low ranges, which are intended to provide a sensitivity analysis as variables are changed but are not intended to imply that actual results could not fall outside of the suggested ranges.
−Removed: Furthermore, analysts and investors may develop and publish their own projections of our business, which may form a consensus about our future performance.
−Removed: Our actual business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside of our control, including those described in this "Risk Factors" section, any of which or combination thereof could materially and adversely affect our business and future operating results.
−Removed: Furthermore, if we make downward revisions to our previously announced guidance, if we withdraw our previously announced guidance, or if our publicly announced guidance regarding future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our securities would decline.
−Removed: Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance furnished by us will not materialize or will vary significantly from actual results.
−Removed: Accordingly, our guidance is only an estimate of what management believes is realizable as of the date of release.
−Removed: 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 securities.
−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 could result in the actual operating results being different from our guidance, and the differences may be adverse and material.
Conversion of the Notes may dilute the ownership interest of existing stockholders, or may otherwise depress the price of our securities.
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We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term stockholder value.
−Removed: In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock, of which $111.5 million remained available for future share repurchases under the authorization as of July 31, 2025.
−Removed: In August 2025, our Board of Directors approved a $350.0 million increase to the share repurchase authorization.
+Added: In August 2023, our Board of Directors authorized the repurchase of up to $350.0 million of our Class A common stock.
+Added: In August 2025 and April 2026, our Board of Directors approved increases of $350.0 million and $750.0 million, respectively, to the share repurchase authorization, of which $728.9 million remained available for future share repurchases as of July 31, 2026.
The authorization has no expiration date and does not obligate us to repurchase any minimum number of shares.
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The program may be modified, suspended or discontinued at any time, and any future announcement of a termination of the program could result in a decrease in the price of our Class A common stock.
−Removed: If financial or industry analysts do not publish research or reports about our business or if they issue inaccurate or unfavorable research regarding our securities, the price and trading volume of our securities could decline.
−Removed: The trading market for our securities will be influenced by the research and reports that industry or financial analysts publish about us or our business.
−Removed: We do not control these analysts or the content and opinions included in their reports.
−Removed: If any of the analysts who cover us issue an inaccurate or unfavorable opinion regarding our securities, the price of our securities would likely decline.
−Removed: In addition, analyst research or reports may also raise performance expectations that we may not be able to meet.
−Removed: The stock prices of many companies in the high technology industry have declined significantly after those companies have failed to meet, or in some cases failed to significantly 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 securities or publish unfavorable research about us.
−Removed: If analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause the price of our securities or trading volume to decline, potentially significantly.
Certain provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove members of our Board of Directors or current management and may adversely affect the market price of our securities.
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These provisions could also make it difficult for stockholders to elect directors that are not nominated by the current members of our Board of Directors or take other corporate actions, including effecting changes in our management.
−Removed: These provisions include:
−Removed: • the ability of our Board of Directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;
−Removed: • the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of our Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors;
−Removed: • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;
−Removed: • the requirement that a special meeting of stockholders may be called only by the chairman of our Board of Directors, our lead independent director, our president, our secretary, or a majority vote of our Board of Directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;
−Removed: • the ability of our Board of Directors, by majority vote, to amend our amended and restated bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our amended and restated bylaws to facilitate an unsolicited takeover attempt;
−Removed: • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
+Added: These provisions include, among other things, the ability of our Board of Directors to issue preferred stock without stockholder approval, restrictions on stockholder action by written consent and the calling of special meetings, advance notice requirements for stockholder nominations and proposals, limitations on the ability of stockholders to fill Board vacancies, and other provisions that may discourage, delay or prevent a change in control transaction or changes in the composition of our Board of Directors or management.
In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law.
−Removed: These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time.
+Added: Section 203 generally restricts certain business combinations with stockholders owning 15% or more of our outstanding voting stock for a specified period of time, subject to certain exceptions.
+Added: These provisions could discourage, delay or prevent transactions that stockholders may consider favorable, reduce the market's willingness to pay a premium for our securities, and limit stockholders' ability to influence corporate matters.
Our amended and restated bylaws designate the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America as the exclusive forums for certain disputes between us and our stockholders, which will restrict our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
−Removed: Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
−Removed: any derivative action or proceeding brought on our behalf, any action asserting a breach of a fiduciary duty, any action arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
+Added: Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for certain actions and proceedings under Delaware law, including derivative actions, fiduciary duty claims, claims arising under the Delaware General Corporation Law, our certificate of incorporation or bylaws, and other claims governed by the internal affairs doctrine.
This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
−Removed: Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions.
−Removed: Accordingly, both state and federal courts have jurisdiction to entertain such claims.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
−Removed: While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
−Removed: This may require significant additional costs associated with resolving such action in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
+Added: Our amended and restated bylaws provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
+Added: A stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.
+Added: There can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees.
−Removed: If a court were to find either exclusive-forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business.
+Added: If a court were to find either provision in our amended and restated bylaws to be inapplicable or unenforceable, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm our business.
We do not intend to pay dividends in the foreseeable future.
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General Risk Factors
−Removed: Investors’ and other stakeholders’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new risks.
−Removed: There is an increasing focus from certain investors, customers, partners, employees, other stakeholders, and regulators concerning environmental, social and governance matters ("ESG").
−Removed: Some investors may use these non-financial performance factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our policies and actions relating to ESG are inadequate.
−Removed: We may face reputational damage in the event that we do not meet the ESG standards set by various constituencies, which may prove challenging if such standards diverge or even contradict.
−Removed: As ESG best practices and reporting standards continue to develop, we may incur increasing costs relating to ESG monitoring and reporting and complying with ESG initiatives.
−Removed: For example, the SEC adopted climate change and ESG reporting requirements.
−Removed: Following several legal challenges, the SEC voted to end its defense of such rules.
−Removed: If, in the future, the SEC were to reverse its current position, our compliance costs would increase.
−Removed: We may also face greater costs to comply with new ESG standards or initiatives in the European Union.
−Removed: We publish an annual Impact Report, which reports, among other things, our greenhouse gas emissions and our efforts to manage our emissions.
−Removed: In addition, our annual Impact Report provides highlights of how we are supporting our workforce, including our efforts to foster culture and community.
−Removed: Our disclosures on these matters, or a failure to meet evolving stakeholder expectations for ESG practices and reporting, may potentially harm our reputation and customer relationships.
−Removed: Due to new regulatory standards and market standards, certain new or existing customers, particularly those in the European Union, may impose stricter ESG guidelines or mandates for, and may scrutinize relationships more closely with, their counterparties, including us, which may lengthen sales cycles or increase our costs.
−Removed: Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current investors may elect to invest with our competitors instead.
−Removed: In addition, in the event that we communicate certain initiatives or goals regarding ESG matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals.
−Removed: If we fail to satisfy the expectations of investors, customers, employees and other stakeholders or our initiatives are not executed as planned, our business, financial condition, results of operations, and prospects could be adversely affected.
Our business is subject to the risks of natural disasters (including extreme weather), pandemics, man-made problems, and other similar events that may be outside of our control.
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For example, despite the implementation of network security measures, our networks also may be vulnerable to computer viruses, break-ins and similar disruptions from unauthorized tampering with our solutions.
−Removed: Further, both our corporate headquarters and our contract manufacturer are located in the San Francisco Bay Area, a region known for seismic activity.
+Added: Further, both our corporate headquarters and our OEM and contract manufacturer are located in the San Francisco Bay Area, a region known for seismic activity.
In addition, natural disasters (including extreme weather) and man-made problems could cause disruptions in our or our end customers’ or channel partners’ businesses, our suppliers’ and manufacturers’ operations or the global economy as a whole.
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Any disruption to our communications, whether caused by a natural disaster or by man-made problems, such as power disruptions, could adversely affect our business.
−Removed: We do not have a formal disaster recovery plan or policy in place and do not currently require that our manufacturing partners have such plans or policies in place.
To the extent that any such disruptions result in delays or cancellations of orders or impede our suppliers’ or our manufacturers’ ability to timely deliver our solutions and product components, or the deployment of our solutions, our business, operating results and financial condition would be adversely affected.
−Removed: We do maintain what we believe are commercially reasonable levels of business interruption insurance.
−Removed: However, such insurance may not adequately cover our losses in the event of a significant disruption in our business.
+Added: Our business interruption insurance may not adequately cover our losses in the event of a significant disruption in our business.
We may further expand through acquisitions of, or investments in, other companies (or vice versa through divestitures), each of which may divert our management’s attention, resulting in additional dilution to our stockholders and consumption of resources that are necessary to sustain and grow our business.
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We also may enter into relationships with other businesses in order to expand our solutions, which could involve preferred or exclusive licenses, additional channels of distribution or discount pricing or investments in other companies.
−Removed: Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to third-party approvals, such as government regulatory approvals, which are beyond our control.
−Removed: Consequently, we can make no assurance that these transactions, once undertaken and announced, will close.
−Removed: These kinds of acquisitions, divestitures or investments may result in unforeseen expenditures and operating and integration difficulties, especially if the acquisitions, divestitures or investments are more complex in structure and scope, including due to the geographic location of the acquired company.
+Added: Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may be subject to third-party approvals, such as government regulatory approvals, beyond our control.
+Added: Consequently, we cannot assure that these transactions, once undertaken and announced, will close.
+Added: Acquisitions, divestitures or investments may result in unforeseen expenditures and operating and integration difficulties, especially if they are more complex in structure and scope, including due to the geographic location of the acquired company.
In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of companies that we may acquire, particularly if the key personnel of the acquired business choose not to work for us.
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dollar relative to foreign currencies could increase the effective cost of our solutions for customers outside the United States, which may adversely affect our financial condition and operating results.
−Removed: An increasing portion of our operating expenses is incurred outside the United States and denominated in foreign currencies, including the Euro, Pound Sterling, Indian Rupee, and Australian Dollar.
+Added: An increasing portion of our operating expenses is incurred outside the United States and denominated in foreign currencies, including the Euro, Pound Sterling, and Indian Rupee.
We also have expenses in other currencies, which are smaller in magnitude but still subject to currency fluctuations.
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Under our corporate investment policy, we seek to preserve principal, maintain liquidity, avoid excessive credit concentrations, and capture a market rate of return.
−Removed: However, the portfolio’s value may decline due to changes in interest rates, instability in the global financial markets that reduces the liquidity of securities in our portfolio, and other factors, including unexpected or unprecedented events such as health epidemics or pandemics.
+Added: However, the portfolio’s value may decline due to changes in interest rates, instability in the global financial markets that reduces the liquidity of securities in our portfolio, and other factors.
Even with diversification and ongoing risk-profile monitoring, we could experience significant losses or reduced liquidity.
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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.