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These risks include, but are not limited to, the following:
−Removed: • The ongoing global COVID-19 outbreak could harm our business and results of operations.
+Added: • The ongoing global COVID-19 pandemic could harm our business and results of operations.
• Our business and operations have experienced growth in recent periods, and if we do not effectively manage any future growth or are unable to improve our systems, processes, and controls, our operating results could be adversely affected.
• Our operating results may vary significantly from period to period and be unpredictable, which could cause the market price of our common stock to decline.
−Removed: • Ongoing global economic uncertainty could have an adverse effect on our business and operating results.
+Added: • Our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment.
• Our revenue growth rate in recent periods may not be indicative of our future performance.
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• If we are unable to hire, integrate, train, retain, and motivate qualified personnel and senior management, our business could suffer.
−Removed: • If we are not successful in executing our strategy to increase sales of our products, subscriptions and support offerings to new and existing medium and large enterprise end-customers, our operating results may suffer.
+Added: • If we are not successful in executing our strategy to increase sales of our products, subscriptions and support offerings to new and existing enterprise end-customers, our operating results may suffer.
• We rely on revenue from subscription and support offerings, and because we recognize revenue from subscription and support over the term of the relevant service period, downturns or upturns in sales of these subscription and support offerings are not immediately reflected in full in our operating results.
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• Our current research and development efforts may not produce successful products, subscriptions, or features that result in significant revenue, cost savings or other benefits in the near future, if at all.
−Removed: • We may acquire other businesses, which could subject us to adverse claims or liabilities, require significant management attention, disrupt our business, and adversely affect our operating results, may not result in the expected benefits of such acquisitions and may dilute stockholder value.
+Added: • We may acquire other businesses, which could subject us to adverse claims or liabilities, require significant management attention, disrupt our business, adversely affect our operating results, may not result in the expected benefits of such acquisitions and may dilute stockholder value.
• Because we depend on manufacturing partners to build and ship our products, we are susceptible to manufacturing and logistics delays and pricing fluctuations that could prevent us from shipping customer orders on time, if at all, or on a cost-effective basis, which may result in the loss of sales and end-customers.
• Managing the supply of our products and product components is complex.
−Removed: Insufficient supply and inventory may result in lost sales opportunities or delayed revenue, while excess inventory may harm our gross margins.
−Removed: • Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our end-customers and may result in the loss of sales and end-customers.
−Removed: • The sales prices of our products and subscriptions may decrease, which may reduce our gross profits and adversely impact our financial results.
+Added: Insufficient supply and inventory would result in lost sales opportunities or delayed revenue, while excess inventory would harm our gross margins.
+Added: • Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which has disrupted or delayed our scheduled product deliveries to our end-customers, increase our costs and may result in the loss of sales and end-customers.
+Added: • The sales prices of our products, subscriptions and support offerings may decrease, which may reduce our gross profits and adversely impact our financial results.
• We generate a significant amount of revenue from sales to distributors, resellers, and end-customers outside of the United States, and we are therefore subject to a number of risks associated with international sales and operations.
−Removed: • We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and operating results.
+Added: • We are exposed to fluctuations in foreign currency exchange rates, which could negatively affect our financial condition and operating results.
• We are exposed to the credit and liquidity risk of some of our channel partners and end-customers, and to credit exposure in weakened markets, which could result in material losses.
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• Our ability to sell our products and subscriptions is dependent on the quality of our technical support services and those of our channel partners, and the failure to offer high-quality technical support services could have a material adverse effect on our end-customers’ satisfaction with our products and subscriptions, our sales, and our operating results.
−Removed: • Claims by others that we infringe their proprietary technology or other rights could harm our business.
+Added: • Claims by others that we infringe their intellectual property rights could harm our business.
• Our proprietary rights may be difficult to enforce or protect, which could enable others to copy or use aspects of our products or subscriptions without compensating us.
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• We license technology from third parties, and our inability to maintain those licenses could harm our business.
−Removed: • Our failure to adequately protect personal information could have a material adverse effect on our business.
−Removed: • We face risks associated with having operations and employees located in Israel.
−Removed: • We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.
−Removed: • Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new products and subscriptions could reduce our ability to compete and could harm our business.
−Removed: • We have a corporate structure aligned with the international nature of our business activities, and if we do not achieve increased tax benefits as a result of our corporate structure, our financial condition and operating results could be adversely affected.
−Removed: • We may not have the ability to raise the funds necessary to settle conversions of our Notes, repurchase our Notes upon a fundamental change, or repay our Notes in cash at their maturity, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of our Notes.
−Removed: • Our charter documents and Delaware law, as well as certain provisions contained in the indentures governing our Notes, could discourage takeover attempts and lead to management entrenchment, which could also reduce the market price of our common stock.
Risks Related to Our Business and Our Industry
−Removed: The ongoing global COVID-19 outbreak could harm our business and results of operations.
+Added: The ongoing global COVID-19 pandemic could harm our business and results of operations.
The novel strain of COVID-19 identified in late 2019 has spread globally, including within the United States, and has resulted in government authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders, and shutdowns.
−Removed: This outbreak has negatively impacted and will likely continue to have a negative impact on, worldwide economic activity and financial markets and has impacted, and will further impact, our workforce and operations, the operations of our end-customers, and those of our respective channel partners, vendors and suppliers.
+Added: This pandemic has negatively impacted and will likely continue to have a negative impact on, worldwide economic activity and financial markets and has impacted, and will further impact, our workforce and operations, the operations of our end-customers, and those of our respective channel partners, vendors and suppliers.
In light of the uncertain and rapidly evolving situation relating to the spread of this virus and various government restrictions and guidelines, we have taken measures intended to mitigate the spread of the virus and minimize the risk to our employees, channel partners, end-customers, and the communities in which we operate.
−Removed: These measures include transitioning our employee population to work remotely from home beginning in March 2020, which continued through the fiscal year ended July 31, 2021, and may continue into future quarters.
+Added: Through our FLEXWORK program, our employees may choose to work from home or in the office for a set number of days per week.
Although we continue to monitor the situation and may adjust our current policies as more information and public health guidance become available, including progress made through vaccinations, these precautionary measures that we have adopted could negatively affect our customer success efforts, sales and marketing efforts, delay and lengthen our sales cycles, and create operational or other challenges, any of which could harm our business and results of operations.
−Removed: In addition, COVID-19 may continue to disrupt the operations of our end-customers and channel partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact our business and results of operations, including cash flows.
+Added: In addition, COVID-19 will likely continue to disrupt the operations of our end-customers and channel partners for an indefinite period of time, including as a result of travel restrictions and/or business shutdowns, all of which could negatively impact our business and results of operations, including cash flows.
The ongoing impact of COVID-19 is fluid and uncertain, but it has caused and may continue to cause various negative effects, including an inability to meet with our existing or potential end-customers;
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us delaying, canceling, or withdrawing from user and industry conferences and other marketing events, including some of our own;
−Removed: changes in the demand for our products, which has caused us to reprioritize our engineering and research and development efforts and make changes to our original offering roadmap;
−Removed: and delays or possible disruptions in our supply chain.
−Removed: As a result, we may experience extended sales cycles;
+Added: and changes in the demand for our products, which has caused us to reprioritize our engineering and research and development efforts and make changes to our original offering roadmap.
+Added: We have also seen supply chain challenges increase significantly, including chip and component shortages (in some cases, attributable to labor shortages), and at times we do not have sufficient inventory of certain of our products to promptly meet customer demand.
+Added: As a result, we have experienced at times extended delivery time and increased costs for chips and components compared to historic levels;
our demand generation activities, and our ability to close transactions with end-customers and partners may be negatively impacted;
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and it has been and, until the COVID-19 outbreak is contained and global economic activity stabilizes, will continue to be more difficult for us to forecast our operating results.
−Removed: More generally, the outbreak has not only significantly and adversely increased economic and demand uncertainty, but it has caused a global economic slowdown, and continuing global economic uncertainty which could decrease technology spending and adversely affect demand for our offerings and harm our business and results of operations.
+Added: More generally, the pandemic has not only significantly and adversely increased economic and demand uncertainty, but it has caused a global economic slowdown, and continuing global economic uncertainty which could decrease technology spending and adversely affect demand for our offerings and harm our business and results of operations.
Our business and operations have experienced growth in recent periods, and if we do not effectively manage any future growth or are unable to improve our systems, processes, and controls, our operating results could be adversely affected.
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• our ability to attract and retain new end-customers or sell additional products and subscriptions to our existing end-customers;
−Removed: • the budgeting cycles, seasonal buying patterns, and purchasing practices of our end-customers, including the likely slowdown in technology spending due to the global economic downturn;
+Added: • the budgeting cycles, seasonal buying patterns, and purchasing practices of our end-customers ;
• changes in end-customer, distributor or reseller requirements, or market needs;
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• changes in the mix of our products, subscriptions, and support, including changes in multi-year subscriptions and support;
−Removed: • our ability to successfully and continuously expand our business domestically and internationally, particularly in the current global economic slowdown;
+Added: • our ability to successfully and continuously expand our business domestically and internationally, particularly in the current global economic slowdown and the escalation of military conflicts such as Russia’s invasion of Ukraine;
• changes in the growth rate of the enterprise security industry;
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• our ability to increase the size and productivity of our distribution channel;
+Added: • our obligation to repay the aggregate principal amount of the Notes as holders exercise their conversion rights under the Notes;
• decisions by potential end-customers to purchase security solutions from larger, more established security vendors or from their primary network equipment vendors;
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• timing of revenue recognition and revenue deferrals;
−Removed: • our ability to manage production and manufacturing related costs, global customer service organization costs, inventory excess and obsolescence costs, and warranty costs, especially due to potential disruptions in our supply chain as a result of COVID-19 ;
+Added: • our ability to manage production and manufacturing related costs, global customer service organization costs, inventory excess and obsolescence costs, and warranty costs, especially due to disruptions in our supply chain as a result of COVID-19 and the global semiconductor chip and component shortage;
• our ability to manage cloud hosting service costs and scale the cloud-based subscription offerings;
−Removed: • insolvency or credit difficulties confronting our end-customers, w hich could increase due to the effects of COVID-19 and adversely affect their ability to purchase or pay for our products and subscription and support offerings in a timely manner or at all, or confronting our key suppliers, including our sole source suppliers, which could disrupt our supply chain;
+Added: • insolvency or credit difficulties confronting our end-customers, including due to the continuing effects of COVID-19 and adversely affect their ability to purchase or pay for our products and subscription and support offerings in a timely manner or at all, or confronting our key suppliers, including our sole source suppliers, which could disrupt our supply chain;
• any disruption in our channel or termination of our relationships with important channel partners, including as a result of consolidation among distributors and resellers of security solutions;
−Removed: • our inability to fulfill our end-customers’ orders due to supply chain delays or events that impact our manufacturers or their suppliers, which may be adversely affected by the effects of COVID-19;
+Added: • our inability to timely fulfill our end-customers’ orders due to supply chain delays or events that impact our manufacturers or their suppliers, including due to the effects of COVID-19 and the global semiconductor chip and component shortage;
• the cost and potential outcomes of litigation, which could have a material adverse effect on our business;
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• increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates, as an increasing amount of our expenses is incurred and paid in currencies other than the U.S.
−Removed: • political, economic and social instability caused by the United Kingdom’s exit from the European Union (“Brexit”), continued hostilities in the Middle East, terrorist activities, any disruptions from COVID-19 and any disruption these events may cause to the broader global industrial economy;
−Removed: • general macroeconomic conditions, both domestically and in our foreign markets that could impact some or all regions where we operate, including the expected global economic slowdown, increased risk of inflation, and potential global recession caused by the COVID-19 pandemic.
+Added: • political, economic and social instability caused by the United Kingdom’s exit from the European Union (“Brexit”), Russia’s invasion of Ukraine, continued hostilities in the Middle East, terrorist activities, any disruptions from COVID-19 and any disruption these events may cause to the broader global industrial economy;
+Added: • general macroeconomic conditions, both domestically and in our foreign markets that could impact some or all regions where we operate, including inflation, and global economic uncertainty due to the continuing effects of COVID-19.
Any one of the factors above, or the cumulative effect of some of the factors referred to above, may result in significant fluctuations in our financial and other operating results.
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If we fail to meet or exceed such expectations for these or any other reasons, the market price of our common stock could fall substantially, and we could face costly lawsuits, including securities class action suits.
−Removed: Ongoing global economic uncertainty could have an adverse effect on our business and operating results.
−Removed: We operate globally and as a result our business and revenues are impacted by global macroeconomic conditions.
−Removed: The multinational efforts to contain the spread of COVID-19 have had a significant adverse effect on the global macroeconomic environment that continues to cause economic uncertainty.
−Removed: In addition, the instability in the global credit markets, falling demand for oil and other commodities, uncertainties regarding the effects of Brexit, uncertainties related to the timing of the lifting of governmental restrictions to mitigate the spread of COVID-19, changes in public policies such as domestic and international regulations, taxes, or international trade agreements, international trade disputes, government shutdowns, geopolitical turmoil and other disruptions to global and regional economies and markets continue to add uncertainty to global economic conditions.
−Removed: These adverse conditions could result in reductions in sales of our products and subscriptions, longer sales cycles, reductions in subscription or contract duration and value, slower adoption of new technologies, and increased price competition.
−Removed: As a result, any continued or further uncertainty, weakness or deterioration in global macroeconomic and market conditions may cause our end-customers to modify spending priorities or delay purchasing decisions, and result in lengthened sales cycles, any of which could harm our business and operating results.
+Added: Our operating results may be adversely affected by unfavorable economic and market conditions and the uncertain geopolitical environment.
+Added: We operate globally, and as a result, our business and revenues are impacted by global economic and geopolitical conditions.
+Added: The instability in the global credit markets, inflation, shortages and delays related to the global supply chain challenges, uncertainties related to the timing of the lifting of governmental restrictions to mitigate the spread of COVID-19, the current economic challenges in China, changes in public policies such as domestic and international regulations, taxes, increase in interest rates, fluctuations in foreign currency exchange rates, or international trade agreements, international trade disputes, government shutdowns, geopolitical turmoil and other disruptions to global and regional economies and markets continue to add uncertainty to global economic conditions.
+Added: Military actions or armed conflict, including Russia’s invasion of Ukraine and any related political or economic responses and counter-responses, and uncertainty about or changes in government and trade relationships, policies and treaties could also lead to worsening economic and market conditions and the geopolitical environment.
+Added: In response to Russia’s invasion of Ukraine, the United States, along with the European Union, has imposed restrictive sanctions on Russia, Russian entities, and Russian citizens (“Sanctions on Russia”).
+Added: We are subject to these governmental sanctions and export controls, which may subject us to liability if we are not in full compliance with applicable laws.
+Added: Any continued or further uncertainty, weakness or deterioration in economic and market conditions or the geopolitical environment could have a material and adverse impact on our business, financial condition and results of operations, including reductions in sales of our products and subscriptions, longer sales cycles, reductions in subscription or contract duration and value, slower adoption of new technologies, alterations in the spending patterns or priorities of current and prospective customers (including delaying purchasing decisions), increased costs for the chips and components to manufacture our products and increased price competition.
Our revenue growth rate in recent periods may not be indicative of our future performance.
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economy due to COVID-19, slowing demand for our products or subscriptions, increasing competition, a decrease in the growth of, or a demand shift in, our overall market, or a failure to capitalize on growth opportunities.
−Removed: Any failure to increase our revenue as we grow our business could prevent us from achieving or maintaining profitability or maintaining or increasing cash flow on a consistent basis.
+Added: We have also entered into a substantial amount of capital commitments for operating lease obligations and other purchase commitments.
+Added: Any failure to increase our revenue as we grow our business could prevent us from achieving or maintaining profitability or maintaining or increasing cash flow on a consistent basis or satisfying our capital commitments.
In addition, we may have difficulty achieving profitability under U.S.
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Further, existing end-customers have no contractual obligation to and may not renew their subscription and support contracts after the completion of their initial contract period.
−Removed: Our end-customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our
−Removed: subscriptions and our support offerings, the frequency and severity of subscription outages, our product uptime or latency, and the pricing of our, or competing, subscriptions.
+Added: Our end-customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our subscriptions and our support offerings, the frequency and severity of subscription outages, our product uptime or latency, and the pricing of our, or competing, subscriptions.
Additionally, our end-customers may renew their subscription and support agreements for shorter contract lengths or on other terms that are less economically beneficial to us.
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• public cloud vendors and startups that offer solutions for cloud security (private, public and hybrid cloud);
−Removed: • large and small companies, such as Crowdstrike, Inc (“Crowdstrike”) that offer solutions for security operations and endpoint security.
+Added: • large and small companies, such as Crowdstrike, Inc.
+Added: (“Crowdstrike”), that offer solutions for security operations and endpoint security.
Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages such as:
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• greater resources to make strategic acquisitions or enter into strategic partnerships;
+Added: • lower levels of indebtedness;
• lower labor and development costs;
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New start-up companies that innovate and large competitors that are making significant investments in research and development may invent similar or superior products and technologies that compete with our products and subscriptions.
−Removed: Some of our competitors have made or could make acquisitions of businesses that may allow them to offer more directly competitive and comprehensive solutions than they had previously offered and adapt more quickly
−Removed: to new technologies and end-customer needs.
+Added: Some of our competitors have made or could make acquisitions of businesses that may allow them to offer more directly competitive and comprehensive solutions than they had previously offered and adapt more quickly to new technologies and end-customer needs.
Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources.
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Increasingly, companies are subject to a wide variety of attacks on their networks on an ongoing basis.
−Removed: In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, and denial of service attacks, sophisticated nation-state and nation-state supported actors engage in intrusions and attacks (including advanced persistent threat intrusions) and add to the risks to our internal networks, cloud-deployed enterprise and customer-facing environments and the information they store and process.
−Removed: The incidence of cybersecurity breaches have increased.
−Removed: Despite significant efforts to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks.
−Removed: We and our third-party service providers may face security threats and attacks from a variety of sources.
−Removed: Our data, corporate systems, third-party systems and security measures may be breached due to the actions of outside parties, employee error, malfeasance, a combination of these, or otherwise, and, as a result, an unauthorized party may obtain access to our data.
+Added: In addition to traditional computer “hackers,” malicious code (such as viruses and worms), phishing attempts, employee theft or misuse, and denial of service attacks, sophisticated nation-state and nation-state supported actors engage in intrusions and attacks (including advanced persistent threat intrusions and supply chain attacks) and add to the risks to our internal networks, cloud-deployed enterprise and customer-facing environments and the information they store and process.
+Added: Incidences of cyberattacks and other cybersecurity breaches and incidents have increased and are likely to continue to increase.
+Added: We and our third-party service providers face security threats and attacks from a variety of sources.
+Added: Despite our efforts and processes to prevent breaches of our internal networks, systems and websites, our data, corporate systems, our systems and security measures, as well as those of our third-party service providers, are still vulnerable to computer viruses, break-ins, phishing attacks, ransomware attacks, or other types of attacks from outside parties, or breaches due to employee error, malfeasance, a combination of these, or otherwise.
+Added: We cannot guarantee that the measures we have taken to protect our networks, systems and websites will provide adequate security.
Furthermore, as a well-known provider of security solutions, we may be a more attractive target for such attacks.
−Removed: A breach in our data security or an attack against our service availability, or that of our third-party service providers, could impact our networks or networks secured by our products and subscriptions, creating system disruptions or slowdowns and exploiting security vulnerabilities of our products, and the information stored on our networks or those of our third-party service providers could be accessed, publicly disclosed, altered, lost, or stolen, which could subject us to liability and cause us financial harm.
−Removed: Although we have not yet experienced significant damages from unauthorized access by a third party of our internal network, any actual or perceived breach of network security in our systems or networks, or any other actual or perceived data security incident we or our third-party service providers suffer, could result in damage to our reputation, negative publicity, loss of channel partners, end-customers and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems and otherwise respond to any incident, regulatory investigations and enforcement actions, costly litigation, and other liability.
−Removed: In addition, we may incur significant costs and operational consequences of investigating, remediating, eliminating and putting in place additional tools and devices designed to prevent actual or perceived security breaches and other security incidents, as well as the costs to comply with any notification obligations resulting from any security incidents.
+Added: The conflict in Ukraine and associated activities in Ukraine and Russia may increase the risk of cyberattacks on various types of infrastructure and operations, and the United States government has warned companies to be prepared for a significant increase in Russian cyberattacks in response to the Sanctions on Russia.
+Added: A security breach or incident or an attack against our service availability suffered by us, or our third-party service providers, could impact our networks or networks secured by our products and subscriptions, creating system disruptions or slowdowns and exploiting security vulnerabilities of our products, and the information stored or otherwise processed on our networks or those of our third-party service providers could be accessed, publicly disclosed, altered, lost, stolen, rendered unavailable, or otherwise used or processed without authorization, which could subject us to liability and cause us financial harm.
+Added: Any actual or perceived breach of security in our systems or networks, or any other actual or perceived data security incident we or our third-party service providers suffer, could result in significant damage to our reputation, negative publicity, loss of channel partners, end-customers and sales, loss of competitive advantages over our competitors, increased costs to remedy any problems and otherwise respond to any incident, regulatory investigations and enforcement actions, demands, costly litigation, and other liability.
+Added: In addition, we may incur significant costs and operational consequences of investigating, remediating, eliminating and putting in place additional tools, devices, and other measures designed to prevent actual or perceived security breaches and other security incidents, as well as the costs to comply with any notification obligations resulting from any security incidents.
While we maintain cybersecurity insurance, our insurance may be insufficient to cover all liabilities incurred by these incidents, and any incidents may result in loss of, or increased costs of, our cybersecurity insurance.
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Any failure to preserve our culture as we grow could limit our ability to innovate and could negatively affect our ability to retain and recruit personnel, continue to perform at current levels or execute on our business strategy.
−Removed: If we are not successful in executing our strategy to increase sales of our products, subscriptions and support offerings to new and existing medium and large enterprise end-customers, our operating results may suffer.
+Added: If we are not successful in executing our strategy to increase sales of our products, subscriptions and support offerings to new and existing enterprise end-customers, our operating results may suffer.
Our growth strategy is dependent, in part, upon increasing sales of our products, services, subscriptions and offerings to new and existing medium and large enterprise end-customers.
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Because the techniques used by computer hackers to access or sabotage networks change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques and provide a solution in time to protect our end-customers’ networks.
+Added: In addition, due to the Russian invasion of Ukraine there could be a significant increase in Russian cyberattacks against our customers, resulting in an increased risk of a security breach of our end-customers’ systems.
Furthermore, as a well-known provider of security solutions, our networks, products, including cloud-based technology, and subscriptions could be targeted by attacks specifically designed to disrupt our business and harm our reputation.
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• an increase in warranty claims compared with our historical experience, or an increased cost of servicing warranty claims, either of which would adversely affect our gross margins;
−Removed: • litigation, regulatory inquiries, or investigations, each of which may be costly and harm our reputation.
+Added: • litigation, regulatory inquiries, investigations, or other proceedings, each of which may be costly and harm our reputation.
Further, our products and subscriptions may be misused by end-customers or third parties that obtain access to our products and subscriptions.
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Although we may be indemnified by our third-party manufacturers for product liability claims arising out of manufacturing defects, because we control the design of our products and subscriptions, we may not be indemnified for product liability claims arising out of design defects.
−Removed: maintain insurance to protect against certain claims associated with the use of our products and subscriptions, but our insurance coverage may not adequately cover any claim asserted against us.
+Added: We maintain insurance to protect against certain claims associated with the use of our products and subscriptions, but our insurance coverage may not adequately cover any claim asserted against us.
In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation, divert management’s time and other resources, and harm our reputation.
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For example, organizations are moving portions of their data to be managed by third parties, primarily infrastructure, platform and application service providers, and may rely on such providers’ internal security measures.
−Removed: In 2019, we announced our new cloud security offerings for securing access to the cloud (Prisma), and our security offerings for securing the future of security operations (Cortex).
While we have historically been successful in developing, acquiring, and marketing new products and product enhancements that respond to technological change and evolving industry standards, we may not be able to continue to do so, and there can be no assurance that our new or future offerings will be successful or will achieve widespread market acceptance.
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The development of our portfolio is difficult and the timetable for commercial release and availability is uncertain as there can be long time periods between releases and availability of new features.
−Removed: If we experience
−Removed: unanticipated delays in the availability of new products, features and subscriptions, and fail to meet customer expectations for such availability, our competitive position and business prospects will be harmed.
+Added: If we experience unanticipated delays in the availability of new products, features and subscriptions, and fail to meet customer expectations for such availability, our competitive position and business prospects will be harmed.
Additionally, we must commit significant resources to developing new features and new cloud security, AI/analytics and other offerings before knowing whether our investments will result in products, subscriptions, and features the market will accept.
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We may acquire other businesses, which could subject us to adverse claims or liabilities, require significant management attention, disrupt our business, adversely affect our operating results, may not result in the expected benefits of such acquisitions and may dilute stockholder value.
−Removed: As part of our business strategy, we may acquire or make investments in complementary companies, products, or technologies.
+Added: As part of our business strategy, we acquire and make investments in complementary companies, products, or technologies.
The identification of suitable acquisition candidates is difficult, and we may not be able to complete such acquisitions on favorable terms, if at all.
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See the risk factors entitled “ Our failure to raise additional capital or generate the significant capital necessary to expand our operations and invest in new products and subscriptions could reduce our ability to compete and could harm our business.
−Removed: ” and “ The issuance of additional stock in connection with financings, acquisitions, investments, our stock incentive plans, the conversion of our Notes or exercise of the
−Removed: related Warrants, or otherwise will dilute all other stockholders .” The occurrence of any of these risks could harm our business, operating results, and financial condition.
+Added: ” and “ The issuance of additional stock in connection with financings, acquisitions, investments, our stock incentive plans, the conversion of our Notes or exercise of the related Warrants, or otherwise will dilute all other stockholders .” The occurrence of any of these risks could harm our business, operating results, and financial condition.
Risks Related to our Supply Chain
Because we depend on manufacturing partners to build and ship our products, we are susceptible to manufacturing and logistics delays and pricing fluctuations that could prevent us from shipping customer orders on time, if at all, or on a cost-effective basis, which may result in the loss of sales and end-customers.
−Removed: We depend on manufacturing partners, primarily our EMS provider, Flex, as our sole source manufacturers for our product lines.
+Added: We depend on manufacturing partners, primarily our electronics manufacturing service provider (“EMS provider”) Flex, to manufacture our hardware product lines.
Our reliance on these manufacturing partners reduces our control over the manufacturing process and exposes us to risks, including reduced control over quality assurance, product costs, product supply, timing and transportation risk.
−Removed: Our products are manufactured by our manufacturing partners at facilities located in the United States.
+Added: Our products are manufactured by our manufacturing partners at facilities located primarily in the United States.
Some of the components in our products are sourced either through Flex or directly by us from component suppliers outside the United States.
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Each of these factors could severely impair our ability to fulfill orders.
−Removed: In addition, we are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) to diligence, disclose, and report whether or not our products contain minerals originating from the Democratic Republic of the Congo and adjoining countries, or conflict minerals.
+Added: In addition, we are subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) to conduct due diligence, disclose, and report whether or not our products contain minerals originating from the Democratic Republic of the Congo and adjoining countries, or conflict minerals.
Although the SEC has provided guidance with respect to a portion of the conflict minerals filing requirements that may somewhat reduce our reporting practices, we have incurred and expect to incur additional costs to comply with these disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products.
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Managing the supply of our products and product components is complex.
−Removed: Insufficient supply and inventory may result in lost sales opportunities or delayed revenue, while excess inventory may harm our gross margins.
+Added: Insufficient supply and inventory would result in lost sales opportunities or delayed revenue, while excess inventory would harm our gross margins.
Our manufacturing partners procure components and build our products based on our forecasts, and we generally do not hold inventory for a prolonged period of time.
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If our actual component usage and product demand are lower than the forecast we provide to our manufacturing partners, we accrue for losses on manufacturing commitments in excess of forecasted demand.
−Removed: Alternatively, insufficient supply levels, including due to the recent global shortage of semiconductors, may lead to shortages that result in delayed product revenue or loss of sales opportunities
−Removed: altogether as potential end-customers turn to competitors’ products that are readily available.
+Added: Alternatively, insufficient supply levels, including due to the recent global shortage of semiconductors, may lead to shortages that result in delayed product revenue or loss of sales opportunities altogether as potential end-customers turn to competitors’ products that are readily available.
If we are unable to effectively manage our supply and inventory, our operating results could be adversely affected.
−Removed: Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which could disrupt or delay our scheduled product deliveries to our end-customers and may result in the loss of sales and end-customers.
+Added: Because some of the key components in our products come from limited sources of supply, we are susceptible to supply shortages or supply changes, which has disrupted or delayed our scheduled product deliveries to our end-customers, increase our costs and may result in the loss of sales and end-customers.
Our products rely on key components, including integrated circuit components, which our manufacturing partners purchase on our behalf from a limited number of component suppliers, including sole source providers.
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For example, we have experienced, and could continue to experience, increased difficulties in obtaining a sufficient amount of materials in the semiconductor market, which could reduce our flexibility to react to product mix changes and unforecasted orders.
+Added: In addition, we have experienced increased costs because of these shortages.
Further, we do not have volume purchase contracts with any of our component suppliers, and they could cease selling to us at any time.
If we are unable to obtain a sufficient quantity of these components in a timely manner for any reason, sales of our products could be delayed or halted, or we could be forced to expedite shipment of such components or our products at dramatically increased costs.
−Removed: Our component suppliers also change their selling prices frequently in response to market trends, including industry-wide increases in demand, and because we do not have volume purchase contracts with these component suppliers, we are susceptible to price fluctuations related to raw materials and components and may not be able to adjust our prices accordingly.
+Added: Our component suppliers also change their selling prices frequently in response to market trends, including industry-wide increases in demand.
+Added: Because we do not have, for the most part, volume purchase contracts with our component suppliers, we are susceptible to price fluctuations related to raw materials and components and may not be able to adjust our prices accordingly.
Additionally, poor quality in any of the sole-sourced components in our products could result in lost sales or sales opportunities.
If we are unable to obtain a sufficient volume of the necessary components for our products on commercially reasonable terms or the quality of the components do not meet our requirements, we could also be forced to redesign our products and qualify new components from alternate component suppliers.
−Removed: The resulting stoppage or delay in selling our products and the expense of redesigning our products could result in lost sales opportunities and damage to customer relationships, which would adversely affect our business and operating results.
+Added: The resulting stoppage or delay in selling our products and the expense of redesigning our products would result in lost sales opportunities and damage to customer relationships, which would adversely affect our business and operating results.
Risks Related to Sales of our Products, Subscriptions and Support Offerings
13 unchanged sentences
Additionally, our international sales and operations are subject to a number of risks, including the following:
−Removed: • political, economic and social uncertainty around the world, health risks such as epidemics and pandemics like COVID-19, macroeconomic challenges in Europe, terrorist activities, and continued hostilities in the Middle East;
+Added: • political, economic and social uncertainty around the world, health risks such as epidemics and pandemics like COVID-19, macroeconomic challenges in Europe, terrorist activities, Russia’s invasion of Ukraine, and continued hostilities in the Middle East;
• greater difficulty in enforcing contracts and accounts receivable collection and longer collection periods;
• the uncertainty of protection for intellectual property rights in some countries;
−Removed: • greater risk of unexpected changes in foreign and domestic regulatory practices, tariffs, and tax laws and treaties, including regulatory and trade policy changes adopted by the current administration or foreign countries in response to regulatory changes adopted by the current administration;
+Added: • greater risk of unexpected changes in foreign and domestic regulatory practices, tariffs, and tax laws and treaties, including regulatory and trade policy changes adopted by the current administration, such as the recently imposed Sanctions on Russia, or foreign countries in response to regulatory changes adopted by the current administration;
• risks associated with trade restrictions and foreign legal requirements, including the importation, certification, and localization of our products required in foreign countries;
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left the E.U.
−Removed: The rules governing the new relationship between the E.U.
−Removed: were set out in the E.U.-U.K.
−Removed: Trade and Cooperation Agreement (i.e., the Brexit deal) and came into force on January 1, 2021.
−Removed: At this time, we cannot predict the impact that the Brexit deal and any future agreements will have on our business.
+Added: and the EU/UK Trade and Cooperation Agreement came into force on January 1, 2021.
Our financial condition and operating results may be impacted by such uncertainty with potential disruptions to our relationships with existing and future customers, suppliers and employees all possibly having a material adverse impact on our business, prospects, financial condition and/or operating results.
−Removed: We are exposed to fluctuations in currency exchange rates, which could negatively affect our financial condition and operating results.
+Added: We are exposed to fluctuations in foreign currency exchange rates, which could negatively affect our financial condition and operating results.
Our sales contracts are primarily denominated in U.S.
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The majority of these demands are currently facilitated by leasing and other financing arrangements provided by our distributors and resellers.
−Removed: To respond to this demand, our customer
−Removed: financing activities may increase in the future.
+Added: To respond to this demand, our customer financing activities may increase in the future.
We also provide financings to certain end-customers.
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For fiscal 2022 , three distributors individually represented 10% or more of our total revenue, and in the aggregate represented 53.6% of our total revenue.
−Removed: As of July 31, 2021, four distributors individually represented 10% or more of our gross accounts receivable, and in the aggregate represented 56.6% of our gross accounts receivable.
+Added: As of July 31, 2022, three distributors individually represented 10% or more of our gross accounts receivable, and in the aggregate represented 47.7% of our gross accounts receivable.
Additionally, to the degree that turmoil in the credit markets makes it more difficult for some customers to obtain financing, those customers’ ability to pay could be adversely impacted, which in turn could have a material adverse impact on our business, operating results, and financial condition.
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Many larger enterprise, service provider, and government entity end-customers have more complex networks and require higher levels of support than smaller end-customers.
−Removed: If we or our channel partners fail to meet the requirements of these larger end-customers,
−Removed: it may be more difficult to execute on our strategy to increase our coverage with larger end-customers.
+Added: If we or our channel partners fail to meet the requirements of these larger end-customers, it may be more difficult to execute on our strategy to increase our coverage with larger end-customers.
Additionally, if our channel partners do not effectively provide support to the satisfaction of our end-customers, we may be required to provide direct support to such end-customers, which would require us to hire additional personnel and to invest in additional resources.
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Risks Related to Intellectual Property and Technology Licensing
−Removed: Claims by others that we infringe their proprietary technology or other rights could harm our business.
−Removed: Companies in the enterprise security industry own large numbers of patents, copyrights, trademarks, domain names, and trade secrets and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights.
−Removed: Third parties are currently asserting, have asserted and may in the future assert claims of infringement of intellectual property rights against us.
−Removed: For example, in December 2011, Juniper, one of our competitors, filed a lawsuit against us alleging patent infringement.
−Removed: In September 2013, we filed a lawsuit against Juniper alleging patent infringement.
−Removed: In May 2014, we entered into a Settlement, Release and Cross-License Agreement with Juniper to resolve all pending disputes between Juniper and us, including dismissal of all pending litigation.
+Added: Claims by others that we infringe their intellectual property rights could harm our business.
+Added: Companies in the enterprise security industry own large numbers of patents, copyrights, trademarks, domain names, and trade secrets and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property rights.
+Added: In addition, non-practicing entities also frequently bring claims of infringement of intellectual property rights.
+Added: Third parties are asserting, have asserted and may in the future assert claims of infringement of intellectual property rights against us.
Third parties may also assert such claims against our end-customers or channel partners, whom our standard license and other agreements obligate us to indemnify against claims that our products and subscriptions infringe the intellectual property rights of third parties.
In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited, that they have divulged proprietary or other confidential information, or that their former employers own their inventions or other work product.
−Removed: Furthermore, we may be unaware of the intellectual property rights of others that may cover some or all of our technology or products and subscriptions.
−Removed: As the number of products and competitors in our market increases and overlaps occur, infringement claims may increase.
−Removed: While we intend to increase the size of our patent portfolio, our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have.
+Added: Furthermore, we may be unaware of the intellectual property rights of others that may cover some or all of our technology, products, subscriptions and services.
+Added: As we expand our footprint, both in our platforms, products, subscriptions and services and geographically, more overlaps occur and we may face more infringement claims both in the United States and abroad.
+Added: While we have been increasing the size of our patent portfolio, our competitors and others may now and in the future have significantly larger and more mature patent portfolios than we have.
In addition, litigation has involved and will likely continue to involve patent holding companies or other adverse patent owners who have no relevant product revenue and against whom our own patents may therefore provide little or no deterrence or protection.
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We generally enter into confidentiality or license agreements with our employees, consultants, vendors, and end-customers, and generally limit access to and distribution of our proprietary information.
−Removed: However, we cannot be certain that we have entered into such agreements with all parties who may have or have had
−Removed: access to our confidential information or that the agreements we have entered into will not be breached.
+Added: However, we cannot be certain that we have entered into such agreements with all parties who may have or have had access to our confidential information or that the agreements we have entered into will not be breached.
We cannot guarantee that any of the measures we have taken will prevent misappropriation of our technology.
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A wide variety of provincial, state, national, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data.
−Removed: These data protection and privacy-related laws and regulations are evolving and being tested in courts and may result in ever-increasing regulatory and public scrutiny, as well as escalating levels of enforcement and sanctions.
+Added: These laws and regulations relating to privacy, data protection and security are evolving and being tested in courts and may result in ever-increasing regulatory and public scrutiny, as well as escalating levels of enforcement and sanctions.
Further, the interpretation and application of foreign laws and regulations in many cases is uncertain, and our legal and regulatory obligations in foreign jurisdictions are subject to frequent and unexpected changes, including the potential for various regulatory or other governmental bodies to enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations, or to increase penalties significantly.
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GDPR requires, among other things, that personal data only be transferred outside of the E.U.
−Removed: to the United States and other jurisdictions that the European Commission has not yet recognized as having “adequate” data protection laws (a “third country”), unless a data transfer mechanism under the E.U.
+Added: to the United States and other jurisdictions that the European Commission has not yet recognized as having “adequate” data protection laws (a “third country”), where a data transfer mechanism under the E.U.
GDPR has been put in place.
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Privacy Shield for purposes of transfers to the U.S.
−Removed: and imposed a requirement for companies to carry out an assessment of the laws and practices governing access to personal data in the third country to ensure an essentially equivalent level of data protection to that afforded in the E.U.
−Removed: We are dealing with the recent “Schrems II” decision by the Court of Justice of the European Union and its impact on our data transfer mechanisms.
−Removed: The effects of this decision are highly uncertain and difficult to predict.
−Removed: Among other effects, we may experience additional costs associated with increased compliance burdens, putting in place any additional data transfer mechanisms to ensure compliance with the E.U.
−Removed: GDPR and the “Schrems II” decision and new contract negotiations with third parties that aid in processing data on our behalf.
−Removed: We may experience reluctance or refusal by current or prospective European customers to use our products, and we may find it necessary or desirable to make further changes to our handling of personal data of residents of the European Economic Area (“EEA”).
−Removed: The regulatory environment applicable to the handling of EEA residents’ personal data, and our actions taken in response, may cause us to assume additional liabilities or incur additional costs and could result in our business, operating results and financial condition being harmed.
−Removed: Additionally, we and our customers may face a risk of enforcement actions by data protection authorities in the EEA relating to personal data transfers to us and by us from the EEA.
+Added: and imposed a requirement for companies to carry out an assessment of the laws and practices govern ing access to personal data in the third country to ensure an essentially equivalent level of data protection to that afforded in the E.U.
+Added: Though we no longer rely on the Privacy Shield programs and instead employ model contractual clauses for personal data transfers, the Schrems II decis ion raises questions as to implications under European and UK law and adequate data protection in the United States.
+Added: Among other effects, we may experience additional costs associated with increased compliance burdens, putting in place any additional data transfer mechanisms and new contract negotiations with third parties that aid in processing data on our behalf.
+Added: We may experience reluctance or refusal by current or prospective customers in the European Economic Area (“EEA”), Switzerland, and the U.K.
+Added: (collectively, “Europe”) to use our products, and we may find it necessary or desirable to make further changes to our handling of personal data of residents of Europe.
+Added: The regulatory environment applicable to the handling of European residents’ personal data, and our actions taken in response, may cause us to assume additional liabilities or incur additional costs and could result in our business, operating results and financial condition being harmed.
+Added: Additionally, we and our customers may face risk of enforcement actions by data protection authorities in Europe relating to personal data transfers to us and by us from Europe.
Any such enforcement actions could result in substantial costs and diversion of resources, distract management and technical personnel and negatively affect our business, operating results, and financial condition.
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(i.e., Brexit), and the expiry of the Brexit transition period, which ended on December 31, 2020, the E.U.
−Removed: GDPR has been implemented in the U.K.
+Added: GDPR has bee n implemented in the U.K.
(as the “U.K.
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The enforcement of the CCPA by the California Attorney General commenced on July 1, 2020.
−Removed: The CCPA has been amended on multiple occasions and the California Attorney General has issued initial and revised regulations that also govern the CCPA, which could be subject to additional modifications.
−Removed: It remains unclear what, if any, additional modifications will be made to this legislation or how it will be interpreted and enforced.
+Added: The CCPA has been amended on multiple occasions and the California Attorney General has issued initial and revised regulations that also govern the CCPA.
+Added: It remains unclear how this legislation will be interpreted and enforced.
The effects of the CCPA potentially are significant, however, and may require us to modify our data processing practices and policies and to incur substantial costs and expenses for compliance.
−Removed: Moreover, additional state-based privacy laws have been passed and will require potentially substantial efforts to obtain compliance.
+Added: Moreover, additional state privacy laws have been passed and will require potentially substantial efforts to obtain compliance.
This includes the California Privacy Rights Act (“CPRA”) which was approved by California voters, and significantly modifies the CCPA.
+Added: federal government also is contemplating privacy legislation.
We may also from time to time be subject to, or face assertions that we are subject to, additional obligations relating to personal data by contract or due to assertions that self-regulatory obligations or industry standards apply to our practices.
1 unchanged sentence
Further, we may be or become subject to data localization laws mandating that data collected in a foreign country be processed and stored within that country.
−Removed: Each of these privacy, security, and data protection laws and regulations, and any other such changes or new laws or regulations, could impose significant limitations,
−Removed: or require changes to our business model or practices or growth strategy, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
+Added: Each of these privacy, security, and data protection laws and regulations, and any other such changes or new laws or regulations, could impose significant limitations, or require changes to our business model or practices or growth strategy, which may increase our compliance expenses and make our business more costly or less efficient to conduct.
Our actual or perceived failure to comply with applicable laws and regulations or other obligations to which we are now or which we may be subject relating to personal data, or to protect personal data from unauthorized acquisition, use or other processing, could result in consequences such as enforcement actions and regulatory investigations against us, fines, public censure, claims for damages by end-customers and other affected individuals, damage to our reputation and loss of goodwill (both in relation to existing end-customers and prospective end-customers), any of which could have a material adverse effect on our operations, financial performance, and business.
3 unchanged sentences
We face risks associated with having operations and employees located in Israel.
−Removed: As a result of various of our acquisitions, including Secdo, PureSec and Twistlock, we have offices and employees located in Israel.
+Added: As a result of various of our acquisitions, including Cyber Secdo Ltd.
+Added: (“Secdo”), PureSec Ltd.
+Added: (“PureSec”) and Twistlock Ltd.
+Added: (“Twistlock”), we have offices and employees located in Israel.
Accordingly, political, economic, and military conditions in Israel directly affect our operations.
The future of peace efforts between Israel and its Arab neighbors remains uncertain.
−Removed: There has been a significant increase in hostilities and political unrest between Hamas and Israel recently.
−Removed: The effects of these hostilities and violence on the Israeli economy and our operations in Israel are unclear, and we cannot predict the effect on us of further increases in these hostilities or future armed conflict, political instability or violence in the region.
+Added: The effects of hostilities and violence on the Israeli economy and our operations in Israel are unclear, and we cannot predict the effect on us of further increases in these hostilities or future armed conflict, political instability or violence in the region.
Current or future tensions and conflicts in the Middle East could adversely affect our business, operating results, financial condition and cash flows.
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Changes in our products or changes in export and import regulations may create delays in the introduction of our products into international markets, prevent our end-customers with international operations from deploying our products globally or, in some cases, prevent or delay the export or import of our products to certain countries, governments, or persons altogether.
−Removed: Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential end-customers with international operations.
+Added: Any change in export or import regulations, economic sanctions, such as the Sanctions on Russia, or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential end-customers with international operations.
Any decreased use of our products or limitation on our ability to export to or sell our products in international markets would likely adversely affect our business, financial condition, and operating results.
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We have reorganized our corporate structure and intercompany relationships to more closely align with the international nature of our business activities.
−Removed: This corporate structure may allow us to reduce our overall effective tax rate through changes in how we use
−Removed: our intellectual property, international procurement, and sales operations.
+Added: This corporate structure may allow us to reduce our overall effective tax rate through changes in how we use our intellectual property, international procurement, and sales operations.
This corporate structure may also allow us to obtain financial and operational efficiencies.
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Further, the determination of our worldwide provision for or benefit from income taxes and other tax liabilities requires significant judgment by management, and there are transactions where the ultimate tax determination is uncertain.
−Removed: Although we believe that our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our consolidated financial statements and may materially affect our financial results in the period or periods for which such determination is made.
+Added: Although we believe that our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded on our consolidated financial statements and may materially affect our financial results in the period or periods for which such determination is made.
In addition, our future income tax obligations could be adversely affected by changes in, or interpretations of, tax laws in the United States or in other jurisdictions in which we operate.
If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
−Removed: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes.
+Added: The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported on our consolidated financial statements and accompanying notes.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue, and expenses that are not readily apparent from other sources.
1 unchanged sentence
In general, if our estimates, judgments or assumptions relating to our critical accounting policies change or if actual circumstances differ from our estimates, judgments or assumptions, including uncertainty in the current economic environment due to COVID-19, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
+Added: Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters.
+Added: There is an increasing focus from regulators, certain investors, and other stakeholders concerning environmental, social, and governance (“ESG”) matters, both in the United States and internationally.
+Added: We communicate certain ESG-related initiatives, goals, and/or commitments regarding environmental matters, diversity, responsible sourcing and social investments, and other matters in our annual ESG Report, on our website, in our filings with the SEC, and elsewhere.
+Added: These initiatives, goals, or commitments could be difficult to achieve and costly to implement.
+Added: We could fail to achieve, or be perceived to fail to achieve, our ESG-related initiatives, goals, or commitments.
+Added: In addition, we could be criticized for the timing, scope or nature of these initiatives, goals, or commitments, or for any revisions to them.
+Added: To the extent that our required and voluntary disclosures about ESG matters increase, we could be criticized for the accuracy, adequacy, or completeness of such disclosures.
+Added: Our actual or perceived failure to achieve our ESG-related initiatives, goals, or commitments could negatively impact our reputation, result in ESG-focused investors not purchasing and holding our stock, or otherwise materially harm our business.
Failure to comply with governmental laws and regulations could harm our business.
−Removed: Our business is subject to regulation by various federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, privacy and data-protection laws, anti-bribery laws (including the U.S.
+Added: Our business is subject to regulation by various federal, state, local, and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, product safety, environmental laws, consumer protection laws, privacy, data security, and data-protection laws, anti-bribery laws (including the U.S.
Foreign Corrupt Practices Act and the U.K.
9 unchanged sentences
Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Directive (“RoHS”) and the E.U.
−Removed: Waste Electrical and Electronic Equipment Directive (“WEEE Directive”), as well as the implementing
−Removed: legislation of the E.U.
+Added: Waste Electrical and Electronic Equipment Directive (“WEEE Directive”), as well as the implementing legislation of the E.U.
member states.
14 unchanged sentences
In July 2018 we issued our 2023 Notes (the “2023 Notes”) and in June 2020 we issued our 2025 Notes (the “2025 Notes,” together with the “2023 Notes,” the “Notes”).
−Removed: We will need to make cash payments (1) if holders of our Notes require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change (e.g., a change of control of Palo Alto Networks, Inc.) before the maturity date, (2) upon conversion of our Notes, (3) to repay our Notes in cash at their maturity, unless earlier converted or repurchased.
−Removed: However, we may not have enough available cash or be able to obtain financing at the time we are required to make payments.
+Added: We will need to make cash payments (1) if holders of our Notes require us to repurchase all or a portion of their Notes upon the occurrence of a fundamental change (e.g., a change of control of Palo Alto Networks, Inc.) before the maturity date, (2) upon conversion of our Notes, or (3) to repay our Notes in cash at their maturity, unless earlier converted or repurchased.
+Added: Effective August 1, 2022 through October 31, 2022, all of the 2023 Notes and 2025 Notes are convertible.
+Added: If all of the Noteholders decided to convert their Notes, we would be obligated to pay the $3.7 billion principal amount of the Notes in cash.
+Added: Under the terms of the Notes, we also have the option to settle the amount of our conversion obligation in excess of the aggregate principal amount of the Notes in cash or shares of our common stock.
+Added: If our cash provided by operating activities, together with our existing cash, cash equivalents and investments, and existing sources of financing, are inadequate to satisfy these obligations, we will need to obtain third-party financing, which may not be available to us on commercially reasonable terms or at all, to meet these payment obligations.
In addition, our ability to repurchase or to pay cash upon conversion of our Notes may be limited by law, regulatory authority or agreements governing our future indebtedness.
10 unchanged sentences
This guidance, which includes forward-looking statements, has been and will be based on projections prepared by our management.
−Removed: These projections are not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our registered public accountants nor any other independent expert or outside party
−Removed: compiles or examines the projections.
+Added: These projections are not prepared with a view toward compliance with published guidelines of the American Institute of Certified Public Accountants, and neither our registered public accountants nor any other independent expert or outside party compiles or examines the projections.
Accordingly, no such person expresses any opinion or any other form of assurance with respect to the projections.
32 unchanged sentences
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company.
−Removed: Securities litigation could result in
−Removed: substantial costs and divert our management’s attention and resources from our business.
+Added: Securities litigation could result in substantial costs and divert our management’s attention and resources from our business.
This could have a material adverse effect on our business, operating results, and financial condition.
13 unchanged sentences
We cannot guarantee that our share repurchase program will be fully consummated, or that it will enhance shareholder value, and share repurchases could affect the price of our common stock.
−Removed: As of July 31, 2021, we had $323.9 million available under our share repurchase program.
−Removed: On August 17, 2021, our board of directors authorized another $676.1 million increase to this share repurchase program, bringing the total authorization to $2.4 billion, with $1.0 billion remaining, and extended the expiration date to December 31, 2022.
+Added: As of July 31, 2022, we had $85.0 million available under our share repurchase program which will expire on December 31, 2022.
Such share repurchase program may be suspended or discontinued by the Company at any time without prior notice.
2 unchanged sentences
In addition, the program may be suspended or terminated at any time, which may result in a decrease in the price of our common stock.
−Removed: We are subject to risks associated with our strategic investments.
−Removed: Impairments in the value of our investments could negatively impact our financial results.
−Removed: In July 2017, we formed the $20.0 million Palo Alto Networks Venture Fund.
−Removed: The fund is aimed at seed-, early-, and growth-stage security companies with a cloud-based application approach.
−Removed: We may not realize a return on our capital investments.
−Removed: Many such private companies generate net losses and the market for their products, services or technologies may be slow to develop, and, therefore, are dependent on the availability of later rounds of financing from banks or investors on favorable terms to continue their operations.
−Removed: The financial success of our investment in any company is typically dependent on a liquidity event, such as a public offering, acquisition or other favorable market event reflecting appreciation in the cost of our initial investment.
−Removed: The capital markets for public offerings and acquisitions are dynamic and the likelihood of liquidity events for the companies we have invested in, and intend to invest in, could significantly change.
−Removed: Further, valuations of privately-held companies are inherently complex due to the lack of readily available market data and as such, the basis for these valuations is subject to the timing and accuracy of the data received from these companies.
−Removed: If we determine that any of our investments in such companies have experienced a decline in value, we may be required to record an impairment, which could be material and negatively impact our financial results.
−Removed: All of our investments are subject to a risk of a partial or total loss of investment capital.
We do not intend to pay dividends for the foreseeable future.
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We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features to enhance our portfolio, improve our operating infrastructure, or acquire complementary businesses and technologies.
−Removed: Accordingly, we may need to engage in equity or debt financings to secure
−Removed: additional funds.
+Added: Accordingly, we may need to engage in equity or debt financings to secure additional funds.
If we raise additional equity or equity-linked financing, our stockholders may experience significant dilution of their ownership interests and the market price of our common stock could decline.
5 unchanged sentences
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely affected.
−Removed: The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain qualified board members.
−Removed: As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the New York Stock Exchange (“NYSE”), and other applicable securities rules and regulations.
−Removed: Compliance with these rules and regulations have increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly, and increased demand on our systems and resources.
−Removed: Among other things, the Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and operating results.
−Removed: In addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: In order to meet the requirements of this standard, significant resources and management oversight may be required.
−Removed: As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results.
−Removed: Although we have already hired additional employees to comply with these requirements, we may need to hire even more employees in the future, which will increase our costs and expenses.
−Removed: In addition, changing laws, regulations, and standards related to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming.
−Removed: These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
−Removed: This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
−Removed: We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities.
−Removed: If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
We are obligated to maintain proper and effective internal control over financial reporting.
5 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.