What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-22 compared with 2022-11-18 · 57 added, 65 removed, 755 unchanged (14% of the section changed)

48 unchanged sentences

As a result, our employee headcount has increased significantly, and we expect it to continue to grow over the next year.

For example, from the end of fiscal 2022 to the end of the first quarter of fiscal 2023, our headcount increased from 12,561 to 13,513 employees.

For example, from the end of fiscal 2022 to the end of the second quarter of fiscal 2023, our headcount increased from 12,561 to 13,932 employees.

In addition, as we have grown, our number of end-customers has also increased significantly, and we have increasingly managed more complex deployments of our products and subscriptions with larger end-customers.

48 unchanged sentences

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.

For example, in the first quarter of fiscal 2023, some of our customers delayed their hardware re-fresh plans, and some of our larger sales transactions required additional internal customer approvals, which can have the affect of extending sales cycles.

Table of Content

3 unchanged sentences

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.

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 relating to new COVID-19 variants, 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.

9 unchanged sentences

our ability to provide 24x7 worldwide support and/or replacement parts to our end-customers may be adversely affected;

and it has been and, until the COVID-19 outbreak subsides globally and global economic conditions improve, will continue to be more difficult for us to forecast our operating results.

and it has been and, until the impact of COVID-19 subsides globally and global economic conditions improve, will continue to be more difficult for us to forecast our operating results.

More generally, the pandemic has not only significantly and adversely increased economic and demand uncertainty, but it has caused or contributed to 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 revenue growth rate in recent periods may not be indicative of our future performance.

We have experienced revenue growth rates of 25.3% and 31.9% in the three months ended October 31, 2022 and 2021, respectively.

We have experienced revenue growth rates of 25.5% and 30.6% in the six months ended January 31, 2023 and 2022, respectively.

Our revenue for any prior quarterly or annual period should not be relied upon as an indication of our future revenue or revenue growth for any future period.

2 unchanged sentences

Other than fiscal 2012, we have incurred losses in all fiscal years since our inception.

As a result, we had an accumulated deficit of $1.6 billion as of October 31, 2022.

As a result, we had an accumulated deficit of $1.6 billion as of January 31, 2023.

We anticipate that our operating expenses will continue to increase in the foreseeable future as we continue to grow our business.

43 unchanged sentences

Many of our smaller competitors that specialize in providing protection from a single type of security threat are often able to deliver these specialized security products to the market more quickly than we can.

Organizations that use legacy products and services may believe that these products and services are sufficient to meet their security needs or that our offerings only serve the needs of a portion of the enterprise security industry.

Accordingly, these organizations may continue allocating their information technology budgets for legacy products and services and may not adopt our

Table of Content

security offerings.

Accordingly, these organizations may continue allocating their information technology budgets for legacy products and services and may not adopt our security offerings.

Further, many organizations have invested substantial personnel and financial resources to design and operate their networks and have established deep relationships with other providers of networking and security products.

20 unchanged sentences

Any of these negative outcomes could adversely impact the market perception of our products and subscriptions and end-customer and investor confidence in our company and could seriously harm our business or operating results.

Table of Content

Reliance on shipments at the end of the quarter could cause our revenue for the applicable period to fall below expected levels.

As a result of end-customer buying patterns and the efforts of our sales force and channel partners to meet or exceed their sales objectives, we have historically received a substantial portion of sales orders and generated a substantial portion of revenue during the last few weeks of each fiscal quarter.

If expected revenue at the end of any fiscal quarter is delayed for any reason, including the failure of anticipated purchase orders to materialize (particularly for large enterprise end-customers with lengthy sales cycles), our logistics partners’ inability to ship products prior to fiscal quarter-end to fulfill purchase orders received near the end of a fiscal quarter (including due to the effects of COVID-19), our failure to manage inventory to meet demand, any failure of our systems related to order review and processing, or any delays in shipments based on trade compliance requirements (including new compliance requirements imposed by new or renegotiated trade agreements), revenue could fall below our expectations and the estimates of analysts for that quarter, which could adversely impact our business and operating results and cause a decline in the market price of

Table of Content

our common stock.

Seasonality may cause fluctuations in our revenue.

24 unchanged sentences

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.

Table of Content

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.

4 unchanged sentences

• increased purchasing power and leverage held by large end-customers in negotiating contractual arrangements with us;

Table of Content

• more stringent requirements in our worldwide support contracts, including stricter support response times and penalties for any failure to meet support requirements;

• longer sales cycles, particularly during the current economic slowdown and in some cases over 12 months, and the associated risk that substantial time and resources may be spent on a potential end-customer that elects not to purchase our products and subscriptions.

• longer sales cycles, particularly during the current economic slowdown, in some cases over 12 months, and the associated risk that substantial time and resources may be spent on a potential end-customer that elects not to purchase our products and subscriptions.

In addition, product purchases by large enterprises are frequently subject to budget constraints, multiple approvals, and unplanned administrative, processing, and other delays.

3 unchanged sentences

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.

Subscription and support revenue accounts for a significant portion of our revenue, comprising 78.9% of total revenue in the three months ended October 31, 2022 and 76.3% of total revenue in the three months ended October 31, 2021.

Subscription and support revenue accounts for a significant portion of our revenue, comprising 78.8% of total revenue in the six months ended January 31, 2023 and 76.5% of total revenue in the six months ended January 31, 2022.

Sales of new or renewal subscription and support contracts may decline and fluctuate as a result of a number of factors, including end-customers’ level of satisfaction with our products and subscriptions (including newly integrated products and services), the prices of our products and subscriptions, the prices of products and services offered by our competitors, and reductions in our end-customers’ spending levels.

4 unchanged sentences

Also, it is difficult for us to rapidly increase our subscription and support revenue through additional subscription and support sales in any period, as revenue from new and renewal subscription and support contracts must be recognized over the applicable service period.

Table of Content

Defects, errors, or vulnerabilities in our products, subscriptions, or support offerings, the failure of our products or subscriptions to block a virus or prevent a security breach or incident, misuse of our products, or risks of product liability claims could harm our reputation and adversely impact our operating results.

13 unchanged sentences

• delayed or lost revenue;

Table of Content

• delay or failure to attain market acceptance;

15 unchanged sentences

Any such false identification of important files or applications could result in damage to our reputation, negative publicity, loss of channel partners, end-customers and sales, increased costs to remedy any problem, and costly litigation.

Table of Content

We rely on our channel partners to sell substantially all of our products, including subscriptions and support, and if these channel partners fail to perform, our ability to sell and distribute our products and subscriptions will be limited, and our operating results will be harmed.

15 unchanged sentences

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.

While we have historically been successful in developing, acquiring, and

Table of Content

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.

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.

If we fail to accurately predict end-customers’ changing needs and emerging technological trends in the enterprise security industry, including in the areas of mobility, virtualization, cloud computing, and software defined networks (“SDN”), our business could be harmed.

8 unchanged sentences

There can be no assurance that we will successfully identify opportunities for new products and subscriptions, develop and bring new products and subscriptions to market in a timely manner, or achieve market acceptance of our products and subscriptions, including our product enhancement efforts in connection with COVID-19, or that products, subscriptions, and technologies developed by others will not render our products, subscriptions, or technologies obsolete or noncompetitive.

Table of Content

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.

17 unchanged sentences

We may find that the acquired businesses, products, or technologies do not further our business strategy as we expected.

Table of Content

acquisitions may be viewed negatively by our customers, financial markets, or investors.

Our acquisitions may be viewed negatively by our customers, financial markets, or investors.

We may experience difficulty integrating the operations and personnel of the acquired business, and we may have difficulty retaining the key personnel of the acquired business.

4 unchanged sentences

” 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.

Table of Content

Risks Related to our Supply Chain

27 unchanged sentences

These forecasts are based on estimates of future demand for our products, which are in turn based on historical trends and analyses from our sales and product management organizations, adjusted for overall market conditions.

Table of Content

COVID-19 has made forecasting more difficult and we may experience increased challenges to our supply chain due to the unpredictability of the impacts of COVID-19.

5 unchanged sentences

If we are unable to effectively manage our supply and inventory, our operating results could be adversely affected.

Table of Content

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, increased our costs and may result in the loss of sales and end-customers.

23 unchanged sentences

We may experience difficulties in recruiting, training, managing, and retaining an international staff, and specifically staff related to sales management and sales personnel.

We also may not be able to maintain successful strategic distributor

Table of Content

relationships internationally or recruit additional companies to enter into strategic distributor relationships.

We also may not be able to maintain successful strategic distributor relationships internationally or recruit additional companies to enter into strategic distributor relationships.

Business practices in the international markets that we serve may differ from those in the United States and may require us in the future to include terms other than our standard terms related to payment, warranties, or performance obligations in end-customer contracts.

3 unchanged sentences

• the uncertainty of protection for intellectual property rights in some countries;

Table of Content

• 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;

31 unchanged sentences

We have entered into forward contracts in an effort to reduce our foreign currency exchange exposure related to our foreign currency denominated expenditures.

As of October 31, 2022, the total notional amount of our outstanding foreign currency forward contracts was $1.3 billion.

As of January 31, 2023, the total notional amount of our outstanding foreign currency forward contracts was $1.1 billion.

For more information on our hedging transactions, refer to Note 6.

Derivative Instruments in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The effectiveness of our existing hedging transactions and the availability and effectiveness of any

The effectiveness of our existing hedging transactions and the availability and effectiveness of any hedging transactions we may decide to enter into in the future may be limited and we may not be able to successfully hedge our exposure, which could adversely affect our financial condition and operating results.

Table of Content

hedging transactions we may decide to enter into in the future may be limited and we may not be able to successfully hedge our exposure, which could adversely 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.

14 unchanged sentences

A material portion of our sales is derived through our distributors.

For the three months ended October 31, 2022, three distributors individually represented 10% or more of our total revenue, and in the aggregate represented 50.9% of our total revenue.

As of October 31, 2022, three distrib utors individually represented 10% or more of our gross accounts receivable, and in the aggregate represented 47.0% of our gross accounts receivable.

For the six months ended January 31, 2023, three distributors individually represented 10% or more of our total revenue, and in the aggregate represented 50.6% of our total revenue.

As of January 31, 2023, three distrib utors individually represented 10% or more of our gross accounts receivable, and in the aggregate represented 52.2% 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.

10 unchanged sentences

government may require certain of the products that it purchases to be manufactured in the United States and other relatively high cost manufacturing locations, and we may not manufacture all products in locations that meet such requirements, affecting our ability to sell these products, subscriptions and support offerings to the U.S.

Table of Content

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.

After our products and subscriptions are deployed within our end-customers’ networks, our end-customers depend on our technical support services, as well as the support of our channel partners, to resolve any issues relating to our products.

Our channel partners often provide similar technical support for third parties’ products and may therefore have fewer resources to dedicate to the

Table of Content

support of our products and subscriptions.

Our channel partners often provide similar technical support for third parties’ products and may therefore have fewer resources to dedicate to the support of our products and subscriptions.

If we or our channel partners do not effectively assist our end-customers in deploying our products and subscriptions, succeed in helping our end-customers quickly resolve post-deployment issues, or provide effective ongoing support, our ability to sell additional products and subscriptions to existing end-customers would be adversely affected and our reputation with potential end-customers could be damaged.

While we have been able to meet increased demand for support services in the three months ended October 31, 2022, failure to do so in the future could have a material adverse effect on our business.

While we have been able to meet increased demand for support services in the six months ended January 31, 2023, failure to do so in the future could have a material adverse effect on our business.

Many larger enterprise, service provider, and government entity end-customers have more complex networks and require higher levels of support than smaller end-customers.

22 unchanged sentences

Any of these events could seriously harm our business, financial condition, and operating results.

Table of Content

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.

5 unchanged sentences

Any issued patents may be challenged, invalidated or circumvented, and any rights granted under these patents may not actually provide adequate defensive protection or competitive advantages to us.

Additional uncertainty may result from changes to

Table of Content

patent-related laws and court rulings in the United States and other jurisdictions.

Additional uncertainty may result from changes to patent-related laws and court rulings in the United States and other jurisdictions.

As a result, we may not be able to obtain adequate patent protection or effectively enforce any issued patents.

19 unchanged sentences

If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue offering our products and subscriptions on terms that are not economically feasible, to reengineer our products and subscriptions, to discontinue the sale of our products and subscriptions if reengineering could not be accomplished on a timely basis, or to make generally available, in source code form, our proprietary code, any of which could adversely affect our business, operating results, and financial condition.

Table of Content

In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or assurance of title or controls on origin of the software.

7 unchanged sentences

We may also be subject to additional fees or be required to obtain new licenses if any of our licensors allege that we have not properly paid for such licenses or that we have improperly used the technologies under such licenses, and such licenses may not be available on terms acceptable to us or at all.

Table of Content

into new licenses on commercially reasonable terms, our ability to develop and sell products and subscriptions containing such technology would be severely limited, and our business could be harmed.

If we are unable to continue to license any of this technology because of intellectual property infringement claims brought by third parties against our licensors or against us, or claims against us by our licensors, or if we are unable to continue our license agreements or enter into new licenses on commercially reasonable terms, our ability to develop and sell products and subscriptions containing such technology would be severely limited, and our business could be harmed.

Additionally, if we are unable to license necessary technology from third parties, we may be forced to acquire or develop alternative technology, which we may be unable to do in a commercially feasible manner or at all, and we may be required to use alternative technology of lower quality or performance standards.

27 unchanged sentences

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.

Table of Content

Following the withdrawal of the U.K.

9 unchanged sentences

GDPR, may lead to similar compliance and operational costs with potential fines of up to £17.5 million or 4% of total worldwide annual turnover.

In the United States, companies that do business in California are subject to the California Consumer Privacy Act (“CCPA”), which requires, among other things, covered companies to provide new disclosures to California consumers, afford such consumers certain rights regarding their personal information, and also affords a private right of action to individuals affected by a data breach, if the breach was caused by a lack of reasonable security.

The enforcement of the CCPA by the California Attorney General commenced on July 1, 2020.

The CCPA has been amended on multiple occasions and the California Attorney General has issued initial and revised regulations that also govern the CCPA.

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.

In the United States, companies that do business in California are subject to the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”).

The CCPA requires, among other things, covered companies to provide enhanced disclosures to California consumers, afford such consumers certain rights regarding their personal data, including the right to opt out of data sales for targeted advertising, and a private right of action to individuals affected by a data breach, if the breach was caused by a lack of reasonable security.

The California Attorney General has issued initial and revised regulations that also govern the CCPA.

The effects of the CCPA have been significant, requiring us to modify our data processing practices and policies and to incur substantial costs and expenses for compliance.

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.

federal government is also contemplating privacy legislation.

This includes laws in Virginia, Colorado, Utah, and Connecticut, which all go into effect throughout 2023.

Many states are actively introducing privacy laws, and the U.S.

federal government continues to contemplate federal privacy legislation.

If passed, these laws would further impact our operations and we will continue to experience additional costs associated with this increased compliance burden.

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.

Additionally, the

Table of Content

Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data.

Additionally, the Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data.

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.

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.

New legislation affecting the scope of personal data and personal information personal data where we or our customers and partners have operations, especially relating to classification of Internet Protocol (“IP”) addresses, machine identification, location data, and other information, may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing or uses of data, and may require significant expenditures and efforts in order to comply.

Notably, public perception of potential privacy, data protection or information security concerns –whether or not valid– may harm our reputation and inhibit adoption of our products and subscriptions by current and future end-customers.

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.

Evolving and changing definitions of personal data and personal information, within the E.U., the United States, and elsewhere, especially relating to classification of Internet Protocol (“IP”) addresses, machine identification, location data, and other information, may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may involve the sharing or uses of data, and may require significant expenditures and efforts in order to comply.

Even the perception of privacy, data protection or information security concerns, whether or not valid, may harm our reputation and inhibit adoption of our products and subscriptions by current and future end-customers.

Risks Related to Operations Outside the United States

We face risks associated with having operations and employees located in Israel.

As a result of various of our acquisitions, including Cyber Secdo Ltd.

As a result of various of our acquisitions, including Cider Security Ltd.

("Cider"), Cyber Secdo Ltd.

(“Secdo”), PureSec Ltd.

9 unchanged sentences

Any disruption in our operations in Israel could adversely affect our business.

Table of Content

We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.

14 unchanged sentences

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.

Table of Content

Tax, Accounting, Compliance and Regulatory Risks

14 unchanged sentences

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.

Table of Content

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.

11 unchanged sentences

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.

Table of Content

Failure to comply with governmental laws and regulations could harm our business.

21 unchanged sentences

Changes in interpretation of the directive may cause us to incur costs or have additional regulatory requirements to meet in the future in order to comply with this directive, or with any similar laws adopted in other jurisdictions.

Table of Content

We are also subject to environmental laws and regulations governing the management of hazardous materials, which we use in small quantities in our engineering labs.

6 unchanged sentences

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.

Effective November 1, 2022 through January 31, 2023, all of the 2023 Notes and 2025 Notes are convertible.

Effective February 1, 2023 through April 30, 2023, all of the 2023 Notes and 2025 Notes are convertible.

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.

2 unchanged sentences

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.

Our failure to repurchase our Notes at a time when the repurchase is required by the applicable indenture governing such Notes or to pay cash upon conversion of such Notes as required by the applicable indenture

Table of Content

would constitute a default under the indenture.

A default under the applicable indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.

10 unchanged sentences

Accordingly, no such person expresses any opinion or any other form of assurance with respect to the projections.

Table of Content

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, many of which are beyond our control, such as COVID-19, and are based upon specific assumptions with respect to future business decisions, some of which will change.

8 unchanged sentences

The market price of our common stock has been volatile since our initial public offering (“IPO”) in July 2012.

The reported high and low sales prices of our common stock during the last 12 months have ranged from $140.07 to $213.63 per share, as measured through November 10, 2022 and adjusted to give effect to the Stock Split.

The reported high and low sales prices of our common stock during the last 12 months have ranged from $132.22 to $213.63 per share, as measured through February 10, 2023 and adjusted to give effect to the Stock Split.

The market price of our common stock may fluctuate widely in response to various factors, some of which are beyond our control.

7 unchanged sentences

• whether our operating results meet the expectations of securities analysts or investors;

Table of Content

• actual or anticipated changes in the expectations of securities analysts or investors, whether as a result of our forward-looking statements, our failure to meet such expectations or otherwise;

13 unchanged sentences

This could have a material adverse effect on our business, operating results, and financial condition.

Table of Content

The convertible note hedge and warrant transactions may affect the value of our common stock.

12 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.

As of October 31, 2022, we had $1.0 billion available under our share repurchase program, which will expire on December 31, 2023.

As of January 31, 2023, we had $750.0 million available under our share repurchase program, which will expire on December 31, 2023.

Such share repurchase program may be suspended or discontinued by the Company at any time without prior notice.

Table of Content

our board of directors has authorized a share repurchase program, we are not obligated to repurchase any specific dollar amount or to acquire any specific number of shares under the program.

Although our board of directors has authorized a share repurchase program, we are not obligated to repurchase any specific dollar amount or to acquire any specific number of shares under the program.

The share repurchase program could affect the price of our common stock, increase volatility and diminish our cash reserves.

11 unchanged sentences

• prohibit our stockholders from taking action by written consent;

Table of Content

• specify that special meetings of our stockholders may be called only by the chairman of our board of directors, our president, our secretary, or a majority vote of our board of directors;

14 unchanged sentences

To the extent that any of the above should result in delays or cancellations of customer orders, the loss of customers, or the delay in the manufacture, deployment, or shipment of our products, our business, financial condition, and operating results would be adversely affected.

Table of Content

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.

8 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.

Table of Content

We are obligated to maintain proper and effective internal control over financial reporting.

3 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.

What changed 10-Q

Item 1A. Risk Factors