What changed in this filing

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Item 1A. Risk Factors

2023-05-24 compared with 2023-02-22 · 55 added, 58 removed, 754 unchanged (13% of the section changed)

26 unchanged sentences

• If we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological and market developments and successfully manage product and subscription introductions and transitions to meet changing end-customer needs in the enterprise security industry, our competitive position and prospects will be harmed.

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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.

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• We license technology from third parties, and our inability to maintain those licenses could harm our business.

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Risks Related to Our Business and Our Industry

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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 second quarter of fiscal 2023, our headcount increased from 12,561 to 13,932 employees.

For example, from the end of fiscal 2022 to the end of the third quarter of fiscal 2023, our headcount increased from 12,561 to 13,979 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.

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• the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of our industry, including consolidation among our competitors or end-customers and strategic partnerships entered into by and between our competitors;

• 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;

• general macroeconomic conditions, both domestically and in our foreign markets, that could impact some or all regions where we operate, including inflation, any U.S.

federal government debt default due to a failure to increase the debt ceiling and global economic uncertainty due to the continuing effects of COVID-19;

• changes in the mix of our products, subscriptions, and support, including changes in multi-year subscriptions and support;

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• our ability to increase the size and productivity of our distribution channel;

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• our obligation to repay the aggregate principal amount of the Notes as holders exercise their conversion rights under the Notes;

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• 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;

• 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 gl obal semiconductor chip and component shortage;

• 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 challenges associated with the gl obal semiconductor chip and component supply;

• our ability to manage cloud hosting service costs and scale the cloud-based subscription offerings;

• insolvency or credit difficulties confronting our end-customers, in cluding 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;

• 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;

• 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;

• 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 challenges associated with the global semiconductor chip and component supply;

• the cost and potential outcomes of litigation, which could have a material adverse effect on our business;

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We operate globally, and as a result, our business and revenues are impacted by global economic and geopolitical conditions.

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.

The instability in the global credit markets, inflation, shortages and delays related to the global supply chain challenges, the current economic challenges in China, changes in public policies such as domestic and international regulations, taxes, increase in interest rates, any U.S.

federal government debt default due to a failure to increase the debt ceiling, 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.

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.

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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.

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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.

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.

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.

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 novel strain of COVID-19 identified in late 2019 has spread globally, including within the United States, and 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.

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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increased requests for delayed payment terms or product discounts by our end-customers and channel partners;

us delaying, canceling, or withdrawing from user and industry conferences and other marketing events, including some of our own;

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.

We have also experienced supply chain challenges, including chip and component shortages (in some cases, attributable to labor shortages), and at times we may not have sufficient inventory of certain of our products to promptly meet customer demand.

We have also experienced, and continue to experience, challenges associated with the global semiconductor chip and component supply and at times we may not have sufficient inventory of certain of our products to promptly meet customer demand.

As a result, we have experienced at times extended delivery times and increased costs for chips and components compared to historic levels;

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Our revenue growth rate in recent periods may not be indicative of our future performance.

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

We have experienced revenue growth rates of 25.0% and 30.1% in the nine months ended April 30, 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.

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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 January 31, 2023.

As a result, we had an accumulated deficit of $1.5 billion as of April 30, 2023.

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

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If we are unable to navigate these challenges as we encounter them, our business, financial condition, and operating results may suffer.

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If we are unable to sell new and additional product, subscription, and support offerings to our end-customers, our future revenue and operating results will be harmed.

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If our efforts to sell additional products and subscriptions to our end-customers are not successful or our end-customers do not renew their subscription and support agreements or renew them on less favorable terms, our revenues may grow more slowly than expected or decline.

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We face intense competition in our market and we may lack sufficient financial or other resources to maintain or improve our competitive position.

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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.

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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.

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Any failure to meet and address these factors could seriously harm our business and operating results.

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A network or data security incident may allow unauthorized access to our network or data, harm our reputation, create additional liability and adversely impact our financial results.

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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.

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

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• the timing of end-customer budget planning at the beginning of the calendar year, which can result in a delay in spending at the beginning of the calendar year potentially resulting in a negative impact on our revenue in our third fiscal quarter.

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As we continue to grow, seasonal or cyclical variations in our operations may become more pronounced, and our business, operating results and financial position may be adversely affected.

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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.

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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.

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If we fail to realize an expected sale from a large end-customer in a particular quarter or at all, our business, operating results, and financial condition could be materially and adversely affected.

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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 78.8% 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.

Subscription and support revenue accounts for a significant portion of our revenue, comprising 78.3% of total revenue in the nine months ended April 30, 2023 and 75.8% of total revenue in the nine months ended April 30, 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.

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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.

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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.

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Such use of our products and subscriptions for censorship could result in negative press coverage and negatively affect our reputation.

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The limitation of liability provisions in our standard terms and conditions of sale may not fully or effectively protect us from claims as a result of federal, state, or local laws or ordinances, or unfavorable judicial decisions in the United States or other countries.

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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.

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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.

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In addition, COVID-19 and the resulting increase in customer demand for work-from-home technologies and other technologies have caused us to reprioritize our engineering and R&D efforts and there can be no assurance that any product enhancements or new features will be successful or address our end-customer needs.

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The technology in our portfolio is especially complex because it needs to effectively identify and respond to new and increasingly sophisticated methods of attack, while minimizing the impact on network performance.

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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.

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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.

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We may have difficulty integrating the acquired technologies or products with our existing product lines and we may have difficulty maintaining uniform standards, controls, procedures, and policies across diverse or expanding geographic locations.

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We may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for any future acquisitions, each of which could adversely affect our financial condition or the market price of our common stock.

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” 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.

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Risks Related to our Supply Chain

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If we are required to change manufacturing partners, our ability to meet our scheduled product deliveries to our end-customers could be adversely affected, which could cause the loss of sales to existing or potential end-customers, delayed revenue or an increase in our costs which could adversely affect our gross margins.

COVID-19 and the global semiconductor shortage have in certain cases caused delays and challenges in obtaining components and inventory, as well as increases to freight and shipping costs, and may result in a material adverse effect on our results of operations.

COVID-19 and the challenges associated with the global semiconductor chip and component supply have in certain cases caused delays and challenges in obtaining components and inventory, as well as increases to freight and shipping costs, and may result in a material adverse effect on our results of operations.

Any production interruptions for any reason, such as a natural disaster, epidemic or pandemic such as COVID-19, capacity shortages, or quality problems at one of our manufacturing partners would negatively affect sales of our product lines manufactured by that manufacturing partner and adversely affect our business and operating results.

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In order to reduce manufacturing lead times and plan for adequate component supply, from time to time we may issue forecasts for components and products that are non-cancelable and non-returnable.

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Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to forecast accurately and effectively manage supply of our products and product components.

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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.

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.

Alternatively, insufficient supply levels, including due to challenges associated with the global semiconductor chip and component supply, 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.

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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.

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The manufacturing operations of some of our component suppliers are geographically concentrated in Asia and elsewhere, which makes our supply chain vulnerable to regional disruptions, such as natural disasters, fire, political instability, civil unrest, a power outage, or health risks, such as epidemics and pandemics like COVID-19, and as a result have impaired, and could impair in the future, the volume of components that we are able to obtain.

Lead times for components have also been adversely impacted by factors outside of our control, including COVID-19 and the recent global shortage of semiconductors.

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.

Lead times for components have also been adversely impacted by factors outside of our control, including COVID-19 and challenges associated with the global semiconductor chip and component supply.

For example, we have experienced, and could continue to experience, 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.

In addition, we have experienced increased costs because of these shortages.

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We cannot guarantee that we will be successful in developing and introducing new offerings with enhanced functionality on a timely basis, or that our products, subscriptions and support offerings, if introduced, will enable us to maintain our prices and gross profits at levels that will allow us to achieve and maintain profitability.

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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.

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

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• 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;

• 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 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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In addition, increased international sales in the future, including through our channel partners and other partnerships, may result in greater foreign currency denominated sales, increasing our foreign currency risk.

Our operating expenses incurred outside the United States and denominated in foreign currencies are increasing and are subject to fluctuations due to changes in foreign currency exchange rates.

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Our operating expenses incurred outside the United States and denominated in foreign currencies are generally increasing and are subject to fluctuations due to changes in foreign currency exchange rates.

If we are not able to successfully hedge against the risks associated with foreign currency fluctuations, our financial condition and operating results could be adversely affected.

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

As of April 30, 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.

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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.

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

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.

For the nine months ended April 30, 2023, three distributors individually represented 10% or more of our total revenue, and in the aggregate represented 50.3% of our total revenue.

As of April 30, 2023, two distrib utors individually represented 10% or more of our gross accounts receivable, and in the aggregate represented 35.7% 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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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.

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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.

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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 six months ended January 31, 2023, 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 nine months ended April 30, 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.

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

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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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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.

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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.

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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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Following the withdrawal of the U.K.

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Moreover, additional state privacy laws have been passed and will require potentially substantial efforts to obtain compliance.

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.

These include laws in Virginia, Colorado, Utah, and Connecticut, which have gone or will go into effect in 2023.

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

federal government continues to contemplate federal privacy legislation.

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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 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 more regularly bringing enforcement actions in connection with federal and state consumer protection laws for false or deceptive acts or practices in relation to the online collection, use, dissemination, and security of personal 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.

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

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

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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.

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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.

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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.

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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.

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

All the 2023 Notes will mature on July 1, 2023, and at that time we will be obligated to pay the $1.7 billion principal amount of the 2023 Notes in cash.

Effective May 1, 2023 through July 31, 2023, all of the 2025 Notes are convertible.

If all of the Noteholders decided to convert their 2025 Notes, we would be obligated to pay the $2.0 billion principal amount of the 2025 Notes in cash.

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

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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.

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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 $132.22 to $213.63 per share, as measured through February 10, 2023 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 $203.44 per share, as measured through May 12, 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.

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

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

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

As of April 30, 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.

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• prohibit our stockholders from taking action by written consent;

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• 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;

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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.

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

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors