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If we fail to manage our transition to a more subscription-based business model successfully, our results of operations and/or cash flows could be negatively impacted.
−Removed: We are transitioning to a more subscription-based business model, which may have negative revenue and/or cash flow implications.
+Added: We are transitioning to a more subscription-based business model, which impacts our revenue and cash flow.
The subscription model prices and delivers our software differently than a perpetual license model.
These changes reflect a significant shift from perpetual license sales in favor of providing our clients the right to access our software in a hosted environment or use downloaded software for a specified subscription period.
−Removed: The potential shift of our clients’ preference to a cloud-based subscription model requires a considerable investment of technical, financial, legal, managerial and sales resources, and a scalable organization.
−Removed: Market acceptance of our subscription-based offering will depend on our ability to continue to:
+Added: The shift of our clients’ preference to subscription-based offerings requires a scalable organization, and a considerable investment of technical, financial, legal, managerial, and sales resources.
+Added: Market acceptance of our subscription-based offerings will depend on our ability to continue to:
• innovate and include new functionality and improve the usability of our products in a manner that addresses our clients’ needs and requirements;
−Removed: • optimally price our products in light of marketplace conditions, competition, our costs, and client demand.
−Removed: Our cloud-based subscription model also requires that we rely on third parties to host our products for our clients.
+Added: • optimally price our products considering marketplace conditions, competition, our costs, and client demand.
+Added: Our cloud-based subscription model also requires that we rely on third parties to host our software for our clients.
We incur significant recurring third-party hosting expenses to deliver our Pega Cloud offering that we do not incur for our perpetual and term license products.
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If we are unable to meet these challenges effectively, our operating results and financial condition could be materially adversely affected.
−Removed: The transition to a subscription-based business model gives rise to several risks, including the following:
+Added: The transition to a subscription-based business model gives rise to several risks, including:
• our revenues and cash flows may fluctuate more than anticipated in the near term;
• if the increased demand for our offerings does not continue, we could experience decreased profitability or losses and reduced or negative cash flow because of our continued significant investments in our Pega Cloud offering;
−Removed: • if new or current clients desire only perpetual licenses, our subscription sales may lag behind our expectations;
+Added: • if new or current clients desire only perpetual licenses, our subscription sales may trail our expectations;
• we may be unsuccessful in maintaining or implementing our target pricing or new pricing models, product adoption, and projected renewal rates, or we may select a target price or new pricing model that is not optimal and could negatively affect our sales or earnings;
−Removed: • if our clients do not renew their subscriptions, our revenue may decline, and our business may be materially adversely affected;
+Added: • a failure to achieve the anticipated level of subscriptions may cause our revenue to decline and our business to be materially adversely affected on an ongoing basis due to lower-than-expected recurring revenue;
• we may incur sales compensation costs at a higher than forecasted rate if the pace of our subscription transition is faster than anticipated.
−Removed: The metrics our investors and we use to monitor our business model transition may evolve over the course of the transition as significant trends emerge.
−Removed: Therefore, it may be difficult to accurately determine the impact of this transition on our business on a contemporaneous basis or to clearly communicate the appropriate metrics to our investors.
+Added: The metrics our investors and we use to monitor our business model transition may evolve during the transition as significant trends emerge.
+Added: Therefore, it may be difficult to accurately determine the impact of this transition on our business on a contemporaneous basis or to communicate the appropriate metrics to our investors clearly.
We may not achieve the key elements of our strategy and grow our business as anticipated.
We currently intend to grow our business by pursuing strategic initiatives.
−Removed: Key elements of our strategy include growing our market share by developing and delivering robust applications that can work together seamlessly with maximum differentiation and minimal customization, offering versatility in our Pega Platform and application deployment and licensing options to meet the specific needs of our clients, growing our network of partner alliances, and developing the talent and organizational structure capable of supporting our revenue and earnings growth targets.
−Removed: We may not be able to achieve one or more of our key initiatives.
+Added: Key elements of our strategy include increasing our market share by developing and delivering robust solutions that can work together seamlessly with maximum differentiation and minimal customization, offering versatility in the Pega Platform and application deployment and licensing options to meet the specific needs of our clients, growing our network of partner alliances, and developing the talent and organizational structure capable of supporting our revenue and earnings growth targets.
+Added: We may not achieve one or more of our key initiatives.
Our success depends on our ability to manage our expenses as we grow our organization appropriately, successfully execute our marketing and sales strategies, successfully incorporate acquired technologies into our unified Pega Platform, and develop new products or product enhancements.
If we are not able to execute these actions, our business may not grow as we anticipate, and our operating results and financial condition could be materially adversely affected.
−Removed: We depend on key personnel, including our Chief Executive Officer, and must be able to attract and retain qualified personnel in the future.
+Added: We depend on key personnel, including our Chief Executive Officer, and must attract and retain qualified personnel in the future.
Our business is dependent on key, highly skilled technical, managerial, consulting, sales, and marketing personnel, including our Chief Executive Officer, who is also our founder and largest stockholder.
−Removed: On February 12, 2021, we entered into an agreement with our landlord to vacate our Cambridge, Massachusetts facility on October 1, 2021 and expect to enter into a new lease agreement for a facility within the greater Boston area.
−Removed: Although we believe this relocation will help us attract and retain key personnel and provide a dynamic space to engage with our employees, competition for talent, delays in and costs associated with development and occupancy of the new facility and changes in commuting for our existing employees could impact our ability to realize the intended benefits of the move.
−Removed: The loss of key personnel could be disruptive to our operations, and materially adversely affect financial performance.
−Removed: We do not have any significant key-person life insurance on any officers or employees and do not plan to obtain any.
−Removed: Our success will largely depend on the ability to attract and retain qualified personnel and rapidly replace and develop new management.
+Added: The loss of key personnel could be disruptive to our operations and materially adversely affect our financial performance.
+Added: We do not carry, nor do we currently intend to obtain, significant key-person life insurance on officers or other employees.
+Added: Our success will depend on attracting and retaining qualified personnel and, as needed, rapidly replacing and developing new management.
The number of potential employees who have the extensive knowledge needed to develop, sell, and maintain our offerings is limited, and competition for their services is intense.
−Removed: There can be no assurance that we will be able to attract and retain such personnel.
+Added: There can be no guarantee that we will be able to attract and retain such personnel.
If we are unable to do so, our business, operating results, and financial condition could be materially adversely affected.
−Removed: The timing of our license and Pega Cloud revenue is difficult to predict accurately, which may cause our operating results to vary considerably.
+Added: We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and difficulty in retaining highly skilled employees with appropriate qualifications.
+Added: In addition, we believe our corporate culture has been a key contributor to our success to date.
+Added: As we continue to grow and expand globally and navigate shifting workforce priorities, including an extended period of time in which our employees are working from their home locations or an increase in remote workers, we may find it difficult to maintain important aspects of our corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future success.
+Added: The timing of our license and Pega Cloud revenue is difficult to predict, which may cause our operating results to vary considerably.
A change in the size or volume of license and Pega Cloud arrangements, or a change in the mix between perpetual licenses, term licenses, and Pega Cloud arrangements, can cause our revenues and cash flows to fluctuate materially between periods.
−Removed: Revenue from Pega Cloud arrangements is typically recognized over the contract term.
−Removed: In contrast, revenue from license sales is generally recognized upfront when the license rights become effective.
−Removed: Pega Cloud and term license arrangements are generally billed and collected over the contract term while perpetual license arrangements are generally billed in full and collected upfront when the license rights become effective.
+Added: Revenue from Pega Cloud and maintenance arrangements is typically recognized over the contract term, while revenue from license sales is recognized when the license rights become effective, typically upfront.
+Added: Subscription license and services are generally billed and collected over the contract term, while perpetual license arrangements usually are billed and collected upfront when the license rights become effective.
Factors that may influence the predictability of our license and Pega Cloud revenue include:
• changes in clients’ budgets and decision-making processes that could affect both the timing and size of transactions;
−Removed: • deferral of license revenue to future periods due to the timing of the execution of an agreement or our ability to deliver the products or services;
+Added: • the timing of the execution of an agreement or our ability to deliver the products or services;
• changes in our business model;
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We budget for our selling and marketing, product development, and other expenses based upon anticipated future bookings and revenue.
−Removed: If the timing or amount of revenue fails to meet our expectations in a given period, our financial performance is likely to be materially adversely affected because only a small portion of our expenses vary with revenue.
−Removed: Other factors that may cause our operating results to vary considerably include changes in foreign currency exchange rates, income tax effects, and the impact of new accounting pronouncements.
+Added: If the timing or amount of revenue fails to meet our expectations, our financial performance is likely to be materially adversely affected because only a small portion of our expenses vary with revenue.
+Added: Other factors that may cause our operating results to vary include changes in foreign currency exchange rates, income tax effects, and the impact of new accounting pronouncements.
As a result, period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied upon to predict future performance.
If our revenues and operating results do not meet the expectations of our investors or securities analysts or fall below guidance we may provide to the market, or due to other factors discussed elsewhere in this section, the price of our common stock may decline.
−Removed: The number of license and Pega Cloud arrangements has been increasing, and we may not be able to sustain this growth unless our partners and we can provide sufficient high-quality consulting, training, and maintenance resources to enable our clients to realize significant business value from our software.
+Added: The number and value of license and Pega Cloud arrangements has been increasing, and we may not be able to sustain this growth unless our partners and we can provide sufficient high-quality consulting, training, and maintenance resources to enable our clients to realize significant business value from our software.
Our clients typically request consulting and training to assist them in implementing our license and Pega Cloud offerings.
−Removed: Our clients also typically purchase maintenance on our perpetual and term licenses.
−Removed: As a result, an increase in the number of license and Pega Cloud arrangements is likely to increase demand for consulting, training, and maintenance related to our offerings.
−Removed: Given that the number of our license and Pega Cloud arrangements has been growing, we will need to provide our clients with more consulting, training, and maintenance to enable them to realize significant business value from our software.
−Removed: We have been increasing our partner and client enablement through training to create an expanded ecosystem of people that are skilled in the implementation of our products.
+Added: Our clients also usually purchase maintenance on our perpetual and term licenses.
+Added: As a result, an increase in the number and value of license and Pega Cloud arrangements is likely to increase demand for consulting, training, and maintenance related to our offerings.
+Added: Given that the number and value of our license and Pega Cloud arrangements has been growing, we will need to provide our clients with more consulting, training, and maintenance to enable them to realize significant business value from our software.
+Added: We have been increasing our partner and client enablement through training to create an expanded ecosystem of people that are skilled in the implementation of our solutions.
However, if our partners and we are unable to provide sufficient high-quality consulting, training, and maintenance resources, our clients may not realize sufficient business value from our offerings to justify follow-on sales, which could impact our future financial performance.
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Finally, the investments required to meet the increased demand for our consulting services could strain our ability to deliver our consulting engagements at desired profitability, thereby impacting our overall profitability and financial results.
−Removed: We may not be able to maintain our retention rate for Pega Cloud clients.
−Removed: An increasing percentage of our revenue has been derived from our Pega Cloud offerings.
−Removed: Our clients have no obligation to renew their Pega Cloud subscriptions, although historically, most have elected to do so.
−Removed: If our retention rate for those clients decreases our business, operating results, and financial condition could be materially adversely affected.
+Added: We may not be able to maintain our retention rate for our subscription clients.
+Added: An increasing percentage of our revenue has been derived from our subscription offerings.
+Added: Our clients have no obligation to renew their subscriptions, although historically, most have elected to do so.
+Added: If our retention rate for those clients decreases our business, operating results, and financial condition could be materially affected.
We are investing heavily in sales and marketing, research and development, and support resources in anticipation of continued growth in license and Pega Cloud arrangements, and we may experience decreased profitability or losses and reduced or negative cash flow if we do not continue to increase the value of our license and Pega Cloud arrangements to balance our growth in expenses.
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Conversely, if we are unable to hire sales and marketing personnel to meet future demand or research and development personnel to enhance our current products or develop new products, we may not be able to achieve our sales and profitability targets .
−Removed: We face risks from operations and clients based outside of the U.S.
+Added: We face risks from operations and clients based outside of the United States.
We market our products and services to clients based outside of the U.S., which represent 42% of our revenue over the last three years.
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We believe that growth will necessitate expanded international operations, resulting in increased managerial attention and costs.
−Removed: We anticipate hiring additional personnel to accommodate increased international market demand, and we may also enter into agreements with local distributors, representatives, or resellers.
+Added: We anticipate hiring additional personnel to accommodate increased international demand, and we may also enter into agreements with local distributors, representatives, or resellers.
If we are unable to do one or more of these things in a timely and effective manner, the growth, if any, of our international operations may be restricted, and our business, operating results, and financial condition could be materially adversely affected.
−Removed: Additional risks inherent in our international business activities generally include:
+Added: Additional risks inherent in our international business activities include:
• laws and business practices favoring local competitors;
−Removed: • compliance with multiple, conflicting, and changing governmental laws and regulations, including employment, tax, privacy and data privacy and protection, and increased tariffs and other trade barriers;
+Added: • compliance with multiple, conflicting, and changing governmental laws and regulations, including employment, tax, privacy, and data privacy and protection;
+Added: • increased tariffs and other trade barriers;
• the costs of localizing offerings for local markets, including translation into foreign languages and associated expenses;
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• treatment of revenue from international sources and changes to tax codes, including being subject to foreign tax laws, being liable for paying withholding, income or other taxes in foreign jurisdictions, and other potentially adverse tax consequences (including restrictions on repatriating earnings and the threat of “double taxation”);
−Removed: • management of our international operations, including increased accounting, internal control, and compliance expenses;
+Added: • management of our international operations, including increased administrative and compliance expenses;
• heightened risks of political and economic instability;
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We have a number of relationships with third parties that are significant to our sales, marketing, support, and product development efforts, including hosting facilities for our Pega Cloud offering.
−Removed: We rely on software and hardware vendors, large system integrators, and technology consulting firms to supply marketing and sales opportunities for our direct sales force and to strengthen our products using industry-standard tools and utilities.
+Added: We rely on software and hardware vendors, large system integrators, and technology consulting firms to supply marketing and sales opportunities for our direct sales force and to strengthen our offerings using industry-standard tools and utilities.
We also have relationships with third parties that distribute our products.
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Further, the use of third-party hosting facilities requires us to rely on the functionality and availability of the third parties’ services, as well as their data security, which despite our due diligence, may be or become inadequate.
−Removed: We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows.
+Added: We are exposed to fluctuations in foreign currency exchange rates that could negatively impact our financial results and cash flows.
Because a significant portion of our business is conducted outside of the U.S., we face exposure to movements in foreign currency exchange rates.
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These exposures may change over time as business practices evolve.
−Removed: We have historically used but do not currently use foreign currency forward contracts to hedge our exposure to changes in foreign currency exchange rates associated with our foreign currency-denominated cash, accounts receivable, and intercompany receivables and payables held by our U.S.
−Removed: parent company and its U.K.
+Added: We have historically used but do not currently use foreign currency forward contracts to hedge our exposure to changes in foreign currency exchange rates.
We may enter into hedging contracts again in the future if we believe it is appropriate.
−Removed: Our realized gain or loss for foreign currency fluctuations will generally depend on the size and type of cross-currency exposures that we enter into, the currency exchange rates associated with these exposures and changes in those rates, whether we have entered into forward contracts to offset these exposures and other factors.
−Removed: All of these factors could materially impact our operating results, financial condition, and cash flows.
+Added: Our realized gain or loss for foreign currency fluctuations will depend on the size and type of cross-currency exposures that we enter into, the currency exchange rates associated with these exposures and changes in those rates, whether we have entered forward contracts to offset these exposures, and other factors.
+Added: All these factors could materially impact our operating results, financial condition, and cash flows.
Our consulting revenue is significantly dependent upon our consulting personnel implementing new license and Pega Cloud arrangements.
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Inability to introduce or implement new or enhanced products in a timely manner could result in loss of market share if competitors are able to provide solutions to meet client needs before we do, give rise to unanticipated expenses related to further development or modification of acquired technologies, and materially adversely affect our financial performance.
−Removed: We may also fail to adequately anticipate and prepare for the development of new markets and applications for our technology and the commercialization of emerging technologies such as blockchain and thereby fail to take advantage of new market opportunities or fall behind early movers in those markets.
+Added: We may also fail to anticipate adequately and prepare for the development of new markets and applications for our technology and the commercialization of emerging technologies such as blockchain and thereby fail to take advantage of new market opportunities or fall behind early movers in those markets.
The market for our offerings is intensely and increasingly competitive, rapidly changing, and fragmented.
We encounter significant competition from:
−Removed: • customer engagement vendors, including CRM application vendors;
−Removed: • DPA vendors and platforms, including BPM vendors, low code application development platforms, and service-oriented architecture middleware vendors;
+Added: • customer engagement vendors, including Customer Relationship Management application vendors;
+Added: • Digital Process Automation vendors and platforms, including Business Process Management vendors, low-code application development platforms, and service-oriented architecture middleware vendors;
• case management vendors;
−Removed: • decision management, data science, and AI vendors, as well as vendors of solutions that leverage decision making and data science in managing customer relationships and marketing;
+Added: • decision management, data science, and Artificial Intelligence vendors, as well as vendors of solutions that leverage decision making and data science in managing customer relationships and marketing;
• robotic automation and workforce intelligence software providers;
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• commercialized open-source vendors;
−Removed: • professional service organizations that develop their own products or create custom software in conjunction with rendering consulting services;
+Added: • professional services organizations that develop their own products or create custom software in conjunction with rendering consulting services;
• clients’ in-house information technology departments, which may seek to modify their existing systems or develop their own proprietary systems.
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Our Chief Executive Officer is our largest stockholder and can exert significant influence over matters submitted to our stockholders, which could materially adversely affect our other stockholders.
−Removed: As of December 31, 2020, our Chief Executive Officer beneficially owned 49% of our outstanding common stock.
+Added: As of December 31, 2021, our Chief Executive Officer beneficially owned approximately 49 percent of our outstanding common stock.
As a result, he has the ability to exert significant influence over all matters submitted to our stockholders for approval, including the election and removal of directors and any merger, consolidation, or sale of our assets.
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Cyber-attacks and security breaches may expose us to significant legal and financial liabilities.
−Removed: Security breaches could expose our clients and us to a risk of loss or misuse of this information.
−Removed: Any security breach could result in a loss of confidence in the security of our services, damage our reputation, disrupt our business, lead to legal liability, and negatively impact our future sales.
+Added: Security breaches could expose our clients and us to a risk of someone obtaining access to our information, to information our clients or their customers, or to our intellectual property, disabling or degrading service, or sabotaging systems or information.
+Added: Any security breach could result in a loss of confidence in the security of our services, damage our reputation, disrupt our business, require us to incur significant costs of investigation, remediation and/or payment of a ransom, lead to legal liability, negatively impact our future sales, and result in a substantial financial loss.
High-profile security breaches at other companies have increased in recent years.
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Threats to IT security can take a variety of forms.
−Removed: Individual hackers, groups of hackers, and sophisticated organizations, including state-sponsored organizations, or nation-states themselves, may take steps that threaten our clients and IT structure.
+Added: Individual hackers, groups of hackers, and sophisticated organizations, including state-sponsored organizations, or nation-states themselves, may take steps that threaten our clients and us.
Additionally, our Pega Cloud offering provides environments that are provisioned, monitored, and maintained for individual clients to create and deploy Pega-based applications using an Internet-based infrastructure.
−Removed: These services involve the storage and transmission of clients’ data and other confidential information.
−Removed: Our security measures and those of our clients may be breached because of third-party actions or that of employees, consultants, or others, including intentional misconduct by computer hackers, system error, human error, technical flaws in our products, or otherwise.
+Added: These services involve storing and transmitting client data and other confidential information.
+Added: Our security measures and those of our clients may be breached because of third-party actions or that of employees, consultants, or others, including intentional misconduct by computer hackers, system errors, human errors, technical flaws in our products, or otherwise.
Because we do not control the configuration of Pega applications by our clients, the transmissions between our clients and our third-party technology providers, the processing of data on the servers at third-party technology providers, or the internal controls maintained by our clients and third-party technology providers that could prevent unauthorized access or provide appropriate data encryption, we cannot fully ensure the complete integrity or security of such transmissions processing or controls.
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The techniques used to obtain unauthorized access or sabotage systems change frequently and are generally not recognized until launched against a target.
−Removed: While we have invested in protecting our data and systems and our clients’ data to reduce these risks, there can be no assurance that our efforts will prevent breaches.
−Removed: We carry data breach insurance coverage to mitigate the financial impact of a breach, though this may prove insufficient in the event of a breach.
−Removed: Our Pega Cloud offering involves the hosting of clients’ applications on the servers of third-party technology providers.
−Removed: We also rely on third-party systems and technology, including encryption, virtualized infrastructure, and support, and we employ a shared security model with our clients and our third-party technology providers.
+Added: While we have invested in protecting our data and systems and our clients’ data to reduce these risks, there can be no assurance that our efforts will prevent breaches and, in fact, we deal with security issues on a regular basis and have experienced security incidents from time to time.
+Added: Accordingly, there is a risk that a security breach will be successful and that such an event will be material.
+Added: We carry data breach insurance coverage to mitigate the financial impact of a security breach, though this may prove insufficient in the event of a breach.
+Added: Our Pega Cloud offering involves hosting client applications on the servers of third-party technology providers.
+Added: We also rely on third-party systems and technology, including encryption, virtualized infrastructure, and support, and employ a shared security model with our clients and third-party technology providers.
To defend against security threats, we need to continuously engineer products and services with enhanced security and reliability features, improve the deployment of software updates to address security vulnerabilities, apply technologies that mitigate the risk of attacks, and maintain a digital security infrastructure that protects the integrity of our network, products, and services.
The cost of these steps could negatively impact our operating results.
−Removed: We may experience significant errors or security flaws in our products and services and could face privacy, product liability, and warranty claims as a result.
+Added: We rely on third-party hosting providers to deliver our offerings.
+Added: Therefore, any disruption or interference with our use of these services could adversely affect our business.
+Added: Our use of third-party hosting facilities requires us to rely on the functionality and availability of the third parties’ services, as well as their data security, which despite our due diligence, may be or become inadequate.
+Added: Our continued growth depends in part on the ability of our existing and potential customers to use and access our cloud services or our website to download our software within an acceptable amount of time.
+Added: We use a number of third-party service providers for key infrastructure components, particularly concerning the development and delivery of our cloud-based products.
+Added: These service providers give us greater flexibility in efficiently delivering a more tailored, scalable customer experience and expose us to additional risks and vulnerabilities.
+Added: Third-party service providers operate platforms that we access, and we are vulnerable to their service interruptions.
+Added: We may experience interruptions, delays, and outages in service and availability due to problems with our third-party service providers’ infrastructure.
+Added: This infrastructure’s lack of availability could be due to many potential causes, including technical failures, power shortages, natural disasters, fraud, terrorism, or security attacks that we cannot predict or prevent.
+Added: Such outages could trigger our service level agreements and the issuance of credits to our clients, which may impact our business and consolidated financial statements.
+Added: If we are unable to renew our agreements with our cloud service providers on commercially reasonable terms, an agreement is prematurely terminated, or we need to add new cloud services providers to increase capacity and uptime, we could experience interruptions, downtime, delays, and additional expenses related to transferring to and providing support for these new platforms.
+Added: Any of the above circumstances or events may harm our reputation and brand, reduce our platforms’ availability or usage, and impair our ability to attract new users, any of which could adversely affect our business, financial condition, and results of operations.
+Added: We may experience significant errors or security flaws in our products and services and could face privacy, product liability, and warranty claims.
Despite quality testing each release, our software frequently contains errors or security flaws, especially when first introduced or when new versions are released.
Errors in our software could affect its ability to work with hardware or other software or delay the development or release of new products or new versions of our software.
−Removed: Additionally, the detection and correction of any security flaws can be time-consuming and costly.
+Added: Additionally, detecting and correcting any security flaws can be time-consuming and costly.
Errors or security flaws in our software could result in the inadvertent disclosure of confidential information or personal data relating to our clients, employees, or third parties.
−Removed: Software errors and security flaws in our products or services could expose us to privacy, product liability, and/or warranty claims as well as harm our reputation, which could impact our future sales of products and services.
+Added: Software errors and security flaws in our products or services could expose us to privacy, product liability, or warranty claims and harm our reputation, which could impact our future sales of products and services.
Typically, we enter into license agreements that contain provisions intended to limit the nature and extent of our risk of product liability and warranty claims.
−Removed: There is a risk that a court might interpret these terms in a limited way or could hold part or all of these terms to be unenforceable.
+Added: There is a risk that a court might interpret these terms in a limited way or hold part or all of these terms unenforceable.
Also, there is a risk that these contract terms might not bind a party other than the direct client.
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Risks Related to Our Financial Obligations and Indebtedness
−Removed: We have a significant amount of debt that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur additional debt in the future, which may adversely affect our operations and financial results.
+Added: We have a significant amount of debt that may limit our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur additional debt in the future, which may adversely affect our operations and financial results.
As of December 31, 2021, we had $600 million aggregate principal amount of indebtedness under our Convertible Senior Notes due 2025 (the “Notes”).
Our indebtedness may:
−Removed: • limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other business purposes;
+Added: • limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, or other general business purposes;
• limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions, or other general business purposes;
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• limit our flexibility to plan for, or react to, changes in our business and industry;
−Removed: • place us at a competitive disadvantage compared to our less leveraged competitors;
−Removed: • dilute the interests of our existing stockholders as a result of issuing shares of our common stock upon the conversion of the Notes;
+Added: • place us at a competitive disadvantage compared to less leveraged competitors;
+Added: • dilute the interests of our existing stockholders because of issuing shares of our common stock upon the conversion of the Notes;
• increase our vulnerability to the impact of adverse economic and industry conditions.
Our ability to pay our debt when due or refinance our indebtedness, including the Notes, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
−Removed: Our business may not generate cash flow from operations in the future sufficient to service our debt and make necessary investments in our business.
−Removed: Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
+Added: Our business may not generate sufficient cash flow from operations in the future to service our debt and make necessary investments in our business.
+Added: Our ability to refinance our indebtedness will depend on the capital market conditions and our financial condition at such time.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations which could, in turn, result in that and our other indebtedness becoming immediately payable in full which could harm our financial condition, results of operation or cost of borrowing.
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The Capped Call Transactions may affect the value of the Notes and our common stock.
−Removed: In connection with the Notes’ issuance, we entered into Capped Call Transactions with certain financial institutions (“option counterparties”).
−Removed: The Capped Call Transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap.
−Removed: From time to time, the option counterparties that are parties to the Capped Call Transactions or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions before the maturity of the Notes.
+Added: In connection with the Notes’ issuance, we entered Capped Call Transactions with certain financial institutions (“option counterparties”).
+Added: The Capped Call Transactions are generally expected to reduce the potential dilution of our common stock upon any conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, with such reduction and/or offset subject to a cap.
+Added: From time to time, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions before the maturity of the Notes.
This activity could cause a decrease in the market price of our common stock.
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Our exposure to the credit risk of the option counterparties is not secured by any collateral.
−Removed: Recent global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions.
If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at the time under such transaction.
Our exposure depends on many factors, but our exposure will generally increase if the market price or the volatility of our common stock increases.
−Removed: In addition, upon default or other failures to perform, or termination of obligations, by an option counterparty, we may suffer more dilution than we currently anticipate with respect to our common stock.
−Removed: We can provide no assurances as to the financial stability or viability of the option counterparties.
+Added: In addition, upon default or other failures to perform, or termination of obligations, by an option counterparty, we may suffer more dilution in our common stock than we currently anticipate.
+Added: We can provide no guarantee as to the financial stability or viability of the option counterparties.
Provisions in the Notes’ Indenture may deter or prevent a business combination that may be favorable to our stockholders.
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In addition, if a “make-whole fundamental change” (as defined in the Indenture) occurs prior to the maturity date, we will in some cases be required to increase the conversion rate of the Notes for a holder that elects to convert its Notes in connection with such make-whole fundamental change.
−Removed: Furthermore, the Indenture will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Notes.
+Added: Furthermore, the Indenture prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Notes.
These and other provisions in the Indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to our stockholders.
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Failure to comply with these covenants could cause amounts borrowed to become immediately due and payable and/or prevent us from borrowing under the credit facility.
−Removed: We must comply with specified financial and operating covenants under our credit facility and to make payments, limiting our ability to operate our business as we otherwise might.
+Added: We must comply with specified financial and operating covenants under our credit facility and make payments, limiting our ability to operate our business as we otherwise might.
Our failure to comply with any of these covenants or to meet any debt payment obligations could result in an event of default which, if not cured or waived, would result in any amounts outstanding, including any accrued interest and/or unpaid fees, becoming immediately due and payable.
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and foreign laws and regulations, requiring costly compliance measures.
−Removed: Any failure to comply with these laws and regulations could subject us to, among other things, penalties and legal expenses that could harm our reputation or have a material adverse effect on our business, financial condition, and results of operations.
+Added: Any failure to comply with these laws and regulations could subject us to, among other things, penalties and legal expenses that could harm our reputation or otherwise have a material adverse effect on our business, financial condition, and results of operations.
We are subject to extensive federal, state, and foreign laws and regulations, including but not limited to the U.S.
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It became effective in May 2018.
−Removed: The GDPR extends the scope of European privacy laws to any entity that controls or processes EU residents' personal data in connection with the offer of goods or services or the monitoring of behavior and imposes new compliance obligations concerning the handling of personal data.
+Added: The GDPR extends the scope of European privacy laws to any entity that controls or processes personal data of European Union residents in connection with the offer of goods or services or the monitoring of behavior and imposes new compliance obligations concerning the handling of personal data.
Complying with the GDPR and other emerging and changing requirements caused us to incur additional costs in 2021 and may cause us to incur substantial additional costs or require us to change our business practices.
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The CCPA requires, among other things, covered companies to provide new disclosure to consumers about such companies’ data collection, use and sharing practices, provide such consumers new ways to opt-out of certain sales or transfers of personal information, and provide consumers with additional causes of action.
−Removed: The CCPA may increase our compliance costs and potential liability.
−Removed: We have developed and implemented a compliance program based on what we believe are current best practices, including the background checking of our current partners and prospective clients and partners.
+Added: Further, California voters approved a new privacy law, the California Privacy Rights Act (“CPRA”) in the November 3, 2020 election.
+Added: Effective January 1, 2023, the CPRA will significantly modify the CCPA, including by expanding California consumers’ rights with respect to certain sensitive personal information.
+Added: The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA.
+Added: The CCPA and CPRA may increase our compliance costs and potential liability.
+Added: We have developed and implemented a compliance program based on what we believe are reasonable practices, including the background checking of our current partners and prospective clients and partners.
We cannot guarantee, however, that we, our employees, our consultants, our partners, or our contractors are or will be compliant with all federal, state, and foreign regulations, particularly as we expand our operations outside of the U.S.
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In addition, regulation of data privacy and security laws is increasing worldwide, including various restrictions on cross-border access or transfer of data, including personal data of our employees, our clients, and customers of our clients.
−Removed: Compliance with such regulations may increase our costs, and there is a risk of enforcement of such laws resulting in damage to our brand, as well as financial penalties and potential loss of business, which could be significant.
−Removed: We may have exposure to greater than anticipated tax liabilities.
+Added: Compliance with such regulations may increase our costs, and there is a risk of enforcement of such laws resulting in damage to our brand, as well as financial penalties and the potential loss of business, which could be significant.
+Added: Our tax exposures could be greater than anticipated.
The determination of our worldwide provision for income taxes and other tax liabilities requires estimation and significant judgment, and there are many transactions and calculations where the ultimate tax determination is uncertain.
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While we have established reserves based on assumptions and estimates that we believe are reasonable to cover such eventualities, these reserves may prove to be insufficient.
−Removed: In addition, our future income taxes could be materially adversely affected by a shift in our jurisdictional income mix, by changes in the valuation of our deferred tax assets and liabilities, as a result of changes in tax laws, regulations, or accounting principles, as well as by certain discrete items.
−Removed: In light of continuing fiscal challenges in many jurisdictions, various levels of government are increasingly focused on tax reform and other legislative action to increase tax revenue, including corporate income taxes.
+Added: In addition, our future income taxes could be materially adversely affected by a shift in our jurisdictional income mix, by changes in the valuation of our deferred tax assets and liabilities, because of changes in tax laws, regulations, or accounting principles, as well as by certain discrete items.
+Added: In the United States, such tax law changes could include the impact of the currently enacted mandatory capitalization of research and experimentation expenses, effective for tax years beginning after December 31, 2021 (but postponed to 2026 in the proposed Build Back Better (“BBBA”) Act, which is currently under consideration in the United States Congress), or new tax revenue-raising provisions also tied to the proposed BBBA.
+Added: Globally, the Organization for Economic Cooperation and Development Inclusive Framework on Base Erosion and Profit Shifting is advancing fundamental changes to the international corporate tax system creating new rules for allocating rights to tax global income and a global minimum tax.
+Added: Considering fiscal challenges in many jurisdictions, various levels of government are increasingly focused on tax reform and other legislative actions to increase tax revenue, including corporate income taxes.
states have attempted to increase corporate tax revenues by taking an expansive view of corporate presence to attempt to impose corporate income taxes and other direct business taxes on companies that have no physical presence in their state, and taxing authorities in foreign jurisdictions may take similar actions.
states are also altering their apportionment formulas to increase the amount of taxable income or loss attributable to their state from certain out-of-state businesses.
−Removed: Similarly, in Europe and elsewhere globally, there are various tax reform efforts underway designed to ensure that corporate entities are taxed on a larger percentage of their earnings.
+Added: Similarly, in Europe and elsewhere globally, there are various tax reform efforts underway designed to increase the taxes paid by corporate entities.
If it becomes necessary or desirable to repatriate any of our foreign cash balances to the United States, we may be subject to increased taxes, other restrictions, and limitations.
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We have obtained patents in strategically important global markets relating to the architecture of our systems.
−Removed: We cannot assure that such patents will not be challenged, invalidated, or circumvented, or that rights granted thereunder, or the claims contained therein will provide us with competitive advantages.
+Added: We cannot be certain that such patents will not be challenged, invalidated, or circumvented, or that rights granted thereunder, or the claims contained therein will provide us with competitive advantages.
Moreover, despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our software or to obtain the use of information that we regard as proprietary.
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Other companies or individuals have obtained proprietary rights covering a variety of designs, processes, and systems.
−Removed: There can be no assurance that third parties, including clients, will not claim infringement by us for current or future products.
−Removed: Although we attempt to limit the amount and type of our contractual liability for infringement of the proprietary rights of third parties and assert ownership of work product and intellectual property rights as appropriate, there are often exceptions, and limitations may not be applicable and enforceable in all cases.
+Added: Third parties have claimed and may in the future claim that we have infringed or otherwise violated their intellectual property.
+Added: We are currently party to litigation with Appian Corp.
+Added: – see Part I, Item 3 “Legal Proceedings” and Note 19 in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report.
+Added: Although we attempt to limit the amount and type of our contractual liability for infringement or other violation of the proprietary rights of third parties and assert ownership of work product and intellectual property rights as appropriate, there are often exceptions, and limitations may not be applicable and enforceable in all cases.
Even if limitations are found to be applicable and enforceable, our liability to our clients for these types of claims could be material given the size of certain of our transactions.
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As a result, we may be required to develop alternative non-infringing technology, which could require substantial effort and cost.
−Removed: If we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software and may be unable to compete effectively, which could have a material adverse effect upon our business, operating results, and financial condition.
−Removed: We may be subject to intellectual property rights claims by third parties, which are extremely costly to defend, could require us to pay significant damages, and could limit our ability to use certain technologies.
+Added: If we cannot license or develop technology for any infringing aspect of our business, we would be forced to limit or stop sales of our software and may be unable to compete effectively, which could have a material effect upon our business, operating results, and financial condition.
+Added: Intellectual property rights claims by third parties are extremely costly to defend, could require us to pay significant damages, and could limit our ability to use certain technologies.
Companies in the software and technology industries, including some of our current and potential competitors, own large numbers of patents, copyrights, trademarks, and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights.
−Removed: In addition, many of these companies can dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
+Added: In addition, many of these companies can dedicate greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
The litigation may involve patent holding companies or other adverse patent owners that have no relevant product revenues and against which our patents may, therefore, provide little or no deterrence.
−Removed: We have received, and may in the future receive, notices that claim we have misappropriated, misused, or infringed other parties' intellectual property rights, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property infringement claims.
−Removed: Coronavirus (“COVID-19”)
−Removed: Epidemic diseases, such as the recent global COVID-19 outbreak, could harm our business and results of operations.
−Removed: The recent outbreak of a novel coronavirus disease (“COVID-19”), which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity.
−Removed: A pandemic, including COVID-19, or other public health epidemics pose the risk that our employees, partners, and clients may be prevented from conducting business activities at full capacity for an indefinite period, including due to the spread of the disease within these groups or due to the shutdowns that are requested or mandated by governmental authorities.
−Removed: Moreover, these conditions can affect the rate of IT spending and may adversely affect our clients’ willingness to purchase our solutions, delay prospective clients’ purchasing decisions, reduce the value or duration of their contracts, request concessions including extended payment terms or better pricing, or affect attrition rates, all of which could adversely affect our future sales and operating results.
−Removed: The global spread of COVID-19 has created significant volatility, uncertainty, and economic disruption.
−Removed: We have undertaken measures to protect our employees, partners, and clients, including by adopting a virtual-only meeting format for our annual PegaWorld conference and encouraging employees to work remotely.
+Added: Third parties have claimed and may claim in the future that we have misappropriated, misused, or infringed other parties' intellectual property rights, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property claims.
+Added: We are currently party to litigation with Appian Corp.
+Added: – see Part I, Item 3 “Legal Proceedings” and Note 19 in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of this Annual Report.
+Added: Any litigation regarding intellectual property could be costly and time-consuming and could divert the attention of our management and key personnel from our business operations.
+Added: Significant judgments are required for the determination of probability and the range of the outcomes in any legal dispute, and the estimates are based only on the information available to us at the time.
+Added: Due to the inherent uncertainties involved in claims, legal proceedings, and in estimating the losses that may arise, actual outcomes may differ from our estimates.
+Added: Contingencies deemed not probable or for which losses were not estimable in one period may become probable, or losses may become estimable in later periods which may have a material impact on our results of operations and financial position.
+Added: Intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from manufacturing or licensing certain of our products, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments to our customers.
+Added: Any of these could seriously harm our business.
+Added: Actual or threatened public health emergencies could harm our business.
+Added: The outbreak of a novel coronavirus disease (“COVID-19”) has spread across the globe and is impacting worldwide economic activity.
+Added: A pandemic, including COVID-19, and other public health emergencies pose the risk that our employees, partners, and clients may be prevented from conducting business activities at full capacity for an indefinite period, including due to the spread of the disease within these groups or due to the shutdowns that are requested or mandated by governmental authorities.
+Added: Moreover, these conditions can affect the rate of information technology spending and may adversely affect our clients’ willingness to purchase our solutions, delay prospective clients’ purchasing decisions, reduce the value or duration of their contracts, cause our clients to request concessions including extended payment terms or better pricing, or affect attrition rates, all of which could adversely affect our future sales and operating results.
+Added: The global spread of COVID-19 has created significant uncertainty, and economic disruption.
+Added: We have undertaken measures to protect our employees, partners, and clients, including allowing our employees to work remotely.
There can be no assurance that these measures will be sufficient, however, or that we can implement them without adversely affecting our business operations.
−Removed: We continue to monitor the situation and adjust our policies as more information and public health guidance become available.
−Removed: Precautionary measures that have been adopted, or may be adopted in the future, could negatively affect our client success efforts, sales, and marketing efforts, delay and lengthen our sales cycles, or create operational or other challenges, any of which could harm our business and results of operations.
−Removed: In addition, COVID-19 may disrupt our clients’, vendors’, and partners’ operations for an indefinite period, 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.
−Removed: At this time, it is not possible to estimate the ultimate impact that COVID-19 could have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.
−Removed: Furthermore, due to our shift to a renewable model, the effect of COVID-19 may not be fully reflected in our results of operations until future periods.
+Added: We continue to monitor COVID-19 and adjust our policies as more information and public health guidance become available.
+Added: Precautionary measures that have been adopted, or may be adopted in the future, could negatively affect our client success, sales, and marketing efforts, delay and lengthen our sales cycles, or create operational or other challenges, all of which could harm our business and results of operations.
+Added: In addition, COVID-19 may disrupt and change our clients’, vendors’, and partners’ operations in ways that are difficult to predict, including because of travel restrictions, business shutdowns, supply chain delays and/or more pervasive remote work environments, all of which could negatively impact our business, results of operations, and cash flows.
+Added: At this time, it is not possible to estimate the ultimate impact that COVID-19 will have on our business, as the impact will depend on future developments, which are highly uncertain and unpredictable.
+Added: Furthermore, due to our shift to a subscription model, the effect of COVID-19 may not be fully reflected in our results of operations until future periods.
The extent to which COVID-19 impacts our business, operations, and financial results will depend on numerous evolving factors that we may not be able to predict accurately, including:
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• the impact of business disruptions and reductions in our clients’ business and the resulting impact on their demand for our services and solutions;
−Removed: • our ability to provide our services and solutions, including as a result of our employees or our clients’ employees working remotely and/or closures of offices and facilities.
+Added: • our ability to provide our services and solutions, including because of our employees or our clients’ employees working remotely and/or closures of offices and facilities.
General Risk Factors
The provision in our amended and restated bylaws, requiring exclusive forum in certain courts in The Commonwealth of Massachusetts or the federal district court for the District of Massachusetts for certain types of lawsuits, may have the effect of discouraging lawsuits against us and our directors, officers, and employees.
−Removed: Our amended and restated bylaws provide that unless we consent in writing to the selection of an alternative forum, the Business Litigation Section of the Superior Court of Suffolk County, Massachusetts (the “BLS”) or, if the BLS lacks jurisdiction, the federal district court for the District of Massachusetts, Eastern Division, shall be the exclusive forum for any (i) derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to the Massachusetts Business Corporation Act (the “MBCA”), our articles of organization, or our bylaws (as each may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine.
+Added: Our amended and restated bylaws provide that unless we consent in writing to the selection of an alternative forum, the Business Litigation Section of the Superior Court of Suffolk County, Massachusetts (the “BLS”) or, if the BLS lacks jurisdiction, the federal district court for the District of Massachusetts, Eastern Division, shall be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to the Massachusetts Business Corporation Act (the “MBCA”), our articles of organization, or our bylaws (as each may be amended from time to time), or (iv) any action asserting a claim governed by the internal affairs doctrine.
The choice of forum provision may increase costs to bring a claim, discourage claims, or limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us or our directors, officers, and other employees.
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Our sales to, and the collection of receivables from, our clients may be impacted by adverse changes in global economic conditions.
−Removed: and other key international economies have experienced cyclical downturns from time to time, during which economic activity has been impacted by falling demand for goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, bankruptcies, and economic uncertainty.
+Added: and other key international economies have experienced cyclical downturns from time to time, during which economic activity has been impacted by falling demand for goods and services, inflation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity, and foreign exchange markets, bankruptcies, and economic uncertainty.
These changes in global economic conditions could impact the ability and willingness of our clients to make investments in technology, which in turn may delay or reduce the purchases of our software and services.
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The financial uncertainties facing many of our clients and the industries in which they operate could negatively impact our business, operating results, and financial condition.
−Removed: The U.K.’s withdrawal from the European Union (commonly referred to as “Brexit”) on January 31, 2020 could have a material impact on our business, including our relationships with existing and future clients, suppliers, and employees, which could harm our financial results and operations.
+Added: The U.K.’s withdrawal from the European Union could have a material impact on our business, including our relationships with existing and future clients, suppliers, and employees, which could harm our financial results and operations.
We have material operations in the U.K.
and European Union.
−Removed: The ultimate or perceived effects of the U.K.’s withdrawal from the European Union, could potentially disrupt the markets we serve and the tax jurisdictions in which we operate.
+Added: While the full effects of Brexit will not be known for some time, the ultimate or perceived impacts of the U.K.’s withdrawal from the European Union could potentially disrupt the markets we serve and the tax jurisdictions in which we operate.
+Added: The impact of Brexit will depend on any agreements the U.K.
+Added: makes to retain access to EU markets following the transition period.
+Added: In addition, Brexit could lead to legal uncertainty, and potentially divergent national laws and regulations as the U.K.
+Added: determine which EU laws to replace or replicate, presenting new regulatory costs and challenges.
+Added: Any of these effects could materially adversely affect our business, results of operations, and financial condition.
The market price of our common stock has been and is likely to continue to be volatile .
−Removed: The market price of our common stock may be highly volatile and may fluctuate substantially due to a variety of factors, some of which are related in complex ways.
+Added: The market price of our common stock may be highly volatile and may fluctuate due to a variety of factors, some of which are related in complex ways.
Factors that may affect the market price of our common stock include:
5 unchanged sentences
• announcements by our competitors or us of significant business developments, acquisitions, or new offerings;
−Removed: • our involvement in any litigation or investigations by regulators;
+Added: • our involvement in any litigation or investigations by regulators, including litigation judgments, settlements, or other litigation-related costs;
• our sale of our common stock or other securities;
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Our business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside of our control and which could materially adversely affect our operations and operating results.
−Removed: Furthermore, if we make downward revisions of our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors, or other interested parties, our common stock price would decline.
+Added: Furthermore, if we make downward revisions of our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors, or other interested parties, our common stock price may decline.
If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.
−Removed: The trading market for our common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business.
+Added: The trading market for our common stock depends, in part, on the research and reports that securities and industry analysts publish about us or our business.
We do not have any control over these analysts.
−Removed: If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our share price would likely decline.
−Removed: If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
+Added: If our financial performance fails to meet analyst estimates or one or more of the analysts who cover us downgrade our shares or change their opinion of our shares, our stock price would likely decline.
+Added: If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.
UNRESOLVED STAFF COMMENTS
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.