59 unchanged sentences
Our revenue growth rate may decline in future periods.
−Removed: Many factors may contribute to declines in our revenue growth rate, including increased competition, slowing demand for our platforms from existing and new customers, a failure by us to continue
−Removed: capitalizing on growth opportunities, terminations of existing contracts or failure to exercise existing options by our customers, and the maturation of our business, among others.
+Added: Many factors may contribute to declines in our revenue growth rate, including increased competition, slowing demand for our platforms from existing and new customers, a failure by us to continue capitalizing on growth opportunities, terminations of existing contracts or failure to exercise existing options by our customers, and the maturation of our business, among others.
If our revenue growth rate declines, our business, financial condition, and results of operations could be adversely affected.
7 unchanged sentences
Because decisions to purchase our platforms involve significant financial commitments, potential customers generally evaluate our platforms at multiple levels within their organization, each of which often have specific requirements, and typically involve their senior management.
−Removed: Our results of operations depend on sales to enterprise customers, which make product purchasing decisions based in part or entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer’s projections of business growth, uncertainty about economic conditions (including as a result of the ongoing COVID-19 pandemic or geopolitical tensions), capital budgets, anticipated cost savings from the implementation of our platforms, potential preference for such customer’s internally-developed software solutions, perceptions about our business and platforms, more favorable terms offered by potential competitors, and previous technology investments.
+Added: Our results of operations depend on sales to enterprise customers, which make product purchasing decisions based in part or entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer’s projections of business growth, uncertainty about economic conditions (including as a result of the ongoing COVID-19 pandemic, inflation or geopolitical tensions), capital budgets, anticipated cost savings from the implementation of our platforms, potential preference for such customer’s internally-developed software solutions, perceptions about our business and platforms, more favorable terms offered by potential competitors, and previous technology investments.
In addition, certain decision makers and other stakeholders within our potential customers tend to have vested interests in the continued use of internally developed or existing software, which may make it more difficult for us to sell our platforms and services.
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We may not be effective in executing this or any other aspect of our growth strategy.
−Removed: Our top three customers together accounted for 18% and 25% of our revenue for the years ended December 31, 2021 and 2020, respectively, and 17% and 20% of our revenue for the three months ended March 31, 2022 and 2021, respectively.
−Removed: Our top three customers by revenue, for the three months ended March 31, 2022, have been with us for an average of five years as of March 31, 2022.
+Added: Our top three customers together accounted for 18% and 25% of our revenue for the years ended December 31, 2021 and 2020, respectively, and 16% and 19% of our revenue for the six months ended June 30, 2022 and 2021, respectively.
+Added: Our top three customers by revenue, for the six months ended June 30, 2022, have been with us for an average of six years as of June 30, 2022.
Certain of our customers, including customers that represent a significant portion of our business, have in the past reduced their spend with us or terminated their agreements with us, which has reduced our anticipated future payments or revenue from these customers, and which has required us to refund some previously paid amounts to these customers.
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In addition, many of our customer contracts permit the customer to terminate their contracts with us with notice periods of varying lengths, generally three to six months.
−Removed: If one or more of our customers terminate their contracts with us, whether for convenience, for default in the event of a breach by us, or for other reasons specified in our contracts, as applicable;
+Added: If one or more of our customers terminate their contracts with us, whether for convenience, for default in the event of a breach by us, or for other reasons specified in our
+Added: contracts, as applicable;
if our customers elect not to renew their contracts with us;
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Our ability to renew or expand our customer relationships may decrease or vary as a result of a number of factors, including our customers’ satisfaction or dissatisfaction with our platforms and services, the frequency and severity of software and implementation errors, our platforms’ reliability, our pricing, the effects of general economic conditions, competitive offerings or alternatives, or reductions in our customers’ spending levels.
−Removed: If our customers do not renew or expand their agreements with us or if they renew their
−Removed: contracts for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business could suffer.
+Added: If our customers do not renew or expand their agreements with us or if they renew their contracts for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business could suffer.
Our business, financial condition, and results of operations would also be adversely affected if we face difficulty collecting our accounts receivable from our customers or if we are required to refund customer deposits.
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We typically close a large portion of our sales in the last several weeks of a quarter, which impacts our ability to plan and manage margins and cash flows.
−Removed: Our sales cycle is often long, and it is difficult to predict exactly when, or if, we will actually make a sale with a potential customer.
+Added: Our sales cycle is often long, and it is difficult to predict exactly when, or if, we will actually make a sale with a potential customer, particularly with large government and commercial customers.
As a result, large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all.
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The timing of customer billing and payment varies from contract to contract.
−Removed: A delay in the timing of receipt of such collections, or a default on a large contract, may negatively impact our liquidity for the period and in the future.
+Added: A delay in the timing of receipt of such collections, or
+Added: a default on a large contract, may negatively impact our liquidity for the period and in the future.
Because a substantial portion of our expenses are relatively fixed in the short-term and require time to adjust, our results of operations and liquidity would suffer if revenue falls below our expectations in a particular period.
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• The timing of expenses related to any future acquisitions;
−Removed: • General economic, regulatory, and market conditions, including the impacts of the COVID-19 pandemic and the ongoing Russian invasion of Ukraine and related economic sanctions and regional instability.
+Added: • General economic, regulatory, and market conditions, including the impacts of the COVID-19 pandemic, the ongoing Russian invasion of Ukraine and related economic sanctions and regional instability, and increasing inflation or interest rates.
In addition, many of our contracts contain termination for convenience provisions, and we may be obligated to repay prepaid amounts or otherwise not realize anticipated future revenue should we fail to provide future services as anticipated.
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While we have historically billed and collected payments for multiple contract years from certain customers in advance, we have and may continue to shift to collecting payments on an annual or other basis.
−Removed: While this has been the historical seasonal pattern of our quarterly sales, we believe that our customers’ required timing for certain new government or commercial programs requiring new software may outweigh the nature or magnitude of seasonal factors that
−Removed: might have influenced our business to date.
+Added: While this has been the historical seasonal pattern of our quarterly sales, we believe that our customers’ required timing for certain new government or commercial programs requiring new software may outweigh the nature or magnitude of seasonal factors that might have influenced our business to date.
As a result, we may experience future growth from additional government or commercial mandates that do not follow the seasonal purchasing and evaluation decisions by our customers that we have historically observed.
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Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by customers brought against us, any of which could harm our business.
−Removed: Moreover, the design and development of new platforms or new features and capabilities to our existing platforms may require substantial investment, and we have no assurance that such investments will be
+Added: Moreover, the design and development of new platforms or new features and capabilities to our existing platforms may require substantial investment, and we have no assurance that such investments will be successful.
If customers do not widely adopt our new platforms, experiences, features, and capabilities, we may not be able to realize a return on our investment and our business, financial condition, and results of operations may be adversely affected.
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As we continue to grow, we face challenges of integrating, developing, retaining, and motivating a rapidly growing employee base in various countries around the world.
−Removed: For example, our headcount has grown from 313 full-time employees as of December 31, 2010 to 3,057 full-time employees as of March 31, 2022, with employees located both in the United States and outside the United States.
+Added: For example, our headcount has grown from 313 full-time employees as of December 31, 2010 to 3,269 full-time employees as of June 30, 2022, with employees located both in the United States and outside the United States.
In the event of continued growth of our operations, our operational resources, including our information technology systems, our employee base, or our internal controls and procedures may not be adequate to support our operations and deployments.
Managing our growth may require significant expenditures and allocation of valuable management resources, improving our operational, financial, and management processes and systems, and effectively expanding, training, and managing our employee base.
−Removed: If we fail to achieve the necessary level of efficiency in our organization as it grows, our business, financial condition, and results of operations
−Removed: would be harmed.
+Added: If we fail to achieve the necessary level of efficiency in our organization as it grows, our business, financial condition, and results of operations would be harmed.
As our organization continues to grow, we may find it increasingly difficult to maintain the benefits of our traditional company culture, including our ability to quickly respond to customers, and avoid unnecessary delays that may be associated with a formal corporate structure.
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Potential candidates may not perceive our compensation package, including our equity awards, as favorably as personnel hired prior to our listing.
−Removed: In addition, our recruiting personnel, methodology, and approach may need to be altered to address a changing candidate pool and profile.
+Added: In addition, our
+Added: recruiting personnel, methodology, and approach may need to be altered to address a changing candidate pool and profile.
We may not be able to identify or implement such changes in a timely manner.
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Personnel may be more likely to leave us if the shares they own or the shares underlying their vested options or RSUs have significantly appreciated in value.
−Removed: In addition, many of our
−Removed: personnel may be able to receive significant proceeds from sales of our equity in the public markets, which may reduce their motivation to continue to work for us.
+Added: In addition, many of our personnel may be able to receive significant proceeds from sales of our equity in the public markets, which may reduce their motivation to continue to work for us.
Any of these factors could harm our business, financial condition, and results of operations.
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In addition, we have invested, and may need to continue investing, significant resources in our sales operations to enable our sales organization to run effectively and efficiently, including supporting sales strategy planning, sales process optimization, data analytics and reporting, and administering incentive compensation arrangements.
−Removed: Furthermore, hiring personnel in new countries requires additional setup and upfront costs that we may not recover if those personnel fail to achieve full productivity in a timely manner.
+Added: Furthermore, hiring personnel in new countries requires
+Added: additional setup and upfront costs that we may not recover if those personnel fail to achieve full productivity in a timely manner.
Our business would be adversely affected if our efforts to build, expand, train, and manage our sales organization are not successful.
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If we do not effectively deploy, update, or upgrade our platforms, succeed in helping our customers quickly resolve post-deployment issues, and provide effective ongoing services, our ability to sell additional products and services to existing customers could be adversely affected, we may face negative publicity, and our reputation with potential customers could be damaged.
−Removed: Many enterprise and government customers require higher levels of services than smaller customers.
−Removed: we fail to meet the requirements of the larger customers, it may be more difficult to execute on our strategy to increase our penetration with larger customers.
+Added: Many enterprise and government customers require higher levels of service than smaller customers.
+Added: If we fail to meet the requirements of the larger customers, it may be more difficult to execute on our strategy to increase our penetration with larger customers.
As a result, our failure to maintain high quality services may have a material adverse effect on our business, financial condition, results of operations, and growth prospects.
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Accordingly, the effect of significant downturns in sales or renewals, significant customer terminations, and potential changes in our contracting terms and pricing policies would not be fully reflected in our results of operations until future periods.
−Removed: The timing of our revenue recognition
−Removed: model also makes it difficult for us to rapidly increase our revenue through additional sales in any given period, as revenue is generally recognized over the applicable contractual term.
+Added: The timing of our revenue recognition model also makes it difficult for us to rapidly increase our revenue through additional sales in any given period, as revenue is generally recognized over the applicable contractual term.
Our pricing structures for our platforms and services may change from time to time, which could adversely impact our business, financial condition, and results of operations.
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Moreover, as we continue to target selling our platforms and services to larger organizations, these larger organizations may demand substantial price concessions.
−Removed: As we expand access to our products to early- or growth-stage companies, our pricing model and product and service offerings for such customers have been, and will continue to be, tailored to be attractive for such customers.
+Added: As we expand access to our products to early- or growth-stage companies, our pricing
+Added: model and product and service offerings for such customers have been, and will continue to be, tailored to be attractive for such customers.
In addition, we may need to change pricing policies to accommodate government pricing guidelines for our contracts with federal, state, local, and foreign governments and government agencies.
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As our business grows and becomes more complex, the staffing of customer-facing personnel, some of whom may have limited industry experience, may result in unintended outcomes or in decisions that are poorly received by customers or other stakeholders.
−Removed: For example, in many cases we launch, at our expense, pilot deployments with customers without a long-term contract in place, and some of those deployments have not resulted
−Removed: in the customer’s adoption or expansion of its use of our platforms and services, or the generation of significant, or any, revenue or payments.
+Added: For example, in many cases we launch, at our expense, pilot deployments with customers without a long-term contract in place, and some of those deployments have not resulted in the customer’s adoption or expansion of its use of our platforms and services, or the generation of significant, or any, revenue or payments.
In addition, as we continue to grow, including geographically, we may find it difficult to maintain our culture.
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In such cases, our partner may be less successful than we would have otherwise been absent the arrangement and our ability to influence, or have visibility into, the sales, marketing, and related efforts of our partners may be limited.
−Removed: In the event we enter into an arrangement with a particular partner, we may be less likely (or unable) to work with one or more direct competitors of our partner with which we would
−Removed: have worked absent the arrangement.
+Added: In the event we enter into an arrangement with a particular partner, we may be less likely (or unable) to work with one or more direct competitors of our partner with which we would have worked absent the arrangement.
We may have interests that are different from our joint venture partners and/or which may affect our ability to successfully collaborate with a given partner.
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In addition, customer satisfaction with our products provided in connection with these arrangements may be less favorable than anticipated, negatively impacting anticipated revenue growth and results of operations of arrangements in question.
−Removed: Further, some of our strategic partners offer competing products and services or work with our competitors.
+Added: Further, some of our strategic partners offer competing products and services or work with our
As a result of these and other factors, many of the companies with which we have or are seeking joint ventures, channel sales relationships, platform partnerships, or strategic alliances may choose to pursue alternative technologies and develop alternative products and services in addition to or in lieu of our platforms, either on their own or in collaboration with others, including our competitors.
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In addition, part of our growth strategy involves supporting a broader set of potential customers, including early- and growth-stage companies.
−Removed: Sales to early- and growth-stage companies often involve risks that vary from those present with sales to large or otherwise established organizations, due to their limited operating history, limited resources for adopting new technologies, and uncertain resources for future operations, among other things.
+Added: Sales to early- and growth-stage companies often involve risks that vary from those present with sales to large or otherwise established organizations, due to their limited operating history, limited resources for adopting new technologies,
+Added: and uncertain resources for future operations, among other things.
Accordingly, we will continue to refine our business strategy and pricing structures to attract and retain such customers, as well as existing and larger customers across the potential customer base.
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At the outset of the COVID-19 pandemic, and in light of the uncertain and rapidly evolving situation, these precautionary measures included temporarily closing our offices worldwide and virtualizing, postponing, or canceling customer, employee, or industry events.
−Removed: More recently and in accordance with relevant public health guidance and local conditions, we have begun to reopen our offices and resume travel, while continuing to closely monitor the COVID-19 pandemic to determine if additional actions or adjustments to our current policies are required.
+Added: More recently and in accordance with relevant public health guidance and local conditions, we reopened our offices and resumed travel, while continuing to closely monitor the COVID-19 pandemic to determine if additional actions or adjustments to our current policies are required.
While the COVID-19 pandemic has provided certain new opportunities for our business to expand, it has also created many negative headwinds that present risks to our business and results of operations.
For example, the COVID-19 pandemic has generally disrupted the operations of our customers and prospective customers, and may continue to disrupt their operations, including as a result of travel restrictions and/or business shutdowns, uncertainty in the financial markets or other harm to their business and financial results, which could result in a reduction to information technology budgets, delayed purchasing decisions, longer sales cycles, extended payment terms, delayed payments, and postponed or canceled projects, all of which would negatively impact our business, financial condition, and results of operations, including sales and cash flows.
−Removed: Moreover, the potential impact on our workforce and business of implementing government orders or rules requiring COVID-19 vaccinations, including but not limited to the U.S.
−Removed: executive order requiring COVID-19 vaccination for federal contractor employees, is currently unknown.
We do not yet know the net impact of the COVID-19 pandemic on our business and cannot guarantee that it will not be materially negative.
1 unchanged sentence
Historically, a significant portion of our field sales, operations and maintenance, and professional services have been conducted in person.
−Removed: Currently, as a result of certain work and travel restrictions related to the COVID-19 pandemic, and the precautionary measures that we have adopted, many of our field sales and professional services activities are still being conducted remotely, which has resulted in a decrease in our travel and office expenditures.
−Removed: However, we expect our travel and office expenditures to increase in the future as we resume such travel and continue to reopen our offices, which could negatively impact our financial condition and results of operations.
+Added: As a result of certain work and travel restrictions implemented during the COVID-19 pandemic, the precautionary measures we adopted, and the increased availability of remote methods of customer support, many of our field sales and professional services activities are still being conducted remotely, which has resulted in a decrease in our travel and office expenditures.
+Added: However, our travel and office-related expenditures have increased, and may continue to increase in the future, which could negatively impact our financial condition and results of operations.
As of the date of this Quarterly Report on Form 10-Q, we do not yet know the extent of the negative impact of such restrictions and precautionary measures on our ability to attract new customers or retain and expand our relationships with existing customers.
Although the majority of our workforce worked remotely during the COVID-19 pandemic, there was minimal disruption in our ability to ensure the effective operation of our software platforms.
−Removed: As public health guidance and local conditions permit, we continue to open our offices in at least a limited capacity and are allowing business travel to resume, while continuing to closely monitor the pandemic.
+Added: We have reopened our offices and are allowing business travel to resume, while continuing to closely monitor the pandemic, and some of our employees continue to work remotely.
It is possible that remote work arrangements may have a negative impact on our operations;
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It is not possible at this time to estimate the full impact that the COVID-19 pandemic will have on our business, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.
−Removed: Moreover, to the extent the COVID-19 pandemic adversely affects our business, financial condition, and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to,
−Removed: those related to our ability to increase sales to existing and new customers, continue to perform on existing contracts, develop and deploy new technologies, expand our marketing capabilities and sales organization, generate sufficient cash flow to service our indebtedness, and comply with the covenants in the agreements that govern our indebtedness.
+Added: Moreover, to the extent the COVID-19 pandemic adversely affects our business, financial condition, and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to, those related to our ability to increase sales to existing and new customers, continue to perform on existing contracts,
+Added: develop and deploy new technologies, expand our marketing capabilities and sales organization, generate sufficient cash flow to service our indebtedness, and comply with the covenants in the agreements that govern our indebtedness.
If the market for our platforms and services develops more slowly than we expect, our growth may slow or stall, and our business, financial condition, and results of operations could be harmed.
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During April 2021, we fully repaid the outstanding term loans in an aggregate principal amount of $200.0 million and mutually agreed with the lenders and other applicable parties under our revolving credit facility to amend our revolving credit facility to, among other things, increase the commitments under the revolving credit facility by $200.0 million, for total revolving commitments of $400.0 million.
−Removed: In March 2022, our revolving credit facility was further amended to, among other things, extend the maturity date of the revolving loan facility and increase the commitments under the revolving credit facility by $100.0 million, for total revolving commitments of $500.0 million, all of which are undrawn as of the date of this Quarterly Report on Form 10-Q.
+Added: In March 2022, our revolving credit facility was further amended to, among other things, extend the maturity date of the revolving loan facility and increase the commitments under the revolving credit facility by $100.0 million, and in July 2022, our revolving credit facility was further amended to, among other things, provide a new incremental DDTL facility in an aggregate principal amount of $450.0 million, upon the terms and conditions set forth in the applicable credit agreement, as amended, with new and existing lenders.
+Added: The DDTL facility is available to draw upon through July 1, 2023 and any drawn amounts will mature on March 31, 2027.
+Added: The existing revolving credit facility, as amended, matures in March 2027.
+Added: The DDTL facility, together with our existing revolving credit facility, provides for total commitments of up to $950.0 million, all of which are undrawn as of the date of this Quarterly Report on Form 10-Q.
Any interest or facility payments are due and payable quarterly or more or less frequently in certain circumstances.
−Removed: The revolving credit facility, as amended, matures in March 2027.
Additional equity or debt financing may not be available on favorable terms, or at all.
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While these obligations remain outstanding and are cash collateralized, we do not have access to and cannot use the pledged cash for our operations or to repay our other indebtedness.
−Removed: As of March 31, 2022, we were in compliance with all covenants and restrictions associated with our revolving credit facility.
+Added: As of June 30, 2022, we were in compliance with all covenants and restrictions associated with our revolving credit facility.
Variable rate indebtedness that we may incur under our revolving credit facility will subject us to interest rate risk, which could cause our debt service obligations to increase significantly.
−Removed: As of March 31, 2022, no borrowings were outstanding under our revolving credit facility.
+Added: As of June 30, 2022, no borrowings were outstanding under our revolving credit facility.
Any borrowings under the revolving credit facility bear interest at variable rates, which exposes us to interest rate risk.
4 unchanged sentences
As part of our business strategy, we have engaged in strategic transactions and alternative investments in the past and expect to evaluate and consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, products and other assets in the future.
−Removed: We also may enter into relationships with other businesses to expand our products or our
−Removed: ability to provide services.
+Added: We also may enter into relationships with other businesses to expand our products or our ability to provide services.
An acquisition, investment or business relationship may result in unforeseen risks, operating difficulties and expenditures, including the following:
17 unchanged sentences
however, we do not currently anticipate entering into new Investment Agreements to purchase, or commit to purchase, securities of special purpose acquisition companies.
−Removed: As of March 31, 2022, we had an outstanding approved investment commitment, subject to the applicable terms and conditions, to purchase a total of 3.5 million shares for an aggregate purchase price of $35.0 million.
−Removed: The closing of such investment commitment is contingent upon the completion of a proposed business combination between the applicable Investee and another party, and are subject to numerous terms and conditions, including approvals of the stockholders of applicable parties and regulatory review, which are inherently uncertain.
+Added: As of June 30, 2022, we had an outstanding approved investment commitment, subject to the applicable terms and conditions, to purchase a total of 3.5 million shares for an aggregate purchase price of $35.0 million.
+Added: The closing of such investment
+Added: commitment is contingent upon the completion of a proposed business combination between the applicable Investee and another party, and are subject to numerous terms and conditions, including approvals of the stockholders of applicable parties and regulatory review, which are inherently uncertain.
Additionally, in connection with approving and signing the Investment Agreements, we and each Investee or an associated entity entered into a commercial contract for access to our products and services.
2 unchanged sentences
Many of these commercial contracts are subject to various termination provisions, including, as applicable, for convenience in the event a proposed business combination or our proposed investment is not completed.
−Removed: Parties to certain of these and other commercial contracts entered into in connection with our Investments may elect to exercise termination rights, including, to the extent applicable, in the event a proposed business
−Removed: combination is not completed, which would negatively impact our expected revenue and collections.
−Removed: The total revenue recognized by us from the commercial contracts during the three months ended March 31, 2022 was $39.2 million.
−Removed: In addition to the above, as of March 31, 2022, we have entered into certain commercial contracts, the total value of which is $68.0 million, that are contingent on the corresponding contemplated Investment Agreements being negotiated, approved, and executed.
+Added: Parties to certain of these and other commercial contracts entered into in connection with our Investments may elect to exercise termination rights, including, to the extent applicable, in the event a proposed business combination is not completed, which would negatively impact our expected revenue and collections.
+Added: The total revenue recognized by us from the commercial contracts during the six months ended June 30, 2022 was $70.6 million.
+Added: In addition to the above, as of June 30, 2022, we have entered into certain commercial contracts, the total value of which is $68.0 million, that are contingent on the corresponding contemplated Investment Agreements being negotiated, approved, and executed.
If the companies that we enter into commercial contracts with, including, as applicable, companies that complete their proposed business combinations as contemplated, are unable to generate sufficient revenues or profitability or to access any necessary financing or funding in a timely manner or on favorable terms to them, our commercial contracts and expected revenue and collections would be negatively impacted.
1 unchanged sentence
Our ability to sell or transfer, or realize value from our Investments may be limited by applicable securities laws and regulations, including the requirement that offers or sales of securities must be registered with the Securities and Exchange Commission (“SEC”) pursuant to applicable laws or qualify for an exemption from such registration, and our ability to liquidate and realize value from our Investments may be negatively and materially impacted by any delays or limitations on our ability to offer, sell, or transfer our Investments.
−Removed: In addition, our Investments are speculative in nature and may be volatile or decline in value or be entirely lost, which could have a negative impact on our future financial position, results of operations, and cash flows.
+Added: In addition, our Investments are speculative in nature and may be volatile or decline in value or be entirely lost.
+Added: We have realized, and may continue to realize, losses related to these marketable securities, which could have a negative impact on our future financial position, results of operations, and cash flows.
The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition.
5 unchanged sentences
Additionally, because many of our customers use our platforms to store, transmit, and otherwise process proprietary, confidential, or sensitive information, and complete mission critical tasks, they have a lower risk tolerance for security vulnerabilities in our platforms and services than for vulnerabilities in other, less critical, software products and services.
−Removed: Our platforms and services operate in conjunction with, and we are dependent upon, third-party products and components across a broad ecosystem.
−Removed: There have been and may continue to be significant attacks on certain third-party providers, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our platforms and services.
+Added: Our platforms and services operate in conjunction with, and we are dependent upon, third-party products and components across a broad ecosystem, including our customer environments.
+Added: There have been and may continue to be significant attacks on certain third-party providers, and we cannot guarantee that our or any third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support or otherwise interface with us and our platforms and services.
If there is a security vulnerability, error, or other bug in one of these third-party products or components and if there is a security exploit targeting them, we could face increased costs, claims, liability, reduced revenue, and harm to our reputation or competitive position.
−Removed: The natural sunsetting or phasing out of third-party products and operating systems that we use requires that our infrastructure teams reallocate time and attention to migration and updates, during which period potential security vulnerabilities could be exploited.
+Added: The natural sunsetting or phasing out of third-party products and operating systems that we use requires that our infrastructure teams reallocate time and attention to migration and updates, during which period potential
+Added: security vulnerabilities could be exploited.
+Added: In addition, our software is deployed on-premises at customer sites and in other locations where we may not have full control over how our products are deployed or managed.
+Added: If our products are not appropriately secured in these environments, they could be compromised, inappropriately accessed, or undergo unauthorized copying and distribution, which could adversely affect our business, financial condition, and results of operations.
+Added: In addition, as we increase the number of customers we serve on our cloud environment, the likelihood increases that some usage of our products may occur that violates our terms of service or is otherwise improper or perceived as improper, which could cause reputational damage and adversely affect our business, financial condition, and results of operations.
We, and the third-party vendors upon which we rely, have experienced, and may in the future experience, cybersecurity attacks and threats, including threats or attempts to disrupt our information technology infrastructure and unauthorized attempts to gain access to sensitive or confidential information.
4 unchanged sentences
Furthermore, because the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until after they are launched against a target, we and our third-party vendors may be unable to anticipate these techniques or implement adequate preventative measures.
−Removed: Although prior known cyberattacks directed
−Removed: at us have not had a material impact on our financial results, and we are continuing to bolster our threat detection and mitigation processes and procedures, we cannot guarantee that past, future, or ongoing cyberattacks or other security breaches or incidents against us or a third party, if successful, will not have a material impact on our business or financial results, whether directly or indirectly.
−Removed: For instance, due to political uncertainty and military actions associated with Russia’s invasion of Ukraine, we and our third-party vendors may be vulnerable to a heightened risk of cybersecurity attacks, phishing attacks, viruses, malware, ransomware, hacking or similar breaches and incidents from nation-state actors or affiliated actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our products and services.
+Added: Although prior known cyberattacks directed at us have not had a material impact on our financial results, and we are continuing to bolster our threat detection and mitigation processes and procedures, we cannot guarantee that past, future, or ongoing cyberattacks or other security breaches or incidents against us or a third party, if successful, will not have a material impact on our business or financial results, whether directly or indirectly.
+Added: For instance, due to political uncertainty, geopolitical tensions, and military actions associated with Russia’s invasion of Ukraine, we and our third-party vendors may be vulnerable to a heightened risk of cybersecurity attacks, phishing attacks, viruses, malware, ransomware, hacking or similar breaches and incidents from nation-state actors or affiliated actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell, and distribute our products and services.
While we have security measures in place to protect our information and our customers’ information and to prevent data loss and other security breaches and incidents, we have not always been able to do so and there can be no assurance that in the future we will be able to anticipate or prevent security breaches or incidents, or unauthorized access of our information technology systems or the information technology systems of the third-party vendors upon which we rely.
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We maintain cybersecurity insurance and other types of insurance, subject to applicable deductibles and policy limits, but our insurance may not be sufficient to cover all costs associated with a potential data security incident.
−Removed: We also cannot be sure that our existing general liability insurance coverage and coverage for cyber liability or errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim.
+Added: We also cannot be sure that our existing general liability insurance coverage and coverage for cyber liability or errors or omissions will continue to be
+Added: available on acceptable terms or will be available in sufficient amounts to cover one or more large claims or that the insurer will not deny coverage as to any future claim.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could harm our financial condition.
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We depend on computing infrastructure operated by Amazon Web Services (“AWS”), Microsoft, and other third parties to support some of our customers and any errors, disruption, performance problems, or failure in their or our operational infrastructure could adversely affect our business, financial condition, and results of operations.
−Removed: We rely on the technology, infrastructure, and software applications, including software-as-a-service offerings, of certain third parties, such as AWS and Microsoft Azure, in order to host or operate some or all of certain key technology platform features or
−Removed: functions of our business, including our cloud-based services (including Palantir Cloud), customer relationship management activities, billing and order management, and financial accounting services.
+Added: We rely on the technology, infrastructure, and software applications, including software-as-a-service offerings, of certain third parties, such as AWS and Microsoft Azure, in order to host or operate some or all of certain key technology platform features or functions of our business, including our cloud-based services (including Palantir Cloud), customer relationship management activities, billing and order management, and financial accounting services.
Additionally, we rely on computer hardware purchased in order to deliver our platforms and services.
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We may be required to spend significant resources to monitor and protect our intellectual property and other proprietary rights, and we may conclude that in at least some instances the benefits of protecting our intellectual property or other proprietary rights may be outweighed by the expense or distraction to our management.
−Removed: We may initiate claims or litigation against third parties for infringement, misappropriation, or other violation of our intellectual property or other proprietary rights or to establish the validity of our intellectual property or other
−Removed: proprietary rights.
+Added: We may initiate claims or litigation against third parties for infringement, misappropriation, or other violation of our intellectual property or other proprietary rights or to establish the validity of our intellectual property or other proprietary rights.
Any such litigation, whether or not it is resolved in our favor, could be time-consuming, result in significant expense to us and divert the efforts of our technical and management personnel.
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We may also be exposed to increased risk of being the subject of intellectual property infringement, misappropriation, or other violation claims as a result of acquisitions and our incorporation of open source and other third-party software into, or new branding for, our technology platforms, as, among other things, we have a lower level of visibility into the development process with respect to such technology or the care taken to safeguard against infringement, misappropriation, or other violation risks.
−Removed: In addition, former employers of our current, former, or future employees may assert claims that such employees have improperly disclosed to us confidential or proprietary information of these former employers.
+Added: In addition, former employers of our current, former, or future employees may assert claims that such employees have improperly disclosed to us confidential or proprietary
+Added: information of these former employers.
Any intellectual property claims, with or without merit, are difficult to predict, could be very time-consuming and expensive to settle or litigate, could divert our management’s attention and other resources, and may not be covered by the insurance that we carry.
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Many of our customers use our platforms in applications that are critical to their businesses or missions and may have a lower risk tolerance to defects in our platforms than to defects in other, less critical, software products.
−Removed: Any errors or delays in releasing new software or new versions of platforms or allegations of unsatisfactory performance, errors, defects, or failures in released software could cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs in
−Removed: redesigning the software, cause us to lose significant customers, subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations and financial condition.
+Added: Any errors or delays in releasing new software or new versions of platforms or allegations of unsatisfactory performance, errors, defects, or failures in released software could cause us to lose revenue or market share, increase our service costs, cause us to incur substantial costs in redesigning the software, cause us to lose significant customers, subject us to liability for damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations and financial condition.
In addition, our platforms could be perceived to be ineffective for a variety of reasons outside of our control.
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In addition, our platforms integrate a wide variety of other elements, and our platforms must successfully interoperate with products from other vendors and our customers’ internally developed software.
−Removed: As a result, when problems occur for a customer using our platforms, it may be difficult to identify the sources of these problems, and we may receive blame for a security, access control, or other compliance breach that was the result of the failure of one of other elements in a customer’s or another vendor’s IT, security, or compliance infrastructure.
+Added: As a result, when problems occur for a customer using our platforms, it may be difficult to identify the sources of these problems, and we may receive blame for a security, access control, or other compliance breach that was the result of the failure of one of the other elements in a customer’s or
+Added: another vendor’s IT, security, or compliance infrastructure.
The occurrence of software or errors in data, whether or not caused by our platforms, could delay or reduce market acceptance of our platforms and have an adverse effect on our business and financial performance, and any necessary revisions may cause us to incur significant expenses.
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In addition, if the open source software we use is no longer maintained by the relevant open source community, then it may be more difficult to make the necessary revisions to our software, including modifications to address security vulnerabilities, which could impact our ability to mitigate cybersecurity risks or fulfill our contractual obligations to our customers.
−Removed: We may also face claims from copyright owners seeking to enforce the terms of an open source license governing the software, including by demanding release of the open source software, derivative works or our proprietary source code that was developed using such software.
+Added: We may also face claims from
+Added: copyright owners seeking to enforce the terms of an open source license governing the software, including by demanding release of the open source software, derivative works or our proprietary source code that was developed using such software.
Such claims, with or without merit, could result in litigation, could be time-consuming and expensive to settle or litigation, including copyright infringement claims, could divert our management’s attention and other resources, could require us to lease some of our proprietary code, or could require us to devote additional research and development resources to change our software, any of which could adversely affect our business.
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federal, state, and foreign legislative and regulatory bodies that could significantly affect our business.
−Removed: For example despite recent developments indicating a possible U.S.
−Removed: and European Commission commitment to develop a new Trans-Atlantic Data Privacy Framework, new legal challenges to the mechanisms allowing companies to transfer personal data from the European Economic Area to certain other jurisdictions, including the United States, could emerge resulting in further limitations on the ability
−Removed: to transfer data across borders.
+Added: For example, despite recent developments indicating an in-principle agreement between the U.S.
+Added: and European Commission to develop a new Trans-Atlantic Data Privacy Framework, new legal challenges to the mechanisms allowing companies to transfer personal data from the European Economic Area to certain other jurisdictions, including the United States, could emerge resulting in further limitations on the ability to transfer data across borders.
The California state legislature passed the California Consumer Privacy Act (“CCPA”) in 2018 and California voters approved a ballot measure subsequently establishing the California Privacy Rights Act (“CPRA”) in 2020, which will jointly regulate the processing of personal information of California residents and increase the privacy and security obligations of entities handling certain personal information of California residents, including requiring covered companies to provide new disclosures to California consumers, and affords such consumers new abilities to opt-out of certain sales of personal information.
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While aspects of both the CCPA and CPRA and their interpretations remain to be determined in practice, we are committed to complying with their applicable obligations.
−Removed: More generally, some observers have noted the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, as observed with the subsequent Virginia Consumer Data Protection Act (“VCDPA”), enacted in March 2021 and scheduled to become effective on January 1, 2023, the Colorado Privacy Act (“CPA”), which was enacted in June 2021 and will become effective on July 1, 2023, and the recent Utah Consumer Privacy Act (“UCPA”), which was enacted in March 2022 and will become effective December 31, 2023.
−Removed: The VCDPA, CPA, and UCPA are comprehensive privacy laws that share similarities with the CCPA, the CPRA, and legislation proposed in other states.
−Removed: We cannot yet fully predict the impact of the CCPA,CPRA, VCDPA, CPA, UCPA, and other new laws or regulations on our business or operations, but developments regarding these and all privacy and data protection laws and regulations around the world may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to maintain compliance on an ongoing basis.
+Added: More generally, some observers have noted the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, as observed with the subsequent adoption of state-level comprehensive consumer privacy legislation, including the following (collectively, the “State Privacy Laws”):
+Added: • The Virginia Consumer Data Protection Act (“VCDPA”), enacted in March 2021 and scheduled to become effective on January 1, 2023;
+Added: • The Colorado Privacy Act (“CPA”), which was enacted in June 2021 and will become effective on July 1, 2023;
+Added: • The Utah Consumer Privacy Act (“UCPA”), which was enacted in March 2022 and will become effective December 31, 2023;
+Added: • Connecticut’s Act Concerning Personal Data Privacy and Online Monitoring (“CTDPA”), which was enacted in May 2022 and most of which will become effective July 1, 2023.
+Added: We cannot yet fully predict the impact of the State Privacy Laws, and other new laws or regulations on our business or operations, but developments regarding these and all privacy and data protection laws and regulations around the world may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to maintain compliance on an ongoing basis.
Outside of the United States, virtually every jurisdiction in which we operate has established its own legal framework relating to privacy, data protection, and information security matters with which we and/or our customers must comply.
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These existing and proposed laws and regulations can be costly to comply with and can make our platforms and services less effective or valuable, delay or impede the development of new products, result in negative publicity, increase our operating costs, require us to modify our data handling practices, limit our operations, impose substantial fines and penalties, require significant management time and attention, or put our data or technology at risk.
−Removed: Any failure or perceived failure by us or our platforms to comply with the laws, regulations, directives, policies, industry standards, or legal obligations of the U.S., European Union, or other
−Removed: governmental or non-governmental bodies at the regional, national, or supra-national level relating to privacy, data protection, or information security, or any security incident that results in actual or suspected loss of or the unauthorized access to, or acquisition, use, release, or transfer of, personal information, personal data, or other customer or sensitive data or information may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, indemnification or other contractual obligations, other remedies, including fines or demands that we modify or cease existing business practices, or adverse publicity, and related costs and liabilities, which could significantly and adversely affect our business and results of operations.
+Added: Any failure or perceived failure by us or our platforms to comply with the laws, regulations, directives, policies, industry standards, or legal obligations of the U.S., European Union, or other governmental or non-governmental bodies at the regional, national, or supra-national level relating to privacy, data protection, or information security, or any security incident that results in actual or suspected loss of or the unauthorized access to, or acquisition, use, release, or transfer of, personal information, personal data, or other customer or sensitive data or information may result in governmental investigations, inquiries, enforcement actions and prosecutions, private claims and litigation, indemnification or other contractual obligations, other remedies, including fines or demands that we modify or cease existing business practices, or adverse publicity, and related costs and liabilities, which could significantly and adversely affect our business and results of operations.
sales and operations subject us to additional risks and regulations that can adversely affect our results of operations.
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dollars, an increase in the strength of the U.S.
−Removed: dollar may make doing business with us less appealing to a non-U.S.
−Removed: dollar denominated customer;
+Added: dollar has made our products more expensive for non-U.S.
+Added: dollar denominated customers, which may make doing business with us less appealing to such customers;
• Management and employee communication and integration problems resulting from language differences, cultural differences, and geographic dispersion;
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• Lack of familiarity with local laws, customs, and practices, and laws and business practices favoring local competitors or partners;
−Removed: • Interruptions to our business operations and our customers’ business operations subject to events such as war, incidents of terrorism, natural disasters, public health concerns or epidemics (such as the COVID-19 pandemic), shortages or failures of power, internet, telecommunications, or hosting service providers, cyberattacks or malicious acts, or responses to these events.
+Added: • Interruptions to our business operations and our customers’ business operations subject to events such as war, incidents of terrorism, natural disasters, public health concerns or epidemics (such as the COVID-19 pandemic), shortages or failures of
+Added: power, internet, telecommunications, or hosting service providers, cyberattacks or malicious acts, or responses to these events.
In addition to the factors above, foreign governments may take administrative, legislative, or regulatory action that could materially interfere with our ability to sell our platforms in certain countries.
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We have previously been, and may currently or in the future become, involved in a number of legal, regulatory, and administrative inquiries and proceedings, and unfavorable outcomes in litigation or other of these matters could negatively impact our business, financial conditions, and results of operations.
−Removed: We have previously been, and may currently be, and from time to time going forward may become involved in and subject to regulatory or other governmental inquiries or investigations, or government or private-party litigation or proceedings for a variety of claims or disputes.
+Added: We have previously been, and may currently be, and from time to time going forward may become involved in and subject to regulatory or other governmental inquiries or investigations, or government or private-party litigation or proceedings for a
+Added: variety of claims or disputes.
These claims, lawsuits, and proceedings could involve labor and employment, discrimination and harassment, commercial disputes, intellectual property rights (including patent, trademark, copyright, trade secret, and other proprietary rights), class actions, general contract, tort, defamation, data privacy rights, antitrust, common law fraud, government regulation, or compliance, alleged federal and state securities and “blue sky” law violations or other investor claims, and other matters.
Derivative claims, lawsuits, and proceedings, which may, from time to time, be asserted against our directors by our stockholders, could involve breach of fiduciary duty, failure of oversight, corporate waste claims, and other matters.
−Removed: One of our stockholders with respect to whom we are currently engaged in litigation as described in the notes to our condensed consolidated financial statements has threatened to bring various of these claims.
+Added: One of our stockholders with respect to whom we recently settled litigation as described in the notes to our condensed consolidated financial statements has threatened to bring various of these claims.
In addition, our business and results may be adversely affected by the outcome of any currently pending or any future legal, regulatory, and/or administrative claims or proceedings, including through monetary damages or injunctive relief.
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Failure to comply with anti-bribery and anti-corruption laws could subject us to penalties and other adverse consequences.
−Removed: As we operate and sell our platforms and services around the world, we are subject to the United States Foreign Corrupt Practices Act (“FCPA”), the UK Bribery Act, the U.S.
+Added: As we operate and sell our platforms and services around the world, we are subject to the United States Foreign Corrupt Practices Act (“FCPA”), the U.K.
+Added: Bribery Act, the U.S.
domestic bribery statute contained in 18 U.S.C.
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While we have implemented policies and procedures to address compliance with such laws, we cannot ensure that our employees or other third parties working on our behalf will not engage in conduct in violation of our policies or applicable law for which we might ultimately be held responsible.
−Removed: Violations of the FCPA, the UK Bribery Act, and other laws may result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, as well as severe criminal or civil sanctions, including suspension or debarment from U.S.
+Added: Violations of the FCPA, the U.K.
+Added: Bribery Act, and other laws may result in whistleblower complaints, adverse media coverage, investigations, imposition of significant legal fees, loss of export privileges, as well as severe criminal or civil sanctions, including suspension or debarment from U.S.
government contracting, and we may be subject to other liabilities and adverse effects on our reputation, which could negatively affect our business, results of operations, financial condition, and growth prospects.
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In particular, we make certain estimates and assumptions related to the adoption and interpretation of these principles including the recognition of our revenue and the accounting for our provision for income taxes.
−Removed: If these assumptions turn out to be incorrect, our financial results and position could materially
−Removed: differ from our expectations and could be materially adversely affected.
+Added: If these assumptions turn out to be incorrect, our financial results and position could materially differ from our expectations and could be materially adversely affected.
A change in any of these principles or guidance, or in their interpretations or application to us, may have a significant effect on our reported results, as well as our processes and related controls, and may retroactively affect previously reported results or our forecasts, which may negatively impact our financial statements.
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sales and use tax, value-added tax (“VAT”), and goods and services tax (“GST”) in a number of jurisdictions.
−Removed: It is possible, however, that we could face sales tax, VAT, or GST audits and that our liability for these taxes could exceed our estimates as state and non-U.S.
+Added: It is possible, however, that we could face
+Added: sales tax, VAT, or GST audits and that our liability for these taxes could exceed our estimates as state and non-U.S.
tax authorities could still assert that we are obligated to collect additional tax amounts from our customers and remit those taxes to those authorities.
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Risks Related to Relationships and Business with the Public Sector
−Removed: A significant portion of our business depends on sales to the public sector, and our failure to receive and maintain government contracts or changes in the contracting or fiscal policies of the public sector could have a material adverse effect on our business.
+Added: A significant portion of our business depends on sales to the public sector, and our failure to receive and maintain government contracts or changes in the contracting or fiscal policies of the public sector has adversely affected and could continue to adversely affect our business, results of operations, financial condition, and growth prospects.
We derive a significant portion of our revenue from contracts with federal, state, local, and foreign governments and government agencies, and we believe that the success and growth of our business will continue to depend on our successful procurement of government contracts.
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• Increased or unexpected costs or unanticipated delays caused by other factors outside of our control, such as performance failures of our subcontractors.
−Removed: Any such event or activity, among others, could cause governments and governmental agencies to delay or refrain from purchasing our platforms and services in the future, reduce the size or payment amounts of purchases from existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition, and growth prospects.
+Added: Such events or activities, among others, have caused and could continue to cause governments and governmental agencies to delay or refrain from purchasing our platforms and services in the future, reduce the size or payment amounts of purchases from
+Added: existing or new government customers, or otherwise have an adverse effect on our business, results of operations, financial condition, and growth prospects.
We have contracts with governments that involve classified programs, which may limit investor insight into portions of our business.
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In general, access to classified information, technology, facilities, or programs requires appropriate personnel security clearances, is subject to additional contract oversight and potential liability, and may also require appropriate facility clearances and other specialized infrastructure.
−Removed: In the event of a security incident involving classified information, technology, facilities, or programs or
−Removed: personnel holding clearances, we may be subject to legal, financial, operational, and reputational harm.
+Added: In the event of a security incident involving classified information, technology, facilities, or programs or personnel holding clearances, we may be subject to legal, financial, operational, and reputational harm.
We are limited in our ability to provide specific information about these classified programs, their risks, or any disputes or claims relating to such programs.
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moreover, whether or not it is resolved in our favor, such disputes or litigation could result in significant expense and divert the efforts of our technical and management personnel.
−Removed: These proceedings could adversely affect our reputation and relationship with government customers and could also result in negative publicity, which could harm
−Removed: customer and public perception of our business.
+Added: These proceedings could adversely affect our reputation and relationship with government customers and could also result in negative publicity, which could harm customer and public perception of our business.
The enforcement of FASA has resulted in a significant increase in our business with the U.S.
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A decline in the U.S.
−Removed: and other government budgets, changes in spending or budgetary priorities, or delays in contract awards may significantly and adversely affect our future revenue and limit our growth prospects.
+Added: and other government budgets, changes in spending or budgetary priorities, or delays in contract awards have affected and may continue to significantly and adversely affect our future revenue and limit our growth prospects.
Because we generate a substantial portion of our revenue from contracts with governments and government agencies, and in particular from contracts with the U.S.
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A significant decline in overall U.S.
−Removed: government spending, a significant shift in spending priorities, the substantial reduction or elimination of particular defense-related programs, or significant budget-related delays in contract or task order awards for large programs could adversely affect our future revenue and limit our growth prospects.
+Added: government spending, a significant shift in spending priorities, the substantial reduction or elimination of particular defense-related programs, or significant budget-related delays in contract or task order awards for large programs have affected and could continue to adversely affect our future revenue and limit our growth prospects.
Risks Related to Ownership of Our Class A Common Stock
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Prior to the listing of our Class A common stock, there was no public market for shares of our Class A common stock.
−Removed: The market prices of the securities of other newly public companies have historically been highly volatile.
+Added: The market prices of the securities of other recently public companies have historically been highly volatile.
The public trading price of our Class A common stock could be subject to fluctuations in response to various factors, including those listed in this Quarterly Report on Form 10-Q, some of which are beyond our control.
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• Other events or factors, including those resulting from war, geopolitical tensions such as the ongoing Russian invasion of Ukraine and related economic sanctions, incidents of terrorism, pandemics, including the COVID-19 pandemic, or responses to these events;
−Removed: • General economic conditions, such as rising inflation rates in the U.S.
+Added: • General economic conditions, such as rising inflation or interest rates in the U.S.
and slow or negative growth of our markets.
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Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders, or employees.
−Removed: Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, stockholders, officers, or other employees to us or our stockholders, (c) any action or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, (d) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (e) any action or proceeding asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court in Delaware or, if no state court in Delaware has jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom, in all cases subject to the court having jurisdiction over the claims at issue and the indispensable parties;
+Added: Our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, stockholders, officers, or other employees to us or our stockholders, (c) any action or proceeding asserting a claim arising pursuant to, or seeking to enforce any right, obligation or remedy under, any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, (d) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or (e) any action or proceeding asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if the Court of Chancery
+Added: does not have jurisdiction, another state court in Delaware or, if no state court in Delaware has jurisdiction, the federal district court for the District of Delaware) and any appellate court therefrom, in all cases subject to the court having jurisdiction over the claims at issue and the indispensable parties;
provided that the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Exchange Act.
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In addition to the supply and demand and volatility risk factors discussed above, sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our directors, executive officers, and principal stockholders, or the perception that these sales might occur in large quantities, could cause the trading price of our Class A common stock to decline.
−Removed: As of March 31, 2022, approximately 7.5 million options will expire through December 2022 if not exercised prior to their respective expiration dates, and we expect many holders will elect to exercise such options prior to expiration.
+Added: As of June 30, 2022, approximately 4.4 million options will expire through December 2022 if not exercised prior to their respective expiration dates, and we expect many holders will elect to exercise such options prior to expiration.
Upon exercise, the holders will receive shares of our Class A or Class B common stock, which may subsequently be sold.
−Removed: As of March 31, 2022, there were 1,945,140,000 shares of our Class A common stock outstanding, 99,731,000 shares of our Class B common stock outstanding and 1,005,000 shares of our Class F common stock outstanding.
+Added: As of June 30, 2022, there were 1,962,382,299 shares of our Class A common stock outstanding, 99,353,552 shares of our Class B common stock outstanding and 1,005,000 shares of our Class F common stock outstanding.
Substantially all of these shares may be immediately sold, although sales by our affiliates remain subject to compliance with the volume limitations of Rule 144.
−Removed: Further, as of March 31, 2022, there were outstanding options to purchase an aggregate of 151,076,644 shares of our Class A common stock and 191,398,313 shares of our Class B common stock, and 86,867,142 shares of our Class A common stock and 54,900,000 shares of Class B common stock subject to RSUs.
+Added: Further, as of June 30, 2022, there were outstanding options to purchase an aggregate of 146,054,340 shares of our Class A common stock and 190,521,721 shares of our Class B common stock, and 82,860,226 shares of our Class A common stock and 53,850,000 shares of Class B common stock subject to RSUs.
All shares of our common stock reserved for future issuance under our equity compensation plans have been registered for sale under the Securities Act.
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See “Risks Related to the Multiple Class Structure of our Common Stock, the Founder Voting Trust Agreement, and the Founder Voting Agreement” below.
−Removed: A “controlled company” pursuant to the NYSE corporate governance rules is a company of which more than 50% of the voting power is held by an individual, group, or another company.
+Added: A “controlled company” pursuant to
+Added: the NYSE corporate governance rules is a company of which more than 50% of the voting power is held by an individual, group, or another company.
In the event that our Founders and their affiliates or other stockholders acquire more than 50% of the voting power of the Company, we may in the future be able to rely on the “controlled company” exemptions under the NYSE corporate governance rules due to this concentration of voting power and the ability of our Founders and their affiliates to act as a group.
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Shares of our Class B common stock may be transferred (without converting into shares of Class A common stock) to, among others, our Founders or their affiliates, and such transfers to our Founders or their affiliates could increase the total voting power of the Founders and their affiliates above 49.999999% of the Voting Power with respect to such matter.
−Removed: Excluding the voting power of the Class F common stock, our Founders and their affiliates owned shares entitled to approximately 27.1% of the voting power of our outstanding capital stock in the aggregate as of May 2, 2022.
+Added: Excluding the voting power of the Class F common stock, our Founders and their affiliates owned shares entitled to approximately 26.9% of the voting power of our outstanding capital stock in the aggregate as of August 1, 2022.
In addition, if one or two Founders withdraw from the Founder Voting Agreement, the total voting power of the Founders and their affiliates in the aggregate could exceed 49.999999% of the Voting Power.
−Removed: For instance, if one Founder has withdrawn from the Founder Voting Agreement and such withdrawing Founder votes his shares in the same manner as the shares of Class F common stock are voted pursuant to the Founder Voting Trust Agreement, then our Founders and their affiliates, in the aggregate, could exercise 49.999999% of the Voting Power of our capital stock plus the voting power of shares held by the withdrawing Founder (which would no longer represent a subset of the 49.999999% of the Voting Power of our capital stock voted by those Founders that remain party to the Founder Voting Agreement).
+Added: For instance, if one Founder has withdrawn from the Founder Voting Agreement and such withdrawing Founder votes his shares in the same manner as the shares of Class F common stock are voted pursuant to the Founder Voting Trust Agreement, then our Founders and their affiliates, in the
+Added: aggregate, could exercise 49.999999% of the Voting Power of our capital stock plus the voting power of shares held by the withdrawing Founder (which would no longer represent a subset of the 49.999999% of the Voting Power of our capital stock voted by those Founders that remain party to the Founder Voting Agreement).
As a result of future issuances of our common stock or the disposal of shares of our common stock by our Founders and their affiliates, our Founders and their affiliates could have voting power that is substantially greater than, and outsized in comparison to, their economic interests and the percentage of our common stock that they hold.
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Such Designated Founders’ Excluded Shares would reduce the total voting power that will be exercised in accordance with the decision of a majority in number of the Founders who are then party to the Founder Voting Agreement.
−Removed: Thiel or his affiliates would vote or not vote such Designated Founders’ Excluded Shares in their discretion, which may include in a manner different than the voting power exercised in accordance with the decision of a majority in number of the Founders who are then party to the Founder Voting Agreement.
+Added: affiliates would vote or not vote such Designated Founders’ Excluded Shares in their discretion, which may include in a manner different than the voting power exercised in accordance with the decision of a majority in number of the Founders who are then party to the Founder Voting Agreement.
Depending on certain circumstances, including the extent to which other holders of Class B common stock convert or sell such shares of Class B common stock, such Designated Founders’ Excluded Shares may have significant voting power and increase Mr.
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The shares identified by Mr.
−Removed: Thiel as Designated Founders’ Excluded Shares represented less than 5% of the voting power of our outstanding capital stock as of May 2, 2022.
+Added: Thiel as Designated Founders’ Excluded Shares represented less than 5% of the voting power of our outstanding capital stock as of August 1, 2022.
In the future, Mr.
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The Ownership Threshold that must be met on any applicable record date is currently 100,000,000 Corporation Equity Securities, which is a small minority of our outstanding Corporation Equity Securities.
−Removed: While the number of outstanding Corporation Equity Securities may exceed the number of shares of our outstanding capital stock, as a comparison, there were 2,045,876,000 shares of our common stock outstanding as of March 31, 2022.
+Added: While the number of outstanding Corporation Equity Securities may exceed the number of shares of our outstanding capital stock, as a comparison, there were 2,062,740,851 shares of our common stock outstanding as of June 30, 2022.
Except for certain equitable adjustments as provided in our amended and restated certificate of incorporation, future issuances of Corporation Equity Securities by us will not increase the Ownership Threshold that must be met on any applicable record date and, accordingly, will decrease the percentage of outstanding Corporation Equity Securities represented by the Ownership Threshold.
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Each of these agreements could remain in place until the death of our last living Founder.
−Removed: As of March 31, 2022, our Founders were 54, 54, and 39 years old.
+Added: As of June 30, 2022, our Founders were 54, 54, and 39 years old.
Further, upon a discretionary or compulsory withdrawal of a Founder as a beneficiary of the Founder Voting Trust Agreement, the Trustee will instruct our transfer agent and us to convert the withdrawing Founder’s pro rata portion of the shares of Class F common stock held in the Founder Voting Trust at the time of the withdrawal into shares of Class B common stock in accordance with our amended and restated certificate of incorporation.
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In addition, the purchase of our platforms and services is often discretionary and typically involves a significant commitment of capital and other resources.
−Removed: A further downturn in economic conditions, rising inflation rates in the U.S., global political and economic uncertainty, geopolitical tensions, including related to the ongoing Russian invasion of Ukraine, a lack of availability of credit, a reduction in business confidence and activity, the curtailment of government or corporate spending, public health concerns or emergencies, financial market volatility, and other factors have in the past and may in the future affect the industries to which we sell our platforms and services.
−Removed: Our customers may suffer from reduced operating budgets, which could cause them to defer or forego purchases of our platforms or services.
+Added: A further downturn in economic conditions, including rising inflation or interest rates in the U.S., supply chain disruptions, global political and economic uncertainty, geopolitical tensions, such as the ongoing Russian invasion of Ukraine, a lack of availability of credit, a reduction in business confidence and activity, the curtailment of government or corporate spending, public health concerns or emergencies, financial market volatility, and other factors have in the past and may in the future affect the industries to which we sell our platforms and services.
+Added: Our customers may suffer from reduced operating budgets, which could cause them to defer, reduce, or forego purchases of our platforms or services.
Moreover, competitors may respond to market conditions by lowering prices and attempting to lure away our customers, and the increased pace of consolidation in certain industries may result in reduced overall spending on our offerings.
−Removed: Uncertainty about global and regional economic conditions, a downturn in the technology sector or any sectors in which our customers operate, or a reduction in information technology spending even if economic conditions are stable, could adversely impact our business, financial condition, and results of operations in a number of ways, including longer sales cycles, lower prices for our platforms and services, material default rates among our customers, reduced sales of our platforms or services, and lower or no growth.
+Added: Uncertainty about global and regional economic conditions, a downturn in the technology sector or any sectors in which our customers operate, or a reduction in information technology spending even if economic conditions are stable, could adversely impact our business, financial condition, and results of operations in a number of ways, including longer sales cycles, lower prices for our platforms and services, material default rates among our customers, contract terminations or renegotiations by our customers, reduced sales of our platforms or services, and lower or no growth.
We cannot predict the timing, strength, or duration of any crises, economic slowdown or any subsequent recovery generally, or for any industry in particular.
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We are also continuing to improve our internal control over financial reporting.
−Removed: Some members of our management team have limited or no experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies, and we have limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act that we were required to include in our Annual Report on Form 10-K for the year ended December 31, 2021.
+Added: Some members of our management team have limited or no experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies, and we have limited accounting and financial reporting personnel and other resources with which to address our internal controls and related procedures, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act that we were required to include in our Annual Report on Form 10-K for the year ended
+Added: December 31, 2021.
We will need to hire and successfully integrate additional accounting and financial staff with appropriate company experience and technical accounting knowledge, as well as implement and integrate new technological systems.
−Removed: In order to maintain and improve the effectiveness of our financial statement
−Removed: and disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
+Added: In order to maintain and improve the effectiveness of our financial statement and disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
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As a result of disclosure of information in this Quarterly Report on Form 10-Q and other filings required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties.
−Removed: If such claims are successful, our business, financial condition, and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, financial condition, and results of operations.
+Added: If such claims are successful, our business, financial condition, and results of operations could be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims,
+Added: and the time and resources necessary to resolve them, could divert the resources of our management and harm our business, financial condition, and results of operations.
We may face exposure to foreign currency exchange rate fluctuations.
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dollars or local currency, while our non-U.S.
−Removed: operating expenses are often denominated in local
+Added: operating expenses are often denominated in local currencies.
Additionally, as we expand our non-U.S.
operations, a larger portion of our operating expenses may be denominated in local currencies.
−Removed: Therefore, increases in the value of the U.S.
−Removed: dollar and decreases in the value of foreign currencies could result in the dollar equivalent of our revenues being lower.
+Added: In recent months, the U.S.
+Added: dollar has strengthened compared to other currencies.
+Added: Continued increases in the value of the U.S.
+Added: dollar and decreases in the value of foreign currencies could result in the dollar equivalent of our revenues being lower, result in increased expenses for our non-U.S.
+Added: operations, or otherwise impact our financial condition and results of operations.
UNREGISTERED SALES OF EQUITY SECURITIES
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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.