12 unchanged sentences
We operate in a highly competitive and rapidly changing environment so we must continually innovate our products and evolve our business model for us to succeed.
−Removed: As a company, we emphasize rapid innovation and prioritize long-term user engagement over short-term financial conditions or results if we believe that it will benefit the aggregate user experience and will thereby improve our financial performance over the long term.
+Added: We emphasize rapid innovation and prioritize long-term user engagement over short-term financial conditions or results if we believe that it will benefit the aggregate user experience and will thereby improve our financial performance over the long term.
We currently have a history of operating losses but, as a result of our long-term focus, we may prioritize investments and expenses we believe are necessary for our long-term growth over achieving short-term profitability.
−Removed: Investments in our future, including through new products or acquisitions, are inherently risky and may not pay off, which would further delay or hinder our ability to settle the principal and interest payments on our convertible notes or other indebtedness when due, and to attain and sustain profitability.
+Added: Investments in our future, including through new products or acquisitions, are inherently risky and may not pay off, which would further delay or hinder our ability to settle the principal and interest payments on the Convertible Notes or other indebtedness when due, and to attain and sustain profitability.
This in turn would hinder our ability to secure additional financing to meet our current and future financial needs on favorable terms, or at all.
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In addition, our advertising business is seasonal and volatile, which could result in fluctuations in our quarterly revenues and operating results, including the expectations of our business prospects.
−Removed: Our business and operations have also been adversely affected by events beyond our control, such as health epidemics, including the COVID-19 pandemic, impacting the markets and communities in which we and our partners, advertisers, and users operate.
+Added: Our business and operations have been , and could in the future be, adversely affected by events beyond our control, such as health epidemics, including the COVID-19 pandemic, impacting the markets and communities in which we and our partners, advertisers, and users operate.
Our Community and Competition
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If our community does not see the value in our products or brand, or if competitors offer better alternatives, our community could easily switch to other services.
−Removed: While we have experienced rapid growth in the last few years, we have also experienced declines and there can be no assurance that won’t happen again.
+Added: While we have experienced rapid growth in our community over the last few years, we have also experienced declines and there can be no assurance that won’t happen again.
We have and expect to continue to expand organically and through acquisitions, including in international markets, which we may not be able to effectively manage or scale.
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From time to time, we are subject to various legal claims, investigations, and proceedings, including class actions and matters involving intellectual property, that may be costly or distract management.
−Removed: We also rely on a variety of statutory and common-law frameworks for the content we provide our users, including the Digital Millennium Copyright Act, the Communications Decency Act, and the fair-use doctrine, each of which has been subject to adverse political and regulatory scrutiny in recent times.
+Added: We also rely on a variety of statutory and common-law frameworks for the content we provide our users, including the Digital Millennium Copyright Act, the Communications Decency Act, and the fair-use doctrine, each of which has been subject to adverse judicial, political, and regulatory scrutiny in recent times.
Our Team and Capital Structure
2 unchanged sentences
A substantial portion of our employment costs is paid in our common stock, the price of which has been very volatile, and our ability to attract and retain talent may be adversely affected if our shares decline in value.
−Removed: Our two co-founders control over 99% of the voting capital stock, which means they control substantially all outcomes submitted to stockholders.
+Added: Our two co-founders control over 99% of the voting power of our outstanding capital stock, which means they control substantially all outcomes submitted to stockholders.
Class A common stockholders have no voting rights, unless required by Delaware law.
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If we fail to retain current users or add new users, or if our users engage less with Snapchat, our business would be seriously harmed.
−Removed: We had 280 million DAUs on average in the quarter ended March 31, 2021.
+Added: We had 293 million DAUs on average in the quarter ended June 30, 2021.
We view DAUs as a critical measure of our user engagement, and adding, maintaining, and engaging DAUs have been and will continue to be necessary.
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In addition, as we achieve maximum market penetration rates among younger users in developed markets, future growth in DAUs will need to come from older users in those markets, developing markets, or users with Android operating systems, which may not be possible or may be more difficult or time consuming for us to achieve.
−Removed: While we may experience periods when our DAUs increase due to products and services with short-term popularity, or due to a lack of other events that compete for our users’ attention, such as during the recent COVID-19 pandemic, we may not always be able to attract new users, retain existing users, or maintain or increase the frequency and duration of their engagement if current or potential new users do not perceive our products to be fun, engaging, and useful.
+Added: While we may experience periods when our DAUs increase due to products and services with short-term popularity, or due to a lack of other events that compete for our users’ attention, we may not always be able to attract new users, retain existing users, or maintain or increase the frequency and duration of their engagement if current or potential new users do not perceive our products to be fun, engaging, and useful.
In addition, because our products typically require high bandwidth data capabilities, the majority of our users live in countries with high-end mobile device penetration and high bandwidth capacity cellular networks with large coverage areas.
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The failure to attract new advertisers, the loss of advertisers, or a reduction in how much they spend could seriously harm our business.
−Removed: Substantially all of our revenue is generated from third parties advertising on Snapchat, a trend that we expect to continue.
+Added: Substantially all of our revenue is generated from third parties advertising on Snapchat.
For the years ended December 31, 2020, 2019, and 2018, advertising revenue accounted for approximately 99%, 98%, and 99% of total revenue, respectively.
+Added: We expect this trend to continue for the foreseeable future.
Although we have and continue to try to establish longer-term advertising commitments with advertisers, most advertisers do not have long-term advertising commitments with us, and our efforts to establish long-term commitments may not succeed.
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Still, no individual customer accounts for more than 10% of our annual revenue.
−Removed: In addition, advertisers may view some of our products as experimental and unproven.
+Added: In addition, advertisers may view some of our products as experimental and unproven, or prefer certain of our products over others.
Advertisers will not continue to do business with us if we do not deliver advertisements in an effective manner, or if they do not believe that their investment in advertising with us will generate a competitive return relative to other alternatives.
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Changes in the European Union’s Electronic Communications Code, which became effective in December 2020, may result in the expanded applicability of the European Union’s ePrivacy Directive over parts of our services, requiring us to make changes to how we process and store certain types of communications data of users in the European Union, which could have a material impact on the availability of data we rely on to improve and personalize our products and features.
−Removed: Furthermore, changes to iOS or Android operating systems’ practices and policies, such as Apple’s upcoming iOS update that may impose heightened restrictions on our access and use of user data, may reduce the quantity or quality of the data and metrics that can be collected or used by us and our partners, or adversely affect our ability to effectively target advertisements to users or demonstrate the value of our advertisements to advertisers, any of which could reduce the demand and pricing for our advertising products and seriously harm our business.
−Removed: The impact of these proposed changes on the overall mobile advertising ecosystem, our competitors, our business, and the developers, partners, and advertisers within our community is uncertain.
−Removed: Depending on how these changes are implemented, how we, our competitors, and the overall mobile advertising ecosystem adjusts, and how our partners, advertisers, and users respond, our business could be seriously harmed.
+Added: Furthermore, changes to iOS or Android operating systems’ practices and policies, such as Apple’s recent iOS update that imposes heightened restrictions on our access and use of user data and similar changes expected to be implemented by Google with respect to its Android operating system, may reduce the quantity or quality of the data and metrics that can be collected or used by us and our partners, or adversely affect our ability to effectively target advertisements to users or demonstrate the value of our advertisements to advertisers, any of which could reduce the demand and pricing for our advertising products and seriously harm our business.
+Added: The impact of these changes on the overall mobile advertising ecosystem, our competitors, our business, and the developers, partners, and advertisers within our community is uncertain, and depending on how we, our competitors, and the overall mobile advertising ecosystem adjusts, and how our partners, advertisers, and users respond, our business could be seriously harmed.
Any adverse effects could be particularly material to us because we are still early in building our advertising business.
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Our two co-founders have control over all stockholder decisions because they control a substantial majority of our voting stock.
−Removed: Our two co-founders, Evan Spiegel and Robert Murphy, own or control voting shares of our capital stock that represent over 99% of the voting power of our outstanding capital stock as of March 31, 2021, and Mr.
+Added: Our two co-founders, Evan Spiegel and Robert Murphy, own or control voting shares of our capital stock that represent over 99% of the voting power of our outstanding capital stock as of June 30, 2021, and Mr.
Spiegel alone can exercise voting control over a majority of our voting power.
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Either of our co-founders’ shares of Class C common stock will automatically convert into Class B common stock, on a one-to-one basis, nine months following his death or on the date on which the number of outstanding shares of Class C common stock held by such holder represents less than 30% of the Class C common stock held by such holder on the closing of our IPO, or 32,383,178 shares of Class C common stock.
−Removed: Should either of our co-founders’ Class C common stock be converted
−Removed: to Class B common stock, the remaining co-founder will be able to exercise voting control over our outstanding capital stock.
+Added: Should either of our co-founders’ Class C common stock be converted to Class B common stock, the remaining co-founder will be able to exercise voting control over our outstanding capital stock.
Moreover, Mr.
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Health epidemics, including the COVID-19 pandemic, have had, and could in the future have, an adverse impact on our business, operations, and the markets and communities in which we and our partners, advertisers, and users operate.
−Removed: The ongoing global COVID-19 pandemic has adversely impacted, and may continue to adversely impact, many aspects of our business.
−Removed: As certain of our advertisers experience downturns or uncertainty in their own business operations and revenue because of the economic effects, including resulting from the spread of COVID-19, they have halted or decreased or may halt or decrease or continue to decrease, whether temporarily or permanently, their advertising spending and may focus their advertising spending more on other platforms, all of which may result in decreased advertising revenue.
−Removed: Furthermore, a portion of our advertising revenue is related to in-person events or activities, such as sporting events, music festivals, the Olympics, and in-person learning that have been or may be postponed or cancelled.
+Added: The ongoing global COVID-19 pandemic adversely impacted, and may continue to adversely impact, many aspects of our business.
+Added: As some of our advertisers experience downturns or uncertainty in their own business operations and revenue because of the economic effects resulting from the spread of COVID-19, they halted or decreased or may halt, decrease, or continue to decrease, temporarily or permanently, their advertising spending or may focus their advertising spending more on other platforms, all of which may result in decreased advertising revenue.
+Added: Furthermore, a portion of our advertising revenue is related to in-person events or activities, such as sporting events, music festivals, the Olympics, and in-person learning, which were postponed or cancelled during the COVID-19 pandemic and may continue to be adversely affected.
In addition, the unpredictability of the COVID-19 pandemic may make it difficult to forecast our advertising revenue, and although we may benefit in the shorter term from changes in the current advertising landscape, any increases may not be indicative of longer-term trends.
Any decline in advertising revenue or the collectability of our receivables could seriously harm our business.
−Removed: In response to the COVID-19 pandemic, many state, local, and foreign governments have put in place, and others in the future may put in place, quarantines, executive actions, shelter-in-place orders, physical distancing requirements, and similar government orders and restrictions in order to control the spread of the disease.
−Removed: Such orders or restrictions, or the perception that such orders or restrictions could occur, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions, and cancellation or postponement of events, among other effects that could negatively impact productivity and disrupt our operations and those of our partners, advertisers, and users.
−Removed: We implemented and continue a work-from-home policy for substantially all of our employees, and we may take further actions that alter our operations as may be required by federal, state, or local authorities, or which we believe are in our best interests.
−Removed: While most of our operations can be performed remotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed, many employees may have additional personal needs to attend to (such as looking after children as a result of school closures or family who become sick), and employees may become sick themselves and be unable to work.
+Added: In response to the COVID-19 pandemic, many state, local, and foreign governments put in place, and others in the future may put in place, quarantines, executive actions, shelter-in-place orders, physical distancing requirements, and similar government orders and restrictions in order to control the spread of the disease.
+Added: Such orders or restrictions, or the perception that such orders or restrictions could occur, continue, or be reimplemented, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions, and cancellation or postponement of events, among other effects that could negatively impact productivity and disrupt our operations and those of our partners, advertisers, and users.
+Added: We implemented and continue a flexible work-from-home policy for substantially all of our employees, and we may take further actions that alter our operations as may be required by federal, state, or local authorities, or which we believe are in our best interests.
+Added: While most of our operations can be performed remotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed, many employees may have additional personal needs to attend to (such as looking after children as a result of school closures or family who become sick), and
+Added: employees may become sick themselves and be unable to work.
Decreased effectiveness of our team could adversely affect our results due to our inability to meet in person with potential advertisers, longer time periods to review and approve ads, longer time to respond to application performance issues or spam, extended timelines for product reviews and a corresponding reduction in innovation, or other decreases in productivity that could seriously harm our business.
3 unchanged sentences
The effects of the COVID-19 pandemic on user engagement or growth are highly uncertain, and may lead to unpredictable results in the short term and long term, including shorter-term increases in user engagement or growth that may not be indicative of longer-term trends.
−Removed: As physical distancing requirements and shelter-in-place orders continue or are reactivated, and there are fewer in-person activities, we may experience short-term and long-term disruption to user behavior and our business.
+Added: As physical distancing requirements and shelter-in-place orders continue or are reactivated, and as fewer in-person activities take place, we may experience short-term and long-term disruption to user behavior and our business.
We may also experience inconsistent or negative engagement as user behavior on our platform changes, including changes in user activity as a result of continued physical distancing requirements and shelter-in-place orders.
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The global impact of COVID-19 has and continues to rapidly evolve, and we will continue to monitor the situation closely.
−Removed: While there have recently been vaccines developed and administered, and the spread of COVID-19 may eventually be contained or mitigated, we cannot predict the timing of the vaccine roll-out globally or the efficacy of such vaccines, and we do not yet know how businesses, advertisers, or our partners will operate in a post COVID-19 environment.
+Added: While there have recently been vaccines developed and administered, and the spread of COVID-19 may eventually be contained or mitigated, we cannot predict the timing of the vaccine roll-out globally or the efficacy of such vaccines, including against variants that emerge, and we do not yet know how businesses, advertisers, or our partners will operate in a post COVID-19 environment.
Our users may change how they use our products and services in an environment where the perceived risk of COVID-19 and regulations surrounding it have changed.
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The short- and long-term impact of any major change, like our early 2018 application redesign and the rewrite of our application for Android users in 2019, or even a less significant change such as a refresh of the application or a feature change, is difficult to predict.
−Removed: Although we believe that these decisions will benefit the aggregate user experience and improve our financial performance over the long term, we may experience disruptions or declines in our DAUs or user activity.
+Added: Although we believe that these decisions will benefit the aggregate user experience and improve our financial performance over the long term, we may experience disruptions or declines in our DAUs or user activity broadly or concentrated on certain portions of our application.
Product innovation is inherently volatile, and if new or enhanced products fail to engage our users, advertisers, or partners, or if we fail to give our users meaningful reasons to return to our application, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, any of which may seriously harm our business in the short term, long term, or both.
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This can create a lag in adoption of new products and new user additions related to new products.
−Removed: To date, this has not hindered our user growth or engagement, but that may be the result of a large portion of our user base being in a younger demographic and more willing to invest the time to learn to use our products most effectively.
+Added: We believe this has not hindered our user growth or engagement, but that may be the result of a large portion of our user base being in a younger demographic and more willing to invest the time to learn to use our products most effectively.
To the extent that future users, including those in older demographics, are less willing to invest the time to learn to use our products, and if we are unable to make our products easier to learn to use, our user growth or engagement could be affected, and our business could be harmed.
−Removed: We may also develop new products or initiatives that
−Removed: increase user engagement and costs without increasing revenue.
+Added: We may also develop new products or initiatives that increase user engagement and costs without increasing revenue.
For example, in 2016, we introduced Memories, our cloud storage service for Snaps, which increases our storage costs but does not currently generate revenue.
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If we are not able to maintain or improve our market share, our business could suffer.
−Removed: We face significant competition in almost every aspect of our business both domestically and internationally.
−Removed: This ranges from smaller or newer companies to larger more established companies such as Apple, ByteDance (including TikTok), Facebook (including Instagram and WhatsApp), Google (including YouTube), Kakao, LINE, Naver (including Snow), Tencent, and Twitter which provide their users with a variety of products, services, content, and online advertising offerings, and advertising-supported video on demand platforms that offer, or will offer, products and services that may compete with Snapchat features or offerings.
+Added: We face significant competition in almost every aspect of our business both domestically and internationally, especially because our products and services operate across a broad list of categories, including communication, content, games, and augmented reality.
+Added: Our competitors range from smaller or newer companies to larger more established companies such as Apple, ByteDance (including TikTok), Facebook (including Instagram and WhatsApp), Google (including YouTube), Kakao, LINE, Naver (including Snow), Tencent, and Twitter which provide their users with a variety of products, services, content, and online advertising offerings, and advertising-supported video on demand platforms that offer, or will offer, products and services that may compete with Snapchat features or offerings.
For example, Instagram, a competing application owned by Facebook, has incorporated many of our features, including a “stories” feature that largely mimics our Stories feature and may be directly competitive.
Facebook has introduced, and likely will continue to introduce, more private ephemeral products into its various platforms which mimic other aspects of Snapchat’s core use case.
−Removed: We may also lose users to companies that offer products and services that compete with specific Snapchat features because of the low cost for our users to switch to a different product or service.
+Added: We also compete for users and their time, so we may lose users or their attention not only to companies that offer products and services that specifically compete with Snapchat features or offerings, but to companies with products or services that target or otherwise appeal to certain demographics, such as Discord or Roblox.
Moreover, in emerging international markets, where mobile devices often lack large storage capabilities, we may compete with other applications for the limited space available on a user’s mobile device.
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impeding Snapchat’s accessibility and usability by modifying existing hardware and software on which the Snapchat application operates.
−Removed: Certain acquisitions by our competitors may result in reduced functionality of our products and services, provide our competitors with valuable insight into the performance of our and our partner s ’ businesses, and provide our competitors with a pipeline of future acquisitions to maintain a dominant position.
+Added: Certain acquisitions by our competitors may result in reduced functionality of our products and services, provide our competitors with valuable insight into the performance of our and our partners’ businesses, and provide our competitors with a pipeline of future acquisitions to maintain a dominant position.
As a result, our competitors may acquire and engage users at the expense of our user base, growth, or engagement, which may seriously harm our business.
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We began commercial operations in 2011 and we have historically experienced net losses and negative cash flows from operations.
−Removed: As of March 31, 2021, we had an accumulated deficit of $8.1 billion and for the three months ended March 31, 2021, we experienced a net loss of $286.9 million.
+Added: As of June 30, 2021, we had an accumulated deficit of $8.2 billion and for the three months ended June 30, 2021, we experienced a net loss of $151.7 million.
We expect our operating expenses to increase in the future as we expand our operations.
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Spiegel, as Chief Executive Officer, has been responsible for our company’s strategic vision and Mr.
−Removed: Murphy, as Chief
−Removed: Technology Officer, developed the Snapchat application’s technical foundation.
+Added: Murphy, as Chief Technology Officer, developed the Snapchat application’s technical foundation.
Should either of them stop working for us for any reason, it is unlikely that the other co-founder would be able to fulfill all of the responsibilities of the departing co-founder nor is it likely that we would be able to immediately find a suitable replacement.
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If our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users’ ability to access our products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether, which could seriously harm our business.
−Removed: Our efforts to protect the information that our users have shared with us may be unsuccessful due to the actions of third parties, software bugs or other technical malfunctions, employee error or malfeasance, or other factors.
−Removed: In addition, third parties may attempt to fraudulently induce employees or users to disclose information to gain access to our data or our users’ data.
−Removed: If any of these events occur, our or our users’ information could be accessed or disclosed improperly.
+Added: Our efforts to protect the information that our users and advertisers have shared with us may be unsuccessful due to the actions of third parties, software bugs or other technical malfunctions, employee error or malfeasance, or other factors.
+Added: In addition, third parties may attempt to fraudulently induce employees, users, or advertisers to disclose information to gain access to our data or our users’ or advertisers’ data.
+Added: If any of these events occur, our or our users’ or advertisers’ information
+Added: could be accessed or disclosed improperly.
We have previously suffered the loss of employee information related to an employee error.
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And even if these third parties take all these steps, their networks may still suffer a breach, which could compromise our users’ data.
−Removed: Any incidents where our users’ information is accessed without authorization, or is improperly used, or incidents that violate our Terms of Service or policies, could damage our reputation and our brand and diminish our competitive position.
+Added: Any incidents where our users’ or advertisers’ information is accessed without authorization, or is improperly used, or incidents that violate our Terms of Service or policies, could damage our reputation and our brand and diminish our competitive position.
In addition, affected users or government authorities could initiate legal or regulatory action against us over those incidents, which could be time-consuming and cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices.
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We continually seek to address these technical issues and improve our accuracy, such as comparing our active users and other metrics with data received from other pipelines, including data recorded by our servers and systems.
−Removed: But given the complexity of the systems involved and the rapidly changing nature of mobile devices and systems, we expect these issues to continue, particularly if we continue to expand in parts of the world where mobile data systems and connections are less stable.
+Added: But given the complexity of the systems involved and the rapidly changing nature of
+Added: mobile devices and systems, we expect these issues to continue, particularly if we continue to expand in parts of the world where mobile data systems and connections are less stable.
If advertisers, partners, or investors do not perceive our user, geographic, or other demographic metrics to be accurate representations of our user base, or if we discover material inaccuracies in our user, geographic, or other demographic metrics, our reputation may be seriously harmed.
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As a result of spamming activities, our users may use our products less or stop using them altogether, and result in continuing operational cost to us.
−Removed: Similarly, terror and other criminal groups may use our products to promote their goals and encourage users to engage in terror and other illegal activities.
−Removed: We expect that as more people use our products, these groups will increasingly seek to misuse our products.
−Removed: Although we invest resources to combat these activities, including by suspending or terminating accounts we believe are violating our Terms of Service and Community Guidelines, we expect these groups will continue to seek ways to act inappropriately and illegally on Snapchat.
−Removed: Combating these groups requires our teams to divert significant time and focus from improving our products.
−Removed: In addition, we may not be able to control or stop Snapchat from becoming the preferred application of use by these groups, which may become public knowledge and seriously harm our reputation or lead to lawsuits or attention from regulators.
+Added: Similarly, terrorists, criminals, and other bad actors may use our products to promote their goals and encourage users to engage in terror and other illegal activities.
+Added: We expect that as more people use our products, these bad actors will increasingly seek to misuse our products.
+Added: Although we invest resources to combat these activities, including by suspending or terminating accounts we believe are violating our Terms of Service and Community Guidelines, we expect these bad actors will continue to seek ways to act inappropriately and illegally on Snapchat.
+Added: Combating these bad actors requires our teams to divert significant time and focus from improving our products.
+Added: In addition, we may not be able to control or stop Snapchat from becoming the preferred application of use by these bad actors, which may become public knowledge and seriously harm our reputation or lead to lawsuits or attention from regulators.
If these activities increase on Snapchat, our reputation, user growth and user engagement, and operational cost structure could be seriously harmed.
−Removed: Because we store, process, and use data, some of which contains personal information, we are subject to complex and evolving federal, state, and foreign laws, regulations, and executive actions regarding privacy, data protection, content, and other matters.
+Added: Because we store, process, and use data, some of which contains personal data, we are subject to complex and evolving federal, state, and foreign laws, regulations, and executive actions regarding privacy, data protection, content, and other matters.
Many of these laws, regulations, and executive actions are subject to change and uncertain interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm our business.
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In addition, the application and interpretation of these laws, regulations, and executive actions are often uncertain, particularly in the new and rapidly evolving industry in which we operate.
−Removed: Because we store, process, and use data, some of which contains personal information, we are subject to complex and evolving federal, state, and foreign laws and regulations regarding privacy, data protection, content, and other matters.
+Added: Because we store, process, and use data, some of which contains personal data, we are subject to complex and evolving federal, state, and foreign laws and regulations regarding privacy, data protection, content, and other matters.
Many of these laws, regulations, and executive actions are subject to change and uncertain interpretation, and could result in investigations, claims, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, any of which could seriously harm our business.
1 unchanged sentence
GDPR in the European Union, which went into effect in May 2018, placed new data protection obligations and restrictions on organizations and may require us to further change our policies and procedures.
−Removed: If we are not compliant with GDPR requirements, we may be subject to significant fines and our business may be seriously harmed.
−Removed: In addition, the California Consumer Privacy Act went into effect in January 2020 and places additional requirements on the handling of personal data.
+Added: If we are not compliant with GDPR requirements, we may be subject to significant fines and our business may be
+Added: seriously harmed.
+Added: In addition, the C CPA went into effect in January 2020 and places additional requirements on the handling of personal data.
The CCPA also provides for civil penalties for violations, as well as a private right of action for data breaches, which may increase the likelihood and cost of data breach litigation.
−Removed: The potential effects of this legislation, including any regulations implemented the legislation, are far-reaching, uncertain, and evolving, and may require us, our partners, and advertisers to modify data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
+Added: The potential effects of this legislation , including any regulations implementing the legislation, are far-reaching , uncertain, and evolving, and may require us, our partners, and advertisers to modify data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
Other state , federal , and foreign legislative and regulatory bodies have enacted or may enact similar legislation regarding the handling of personal data, or conduct additional investigations into specific companies or the industry as a whole that could alter the existing regulatory environment in a manner that would be adverse to us.
−Removed: Changes in the European Union’s Electronic Communications Code, which became effective in December 2020, may result in the
−Removed: expanded applicability of the European Union’s ePrivacy Directiv e over parts of our services, requiring us to make changes to how we process and store certain types of communications data of users in the European Union, which could have a material impact on the availability of data we rely on to improve and personalize our products and features.
+Added: C hanges in the E uropean Union’s Electronic Communications Cod e, which became effective in December 2020, may result in the expanded applicability of the European Union’s ePrivacy Directiv e over parts of our services, requiring us to make changes to how we process and store certain types of communications data of users in the European Union, which could have a material impact on the availability of data we rely on to improve and personalize our products and features.
Furthermore, in December 2018, the Australian government passed the Assistance and Access Bill 2018 that provides Australian law enforcement authorities with mechanisms to make requests for electronic communication, even if the data is end-to-end encrypted like in Snapchat, which may create new obligations for companies providing communication services and make their data less secure .
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We do not seek to monetize all of our products nor do we focus our efforts on users with higher ARPU, and we may not be successful in achieving a balance that continues to attract and retain users and advertisers.
+Added: We focus on growing engagement across our service, and from time to time our efforts may reduce user activity with certain monetizable products in favor of other products we do not currently monetize.
If we are not successful in our efforts to grow or effectively monetize our user base, or if we are unable to build and maintain good relations with our advertisers, our user growth and user engagement and our business may be seriously harmed.
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To effectively manage our growth, we must continue to improve our operational, financial, and management processes and systems and effectively expand, train, and manage our employee base.
−Removed: As part of that effort, in 2019, we reorganized the structure and operations of our ad sales team.
−Removed: Although we believe the reorganization will improve the efficiency of our sales team and result in better service for our advertisers over the long term, the reorganization may not have the intended effect and we may experience disruptions, employee turnover, and declines in revenue while our sales team and advertisers become accustomed to the new operations.
+Added: However, the actions we take to achieve such improvements may not have the intended effect and may instead result in disruptions, employee turnover, declines in revenue, and other adverse effects.
As our organization continues to mature and we are required to implement more complex organizational management structures, we may also find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and launch new and innovative products.
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In addition, our business is subject to interruptions, delays, and failures resulting from earthquakes, other natural disasters, terrorism, pandemics, and other catastrophic events.
−Removed: Substantially all of our network infrastructure is provided by third parties, including Google Cloud and Amazon Web Services.
+Added: Substantially all of our network infrastructure is provided by third parties, including Google Cloud and AWS.
Any disruption or failure in the services we receive from these providers could harm our ability to handle existing or increased traffic and could seriously harm our business.
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As part of this implementation, we may experience difficulties in managing our existing systems and processes, which could disrupt our operations, the management of our finances, and the reporting of our financial results.
−Removed: Our failure to complete such system implementation on a timely basis, or its failure to operate in the intended manner, may result in our inability to manage the growth of our business and to accurately forecast and report our results, each of which could seriously harm our business.
+Added: Our failure to complete such system implementation on a timely basis, or its failure to
+Added: operate in the intended manner, may result in our inability to manage the growth of our business and to accurately forecast and report our results , each of which could seriously harm our business .
Our business emphasizes rapid innovation and prioritizes long-term user engagement over short-term financial condition or results of operations.
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Our focus on innovations and quick reactions could result in unintended outcomes or decisions that are poorly received by our users, advertisers, or partners.
−Removed: We have made, and expect to continue to make, significant investments to develop and launch new products and services and we
−Removed: cannot assure you that users will purchase or use such new products and services in the future.
+Added: We have made, and expect to continue to make, significant investments to develop and launch new products and services and we cannot assure you that users will purchase or use such new products and services in the future.
We will also continue to attempt to find effective ways to show our community new and existing products and alert them to events, holidays, relevant content, and meaningful opportunities to connect with their friends.
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In addition, we improve Snapchat based on feedback provided by our users, advertisers, and partners.
−Removed: These decisions may not produce the long-term benefits that we expect, in which case our user growth and engagement, our relationships with advertisers and partners, and our business could be seriously harmed.
+Added: These decisions may not produce the long-term benefits that we expect, in which case our user growth and engagement on our service or on certain platforms, our relationships with advertisers and partners, and our business could be seriously harmed.
If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed.
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Foreign governments may censor Snapchat in their countries, restrict access to Snapchat from their countries entirely, impose other restrictions that may affect their citizens’ ability to access Snapchat for an extended period of time or even indefinitely, require data localization, or impose other laws or regulations that we cannot comply with, would be difficult for us to comply with, or would require us to rebuild our products or the infrastructure for our products.
−Removed: Any restriction on access to Snapchat due to foreign government actions or initiatives, or any withdrawal by us from certain countries because of such actions or initiatives, would adversely affect our DAUs, including by giving our competitors an opportunity to penetrate geographic markets that we cannot access.
+Added: Such restrictions may also be implemented or lifted selectively to target or benefit other companies or products, which may result in sudden or unexpected fluctuations in competition in regions where we operate.
+Added: Any restriction on access to Snapchat due to foreign government actions or initiatives, or any withdrawal by us from certain countries because of such actions or initiatives, or any increased competition due to actions and initiatives of foreign governments would adversely affect our DAUs, including by giving our competitors an opportunity to penetrate geographic markets that we cannot access or to which they previously did not have access.
As a result, our user growth, retention, and engagement may be seriously harmed, and we may not be able to maintain or grow our revenue as anticipated and our business could be seriously harmed.
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If we are not successful in expanding and operating our business in international markets, we may incur significant costs, damage our brand, or need to lay off employees in those markets, any of which may seriously harm our business.
−Removed: We have expanded to new international markets, which may have very different cultures and commercial, legal, and regulatory systems than where we predominately operate.
−Removed: In connection with our international expansion, we have also hired new employees in many of these markets.
+Added: We have expanded to new international markets, which may have very different cultures and commercial, legal, and regulatory systems than where we predominately operate, and are growing our operations in existing international markets.
+Added: In connection with our international expansion and growth, we have also hired new employees in many of these markets.
This international expansion may:
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Spectacles, as an eyewear product, is regulated by the U.S.
−Removed: Food and Drug Administration, or the FDA, and may malfunction in a way that physically harms a user.
+Added: Food and Drug Administration, or the FDA, and may malfunction in a way that results in physical harm to a user or others around the user.
We offer a limited one-year warranty in the United States and a limited two-year warranty in Europe, and any such defects discovered in our products after commercial release could result in a loss of sales and users, which could seriously harm our business.
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These investigations and inquiries, and our compliance with any associated regulatory orders or consent decrees, may require us to change our policies or practices, subject us to substantial monetary fines or other penalties or sanctions, result in increased operating costs, divert management’s attention, harm our reputation, and require us to incur significant legal and other expenses, any of which could seriously harm our business.
−Removed: For example, in the past, we responded to subpoenas and requests for information made by staff from the U.S.
−Removed: Department of Justice, or DOJ, and the SEC.
−Removed: We believe that these regulators were investigating issues related to allegations asserted in our federal securities class actions about our IPO disclosures.
−Removed: In September 2019, both the DOJ and SEC provided us with written confirmations that they are no longer pursuing their investigations of these matters.
We are currently, and expect to be in the future, party to patent lawsuits and other intellectual property claims that are expensive and time-consuming.
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Furthermore, from time to time we may introduce new products or make other business changes, including in areas where we currently do not compete, which could increase our exposure to patent, copyright, trademark, trade secret, and other intellectual property rights claims from competitors and non-practicing entities.
−Removed: We have been subject to, and expect to continue to be subject to, claims and legal proceedings from holders of patents, trademarks, copyrights, and other intellectual property rights alleging that some of our products or content infringe their rights.
−Removed: For example, in January 2020, You Map, Inc.
+Added: We have been subject to, and expect to
+Added: continue to be subject to, claims and legal proceedings from holders of patents, trademarks, copyrights, and other intellectual property rights alleging that some of our products or content infringe their rights.
+Added: For example, i n January 2020, You Map, Inc.
filed a lawsuit in the U.S.
−Removed: District Court for the District of Delaware against us, our subsidiary Zenly, and certain of our respective employees alleging that we misappropriated various trade secrets regarding map technology used in Snapchat’s and Zenly’s map products and that Snapchat and Zenly’s application infringe a You Map patent.
−Removed: While we believe we have meritorious defenses to these claims, an unfavorable outcome in these lawsuits could seriously harm our business.
+Added: District Court for the District of Delaware against us, our subsidiary Zenly , and certain of our respective employees alleging that we misappropriated various trade secrets regarding map technology used in Snapchat’s and Zenly’s map products and that Snapchat and Zenly’s app lication infringe a You Map patent .
+Added: While we believe we have meritorious defenses to these claims, an unfavorable outcome in these and other similar lawsuits could seriously harm our business.
If these or other matters continue in the future or we need to enter into licensing arrangements, which may not be available to us or on terms favorable to us, it may increase our costs and decrease the value of our products, and our business could be seriously harmed.
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However, each of these statutes and doctrines is subject to uncertain judicial interpretation and regulatory and legislative amendments.
−Removed: For example, Congress amended the CDA in 2018 in ways that could expose some Internet platforms to an increased risk of litigation .
−Removed: In addition, Congress and the Executive branch have proposed further changes or amendments each year since 2019 including, among other things , proposals that would narrow the CDA immunity, expand government enforcement power relating to content moderation concerns, or repeal the CDA altogether.
−Removed: While such efforts have not been enacted into law , any changes enacted in the future may decrease the protections provided by the CDA.
−Removed: Moreover, some of these statutes and doctrines provide protection only or primarily in the United States.
+Added: For example, the U.S.
+Added: Congress amended the CDA in 2018 in ways that could expose some Internet platforms to an increased risk of litigation.
+Added: In addition, the U.S.
+Added: Congress and the Executive branch have proposed further changes or amendments each year since 2019 including, among other things, proposals that would narrow the CDA immunity, expand government enforcement power relating to content moderation concerns, or repeal the CDA altogether.
+Added: states have also enacted or proposed legislation that would undercut, or conflict with, the CDA’s protections.
+Added: Although such state laws have been or can be expected to be challenged in court, if these laws were upheld or if additional similar laws or the changes or amendments to the CDA proposed by the U.S.
+Added: Congress and the Executive branch were enacted, such changes may decrease the protections provided by the CDA and expose us to lawsuits, penalties, and additional compliance obligations.
+Added: Moreover, some of these statutes and doctrines that we rely on provide protection only or primarily in the United States.
If the rules around these doctrines change, if international jurisdictions refuse to apply similar protections, or if a court were to disagree with our application of those rules to our service, we could incur liability or be required to make significant changes to our products, business practices, or operations, and our business could be seriously harmed.
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Because we have millions of users, class-action lawsuits against us that are purportedly filed by or on behalf of users typically claim enormous monetary damages in the aggregate even if the alleged per-user harm is small or non-existent.
−Removed: For example, in November 2020 a putative class filed an action against us in Illinois, alleging that we violated Illinois’ Biometric Information Privacy Act with respect to many Illinois users of Snapchat and allege that we are liable to those users for statutory damages.
−Removed: While we believe we have meritorious defenses to these claims, an unfavorable outcome in these lawsuits could seriously harm our business.
+Added: For example, in November 2020, a putative class filed an action against us in Illinois, alleging that we violated Illinois’ Biometric Information Privacy Act with respect to many Illinois users of Snapchat and that we are liable to those users for statutory damages.
+Added: This lawsuit was recently dismissed, and we believe we have meritorious defenses to this and other putative class actions.
+Added: However, an unfavorable outcome in these lawsuits could seriously harm our business.
Similarly, because we have a large number of stockholders, class-action lawsuits on securities theories typically claim enormous monetary damages in the aggregate even if the alleged loss per stockholder is small.
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For example, beginning on May 16, 2017, we, certain of our officers and directors, and the underwriters of our IPO were named as defendants in securities class actions in federal and state courts purportedly brought on behalf of purchasers of our Class A common stock.
−Removed: In January 2020, we entered into a preliminary agreement to settle the federal and state securities class actions.
−Removed: The settlement amount was paid into escrow in December 2020.
−Removed: The settlement amount was paid into escrow in December 2020.
−Removed: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgement in April 2021.
−Removed: The settlement amount will be released from escrow following exhaustion of any appeals.
+Added: In January 2020, we entered into a preliminary agreement to settle the federal and state securities class actions, and the settlement amount was paid into escrow in December 2020.
+Added: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgment in April 2021.
+Added: The settlement amount will be released from escrow as determined by the plaintiffs’ lawyers and the settlement administrator.
We may face lawsuits, incur liability, or need to seek licenses based on information posted to our products.
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In the United States, there have been various Congressional and Executive branch efforts to remove or restrict the scope of the protections available to online platforms under Section 230 of the CDA.
−Removed: For example, the CDA was amended in 2018, and Congress and the executive branch have proposed further changes or amendments each year since 2019, including among other things proposals that would narrow CDA immunity, expand government enforcement power relating to content moderation concerns, or repeal the CDA altogether.
+Added: For example, the CDA was amended in 2018, and the U.S.
+Added: Congress and the E xecutive branch have proposed further changes or amendments each year since 2019, including among other things proposals that would narrow CDA immunity, expand government enforcement power relating to content moderation concerns, or repeal the CDA altogether.
Such changes could decrease or change our protections from liability for third-party content in the United States.
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Snapchat is currently available in more than 30 languages, and we have offices in more than 15 countries.
−Removed: We plan to enter new international markets where we have limited or no experience in marketing, selling, and deploying our products and advertisements.
+Added: We plan to enter new international markets and expand our operations in existing international markets, where we have limited or no experience in marketing, selling, and deploying our products and advertisements.
Our limited experience and infrastructure in such markets, or the lack of a critical mass of users in such markets, may make it more difficult for us to effectively monetize any increase in DAUs in those markets, and may increase our costs without a corresponding increase in revenue.
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We have based a significant portion of our European operations in the United Kingdom and have licensed a portion of our intellectual property to one of our United Kingdom subsidiaries.
−Removed: These operations continue to face risks and potential disruptions related to the withdrawal of the United Kingdom from the European Union, commonly referred to as “Brexit.” Although the United Kingdom and the European Union have recently entered into a trade and cooperation agreement, the long-term nature of the United Kingdom’s relationship with the European Union remains unclear.
+Added: These operations continue to face risks and potential disruptions related to the withdrawal of the United Kingdom from the European Union, commonly referred to as “Brexit.” Although the United Kingdom and the European Union have entered into a trade and cooperation agreement, the long-term nature of the United Kingdom’s relationship with the European Union remains unclear.
For example, Brexit could lead to potentially divergent laws and regulations, such as with respect to data protection and data transfer laws, that could be costly and difficult to comply with.
22 unchanged sentences
Goodwill is required to be tested for impairment at least annually.
−Removed: As of March 31, 2021, we had recorded a total of $1.2 billion of goodwill and intangible assets, net related to our acquisitions.
+Added: As of June 30, 2021, we had recorded a total of $1.7 billion of goodwill and intangible assets, net related to our acquisitions.
An adverse change in market conditions, particularly if such change has the effect of changing one of our critical assumptions or estimates, could result in a change to the estimation of fair value that could result in an impairment charge to our goodwill or intangible assets.
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Delays, component shortages, including custom components that are manufactured for us at our direction, global trade conditions and agreements, and other manufacturing and supply problems could impair the distribution of our products and ultimately our brand.
−Removed: For example, the United States has threatened tougher trade terms with China and other countries, leading to the imposition, or announcement of future imposition, of substantially higher U.S.
+Added: For example, the United States has threatened tougher trade terms with China and other countries, leading to the imposition, or potential future imposition, of substantially higher U.S.
Section 301 tariffs on certain imports from China, which may adversely affect our products and seriously harm our business.
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Government authorities, primarily the FDA and corresponding regulatory agencies, regulate the medical device industry.
−Removed: Unless there is an exemption, we must obtain regulatory approval from the FDA and corresponding agencies, or other applicable governmental authorities, before we can market or sell a new regulated product or make a significant modification to an existing product.
+Added: Unless there is an exemption, we must
+Added: obtain regulatory approval from the FDA and corresponding agencies, or other applicable governmental authorities, before we can market or sell a new regulated product or make a significant modification to an existing product.
Obtaining regulatory clearances to market a medical device or other regulated products can be costly and time-consuming, and we may not be able to obtain these clearances or approvals on a timely basis, or at all, for future products.
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Risks Related to Credit and Financing
−Removed: As our business expands, we have offered and may continue to offer credit to our partners to stay competitive, and as a result we may be exposed to credit risk of some of our partners, which may seriously harm our business.
−Removed: As our business continues to grow and expand, we have decided to engage in business with some of our partners on an open credit basis.
+Added: We have offered and may continue to offer credit to our partners to stay competitive, and as a result we may be exposed to credit risk of some of our partners, which may seriously harm our business.
+Added: We engage in business with some of our partners on an open credit basis.
While we attempt to monitor individual partner payment capability when we grant open credit arrangements and maintain allowances we believe are adequate to cover exposure for doubtful accounts, we cannot assure investors these programs will be effective in managing our credit risks in the future.
−Removed: This may be especially true as our business expands, we engage with partners that have limited operating history, or we engage with partners that we may not be familiar with.
+Added: This may be especially true as our business grows and expands, we engage with partners that have limited operating history, or we engage with partners that we may not be familiar with.
If we are unable to adequately control these risks, our business could be seriously harmed.
−Removed: Operating our business requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our Convertible Notes, and any other debt when due, which may seriously harm our business.
+Added: Operating our business requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay the Convertible Notes, and any other debt when due, which may seriously harm our business.
Our ability to make principal or interest payments on, or to refinance, the Convertible Notes or other indebtedness depends on our future performance, which is subject to many factors beyond our control.
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We may not be able to engage in any of these activities or on desirable terms, which could result in a default on our debt obligations.
−Removed: In addition, our existing and future debt agreements, including our Convertible Notes and Credit Facility, may contain restrictive covenants that may prohibit us from adopting any of these alternatives.
+Added: In addition, our existing and future debt agreements, including the Convertible Notes and Credit Facility, may contain restrictive covenants that may prohibit us from adopting any of these alternatives.
Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in the acceleration of our debt, and would seriously harm our business.
In addition, holders of the Convertible Notes will have the right to require us to repurchase all or a portion of the Convertible Notes on the occurrence of a fundamental change at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date.
−Removed: Further, if a make-whole fundamental change as defined in each of the Indentures governing the Convertible Notes occurs prior to the maturity date of the Convertible Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change.
+Added: Further, if a make-whole fundamental change as defined in each of the indentures governing the Convertible Notes, or the Indentures, occurs prior to the maturity date of the Convertible Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change.
On the conversion of the Convertible Notes, unless we elect to deliver solely shares of our Class A common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments for the Convertible Notes being converted.
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administration has indicated a desire to reform the Code, including by potentially increasing U.S.
−Removed: federal corporate income tax rates, and it is currently unclear what, if any, changes to the tax code will be enacted and how that may affect our business or the financial markets and the market price of our Class A common stock.
+Added: federal corporate income tax rates, and it is currently unclear what, if any, changes to the Code will be enacted and how that may affect our business or the financial markets and the market price of our Class A common stock.
In addition, many jurisdictions and intergovernmental organizations have been discussing proposals that may change various aspects of the existing framework under which our tax obligations are determined in many of the jurisdictions in which we do business and in which our users are located.
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Taxing authorities may also determine that the manner in which we operate our business is not consistent with how we report our income, which could increase our effective tax rate and the amount of taxes we pay and seriously harm our business.
−Removed: In addition, our future income taxes could fluctuate because of earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates,
−Removed: by changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws, regulations, or accounting principles.
+Added: In addition, our future income taxes could fluctuate because of earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws, regulations, or accounting principles.
We are subject to regular review and audit by U.S.
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As a result, all matters submitted to stockholders will be decided by the vote of holders of Class B common stock and Class C common stock.
−Removed: As of March 31, 2021, Mr.
+Added: As of June 30, 2021, Mr.
Spiegel and Mr.
−Removed: Murphy control over 99% of our voting power, and Mr.
+Added: Murphy control over 99% of the voting power of our capital stock, and Mr.
Spiegel alone may exercise voting control over our outstanding capital stock.
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In addition, some indexes have indicated they will exclude non-voting stock, like our Class A common stock, from their membership.
−Removed: For example, FTSE Russell, a provider of widely followed stock indexes, now requires new constituents of its indexes to have at least five percent of their voting rights in the hands of public stockholders.
−Removed: In addition, S&P Dow Jones, another provider of widely followed stock indexes, has stated that companies with multiple share classes will not be eligible for certain of their
+Added: For example, FTSE Russell, a provider of widely followed stock indexes, requires new constituents of its indexes to have at least five percent of their voting rights in the hands of public stockholders.
+Added: In addition, S&P Dow Jones, another provider of widely followed stock indexes, has stated that companies with multiple share classes will not be eligible for certain of their indexes.
As a result, our Class A common stock is likely not eligible for these stock indexes.
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Shares of Class A common stock were sold in our IPO in March 2017 at a price of $17.00 per share.
−Removed: Since then, the trading price of our Class A common stock has ranged from $4.82 to $73.59 through March 31, 2021.
+Added: Since then, the trading price of our Class A common stock has ranged from $4.82 to $73.59 through June 30, 2021.
Declines or volatility in our trading price could make it more difficult to attract and retain talent, adversely impact employee retention and morale, and may require us to issue more equity to incentivize employees which could dilute stockholders.
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Beginning on May 16, 2017, we, certain of our officers and directors, and the underwriters for our IPO were named as defendants in securities class actions purportedly brought on behalf of purchasers of our Class A common stock.
−Removed: In January 2020, we entered into a preliminary agreement to settle the federal and state securities class actions.
−Removed: The settlement amount was paid into escrow in December 2020The settlement amount was paid into escrow in December 2020.
−Removed: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgement in April 2021.
−Removed: The settlement amount will be released from escrow following exhaustion of any appeals.
+Added: In January 2020, we entered into a preliminary agreement to settle the federal and state securities class actions, and the settlement amount was paid into escrow in December 2020.
+Added: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgment in April 2021.
+Added: The settlement amount will be released from escrow as determined by the plaintiffs’ lawyers and the settlement administrator.
Any litigation could subject us to substantial costs, divert resources and the attention of management from our business, and seriously harm our business.
−Removed: Conversion of the Convertible Notes may dilute the ownership interest of our stockholders or may otherwise depress the market price of our Class A common stock.
+Added: Conversions or exchanges of the Convertible Notes may dilute the ownership interest of our stockholders or may otherwise affect the market price of our Class A common stock.
The conversion of some or all of the Convertible Notes may dilute the ownership interests of our stockholders.
On conversion of the Convertible Notes, we have the option to pay or deliver, as the case may be, cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock.
−Removed: If we elect to settle our conversion obligation in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, any sales in the public market of our Class A common stock issuable on such conversion could adversely affect prevailing market prices of our Class A common stock.
+Added: If we elect to settle our conversion
+Added: obligation in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, any sales in the public market of our Class A common stock issuable on such conversion could adversely affect prevailing market prices of our Class A common stock.
In addition, the existence of the Convertible Notes may encourage short selling by market participants because the conversion of the Convertible Notes could be used to satisfy short positions, or anticipated conversion of the Convertible Notes into shares of our Class A common stock, any of which could depress the market price of our Class A common stock.
+Added: We may also engage in exchanges, or we may repurchase or induce conversions, of the Convertible Notes in the future.
+Added: Holders of the Convertible Notes that participate in any of these exchanges, repurchases, or induced conversions may enter into or unwind various derivatives with respect to our Class A common stock or sell shares of our Class A common stock in the open market to hedge their exposure in connection with these transactions.
+Added: These activities could decrease (or reduce the size of any increase in) the market price of our Class A common stock or the Convertible Notes.
+Added: In addition, the market price of our Class A common stock is likely to be affected by short sales of our Class A common stock or the entry into or unwind of economically equivalent derivative transactions with respect to our Class A common stock by investors that do not participate in the exchange transactions and by the hedging activity of the counterparties to our Capped Call Transactions or their respective affiliates.
We may still incur substantially more debt or take other actions that would diminish our ability to make payments on the Convertible Notes when due.
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The conditional conversion feature of the Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
−Removed: Our Convertible Notes are convertible at the option of the holder.
−Removed: In the event the conditions for optional conversion of the 2025 Notes or 2026 Notes by holders continue to be met before the close of business on the business day immediately preceding February 1, 2025 or May 1, 2026, respectively, holders of the applicable Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
+Added: The Convertible Notes are convertible at the option of the holder.
+Added: In the event the conditions for optional conversion of the 2025 Notes, 2026 Notes, or 2027 Notes by holders continue to be met before the close of business on the business day immediately preceding February 1, 2025, May 1, 2026, or February 1, 2027, respectively, holders of the applicable Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
If one or more holders elect to convert their Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than paying cash in lieu of delivering any fractional share), we may settle all or a portion of our conversion obligation in cash, which could adversely affect our liquidity.
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Any provision of our certificate of incorporation, bylaws, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
−Removed: Furthermore, certain provisions in the Indentures governing our Convertible Notes may make it more difficult or expensive for a third party to acquire us.
+Added: Furthermore, certain provisions in the Indentures governing the Convertible Notes may make it more difficult or expensive for a third party to acquire us.
For example, the Indentures require us, at the holders’ election, to repurchase the Convertible Notes for cash on the occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its Convertible Notes in connection with a make-whole fundamental change.
4 unchanged sentences
If our existing stockholders, including employees and service providers who obtain equity, sell, or indicate an intention to sell, substantial amounts of our Class A common stock in the public market, the trading price of our Class A common stock could decline.
−Removed: As of March 31, 2021, we had outstanding a total of 1.3 billion shares of Class A common stock, 23.6 million shares of Class B common stock, and 231.6 million shares of Class C common stock.
−Removed: In addition, as of March 31, 2021, 109.4 million shares of Class A common stock and 0.8 million shares of Class B common stock were subject to outstanding stock options and RSUs.
−Removed: All of our outstanding shares are eligible for sale in the public market, except approximately 389.5 million shares (including options exercisable and RSAs subject to forfeiture as of March 31, 2021) held by directors, executive officers, and other affiliates that are subject to volume limitations under Rule 144 of the Securities Act.
+Added: As of June 30, 2021, we had outstanding a total of 1.3 billion shares of Class A common stock, 23.6 million shares of Class B common stock, and 231.6 million shares of Class C common stock.
+Added: In addition, as of June 30, 2021, 103.7 million shares of Class A common stock and 0.8 million shares of Class B common stock were subject to outstanding stock options and RSUs.
+Added: All of our outstanding shares are eligible for sale in the public market, except approximately 377.9 million shares (including options exercisable and RSAs subject to forfeiture as of June 30, 2021) held by directors, executive
+Added: officers, and other affiliates that are subject to volume limitations under Rule 144 of the Securities Act.
Our employees, other service providers, and directors are subject to our quarterly trading window closures.
In addition, we have reserved shares for issuance under our equity incentive plans.
+Added: We may also issue shares of our Class A common stock or securities convertible into our Class A common stock from time to time in connection with a financing, acquisition, investment, or otherwise.
When these shares are issued and subsequently sold, it would be dilutive to existing stockholders and the trading price of our Class A common stock could decline.
19 unchanged sentences
For example, beginning on May 16, 2017, we, certain of our officers and directors, and the underwriters of our IPO were named as defendants in securities class actions purportedly brought on behalf of purchasers of our Class A common stock.
−Removed: In January 2020, we entered into a preliminary agreement to settle the federal and state securities class actions.
−Removed: The settlement amount was paid into escrow in December 2020.
−Removed: The settlement amount was paid into escrow in December 2020.
−Removed: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgement in April 2021.
−Removed: The settlement amount will be released from escrow following exhaustion of any appeals.
+Added: 2020, we entered into a preliminary agreement to settle the federal and state securities class actions , and t he settlement amount was paid into escrow in December 2020 .
+Added: In March 2021, the federal court granted final approval of the settlement and entered judgment while the state court granted final approval of the settlement in March 2021 and entered judgment in April 2021 .
+Added: The settlement amount will be released from escrow as determined by the plaintiffs ’ lawyers and the settlement administrator .
Shareholder litigation can subject us to substantial costs and divert resources and the attention of management from our business and, if the claims are successful, our business could be seriously harmed.
14 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.