8 unchanged sentences
Our revenue was $3.6 billion, $2.8 billion, and $2.1 billion for the fiscal years ended January 31, 2025, 2024, and 2023, respectively.
−Removed: As a result of our historical rapid growth, limited operating history, and unstable macroeconomic conditions, our ability to accurately forecast our future results of operations, including revenue, remaining performance obligations (RPO), and the percentage of RPO we expect to recognize as revenue in future periods, is limited and subject to a number of uncertainties, including our ability to plan for and model future growth and platform consumption.
+Added: As a result of our historical rapid growth, limited operating history, large number of new product features, including those incorporating artificial intelligence and machine learning technology (AI Technology), and unstable macroeconomic conditions, our ability to accurately forecast our future results of operations, including revenue, gross margin, remaining performance obligations (RPO), and the percentage of RPO we expect to recognize as revenue in future periods, is limited and subject to a number of uncertainties, including our ability to plan for and model future growth and platform consumption.
Our historical revenue growth should not be considered indicative of our future performance.
−Removed: Further, our revenue growth could slow or our revenue could decline for a number of reasons, including increased competition, changes to technology, such as changes in software or underlying cloud infrastructure or the increasing prominence of new technology like artificial intelligence, and reduced demand for our platform.
+Added: Further, our revenue growth could slow or our revenue could decline for a number of reasons, including increased competition;
+Added: changes to technology, such as changes in software or underlying cloud infrastructure or the increasing prominence of new technology like artificial intelligence;
+Added: reputational harm;
+Added: and reduced demand for our platform.
For example, customers may continue to optimize consumption, rationalize budgets, and prioritize cash flow management, including by reducing storage through shorter data retention policies and shortening committed contract durations.
1 unchanged sentence
Any further declines in our revenue growth rate could adversely affect investors’ perceptions of our business, and negatively impact the trading price of our common stock.
+Added: Our revenue growth is also dependent on our ability to increase our penetration into existing markets, and to successfully enter and grow new markets, including highly-regulated markets such as financial services, healthcare, and the public sector.
+Added: Sales to highly-regulated entities are subject to substantial additional costs and risks that are not present in sales to other customers, which are described below in the risk factor titled “ We do business with federal, state, local, and foreign governments and agencies, and heavily regulated organizations;
+Added: as a result, we face heightened risks related to special contract terms, non-standard product deployments, and compliance with additional processes, rules, and regulations.
We have also encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as the risks and uncertainties described below.
1 unchanged sentence
We may not have visibility into our future financial position and results of operations.
−Removed: Customers generally consume our platform by using compute, storage, and data transfer resources.
+Added: Customers generally consume our platform by using compute, storage, and/or data transfer resources.
Unlike a subscription-based business model, in which revenue is recognized ratably over the term of the subscription, we generally recognize revenue on consumption.
Because our customers have flexibility in the timing of their consumption, we do not have the visibility into the timing of revenue recognition that a typical subscription-based software company has.
−Removed: There is a risk that customers will consume our platform at lower levels than we expect, including in response to adverse macroeconomic conditions or holidays.
−Removed: For example, during April 2023 and part of May 2023, consumption of our platform increased at a slower pace than expected.
+Added: Customer consumption fluctuates from time to time, and there is a risk that customers will consume our platform at lower levels than we expect, including in response to new software releases or hardware improvements that may make our platform more efficient, adverse macroeconomic conditions, or holidays.
Unexpected fluctuations in customer consumption may cause actual results to differ from our forecasts.
2 unchanged sentences
We have experienced net losses in each period since inception.
−Removed: We generated net losses of $838.0 million, $797.5 million and $679.9 million for the fiscal years ended January 31, 2024, 2023 and 2022, respectively.
+Added: We generated net losses of $1.3 billion, $838.0 million and $797.5 million for the fiscal years ended January 31, 2025, 2024 and 2023, respectively.
As of January 31, 2025 and 2024, we had an accumulated deficit of $7.3 billion and $4.1 billion, respectively.
2 unchanged sentences
In addition, our platform currently operates on public cloud infrastructure provided by Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP), and our costs and gross margins are significantly influenced by the prices we are able to negotiate with these public cloud providers, which in certain cases are also our competitors.
−Removed: If we fail to meet any minimum commitments under these third-party cloud infrastructure agreements, we may be required to pay the difference, and our results of operations could be negatively impacted.
+Added: If we fail to meet any minimum commitments under our third-party cloud infrastructure agreements, we may be required to pay the difference, and our results of operations could be negatively impacted.
We will also incur increased general and administrative expenses associated with our growth, including costs related to internal systems, operating as a public company, and targeting regulated industries or markets.
−Removed: Our efforts to grow our business may be costlier than we expect, or our revenue growth rate may be slower than we expect, and we may not be able to increase our revenue enough to offset the increase in operating expenses resulting from these investments.
+Added: Our efforts to grow our business have been and may continue to be costlier than we expect, or our revenue growth rate may be slower than we expect, and we may not be able to increase our revenue enough to offset the increase in operating expenses resulting from these investments.
If we are unable to achieve and sustain profitability, or if we are unable to achieve the revenue growth that we expect from these investments, the value of our business and common stock may significantly decrease.
The markets in which we operate are highly competitive, and if we do not compete effectively, our business, financial condition, and results of operations could be harmed.
−Removed: Our go-to-market strategy is focused on acquiring new customers and driving increased use of our platform by existing customers.
The markets in which we operate are rapidly evolving and highly competitive.
−Removed: As these markets continue to mature and new technologies and competitors enter such markets, we expect competition to intensify.
+Added: In recent years, we have adopted open data formats like Apache Iceberg tables to allow customers to use our platform to process data stored in external customer-controlled environments outside of Snowflake, and we have introduced a significant number of new features and expanded into new product categories like artificial intelligence.
+Added: These changes are driving increased competition, both because there is less customer “lock in” when our products are used in external environments, and also because we are competing across more product categories, each of which is subject to distinct customer requirements and preferences.
+Added: Our success depends on our ability to continue to innovate in response to changing market dynamics.
Our current competitors include:
• large, well-established, public cloud providers that generally compete in all of our markets, including AWS, Azure, and GCP;
−Removed: • less-established public and private cloud companies with products that compete in some of our markets;
+Added: • less-established public and private cloud companies with products that compete in some or all of our markets;
• other established vendors of legacy database solutions or big data offerings;
• new or emerging entrants seeking to develop competing technologies.
−Removed: We compete based on various factors, including price, performance, breadth of use cases, multi-cloud availability, brand recognition and reputation, customer support, and differentiated capabilities, including ease of implementation and data migration, ease of administration and use, scalability and reliability, data governance, security and compatibility with existing standards, programming languages, and third-party products.
+Added: We compete based on various factors, including price, performance, product features, breadth of use cases, multi-cloud availability, brand recognition and reputation, customer support, and differentiated capabilities, including ease of implementation and data migration, ease of administration and use, scalability and reliability, data governance, security and compatibility with existing standards, programming languages, third-party products, and the ability to operate in hybrid environments.
Many of our competitors have substantially greater brand recognition, customer relationships, and financial, technical, and other resources than we do, and may be able to respond more effectively than us to new or changing opportunities, technologies, standards, customer requirements, and buying practices.
−Removed: In addition, we may not be able to respond to market opportunities as quickly as smaller companies.
−Removed: We currently only offer our platform on the public clouds provided by AWS, Azure, and GCP, which are also some of our primary competitors.
+Added: In addition, we may not be able to respond to market opportunities as quickly as smaller companies or offer as many discounts or free services as our competitors.
+Added: Our support of open data formats may also reduce switching costs between us and our competitors.
+Added: We currently offer our platform on the public clouds provided by AWS, Azure, and GCP, which are also some of our primary competitors.
Currently, a substantial majority of our business is run on the AWS public cloud.
There is risk that one or more of these public cloud providers could use its respective control of its public clouds to embed innovations or privileged interoperating capabilities in competing products, bundle competing products, provide us unfavorable pricing, leverage its public cloud customer relationships to exclude us from opportunities, and treat us and our customers differently with respect to terms and conditions or regulatory requirements than it would treat its similarly situated customers.
−Removed: Further, they have the resources to acquire, invest in, or partner with existing and emerging providers of competing technology and thereby accelerate adoption of those competing technologies.
+Added: Further, they have the resources to acquire, invest in, or partner with existing and emerging providers of competing technologies and thereby accelerate adoption of those competing technologies.
All of the foregoing could make it difficult or impossible for us to provide products and services that compete favorably with those of the public cloud providers.
−Removed: For all of these reasons, competition may negatively impact our ability to acquire new customers and maintain and grow use of our platform, or it may put downward pressure on our prices and gross margins, any of which could materially harm our reputation, business, results of operations, and financial condition.
+Added: Some of our customers use drivers and/or connectors to connect our platform to third-party applications or databases.
+Added: Attempts by third-party application or database providers to restrict the use of drivers and connectors may make it more difficult for customers to use our platform, which could lead to reduced sales and consumption.
+Added: For all of these reasons, competition may negatively impact our ability to acquire new customers and maintain and grow use of our platform, put downward pressure on our prices and gross margins, or lead us to take greater risks, any of which could materially harm our business, reputation, results of operations, revenue retention rate, and financial condition.
If we fail to innovate in response to changing customer needs, new technologies, or other market requirements, our business, financial condition, and results of operations could be harmed.
We compete in markets that evolve rapidly.
−Removed: We believe that the pace of innovation will continue to accelerate as customers increasingly base their purchases of cloud data platforms on a broad range of factors, including performance and scale, markets addressed, types of data processed, ease of data ingress and egress, user experience and programming languages, use of artificial intelligence, and data governance and regulatory compliance.
−Removed: We introduced data warehousing on our platform in 2014 as our core use case, and our customers subsequently began using our platform for additional workloads, including data lake, data engineering, AI/ML, applications, collaboration, cybersecurity, and Unistore.
−Removed: Our future success depends on our ability to continue to innovate rapidly and effectively and increase customer adoption of our platform and the Data Cloud, including the Snowflake Marketplace and Snowpark.
−Removed: Further, the value of our platform to customers is increased to the extent they are able to use it to process and access all types of data.
−Removed: We need to continue to invest in technologies, services, and partnerships that increase the types of data available and processed on our platform and the ease with which customers can ingest data into our platform.
−Removed: We must also continue to enhance our data sharing and marketplace capabilities so customers can share their data with internal business units, customers, and other third parties, acquire additional third-party data and data products to combine with their own data in order to gain additional business insights, and develop and monetize applications on our platform.
+Added: We believe that the pace of innovation will continue to accelerate as customers increasingly base their purchases of cloud data platforms on a broad range of factors, including performance and scale, markets addressed, types of data processed, ease of data ingress and egress, support of open data formats, user experience and programming languages, use of artificial intelligence, and data governance, security, and regulatory compliance.
+Added: We introduced data warehousing on our platform in 2014 as our core use case, and our customers subsequently began using our platform for additional product categories, including analytics, data engineering, artificial intelligence, and applications and collaboration.
+Added: Our future success depends on our ability to continue to innovate rapidly and effectively and increase customer adoption of our platform and the AI Data Cloud, including the Snowflake Marketplace and Snowpark.
+Added: Further, the value of our platform to customers increases to the extent they are able to use it to process and access all types of data.
+Added: We need to continue to invest in technologies, services, and partnerships that increase the types of data available and processed on our platform, the ease with which customers can ingest data into our platform, and the types of environments that our platform supports, including hybrid offerings that extend into customer-managed environments.
+Added: We must also continue to enhance our data sharing and marketplace capabilities so customers can share their data with internal business units, customers, and other third parties, acquire additional third-party data and data products to combine with their own data to gain additional business insights, and develop and monetize applications on our platform.
As we develop, acquire, and introduce new services and technologies, including those that may incorporate artificial intelligence and machine learning, we may be subject to new or heightened legal, ethical, and other challenges.
4 unchanged sentences
To the extent we expand further into the public sector and highly regulated countries and industries, our platform and operations may need to address additional requirements specific to those markets, including data sovereignty requirements.
−Removed: If we are unable to enhance our platform or operations to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that are able to deliver competitive products at lower prices, more efficiently, more conveniently, or more securely than our platform, our business, financial condition, and results of operations could be adversely affected.
−Removed: If we are not successful in executing our investments in artificial intelligence and machine learning technology, including generative AI Technology, our business, financial condition, and results of operations could be harmed.
−Removed: We are investing significantly in artificial intelligence and machine learning technology, or AI Technology.
+Added: If we are unable to enhance our platform or operations to keep pace with these rapidly evolving customer requirements, or if new technologies emerge that deliver competitive products at lower prices, more efficiently, more conveniently, or more securely than our platform, our business, financial condition, and results of operations could be adversely affected.
+Added: If we are not successful in executing our investments in AI Technology, including generative AI Technology, our business, financial condition, and results of operations could be harmed.
+Added: We are investing significantly in AI Technology.
Our investments include internally developing AI Technology, acquiring companies with complementary AI Technology, and partnering with companies to bring AI Technology to our platform.
−Removed: Our competitors are pursuing similar opportunities.
−Removed: These competitors may, as a result of greater resources, branding, or otherwise, develop, adopt and implement AI Technology faster or more successfully than we do, which could impair our ability to compete effectively and adversely affect our business, financial condition and results of operations.
+Added: Our competitors are pursuing similar opportunities and may, as a result of greater resources, branding, or otherwise, develop, adopt and implement AI Technology faster or more successfully than we do, which could impair our ability to compete effectively and adversely affect our business, financial condition and results of operations.
In addition, our successful development of AI Technology depends on our access to GPUs, which are currently in high demand.
+Added: Finally, customers’ use of our AI Technology is often dependent on their ability to meet evolving regulatory standards, successfully complete internal compliance reviews, and enter into mutually acceptable contractual terms.
+Added: If they are unable to do so, they may not use our AI Technology as much as we anticipate, or at all.
It is also possible that our investments in AI Technology do not result in the benefits we anticipate, or enable us to maintain our competitive advantage, which may adversely affect our business, financial condition, and results of operations.
For example, we may not accurately anticipate market demand or offer AI Technology that amplifies our core data platform.
−Removed: If we or our third-party service providers experience an actual or perceived security breach or unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may be reduced, and we may incur significant liabilities.
−Removed: Our platform processes, stores, and transmits our own sensitive data as well as customers’ and partners’ proprietary, confidential, and sensitive data, such as personal information, protected health information, and financial data.
−Removed: Our platform is built on the infrastructure of third-party public cloud providers, such as AWS, Azure, and GCP.
+Added: If we, our customers, or third-party service providers experience an actual or perceived security breach or unauthorized parties otherwise obtain access to our customers’ data, our data, or our platform, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may be reduced, and we may incur significant liabilities.
+Added: In the ordinary course of our business, we store, transmit, generate, and process our, our customers’, and our business partners’ confidential and proprietary data.
+Added: Such data includes sensitive data, such as personal information, protected health information, and financial data.
We also use third-party service providers, sub-processors, and technology to help us deliver services to our customers and their end-users, as well as for our internal business operations.
−Removed: These third-party providers may process, store, or transmit data of our employees, partners, customers, and customers’ end-users or may otherwise be used to help operate our technology.
−Removed: Some of this third-party technology, including open-source software, could be used as an attack vector.
−Removed: Even though we may not control the security measures of these vendors, we may be responsible for any breach of such measures.
−Removed: Threats to information systems and data come from a variety of sources, including traditional computer “hackers,” internal and external personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
−Removed: We and the third parties on which we rely are subject to a variety of evolving cyber threats, including unauthorized intrusions, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, social engineering attacks (including through deep fakes and phishing), internal and external personnel misconduct or error, supply-chain attacks, software vulnerabilities, software or hardware disruptions or failures, and attacks enhanced or facilitated by AI Technology, all of which are prevalent in our industry and our customers’ and partners’ industries.
−Removed: Furthermore, future business expansions, acquisitions or partnerships could expose us to additional cybersecurity risks and vulnerabilities.
−Removed: The techniques used to sabotage or obtain unauthorized access to our and our third-party providers’ platforms, systems, networks, or physical facilities in which data is stored or processed, or through which data is transmitted change frequently, and are becoming increasingly difficult to detect.
−Removed: In addition, ransomware attacks are becoming more frequent and severe, and we may be unwilling or unable to make ransom payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: In general, cybersecurity breaches or security vulnerabilities could lead to significant interruptions in our operations, loss of data and income, reputational harm, diversion of funds, unexpected service interruptions, increased insurance costs, and other harm to our business, reputation, and competitive position.
−Removed: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
−Removed: We are a target of threat actors seeking unauthorized access to our or our customers’ or partners’ systems or data or to disrupt our operations or ability to provide our services.
−Removed: Threat actors may also exploit vulnerabilities in, or obtain unauthorized access to, platforms, systems, networks, or physical facilities utilized by our third-party service providers.
−Removed: While we take steps designed to detect, mitigate, and remediate vulnerabilities in our information security systems (such as our hardware and software, including that of third parties upon which we rely), we may be unable in the future to detect and remediate all such vulnerabilities on a timely basis.
−Removed: Any security breach of our platform, our operational systems, our software (including open-source software), our physical facilities, or the systems of our third-party service providers or sub-processors, or the perception that one has occurred, could result in litigation, indemnity obligations, regulatory enforcement actions, investigations, fines, penalties, mitigation and remediation costs, disputes, reputational harm, diversion of management’s attention, and other liabilities and damage to our business.
−Removed: Security breaches and consequences from breaches, including negative publicity, may also prevent or cause customers to stop using our products, deter new customers from using our products, and negatively impact our ability to grow and operate our business.
−Removed: We have contractual and other legal obligations to notify relevant stakeholders of security breaches.
+Added: For example, our platform is built on the infrastructure of third-party public cloud providers, such as AWS, Azure, and GCP, and we use third-party technology to assist with securing our environment and providing access to our platform.
+Added: Some of our customers also use third-party service providers to assist with their use of our platform or third-party technology, such as connectors, to access our platform.
+Added: These third-party service providers may process, store, or transmit data of our employees, partners, customers, and customers’ end-users or may otherwise be used to help operate our platform and corporate systems.
+Added: We, our customers and business partners, and these third parties face a variety of evolving cybersecurity threats.
+Added: Cybersecurity threats come from a variety of sources, including traditional computer “hackers,” internal and external personnel (such as through theft or misuse), sophisticated nation-states, and nation-state-supported actors.
+Added: Cybersecurity threat actors can use a wide variety of methods, including unauthorized intrusions, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, infostealer malware, social engineering attacks (including through deep-fakes and phishing), internal and external personnel misconduct or error, supply-chain attacks, software vulnerabilities, software or hardware disruptions or failures, and attacks enhanced or facilitated by AI Technology, all of which are prevalent in our industry and our customers’ and partners’ industries.
+Added: These methods change frequently and are becoming increasingly difficult to detect.
+Added: Threat actors who successfully compromise networks or systems may use the unauthorized access as a vector to compromise other networks and systems.
+Added: Threat actors’ goals often include disrupting a company’s operations or ability to provide services, obtaining unauthorized access to platforms, systems, networks, or physical facilities in which data is stored or processed, or through which data is transmitted, and stealing data.
+Added: Ransomware attacks are becoming more frequent and severe.
+Added: There can be no assurance that security measures designed to protect against security incidents will be effective, and our efforts to investigate, mitigate, contain, and remediate any security incidents that do occur may not be successful.
+Added: Even though we may not control the security measures of third-party providers or environments, we may incur liability or suffer reputational harm if such measures are breached.
+Added: Actions taken by us, third-party cloud providers, or the other third parties with whom we work to detect, investigate, mitigate, contain, and remediate security incidents could result in outages, data losses, and disruptions of our business.
+Added: We may be unable to detect, mitigate, or remediate vulnerabilities in our information security systems (such as our hardware and software, including that of third parties upon which we rely) on a timely basis.
+Added: We may be unwilling or unable to make ransom payments due to, for example, applicable laws or regulations prohibiting such payments, the negative precedent such payments would set, or uncertainty over whether such payments would result in the threat actor deleting stolen data or otherwise delivering on their promised course of action.
+Added: In general, cybersecurity incidents or security vulnerabilities could lead to significant interruptions in our operations, loss of data and income, reputational harm, diversion of funds, increased insurance costs, and other harm to our business, reputation, and competitive position.
+Added: In addition, customers’ use of our platform in violation of our terms of service, including by granting access to a single Snowflake account to various third-party entities, could amplify the impact of any cybersecurity or product incidents.
+Added: Security incidents and their resulting consequences, including negative publicity, may also cause customers to stop using our platform, deter existing or prospective customers from using our platform, and negatively impact our ability to grow and operate our business.
+Added: Our customers have experienced, and may in the future experience, security incidents in connection with their use of our platform that harm our customer relationships and our reputation, even when such incidents are due to vulnerabilities, policy violations, inadequate security controls, or credential exposures that we do not cause.
+Added: We operate under a shared responsibility cybersecurity model where we are responsible for the security of our platform and underlying cloud infrastructure, while our customers are responsible for selecting, enabling, and configuring security controls for their individual environments in a manner that meets applicable cybersecurity standards and effectively reduces their information security risk.
+Added: To assist customers in meeting their responsibilities, we offer and support a range of tools and features within our platform for access control, including multi-factor authentication (MFA), network access policies, and unified role-based access controls and policies.
+Added: Some customers also use third-party external authentication tools, in which case we do not have visibility into whether adequate access controls (such as MFA or network restrictions) are being enforced.
+Added: Regardless of whether customers use our authentication tools or external tools, if customers allow static access credentials, they are responsible for ensuring that the credentials remain private and are rotated on a regular basis.
+Added: If our customers do not implement, or incorrectly implement, these features or otherwise fail to fulfill their responsibilities under our shared responsibility cybersecurity model, there is a higher risk that they will be the victim of cybersecurity incidents, which may harm our customer relationships, our reputation, and our business, which has occurred in the past and may happen again in the future.
+Added: We have contractual and other legal obligations to notify customers and other parties of certain security incidents, and may choose to make such notifications even if not legally required to do so.
For example, SEC rules require disclosure on Form 8-K of the nature, scope and timing of any material cybersecurity incident and the reasonably likely impact of such incident.
−Removed: Determining whether a cybersecurity incident is notifiable or reportable may not be straightforward and any such mandatory disclosures are costly and could lead to negative publicity, loss of customer or partner confidence in the effectiveness of our security measures, diversion of management’s attention, governmental investigations, and the expenditure of significant capital and other resources to respond to or alleviate problems caused by the actual or perceived security breach.
−Removed: A security incident may also cause us to breach, or lead to claims that we have breached, customer contracts or other legal obligations.
−Removed: As a result, we could be subject to legal action (including the imposition of fines or penalties) and our customers could end their relationships with us.
−Removed: Furthermore, there can be no assurance that any limitations of liability in our contracts would be enforceable or adequate or would otherwise protect us from liabilities, damages, or claims related to our data privacy and security obligations.
−Removed: Litigation and regulatory actions resulting from security breaches or related to our information security practices may adversely affect our business.
−Removed: Unauthorized access to our platform, systems, networks, or physical facilities could result in litigation with our customers, our customers’ end-users, or other relevant stakeholders, or investigations, inquiries, or actions by regulators.
−Removed: We may be subject to, and have received in the past, requests by regulators for information about our security practices, experiences, and issues.
−Removed: Alleged failures, problems, or issues related to our information security, including following such information requests, could result in formal investigations or actions from a variety of regulators, including state attorneys general, the Federal Trade Commission (FTC), the SEC, and others.
−Removed: These proceedings could force us to spend money in defense or settlement, divert management’s time and attention, increase our costs of doing business, or adversely affect our reputation.
−Removed: We could be required to fundamentally change our business activities and practices or modify our platform capabilities in response to such litigation, which could have an adverse effect on our business.
−Removed: Our insurance coverage may not be adequate for data security, indemnification obligations, or other liabilities.
+Added: Determining whether a cybersecurity incident is notifiable or reportable may not be straightforward, and any such mandatory disclosures are costly and could lead to negative publicity, loss of customer or partner confidence in the effectiveness of our security measures, diversion of management’s attention, governmental investigations, and the expenditure of significant capital and other resources to investigate, respond to, or alleviate problems caused by the actual or perceived security breach.
+Added: Any security breach of our platform, our operational systems, our software (including open-source software), our physical facilities, or the systems of our third-party service providers or sub-processors, or the perception that one has occurred, or unauthorized access to our customers’ or partners’ systems, data, or technology, could result in claims that we have breached customer contracts or other legal obligations, including as described below.
+Added: In addition, we may be subject to, and have received in the past, requests by regulators (including members of Congress) for information about our security practices, our public statements about our security program, experiences, and issues.
+Added: Alleged failures, problems, or issues related to our information security or our customers’ use of our platform, including following such information requests, could result in additional investigations;
+Added: actions from a variety of regulators, including state attorneys general, the Department of Justice, the Federal Trade Commission (FTC), and the SEC;
+Added: indemnity obligations;
+Added: mitigation and remediation costs;
+Added: reputational harm;
+Added: diversion of management’s attention;
+Added: customer relationship issues;
+Added: and other liabilities and damage to our business.
+Added: Further, cybersecurity incidents have in the past and may in the future lead customers or prospective customers to attempt to negotiate contractual terms that are less favorable to us, such as broader indemnification obligations, more stringent cybersecurity requirements, and higher limitations of liability.
+Added: Our insurance coverage may not be adequate for liability arising from data security breaches involving us or our customers or other third parties, indemnification obligations, or other liabilities.
The successful assertion of one or more large claims against us that exceeds our available insurance coverage or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements) could have an adverse effect on our business.
In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
−Removed: Risks related to our systems and security breaches are likely to increase as we continue to expand our platform and geographic footprint, grow our customer and partner base, and process, store, and transmit increasingly large amounts of data.
−Removed: In addition, some of our employees work remotely, including while traveling for business, which increases our cybersecurity risk, creates data accessibility concerns, and makes us more susceptible to security breaches or business disruptions.
+Added: Risks related to our systems and security breaches are likely to increase as we continue to expand our platform and geographic footprint, grow our customer and partner base, acquire operating companies, begin to operate in environments outside of our platform and over which we exercise significantly less or no control, and process, store, and transmit increasingly large amounts of data.
+Added: For example, in May 2024, we became aware that a cybersecurity threat actor had accessed a number of our customers’ Snowflake accounts as a result of such customers’ failure to fulfill certain of their obligations under our shared responsibility cybersecurity model (e.g., implementing MFA and network access policies).
+Added: Even though we did not identify any evidence suggesting this activity was caused by or otherwise related to any vulnerability or misconfiguration of our systems, or a breach of our platform’s security or our environment, we have been the subject of numerous lawsuits, regulatory investigations, and lawmaker inquiries relating to these customer incidents.
+Added: Since May 2024, we have been made aware of additional cyberattacks on customers’ Snowflake accounts using similar methods to take advantage of customers’ failures to implement appropriate security safeguards (e.g., MFA and network access policies).
+Added: We are unable to predict the outcome or timeline of these matters or if any additional requests, inquiries, lawsuits, investigations or other government actions may arise.
+Added: We have suffered and may continue to suffer negative publicity and reputational damage, including due to the misperception that our customers’ incidents resulted from a vulnerability, misconfiguration or breach of our platform’s security or systems and malicious activity within our environment.
+Added: In addition, we may experience a loss of existing customers or face claims by customers, and it is possible that we are not able to fully recover any losses relating to these matters through any applicable insurance coverage or we may be required to seek indemnification from breached customers to mitigate our damages, which may be unsuccessful or impractical.
+Added: These matters, together with any additional inquiries, regulatory or governmental investigations, or other disputes that result from these customer security incidents, will require us to divert resources and may harm our reputation, business, financial condition, or results of operations.
+Added: Finally, some of our employees work remotely, including while traveling for business, which increases our cybersecurity risk, creates data accessibility concerns, and makes us more susceptible to security breaches or business disruptions.
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, or prospects.
−Removed: We could suffer disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies.
+Added: Any litigation against us could be costly and time-consuming to defend.
+Added: From time to time, we may become subject to legal proceedings and claims, such as claims brought by our customers in connection with commercial disputes, cybersecurity incidents, employment claims, including claims related to the loss of employee equity grants upon termination, intellectual property claims, or securities class actions or other claims related to volatility in the trading price of our common stock.
+Added: For example, we are named in a securities class action lawsuit in federal court alleging federal securities law violations, as well as numerous class action lawsuits alleging common law and statutory claims in connection with cybersecurity matters.
+Added: See the section titled “Legal Proceedings” for more information.
+Added: Litigation could result in substantial costs and divert management’s attention and resources, which might seriously harm our business, financial condition, and results of operations.
+Added: Our existing insurance might not cover such claims, provide sufficient payments to cover all the costs to resolve one or more such claims, or continue to be available on terms acceptable to us (including premium increases or the imposition of large deductible or co-insurance requirements).
+Added: A claim brought against us that is uninsured or underinsured could result in unanticipated costs, potentially harming our business, financial position, and results of operations.
+Added: We or our third-party service providers could suffer disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies.
Our business depends on our platform being available without disruption.
−Removed: We have experienced, and may in the future experience, disruptions, outages, defects, and other performance and quality problems with our platform and with the public cloud and internet infrastructure on which our platform relies.
−Removed: These problems can be caused by a variety of factors, including introductions of new functionality, vulnerabilities, and defects in proprietary and open-source software, human error or misconduct, natural disasters (such as tornadoes, earthquakes, or fires), capacity constraints, design limitations, denial of service attacks, or other security-related incidents.
−Removed: Further, if our contractual and other business relationships with our public cloud providers are terminated, suspended, or suffer a material change to which we are unable to adapt, such as the elimination of services or features on which we depend, we could be unable to provide our platform and could experience significant delays and incur additional expense in transitioning customers to a different public cloud provider.
−Removed: Any disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud and internet infrastructure on which it relies, or any material change in our contractual and other business relationships with our public cloud providers, could result in reduced use of our platform, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: We and our third-party service providers have experienced, and may in the future experience, disruptions, outages, defects, and other performance and quality problems related to our platform and with the public cloud and internet infrastructure on which our platform relies.
+Added: These problems can be caused by a variety of factors, including introductions of new functionality, vulnerabilities, coding errors, and defects in proprietary and open-source software, human error or misconduct, natural disasters (such as tornadoes, earthquakes, or fires), capacity constraints, design limitations, denial of service attacks, or other security-related incidents.
+Added: Further, if our contractual and other business relationships with our public cloud providers are terminated, suspended, or suffer a material change to which we are unable to adapt, such as the elimination of services or features on which we depend, we could be unable to provide our platform and could experience significant delays and incur additional expenses in transitioning customers to a different public cloud provider.
+Added: Any disruptions, outages, defects, and other performance and quality problems with our platform or with the public cloud, internet infrastructure, or other technology on which it relies, or any material change in our contractual and other business relationships with our public cloud providers, could result in reduced use of our platform, increased expenses, including service credit obligations, and harm to our brand and reputation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
We expect fluctuations in our financial results, making it difficult to project future results, and if we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.
5 unchanged sentences
• our ability to attract new customers;
−Removed: • our ability to retain existing customers and drive their increased consumption of our platform;
+Added: • our ability to retain existing customers and drive their increased sustained consumption of our platform (including new product features and functionality);
• customer expansion rates;
2 unchanged sentences
• investments in new features, functionality, and programming languages, including investments in AI Technology and in making our platform available to store and process highly regulated data or comply with new or existing data sovereignty requirements;
−Removed: • fluctuations in consumption resulting from the introduction of new features, technologies, or capabilities to our software, systems, or to underlying cloud infrastructure, including features or capabilities that may increase or decrease the consumption required to execute existing or future workloads, like better storage compression and cloud infrastructure processor improvements, or that allow customers to use our platform to provide compute services without requiring them to store data;
−Removed: • our ability to execute on our business strategy, including our strategies related to the Data Cloud, such as Snowpark and the Snowflake Marketplace;
+Added: • fluctuations in consumption resulting from the introduction of new features, technologies, or capabilities to our software, systems, or to underlying cloud infrastructure, including features or capabilities that may increase or decrease the consumption required to execute existing or future workloads, like better storage compression, cloud infrastructure processor improvements, or compute optimization, or that allow customers to use our platform for compute services without requiring storage;
+Added: • our ability to execute on our business strategy, including our strategies related to the AI Data Cloud, such as Snowpark, the Snowflake Marketplace, and Snowflake Cortex AI;
• the timing and frequency of purchases;
8 unchanged sentences
• general political, social, market, and economic conditions, uncertainty, or volatility, both domestically and internationally, as well as political, social, and economic conditions specifically affecting industries in which our customers and partners participate or on which they rely;
−Removed: • health epidemics or pandemics, such as the COVID-19 pandemic;
+Added: • public health crises, such as the COVID-19 pandemic;
• the impact, or timing of our adoption, of new accounting pronouncements;
2 unchanged sentences
• the impact of changes in tax laws or judicial or regulatory interpretations of tax laws, which are recorded in the period in which such laws are enacted or interpretations are issued and may significantly affect the effective tax rate of that period;
−Removed: • rising inflation and our ability to control costs, including our operating expenses;
+Added: • inflation and our ability to control costs, including our operating expenses;
• fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated or measured in foreign currencies;
2 unchanged sentences
• changes in the competitive dynamics of our market, including consolidation among competitors or customers;
−Removed: • significant security breaches of, technical difficulties with, or interruptions to, the delivery and use of our platform.
−Removed: Any of these and other factors, or the cumulative effect of some of these factors, may cause our results of operations to vary significantly or be adversely affected.
+Added: • significant security breaches affecting our platform or customers’ accounts, external systems, or data;
+Added: • our ability to meet our debt obligations;
+Added: • technical difficulties with, or interruptions to, the delivery and use of our platform.
+Added: Any of these factors may cause our results of operations to vary significantly or be adversely affected.
If our results of operations fall below the expectations of investors and securities analysts who follow our stock, the price of our common stock could decline substantially, and we could face costly lawsuits, including securities class actions.
Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our products and platform.
−Removed: We must increase the productivity of our sales and marketing organization to increase our sales to new and existing customers.
−Removed: It requires significant time and resources to effectively onboard new sales and marketing personnel and to train new and existing personnel so they are able to successfully sell our product.
+Added: We must continue to increase the size and productivity of our sales and marketing organization to increase our sales to new and existing customers.
+Added: It requires significant time and resources to hire and effectively onboard new sales and marketing personnel and to train and manage new and existing personnel so they are able to successfully sell our product.
We also plan to continue to dedicate significant resources to sales and marketing programs that are industry-specific and focused on large organizations.
Once a new customer begins using our platform, our sales team needs to focus on expanding consumption with that customer.
−Removed: All of these efforts will require us to invest significant financial and other resources, including in industries and sales channels in which we have limited experience to date.
+Added: All these efforts require us to invest significant financial and other resources, including in industries and sales channels in which we have limited experience to date.
+Added: In addition, our sales compensation plans must be structured in a way that properly incentivizes our sales and marketing personnel to drive increased consumption and new capacity arrangements on favorable terms.
Our business and results of operations will be harmed if our sales and marketing efforts generate increases in revenue that are smaller than anticipated.
−Removed: We may not achieve anticipated revenue growth from our sales force if we are unable to hire, develop, integrate, and retain talented and effective sales personnel, if our sales personnel are unable to achieve desired productivity levels, or if our sales and marketing programs are not effective.
+Added: We may not achieve anticipated revenue growth from our sales force if we are unable to attract, hire, develop, integrate, and retain talented and effective sales personnel, if our sales personnel are unable to achieve desired productivity levels, or if our sales and marketing programs, including our sales compensation plans, are not effective.
Sales efforts to large customers involve risks that may not be present or that are present to a lesser extent with respect to sales to smaller organizations.
−Removed: Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, stronger customer leverage in negotiating pricing and other terms, more complex customer requirements, including our ability to partner with third parties that advise such customers or help them integrate their IT solutions, substantial upfront sales costs, less predictability in completing some of our sales, and higher customer support expectations.
+Added: Sales to large customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer sales cycles, stronger customer leverage in negotiating pricing and other terms, more complex customer requirements, including in response to evolving industry regulations, the additional need to partner with third parties that advise such customers or help them integrate their IT solutions, substantial upfront sales costs, less predictability in completing some of our sales, and higher customer support expectations.
For example, large customers may require considerable time to evaluate and test our platform or new features prior to making a purchase decision.
In addition, large customers may be switching from legacy on-premises solutions when purchasing our products, and may rely on third parties with whom we do not have relationships when making purchasing decisions.
−Removed: A number of factors also influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our platform, the renegotiation of existing agreements to cover additional workloads, changing laws, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval processes.
+Added: Furthermore, large customers typically have more extensive compliance and vendor diligence programs with respect to new products and services, which can increase both the time and resources needed to sell to them and also result in the inability to sell to them if we do not meet their compliance standards.
+Added: A number of factors also influence the length and variability of our sales cycle, including the need to educate potential customers about the uses and benefits of our platform, the renegotiation of existing agreements to cover additional product categories, changing laws, the discretionary nature of purchasing and budget cycles, and the competitive nature of evaluation and purchasing approval processes.
As a result, the length of our sales cycle, from identification of the opportunity to deal closure, may vary significantly from customer to customer, with sales to large enterprises typically taking longer to complete.
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Moreover, large customers often begin to deploy our products on a limited basis but nevertheless demand implementation services and negotiate pricing discounts, which increase our upfront investment in the sales effort with no guarantee that sales to these customers will justify our substantial upfront investment.
−Removed: If we fail to effectively manage these risks associated with sales cycles and sales to large customers, our business, financial condition, and results of operations may be affected.
−Removed: Unfavorable conditions in our industry or the global economy, or reductions in cloud spending, could limit our ability to grow our business and negatively affect our results of operations.
−Removed: Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers.
−Removed: Negative conditions or volatility in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, bank failures, international trade relations, inflation, and interest rate fluctuations, or the existence of pandemics (such as the COVID-19 pandemic), political turmoil, natural catastrophes, warfare, or terrorist attacks on the United States, Europe, the Asia-Pacific region, Japan, or elsewhere, could cause a decrease in business investments, including spending on cloud technologies, and negatively affect the growth of our business.
−Removed: For example, the ongoing Hamas-Israel and the Russia-Ukraine conflicts have created volatility in the global capital markets and could have further global economic consequences, including disruptions of the global supply chain.
−Removed: In addition, unfavorable conditions in the general economy may negatively impact our customers’ budgets or cash flow, which could impact the contract terms, including payment terms, our customers demand from us.
−Removed: Competitors, many of whom are larger and have greater financial resources than we do, may respond to challenging market conditions by lowering prices in an attempt to attract our customers.
−Removed: We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry.
−Removed: Our growth depends on the development, expansion, and success of our partner relationships.
−Removed: As part of our vision for the Data Cloud, we will need to grow and maintain a network of data providers, data consumers, and data application developers.
−Removed: The relationships we have with these partners, and that our partners have with our customers, provide our customers with enhanced value from our platform and the Data Cloud, including the Snowflake Marketplace.
−Removed: Our future growth will be increasingly dependent on the success of these relationships, and if we are unsuccessful in growing and maintaining these relationships or the types and quality of data and data applications supported by or available for consumption on our platform, our business, financial condition, and results of operations could be adversely affected.
−Removed: Additionally, a small but increasing portion of our revenue is generated as a result of our relationships with global system integrators, managed service providers, and resellers.
−Removed: Increasingly, we and our customers rely on these partners to provide professional services, including customer implementations and migrations from legacy solutions, and there may not be enough qualified partners available, or we may not be able to develop or maintain relationships with enough partners, to meet customer demand.
−Removed: While we provide our partners with training and other enablement programs, these programs may not be effective or utilized consistently, and our return on these investments may be lower than expected.
−Removed: In addition, new partners may require extensive training or significant time and resources to achieve productivity.
−Removed: If we fail to effectively manage and grow our network of these partners, or properly monitor the quality and efficacy of their interactions with our customers, our ability to attract and retain new customers and expand customer consumption of our platform may be impacted, and our operating results and growth rate may be harmed.
−Removed: If we are unable to successfully manage the growth of our professional services business and improve our profit margin from these services, our operating results will be harmed.
−Removed: Our professional services business, which performs implementation services for our customers, has grown larger and more complex as our product revenue has increased.
−Removed: We believe our future success depends in part on investment in professional services to facilitate customer code conversion and migration from legacy solutions and adoption of our platform, especially with large enterprises.
−Removed: As a result, our sales efforts have and will continue to be focused on helping our customers more quickly realize the value of our platform and the Data Cloud rather than on the profitability of our professional services business.
−Removed: We price our professional services based on the anticipated cost of those services and, as a result, we expect to improve the gross profit percentage of our professional services business over time.
−Removed: If we are unable to manage the growth of our professional services business and improve our profit margin from these services, our operating results, including our profit margins, will be harmed.
+Added: If we fail to effectively manage these risks associated with sales cycles and sales to large customers, our business, financial condition, and results of operations could be affected.
+Added: We do business with federal, state, local, and foreign governments and agencies, and heavily regulated organizations;
+Added: as a result, we face heightened risks related to special contract terms, non-standard product deployments, and compliance with additional processes, rules, and regulations.
+Added: We sell to the U.S.
+Added: government, state and local governments, foreign governments, and heavily regulated organizations directly and through our partners.
+Added: Selling to government and regulated customers involves significant costs and operational efforts that arise from special laws, regulations, certification or clearance requirements, procurement processes, contract terms, and customer requirements.
+Added: We may fail to win sufficient government or regulated business to justify our investments.
+Added: For the government and regulated business that we do win, performing under the contracts involves higher ongoing cost to meet the special requirements as well as heightened civil and criminal liability for noncompliance for us, our officers, and directors.
+Added: We have obtained various government certifications and authorizations that are required to support sales opportunities to the government, including FedRAMP High and DOD Impact Level 4.
+Added: We may be unable to achieve government certifications or clearances, or we may be required to make unexpected changes to our business, operations or products to obtain or sustain such certifications or clearances.
+Added: As a result, our ability to sell into the government sector could be restricted until we satisfy the requirements of such certifications or clearances.
+Added: In addition, we plan to continue to pursue additional authorizations, including national security clearances that allow us to support the U.S.
+Added: national security community.
+Added: Obtaining and maintaining national security clearances within a global enterprise will require significant operational investments and the successful implementation of new processes and controls.
+Added: In addition, unlike our standard commercial offering, we anticipate delivering our platform and other offerings into customer environments, which presents risks and challenges arising from having less visibility into and control over the operation and security of our platform and other offerings.
+Added: A substantial majority of our sales to government entities have been made indirectly through our distribution and reseller partners.
+Added: Doing business with government entities, whether directly or indirectly, presents a variety of risks.
+Added: Many government entities need significant education regarding our business model, as well as the uses and benefits of our platform.
+Added: The procurement process for governments and their agencies is highly competitive and time-consuming, and government decisions about their procurement needs may, in certain circumstances, be subject to political influence.
+Added: Beyond this, demand for our platform may be adversely impacted by public sector budgetary cycles, and funding availability that in any given fiscal cycle may be reduced or delayed, including in connection with an extended federal government shutdown.
+Added: Further, if we or our partners are successful in receiving a competitive contract award, that award could be challenged by one or more competitive bidders in a legal action known as a “bid protest.” Bid protests may result in an increase in expenses related to obtaining or preserving contract awards or an unfavorable modification or loss of an award.
+Added: In the event a bid protest is unsuccessful, the resulting delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated.
+Added: As a result of these lengthy and uncertain sales cycles, it is difficult for us to predict the timing of entering into customer agreements with government entities or with our distribution and reseller partners in the government market.
+Added: In addition, public sector customers may have contractual, statutory, or regulatory rights to terminate current contracts with us or our third-party distributors or resellers for convenience or default.
+Added: If a contract is terminated for convenience, we may only be able to collect fees for platform consumption prior to termination and settlement expenses.
+Added: If a contract is terminated due to a default, we may be liable for excess costs incurred by the customer for procuring alternative products or services or be precluded from doing further business with government entities.
+Added: Further, entities providing products or services to governments, whether directly or indirectly, are required to comply with a variety of complex laws, regulations, and contractual provisions relating to the formation, administration, and performance of government contracts.
+Added: Such laws, regulations, and contractual provisions impose compliance obligations that are more burdensome than those typically encountered in commercial contracts, and they often give customers in the government market substantial rights and remedies, many of which are not typically found in commercial contracts.
+Added: These rights and remedies may relate to intellectual property, price protection, the accuracy of information provided to the government, incident notification, termination rights, and prohibition against any government indemnification obligations.
+Added: In addition, governments may use procurement requirements as an alternative to lawmaking, and impose stricter requirements than would apply to the commercial sector in areas that are not directly related to the purchase.
+Added: These rules and requirements may apply to us or third-party resellers or distributors whose practices we may not control.
+Added: Such parties’ non-compliance could result in repercussions for us with respect to contractual and customer satisfaction issues.
+Added: Further, federal, state, and local governments and regulators routinely investigate and audit contractors for compliance with applicable laws, regulations, and contractual provisions, and changes in government policies may affect the level of oversight of government contractors and areas of focus (such as recent executive orders that affect compliance with nondiscrimination plans).
+Added: If, as a result of an audit or investigation, it is determined that we have failed to comply with applicable requirements, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits or payments we have received, costs associated with the triggering of price reduction clauses, fines, loss of a government certification or clearance, and suspensions or debarment from future government business, and we may suffer reputational harm.
+Added: Our customers include a number of non-U.S.
+Added: governments, to which similar procurement, budgetary, contract, and audit risks of U.S.
+Added: government contracting also apply, particularly in certain emerging markets where our customer base is less established.
+Added: Such sales may also heighten our exposure to liabilities under anti-corruption laws.
+Added: In addition, compliance with complex regulations, security certifications, and contracting provisions in a variety of jurisdictions can be expensive and consume significant financial and management resources.
+Added: In certain jurisdictions, our ability to win business may be constrained by political and other factors unrelated to our competitive position in the market.
+Added: Further, our business and results of operations could be harmed if our efforts to do business with governments and heavily regulated organizations do not generate the anticipated increases in revenue.
+Added: Each of these difficulties could materially adversely affect our business and results of operations.
+Added: Finally, we are increasingly investing in doing business with customers and partners in heavily regulated commercial industries, such as the financial services and health care industries.
+Added: Existing and prospective customers, such as those in these industries, may be required to comply with more stringent regulations in connection with using and implementing our platform or services or particular regulations regarding third-party vendors that may be interpreted differently by different customers and partners.
+Added: In addition, regulatory agencies may impose requirements toward third-party vendors of regulated entities generally, or our company in particular, that we may not be able to, or may choose not to, meet.
+Added: We may make special compliance commitments that are more expensive to satisfy than we anticipate, or that we are unable to satisfy.
+Added: In addition, customers in these heavily regulated areas and their regulators often have a right to conduct audits of our systems, products, and practices.
+Added: In the event that one or more customers or their regulators determine that some aspect of our business does not meet regulatory requirements, we may be limited in our ability to continue or expand our business.
If we lose key members of our management team or are unable to attract and retain the executives and employees we need to support our operations and growth, our business and future growth prospects may be harmed.
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Our executive officers and other key employees are employed on an at-will basis, which means that these personnel could terminate their employment with us at any time.
−Removed: For example, in February 2024, Frank Slootman retired as Chief Executive Officer and we appointed Sridhar Ramaswamy to replace him.
−Removed: The loss of one or more of our executive officers could harm morale, cause additional personnel to depart, or introduce operational delays or risks as successor executives learn our business, each of which could harm our operating results.
+Added: For example, in February 2024, Frank Slootman retired as Chief Executive Officer and Sridhar Ramaswamy was appointed to replace him;
+Added: in July 2024, Grzegorz Czajkowski, our former EVP, Engineering and Support, resigned and left Snowflake to pursue another opportunity, and in September 2024, Vivek Raghunathan was appointed as SVP, Engineering and Support to replace him;
+Added: in February 2025, Michael P.
+Added: Scarpelli notified us of his intention to retire as Chief Financial Officer once his successor is appointed, after which he will transition into an advisory role to support continuity and a smooth transition;
+Added: and in March 2025, Christopher W.
+Added: Degnan notified us of his intention to retire as Chief Revenue Officer and Michael Gannon was appointed to replace him.
+Added: The loss of additional executive officers or any significant change in key leadership could harm morale, cause additional personnel to depart, introduce operational delays or risks as departing employees are replaced and successors learn our business, or disrupt operations and implementation of business strategy as result of any changes such successors may make, each of which could harm our operating results.
In addition, to execute our growth plan, we must attract and retain highly qualified personnel.
1 unchanged sentence
We also are dependent on the continued service of our existing software engineers because of the sophistication of our platform.
−Removed: In order to continue to hire and retain highly qualified personnel, we will need to continue to hire in new locations around the world and manage return to work and remote working policies, which may add to the complexity and costs of our business operations.
+Added: In order to support our growing business, we will need to continue to hire in new locations around the world and manage return to work and remote working policies, which may add to the complexity and costs of our business operations.
From time to time, we have experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications.
−Removed: Many of the companies with which we compete for experienced personnel have greater resources than we have and can provide higher compensation and benefits.
+Added: Many of the companies with which we compete for experienced personnel have greater resources than we have and can provide more competitive compensation and benefits.
In addition, we require the majority of our employees to work from a physical office, while certain of our competitors allow remote work environments.
In addition, prospective and existing employees often consider the value of the equity awards they receive in connection with their employment.
−Removed: If the actual or perceived value of our equity awards declines or continues to experience significant volatility, or if our existing employees receive significant proceeds from liquidating their previously vested equity awards, it may adversely affect our ability to recruit and retain key employees.
+Added: Our stock price declined significantly during a portion of fiscal 2025.
+Added: If the actual or perceived value of our equity awards declines or undergoes significant volatility, or if our existing employees receive significant proceeds from liquidating their previously vested equity awards, it may adversely affect our ability to recruit and retain key employees.
Furthermore, current and prospective employees may believe that their equity award offers have limited upside, and our competitors may be able to offer more appealing compensation packages.
In order to retain our existing employees and manage potential attrition, including as a result of any stock price decreases and market volatility that impact the actual or perceived value of our equity awards, we may issue additional equity awards or provide our employees with increased cash compensation, which could negatively impact our results of operations and be dilutive to stockholders.
+Added: For example, our stock-based compensation, net of amounts capitalized, represented 41% of our revenue for fiscal 2025 and 42% for fiscal 2024, and we expect stock-based compensation to remain substantial even if we are successful in reducing it as a percentage of our revenue.
Finally, if we hire employees from competitors or other companies, their former employers may attempt to assert that we or these employees have breached our or their legal obligations, resulting in a diversion of our time and resources.
We also believe our culture has been a key contributor to our success to date and that the critical nature of the platform that we provide promotes a sense of greater purpose and fulfillment in our employees.
−Removed: As our workforce becomes larger and more distributed around the world, we may not be able to maintain important aspects of our culture.
+Added: As our workforce becomes larger and more distributed around the world or as our executive management team changes, we may not be able to maintain important aspects of our culture.
Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel.
−Removed: If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be harmed.
−Removed: If the availability of our platform does not meet our service-level commitments to our customers, our current and future revenue may be negatively impacted.
+Added: If we fail to attract and recruit new personnel or fail to retain and motivate our current personnel, our business and future growth prospects would be harmed.
+Added: Unfavorable conditions in our industry or the global economy, or reductions in cloud spending, or lower than expected consumption, could limit our ability to grow our business and negatively affect our results of operations.
+Added: Our results of operations may vary based on the impact of changes in our industry or the global economy on us or our customers and potential customers.
+Added: Negative conditions or volatility in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations, bank failures, international trade relations, inflation, tariffs, and interest rate fluctuations, or the existence of epidemics, pandemics or other public health crises, political turmoil and geopolitical conflicts, natural catastrophes, warfare, or terrorist attacks on the United States, Europe, the Asia-Pacific region, Japan, or elsewhere, could cause a decrease in business investments, including spending on cloud technologies, and negatively affect the growth of our business.
+Added: For example, the ongoing military conflicts between Russia and Ukraine and in the Middle East, as well as the rising tensions between China and Taiwan, have created volatility in the global capital markets and could have further global economic consequences, including disruptions of the global supply chain.
+Added: In addition, unfavorable conditions in the general economy may negatively impact our customers’ budgets or cash flow, which could impact the contract terms, including payment terms, our customers demand from us.
+Added: Competitors, many of whom are larger and have greater financial resources than we do, may respond to challenging market conditions by lowering prices in an attempt to attract our customers.
+Added: We cannot predict the timing, strength, or duration of any economic slowdown, instability, or recovery, generally or within any particular industry.
+Added: Our growth depends on the development, expansion, and success of our partner relationships.
+Added: As part of our vision for the AI Data Cloud, we will need to grow and maintain a network of partners, including data and technology providers, data consumers, and data application developers.
+Added: The relationships we have with these partners, and that our partners have with our customers, provide our customers with enhanced value from our platform and the AI Data Cloud, including Snowflake Cortex AI and the Snowflake Marketplace.
+Added: Our future growth will be increasingly dependent on the success of these relationships, and if we are unsuccessful in growing and maintaining these relationships or the types and quality of data and data applications supported by or available for consumption on our platform, our business, financial condition, and results of operations could be adversely affected.
+Added: Additionally, a small but increasing portion of our revenue is generated as a result of our relationships with global system integrators, managed service providers, and resellers.
+Added: Increasingly, we and our customers rely on these partners to provide professional services, including customer implementations and migrations from legacy solutions and there may not be enough qualified partners available, or we may not be able to develop or maintain relationships with enough partners, to meet customer demand.
+Added: While we provide our partners with training and other enablement programs, these programs may not be effective or utilized consistently, and our return on these investments may be lower than expected.
+Added: In addition, new partners may require extensive training or significant time and resources to achieve productivity.
+Added: If we fail to effectively manage and grow our network of these partners, or properly monitor the quality and efficacy of their interactions with our customers, our ability to attract and retain new customers and expand customer consumption of our platform may be impacted, and our operating results and growth rate may be harmed.
+Added: If we are unable to successfully manage the growth of our professional services business and improve our profit margin from these services, our operating results could be harmed.
+Added: Our professional services business, which performs implementation and training services for our customers, has grown larger and more complex as our product revenue has increased.
+Added: We believe our future success depends in part on investment in professional services to facilitate customer code conversion and migration from legacy solutions and adoption of our platform, especially with large enterprises.
+Added: As a result, our sales efforts have been and will continue to be focused on helping our customers more quickly realize the value of our platform and the AI Data Cloud rather than on the profitability of our professional services business.
+Added: We price our professional services based on the anticipated cost of those services and, as a result, we expect to improve the gross profit percentage of our professional services business over time.
+Added: If we are unable to manage the growth of our professional services business and improve our profit margin from these services, our operating results, including our profit margins, could be harmed.
+Added: If we are unable to maintain and enhance our brand and reputation, our business and results of operations may be adversely affected.
+Added: We believe that maintaining and enhancing our brand identity and reputation is critical to our relationships with, and to our ability to attract and retain, customers, partners, investors, and employees.
+Added: The successful promotion of our brand depends on a number of factors, including our ability to continue to develop and deliver reliable, high-quality, and cost-effective products and services that meet the needs of our customers;
+Added: our sales and marketing efforts, including effectiveness at developing a positive presence within our industry through participation in industry events and key media coverage;
+Added: the influence of customer testimonials and use cases on the perception of our brand;
+Added: effective integration into our platform of products and services we acquire or invest in;
+Added: and our ability to differentiate our products from those of our competitors.
+Added: The promotion of our brand requires us to make substantial expenditures, which we anticipate will increase as our market becomes more competitive.
+Added: Our brand promotion activities may not be successful or generate the awareness or increased revenue we expect, and even if they do, any increase in revenue may not offset the significant expenses we incur in the efforts to build our brand.
+Added: In addition, independent industry or financial analysts often provide reviews of our platform, as well as products and services of our competitors, and perception of our platform in the marketplace may be significantly influenced by these reviews.
+Added: If these reviews are negative, or less positive as compared to those of our competitors’ products and services, our brand may be adversely affected.
+Added: Negative media coverage could also adversely affect our brand and reputation.
+Added: If we do not successfully maintain and enhance our brand, our business may not grow, we may have reduced pricing power relative to competitors and we could lose customers or fail to attract potential customers, or fail to hire and retain employees, all of which would materially and adversely affect our business, results of operations, and financial condition.
+Added: If the availability of our platform does not meet our service-level commitments to our customers, our revenue may be negatively impacted.
We typically commit to our customers that our platform will maintain a minimum service-level of availability.
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In some cases, we may not have a contractual right with our public cloud providers that compensates us for any losses due to availability interruptions in the public cloud.
−Removed: Further, any failure to meet our service-level commitments could damage our reputation and adoption of our platform, and we could face loss of revenue from reduced future consumption of our platform.
+Added: Further, any failure to meet our service-level commitments could damage our reputation and hinder the adoption of our platform, and we could face loss of revenue from reduced future consumption of our platform.
Any service-level failures could adversely affect our business, financial condition, and results of operations.
We assume liability for data breaches, intellectual property infringement, and other claims, which exposes us to substantial potential liability.
−Removed: In our customer contracts, we assume liability for security breaches and data protection claims caused by us and by certain third parties on which we rely.
−Removed: Our contracts with customers, investors, and other third parties may also include indemnification provisions under which we agree to defend and indemnify them against claims and losses arising from alleged infringement, misappropriation, or other violation of intellectual property rights and for other matters.
−Removed: Although we attempt to limit our liability and indemnity obligations and negotiate corresponding liability and indemnification rights with vendors that would require them to contribute to our indemnity obligations, we may not be successful in doing so, and an event triggering our liability or indemnity obligations could give rise to multiple claims involving multiple customers or other third parties.
+Added: In our customer contracts and certain strategic partnership agreements, we assume liability for certain security breaches and data protection claims caused by us and by certain third parties on which we rely.
+Added: Our contracts with customers, partners, investors, and other third parties may also include indemnification provisions under which we agree to defend and indemnify them against claims and losses arising from alleged infringement, misappropriation, or other violation of intellectual property rights and for other matters.
+Added: Such claims may arise more often (and if they arise, may be more complex to litigate) as we begin to extend our platform and other offerings into customer environments over which we exercise significantly less or no control.
+Added: We may not be successful in our attempt to limit our liability and indemnity obligations and obtain corresponding liability and indemnification obligations from vendors and partners that would require them to contribute to our obligations, and an event triggering our liability or indemnity obligations could give rise to multiple claims involving multiple customers or other third parties.
+Added: In addition, there have been instances where our customers or other business partners attempt to claim indemnification even if indemnification obligations have not been triggered, and defending against such claims can be time-consuming and expensive.
There is no assurance that our applicable insurance coverage, if any, would cover, in whole or in part, any such liability or indemnity obligations.
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We have in the past and may in the future seek to acquire or invest in businesses, joint ventures, and platform technologies that we believe could complement or expand our platform, enhance our technology, or otherwise offer growth opportunities.
−Removed: For example, during the fiscal year ended January 31, 2024, we acquired several companies, including Samooha, Inc., a privately-held company which developed data clean room technology;
−Removed: Neeva Inc., a privately-held internet search company which leveraged generative artificial intelligence;
−Removed: Mountain US Corporation (f/k/a Mobilize.net Corporation), a privately-held company which provided a suite of tools for efficiently migrating databases to the Data Cloud;
−Removed: and LeapYear Technologies, Inc., a privately-held company which provided a differential privacy platform.
−Removed: Any such acquisitions or investments may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable opportunities, whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures.
−Removed: In particular, we may encounter difficulties or unexpected costs assimilating or integrating the businesses, technologies, products, personnel, or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform, or we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise.
+Added: For example, since the beginning of fiscal 2024, we have acquired several companies, including Samooha, Inc., a privately-held company which developed data clean room technology;
+Added: (Neeva), a privately-held internet search company which leveraged generative AI Technology;
+Added: Mountain US Corporation (f/k/a Mobilize.net Corporation), a privately-held company which provided a suite of tools for efficiently migrating databases to the AI Data Cloud;
+Added: LeapYear Technologies, Inc., a privately-held company which provided a differential privacy platform;
+Added: Night Shift Development, Inc., a privately-held data analytics firm focused on the U.S.
+Added: public sector;
+Added: and Datavolo, Inc., a privately-held company that built a dataflow infrastructure to support the creation, management, and observability of multimodal data pipelines for enterprise AI.
+Added: Any such acquisitions or investments may divert the attention of management and cause us to incur various expenses in identifying, investigating, financing, and pursuing suitable opportunities, whether or not the transactions are completed, and may result in unforeseen operating difficulties and expenditures.
+Added: In particular, we may encounter difficulties or unexpected costs assimilating or integrating the businesses, technologies, products, personnel, contracts or operations of any acquired companies, particularly if the key personnel of an acquired company choose not to work for us, their software is not easily adapted to work with our platform, or we have difficulty retaining the customers, suppliers, or partners of any acquired business due to changes in ownership, management, or otherwise.
Any such transactions that we are able to complete may not result in the synergies or other benefits we expect to achieve, which could result in substantial impairment charges.
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In addition, we may inherit commitments, risks, and liabilities of companies that we acquire that we are unable to successfully mitigate and that may be amplified by our existing business.
−Removed: Finally, our acquisitions or investments may result in disputes or litigation, including in connection with the achievement of earnouts.
+Added: Finally, disputes or litigation can arise out of our acquisitions or investments from time to time, including in connection with the achievement of earnouts.
As part of our corporate development program, we invest in companies to support our key business initiatives.
−Removed: These companies range from early, growth stage companies still defining their strategic direction to mature companies with established revenue streams.
+Added: These companies range from early, growth stage companies to mature companies with established revenue streams.
Our strategic investments are subject to risk of inability to achieve the desired strategic synergies and partial or total loss of investment capital.
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The financial success of our investment is typically dependent on an exit in favorable market conditions.
−Removed: To the extent any of the companies in which we invest are not successful, which can include failure to achieve strategic business objectives as well as failure to achieve a favorable exit, we could recognize an impairment or loss on all or part of our investment.
−Removed: In addition, in certain cases we may be required to consolidate one or more of our strategic investee’s financial results into ours.
−Removed: Fluctuations in any such investee’s financial results, due to general market conditions, bank failures, or otherwise, could negatively affect our consolidated financial condition, results of operations, cash flows, or the price of our common stock.
+Added: To the extent any of the companies in which we invest are not successful, which can include failure to achieve strategic business objectives as well as failure to achieve a favorable exit, we could recognize an impairment or loss on all or part of our investment, which we have done in the past.
+Added: In addition, in certain cases we are required to consolidate one or more of our strategic investee’s financial results into ours.
+Added: Fluctuations in any such investee’s financial results, due to general market conditions, bank failures, or otherwise, can negatively affect our consolidated financial condition, results of operations, cash flows, or the price of our common stock.
If one or more of such investees fails to timely provide us with information necessary for the preparation of our consolidated financial statements and disclosures, we may be unable to report our financial results in a timely manner, which would negatively affect our business and the price of our common stock.
+Added: We also enter into strategic partnerships where we agree to incorporate third-party technologies into our platform and services.
+Added: In some cases, we have revenue-sharing arrangements with our strategic partners who supply the technology.
+Added: We may be unable to reach agreements with potential strategic partners on terms acceptable to us, if at all, and we may not be successful in partnering with the companies that have the technologies we need.
+Added: Such strategic partnerships are also subject to a number of risks, including with respect to security controls, indemnification obligations, and ownership of intellectual property and other proprietary information.
+Added: Any of the foregoing could harm our business, financial position, and results of operations.
Seasonality may cause fluctuations in our remaining performance obligations or in customer consumption.
Historically, we have received a higher volume of orders from new and existing customers in the fourth fiscal quarter of each year.
−Removed: As a result, we have historically seen higher non-GAAP free cash flow in the first and fourth fiscal quarters of each year, and our sequential growth in remaining performance obligations has historically been highest in the fourth fiscal quarter of each year.
−Removed: Although we seek to moderate our cash outflows with our cash receipts, we may not be successful in doing so, particularly since we expect this seasonality to become more pronounced as we continue to target large enterprise customers based on their procurement, budgeting, and deployment cycles.
+Added: As a result, we have historically seen higher non-GAAP free cash flow in the first and fourth fiscal quarters of each year, and our sequential growth in remaining performance obligations has historically been the highest in the fourth fiscal quarter of each year.
+Added: We may not be successful in our attempt to align our cash outflows with our cash receipts, particularly since we expect this seasonality to become more pronounced as we continue to target large enterprise customers based on their procurement, budgeting, and deployment cycles.
In addition, while consumption is typically lower during holidays, the magnitude of any decrease is difficult to predict and that may result in inaccurate financial guidance.
−Removed: For more information about non-GAAP free cash flow, including a definition of non-GAAP free cash flow and a reconciliation of free cash flow to the most directly comparable financial measure calculated in accordance with U.S.
−Removed: generally accepted accounting principles (GAAP), see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
−Removed: We do business with federal, state, local, and foreign governments and agencies, and heavily regulated organizations;
−Removed: as a result, we face risks related to the procurement process, budget, delays, and product decisions driven by statutory and regulatory determinations, termination of contracts, and compliance with government contracting requirements.
−Removed: We provide our platform to the U.S.
−Removed: government, state and local governments, foreign governments, and heavily regulated organizations directly and through our partners.
−Removed: We have made, and may continue to make, significant investments to support future sales opportunities in the government sector, including obtaining government certifications.
−Removed: However, government certification requirements may change, we may be unable to achieve or sustain one or more required government certifications, or we may be required to make unexpected changes to our business or products to obtain or sustain such certifications.
−Removed: As a result, our ability to sell into the government sector could be restricted until we satisfy the requirements of such certifications.
−Removed: A substantial majority of our sales to government entities have been made indirectly through our distribution and reseller partners.
−Removed: Doing business with government entities, whether directly or indirectly, presents a variety of risks.
−Removed: Many government entities need significant education regarding our business model, as well as the uses and benefits of our platform.
−Removed: The procurement process for governments and their agencies is highly competitive and time-consuming, and government decisions about their procurement needs may, in certain circumstances, be subject to political influence.
−Removed: To pursue these opportunities, we incur significant up-front time and expense, which subjects us to additional compliance risks and costs, without any assurance that we (or a third-party distributor or reseller) will win a contract.
−Removed: Beyond this, demand for our platform may be adversely impacted by public sector budgetary cycles, and funding availability that in any given fiscal cycle may be reduced or delayed, including in connection with an extended federal government shutdown.
−Removed: Further, if we or our partners are successful in receiving a competitive contract award, that award could be challenged by one or more competitive bidders in a legal action known as a “bid protest.” Bid protests may result in an increase in expenses related to obtaining or preserving contract awards or an unfavorable modification or loss of an award.
−Removed: In the event a bid protest is unsuccessful, the resulting delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated.
−Removed: As a result of these lengthy and uncertain sales cycles, it is difficult for us to predict the timing of entering into customer agreements with government entities or with our distribution and reseller partners in the government market.
−Removed: In addition, public sector customers may have contractual, statutory, or regulatory rights to terminate current contracts with us or our third-party distributors or resellers for convenience or default.
−Removed: If a contract is terminated for convenience, we may only be able to collect fees for platform consumption prior to termination and settlement expenses.
−Removed: If a contract is terminated due to a default, we may be liable for excess costs incurred by the customer for procuring alternative products or services or be precluded from doing further business with government entities.
−Removed: Further, entities providing products or services to governments, whether directly or indirectly, are required to comply with a variety of complex laws, regulations, and contractual provisions relating to the formation, administration, and performance of government contracts.
−Removed: Such laws, regulations, and contractual provisions impose compliance obligations that are more burdensome than those typically encountered in commercial contracts, and they often give customers in the government market substantial rights and remedies, many of which are not typically found in commercial contracts.
−Removed: These rights and remedies may relate to intellectual property, price protection, the accuracy of information provided to the government, incident notification, and termination rights.
−Removed: In addition, governments may use procurement requirements as an alternative to lawmaking, and impose stricter requirements than would apply to the commercial sector in areas that are not directly related to the purchase.
−Removed: These rules and requirements may apply to us or third-party resellers or distributors whose practices we may not control.
−Removed: Such parties’ non-compliance could result in repercussions for us with respect to contractual and customer satisfaction issues.
−Removed: In addition, federal, state, and local governments routinely investigate and audit contractors for compliance with applicable laws, regulations, and contractual provisions.
−Removed: If, as a result of an audit or investigation, it is determined that we have failed to comply with applicable requirements, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits or payments we have received, costs associated with the triggering of price reduction clauses, fines, and suspensions or debarment from future government business, and we may suffer reputational harm.
−Removed: Further, we are increasingly investing in doing business with customers and partners in heavily regulated industries, such as the financial services and health care industries.
−Removed: Existing and prospective customers, such as those in these industries, may be required to comply with more stringent regulations in connection with using and implementing our services or particular regulations regarding third-party vendors that may be interpreted differently by different customers.
−Removed: In addition, regulatory agencies may impose requirements toward third-party vendors generally, or our company in particular, that we may not be able to, or may choose not to, meet.
−Removed: We may make special compliance commitments that are more expensive to satisfy than we anticipate, or that we are unable to satisfy.
−Removed: In addition, customers in these heavily regulated areas and their regulators often have a right to conduct audits of our systems, products, and practices.
−Removed: In the event that one or more customers or their regulators determine that some aspect of our business does not meet regulatory requirements, we may be limited in our ability to continue or expand our business.
−Removed: Our customers also include a number of non-U.S.
−Removed: governments, to which similar procurement, budgetary, contract, and audit risks of U.S.
−Removed: government contracting also apply, particularly in certain emerging markets where our customer base is less established.
−Removed: Such sales may also heighten our exposure to liabilities under anti-corruption laws.
−Removed: In addition, compliance with complex regulations, security certifications, and contracting provisions in a variety of jurisdictions can be expensive and consume significant financial and management resources.
−Removed: In certain jurisdictions, our ability to win business may be constrained by political and other factors unrelated to our competitive position in the market.
−Removed: Further, our business and results of operations will be harmed if our efforts to do business with governments and heavily regulated organizations do not generate the anticipated increases in revenue.
−Removed: Each of these difficulties could materially adversely affect our business and results of operations.
−Removed: Any litigation against us could be costly and time-consuming to defend.
−Removed: From time to time, we may become subject to legal proceedings and claims, such as claims brought by our customers in connection with commercial disputes, employment claims, including claims related to the loss of employee equity grants upon termination, intellectual property claims, or securities class actions or other claims related to volatility in the trading price of our common stock.
−Removed: For example, we are currently subject to a securities class action lawsuit in federal court alleging federal securities law violations in connection with our initial public offering (IPO).
−Removed: See the section titled “Legal Proceedings” for more information.
−Removed: Litigation might result in substantial costs and may divert management’s attention and resources, which might seriously harm our business, financial condition, and results of operations.
−Removed: Insurance might not cover such claims, provide sufficient payments to cover all the costs to resolve one or more such claims, or continue to be available on terms acceptable to us (including premium increases or the imposition of large deductible or co-insurance requirements).
−Removed: A claim brought against us that is uninsured or underinsured could result in unanticipated costs, potentially harming our business, financial position, and results of operations.
−Removed: In addition, we cannot be sure that our existing insurance coverage and coverage for errors and omissions will continue to be available on acceptable terms or that our insurers will not deny coverage as to any future claim.
−Removed: Natural disasters, pandemics, and other catastrophic events could have an adverse impact on our business, operations, and the markets and communities in which we, our partners, and our customers operate.
−Removed: Our platform and the public cloud infrastructure on which our platform relies are vulnerable to damage or interruption from catastrophic events, such as earthquakes, floods, fires, power loss, telecommunication failures, cyber attacks, military conflict or war, terrorist attacks, criminal acts, sabotage, other intentional acts of vandalism and misconduct, geopolitical events, and epidemics or pandemics, such as the COVID-19 pandemic.
+Added: For more information about non-GAAP free cash flow, including a definition of non-GAAP free cash flow and a reconciliation of net cash provided by operating activities, which is the most directly comparable financial measure calculated in accordance with U.S.
+Added: generally accepted accounting principles (GAAP), to free cash flow, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
+Added: Natural disasters, public health crises, and other catastrophic events could have an adverse impact on our business, operations, and the markets and communities in which we, our partners, and our customers operate.
+Added: Our platform and the public cloud infrastructure on which our platform relies are vulnerable to damage or interruption from catastrophic events, such as earthquakes, hurricanes, floods, fires, power loss, telecommunication failures, cyber attacks, military conflict or war, terrorist attacks, criminal acts, sabotage, other intentional acts of vandalism and misconduct, geopolitical events, and epidemics, pandemics or other public health crises.
Some of our U.S.
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We are continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect.
−Removed: For example, we anticipate that we will need to establish relationships with new partners in order to expand into certain countries, including China, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans.
+Added: For example, we anticipate that we will need to establish relationships with new partners in order to expand or continue our expansion into certain countries, including China, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans.
We expect that our international activities will continue to grow for the foreseeable future as we continue to pursue opportunities in existing and new international markets, which will require significant dedication of management attention and financial resources.
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• changes in a specific country’s or region’s political, economic, or legal and regulatory environment, including the effects of pandemics, tariffs, trade wars, sanctions, or long-term environmental risks;
−Removed: • the need to adapt and localize our platform for China and other countries, including as a result of data sovereignty requirements, and the engineering and related costs that we may incur when making those changes;
+Added: • the need to adapt and localize our platform for China, Saudi Arabia, and other countries, including as a result of data sovereignty requirements, and the engineering and related costs that we may incur when making those changes;
• greater difficulty collecting accounts receivable and longer payment cycles;
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• new, evolving, and more stringent regulations relating to privacy and data security, data localization, and the unauthorized use of, or access to, commercial and personal information;
+Added: • compliance with requirements to hire local employees to perform certain specific functions, such as Saudi Arabia’s Regional Headquarters Program, which may not align with how we would otherwise operate our business;
• new, evolving, and potentially more stringent regulations relating to AI Technology;
−Removed: • differing and potentially more onerous labor regulations where labor laws are generally more advantageous to employees as compared to the United States, including regulations governing terminations in locations that do not permit at-will employment and deemed hourly wage and overtime regulations;
+Added: • differing and potentially more onerous labor regulations that are generally more advantageous to employees as compared to the United States, including regulations governing terminations in locations that do not permit at-will employment and deemed hourly wage and overtime regulations;
• challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction;
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• regulations, adverse tax burdens, and foreign exchange controls that could make it difficult or costly to repatriate earnings and cash.
−Removed: We expect to invest substantial time and resources to further expand our international operations, and, if we are unable to do so successfully and in a timely manner, our business and results of operations will suffer.
−Removed: As we prepare to offer our platform to Chinese affiliates of certain multi-national customers, risks associated with economic, political, and social events in China could negatively affect our business, financial condition, results of operations and growth prospects.
−Removed: We are currently preparing to offer our platform to Chinese affiliates of certain multi-national customers.
+Added: We expect to invest substantial time and resources to further expand our international operations, and, if we are unable to do so successfully and in a timely manner, our business and results of operations could suffer.
+Added: As we are offering our platform through a Chinese-owned operating partner to Chinese affiliates of certain multi-national customers, risks associated with economic, political, and social events in China could negatively affect our business, financial condition, results of operations and growth prospects.
+Added: We are currently offering our platform to Chinese affiliates of certain multi-national customers.
Under Chinese law, we must offer our platform through a Chinese-owned operating partner, which must assume control and management of certain aspects of our platform and serve as the seller of record.
−Removed: This requires a new operating and go-to-market model, and there is a risk that functionality or customer experience may suffer and that we may incur liability or brand impairment arising from the operating partner’s actions or inactions.
+Added: This has required a new operating and go-to-market model, and there is a risk that functionality or customer experience may suffer and that we may incur liability or brand impairment arising from the operating partner’s actions or inactions.
In addition, developing and operationalizing this new model is a significant investment and may not generate expected returns.
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• a slowdown in China’s economy;
−Removed: • a government-controlled foreign exchange rate and limitations on the convertibility of the Chinese yuan to other currencies.
+Added: • a government-controlled foreign exchange rate and capital controls, including limitations on the convertibility of the Chinese yuan to other currencies.
Further, geopolitical and national security tensions between China and the United States or other countries could lead to further restrictions on our ability to operate in China, increased scrutiny of our business operations in China, or unwillingness of certain customers to do business with us, including the U.S.
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We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.
−Removed: We have funded our operations since inception primarily through equity financings, including our IPO, and payments received from our customers.
+Added: We have funded our operations since inception primarily through equity and debt financings and payments received from our customers.
We cannot be certain if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business.
−Removed: We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds.
+Added: We intend to continue to make investments to support our business, which may require us to engage in further equity or debt financings to secure additional funds.
Additional financing may not be available on terms favorable to us, if at all, particularly during times of market volatility and general economic instability.
If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, operating results, and financial condition.
−Removed: If we incur debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to repurchase stock and pay dividends on our common stock.
−Removed: Furthermore, if we issue additional equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock.
+Added: Any debt we incur could give the debt holders rights senior to our stockholders to make claims on our assets and could involve covenants relating to our capital raising activities and other financial and operational matters, which may limit our ability to obtain additional capital, pursue business opportunities and strategic transactions, repurchase stock and pay dividends on our common stock.
+Added: For example, the holders of our 0% convertible senior notes due 2027 and 0% convertible senior notes due 2029 (collectively, the Notes) have rights senior to holders of our common stock to make claims on our assets, and the indentures governing each series of the Notes, as supplemented (each an Indenture and together, the Indentures), include customary covenants for us, such as covenants to make payment of principal and special interest (if any) and remain current in our reporting obligations with the SEC (though no financial or operating covenants or restrictions on us paying dividends or issuing or repaying, prepaying or repurchasing our other securities or indebtedness).
+Added: Furthermore, if we issue additional equity securities, including shares of common stock issued upon conversion of the Notes, stockholders will experience dilution, and in some cases we may issue new equity securities that have rights senior to those of our common stock.
Because our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities.
As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.
+Added: Servicing our debt requires a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial debt.
+Added: Our ability to make scheduled payments of the principal of, to pay special interest, if any, on or to refinance the Notes depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.
+Added: Our business may not continue to generate sufficient cash flow from operations to service our debt and make necessary capital expenditures.
+Added: If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive.
+Added: Our ability to refinance the Notes will depend on the capital markets and our financial condition at such time.
+Added: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
+Added: We may not have enough available cash or the ability to raise the funds necessary to pay cash upon conversion of the Notes or to repurchase the Notes upon a fundamental change, and any future debt may contain limitations on our ability to do so.
+Added: Holders of each series of the Notes will have the right, subject to certain conditions and limited exceptions, to require us to repurchase all or any portion of their Notes upon the occurrence of a fundamental change prior to the maturity date of such series of the Notes (as defined and described in the applicable Indenture).
+Added: Upon any conversion of Notes, we will be required to make cash payments to settle such conversion unless we elect to fully settle it by delivering shares of our common stock (other than any cash paid in lieu of delivering fractional shares).
+Added: We may not have enough available cash or be able to obtain financing at the time if we are required to repurchase surrendered Notes or settle the conversion of Notes in cash.
+Added: In addition, our ability to repurchase Notes or to pay cash upon conversions of the Notes may be limited by law, regulatory authority, or agreements governing our future indebtedness.
+Added: Our failure to repurchase the Notes or to pay any cash upon future conversions of the Notes, when required by the Indentures, would constitute a default under the relevant Indenture.
+Added: A default under either Indenture or the fundamental change itself could also lead to a default under agreements governing any future indebtedness.
+Added: If the repayment of such future indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Notes or make cash payments upon conversions thereof.
+Added: The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
+Added: If the conditional conversion feature of a series of the Notes is triggered, holders of such Notes will be entitled to elect to convert their Notes at any time during specified periods, as described in the applicable Indenture.
+Added: If one or more holders elect to convert their Notes, we would be required to settle a portion or all of our conversion obligation through the payment of cash, unless we elect to fully settle such conversion by delivering shares of our common stock (other than any cash paid in lieu of delivering fractional shares), which could adversely affect our liquidity.
+Added: In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the relevant series of Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
We are exposed to fluctuations in currency exchange rates, which could negatively affect our results of operations and our ability to invest and hold our cash.
Our sales are currently denominated in U.S.
−Removed: dollars, Euros, British pounds, Australian dollars, and Brazilian reals, and will likely be denominated in other currencies in the future.
+Added: dollars, Euros, British pounds, Australian dollars, Canadian dollars, and Brazilian reals, and will likely be denominated in other currencies in the future.
Because we report our results of operations and revenue in U.S.
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Our intellectual property rights may not protect our business or provide us with a competitive advantage.
−Removed: To be successful, we must protect our technology and brand in the United States and other jurisdictions through trademarks, trade secrets, patents, copyrights, service marks, invention assignments, contractual restrictions, and other intellectual property rights and confidentiality procedures.
+Added: To be successful, we must protect our business, technology and brand in the United States and other jurisdictions through trademarks, trade secrets, patents, copyrights, service marks, invention assignments, contractual restrictions, and other intellectual property rights and confidentiality procedures.
Despite our efforts to implement these protections, they may not protect our business or provide us with a competitive advantage for a variety of reasons, including:
• the failure by us to obtain patents and other intellectual property rights for important innovations or maintain appropriate confidentiality and other protective measures to establish and maintain our trade secrets;
−Removed: • to the extent a customer or partner owns any intellectual property created through a professional services engagement, our inability to use or monetize that intellectual property as part of our business;
+Added: • to the extent a customer or partner owns any intellectual property created through a professional services or other engagement, our inability to use or monetize that intellectual property as part of our business;
• uncertainty in, and evolution of, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights;
• potential invalidation of our intellectual property rights through administrative processes or litigation;
−Removed: • our inability to detect infringement or other misappropriation of our intellectual property rights by third parties;
+Added: • our inability to detect and protect against infringement or other misappropriation of our intellectual property rights by third parties;
• uncertainty regarding the applicability of intellectual property protections to AI Technology (including outputs generated from AI Technology);
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Moreover, if we are unable to prevent the disclosure of our trade secrets to third parties, or if our competitors independently develop any of our trade secrets, we may not be able to establish or maintain a competitive advantage in our market, which could seriously harm our business.
−Removed: Litigation may be necessary to enforce our intellectual property or proprietary rights, protect our trade secrets, or determine the validity and scope of proprietary rights claimed by others.
+Added: Litigation may be necessary to enforce our intellectual property or proprietary rights, protect our trade secrets, protect our trademarks, or determine the validity and scope of proprietary rights claimed by others.
Any litigation, whether or not resolved in our favor, could result in significant expense to us, divert the efforts of our technical and management personnel, and result in counterclaims with respect to infringement of intellectual property rights by us.
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We may be subject to suits by parties claiming ownership of what we believe to be open-source software or claiming non-compliance with the applicable open-source licensing terms.
−Removed: Additionally, while we have policies and procedures in place designed to govern our use of open-source software, there is a risk that we may incorporate open-source software with onerous licensing terms, including the obligation to make our source code available for others to use or modify without compensation to us, or inadvertently use third-party open-source software in a manner that exposes us to claims of non-compliance with the applicable terms of such license, including claims for infringement of intellectual property rights or for breach of contract.
−Removed: If we receive an allegation that we have violated an open-source license, we may incur significant legal expenses, be subject to damages, be required to redesign our product to remove the open-source software or publicly release certain portions of our proprietary source code, or be required to comply with onerous license restrictions, all of which could have a material impact on our business.
+Added: Additionally, despite our policies and procedures designed to govern our use of open-source software, we may incorporate open-source software with onerous licensing terms, including the obligation to make our source code available for others to use or modify without compensation to us, or inadvertently use third-party open-source software in a manner that exposes us to claims of non-compliance with the applicable terms of such license, including claims for infringement of intellectual property rights or for breach of contract.
+Added: If we receive an allegation that we have violated an open-source license, we may incur significant legal expenses, be subject to damages, be required to redesign our product to remove the open-source software or publicly release certain portions of our proprietary source code, or be required to comply with onerous license restrictions, any of which could have a material impact on our business.
Even in the absence of a claim, if we discover the use of open-source software inconsistent with our policies, we could expend significant time and resources to replace the open-source software or obtain a commercial license, if available.
−Removed: All of these risks are heightened by the fact that the ownership of open-source software can be uncertain, leading to litigation, and many of the licenses applicable to open-source software have not been interpreted by courts, and these licenses could be construed to impose unanticipated conditions or restrictions on our ability to commercialize our products.
+Added: All of these risks are heightened by the fact that the ownership of open-source software can be uncertain, leading to litigation, that many of the licenses applicable to open-source software have not been interpreted by courts, and that these licenses could be construed to impose unanticipated conditions or restrictions on our ability to commercialize our products.
Any use of open-source software inconsistent with our policies or licensing terms could harm our business and financial position.
−Removed: Risks Related to Our Tax, Legal, and Regulatory Environment
+Added: Risks Related to Our Legal, Regulatory, and Tax Environment
We are subject to stringent and changing obligations related to data, including data privacy and security, and the failure or perceived failure to comply with these obligations could result in significant fines and liability or otherwise result in substantial harm to our business and prospects.
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Examples of recent and anticipated developments that have impacted or could impact our business include the following:
−Removed: • The European Union’s (EU) General Data Protection Regulation (GDPR) and the United Kingdom’s General Data Protection Regulation established strict requirements applicable to the handling of personal information.
+Added: • The European Union’s (EU) General Data Protection Regulation (GDPR) and the United Kingdom’s General Data Protection Regulation (U.K.
+Added: GDPR) established strict requirements applicable to the handling of personal information.
+Added: • The EU’s Digital Operational Resilience Act (DORA), which became effective as of January 17, 2025, applies to financial entities, such as banks, insurance companies, and investment firms, as well as their information and communication technology third-party service providers.
+Added: DORA aims to promote resiliency against operational disruptions in the financial sector.
+Added: • India’s Digital Personal Data Protection Act (DPDP Act), which was passed in August 2023, imposes strict rules regarding the collection, use, processing and storage of personal data in India.
+Added: The DPDP Act will not come into effect until the Indian government provides notice of an effective date, which is expected in 2025.
• The EU has proposed the Regulation on Privacy and Electronic Communications, which, if adopted, would impose new obligations on using personal information in the context of electronic communications, particularly with respect to online tracking technologies and direct marketing.
−Removed: • Certain other jurisdictions have enacted data localization laws and cross-border personal information transfer laws, such as Brazil and China, which could make it more difficult for us to transfer personal information across jurisdictions (such as transferring or receiving personal or other sensitive information that originates in the EU or China), or to enable our customers to transfer or replicate their data across jurisdictions using our platform.
+Added: • Certain other jurisdictions have enacted data localization laws and cross-border personal information transfer laws, such as Brazil, China, and Saudi Arabia, which could make it more difficult for us to transfer personal information across jurisdictions (such as transferring or receiving personal or other sensitive information that originates in the EU, China, or Saudi Arabia), or to enable our customers to transfer or replicate their data across jurisdictions using our platform.
Existing mechanisms that may facilitate cross-border personal information transfers may change or be invalidated.
−Removed: An inability or material limitation on our ability to transfer personal data to the United States or other countries could materially impact our business operations and revenue.
+Added: Because our business model involves transmitting and mobilizing data across geographical areas, an inability or material limitation on our ability to transfer personal data to the United States or other countries could materially impact our business operations and revenue.
• In the United States, federal, state, and local governments have enacted or proposed data privacy and security laws, including data breach notification laws, personal data privacy laws, and consumer protection laws.
−Removed: Additionally, in the past few years, numerous U.S.
−Removed: states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
+Added: Numerous U.S.
+Added: states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
Such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making and, if exercised, may adversely impact our business and ability to provide our products and services.
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states have adopted, or are considering adopting, similar laws.
−Removed: • The certifications we may maintain and the standards that may apply to our business, such as the U.S.
+Added: • The certifications we maintain and the standards that apply to our platform (or those we may maintain or that may apply in the future), such as the U.S.
Federal Risk and Authorization Management Program (FedRAMP), U.S.
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• We may also become subject to new laws that specifically regulate non-personal data.
−Removed: For example, we may become subject to certain parts of the European Union’s Data Act, which imposes certain data and cloud service interoperability and switching obligations to enable users to switch between cloud service providers without undue delay or cost, as well as certain requirements concerning cross-border international transfers of, and governmental access to, non-personal data outside the European Economic Area.
−Removed: These and other similar legal and regulatory developments could contribute to legal and economic uncertainty, increase our exposure to liability, affect how we design, market, and sell our platform, and how we operate our business, how our customers and partners process and share data, how we process and use data, and how we transfer personal data from one jurisdiction to another, any of which could increase our costs, require us to take on more onerous obligations in our contracts, impact our ability to operate in certain jurisdictions, and/or negatively impact the types of data available on or the demand for our platform.
+Added: For example, we may become subject to certain parts of the EU’s Data Act, which imposes certain data and cloud service interoperability and switching obligations to enable users to switch between cloud service providers without undue delay or cost, as well as certain requirements concerning cross-border international transfers of, and governmental access to, non-personal data outside the European Economic Area.
+Added: Additionally, in the EU, the Network and Information Security Directive (NIS2) regulates resilience and incident response capabilities of entities operating in a number of sectors, including the digital infrastructure sector (such as cloud computing service providers).
+Added: The deadline for transposition of NIS2 into local law was October 17, 2024;
+Added: however, many of the member states in the EU have not fully transposed the Directive, leading to the opening of infringement procedures by the European Commission.
+Added: Once fully implemented, non-compliance with NIS2 may lead to administrative fines of a maximum of 10 million Euros or up to 2% of the total worldwide revenue of the preceding fiscal year.
+Added: These and other similar legal and regulatory developments could contribute to legal and economic uncertainty, increase our exposure to liability, affect how we design, market, and sell our platform, and impact how we operate our business, how our customers and partners process and share data, how we process and use data, and how we transfer personal data from one jurisdiction to another, any of which could increase our costs, require us to take on more onerous obligations in our contracts, impact our ability to operate in certain jurisdictions, and/or negatively impact the types of data available on or the demand for our platform.
It is possible that new laws may be adopted or existing laws may be interpreted and applied in a manner that is inconsistent with our practices and our efforts to comply with the evolving data protection rules may be unsuccessful.
−Removed: We may incur substantial costs to comply with such laws and regulations, to meet the demands of our customers relating to their own compliance with applicable laws and regulations, and to establish and maintain internal policies, self-certifications, and third-party certifications supporting our compliance programs.
+Added: We incur substantial costs to comply with such laws and regulations, to meet the demands of our customers relating to their own compliance with applicable laws and regulations, and to establish and maintain internal policies, self-attestations, and third-party certifications supporting our compliance programs.
Our customers may delegate certain of their GDPR compliance or other privacy law obligations to us, and we may otherwise be required to expend resources to assist our customers with such compliance obligations.
−Removed: Although we endeavor to comply with applicable data privacy and security obligations, any actual or perceived non-compliance with such obligations by us or our third-party service providers and sub-processors could result in proceedings, investigations, or claims against us by regulatory authorities, customers, or others, leading to reputational harm, higher liability and indemnity obligations, significant fines, litigation costs, additional reporting requirements or oversight, bans on processing personal information, orders to destroy or not use personal information, limitations in our ability to develop or commercialize our platform, inability to process personal information or operate in certain jurisdictions, and other damages.
+Added: Any actual or perceived non-compliance with applicable data privacy and security obligations by us or our third-party service providers and sub-processors could result in proceedings, investigations, litigation, or claims against us by regulatory authorities, customers, or others, leading to reputational harm, higher liability and indemnity obligations, significant fines, litigation costs, additional reporting requirements or oversight, bans on processing personal information, orders to destroy or not use personal information, limitations in our ability to develop or commercialize our platform, inability to process personal information or operate in certain jurisdictions, and other damages.
For example, if regulators assert that we have failed to comply with the GDPR or U.K.
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Any of these events could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: We publish privacy policies and other documentation regarding our security program and our collection, processing, use, and disclosure of personal information or other confidential information.
−Removed: Although we endeavor to comply with our published policies, certifications, and documentation, we or our vendors may at times fail to do so or may be perceived to have failed to do so.
−Removed: Claims by regulators or private parties that we have not followed our published documentation or otherwise violated individuals’ privacy rights or failed to comply with data protection laws, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
+Added: We publish privacy policies, certifications and other documentation regarding our security program and our collection, processing, use, and disclosure of personal information or other confidential information.
+Added: We or our vendors may fail to comply with these policies, certifications, or documentation, or may be perceived to have failed to do so.
+Added: We also from time to time make public statements regarding the data privacy and security features of our products, which may draw scrutiny from regulators or private parties.
+Added: Claims by regulators or private parties that we have failed to follow our published statements or documentation or otherwise violated individuals’ privacy rights, misrepresented or made inaccurate claims about our products, or failed to comply with security or data protection laws, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
Issues in the development and use of AI Technology, combined with an uncertain regulatory environment, may result in reputational harm, liability, or other adverse consequences to our business operations.
−Removed: The legal and regulatory landscape applicable to AI Technology is uncertain and is evolving rapidly, which may result in new and enhanced governmental or regulatory scrutiny, litigation, confidentiality, privacy or security risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation or financial results.
−Removed: For example, states, regions, and supranational bodies, including the European Union and the United States, have passed or proposed new rules and regulations related to the use or sale of AI Technology.
+Added: The legal and regulatory landscape applicable to AI Technology is uncertain and is evolving rapidly, which may result in new and enhanced governmental or regulatory scrutiny, litigation, confidentiality, privacy or security risks, ethical concerns, legal liability, or other complications that could adversely affect our business, reputation or financial condition, or results of operations.
+Added: States, regions, and supranational bodies, including the EU and the United States, have passed or proposed new rules and regulations related to the use or sale of AI Technology.
+Added: For example, the EU’s Artificial Intelligence Act, the first comprehensive legal framework regulating artificial intelligence, entered into force in August 2024;
+Added: Colorado’s Artificial Intelligence Act, which will go into effect on February 1, 2026, imposes obligations on developers and deployers of “high-risk” artificial intelligence systems;
+Added: and South Korea’s AI Basic Act, the country’s first major artificial intelligence legislation, which will go into effect on January 1, 2026, imposes obligations on developers and deployers of “high impact” and generative AI Technology.
These regulations may impose onerous obligations related to our development, offering, and use of AI Technology and expose us to an increased risk of regulatory enforcement and litigation.
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In particular, there is significant uncertainty surrounding the applications of intellectual property and privacy laws to AI Technology.
−Removed: Intellectual property ownership and license rights, including copyright, surrounding AI Technology have not been fully addressed by courts or other federal or state laws or regulations, and our use of AI Technology or adoption of AI Technology into our products and services may result in disputes with respect to ownership or intellectual property, or exposure to claims of copyright or other intellectual property misappropriation.
+Added: Intellectual property ownership and rights (including copyright) and the remedies of rights owners surrounding the use and development of AI Technology have not been fully addressed by courts or other federal or state laws or regulations, and our use of AI Technology or adoption of AI Technology into our products and services may result in disputes with respect to ownership of intellectual property, or exposure to claims of copyright or other intellectual property infringement or misappropriation.
In addition, our AI Technology may involve the processing of personal and other sensitive data and may be subject to laws, policies, legal obligations, and contractual requirements related to privacy, data protection, and information security.
Certain privacy laws extend rights to consumers (such as the right to obtain consent or delete certain personal data) and regulate automated decision making.
−Removed: An alleged or actual failure to meet these obligations may lead to regulatory investigations and fines or penalties;
−Removed: may require us to change our business practices or retrain our algorithms;
−Removed: or may prevent or limit our use of AI Technology.
−Removed: For example, the FTC has required other companies to turn over or disgorge valuable insights or trainings generated through the use of AI Technology where they allege the company has violated privacy and consumer protection laws, meaning that we would be unable to use that data in our AI Technology.
−Removed: It is also possible that we are held liable for intellectual property, privacy, or other legal violations of third-party AI Technology that we use, and that we may not have full recourse for any damages that we suffer (for example, our use of third-party AI Technology may be subject to limitations of liability or provide no liability coverage (e.g., free or open-source technology)).
+Added: An alleged or actual failure to meet these obligations may lead to regulatory investigations and fines or penalties, require us to change our business practices or retrain our algorithms, or prevent or limit our use of AI Technology.
+Added: For example, the FTC has required other companies to turn over or disgorge valuable insights or trainings generated through the use of AI Technology where the FTC determined such companies violated privacy and consumer protection laws.
+Added: We may also be held liable for intellectual property, privacy, or other legal violations of third-party AI Technology (including outputs from AI Technology) that we use, and we may not have full recourse for any damages that we suffer (for example, our use of third-party AI Technology may be subject to limitations of liability or provide no liability coverage (e.g., free or open-source technology)).
+Added: We could also face claims alleging open-source software or other license terms apply with respect to outputs from AI Technology that we believed to be available for use, and not subject to license terms or other third-party proprietary rights.
The algorithms or training methodologies used in the AI Technology we use or offer may be flawed.
−Removed: Datasets may be overly broad, insufficient, or contain inappropriately biased information.
−Removed: Our generative AI Technology may also generate outputs that are inaccurate, misleading, harmful, or otherwise flawed.
+Added: Data sets may be overly broad, insufficient, or contain inappropriately biased information.
+Added: Our generative AI Technology may also generate outputs that are inaccurate, misleading, harmful, offensive, or otherwise flawed.
This may happen if the inputs that the model relied on were inaccurate, incomplete, or flawed (including if a bad actor “poisons” the model with bad inputs or logic), or if the logic of the algorithm is flawed (a so-called “hallucination”).
+Added: Such outputs may also contain copyrighted or other protected material.
Our customers or others may rely on or use such outputs to their detriment, or it may lead to adverse outcomes, which may expose us to brand or reputational harm, competitive harm, and/or legal liability.
−Removed: Finally, if we enable or offer services or technologies that draw scrutiny or controversy, we may experience brand or reputational harm, competitive harm, and/or legal liability.
+Added: Further, unauthorized use or misuse of generative AI Technology by our employees or others who have access to our systems may result in disclosure of confidential company and customer data, reputational harm, privacy law violations and legal liability.
+Added: Finally, if we enable or offer services or technologies that draw scrutiny or controversy, if our use of AI Technology becomes controversial or causes ethical issues, or if we are perceived to overstate the capabilities or benefits of our products, services, or technologies that employ AI Technology, we may experience brand or reputational harm, competitive harm, and/or legal liability.
We are subject to anti-corruption, anti-bribery, anti-money laundering, and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition, and results of operations.
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We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.
−Removed: While we have policies and procedures to address compliance with such laws, there is a risk that our employees, agents, and other third parties with which we do business, including reseller and system integrator partners, will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.
+Added: We may be held responsible for the actions of our employees, agents, customers, partners, suppliers and other third parties with which we do business if such actions violate our policies and applicable law.
As we expand internationally and into the public sector market, our risks under these laws may increase.
−Removed: Detecting, investigating, and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources, and attention from senior management.
−Removed: In addition, noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, other civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences.
+Added: Detecting, investigating, and resolving actual or alleged violations of anti-corruption, anti-bribery, or anti-money laundering laws can require a significant diversion of time, resources, and attention from senior management.
+Added: In addition, noncompliance with anti-corruption, anti-bribery, or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, litigation, fines, damages, other civil or criminal penalties or injunctions, suspension or debarment from contracting with certain persons, reputational harm, adverse media coverage, and other collateral consequences.
If any subpoenas or investigations are launched, or governmental or other sanctions are imposed, or if we do not prevail in any possible civil or criminal proceeding, our business, financial condition, and results of operations could be harmed.
+Added: Increasing scrutiny and changing expectations from global regulations, our investors, customers, and employees with respect to ESG may impact our reputation and business.
+Added: Companies across many industries are facing increasing scrutiny related to their environmental, social and governance (ESG) practices and reporting, both in the United States and internationally.
+Added: For example, new domestic and international laws and regulations relating to ESG matters, including environmental sustainability and climate change and human capital management, are under consideration or being adopted, which may include specific, target-driven disclosure requirements or obligations.
+Added: Our response to increased ESG disclosure requirements may require additional investments and implementation of new practices and reporting processes, all entailing additional compliance risk and cost.
+Added: To the extent we share information about our ESG practices, we could be criticized for the accuracy, adequacy, or completeness of such disclosures.
+Added: In addition, we may communicate ESG goals or initiatives from time to time, which can be costly to achieve and difficult to implement.
+Added: There is no assurance that we will achieve any of these goals, that our initiatives will achieve their intended outcome, and our ability to implement these ESG-related initiatives or achieve ESG-related goals may be dependent on external factors outside our control.
+Added: At the same time, anti-ESG sentiment has gained momentum across the United States, and both the federal and state governments have enacted or proposed “anti-ESG” policies or legislation or have issued related legal opinions.
+Added: In addition, the U.S.
+Added: Supreme Court’s ruling striking down race-based affirmative action in higher education has increased scrutiny of private sector employment practices and activist groups and state attorneys general have begun to analogize the outcome of that case to private employment matters, asserting that certain corporate practices, such as diversity, equity, and inclusion (DEI), are discriminatory and unlawful.
+Added: Such anti-ESG and anti-DEI related policies, legislation, initiatives and scrutiny could expose any ESG, DEI or other practices we adopt to the risk of litigation, antitrust investigations or challenges by federal or state authorities, result in injunctions, penalties, and reputational harm.
+Added: Further, we may experience backlash from customers, government entities, advocacy groups, employees, or other stakeholders who disagree with our actual or perceived positions, or with our lack of position on social, environmental, governance, political, public policy, economic, geopolitical, or other sensitive issues.
+Added: Any perceived lack of transparency about these matters could harm our brand and reputation, our employees’ engagement and retention, and the willingness of our customers and partners to do business with us.
+Added: Both advocates and opponents to ESG-related matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
+Added: To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business, results of operations, or financial condition.
We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
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This encryption technology may be exported outside of the United States only with the required export authorizations, including by license, a license exception, or other appropriate government authorizations, including the filing of an encryption classification request or self-classification report.
−Removed: Obtaining the necessary export license or other authorization for a particular sale may be time-consuming and may result in the delay or loss of sales opportunities.
+Added: Obtaining the necessary export license or other authorization for a particular sale can be time-consuming and may result in the delay or loss of sales opportunities.
Furthermore, our activities are subject to U.S.
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From time to time, various governmental agencies have proposed additional regulation of encryption technology.
−Removed: Any change in export or import regulations, economic sanctions, or related legislation, increased export and import controls, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell our platform to, existing or potential customers with international operations.
+Added: Any change in export or import regulations, economic sanctions, or related legislation, increased export and import controls, or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or our decreased ability to export or sell our platform to, existing or potential customers with international operations.
Any decreased use of our platform or limitation on our ability to export or sell our platform would adversely affect our business, financial condition, and results of operations.
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Our corporate structure and associated transfer pricing policies contemplate future growth in international markets and consider the functions, risks, and assets of the various entities involved in intercompany transactions.
−Removed: The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
+Added: The amount of taxes we pay in different jurisdictions depends on the application of the tax laws of various jurisdictions, including the United States, to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
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Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially affect our financial position and results of operations.
−Removed: For example, 2017 legislation informally titled the Tax Act significantly reformed the Internal Revenue Code of 1986, as amended (the Code).
−Removed: In August 2022, the United States passed the Inflation Reduction Act, which provides for a minimum tax equal to 15% of the adjusted financial statement income of certain large corporations, as well as a 1% excise tax on stock repurchases.
+Added: Legislation informally titled the Tax Cuts and Jobs Act and the Inflation Reduction Act (Inflation Act) made many significant changes to U.S.
+Added: For example, the Inflation Act includes provisions that will impact the U.S.
+Added: federal income taxation of certain corporations, including a minimum tax equal to 15% of the adjusted financial statement income of certain large corporations, as well as a 1% excise tax applicable to corporations traded on an established securities market (which includes the New York Stock Exchange) on the fair market value of certain stock repurchases in excess of the fair market value of stock issuances in the same taxable year.
In February 2023, our board of directors authorized the repurchase of up to $2.0 billion of our common stock through a stock repurchase program.
−Removed: We do not expect the excise tax on repurchases under our stock repurchase program to have a material impact on our aggregate tax liability.
−Removed: In addition, many countries have recently proposed, recommended, or enacted changes to existing tax laws or new tax laws that could significantly increase our tax obligations in the countries where we do business or require us to change the manner in which we operate our business.
−Removed: Over the last several years, the Organization for Economic Cooperation and Development has been working on a Base Erosion and Profit Shifting Project that, if implemented, would change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business.
−Removed: As of July 2023, nearly 140 countries have approved a framework that imposes a minimum tax rate of 15%, among other provisions.
−Removed: As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain.
−Removed: Similarly, the European Commission and several countries have issued proposals that would apply to various aspects of the current tax framework under which we are taxed.
−Removed: These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes (such as taxes based on a percentage of revenue or taxes applicable to digital services), which could apply to our business.
−Removed: Due to the large and expanding scale of our international business activities, these types of changes to the taxation of our activities could increase our worldwide effective tax rate, increase the amount of taxes imposed on our business, and harm our financial position.
+Added: In August 2024, our board of directors authorized the repurchase of an additional $2.5 billion of our outstanding common stock under the stock purchase program and extended the expiration date of the stock repurchase program from March 2025 to March 2027.
+Added: Repurchases of our common stock under current or future stock repurchase programs could result in an excise tax liability, and we are continuing to evaluate the impact that such excise tax liability, if any, may have on our aggregate tax liability.
+Added: Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects thereof could be repealed or modified in future legislation.
+Added: In addition, our tax obligations and effective tax rate in the jurisdictions in which we conduct business could increase, including as a result of the base erosion and profit shifting (BEPS) project that is being led by the Organization for Economic Co-operation and Development (OECD), and other initiatives led by the OECD or the European Commission.
+Added: Due to the large and expanding scale of our international business activities, these types of changes to the taxation of our activities could increase our worldwide effective tax rate, the amount of taxes imposed on our business, and our compliance costs, and harm our financial position.
Such changes may also apply retroactively to our historical operations and result in taxes greater than the amounts estimated and recorded in our financial statements.
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federal net operating losses (NOLs) for taxable years beginning before January 1, 2018, may be carried forward to offset future taxable income, if any, until such unused NOLs expire.
−Removed: Under the Tax Act, as modified by 2020 legislation referred to as the CARES Act, U.S.
+Added: Under current U.S.
+Added: federal income tax law, U.S.
federal NOLs arising in taxable years beginning after December 31, 2017, can be carried forward indefinitely, but the deductibility of such U.S.
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Of the $178.0 million foreign NOL carryforwards, $165.2 million may be carried forward indefinitely, and the remaining $12.8 million will begin to expire in 2027.
−Removed: In addition, under Section 382 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as one or more stockholders or groups of stockholders who own at least 5% of our stock increasing their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period, the corporation’s ability to use its pre-change NOL carryforwards to offset its post-change income or taxes may be limited.
+Added: In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as one or more stockholders or groups of stockholders who own at least 5% of our stock increasing their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period, the corporation’s ability to use its pre-change NOL carryforwards to offset its post-change income or taxes may be limited.
It is possible that we have experienced or may experience ownership changes as a result of shifts in our stock ownership, some of which may be outside of our control.
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• the outcome of current and future tax audits, examinations, or administrative appeals;
−Removed: • the effects of acquisitions.
+Added: • the effects of acquisitions, divestitures, and restructurings.
Any of these developments could adversely affect our results of operations.
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• actual or anticipated fluctuations in our financial condition or results of operations;
−Removed: • variance in our actual or projected financial performance from expectations of securities analysts;
+Added: • variance in our actual or projected financial performance from expectations of securities analysts and investors;
• changes in the pricing or consumption of our platform;
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• rumors and market speculation involving us or other companies in our industry;
−Removed: • significant data breaches, disruptions to, or other incidents involving our platform;
−Removed: • our involvement in litigation;
+Added: • significant data breaches, disruptions to, or other incidents involving our platform or our customers;
+Added: • our involvement in litigation or governmental or regulatory investigations or inquiries and the development and outcome of such litigation, investigations, or inquiries;
• changes in senior management or key personnel;
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• the trading volume of our common stock;
+Added: • purchase and sale of our common stock by our insiders or our other stockholders;
• changes in the anticipated future size and growth rate of our market;
−Removed: • our issuance or repurchase of shares of our common stock;
+Added: • our issuance or repurchase of shares of our common stock or securities convertible into or exchangeable for share of our common stock and any derivative transactions relating to such securities;
• general political, social, economic, and market conditions.
−Removed: Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, such as recessions, interest rate changes, or international currency fluctuations, may also negatively impact the market price of our common stock.
+Added: Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, such as recessions, inflation, interest rate changes, tariffs and trade wars, or international currency fluctuations, may also negatively impact the market price of our common stock.
In addition, technology stocks have historically experienced high levels of volatility.
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We have been, and may be in the future, the target of this type of litigation, which could result in substantial expenses and divert our management’s attention.
−Removed: We are currently subject to a securities class action lawsuit in federal court alleging federal securities law violations in connection with our IPO.
+Added: We are currently subject to a securities class action lawsuit in federal court.
See the section titled “Legal Proceedings” for more information.
−Removed: Future sales of our common stock in the public market could cause the market price of our common stock to decline.
−Removed: Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
−Removed: Many of our stockholders who held our capital stock prior to completion of our IPO have substantial unrecognized gains on the value of the equity they hold based upon the price at which shares were sold in our IPO, and therefore, they may take steps to sell their shares or otherwise secure the unrecognized gains on those shares.
−Removed: We are unable to predict the timing of or the effect that such sales may have on the prevailing market price of our common stock.
−Removed: The shares of common stock subject to outstanding options and restricted stock unit awards under our equity incentive plans, and the shares reserved for future issuance under our equity incentive plans, will become eligible for sale in the public market upon issuance, subject to compliance with applicable securities laws.
−Removed: Further, certain holders of our common stock have rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
+Added: Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
+Added: The conversion of the Notes may dilute the ownership interests of our stockholders.
+Added: Upon conversion of the Notes, we have the option to settle the obligation in cash, shares of our common stock, or a combination of both.
+Added: If we elect to settle our conversion obligation in shares of our common stock or a combination of cash and shares of our common stock, any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market price of our common stock.
+Added: In addition, the existence of the Notes may encourage short selling by market participants because the conversion of the Notes could be used to satisfy short positions, or anticipated conversion of the Notes into shares of our common stock could depress the price of our common stock.
+Added: The capped call transactions may affect the value of the Notes and the market price of our common stock.
+Added: We entered into privately negotiated capped call transactions relating to each series of Notes with some of the initial purchasers (or their affiliates) and certain other financial institutions (collectively, the option counterparties).
+Added: The capped call transactions are generally expected to reduce the potential dilution to our common stock upon any conversion of the relevant series of Notes or offset any cash payments we are required to make in excess of the principal amount of converted Notes, with such reduction or offset subject to a cap.
+Added: In connection with establishing their initial hedges of the capped call transactions, the option counterparties entered into various derivative transactions with respect to our common stock and/or purchased shares of our common stock concurrently with, or shortly after, the pricing of the Notes.
+Added: They may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling shares of our common stock or other securities of ours in secondary market transactions prior to the maturity of the Notes, and they are likely to do so during any “observation period” related to a conversion of Notes or, to the extent we exercise the relevant election under the capped call transactions, following any repurchase or redemption of the Notes, in each case as described in the Indentures.
+Added: This activity could also cause or avoid an increase or a decrease in the market price of our common stock or the Notes.
+Added: We are subject to counterparty risk with respect to the capped call transactions.
+Added: The option counterparties are financial institutions, and we will be subject to the risk that any or all of them might default under the capped call transactions.
+Added: Our exposure to the credit risk of the option counterparties will not be secured by any collateral.
+Added: Past global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions and could adversely affect the option counterparties’ performance under the capped call transactions.
+Added: If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such option counterparty.
+Added: Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the market price and in the volatility of our common stock.
+Added: In addition, upon a default by an option counterparty, we may suffer more dilution, the effect of which would not be compensated for, than we currently anticipate with respect to our common stock.
+Added: We can provide no assurance as to the financial stability or viability of the option counterparties.
Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders.
−Removed: We expect to issue additional capital stock in the future that will result in dilution to all other stockholders.
−Removed: We expect to grant equity awards to employees, non-employee directors, and consultants under our equity incentive plans.
+Added: We expect to issue additional capital stock in the future that will result in dilution to all other stockholders, including issuance of shares of our common stock upon conversion of the Notes.
+Added: We expect to continue to grant equity awards to employees, non-employee directors, and consultants under our equity incentive plans.
We may also raise capital through equity financings in the future.
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In February 2023, our board of directors authorized the repurchase of up to $2.0 billion of our common stock through a stock repurchase program.
+Added: In August 2024, our board of directors authorized the repurchase of an additional $2.5 billion of our outstanding common stock under the stock repurchase program and extended the expiration date of the stock repurchase program from March 2025 to March 2027.
Repurchases may be effected, from time to time, either on the open market (including via pre-set trading plans), in privately negotiated transactions, or through other transactions in accordance with applicable securities laws.
−Removed: The program expires in March 2025.
The timing and amount of any repurchases will be determined by management based on an evaluation of market conditions and other factors.
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Repurchasing our common stock reduces the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or investments, other business opportunities, and other general corporate projects, and we may fail to realize the anticipated long-term stockholder value of any stock repurchase program.
+Added: In addition, the Inflation Act imposes an excise tax of 1% on certain corporate stock repurchases.
If securities or industry analysts publish unfavorable or inaccurate research about our business, the market price or trading volume of our common stock could decline.
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Moreover, these rules and regulations have increased our legal and financial compliance costs and make some activities more time-consuming and costly.
−Removed: In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure, including those related to climate change and other environmental, social, and governance focused disclosures, are creating uncertainty for public companies.
+Added: In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies.
These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.
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Our compliance with Section 404 requires that we incur substantial expenses and expend significant management efforts.
−Removed: We have established an internal audit group, and as we continue to grow, we will hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and update the system and process documentation necessary to perform the evaluation needed to comply with Section 404.
+Added: We have established an internal audit group, and as we continue to grow, we expect to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and update the system and process documentation necessary to perform the evaluation needed to comply with Section 404.
During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective.
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Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
−Removed: Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.
+Added: Anti-takeover provisions in our charter documents, the Indentures, and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a change of control or changes in our management.
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• specify that special meetings of our stockholders can be called only by our board of directors, the chairperson of our board of directors, or our Chief Executive Officer;
−Removed: • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;
+Added: • establish an advance notice procedure for stockholder proposals to be brought before an annual or special meeting, including proposed nominations of persons for election to our board of directors;
• establish that our board of directors is divided into three classes, with each class serving three-year staggered terms;
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Any of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock, and they could deter potential acquirers of our company, thereby reducing the likelihood that holders of our common stock would receive a premium for their shares of our common stock in an acquisition.
+Added: In addition, certain provisions in the Indentures may make it more difficult or expensive for a third party to acquire us.
+Added: For example, the Indentures will require us, except as described therein, to repurchase the Notes of the relevant series for cash upon the occurrence of a fundamental change (as defined in the Indentures) and, in certain circumstances, to increase the relevant conversion rate for a holder that converts its Notes of the relevant series in connection with a make-whole fundamental change (as defined in the Indentures).
+Added: A takeover of us may trigger the requirement that we repurchase the relevant series of Notes and/or increase the relevant conversion rate, which could make it more costly for a potential acquirer to engage in such takeover.
+Added: Such additional costs may have the effect of delaying or preventing a takeover of us that would otherwise be beneficial to investors.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States of America as the exclusive forums for certain disputes between us and our stockholders, which will restrict our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
−Removed: any derivative action or proceeding brought on our behalf, any action asserting a breach of a fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine.
+Added: any derivative action or proceeding brought on our behalf, any action asserting a breach of a fiduciary duty owed by any of our current or former directors, officers, or other employees to our company or our stockholders, any action asserting a claim against us arising out of or pursuant to the Delaware General Corporation Law, our amended and restated certificate of incorporation, or our amended and restated bylaws, any action as to which the Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware, or any action asserting a claim against us or any of our current or former directors, officers, or other employees that is governed by the internal affairs doctrine.
This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
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This may require significant additional costs associated with resolving such action in other jurisdictions, and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.
+Added: In addition, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder.
These choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees.
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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.