지스케일러(ZS) 리스크 요인 변화

이번 보고서

2026 연차보고서

10-K · 기간 말 2026. 7. 31. · 제출 2026. 9. 3.

비교 기준

2025 연차보고서

10-K · 기간 말 2025. 7. 31.

SEC 원문 ↗

새 리스크 항목

신규 문단

수정 문단

삭제

-1%

분량 변화

AI 한국어 요약

한 줄 요약

리스크 서술 전반에 AI가 들어갔습니다. 고객의 AI 도입이 '사용자 수' 기반 과금 모델을 흔들 수 있다는 점, AI가 찾아내는 취약점 급증과 양자컴퓨팅 대응 비용, AI 사업자와 하이퍼스케일러의 시장 진입이 새로 강조됐습니다.

주목할 변화

강화AI 자동화에 따른 사용자 수 감소와 과금 모델 부담고객 이탈·축소 요인에 고객의 AI 업무 자동화가 추가됐습니다. AI 에이전트가 늘면서 '사람이 아닌 트래픽'을 수익화해야 한다는 과제도 새로 명시됐습니다. 원문: "our customers' increasing use of AI to automate tasks traditionally performed by human workers", "monetize the increasing prevalence of non-user-based traffic". 주가 변동 요인에도 "AI-related disruption to software companies"가 추가됐습니다.
신규AI가 찾아낸 취약점 급증과 양자 암호 리스크AI 기반 점검 도구가 과거보다 훨씬 많은 취약점을 드러내고 있습니다. 회사는 패치 작업에 엔지니어링 역량이 쏠려 신기능 개발이 늦어질 수 있다고 밝혔습니다. 또 양자컴퓨팅 도입이 예상보다 빠르면 장비 교체를 앞당겨야 하고, 가격·패키징 변경으로 매출과 마진에 영향이 있을 수 있다고 적었습니다. 원문: "substantially greater volume of vulnerabilities", "accelerate the refresh of our service delivery fleet".
강화AI 사업자·하이퍼스케일러발 경쟁AI가 진입장벽을 낮춰 대형 AI 기업과 하이퍼스케일러가 경쟁자로 들어올 수 있다는 문장이 신설됐습니다. 경쟁 영역 목록에도 DSPM, 브라우저 보안, MDR, SecOps, 클라우드 서비스 벤더가 추가됐습니다. 원문: "AI technologies may lower barriers to entry for new competitors, including large AI providers and hyperscalers".
강화AI로 대중화된 사이버공격AI 공격 툴킷이 흔해지면서 숙련도가 낮은 공격자도 대규모·맞춤형 공격을 할 수 있게 됐다고 서술했습니다. 공격의 양, 속도, 건당 피해가 커질 것으로 예상하며, 핵심 SaaS 공급업체가 뚫리거나 중단될 위험도 추가됐습니다. 원문: "less-sophisticated actors are increasingly able to plan, develop and deliver attacks".
신규사내 AI 활용과 AI 규제 리스크회사 스스로 AI 에이전트를 도입하고 있으며, 에이전트가 잘못되거나 되돌릴 수 없는 행동을 할 수 있다고 밝혔습니다. 직원들이 직접 소프트웨어를 만드는 '개발 분산화'에 따른 보안·규정 위험도 새로 언급했습니다. 리스크 섹션 제목에 'Artificial Intelligence'가 추가됐고, EU AI Act 등 파편화된 AI 규제에 관한 문단이 신설됐습니다. 원문: "actions that are erroneous, irreversible or misaligned".
강화부품·데이터센터 비용 상승메모리·스토리지·프로세서 가격 상승과 AI 수요로 인한 부품 부족을 명시했고, 표현도 과거형에서 "have experienced and may continue to experience"로 바뀌었습니다. 비용 증가를 고객 가격에 전가해야 할 수 있다는 점, 데이터센터 용량을 수용 가능한 조건으로 확보하지 못할 수 있다는 점도 추가됐습니다. 데이터 주권 요구에 대응해 일부 지역에서는 제3자 데이터센터가 서비스를 호스팅한다는 내용도 새로 들어갔습니다.
신규영업 리더 이탈경영진 변동 사례로 최근 영업 리더 2명의 퇴사가 구체적으로 명시됐습니다. 원문: "two sales leaders recently departed the Company".
신규중동 분쟁발 에너지 비용과 캘리포니아 SaaS 판매세이란 관련 분쟁이 언급됐고, 중동 분쟁이 에너지 부족과 비용 상승을 일으켜 고객 IT 예산을 압박할 수 있다고 추가됐습니다. 또 2027년 1월부터 캘리포니아가 일부 SaaS 거래에 판매세를 부과해 고객 가격과 회사 비용이 오를 수 있다고 밝혔습니다. 원문: "disrupted global energy markets".

읽는 법

이번 개정의 중심은 AI가 Zscaler의 사업 구조 자체에 주는 압력입니다. AI는 보안 수요를 키우는 동시에 고객사 인력 감소로 사용자 수 기반 매출을 줄일 수 있고, 새로운 대형 경쟁자를 불러오며, 취약점 대응과 장비 교체 비용도 늘릴 수 있습니다. 앞으로는 비사용자 기반 트래픽의 수익화 진척, 가격·패키징 변화, 부품 비용이 마진에 미치는 영향이 실적 발표에서 어떻게 설명되는지 확인하는 것이 이 변화를 해석하는 데 도움이 됩니다.

원문 비교

신규Summary of Risk Factors
•if we fail to develop or introduce new enhancements to our cloud platform, including AI enhancements, our ability to attract and retain customers and remain competitive could be impaired;
신규If we fail to develop or introduce new enhancements to our cloud platform, including AI enhancements, on a timely basis, our ability to attract and retain customers, remain competitive and grow our business could be impaired.
In addition, the application of AI-enabled vulnerability tools to our infrastructure and software is surfacing a substantially greater volume of vulnerabilities requiring remediation than in the past. In the future, new computing methods, including quantum, may introduce vulnerabilities, compatibility issues, increased processing requirements, latency or service disruptions, which may render key cryptographic methods used for encryption, authentication, digital signatures, certificates, software integrity, and key establishment ineffective. If quantum adoption materializes faster than expected, we may need to accelerate the refresh of our service delivery fleet, which could have a material impact on our costs. Additionally, we may need to make changes to our pricing and packaging in response to evolving customer needs, competitive dynamics or the costs associated with these technology transitions, which could adversely affect our revenue and margins. While timely remediation strengthens the security of our cloud platform, the engineering capacity required for patching, regression testing and re-validation may reduce the resources available for new feature development and the introduction of new solutions, which could adversely affect our ability to timely develop and release new product features and enhancements.
신규Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
•requirements to comply with foreign privacy, data protection and cybersecurity laws and the need to offer data sovereignty solutions to satisfy some customers' demands;
신규If we were not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our business, results of operations and financial condition could be harmed.
AI laws and regulations, such as the European Union's AI Act, impose compliance obligations on AI systems that process personal data. Such laws and regulations may, among other things, require risk assessments specific to AI, changes to data governance practices and enhancing transparency disclosures that supplement existing data protection requirements. The AI regulatory landscape is fragmented and uncertain, with various countries considering or enacting differing AI-specific laws and regulations to govern the emerging technology. This creates significant regulatory uncertainty about which compliance standards will ultimately govern our operations and solutions.
신규The market price of our common stock may be volatile, and you could lose all or part of your investment.
•investor and market perceptions regarding AI-related disruption to software companies and the cybersecurity industry;
수정Summary of Risk Factors
~~•servicing~~ •repayment of our debt may require a significant amount of cash, and we may not have sufficient cash flow from our business or the ability to raise funds to pay our substantial debt; and
수정We have a history of annual net losses and may not be able to achieve or sustain profitability in the future.
We have incurred net losses in all annual periods since our inception, and we expect we will continue to incur annual net losses for the foreseeable future. We experienced net losses of $63.2 million, $41.5 ~~million, $57.7~~ million and ~~$202.3~~ $57.7 million for fiscal ~~2025,~~ 2026, fiscal ~~2024~~ 2025 and fiscal ~~2023,~~ 2024, respectively. As of July 31, ~~2025,~~ 2026, we had an accumulated deficit of ~~$1,189.6~~ $1,252.7 million. Because the market for our cloud platform is rapidly evolving and cloud-based security solutions ~~have not yet reached widespread adoption,~~ are still in the process of being widely adopted, it is difficult for us to predict our future results of operations. We expect our operating expenses to increase significantly over the next several years as we continue to hire additional personnel, particularly in research and development and sales and marketing, expand our operations and infrastructure, both domestically and internationally, and continue to develop our platform. If we fail to increase our revenue to offset the increases in our operating expenses, we may not achieve or sustain profitability in the future.
수정If organizations do not adopt our cloud platform, our ability to grow our business and operating results may be adversely affected.
Cloud security technologies are still evolving, and it remains difficult to predict customer demand and adoption rates for our solutions. We believe that our cloud platform offers superior protection to our customers, who are moving their applications and data to the cloud and embracing AI applications and agents. We also believe that our cloud platform represents a major shift from on-premises appliance-based security solutions. While cloud-based security solutions have seen increased adoption, traditional on-premises security appliances continue to be entrenched in the infrastructure of many of our potential customers, particularly large enterprises, because of their prior investment in and the familiarity of their IT personnel with on-premises appliance-based solutions. As a result, our sales process often involves extensive efforts to educate our customers on the benefits and capabilities of our cloud platform, particularly as we continue to pursue customer relationships with large organizations. Even with these efforts, we cannot predict long-term market acceptance of our cloud platform, or the adoption of competing products, services or technologies. If we fail to achieve or maintain broad market acceptance of our cloud platform or are unable to keep pace with industry changes, particularly as a result of AI, our ability to grow our business and our operating results will be materially and adversely affected.
수정If we are unable to attract new customers, our future results of operations could be harmed.
•competition from ~~hybrid~~ hybrid, cloud or ~~cloud~~ legacy security products;
수정If we are unable to attract new customers, our future results of operations could be harmed.
As a result of challenging or and uncertain macroeconomic ~~conditions,~~ conditions and the other challenges described in these risk factors, we have ~~experienced~~ experienced, and may experience in the ~~future~~ future, increased scrutiny and a longer approval process for initial purchases by new customers, particularly for larger transactions. We cannot predict how challenging or and uncertain macroeconomic conditions or other challenges will impact potential customers' purchasing decisions and whether potential customers may decide to delay purchases, decrease the size of purchases or entirely forego purchasing our services.
수정If our customers do not renew their subscriptions for our services and add additional users and services to their subscriptions, our future results of operations could be harmed.
In order for us to maintain or improve our results of operations, it is important that our customers renew their subscriptions for our services when existing contract terms expire, and that we expand our commercial relationships with our existing customers. Our customers have no obligation to renew their subscriptions for our services after the expiration of their contractual subscription period, which is typically one to ~~three~~ five years, and in the normal course of business, some customers have elected not to renew. In addition, in certain cases, including under the ~~new~~ EU Data Act, customers may cancel their subscriptions without cause either at any time or upon advance written notice (commonly ranging from 30 days to 60 days), typically subject to an early termination penalty for unused services. In addition, our customers may renew for fewer users, elect not to renew non-user-based services, renew for shorter contract lengths or switch to a lower-cost product suite. If our customers do not renew their ~~subscription services,~~ subscriptions, we could incur impairment losses related to our deferred contract acquisition costs. It is difficult to accurately predict long-term customer retention because of our varied customer base and given the length of our subscription contracts. Our customer retention and expansion may decline or fluctuate as a result of a number of factors, including our customers’ satisfaction with our services, our prices and pricing plans, our customers’ spending levels, decreases in the number of services purchased and/or the users to which our customers deploy our solutions, new laws and regulations impacting service contract terms, mergers and acquisitions involving our customers, ~~competition~~ competition, our customers' increasing use of AI to automate tasks traditionally performed by human workers and deteriorating or uncertain general economic ~~conditions, which may result in reductions in IT budgets and lower employee headcounts.~~ conditions. Any of these factors may result in our customers and potential customers reducing their IT budgets or lowering employee headcounts, which could negatively impact our business.
수정If our customers do not renew their subscriptions for our services and add additional users and services to their subscriptions, our future results of operations could be harmed.
Our future success also depends in part on the rate at which our current customers add additional users or services to their subscriptions, which is driven by a number of factors, including customer satisfaction with our services, customer security and networking issues and requirements, general economic conditions and customer reaction to the price per additional user or of additional services. In addition, as our customers increasingly deploy AI agents, our success will increasingly depend on our ability to monetize the increasing prevalence of non-user-based traffic. If our efforts to expand our relationships with our existing customers are not successful, our business may materially suffer.
수정We have experienced rapid revenue and other growth in recent periods, which may not be indicative of our future performance.
We have experienced rapid growth in revenue, operations and employee headcount in recent periods. In addition, the number of customers, users, services and internet traffic on our cloud platform has increased rapidly in recent years, and we anticipate that the increasing adoption and deployment of AI technologies by our customers will result in significant increases in traffic on and usage of our platform. Our growth may not be sustainable and may not be sufficient to achieve and sustain profitability, as we also expect our costs to increase in future periods as we expand our operations and significantly increase our headcount. In addition, we expect our recent revenue growth rates will decline in the future as the size of our revenue base increases. As a result, we believe that historical comparisons of our revenue may not be meaningful and should not be relied upon as an indication of future performance. Accordingly, you should not rely on our revenue and other growth for any prior quarter or fiscal year as an indication of our future revenue or revenue growth.
수정If we fail to effectively manage our growth, we may be unable to execute our business plan, maintain high levels of service, adequately address competitive challenges or maintain our corporate culture, and our business, financial condition and results of operations would be harmed.
In addition, we believe that our corporate culture has been a contributor to our success, which we believe fosters innovation, teamwork and an emphasis on customer-focused results. We also believe that our culture creates an environment that drives and perpetuates our strategy and cost-effective distribution approach. In the past we have, and in the future we may, restructure or reduce our workforce to align people, roles and projects to our strategic priorities. Any restructuring, reduction or realignment in the workforce has the potential to negatively impact employee morale or make it more difficult to attract and retain talent. As we continue to grow, we may find it difficult to maintain our corporate culture. Preservation of our corporate culture is also made more difficult following the implementation of our hybrid work environment, and many of our employees continue to work from home on a ~~full time~~ full-time or ~~part time~~ part-time basis. Any failure to preserve our culture could harm our future success, including our ability to retain and recruit personnel, innovate and operate effectively and execute on our business strategy. If we experience any of these effects in connection with future growth, it could materially impair our ability to attract new customers, support and retain existing customers and expand their use of our platform, all of which would materially and adversely affect our business, financial condition and results of operations.
수정Our business and growth depend in part on the success of our relationships with our channel partners.
We currently derive most of our revenue from sales through our channel partner network, and we expect for the foreseeable future most of our future revenue growth will also be driven through this network. Not only does our joint sales approach require additional investment to grow and train our sales force, but we believe that continued growth in our business is dependent upon identifying, developing and maintaining strategic relationships with our existing and potential channel partners, including global systems integrators and regional telecommunications service providers that will in turn drive substantial revenue and provide additional value-added services to our customers. Our agreements with our channel partners are generally non-exclusive, meaning our channel partners may offer customers the products of several different companies, including products that compete with our cloud platform. Our channel partners may also cease marketing or reselling our platform with limited or no notice and without penalty. If our channel partners do not effectively market and sell subscriptions to our cloud platform, choose to promote our competitors’ products or fail to meet the needs of our customers, our ability to grow our business and sell subscriptions to our cloud platform may be adversely affected. For example, sales through our top five channel partners and their affiliates, in aggregate, represented 31% of our revenue for fiscal 2026, 28% of our revenue for fiscal ~~2025,~~ 2025 and 25% of our revenue for fiscal ~~2024 and 26% of our revenue for fiscal 2023.~~ 2024. In addition, our channel partner structure could subject us to lawsuits or reputational harm if, for example, a channel partner misrepresents the functionality of our cloud platform to customers or violates applicable laws or our corporate policies. Moreover, our channel partners' operations may be negatively impacted by events including pandemics, international conflicts, changes to applicable trade laws and regulations ~~including tariffs,~~ (including tariffs), inflation and other events affecting the global economy in general. For example, these events could increase credit risk of end customers and create uncertainty in credit markets. Our ability to achieve revenue growth in the future will depend in large part on our success in maintaining successful relationships with our channel partners, identifying additional channel partners and training our channel partners to independently sell and deploy our platform. If we are unable to maintain our relationships with our existing channel partners or develop successful relationships with new channel partners or if our channel partners fail to perform, our business, financial position and results of operations could be materially and adversely affected.
수정We face intense and increasing competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
•large ~~networking~~ networking, cloud service and other vendors, which offer security appliances and/or incorporate security capabilities in their ~~networking products~~ products, platforms and other services;
수정We face intense and increasing competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
•companies with point solutions that compete with some of the features of our cloud platform, such as proxy, firewall, CASB, sandboxing and advanced threat protection, AI security, ~~data loss prevention, encryption,~~ DLP, DSPM, browser security, MDR, SecOps, load balancing and VPN; and
수정We face intense and increasing competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
•other providers of IT security services that offer, or may leverage related ~~technologies~~ technologies, including AI, to ~~introduce,~~ introduce products that compete with or are alternatives to our cloud platform.
수정We face intense and increasing competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
Our competitors may be successful in convincing IT decision makers that legacy appliance-based security ~~products or~~ products, hybrid security cloud solutions based on ~~legacy~~ outdated technology or newly developed cloud-delivered and/or AI-based security services are sufficient to meet their security needs and provide security performance that competes with our cloud platform. In addition, our competitors have and may develop cloud-based solutions with architectures similar to our products. Further, many organizations have invested substantial personnel and financial resources to design and operate their appliance-based networks and have established deep relationships with ~~appliance vendors.~~ our competitors. As a result, these organizations may prefer to purchase from their existing suppliers rather than add or switch to a new supplier.
수정We face intense and increasing competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
Conditions in our market change rapidly and significantly as a result of technological ~~advancements,~~ advancements (particularly as a result of AI), partnering or acquisitions by our competitors or continuing market consolidation. Start-up companies that innovate and large competitors that are making significant investments in research and development may introduce similar or superior products, services and technologies that compete with our cloud platform. ~~In addition, large~~ Large companies with substantial communications infrastructure, such as global telecommunications services ~~provider partners~~ providers or public cloud providers, have entered or could choose to enter the security solutions market. Some of our current or potential competitors have made or could make acquisitions of businesses or establish cooperative relationships that may allow them to offer more directly competitive and comprehensive solutions than were previously offered and adapt more quickly to new technologies and customer needs.
수정We face intense and increasing competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.
In addition, AI technologies may lower barriers to entry for new competitors, including large AI providers and hyperscalers, and enable faster development of alternative solutions. These competitive pressures in our market or our failure to compete effectively may result in price reductions, fewer orders, reduced revenue and gross margins, increased net losses and loss of market share. Any failure to meet and address these factors could materially harm our business and operating results.
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
Any interruption or delay in the delivery of our services will negatively impact our customers. Our solutions enable secure connections to cloud-based applications and other destinations via the internet, by directing our customers’ internet traffic through our cloud platform. In addition, in certain local jurisdictions, we enable select third parties to host our services and cloud platform via their owned and controlled data centers to align with local requirements. Our customers depend on the continuous availability of our cloud platform to access the internet, and our services are designed to operate without interruption in accordance with our service level commitments. However, our platform is complex and may contain defects or errors that are not detected until after deployment. If we fail to timely detect defects or errors before deployment, or if our entire platform were to fail, customers and users could lose access to critical services and applications until the disruption is resolved or customers deploy our disaster recovery solution that allows them to bypass our cloud platform to access the internet. The adverse effects of any service interruptions on our reputation and financial condition may be disproportionately heightened due to the nature of our business and the fact that our customers expect continuous and uninterrupted internet access and have a low tolerance for interruptions of any duration. While we do not consider them to have been material, we have experienced, and may in the future experience, service disruptions and other performance problems due to a variety of factors.
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
The following factors, many of which are beyond our control, can affect the delivery and availability of our services and the performance of our ~~cloud:~~ cloud, whether delivered by us or select third-party providers:
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
•the occurrence of earthquakes, floods, fires, pandemics, power loss, system failures, physical or electronic break-ins, acts of war, international conflicts (such as the current conflicts between Russia and Ukraine and in the Middle ~~East)~~ East, including recent conflicts related to Iran) or terrorism, human error or interference (including by disgruntled or negligent, current or former employees or contractors) and other catastrophic events;
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
•government action to limit access to the ~~internet;~~ internet or internet infrastructure;
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
•the actual or potential implementation of export ~~controls, tariffs~~ controls or tariffs, or retaliatory measures in response to such actions, on the sales of our products in countries where our customers or potential customers are located.
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
The occurrence of any of these factors, or if we are unable to efficiently and cost-effectively fix such errors or other problems that may be identified, could damage our reputation, negatively impact our relationship with our customers or otherwise materially harm our business, results of operations and financial condition. In addition, powerful new AI models have accelerated our ability to discover vulnerabilities in our software and third-party components we incorporate into our software. As a result, we are identifying more vulnerabilities, and any failure to timely remediate any significant vulnerability may result in issues that could disrupt the continuity or security of our services.
수정If the delivery of our services to our customers is interrupted or delayed for any reason, our business would suffer.
~~In addition, we~~ We provide our services through a cloud-based inline proxy, and some governments, third-party products, websites or services may block proxy-based traffic under certain circumstances. For example, vendors may attempt to block traffic from our cloud platform or blacklist our IP addresses because they cannot identify the source of the proxy-based traffic. Our competitors may use this as an excuse to block traffic from their solutions or blacklist our IP addresses, which may result in our customers’ traffic being blocked from our platform. If our customers experience significant instances of traffic blockages, they will experience reduced functionality or other inefficiencies, which would reduce customer satisfaction with our services and likelihood of renewal.
수정If we fail to develop or introduce new enhancements to our cloud platform, including AI enhancements, on a timely basis, our ability to attract and retain customers, remain competitive and grow our business could be impaired.
If we fail to develop or introduce new enhancements to our cloud ~~platform~~ platform, including AI enhancements, on a timely basis, our ability to attract and retain customers, remain competitive and grow our business could be impaired.
수정If our global network of data centers, which deliver our services, was damaged or otherwise failed to meet the requirements of our business, our ability to provide services to our customers and maintain the performance of our cloud platform could be negatively impacted, which could cause our business to suffer.
We currently host our cloud platform and serve our customers from a global network of over ~~160~~ 200 public ~~exchanges~~ data centers globally and thousands of private ~~exchanges~~ sites at the edge. While we have electronic access to the components and infrastructure of our cloud platform that are hosted by third parties, we do not control the operation of these facilities. Consequently, we may be subject to service disruptions as well as a lack of adequate support for our data center operations due to reasons that are outside of our control. Our data centers are hosted in third-party locations, which are vulnerable to damage and connections to our data centers may be interrupted by a variety of sources, including earthquakes, floods, fires, power loss, system or infrastructure failures, computer viruses, physical or electronic break-ins, human error or interference (including by disgruntled or negligent, current or former employees or contractors) and other catastrophic events. Our data centers may also be subject to national or local administrative actions, changes in government regulations, including, for example, the impact of global economic and other sanctions like those levied in response to the current conflict between Russia and Ukraine, changes to legal or permitting requirements and litigation to stop, limit or delay operations. Despite precautions taken at these facilities, a decision to close the facilities without adequate notice or other unanticipated problems at these facilities could result in interruptions or delays in our services, impede our ability to scale our operations or have other adverse impacts upon our business. In addition, if we do not accurately plan for our infrastructure capacity requirements or experience significant strains on our data center ~~capacity,~~ resources, or if data center capacity is unavailable or unavailable at acceptable terms, we may experience delays and additional expenses in ~~arranging~~ establishing new data centers, and our customers could experience performance degradation or service outages that may subject us to financial liabilities, result in customer losses and materially harm our business.
수정If our cloud platform or internal networks, systems or data are or are perceived to have been breached, our solution may be perceived as insecure, our reputation may be damaged and our financial results may be negatively impacted.
It is virtually impossible for us to entirely mitigate the risk of breaches of our cloud platform or other security incidents affecting our cloud platform or our internal systems, networks or data. In addition, the functionality of our platform may be disrupted, either intentionally or due to negligence, including by disgruntled or negligent, current or former employees or contractors. The security measures we use internally and have integrated into our cloud platform, which are designed to detect unauthorized activity and prevent or minimize security breaches, and include our own newly developed products and services, may not function as expected or may not be sufficient to identify or protect against certain attacks. Enterprises are subject to a wide variety of attacks on their networks and systems, and techniques used to sabotage or to obtain unauthorized access to networks in which data is stored or through which data is transmitted change frequently and generally are not recognized until launched against a target. Further, the development of AI and ML and the proliferation of AI and ML tools used to identify and exploit vulnerabilities create additional risks of attacks and of impactful security breaches and incidents. The growth in state sponsored cyber activity, including those actions taken in connection with ~~the current conflict between Russia~~ recent global conflicts and ~~Ukraine, showcase~~ geopolitical tensions, showcases the increasing sophistication of cyber threats. As a result, we may be unable to anticipate these techniques or implement adequate measures to prevent an electronic intrusion into our customers through our cloud platform or to prevent breaches and other security incidents affecting our cloud platform, internal networks, systems or data. Further, once identified, we may be unable to remediate or otherwise respond to a breach or other incident in a timely manner. Actual, perceived or purported security breaches of our cloud platform could result in actual, perceived or purported breaches of our customers’ networks and systems.
수정If our cloud platform or internal networks, systems or data are or are perceived to have been breached, our solution may be perceived as insecure, our reputation may be damaged and our financial results may be negatively impacted.
Further, our vendors and service providers have been, and may in the future be, the targets of cyberattacks, and their systems and networks have been, and may in the future be, breached or may contain exploitable defects or bugs that could result in a breach of or disruption to their or our systems and networks. Our ability to monitor our vendors’ and service providers’ data security is limited, and, in any event, third parties may be able to circumvent their security measures, resulting in the unauthorized access to, misuse, disclosure, loss, alteration, or destruction of our data, including confidential, sensitive, and other information about individuals. Geo-political factors including international conflicts, such as between Russia and Ukraine and in the Middle East, including recent conflicts related to Iran, may increase the risk of such cyberattacks.
수정If we do not effectively develop and expand our sales and marketing capabilities, we may be unable to add new customers or increase sales to our existing customers, and our business will be adversely affected.
To increase the number of customers and increase the market acceptance of our platform, we will need to expand our sales and marketing operations, including our domestic and international sales force. Although we have a channel sales model, our sales representatives ~~typically~~ often engage in direct interaction with our prospective customers. Therefore, we continue to be substantially dependent on our sales force to obtain new customers. Increasing our customer base and achieving broader market acceptance of our cloud platform will depend, to a significant extent, on our ability to expand and further invest in our sales and marketing operations and activities. There is significant competition for sales personnel with the advanced sales skills and technical knowledge we need. We believe that selling a cloud-based security solution requires particularly talented sales personnel with the ability to communicate the transformative potential of our cloud platform. Our ability to achieve significant growth in revenue in the future will depend, in large part, on our success in recruiting, training and retaining enough talented sales personnel in both the U.S. and international markets.
수정Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.
Sales to larger customers involve risks that may not be present, or that are present to a lesser extent, with sales to smaller ~~customers, which can act as a disincentive to our sales team to pursue these larger~~ customers. These risks include:
수정Because we recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results and may be difficult to discern.
We generally recognize revenue from customers ratably over the terms of their subscriptions, which are typically one to ~~three~~ five years. As a result, a substantial portion of the revenue we report in each period is attributable to the recognition of deferred revenue relating to agreements that we entered into during previous periods. Consequently, any increase or decline in new sales or renewals in any one period may not be immediately reflected in our revenue for that period. Any change, however, may affect our revenue in future periods. Additionally, subscriptions that are invoiced annually in advance or multi-year in advance contribute significantly to our short-term and long-term deferred revenue. Accordingly, the effect of downturns or upturns in new sales and potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods. We may also be unable to reduce our cost structure in line with a significant deterioration in sales or renewals. Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription term.
수정Our ability to maintain customer satisfaction depends in part on the quality of our customer support, including the quality of the support provided on our behalf by certain channel partners. Failure to maintain high-quality customer support could have an adverse effect on our business, financial condition and results of operations.
If we do not provide superior support to our customers, our ability to renew subscriptions, increase the number of users and sell additional services to customers may be adversely affected. We believe that successfully delivering our cloud solution requires a highly skilled level of customer support and engagement. We or our channel partners must assist our customers to deploy our cloud platform, resolve performance issues, address interoperability challenges with a customer’s existing network and security infrastructure and respond to security threats and cyberattacks. Many enterprises, particularly large organizations, have very complex networks and require high levels of focused support, including premium support offerings, to fully realize the benefits of our cloud platform. Any failure by us to maintain the expected level of support could reduce customer satisfaction and hurt our customer retention, particularly with respect to our large enterprise customers. Additionally, if our channel partners do not provide support to the satisfaction of our customers, we may be required to provide this level of support to those customers, which would require us to hire additional personnel and to invest in additional resources, including the possible use of AI support agents. To the extent that we or our channel partners are unsuccessful in hiring, training, retaining or deploying adequate support resources, our ability and the ability of our channel partners to provide adequate and timely support to our customers will be negatively impacted, and our customers’ satisfaction with our cloud platform could be adversely affected. We currently rely in part on contractors provided by third-party service providers internationally to provide support services to our customers, and we expect to expand our international customer service support team to other countries. Any failure to properly train or oversee such contractors could result in a poor customer experience and an adverse impact on our reputation and ability to renew subscriptions or engage new customers. Furthermore, as we sell our solutions internationally, our support organization faces additional challenges, including those associated with delivering support, training and documentation ~~in languages other than English.~~ globally. Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality support, could materially harm our reputation, adversely affect our ability to sell our solutions to existing and prospective customers and could harm our business, financial condition and results of operations.
수정We rely on our key technical, sales and management personnel to grow our business, and the loss of one or more key employees or the inability to attract and retain qualified personnel could harm our business.
Our future success is substantially dependent on our ability to attract, retain and motivate the members of our management team and other key employees throughout our organization. In particular, we are highly dependent on the services of Jay Chaudhry, our Chief Executive Officer and chairman of our board of directors, who is critical to our future vision and strategic direction. We rely on our leadership team in the areas of operations, security, marketing, sales, support and general and administrative functions, and on individual contributors on our research and development team. Although we have entered into employment agreements with our key personnel, these agreements have no specific duration and constitute at-will employment. We do not maintain key person life insurance policies on any of our employees. The loss of one or more of our executive officers or key employees could seriously harm our business. We have experienced, and may in the future experience, significant change in senior management. For example, two sales leaders recently departed the Company. Any significant leadership change or senior management transition involves ~~risk, especially nearly simultaneous changes involving so many leaders and employees,~~ risk and any failure to transition effectively or to retain ~~these~~ new leaders could hinder our strategic planning, business execution and future performance.
수정We rely on our key technical, sales and management personnel to grow our business, and the loss of one or more key employees or the inability to attract and retain qualified personnel could harm our business.
To execute our growth plan, we must attract and retain highly qualified personnel. Competition for these personnel in the San Francisco Bay Area, where our headquarters are located, and in other locations where we operate, is often intense, especially for experienced sales professionals and for engineers experienced in designing and developing cloud applications, security software and AI and ML solutions. In addition, the United States and other regions in which we operate have in the past and may again in the future experience acute workforce shortages for highly skilled workers, which in turn, can create hyper-competitive wage environments that may impact our ability to attract and retain employees. We have from time to time experienced, and we may continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. For example, in recent years, recruiting, hiring and retaining employees with expertise in ~~the~~ cybersecurity ~~industry~~ and AI/ML has become increasingly difficult as the demand for cybersecurity and AI/ML professionals has ~~increased as a result of the ongoing cybersecurity attacks on global corporations and governments.~~ increased. Many of the companies with which we compete for experienced personnel have greater resources than we have. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. Volatility or lack of performance in our stock price may also affect our ability to attract and retain our key employees.
수정Our business depends, in part, on sales to the public sector and significant changes in the contracting or fiscal policies of public sector organizations could have an adverse effect on our business and operating results.
•U.S. or other government requirements relating to the formation, administration and performance of contracts with the public ~~sector~~ sector, including the requirement to maintain facilities and other security clearances, affect how we and our channel partners do business with governmental agencies;
수정Our business depends, in part, on sales to the public sector and significant changes in the contracting or fiscal policies of public sector organizations could have an adverse effect on our business and operating results.
•U.S. or other government certification requirements applicable to our cloud platform, including the Federal Risk and Authorization Management ~~Program (FedRAMP),~~ Program, are often difficult and costly to obtain and maintain and failure to do so will restrict our ability to sell to government customers;
수정Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
•political, economic and social uncertainty or international conflict, such as the current conflicts between Russia and Ukraine and in the Middle ~~East;~~ East, including recent conflicts related to Iran;
수정Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
•greater risk of unexpected changes in in, or increased costs associated with, regulatory practices or enforcement policies, trade regulations including tariffs and tax laws and treaties;
수정Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
•greater risk of a failure of foreign employees, partners, distributors and resellers to comply with both U.S. and foreign laws, including antitrust regulations, anti-bribery laws, export and import control laws, ~~trade and economic~~ sanctions and other applicable trade laws and regulations;
수정Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
•increased expenses incurred in providing customer support services to our global customer base and establishing and maintaining office space and equipment for our international operations;
수정Future acquisitions, strategic investments, partnerships or alliances could be difficult to identify and integrate, divert the attention of key management personnel, disrupt our business, dilute stockholder value and adversely affect our operating results, financial condition and prospects.
Our business strategy includes acquiring other complementary solutions, technologies or businesses. We have in the past acquired, and expect in the future to acquire, businesses that we believe will complement or augment our existing business. ~~In order to~~ To expand our security offerings and features, we also may enter into relationships with other businesses, which could involve preferred or exclusive licenses, additional channels of distribution or investments in other companies. Negotiating these transactions can be time-consuming, difficult and costly, and our ability to close these transactions may be subject to third-party approvals, such as government regulatory approvals, which are beyond our control. Consequently, we cannot assure you that these transactions, once undertaken and announced, will close.
수정If we are unable to effectively manage certain risks and challenges related to our India operations, our business could be harmed.
We believe that our significant presence in India provides important advantages for our business, such as direct access to a large pool of skilled professionals. However, it also creates certain risks that we must effectively manage. As of July 31, ~~2025, 37%~~ 2026, 36% of our global ~~work force~~ workforce is based in India and is comprised mostly of R&D, finance and operations professionals. Wage costs in India for skilled professionals are currently lower than in the United States for comparably skilled professionals. However, wages and benefit costs in India are increasing at a faster rate than in the United States, which could result in us incurring increased costs for technical professionals. There is intense competition in India for skilled technical professionals, and we expect such competition to increase. As a result, we may be unable to retain our current employee base in India or hire additional new talent or do so cost-effectively. In addition, India has experienced natural disasters, civil unrest and terrorism and, in the past, has been and may again be involved in conflicts with neighboring ~~countries, such as the recent conflict with Pakistan.~~ countries. If we are unable to effectively manage any of the foregoing risks related to our India operations, our development efforts and operations could be impaired, which could materially and negatively impact our growth and operating results.
수정Our failure to raise additional capital necessary to expand our operations and invest in new solutions could reduce our ability to compete and could harm our business.
Risks Related to Artificial Intelligence, Information Technology, Intellectual Property, Data Security and Privacy
수정The actual or perceived failure of our cloud platform to block malware or prevent a security breach or incident could harm our reputation and adversely impact our business, financial condition and results of operations.
In addition, the techniques used by cyber threat actors, including state sponsored actors, to access or sabotage networks and other systems change ~~frequently and~~ frequently, generally are not recognized until launched against a ~~target.~~ target and are becoming faster, more sophisticated, more prevalent and more automated as a result of the availability and rapid commoditization of AI-enabled cyberattack toolkits. While advanced adversaries continue to gain capabilities, less-sophisticated actors are increasingly able to plan, develop and deliver attacks at a scale, speed and degree of customization that has historically required specialized expertise. As a result, we expect the volume, speed and the per-incident impact of cyberattacks to increase and dramatically expand the global threat landscape. ~~As a result,~~ Further, there is a risk that a cyber threat could emerge that our services are unable to detect or prevent until after some of our customers are impacted.
수정The actual or perceived failure of our cloud platform to block malware or prevent a security breach or incident could harm our reputation and adversely impact our business, financial condition and results of operations.
~~Moreover, as~~ As our services are adopted by an increasing number of enterprises, it is possible that the individuals and organizations behind cyber threats will focus on finding ways to defeat our services or to target our systems. If this happens, our cloud platform could be targeted by attacks specifically designed to disrupt our business and create the perception that our cloud platform is not capable of providing superior security, which, in turn, could have a serious impact on our reputation as a provider of security solutions. Further, high profile security breaches or incidents, in particular those of cloud-based service providers, may cause our customers and potential customers to lose trust in cloud solutions generally, and with respect to security in particular, which could materially and adversely impact our ability to retain existing customers or attract new customers.
수정The actual or perceived failure of our cloud platform to block malware or prevent a security breach or incident could harm our reputation and adversely impact our business, financial condition and results of operations.
Increasingly, enterprises are subject to a wide variety of attacks on their networks and systems, including traditional threat actors, malicious code (such as viruses and worms), social engineering attacks (such as deep fakes), targeted phishing attacks, distributed denial-of-service attacks, advanced attacks conducted or sponsored by nation-states, AI enabled attacks or attacks targeting and exploiting AI and ML systems and applications, advanced persistent threat intrusions, ransomware and other malware, attacks on their vendors and supply chains, and theft or misuse of intellectual property or business or personal data, including by disgruntled or negligent, current or former employees or contractors. No security solution, including our cloud platform, can address all possible security threats, which are becoming increasingly frequent and sophisticated with the development of AI and ~~ML,~~ ML and the proliferation of AI and ML tools used to identify and exploit vulnerabilities, or block all methods of penetrating a network or otherwise perpetrating a security breach or incident. Our customers typically rely on complex network and security infrastructures, which include products and services from multiple vendors, to secure their networks. If any ~~of our customers~~ customer's network becomes infected with malware or experiences a security breach or incident, they could be disappointed with our services, regardless of whether our services are intended to block the attack or would have blocked the attack if the customer had properly configured our cloud platform. Additionally, if any enterprises that are publicly known to use our services are the subject of a cyberattack that becomes publicized, our current or potential customers may look to our competitors for alternatives to our services.
수정Issues in the development, use and execution of AI and ML, combined with an uncertain regulatory environment and evolving market expectations, may harm our business.
Issues in the development, use and execution of AI and ML, combined with an uncertain regulatory ~~environment,~~ environment and evolving market expectations, may harm our business.
수정Issues in the development, use and execution of AI and ML, combined with an uncertain regulatory environment and evolving market expectations, may harm our business.
We are increasingly utilizing AI and ML capabilities in our business operations and our product offerings. As with many developing technologies, AI and ML present risks and challenges, many of which may be unknown, ~~that~~ which could affect their further development, adoption and ~~use.~~ use and our ability to realize their anticipated benefits. The rapid evolution of AI and ML requires the application of significant financial, operational and human resources to develop, ~~test~~ test, maintain and ~~maintain~~ monitor our products and services and our internal applications, systems and processes to help ensure that AI and ML are implemented ~~responsibly to benefit our business, while also minimizing any unintended or harmful impact.~~ effectively and responsibly. We may not accurately forecast the required resources or effectively deploy resources when and where needed to realize the benefits of AI and ML technologies. We are increasingly deploying AI agents, which may take actions that are erroneous, irreversible or misaligned with intended business outcomes, including interacting with unauthorized data sources and external tools. We are also enabling employees across our organization to design, build and deploy software applications. This decentralization of software development activity may increase the risk of security vulnerabilities, data exposure, regulatory non-compliance and operational failures that are difficult to detect or remediate through traditional oversight mechanisms.
수정Issues in the development, use and execution of AI and ML, combined with an uncertain regulatory environment and evolving market expectations, may harm our business.
Further, a quickly evolving legal and regulatory environment may cause us to incur increased research and development costs, or divert resources from other development efforts, to address social and ethical issues related to AI and ML. ~~In addition, as~~ As the regulatory landscape for AI and ML evolves, including through new frameworks such as the EU AI Act, we must develop and maintain robust internal policies and standards that clarify functional roles and responsibilities for the responsible and compliant ~~development~~ development, deployment and ~~deployment~~ use of AI ~~technologies.~~ technologies in our internal operations and product offerings. ~~The~~ Since the use of AI technologies presents ~~emerging~~ ethical issues that could become ~~controversial and~~ controversial, failure, or perceived failure, to establish or enforce such policies and clear lines of accountability could increase our risk of noncompliance, operational ~~errors or~~ errors, reputational ~~harm.~~ harm and penalties.
수정Issues in the development, use and execution of AI and ML, combined with an uncertain regulatory environment and evolving market expectations, may harm our business.
As a result of these and other challenges associated with our use, implementation and training of AI and ML, or misunderstandings or misrepresentations by third parties about the type of data that we use to train AI or ML, we may in the future be subject to legal liability, competitive harm, negative media ~~coverage or~~ coverage, regulatory action, including new proposed, and in certain cases enacted, rules and legislation regulating AI in jurisdictions such as the European Union, new applications of existing data protection, privacy, cybersecurity, information security, intellectual property and other laws, action and brand or reputational harm.
수정Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
Our solutions incorporate software licensed by third parties under open source licenses, including open source software included in software we receive from third-party commercial software vendors. Use of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, updates or warranties or other contractual protections regarding infringement claims or the quality of the code. In addition, the wide availability of open source software used in our solutions could expose us to security vulnerabilities. ~~In particular, some~~ Some of the open source software we incorporate into our products may include LLMs. Using open source LLMs can present uncertainty regarding license terms and restrictions, potential exposure to intellectual ~~property~~ property, privacy or ~~privacy~~ other claims related to training data, increased risk of embedded bias or security vulnerabilities and challenges in compliance with evolving AI-specific regulations. Furthermore, the terms of many open source licenses have not been interpreted by U.S. and other courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or commercialize our solutions. As a result, we could be subject to lawsuits by parties claiming ownership of what we believe to be open source software. Litigation could be costly for us to defend, have a negative effect on our results of operations and financial condition or require us to devote additional research and development resources to change our solutions. In addition, by the terms of some open source licenses, under certain conditions we could be required to release the source code of our proprietary software, and to make our proprietary software available under open source licenses, including authorizing further modification and redistribution. In the event that portions of our proprietary software are determined to be subject to such requirements by an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our platform or otherwise be limited in the licensing of our services, each of which could provide an advantage to ~~our~~ competitors or other entrants to the market, create security vulnerabilities in our solutions and ~~could~~ reduce or eliminate the value of our services. Many of the risks associated with use of open source software cannot be eliminated and could negatively affect our business. Moreover, our processes for controlling our use of open source software in our platform may not be effective. Responding to any infringement or noncompliance claim by an open source vendor, regardless of its validity, or discovering open source software code in our platform could harm our business, operating results and financial ~~condition by, among other things:~~ condition.
수정We rely on a limited number of suppliers for certain components of our cloud platform and the systems we use to operate our business and provide services to our customers, and any disruption in the availability of these components could delay our ability to expand or increase the capacity of our global data center network, replace defective equipment in our existing data centers or otherwise operate our business and provide services to our customers.
We rely on a limited number of suppliers for several components of our cloud platform and the systems we use to operate our business and provide services to our customers, including sole or limited sourced hardware, software and SaaS services. Some of our suppliers also temporarily hold a portion of our assets for us. Our reliance on these suppliers exposes us to risks, including reduced control over production costs, constraints based on the then-current availability, terms and pricing of these components and potential loss of assets. For example, we generally purchase equipment or the components of equipment on a purchase order basis, and do not have long-term contracts guaranteeing supply. We also rely on sole or limited sourced SaaS vendors to provide critical services, and as AI-enabled cyberattacks increase, these SaaS vendors may be compromised or suffer outages, which may disrupt their services on which our cloud platform depends.
수정We rely on a limited number of suppliers for certain components of our cloud platform and the systems we use to operate our business and provide services to our customers, and any disruption in the availability of these components could delay our ability to expand or increase the capacity of our global data center network, replace defective equipment in our existing data centers or otherwise operate our business and provide services to our customers.
The technology industry has experienced component shortages, delivery delays, price increases (including memory, storage and processor price increases) and service interruptions in the past. ~~In addition, the technology industry has~~ We have experienced ~~component shortages, delivery delays, price increases~~ and ~~service interruptions in the past, and we~~ may continue to experience shortages, delays, materially increased costs or service interruptions ~~in the future, including~~ as a result of natural disasters, acts of war or international conflicts, epidemics or global pandemics, increased demand in the ~~industry~~ industry, increased demand for components or if services used to support AI development or the inability of our suppliers ~~do not have sufficient rights~~ to supply the components in all jurisdictions in which we may host our services. Additionally, changes to existing international trade agreements, tariffs, export controls or other trade measures and regulations that impact our sourcing partners or us ~~could~~ may lead to increased costs to operate our business and to disruptions in our supply chain, which could limit our ability to support our customers. For instance, ~~there is a risk that current~~ geopolitical, diplomatic and other developments affecting the relationship between China and Taiwan ~~may~~ could materially and negatively impact the availability of certain critical components that we use in our data ~~centers, which we source from overseas.~~ centers.
수정We rely on a limited number of suppliers for certain components of our cloud platform and the systems we use to operate our business and provide services to our customers, and any disruption in the availability of these components could delay our ability to expand or increase the capacity of our global data center network, replace defective equipment in our existing data centers or otherwise operate our business and provide services to our customers.
If our supply of certain components is ~~disrupted~~ disrupted, delayed or ~~delayed,~~ becomes significantly more expensive, there can be no assurance that available alternatives can serve as adequate replacements for the existing components or that alternatives will be available on terms that are favorable to us, if at all, as it may take several months or longer to identify, qualify and engage a new supplier or integrator. Any disruption or delay in access to components may materially increase our costs, require us to increase costs to our customers, delay ~~opening~~ establishing new data centers, delay increasing capacity or replacing defective equipment at existing data centers, cause other constraints on our operations that could damage our channel partner or customer relationships or otherwise have a material adverse impact on our ~~business.~~ business and operating results.
수정Claims by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant costs and substantially harm our business, financial condition, results of operations and prospects.
A number of companies in our industry hold a large number of patents and also protect their copyright, trade secret and other intellectual property rights, and companies in the networking and security industry frequently enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. In addition, patent holding companies seek to monetize patents they previously developed, have purchased or otherwise obtained. Many companies, including our competitors, may now, and in the future, have significantly larger and more mature patent, copyright, trademark and trade secret portfolios than we have, which they may use to assert claims of infringement, misappropriation and other violations of intellectual property rights against us. In addition, intellectual property litigation may involve non-practicing entities or other patent owners who have no relevant product offerings or revenue and against whom our own patents may therefore provide little or no deterrence or protection. As we face increasing competition and gain an increasingly higher profile, the possibility of intellectual property rights claims against us grows. Third parties have asserted in the past and may in the future assert claims of infringement of intellectual property rights against us and these claims, even without merit, could harm our business, including by increasing our costs, reducing our revenue, creating customer concerns that result in delayed or reduced sales, distracting our management from the running of our business and requiring us to cease use of important intellectual property. In addition, because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover one or more of our services. ~~Moreover, in~~ In a patent infringement claim against us, we may assert, as a defense, that we do not infringe the relevant patent claims, that the patent is invalid or both. However, we could be unsuccessful in advancing non-infringement and/or invalidity arguments in our defense. Furthermore, because of the substantial amount of discovery required in connection with patent and other intellectual property rights litigation, there is a risk that some of our confidential information could be compromised by the discovery process.
수정Claims by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant costs and substantially harm our business, financial condition, results of operations and prospects.
As the number of products and competitors in our market increases and overlaps occur, claims of infringement, misappropriation and other violations of intellectual property rights may increase. Our insurance may not cover intellectual property rights infringement claims. Third parties have in the past and may in the future also assert infringement claims against our customers or channel partners, ~~with whom~~ and our agreements may obligate us to indemnify them against these claims. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that such employees have divulged proprietary or other confidential information to us.
수정The success of our business depends in part on our ability to protect and enforce our intellectual property rights.
We may not be effective in policing unauthorized use of our intellectual property rights, and even if we do detect violations, litigation may be necessary to enforce our intellectual property rights. In addition, our intellectual property may be stolen, including by cybercrimes, and we may not be able to identify the perpetrators or prevent the exploitation of our intellectual property by our competitors or others. Protecting against the unauthorized use of our intellectual property rights, technology and other proprietary rights is expensive and difficult, particularly outside of the United States. Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive and could divert management’s attention, either of which could harm our business, operating results and financial condition. Further, attempts to enforce our rights against third parties could also provoke these third parties to assert their own intellectual property or other rights against us, or result in a holding that invalidates or narrows the scope of our rights, in whole or in part. The inability to adequately protect and enforce our intellectual property and other proprietary rights could seriously harm our business, operating results, financial condition and prospects. Even if we are able to secure our intellectual property rights, we cannot assure you that such rights will provide us with competitive advantages or ~~distinguish our services from those of our competitors or~~ that our competitors will not independently develop similar ~~technology, duplicate any of our technology,~~ technology or design around our patents.
수정Adverse economic conditions or reduced IT security spending may adversely impact our revenue and profitability.
The United States and the global economy have recently experienced historically high levels of inflation. The existence of inflation in the U.S. and global economy, the pricing pressure created by rising inflation in prior periods and changes to trade regulations including the imposition of new or increased tariffs (or the threat thereof) may result in high interest rates and capital costs, high shipping costs, supply shortages, increased costs of labor, weakening exchange ~~rates~~ rates, reduced demand, and other similar effects. Elevated inflation rates can affect our expenses, especially employee compensation. In addition, rising interest rates could adversely affect the value of our investments and cash on hand and increase our borrowing costs. Further, the recent conflict in the Middle East has disrupted global energy markets, causing actual or perceived energy shortages and increased energy costs. Inflation and related increases in interest ~~rates~~ rates, elevated energy costs and energy shortages could ~~also~~ increase our customers' operating ~~costs,~~ costs and disrupt their operations, which could result in reduced IT budgets, less demand for our ~~solutions,~~ solutions or delays in new orders, renewals or payments due to us.
수정Adverse economic conditions or reduced IT security spending may adversely impact our revenue and profitability.
Governments have implemented and are implementing fiscal policy interventions in response to high levels of inflation, including raising interest rates or keeping them at elevated levels. Even if these interventions lower inflation to desirable levels, they may also reduce economic growth rates, create recessions and increase unemployment rates. This could have an adverse effect on our consolidated financial condition and results of operations. For example, if our customers were to reduce their IT budgets or workforces in response to deteriorating economic conditions, they may not purchase or renew subscriptions for our services or may renew for fewer users or less expensive services. ~~These policy changes~~ Higher interest rates have provided a benefit to us as a result of the increased interest income we earn on our cash and investments, but a reduction of interest rates in the future would reduce this income.
수정Failure to comply with laws and regulations applicable to our business could subject us to fines and penalties.
If any government sanctions are imposed, or if we do not prevail in any possible civil or criminal ~~litigation,~~ litigation or elect to settle legal proceedings even where we have meritorious claims or defenses, our business, operating results and financial condition could be adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could materially harm our business, operating results and financial condition.
수정Failure to comply with laws and regulations applicable to our business could subject us to fines and penalties.
As a global employer, we are subject to various labor laws, including worker classification laws, that impact compliance obligations regarding working time, proper payment for time worked, time off regulations, as well as anti-retaliation, discrimination and harassment policies and compliance with employee representative rights. We take reasonable efforts to comply with applicable labor laws and regulations impacting our workforce, but failure to comply with such laws could result in government enforcement actions and ~~penalties,~~ penalties or lawsuits by employees, may negatively impact business operations and may be harmful to our reputation and our ability to attract and retain employees.
수정If we were not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our business, results of operations and financial condition could be harmed.
The regulatory ~~framework~~ frameworks for privacy, data protection and security matters are rapidly evolving and are likely to remain volatile for the foreseeable future. Our handling of personal data is subject to various data protection, cybersecurity, information security and other telecommunications regulations or requirements where we offer our solutions around the world. We also may find it necessary or desirable to join industry or other self-regulatory bodies or other cybersecurity or information security or data protection-related organizations that require us to comply with rules pertaining to privacy, data protection, cybersecurity and information security. Further, we may be bound by additional, more stringent contractual obligations and other actual and asserted obligations, such as industry standards, relating to our collection, use and disclosure of personal, financial and other data. Changes in laws or regulations that adversely affect the use of the internet, including laws impacting net neutrality, could also impact our business.
수정We are subject to governmental import and export controls and trade and economic sanctions and other trade controls including tariffs that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.
Our business activities are subject to various restrictions under U.S. export and similar laws and regulations, including the U.S. Department of Commerce's Export Administration Regulations and various economic and trade sanctions regulations administered by the U.S. Department of the Treasury's Office of Foreign Assets Control. U.S. export controls and trade and economic sanctions include restrictions or prohibitions on the sale or supply of certain products and services to U.S. embargoed or sanctioned countries and governments of these countries, as well as other persons and entities. For example, the U.S. and other countries have ~~implemented~~ continued to implement increased economic and other sanctions, as well as increased export ~~controls~~ controls, in response to the current ~~conflict~~ conflicts between Russia and ~~Ukraine.~~ Ukraine and in the Middle East and other geopolitical conflicts. These export controls and sanctions and any additional restrictions may impact our ability to operate in ~~Russia and other~~ the affected regions. In addition, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide our services and software and operate our cloud platform or could limit our customers’ ability to access or use our services or software in those countries.
수정We are subject to governmental import and export controls and trade and economic sanctions and other trade controls including tariffs that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.
Although we take precautions to prevent our services and software from being provided in violation of such laws, our services and software may have been in the past, and could in the future be, provided inadvertently in violation of such laws, despite the precautions we take. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges and fines. We may also be materially and adversely affected through penalties, reputational harm, loss of access to certain markets, or otherwise. Obtaining the necessary authorizations, including any required licenses, for a particular transaction may be costly or time-consuming, is not guaranteed and may result in the delay or loss of sales opportunities.
수정We are subject to governmental import and export controls and trade and economic sanctions and other trade controls including tariffs that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.
In addition, changes in our ~~platform;~~ platform or changes in applicable export, sanctions and import laws and regulations or (including tariffs and other trade ~~regulations~~ regulations) could delay the introduction of our ~~products and~~ products, reduce the sale of subscriptions to our platform in international markets, prevent users in certain countries from accessing our services or, in some cases, prevent the provision of our services to certain countries, governments, persons or entities altogether. Any change or threatened change in export or import regulations, tariffs, economic sanctions or related laws, shift in the enforcement or scope of existing regulations or change in the countries, governments, persons or technologies targeted by such regulations could decrease or eliminate our ability to sell subscriptions to our platform or provide software to existing customers or potential new customers with international operations. Any ~~decrease~~ limitation in our ability to sell subscriptions to our platform or provide software could materially and adversely affect our business, results of operations and financial condition.
수정We are subject to counterparty default risks.
We have numerous arrangements with financial institutions that include cash and investment deposits, and non-collateralized capped call ~~contracts and non-collateralized~~ contracts, interest rate swap contracts and foreign currency forward contracts. As a result, we are subject to the risk that the counterparty to one or more of these arrangements may default on its performance under the terms of the arrangement. In times of market distress, a counterparty may default rapidly and without notice, and we may be unable to take action to cover our exposure, either because of lack of contractual ability to do so or because market conditions make it difficult to take effective action. If one of our counterparties becomes insolvent or files for bankruptcy, our ability eventually to recover any losses suffered as a result of that counterparty’s default may be limited by the impaired liquidity of the counterparty or the applicable legal regime governing the bankruptcy proceedings. In the event of such a default, we could incur significant losses, which could harm our business and adversely affect our results of operations and financial condition.
수정Our corporate structure and intercompany arrangements are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which would harm our results of operations.
Many countries are beginning to implement legislation and other guidance to align their international tax rules with the ~~Organization for Economic Cooperation and Development’s, or OECD,~~ OECD's Base Erosion and Profit Shifting recommendations and action plan that aim to standardize and modernize global corporate tax policy, including changes to cross-border tax, transfer pricing documentation rules and nexus-based tax incentive practices. The OECD is also continuing discussions surrounding fundamental changes in the allocation of profits among tax jurisdictions in which companies do business, as well as the implementation of a global minimum tax (namely the “Pillar One” and “Pillar Two” proposals). In calendar year 2026, the OECD announced a side-by-side elective safe harbor that would exempt electing U.S.-parented multinationals from certain provisions of Pillar Two for fiscal years beginning on or after January 1, 2026. ~~Many~~ However, this safe harbor does not provide an exemption from the "qualified domestic minimum top-up taxes" that many countries have enacted or begun the process of enacting laws based on Pillar Two proposals, which may adversely impact our provision for income taxes, net income and cash flows.
수정Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As of July 31, ~~2025,~~ 2026, we had net operating loss carryforwards for U.S. federal income tax purposes and state income tax purposes of approximately ~~$1,057.0~~ $1,062.9 million and ~~$504.7~~ $600.4 million, respectively, available to offset future taxable income. ~~Beginning in 2025, $426.8~~ In 2026, $531.5 million of state net operating losses began to expire at different periods. The remaining ~~$77.9~~ $68.9 million of state net operating losses will carry forward indefinitely. As of July 31, ~~2025,~~ 2026, we had foreign net operating loss ~~carryforward of $87.7~~ carryforwards totaling $71.0 million, all of which will be carried forward indefinitely.
수정Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
As of July 31, ~~2025,~~ 2026, we also had U.S. ~~federal, California,~~ federal and ~~foreign~~ California research and development and other tax credit carryforwards of ~~$192.8 million, $102.6 million,~~ $188.8 million and ~~$2.1~~ $122.6 million, respectively. If not utilized, the federal research and development tax credit carryforwards will ~~begin expiring~~ expire at different periods beginning in 2037. Our California research and development tax credits may be carried forward indefinitely. Realization of these net operating loss and research and development tax credit carryforwards depends on future income, and there is a risk that a portion of our existing carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could materially and adversely affect our results of operations.
수정Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and we could be subject to liability with respect to past or future sales, which could adversely affect our operating results.
We do not collect sales and use, value added or similar taxes in all jurisdictions in which we have sales because we have been advised that such taxes are not applicable to our services in certain jurisdictions. Sales and use, value added and similar tax laws and rates vary greatly by jurisdiction. Certain jurisdictions in which we do not collect such taxes may enact new legislation requiring collection of such taxes. For example, California has enacted legislation that, beginning January 1, 2027, will subject certain SaaS transactions to sales and use tax. The legislation may increase the price of our services to California customers and our costs as a purchaser of third-party SaaS. ~~Certain~~ In addition, jurisdictions ~~in which we do not collect such taxes~~ may assert that ~~such~~ existing sales and use, value added or similar taxes are ~~applicable,~~ applicable to our services, which could result in tax assessments, penalties and interest, to us or our customers for the past amounts, and we may be required to collect such taxes in the future. If we are unsuccessful in collecting such taxes from our customers, we could be held liable for such costs, which may materially and adversely affect our operating results.
수정Certain 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 members of our board of directors or current management and may adversely affect the market price of our common stock.
•the requirement for the affirmative vote of holders of at least 66 2⁄3% of the voting power ~~of all of the then outstanding shares of the voting stock, voting together as a single class,~~ to amend ~~the~~ certain provisions of our amended and restated certificate of incorporation ~~relating to the issuance of preferred stock and management of our business~~ or our amended and restated bylaws, which may inhibit the ability of an acquirer to ~~affect such amendments to~~ facilitate an unsolicited takeover attempt;
수정The market price of our common stock may be volatile, and you could lose all or part of your investment.
•price and volume fluctuations in the overall stock market or in the trading of our common stock from time to time;
수정Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, as well as any issuances of our common stock in connection with the conversion of the 2028 Notes or other securities convertible or exercisable into shares of our common stock, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
We may also issue our shares of common stock or securities convertible or exercisable into shares of our common stock from time to time in connection with a financing, acquisition, investments or otherwise. Any such issuance could result in substantial dilution to our existing stockholders, cause the market price of our common stock to decline and dilute your voting power. For instance, prior to April 15, 2028, our 0.0% Convertible Senior Notes due 2028, or the 2028 Notes, are convertible at the option of the holders only under certain conditions or upon the occurrence of certain events. After April 15, 2028, holders may convert all or any portion of the 2028 Notes at their option at any time. If one or more holders elect to convert their 2028 Notes and we elect to settle all or any portion of such conversions in shares of our common stock, any sales in the public market of the common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock. In addition, certain holders of the 2028 Notes may engage in short selling to hedge their position in the ~~2028 Notes.~~
수정Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, as well as any issuances of our common stock in connection with the conversion of the 2028 Notes or other securities convertible or exercisable into shares of our common stock, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
2028 Notes. Any anticipated future issuances of shares of our common stock upon conversion of the 2028 Notes could also depress the price of our common stock.
수정The capped call transactions may affect the value of our common stock.
In connection with the pricing of the 2028 Notes, we entered into privately negotiated capped call transactions with certain ~~of the initial purchasers and/or their respective affiliates and other~~ financial institutions, or the Option Counterparties. The capped call transactions are generally expected ~~generally~~ to ~~reduce the~~ offset potential dilution to of our common ~~stock upon~~ stock, resulting from conversion of the 2028 ~~Notes and/or~~ Notes, or offset any cash payments ~~we are required to make~~ made in excess of ~~the~~ principal ~~amount~~ amounts of converted 2028 Notes, ~~as the case may be, with such reduction and/or offset~~ subject to a cap.
수정The capped call transactions may affect the value of our common stock.
The Option Counterparties ~~or their respective affiliates~~ may modify their hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2028 Notes (and are likely to do so during the observation period related to a conversion of the 2028 Notes, in connection with any fundamental change repurchase of the 2028 Notes and, to the extent we unwind a corresponding portion of the capped call transactions, following any other repurchase of the 2028 Notes). Notes. It is likely they will engage in such activity during the observation period related to a conversion of the 2028 Notes, in connection with any fundamental change repurchase of the 2028 Notes and, to the extent that we unwind a corresponding portion of the capped call transactions, following any other repurchase of the 2028 Notes. ~~This activity~~ These activities could ~~also cause or avoid an increase or a decrease in~~ influence the market price of our common stock or the 2028 Notes.
수정We are subject to counterparty risk with respect to the capped call transactions.
The Option Counterparties are financial institutions, and we ~~will be~~ are subject to the risk that any or all of them might default under the capped call transactions. Our exposure to the credit risk of the Option Counterparties ~~will~~ is not be secured by any collateral. Past global economic ~~conditions~~ conditions, including in connection with increases in prevailing interest rates, have resulted in the actual or perceived failure or financial difficulties of many financial institutions. If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transactions with such Option Counterparty. 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. In addition, upon a default by an Option Counterparty, we may suffer adverse tax consequences and/or more dilution than we currently anticipate with respect to our common stock. We can provide no assurance as to the financial stability or viability of any of the Option Counterparties.
수정Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as acts of war and international conflicts.
Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as ~~power disruptions, computer viruses,~~ acts of ~~war,~~ war and international ~~conflicts, terrorism and security breaches or incidents.~~ conflicts.
수정Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as acts of war and international conflicts.
An extreme natural disaster, such as an earthquake, fire, flood or severe weather event; a man-made problem, such as an act of war or international conflict; or a public health emergency occurring where we have significant facilities, employees, customers, channel partners, component suppliers, vendors, data centers or other infrastructure could adversely affect our business, results of operations and financial condition. Our corporate headquarters are located in the San Francisco Bay Area, ~~a region known for seismic activity.~~ and we have significant facilities in India. Both regions have heightened exposure to natural disasters including earthquakes, fires and floods. In addition to the natural disasters and man-made problems described above, cyberattacks have become more prevalent and damaging and may become more frequent and effective through the use of AI. Any of these potential natural or man-made problems could adversely impact our business or cause widespread issues in national economies or the world economy, which could adversely impact our business.
수정If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Our current controls and any new controls we develop may become inadequate because of changes in conditions in our ~~business.~~ business, and weaknesses in our internal controls may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal controls also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our common stock.
수정If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
~~In order to~~ To maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended and anticipate we will continue to expend significant resources, including accounting-related costs, and provide significant management oversight. Any failure to maintain the adequacy of our internal controls, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. If we are unable to assert that our internal control over financial reporting is effective, or if, when required, our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
수정If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected.
The preparation of financial statements in conformity with generally accepted accounting principles in the ~~United States,~~ U.S., or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled "Management’s Discussion and Analysis of Financial Condition and Results of Operations." The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing the consolidated financial statements include those related to determination of revenue recognition, deferred revenue, deferred contract acquisition costs, capitalized internal-use software, valuation of acquired intangible assets, period of benefit generated from our deferred contract acquisition costs, allowance for doubtful accounts, valuation of ~~common stock options and stock-based~~ equity incentive awards, useful lives of property and equipment, useful lives of acquired intangible assets, recoverability of goodwill, valuation of deferred tax assets and liabilities, loss contingencies related to litigation, fair value of the 2028 Notes and the discount rate used for operating leases. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of industry or financial analysts and investors, resulting in a decline in the trading price of our common stock.
수정We may become involved in litigation that may materially and adversely affect us.
From time to time, we may ~~become,~~ become involved in various legal ~~proceedings relating to matters incidental to the ordinary course of our business,~~ proceedings, including patent, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability and/or require us to change our business practices. In addition, the expense of litigation and the timing of this expense from period to period are difficult to estimate, subject to change and could adversely affect our results of operations. Because of the potential risks, expenses and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, financial condition, results of operations and prospects.
문장 삭제We have experienced rapid revenue and other growth in recent periods, which may not be indicative of our future performance.
In addition, the number of customers, users and internet traffic on our cloud platform has increased rapidly in recent years.
문장 삭제Our sales cycles can be long and unpredictable, and our sales efforts require considerable time and expense.
Our sales force develops relationships directly with our customers, and together with our channel account teams, works with our channel partners on account penetration, account coordination, sales and overall market development.
문장 삭제Our ability to maintain customer satisfaction depends in part on the quality of our customer support, including the quality of the support provided on our behalf by certain channel partners. Failure to maintain high-quality customer support could have an adverse effect on our business, financial condition and results of operations.
We may not be able to hire or deploy such resources fast enough to keep up with demand, particularly if the sales of our platform exceed our internal forecasts. We may also not be successful in our efforts to fully onboard new hires and provide adequate training to our employees, many of whom continue to work remotely.
문장 삭제We rely on our key technical, sales and management personnel to grow our business, and the loss of one or more key employees or the inability to attract and retain qualified personnel could harm our business.
We have added several new senior management employees in recent years, including our Chief Financial Officer.
삭제Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
•requirements to comply with foreign privacy, data protection, cybersecurity and information security laws and regulations and the risks and costs of noncompliance;
문장 삭제The actual or perceived failure of our cloud platform to block malware or prevent a security breach or incident could harm our reputation and adversely impact our business, financial condition and results of operations.
The growth in state sponsored cyber activity showcases the increasing sophistication of cyber threats and dramatically expands the global threat landscape.
문장 삭제Issues in the development, use and execution of AI and ML, combined with an uncertain regulatory environment, may harm our business.
We are increasingly utilizing AI and ML capabilities, including, for example, those relating to generative AI and large language models, into our product offerings. These risks and challenges could undermine public confidence in AI and ML, which could slow or even halt its adoption and negatively affect our business.
문장 삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
Further, if we are held to have breached or otherwise failed to comply with the terms of an open source software license, we could be required to release certain of our proprietary source code under open source licenses, pay monetary damages, seek licenses from third parties to continue offering our services on terms that are not economically feasible or be subject to injunctions that could require us to discontinue the sale of our services if re-engineering could not be accomplished on a timely basis.
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•resulting in time-consuming and costly litigation;
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•diverting management’s time and attention from developing our business;
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•requiring us to pay monetary damages or enter into royalty and licensing agreements that we would not normally find acceptable;
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•causing delays in the deployment of our platform or service offerings to our customers;
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•requiring us to stop offering certain services on or features of our platform;
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•requiring us to redesign certain components of our platform using alternative non-infringing or non-open source technology, which could require significant effort and expense;
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•requiring us to disclose our software source code and the detailed program commands for our software; and
삭제Some of our technology incorporates "open source" software, and we license some of our software through open source projects, which could negatively affect our ability to sell our platform and subject us to possible litigation.
•requiring us to satisfy indemnification obligations to our customers.
문장 삭제We rely on a limited number of suppliers for certain components of our cloud platform and the systems we use to operate our business and provide services to our customers, and any disruption in the availability of these components could delay our ability to expand or increase the capacity of our global data center network, replace defective equipment in our existing data centers or otherwise operate our business and provide services to our customers.
We also rely on sole or limited sourced SaaS vendors to provide critical services that we use to operate our business. While global economic conditions have not yet had a material impact on our supply chain, these conditions have increased our costs in the past and could result in disruptions and delays for components in the future.
문장 삭제Claims by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant costs and substantially harm our business, financial condition, results of operations and prospects.
The strength of our defenses will depend on the patents asserted, the interpretation of these patents, and our ability to invalidate the asserted patents. In the United States, issued patents enjoy a presumption of validity, and the party challenging the validity of a patent claim must present clear and convincing evidence of invalidity, which is a high burden of proof. Conversely, the patent owner need only prove infringement by a preponderance of the evidence, which is a lower burden of proof.
문장 삭제Claims by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant costs and substantially harm our business, financial condition, results of operations and prospects.
Any of these outcomes could result in a material adverse effect on our business.
삭제Claims by others that we infringe their proprietary technology or other rights, or other lawsuits asserted against us, could result in significant costs and substantially harm our business, financial condition, results of operations and prospects.
Any of these events could materially and adversely harm our business, financial condition and results of operations.
문장 삭제The success of our business depends in part on our ability to protect and enforce our intellectual property rights.
In these countries, patents may provide limited or no benefit. Moreover, we may need to expend additional resources to defend our intellectual property rights in these countries, and our inability to do so could impair our business or adversely affect our international expansion.
삭제Adverse economic conditions or reduced IT security spending may adversely impact our revenue and profitability.
The impact of economic conditions, including the ongoing effects of inflation, high interest rates, regional or global recessions and changing trade regulations including tariffs could materially and adversely affect our business, operating results and financial condition in a number of ways, including by reducing sales, lengthening sales cycles and requiring us to lower prices for our services.
문장 삭제If we were not able to satisfy data protection, security, privacy and other government- and industry-specific requirements or regulations, our business, results of operations and financial condition could be harmed.
Following the invalidation of the EU-US Privacy Shield and ongoing challenges to Standard Contractual Clauses, data localization requirements and transfer restrictions continue to evolve.
문장 삭제We are subject to governmental import and export controls and trade and economic sanctions and other trade controls including tariffs that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.
These measures have continued to increase.
문장 삭제Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
Foreign tax credits will begin to expire in the fiscal year ending 2033.
삭제The market price of our common stock may be volatile, and you could lose all or part of your investment.
•volume fluctuations in the trading of our common stock from time to time;
삭제The market price of our common stock may be volatile, and you could lose all or part of your investment.
•the sales of shares of our common stock by us or our stockholders;
삭제The market price of our common stock may be volatile, and you could lose all or part of your investment.
•issuances of shares of our common stock, whether in connection with an acquisition or upon conversion of some or all of our outstanding Notes;
문장 삭제Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, acts of war, international conflicts, terrorism and security breaches or incidents.
A significant natural disaster, such as an earthquake, fire, flood or public health emergency, occurring at our headquarters, in India, where we have significant facilities, or where a key channel partner, vendor or data center is located could adversely affect our business, results of operations and financial condition. Further, if a natural disaster or man-made problem were to affect our component suppliers or other third-party providers, including our network bandwidth and SaaS solution providers, this could materially and adversely affect our ability to provide services in a timely or cost-effective manner.
문장 삭제Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, acts of war, international conflicts, terrorism and security breaches or incidents.
In addition, natural disasters, acts of war, international conflicts, such as the current conflicts between Russia and Ukraine and in the Middle East, terrorism and other geopolitical unrest or health issues, such as an outbreak of a pandemic or epidemic disease, or fear of such events, could cause disruptions in our or our customers’ businesses, national economies or the world economy as a whole. In addition, computer malware, viruses and computer hacking, fraudulent use attempts and phishing attacks have become more prevalent in our industry and may become more frequent and effective through the use of AI. As a result, our internal systems may be victimized by such attacks. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security and availability of our platform to the satisfaction of our users may materially harm our reputation and our ability to retain existing customers and attract new customers.
문장 삭제If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
We have developed our disclosure controls, internal control over financial reporting and other procedures to ensure information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.
문장 삭제If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Further, weaknesses in our internal controls may be discovered in the future.
문장 삭제If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
If our internal controls are perceived as inadequate or we are unable to produce timely or accurate financial statements, investors may lose confidence in our operating results and our stock price could decline.
삭제If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Pursuant to Section 404 of the Sarbanes-Oxley Act, we are required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. We are also required to have our independent registered public accounting firm issue an opinion on the effectiveness of our internal control over financial reporting. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.
삭제된 항목
We rely on third parties for certain essential financial and operational services, and a failure or disruption in these services could materially and adversely affect our ability to manage our business effectively.
삭제We rely on third parties for certain essential financial and operational services, and a failure or disruption in these services could materially and adversely affect our ability to manage our business effectively.
We rely on third parties to provide many essential financial and operational services to support our business. Many of these vendors are less established and have shorter operating histories than traditional software vendors. Moreover, these vendors provide their services to us via a cloud-based model instead of software that is installed on our premises. As a result, we depend upon these vendors to provide us with services that are always available and are free of errors or defects that could cause disruptions in our business processes. Any failure by these vendors to do so, or any disruption in our ability to access the internet, would materially and adversely affect our ability to manage our operations.
사소Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below expectations.
Any one or more of the factors above may result in significant fluctuations in our results of operations. We also intend to continue to invest significantly to grow our business in the near future rather than optimizing for profitability or cash flows. In addition, we generally experience seasonality in terms of when we enter into agreements with customers. We typically enter into a higher percentage of agreements with new customers, as well as renewal agreements with existing customers, in the second half of our fiscal year. This seasonality is reflected to a much lesser extent, and sometimes is not immediately apparent, in revenue, due to the fact that we recognize subscription revenue ratably over the term of the subscription, which is generally one to ~~three~~ five years. We expect that seasonality will continue to affect our operating results in the future and may reduce our ability to predict cash flow and optimize the timing of our operating expenses.
사소If we do not effectively develop and expand our sales and marketing capabilities, we may be unable to add new customers or increase sales to our existing customers, and our business will be adversely affected.
New hires require significant training and may take significant time before they achieve full productivity. As a result, our new hires and planned hires may not become as productive as we would like, and we may be unable to hire or retain enough qualified individuals in the future. As a result of our rapid headcount growth, a large percentage of our sales and marketing team is new to our company and selling our solutions, and therefore this team may be less effective than our more seasoned employees. Furthermore, hiring sales personnel in new countries, or expanding our existing presence, requires upfront and ongoing expenditures that we may not recover if the sales personnel fail to achieve full productivity. We cannot predict whether, or to what extent, our sales will increase as we expand our sales force or how long it will take for sales personnel to become productive. The effectiveness of our sales and marketing has also varied over time and, together with the effectiveness of any partners or resellers we may engage, may vary in the future. Our business and operating results may be harmed if our efforts do not generate a correspondingly significant increase in revenue. We may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop and retain talented sales personnel, if our new sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective.
사소Our business depends, in part, on sales to the public sector and significant changes in the contracting or fiscal policies of public sector organizations could have an adverse effect on our business and operating results.
•changes in government policy positions, including applicable tariffs and other trade regulations, or the threat of such changes; spending priorities or reductions in government employees or programs, which result in a reduction of government spending in general or on technology and cybersecurity products in particular.
사소Our international operations expose us to significant risks, and failure to manage those risks could materially and adversely impact our business.
Historically, we have derived a significant portion of our revenue from outside the United States. We derived approximately ~~49%, 50%~~ 47%, 49% and 50% of our revenue from our international customers in fiscal ~~2025,~~ 2026, fiscal ~~2024~~ 2025 and fiscal ~~2023,~~ 2024, respectively. As of July 31, ~~2025,~~ 2026, approximately ~~63%~~ 60% of our full-time employees were located outside of the United States. We are continuing to adapt to, and develop strategies to address, international markets and our growth strategy includes continued expansion into target geographies, but there is no guarantee that such efforts will be successful. We expect that our international activities will continue to grow in the future, as we continue to pursue opportunities in international markets. These international operations will require significant management attention and financial resources and are subject to substantial risks, including:
사소Our failure to raise additional capital necessary to expand our operations and invest in new solutions could reduce our ability to compete and could harm our business.
We expect that our existing cash, cash equivalents and short-term investments will be sufficient to meet our anticipated cash needs for working capital, capital expenditures and 2028 Notes repayment requirements for at least the next 12 months. We may, however, need to raise additional funds to fund our operating expenses, make capital purchases, acquire or invest in business or technology, and we may not be able to obtain those funds on favorable terms, or at all. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the per share value of our common stock could decline. Furthermore, if we engage in additional debt financing, the holders of our debt would have priority over the holders of our common stock, and we may be required to accept terms that restrict our ability to incur additional indebtedness or our ability to pay any dividends on our common stock, though we do not intend to pay dividends in the foreseeable future. We may also be required to take other actions, any of which could harm our business and operating results. If we need to access the capital markets, there can be no assurance that financing may be available on attractive terms, if at all. If we are unable to obtain adequate financing, or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited, and our business, operating results, financial condition and prospects could be materially and adversely affected.
사소Our corporate structure and intercompany arrangements are subject to the tax laws of various jurisdictions, and we could be obligated to pay additional taxes, which would harm our results of operations.
We are expanding our international operations and staff to support our business in international markets. Our corporate structure and associated transfer pricing policies contemplate the business flows and future growth into the international markets, and consider the functions, risks and assets of the various entities involved in the intercompany transactions. The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the 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. For example, certain jurisdictions have ~~recently~~ introduced a digital services tax, which is generally a tax on gross revenue generated from users or customers located in those jurisdictions, and other jurisdictions are considering enacting similar laws. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to the intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, or if there are changes in tax laws or the way existing tax laws are interpreted or applied, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency.
사소Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an "ownership change," generally defined as a greater than 50% change (by value) in its equity ownership by "5% shareholders" over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research and development tax credits, to offset its post-change income may be limited. As a result, in the event that it is determined that we have in the past experienced an ownership change, or if we experience one or more ownership changes in the future as a result of subsequent shifts in our stock ownership, our ability to use our pre-change net operating loss carryforwards and other pre-change tax attributes to offset our U.S. federal ~~taxable~~ tax liability may be subject to limitations, which could potentially result in increased future tax liability to us. Furthermore, our state carryforwards may be subject to similar and additional limitations.
사소The concentration of our stock ownership with insiders will likely limit your ability to influence corporate matters, including the ability to influence the outcome of director elections and other matters requiring stockholder approval.
As of July 31, ~~2025,~~ 2026, our executive officers, directors, current 5% or greater stockholders and affiliated entities together beneficially owned approximately ~~41.4%~~ 39.7% of our common stock outstanding with Jay Chaudhry, our Chief Executive Officer and chairman of our board of directors, and his affiliates beneficially owning approximately ~~17.0%~~ 16.5% of our common stock. As a result, these stockholders, acting together, will have significant control over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions. Corporate action might be taken even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of us that other stockholders may view as beneficial.
사소The market price of our common stock may be volatile, and you could lose all or part of your investment.
In addition, the stock market in general, and the market for technology companies in particular, ~~has~~ have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may seriously affect the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market prices of a particular company’s securities, securities class action litigation has often been instituted against that company. Securities litigation, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business. This could have an adverse effect on our business, operating results and financial condition.
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Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, as well as any issuances of our common stock in connection with the conversion of the 2028 Notes or other securities convertible or exercisable into shares of our common stock, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
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Servicing of our debt will require a significant amount of cash, which may impact our cash available for working capital, capital expenditures and other corporate purposes.
사소Servicing of our debt will require a significant amount of cash, which may impact our cash available for working capital, capital expenditures and other corporate purposes.
On July 3, 2025, we issued $1,725 million in aggregate principal amount of our 0.0% Convertible Senior Notes due 2028, which mature on July 15, 2028. Prior to April 15, 2028, the 2028 Notes are convertible at the option of the holders only under certain conditions or upon the occurrence of certain events. During the quarter ended July 31, ~~2025,~~ 2026, the conditions allowing holders of the 2028 Notes to convert were not met. After April 15, 2028, holders may convert all or any portion of their 2028 Notes at their option at any time. If one or more holders elect to convert their 2028 Notes when eligible, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2028 Notes being converted.
사소If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and the rules and regulations of The Nasdaq Global Select Market, or Nasdaq. The requirements of these rules and regulations ~~will~~ impose significant legal, accounting and financial compliance costs; make some activities more difficult, time-consuming and costly; and place significant strain on our personnel, systems and resources.