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01-outline.txt
FORM 10-K
FORM 10-K
Filing Information under the Securities Exchange Act of 1934
Annual and Transition Report Filing Information under the Securities Exchange Act of 1934.
DOCUMENTS INCORPORATED BY REFERENCE
Incorporation by Reference of Definitive Proxy Statement for 2020 Annual Meeting of Stockholders.
Exclusion of Proxy Statement from Form 10-K Filing.
TABLE OF CONTENTS
PART I Item 1 Business 1 Item 1A Risk Factors 10 Item 1B Unresolved Staff Comments 28 Item 2 Properties 28 Item 3 Legal Proceedings 28 Item 4 Mine Safety Disclosures 28
PART II Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6 Selected Consolidated Financial Data 31 Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A Quantitative and Qualitative Disclosures About Market Risk 50 Item 8 Consolidated Financial Statements and Supplementary Data 52 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 89 Item 9A Controls and Procedures 89 Item 9B Other Information 90
PART III Item 10 Directors, Executive Officers and Corporate Governance 90 Item 11 Executive Compensation 90 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 91 Item 13 Certain Relationships and Related Party Transactions and Director Independence 91 Item 14 Principal Accounting Fees and Services 91
PART IV Item 15 Exhibits and Financial Statement Schedules 91 Item 16 Form 10-K Summary 95 Signatures 95 Index to Exhibits 92
PART I
FORWARD-LOOKING STATEMENTS
Forward-Looking Statements Disclaimer in Annual Report.
Identification of Forward-Looking Statements Through Key Phrases.
Disclaimer Regarding Forward-Looking Statements and Potential Discrepancies in Actual Results.
References to Risk Factors and SEC Filings Affecting Forward-Looking Statements.
Disclaimer on Reliance on Forward-Looking Statements.
Disclaimer of Obligation to Update Forward-Looking Statements.
ITEM 1. BUSINESS
ServiceNow's Mission and Application Development for Workflow Automation.
Integration of Workflows Across Departments for Enhanced Efficiency and Experience.
Digital Workflows on the Now Platform®.
Product Portfolio Focused on IT, Employee, and Customer Workflow Solutions.
Customer Use of Now Platform App Engine for Custom Workflow Applications.
Definition and Challenges of Enterprise Workflows.
Example of New Hire Process and Departmental Coordination for Employee Onboarding.
Digital Workflow Platform for Streamlined Employee Onboarding Tasks.
Manager Approval and Subsequent Notifications for New Hire Onboarding Process.
Now Platform Usage Requirement for Workflow Participants.
Explanation of Digital Workflow Management Capabilities and Benefits.
Enterprise-Wide Application of Digital Workflow Management Tools in Complex Workflows.
The Now Platform as the Foundation for IT, Employee, and Customer Workflow Offerings.
Applicability of Enterprise Workflows to Now Platform-Based Applications.
Role of Native Mobile Applications in Automated Workflow Deployment.
Third-party Application Development and Distribution on Now Platform.
Software Delivery via Internet as a Service with User-Friendly Interface for Rapid Deployment and Custom Application Development.
Self-Hosted or Third-Party Hosted Software Option for Customers.
1 Table of Contents
Description of Product and Service Offerings and Sales Channels.
Corporate Formation and Name Change History (2004-2006).
Reincorporation in Delaware as ServiceNow, Inc. in May 2012.
Our Products
Description of the Now Platform and Pre-Packaged Workflow Automation Applications.
Description of the Now Platform's Capabilities in Custom Workflow Creation and Application Development.
Role of Products and Services in Digital Transformation and Workflow Integration.
The Now Platform and Now Platform App Engine
Capabilities of the Now Platform for Workflow Management and Enterprise Service Delivery.
Supported Services on the Now Platform.
Product Integration on the Now Platform for Unified Workflow Management.
Native Mobile Experiences Powered by the Now Platform.
Objective to Simplify and Enhance Customer Work Lives with Mobile-Friendly Solutions.
Description of the Now Platform App Engine Capabilities.
Examples of Customer-Developed Applications Using Now Platform App Engine.
Applications Developed and Deployed Using Now Platform App Engine Available on ServiceNow Store.
Description of the ServiceNow Store and Its Benefits.
IT Workflows
Origin and Purpose of Company's IT Workflow Systems.
Advanced Capabilities of IT Products in Supporting IT Departments.
Bridging Traditional IT Practices with Modern Business Needs through IT Workflows.
Overview of IT Workflow Products and Their Applications in Employee and Customer Workflows.
Now IT Service Management
Overview of IT Service Management (ITSM) Capabilities and Functions.
ITSM Product Suite Capabilities: Incident Recording, Problem Remediation, and Routine Task Automation.
Enhancement of IT Service Experience through ITSM.
Customer Service Portals for IT Service Requests, Software/Hardware Orders, and Incident Submissions.
Now IT Business Management
Overview of IT Business Management (ITBM) Product Suite Capabilities.
Customer Benefits of IT Business Management (ITBM) Product Suite.
Now DevOps
Overview of Enterprise DevOps Product Features and Integration Capabilities.
Benefits of DevOps for Streamlining Software Development and Deployment.
Now IT Operations Management
Description and Benefits of IT Operations Management (ITOM) Product Suite.
Now IT Asset Management
Automation of IT Asset Lifecycles with Detailed Tracking Workflows.
Customer Benefits: Visibility into IT Asset Lifecycle for Cost Optimization and Workflow Automation.
Now Security Operations
Functionality of Security Operations Product in Integrating and Responding to Security Alerts.
Components of Security Operations Product.
Simplification of Incident Response Through Automated Security Orchestration and Prioritization.
Now Integrated Risk Management
Integrated Risk Management Product: Policy Creation, Regulatory Compliance, and Real-Time Risk Monitoring.
Customer Risk Assessment and Strategic Decision-Making with Continuous Monitoring and Prioritization.
Employee Workflows
Overview of Employee Workflow Products and Their Benefits.
Employee Workflows Enabled by Now HR Service Delivery, Finance Operations Management, and ITSM.
Now HR Service Delivery
Overview of HR Service Delivery Product Functions.
HR Service Delivery Capabilities Including Case Management and Lifecycle Event Management.
Automation and Orchestration of Cross-Departmental HR Tasks.
Advantages of HR Service Delivery for Resource Efficiency and Employee Lifecycle Management.
Now Finance Operations Management
Finance Close Automation (FCA) Overview and Integration with ERP Systems.
Centralized Workspace for Enhanced Financial Systems Management with FCA.
Customer Workflows
Purpose and Benefits of Customer Workflow Products.
Enhancing Customer Loyalty and Proactively Resolving Issues Through Customer Workflows.
Customer Workflow Enablement via Now Customer Service Management, Now Field Service Management, and ITOM.
Now Customer Service Management
Functionality and Automation Capabilities of Customer Service Management Product.
Customer Service Management Benefits: Enhanced Efficiency and Service Quality.
Now Field Service Management
Field Service Agent Assignment and Management on Customer Service Platform.
Field Service Management for Efficient Task Scheduling and Dispatch.
Professional Services
Overview of Professional Services and Customer Success Programs.
Definition of Expert Services Including Process Design, Implementation, Configuration, Architecture, and Optimization.
Support for Enterprise Digital Transformations in Service Management Strategy and Roadmap.
Details of Customer Success Programs Including Training, Certification, and Support Resources.
Customer Support
/7 Global Customer Support Availability.
Self-Service Technical Support via Online Support Portal.
Our Technology and Operations
Description of Multi-Instance Architecture and Development Environment.
Composition of Cloud Infrastructure and Database Systems.
Hosting of Software-as-a-Service on Private and Public Clouds for Regulated Customers.
Data Center Locations and High-Availability Configuration.
Option for Customers to Deploy Services on Dedicated Hardware in Data Centers.
Title: Internal or Third-Party Deployment Options for Regulatory and Security Compliance.
Customer Support Equivalence for Self-Hosted and Managed Data Center Deployments.
Sales and Marketing
Primary Sales Channels and Distribution Partnerships.
Marketing and Lead Generation Activities Overview.
Annual Knowledge User Conference and Other Educational User Forums.
Expansion of Sales Capabilities in New Geographies Through Diverse Investments.
Planned Investment Increase in Existing Locations for Sales and Marketing Scale Efficiencies.
Customers
Primary Market and Deployment Services for Large Enterprise Customers.
Customer Base as of December 31, 2019.
Industry Diversity of Customer Base.
Revenue Diversification Among Customers.
Remaining Performance Obligations
Remaining Performance Obligations (RPO) as of December 31, 2019 and 2018.
RPO as Indicator of Firm Customer Backlog Orders Aligned with Revenue Recognition Standard.
Reference to Note 9 for Additional Information on Remaining Performance Obligations.
Research and Development
Research and Development Responsibilities and Focus Areas.
Utilization of Emerging Technologies to Anticipate Customer Demands and Expedite Market Introduction of New Services.
Commitment to Ongoing Research and Development Investments.
Acquisitions and Investments
Strategic Acquisitions and Investments to Complement Technology and Expand Product Reach.
Strategic Platform and Product Development through Acquisitions and Investments to Meet Customer Needs.
Competition
Competitive Market Dynamics and Anticipated Intensification.
List of Current Competitors in the Market :
Customer Reluctance to Migrate Due to Prior Investments in Enterprise Software.
Anticipated Increase in Competition from Platform and Application Development Vendors.
Key Factors Influencing Purchase Decisions and Competitive Positioning.
Competitors' Superior Resources and Agility in Market Response.
Risk of Competitors Introducing or Utilizing Technology to Reduce Demand for Our Services.
Impact of Industry Consolidation on Competitive Position.
Pricing Pressures Due to Competitors' Lower Prices and Bundling Flexibility.
Expectation of Ongoing or Increasing Pricing Competition Due to Market Intensification.
Intellectual Property
Intellectual Property Protection Measures and Legal Frameworks.
Confidentiality and Proprietary Rights Agreements with Stakeholders and Access Control to IP.
Technology Acquisition and Licensing for Product Integration.
Intellectual Property Rights in Partnership-Developed Technology on the Now Platform.
Expansion of Global Patent Portfolio and IP Rights.
Dependence on Protecting Core Technology and Intellectual Property for Success.
Patent Portfolio and Pending Applications Overview.
Assertion of Independence from Individual Patents or IP Rights.
Uncertainty in Patent Application Outcomes and Value.
Potential Challenges and Limitations of Patent Protection Enforcement.
Unauthorized Use and Policing Challenges of Proprietary Technology.
Limited International Legal Protection for Proprietary Technology.
Potential Competitor Developments and Limitations of IP Rights.
Risks of Reverse Engineering, Unauthorized Copying, and Misappropriation of Proprietary Technology.
Frequent Claims and Litigation in the Industry Regarding Patent and IP Rights.
Third-Party IP Claims Against Company and Affiliates.
Increased Risk of IP Infringement Claims Due to Public Company Status and Market Exposure.
Example of Patent Litigation Settlements and Related Financial Impact in 2016.
Employees
Employee Statistics and Labor Union Representation as of December 31, 2019.
Available Information
Availability of SEC Filings and Reports on Company Website.
Reference to SEC Internet Site for Electronic Filings and Reports.
Incorporation Disclaimer for Website Contents and URL References.
ITEM 1A. RISK FACTORS
Risk Disclosure and Considerations for Investors.
Identification of Material Risks and Potential Adverse Effects on Business Operations.
Potential Decline in Stock Price and Investment Loss Due to Identified Risks.
Risks Related to Our Ability to Grow Our Business
Competitive Market Participation and Impact on Business Performance.
Competitive Landscape and Market Entry Barriers for Enterprise Cloud Solutions.
Expected Intensification of Competition in the Maturing Digital Workflow Products Market.
List of Current Competitors in the Digital Workflow Market :
Customer Reluctance Due to Existing Enterprise Software Investments.
Competitive Disadvantage Due to Competitors' Larger Size, Name Recognition, and Resources.
Competitive Threats and Market Responses by Established Competitors.
Expanding Competition from Adjacent Markets and New Service Offerings.
Impact of Smaller Competitors and New Entrants on Pricing Pressure in ITSM Market.
Potential Competitive Disadvantages and Business Impact Risks.
Impact of Privacy Laws, Cloud Computing Regulations, and Data Transfer Restrictions on Business.
Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services.
Utilization of Product Usage Data for Continuous Improvement.
Impact of Evolving Data Privacy Laws on Service Development and Deployment.
Examples of Recent Regulatory Changes Affecting Data Handling :
- Introduction of GDPR and Interpretation Variability.
EU Proposed e-Privacy Regulation and Right to be Forgotten Requirements.
- Impact of Brexit on Compliance with EU and UK Privacy Regulations and Customer Uncertainty.
- European Court of Justice Ruling on Privacy Shield and Standard Contractual Clauses Impact on Data Transfer.
- Implementation and Impact of the California Consumer Privacy Act (CCPA) in January 2020.
Potential Future Legislation on Data Privacy and Localization by Various Jurisdictions.
- Consideration of AI and Machine Learning Regulation by US and Non-US Governments.
Compliance Costs and Obligations Under Data Privacy and Transfer Regulations.
Potential Consequences of Non-Compliance with Data Privacy Regulations.
Potential Fines for GDPR Non-Compliance and Regulatory Interpretations.
Impact of Product Changes on Compliance Requirements.
Impact of Increased Privacy Regulation Compliance Costs on Innovation and Product Demand.
Additional Obligations from Self-Regulatory Standards by Privacy and Industry Groups.
Customer Expectations for Voluntary Certifications and Third-Party Standards Compliance.
Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes.
Acceleration of Innovation Driven by Digital Technology Adoption.
Customer Decision-Making on Digital Technology Adoption.
Requirements for Competitive Effectiveness in Technology Market :
Potential Risks of Failing to Meet Key Business Requirements.
Impact of Product Release Delays and Defects on Technology Adoption and Customer Satisfaction.
Necessity for Successful Release of New Products and Updates and Associated Risk Management.
Impact of Delayed or Defective Product Releases on Customer Adoption and Business Growth.
Risks Associated with Government and Heavily-Regulated Organizational Contracts.
Provision of Products and Services to Government and Regulated Entities Directly and Through Partners.
Investments in Government Sector Sales and Cloud Security Certifications.
Potential Changes and Challenges in Maintaining Government Certifications.
Impact of Certification Requirements on Government Sector Sales.
Sales to Government Entities Primarily Through Distributors and Resellers.
Risks and Challenges in Government Procurement Process.
Significant Up-Front Costs and Compliance Risks in Government Contract Bidding.
Impact of Public Sector Budgetary Cycles and Federal Government Shutdown on Product and Service Demand.
Potential Challenges to Bid Awards by Competitive Bidders.
Impact of Bid Protests on Contract Award Expenses and Outcomes.
Impact of Unsuccessful Bid Protests on Project Initiation and Financial Results
Termination Rights of Public Sector Customers for Convenience or Default.
Termination for Convenience – Fee Collection Limitations.
Liability for Excess Costs and Business Restrictions Upon Contract Termination Due to Default.
Compliance Requirements and Legal Obligations for Government Contracting Entities.
Government Audits and Potential Penalties for Non-Compliance with Contractual Requirements.
Expansion into Heavily Regulated Industries.
Regulatory Compliance Requirements for Customers in Heavily Regulated Industries.
Regulatory Compliance Challenges for Third-Party Vendors and Our Company.
Customer Audit Rights in Heavily-Regulated Areas.
Regulatory Compliance Determination and Business Continuity Constraints.
Risks Associated with Non-U.S. Government Customers in Emerging Markets.
Compliance Costs and Management Resource Consumption Due to Complex Regulations in Various Jurisdictions.
Impact of Political and Non-Competitive Factors on Business Opportunities in Certain Jurisdictions.
Potential Adverse Impact on Business and Operational Results.
Reliance on Partner Network and Potential Impact on Revenue and Growth.
Revenue Generation through Partner Network, Including Managed Service Providers and Resellers.
Increasing Reliance on Partners for Professional Services and Customer Implementations.
Effectiveness and Consistency of Partner Training Programs.
Extensive Training and Resource Requirements for New Partners.
Partner-Related Legal Risks and Reputational Harm Due to Misrepresentation, Service Failures, or Policy Violations.
Potential Competitive Threats and Intellectual Property Concerns from Partners.
Impact of Partner Network Management and Service Quality on Business Performance.
Impact of Unsuccessful International Market Penetration and Risk Management on Business and Operating Results.
Dependence on Increasing International Sales and Risks of Failing to Grow Internationally.
Risks and Investments Associated with Operating in International Markets.
Investment Uncertainty in New Geographic Markets.
Lower Rate of Acquisition of Large Enterprise Customers in Less Established Markets Due to Regulatory and Operational Risks.
Emerging Markets Presence Among Prospective Large Enterprise Customers.
Challenges in Geographic Expansion and Foreign Operations Management.
Risks Associated with International Market Expansion :
Adverse Effects of Unmanaged International Market Risks on Business and Revenue Growth.
Potential Risks and Downsides of Acquisitions and Investments.
Past and Future Strategic Transactions: Acquisitions and Investments in Businesses, Technologies, Services, Products, and Assets.
Potential Strategic Business Relationships for Expanding Services and International Capabilities.
Limitations of Due Diligence in Strategic Transactions.
Risks Associated with Strategic Transactions :
Potential Financial Impact of Future Acquisition Financing Methods.
Potential Dilution and Financial Constraints from Equity or Debt Financing of Acquisitions.
Potential Negative Impact on Business, Operating Results, and Financial Condition.
Risks Related to the Operation of Our Business
Potential Liabilities and Business Impact of Cyber-Security Events.
Handling and Protection of Confidential and Sensitive Customer Data.
Potential Breach of Security Measures and Unauthorized Data Access.
Fraudulent Inducement and Phishing Risks by Third Parties.
Lack of Control Over Third-Party Data Processing and Security Measures.
Prevalence and Recurrence of Cybersecurity Threats in Industry.
Inability to Anticipate and Prevent Evolving Cybersecurity Threats.
Ongoing Investment in Cyber-Security Measures and Potential Future Expenditures.
Potential Consequences of Security Breaches and Cyber Attacks.
Potential Costs and Operational Consequences of Security Incident Mitigation and Prevention.
Uncertainty of Insurance Coverage for Security Incidents and Breaches.
Customer Responsibility for Data Access and Optional Use of Provided Security Tools and Practices.
Potential Economic, Operational, and Reputational Impact of Customer-Caused Cyber-Security Events.
Dependence on Key Employees and Impact on Business Operations.
Management Team Changes and Potential Impact on Business Operations.
Challenges in Attracting and Retaining Qualified Technology Industry Personnel.
Challenges in Hiring and Retaining Highly-Skilled Employees in Key Geographic Locations.
At-Will Employment and Its Impact on Recruitment and Retention.
Importance of Corporate Culture in Retaining and Recruiting Personnel During Global Expansion.
Impact of Natural Disasters and Catastrophic Events on Business Operations.
Risk of Business Interruption Due to Natural Disasters and Uncontrollable Events.
Insurance Coverage Insufficiency for Potential Losses and Expenses.
Risk of Operational Disruption Due to Proximity to Seismic Faults in California and Washington.
Factors Impacting Product Implementation Success and Business Dependence on Effective Customer Implementation.
Dependence on Partner Network for Implementation Services and Potential Shortage of Qualified Partners.
Potential Causes of Implementation Delays and Inefficiencies.
Potential for Significant Implementation Costs Due to Various Risks.
Customer Implementation Delays and Impact on Sales and Subscription Renewals.
Customer Capacity and Talent Limitations Impacting Digital Transformation Benefits.
Risks of Unsuccessful, Lengthy, or Costly Customer Implementation and Integration Projects.
Potential Liability and Reputational Damage from Service Disruptions or Defects.
Potential for Defects in Services and Impact of Third-Party Software.
Potential Sources of Service Disruptions: Internal Errors and External Incidents.
Current and Future Data Center Management and Service Provision Strategy.
Vulnerability of Data Centers to Natural Disasters, Misconduct, and Operational Failures.
Potential Service Interruptions and Customer Data Loss Due to Data Center Issues.
Customer-Induced Service Disruption Risks.
Impact of Service Reliability on Customer Trust and Business Reputation.
Impact of Service Disruptions or Defects on Revenue, Penalties, Litigation, Customer Retention, and New Customer Acquisition.
Customer-Specific System Resiliency Requirements and Potential Non-Compliance.
Impacts of Claims and Breaches on Financial Liabilities and Litigation Risks.
Insufficient Insurance Coverage for Service Disruption Claims.
Risks Related to the Financial Performance or Financial Position of Our Business
Potential Impact of Financial Performance on Common Stock Price.
Variability of Operating Results Due to Uncontrollable Factors.
Risk of Financial Performance Not Meeting Guidance or Expectations of Analysts and Investors.
Potential Impact on Common Stock Price and Investor Losses Due to Unmet Financial Expectations.
Factors Influencing Financial Performance and Forward-Looking Guidance :
- Ability to Attract, Retain, and Satisfy Customers ;
- Changes in Product and Service Mix, Cloud vs. Self-Hosted Offerings, Market Penetration, and Customer Usage ;
- Ability to Increase Sales of Emerging Products ;
- Volatility in Foreign Currency Exchange Rates and Hedging Ability ;
- Sales Force Expansion, Retention, and Productivity Rate ;
- Number of New Employees Added ;
- Cost, Timing, and Management Effort for Development of New Products and Services ;
- General Economic Conditions Impacting Customer Purchasing Decisions ;
- Operating Costs and Capital Expenditures: Amount and Timing Related to Business Operation and Expansion ;
- Seasonality of Customer Agreement Timings ;
- Length and Complexity of Sales Cycle and Certification Process for Services ;
- Changes in Customer Relationship Size and Complexity ;
- Changes to Management, Sales, and Account Management Teams Due to Scaling and Evolving Business Priorities ;
- Changes in Pricing Policies of Company or Competitors ;
- Significant Security Breaches, Technical Difficulties, or Service Interruptions ;
- Competitor Introductions of New Solutions or Products ;
- Changes in Effective Tax Rates ;
- Changes in Customer Agreement Terms and Billing Durations ;
- Timing of Customer Payments and Payment Defaults ;
- Extraordinary Expenses Including Litigation Costs and Settlement Payments ;
- Costs of Acquiring New Businesses and Technologies, Integration, and Tax Effects of Acquisitions ;
- Changes in Laws or Regulations Impacting Service Delivery ;
- Compliance with Privacy Laws and Regulations, Including GDPR and CCPA ;
- Significant Litigation or Regulatory Actions Regarding Intellectual Property, Privacy Laws, Employment, or Other Significant Matters ;
- Equity Awards and Related Financial Statement Expenses ;
- Impact of New Accounting Pronouncements
- Estimation précise du marché total adressable pour nos produits et services.
Risk of Intellectual Property Infringement Claims by Third Parties.
Disparity in Patent Portfolios and Increased Risk of Infringement Litigation.
Potential Claims of Intellectual Property Infringement by Competitors and Third Parties.
Example of Legal Settlement Charges and Fulfillment of Obligations with BMC and HPE.
Potential Consequences and Costs of Intellectual Property Litigation :
Potential Intellectual Property Litigation Due to Expiration of Third-Party Agreements.
Impact of Litigation and Public Statements on Customer Satisfaction, Sales, and Stock Price.
Impact of Claims or Litigation on Management Focus and Financial Health.
Consequences of Non-Compliance with Anti-Corruption Laws and Trade Regulations.
Compliance with FCPA, 18 U.S.C. §201, UK Bribery Act, and Other International Anti-Bribery Laws.
Risks of Non-Compliance with FCPA and Anti-Corruption Laws.
Liability for Third-Party Intermediaries' Corrupt Activities.
Anti-Corruption Compliance Program and Associated Risks of Employee and Agent Violations.
Increased Scrutiny and Liability Due to Business Expansion in Countries with High Corruption Levels.
Compliance with International Trade Regulations and Restrictions.
Consequences of Violating FCPA, Anti-Corruption Laws, or Trade Regulations.
Impact of Enforcement Action Response on Management Focus and Defense Costs.
Potential Lack of Competitive Advantage and Significant Costs in Defending Intellectual Property.
Dependence on Intellectual Property Protections for Success.
Potential Limitations and Risks of Patent Protection.
Uncertainty of Legal Standards for Intellectual Property Rights Validity and Enforceability.
Challenges and Invalidations of Intellectual Property Rights Through Administrative Processes or Litigation.
Availability of Intellectual Property Protection Across Different Countries.
Differences in Intellectual Property Protection and Enforcement in Foreign Countries.
Monitoring and Protection of Intellectual Property Rights Expenditure.
Potential Claims or Litigation for Infringement and Validation of Proprietary Rights.
Potential Impact of Litigation on Company Resources and Risk of Counter-Claims.
Risk of Adverse Effects on Business Due to Intellectual Property Infringement and Defense Costs.
Risks Associated with Open Source Software Use.
Incorporation of Third-Party Open Source Software in Products and Services.
Efforts to Monitor Open Source Software Usage and Mitigate Adverse Licensing Conditions.
Uncertainty and Lack of Legal Precedent in Open Source License Interpretation.
Potential Obligations Under Various Open Source Licenses.
Potential Legal Risks of Non-Compliance with Open Source Software Licenses.
Revenue Recognition and Impact of Subscription Fluctuations on Operating Results.
Impact of Decline in Subscriptions and Renewals on Future Revenues.
Impact of Subscription Model on Revenue Recognition and Growth.
Revenue Recognition Variability Due to Contract Complexity Under ASC 606.
Impact of Subscription and Contract Variability on Period Billings.
Expected Decline in Revenue Growth Rate and Potential Impact on Stock Price.
Impact of Changes in Effective Tax Rate and Tax Position Rejection on Financial Results.
Impact of Changes in Accounting Principles and Tax Laws on Future Effective Tax Rate.
Authority of the U.S. Department of Treasury to Issue Regulations and Interpretative Guidance Affecting Operational Results.
Consideration and Enactment of New Tax Laws by Various Countries and International Organizations.
Impact of Recent Global Tax Developments and Increased Scrutiny on Multinational Businesses.
Impact of Changes in Tax Laws or Rulings on Effective Tax Rate and Financial Results.
Potential for Global Income Tax Audits and Ambiguities in Cloud Computing Tax Treatment.
Potential Impact of Adverse Resolution of Uncertain Tax Positions on Operational Results.
Potential Tax Liabilities from International Intangible Assets and Inter-Company Agreements.
Potential GAAP Losses Despite Historical Profitability.
Potential Future GAAP Losses Due to Increased Costs and Unforeseen Expenses.
Market Uncertainty and Competitive Dynamics Impacting Business Performance Predictability.
Potential Negative Impact on Future Profitability and Cash Flow.
Impact of Insufficient Revenue Growth on Business and Financial Performance.
Impact of Ineffective Internal Control on Financial Reporting Accuracy and Timeliness.
Sarbanes-Oxley Act Annual and Quarterly Reporting Requirements for Internal Control and Disclosure Controls.
Annual Audit Requirement of Internal Control Effectiveness by Independent Accounting Firm under Section 404(b) of Sarbanes-Oxley Act.
Adverse Report Issuance by Independent Registered Public Accounting Firm Due to Unsatisfactory Control Levels.
Potential Discovery of Material Weaknesses or Significant Deficiencies Through Testing.
Potential Consequences of Identifying Material Weaknesses or Non-Compliance with Section 404.
Potential Delays in Implementing System and Process Changes for New Standards.
Risks Related to General Economic Conditions
Impact of Global Economic Conditions on Business and Operations.
Impact of Global Macroeconomic Conditions on Business and Revenues.
Impact of 2020 Geopolitical and Economic Events on Business Operations.
Potential Impact of Brexit on UK and EU Economies and Businesses
Impact of Global Financial Conditions on Business and Operational Judgments.
Impact of Foreign Currency Exchange Rate Fluctuations on Financial Results.
Risk of Unpredictable Currency Fluctuations on Financial Results.
Impact of Brexit Announcement and Uncertainty on Global Markets and Currency Volatility.
Expected Continued Volatility in Exchange Rates and Global Financial Markets Due to Brexit and Global Uncertainty.
Initiation of Derivative Instruments for Currency Exchange Rate Hedging in 2018.
Risk of Unanticipated Currency Exchange Rate Changes on Financial Performance.
Risk of Imperfect Correlation in Hedging Due to Limited Experience.
Risk of Loss Due to Imperfect Correlation in Hedging.
Risks Related to Our Convertible Senior Notes
Potential Inability to Fund Cash Settlements or Repurchases of 2022 Convertible Senior Notes.
Repurchase Rights of Holders Upon Fundamental Change.
Adjustment to Conversion Rate upon Make-Whole Fundamental Change.
Cash Settlement Requirement and Potential Liquidity Constraints upon Conversion of 2022 Notes.
Future Incurrence of Additional Debt by Company and Subsidiaries Subject to Future Debt Instrument Restrictions.
No Restrictions on Incurring Additional Debt or Recapitalizing Existing Debt Under the Indenture.
Acquisition Prohibition and Obligations Assumption Clause.
Limitations on Repurchase or Cash Payment upon Conversion of 2022 Notes Due to Legal and Regulatory Constraints.
Failure to Repurchase or Pay Cash Upon Conversion of 2022 Notes Constitutes Default.
Consequential Default Under Future Indebtedness Agreements.
Impact of Fundamental Change on Default and Indebtedness Repayment Obligations.
Potential Adverse Impact of Conditional Conversion Feature on Financial Condition and Operating Results.
Conditions for Conversion of 2022 Notes Prior to February 1, 2022.
Conversion Eligibility of 2022 Notes Based on Conversion Condition Compliance.
Cash Settlement of Immaterial Principal Amount of 2022 Notes for Year Ended December 31, 2019.
Expected Cash Settlement of 2022 Notes Conversion Requests for Q1 and Q2 2020.
Potential Liquidity Impact of Future 2022 Notes Conversions.
Recording a Loss on Early Conversions of 2022 Notes.
Impact of Convertible Note Hedge and Warrant Transactions on 2022 Notes and Common Stock Value.
Convertible Note Hedge and Warrant Transactions with Option Counterparties.
Purpose and Effect of the 2022 Note Hedge Transactions.
Potential Dilutive Effect and Share Issuance Mechanics of the 2022 Warrants.
Expected Issuance of Additional Shares Upon Automatic Exercise of 2022 Warrants.
Potential Impact of Hedge Position Adjustments by Option Counterparties on Stock and 2022 Notes Prices.
Market Condition Dependency on Stock and Note Price Effects.
Potential Adverse Effects on Common Stock and 2022 Notes Value and Conversion Ability.
Disclaimer on Potential Effects of Transactions on 2022 Notes and Common Stock Prices.
Non-Representation of Option Counterparties' Engagement and Continuity of Transactions.
Counterparty Risk and Credit Exposure in the 2022 Note Hedge.
Impact of Recent Global Economic Conditions on Financial Institutions' Stability.
Unsecured Creditor Status in Option Counterparty Insolvency Proceedings.
Correlation Between Exposure and Stock Price/Volatility.
Potential Adverse Tax Consequences and Increased Dilution Due to Option Counterparty Default.
No Assurance on Financial Stability or Viability of Option Counterparties.
Risks Related to Ownership of Our Common Stock
Potential Litigation Due to Stock Price Volatility.
Stock Price Volatility Due to Uncontrollable Factors.
Technology Sector Stock Price and Trading Volume Volatility Disproportionate to Financial Performance.
Factors Influencing Stock Price Volatility Beyond Company Control :
Potential Impact of Securities Class Action Litigation Due to Market Price Volatility.
Dividend Policy and Return on Stock Price.
Anti-Takeover Provisions and Their Impact on Stock Price.
Provisions in Restated Certificate of Incorporation and Bylaws Potentially Affecting Stock Price by Discouraging Changes in Control or Management.
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"name": "Annual and Transition Report Filing Information under the Securities Exchange Act of 1934",
"content": "\u2612Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934\nFor the fiscal year ended December 31, 2019\nOR\n\u2610Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934\nCommission File Number: 001-35580\nSERVICENOW, INC. (Exact name of registrant as specified in its charter)\nDelaware 20-2056195\n(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)\nServiceNow, Inc.\n2225 Lawson Lane\nSanta Clara, California 95054\n(408) 501-8550\n(Address, including zip code, and telephone number, including area code, of registrant\u2019s principal executive offices)\nSecurities registered pursuant to Section 12(b) of the Act:\nTitle of each class Trading Symbol Name of each exchange on which registered\nCommon stock, par value $0.001 per share NOW The New York Stock Exchange\nSecurities registered pursuant to Section 12(g) of the Act:\nNot applicable\nIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.\nYes \u2612 No \u2610\nIndicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of Act.\nYes \u2610 No \u2612\nIndicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:\nYes \u2612 No \u2610\nIndicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (\u00a7232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).\nYes \u2612 No \u2610\nIndicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of \u201clarge accelerated filer,\u201d \u201caccelerated filer,\u201d \u201csmaller reporting company\u201d and \u201cemerging growth company\u201d in Rule 12b-2 of the Exchange Act.\nLarge Accelerated Filer \u2612\nAccelerated Filer \u2610\nNon-Accelerated Filer \u2610\nSmaller Reporting Company \u2610\nEmerging Growth Company \u2610\nIf an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.\n\u2610\nIndicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).\nYes \u2610 No \u2612\nBased on the closing price of the Registrant\u2019s Common Stock on the last business day of the Registrant\u2019s most recently completed second fiscal quarter, which was June 28, 2019, the aggregate market value of its shares (based on a closing price of $274.57 per share on June 28, 2019 as reported on the New York Stock Exchange) held by non-affiliates was approximately $37.7 billion. As of January 31, 2020, there were approximately 189.8 million shares of the Registrant\u2019s Common Stock outstanding.",
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"name": "Incorporation by Reference of Definitive Proxy Statement for 2020 Annual Meeting of Stockholders",
"content": "Portions of the Registrant\u2019s definitive proxy statement for its 2020 Annual Meeting of Stockholders (Proxy Statement) to be filed within 120 days of the Registrant\u2019s fiscal year ended December 31, 2019, are incorporated by reference in Part III of this Report on Form 10-K.",
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"title": "PART I Item 1 Business 1 Item 1A Risk Factors 10 Item 1B Unresolved Staff Comments 28 Item 2 Properties 28 Item 3 Legal Proceedings 28 Item 4 Mine Safety Disclosures 28",
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"title": "PART II Item 5 Market for Registrant\u2019s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6 Selected Consolidated Financial Data 31 Item 7 Management\u2019s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A Quantitative and Qualitative Disclosures About Market Risk 50 Item 8 Consolidated Financial Statements and Supplementary Data 52 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 89 Item 9A Controls and Procedures 89 Item 9B Other Information 90",
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"name": "Identification of Forward-Looking Statements Through Key Phrases",
"content": "Words such as \u201cbelieve,\u201d \u201cmay,\u201d \u201cwill,\u201d \u201cestimate,\u201d \u201ccontinue,\u201d \u201canticipate,\u201d \u201cwould,\u201d \u201ccould,\u201d \u201cshould,\u201d \u201cintend\u201d and \u201cexpect,\u201d variations of these words, and similar expressions are intended to identify those forward-looking statements.",
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"name": "Disclaimer Regarding Forward-Looking Statements and Potential Discrepancies in Actual Results",
"content": "These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict.Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.",
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"name": "References to Risk Factors and SEC Filings Affecting Forward-Looking Statements",
"content": "Factors that might cause or contribute to such differences include, but are not limited to, those discussed in this Report under the section entitled \u201cRisk Factors\u201d in Item 1A of Part I and elsewhere herein, and in other reports we file with the Securities and Exchange Commission (SEC).",
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"content": "While forward-looking statements are based on the reasonable expectations of our management at the time that they are made, you should not rely on them.",
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"name": "Disclaimer of Obligation to Update Forward-Looking Statements",
"content": "We undertake no obligation to revise or update publicly any forward-looking statements for any reason, whether as a result of new information, future events or otherwise, except as may be required by law.",
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"name": "ServiceNow's Mission and Application Development for Workflow Automation",
"content": "ServiceNow\u2019s purpose is to make the world of work, work better for people. We believe that people should work the way they want to, so we build applications that help automate existing processes and create efficient, digitized workflows.",
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"name": "Integration of Workflows Across Departments for Enhanced Efficiency and Experience",
"content": "Our products and services enable the steps of a job to flow naturally across disparate departments, systems and processes of a business. When work flows naturally, great experiences follow.",
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"name": "Digital Workflows on the Now Platform\u00ae",
"content": "We deliver digital workflows on a single enterprise cloud platform called the Now Platform\u00ae.",
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"name": "Product Portfolio Focused on IT, Employee, and Customer Workflow Solutions",
"content": "Our product portfolio is currently focused on providing Information Technology (IT), Employee and Customer workflows in pre-packaged product offerings.",
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"name": "Customer Use of Now Platform App Engine for Custom Workflow Applications",
"content": "We also enable our customers to use the Now Platform App Engine to design and build workflow applications that are purpose built for their own business.",
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"name": "Definition and Challenges of Enterprise Workflows",
"content": "Getting a job done in an enterprise (what we call a \u201cworkflow\u201d) usually requires different people in various functions of an organization to work together. Often they rely on different technology systems and inefficient, manual processes.",
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"name": "Example of New Hire Process and Departmental Coordination for Employee Onboarding",
"content": "One example, to illustrate, is the new hire process. When a new employee is hired, he or she needs to be set up in the employer\u2019s HR system of record and payroll, have a desk assigned, get a computer, get access to necessary internal systems, and perform other tasks. Successfully onboarding the new employee requires different departments of the business, utilizing different systems and databases, to coordinate and complete their specific tasks.",
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"name": "Digital Workflow Platform for Streamlined Employee Onboarding Tasks",
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"name": "Manager Approval and Subsequent Notifications for New Hire Onboarding Process",
"content": "A new employee\u2019s manager approves the new hire\u2019s specifics in the HR systems; that approval triggers a notification to the facilities team so they can assign a desk to the new employee; that assignment triggers a notification to the IT group for computer and systems access configuration, etc.",
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"name": "Now Platform Usage Requirement for Workflow Participants",
"content": "Each person acting in this workflow only needs to use the Now Platform.",
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"name": "Explanation of Digital Workflow Management Capabilities and Benefits",
"content": "The digital management of this workflow is possible because our technology platform hides the complexity of working across multiple, siloed departments and systems of record to make work flow more seamlessly. This enables our customers to deliver their employees the experiences they want and their customers the service they expect.",
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"name": "Enterprise-Wide Application of Digital Workflow Management Tools in Complex Workflows",
"content": "Our digital workflow management tools are applied across an enterprise and in complex and sophisticated workflows.",
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"name": "The Now Platform as the Foundation for IT, Employee, and Customer Workflow Offerings",
"content": "The Now Platform is the foundation of our IT, Employee and Customer workflow offerings. The Now Platform has one code base and one data model, which allows our applications and those developed by our customers to work seamlessly with each other.",
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"name": "Applicability of Enterprise Workflows to Now Platform-Based Applications",
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"name": "Role of Native Mobile Applications in Automated Workflow Deployment",
"content": "Our native mobile applications greatly assist in the roll-out of automated workflows to our customer\u2019s employees.",
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"name": "Software Delivery via Internet as a Service with User-Friendly Interface for Rapid Deployment and Custom Application Development",
"content": "We primarily deliver our software via the Internet as a service through a simple and easy-to-use interface so that we can rapidly deploy our packaged offerings, and customers can easily build their custom applications.",
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"content": "We market and sell our products and services to enterprises across industries, including government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education and consumer products. We sell our products through subscription services and primarily through direct sales. We also offer professional services, both directly and through partners, to help our customers deploy and utilize our products and platform.",
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"name": "Corporate Formation and Name Change History (2004-2006)",
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"content": "Each of our products and services helps in critical aspects of our customers\u2019 digital transformation process, and some of these products and services, as captured in the graphic and described below, are used in multiple workflows.",
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"content": "Among the many services that our platform supports are workflow automation, electronic service catalogs and portals, configuration management systems, data benchmarking, performance analytics, encryption and collaboration and development tools.",
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"content": "All of our products are built on the Now Platform, which allows our customers to create a common user experience to manage workflows across all of their systems.",
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"content": "The Now Platform also powers three native mobile experiences for everyday work across the enterprise: Virtual Agent, Now Mobile and Mobile Onboarding. Enterprises can take advantage of consumer-like, mobile experiences, such as getting help from human resources or ordering a computer, from our platform.",
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"name": "Description of the Now Platform App Engine Capabilities",
"content": "Our platform also features the Now Platform App Engine, which enables customers and third-party developers to create, test and deploy their own applications. They can do so within an integrated development environment while leveraging the single data model and common services of the Now Platform.",
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"content": "Examples of applications our customers have developed include: an application developed by a company with a large network of seasonal retail stores and offices to track progress and identify issues in opening and closing their seasonal retail stores and offices, which enabled significant cost savings; an application developed by the IT office of a university that allocated and billed costs associated with IT maintenance, allowing the university to retire multiple legacy software systems; and an application developed by a mortgage company to ensure that loan files were complete and accurate prior to packaging and selling the loans to investors.",
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"content": "These types of applications which extend the automation of our customers\u2019 workflows have been developed and deployed by our customers and third-party developers using the Now Platform App Engine, and many are available through our marketplace (ServiceNow Store).",
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"name": "Advanced Capabilities of IT Products in Supporting IT Departments",
"content": "Our IT products have become increasingly sophisticated in assisting IT departments to serve their customers, manage their networks, identify and remediate threats and develop and build their products.",
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"name": "Bridging Traditional IT Practices with Modern Business Needs through IT Workflows",
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"name": "Enhancement of IT Service Experience through ITSM",
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"name": "Overview of IT Business Management (ITBM) Product Suite Capabilities",
"content": "Our IT Business Management (ITBM) product suite enables customers to manage their IT priorities, including the scope and cost of IT projects, the development of software related to those projects and the overall management of the customer\u2019s IT project portfolio.",
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"title": "",
"name": "Overview of Enterprise DevOps Product Features and Integration Capabilities",
"content": "Our enterprise DevOps product provides visibility across a product development toolchain. It integrates with the leading DevOps toolchains to provide automated change management, information gathering and collecting and a single dashboard across planning, development, testing, deployment and operations.",
"type": "body",
"path": "000:011:003:004:006:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Benefits of DevOps for Streamlining Software Development and Deployment",
"content": "With DevOps, our customers can streamline their software development and deployment processes.",
"type": "body",
"path": "000:011:003:004:006:001",
"children": []
}
]
},
{
"index": 7,
"title": "Now IT Operations Management",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:004:007",
"children": [
{
"index": 0,
"title": "",
"name": "Description and Benefits of IT Operations Management (ITOM) Product Suite",
"content": "Our IT Operations Management (ITOM) product suite connects a customer\u2019s physical and cloud-based IT infrastructure with our applications and platform. It identifies a customer\u2019s IT infrastructure components (e.g., servers) and associated business services (e.g., email) which are dependent upon that infrastructure. It also maintains a single data record for all IT configurable items, which allows our customers to exercise control over their on-premises or cloud-based infrastructures and orchestrate key processes and tasks. With ITOM, our customers can enhance visibility of IT resources, manage service health and optimize cloud delivery and spend.",
"type": "body",
"path": "000:011:003:004:007:000",
"children": []
}
]
},
{
"index": 8,
"title": "Now IT Asset Management",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:004:008",
"children": [
{
"index": 0,
"title": "",
"name": "Automation of IT Asset Lifecycles with Detailed Tracking Workflows",
"content": "Our IT Asset Management (ITAM) product automates customers\u2019 IT asset lifecycles with workflows to track the financial, contractual and inventory details of IT and non-IT assets throughout their lifecycles.",
"type": "container",
"path": "000:011:003:004:008:000",
"children": [
{
"index": 0,
"title": "",
"name": "Customer Benefits: Visibility into IT Asset Lifecycle for Cost Optimization and Workflow Automation",
"content": "With ITAM, our customers gain visibility into the full IT asset lifecycle to help optimize costs and automate workflows.",
"type": "body",
"path": "000:011:003:004:008:000:000",
"children": []
}
]
}
]
},
{
"index": 9,
"title": "Now Security Operations",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:004:009",
"children": [
{
"index": 0,
"title": "",
"name": "Functionality of Security Operations Product in Integrating and Responding to Security Alerts",
"content": "Our security operations product connects with internal and third-party security alerts from a customer\u2019s infrastructure to prioritize and respond to incidents and vulnerabilities according to their potential impact on a customer\u2019s business.",
"type": "body",
"path": "000:011:003:004:009:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Components of Security Operations Product",
"content": "Our security operations product includes security incident management, threat enrichment intelligence, vulnerability response management and security incident intelligence sharing.",
"type": "body",
"path": "000:011:003:004:009:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Simplification of Incident Response Through Automated Security Orchestration and Prioritization",
"content": "With our security operations product, we help simplify our customers\u2019 incident response by allowing them to replace manual tasks with automated security orchestration and to prioritize and remediate vulnerabilities and security incidents.",
"type": "body",
"path": "000:011:003:004:009:002",
"children": []
}
]
},
{
"index": 10,
"title": "Now Integrated Risk Management",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:004:010",
"children": [
{
"index": 0,
"title": "",
"name": "Integrated Risk Management Product: Policy Creation, Regulatory Compliance, and Real-Time Risk Monitoring",
"content": "Our integrated risk management product creates a common set of policies and controls to help our customers meet the requirements of an ever-expanding regulatory environment. It also allows our customers to be more resilient and monitor risk and compliance events in real time to take action to remediate and mitigate risks.",
"type": "body",
"path": "000:011:003:004:010:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Customer Risk Assessment and Strategic Decision-Making with Continuous Monitoring and Prioritization",
"content": "With our integrated risk management product, customers can assess risk and make strategic decisions with confidence by being able to continuously monitor and prioritize risks.",
"type": "body",
"path": "000:011:003:004:010:001",
"children": []
}
]
}
]
},
{
"index": 5,
"title": "Employee Workflows",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:005",
"children": [
{
"index": 0,
"title": "",
"name": "Overview of Employee Workflow Products and Their Benefits",
"content": "Our Employee workflow products provide service at every stage of an employee\u2019s engagement with an employer. With our Employee Workflows, our customers can simplify how their employees get the services they need, to help improve employee satisfaction and boost productivity.",
"type": "body",
"path": "000:011:003:005:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Employee Workflows Enabled by Now HR Service Delivery, Finance Operations Management, and ITSM",
"content": "We enable Employee workflows through our Now HR Service Delivery and Now Finance Operations Management products, in addition to ITSM.",
"type": "body",
"path": "000:011:003:005:001",
"children": []
},
{
"index": 2,
"title": "Now HR Service Delivery",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:005:002",
"children": [
{
"index": 0,
"title": "",
"name": "Overview of HR Service Delivery Product Functions",
"content": "Our HR service delivery product defines, structures, consolidates, manages and automates HR services related to employee requests.",
"type": "body",
"path": "000:011:003:005:002:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "HR Service Delivery Capabilities Including Case Management and Lifecycle Event Management",
"content": "HR service delivery capabilities include HR case management, employee self-service, knowledge management and management of employee lifecycle events across multiple departments, such as onboarding, transfers and off-boarding.",
"type": "body",
"path": "000:011:003:005:002:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Automation and Orchestration of Cross-Departmental HR Tasks",
"content": "For example, tasks that start in HR but require action from other departments, such as new hire equipment selection and fulfillment, can be easily automated and orchestrated.",
"type": "body",
"path": "000:011:003:005:002:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Advantages of HR Service Delivery for Resource Efficiency and Employee Lifecycle Management",
"content": "With HR service delivery, we make it easy for our customers\u2019 employees to get the services they need, allowing our customers to use fewer resources to serve more employees, streamline employee lifecycle events, and increase visibility, staffing efficiency and delivery of services.",
"type": "body",
"path": "000:011:003:005:002:003",
"children": []
}
]
},
{
"index": 3,
"title": "Now Finance Operations Management",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:005:003",
"children": [
{
"index": 0,
"title": "",
"name": "Finance Close Automation (FCA) Overview and Integration with ERP Systems",
"content": "Our finance operations management product and its first application, Finance Close Automation (FCA), are built for the office of the CFO. FCA is designed to complement enterprise resource planning (ERP) systems and digitize workflows to accelerate the financial statement close process and reduce financial close risks.",
"type": "body",
"path": "000:011:003:005:003:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Centralized Workspace for Enhanced Financial Systems Management with FCA",
"content": "With FCA, our customers can connect their finance teams, tasks and systems in a centralized workspace and manage their financial systems more effectively.",
"type": "body",
"path": "000:011:003:005:003:001",
"children": []
}
]
}
]
},
{
"index": 6,
"title": "Customer Workflows",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:006",
"children": [
{
"index": 0,
"title": "",
"name": "Purpose and Benefits of Customer Workflow Products",
"content": "Our Customer workflow products help enterprises create a seamless experience for their customers - from identifying a customer issue to resolving that issue and its underlying cause.",
"type": "container",
"path": "000:011:003:006:000",
"children": [
{
"index": 0,
"title": "",
"name": "Enhancing Customer Loyalty and Proactively Resolving Issues Through Customer Workflows",
"content": "With our Customer workflows, we help our customers increase customer loyalty and, in some cases, fix issues before they are known to their customers.",
"type": "body",
"path": "000:011:003:006:000:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Customer Workflow Enablement via Now Customer Service Management, Now Field Service Management, and ITOM",
"content": "We enable Customer workflows through Now Customer Service Management and Now Field Service Management products, in addition to ITOM.",
"type": "body",
"path": "000:011:003:006:000:001",
"children": []
}
]
},
{
"index": 1,
"title": "Now Customer Service Management",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:006:001",
"children": [
{
"index": 0,
"title": "",
"name": "Functionality and Automation Capabilities of Customer Service Management Product",
"content": "Our customer service management product defines, structures, consolidates, manages and automates customer service cases and requests. It allows common customer requests, such as password resets, to be automated with out-of-the-box self-service, and for other cases it routes work from the customer service agent to field service, engineering, operations, finance or legal personnel to resolve the underlying issues.",
"type": "body",
"path": "000:011:003:006:001:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Customer Service Management Benefits: Enhanced Efficiency and Service Quality",
"content": "With customer service management, we help our customers elevate their customer service by boosting resolution efficiency and improving service quality through service automation and management.",
"type": "body",
"path": "000:011:003:006:001:001",
"children": []
}
]
},
{
"index": 2,
"title": "Now Field Service Management",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:006:002",
"children": [
{
"index": 0,
"title": "",
"name": "Field Service Agent Assignment and Management on Customer Service Platform",
"content": "Our field service management product allows field service agents to be effectively assigned, deployed and managed on the same underlying customer service management platform that created and managed the customer incident.",
"type": "body",
"path": "000:011:003:006:002:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Field Service Management for Efficient Task Scheduling and Dispatch",
"content": "With field service management, we help our customers efficiently manage location-based work tasks, including dynamic scheduling and visual dispatch.",
"type": "body",
"path": "000:011:003:006:002:001",
"children": []
}
]
}
]
},
{
"index": 7,
"title": "Professional Services",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:007",
"children": [
{
"index": 0,
"title": "",
"name": "Overview of Professional Services and Customer Success Programs",
"content": "Our professional services include expert services and customer success programs, offered by ServiceNow alone and in a co-delivery model with our network of partners, to help customers become proficient in the use of our platform and to maximize the value of their ServiceNow investment.",
"type": "body",
"path": "000:011:003:007:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Definition of Expert Services Including Process Design, Implementation, Configuration, Architecture, and Optimization",
"content": "Expert services include process design (including identifying inefficiencies in existing workflows), implementation, configuration, architecture and optimization services.",
"type": "body",
"path": "000:011:003:007:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Support for Enterprise Digital Transformations in Service Management Strategy and Roadmap",
"content": "Our focus is on supporting customers as they embark on enterprise digital transformations to reimagine their service management strategy and roadmap.",
"type": "body",
"path": "000:011:003:007:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Details of Customer Success Programs Including Training, Certification, and Support Resources",
"content": "Customer success programs include training and certification programs for all of our products, expertise from support professionals and our Customer Success Center, an online resource.",
"type": "body",
"path": "000:011:003:007:003",
"children": []
}
]
},
{
"index": 8,
"title": "Customer Support",
"name": "",
"content": "",
"type": "container",
"path": "000:011:003:008",
"children": [
{
"index": 0,
"title": "",
"name": "24\/7 Global Customer Support Availability",
"content": "As part of their subscription, customers receive support 24 hours a day, seven days a week around the globe, from technical resources located in the United States and internationally.",
"type": "body",
"path": "000:011:003:008:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Self-Service Technical Support via Online Support Portal",
"content": "We also offer self-service technical support through our support portal, which provides access to documentation, knowledge base articles, online training, online support forums and online incident filing.",
"type": "body",
"path": "000:011:003:008:001",
"children": []
}
]
}
]
},
{
"index": 4,
"title": "Our Technology and Operations",
"name": "",
"content": "",
"type": "container",
"path": "000:011:004",
"children": [
{
"index": 0,
"title": "",
"name": "Description of Multi-Instance Architecture and Development Environment",
"content": "We operate a multi-instance architecture that provides each customer with its own dedicated application logic and database. This architecture is designed to deliver high-availability, scalability, performance, security and ease of upgrading. We have a standardized, Java-based development environment, with the majority of our software written in industry-standard software programming languages.",
"type": "body",
"path": "000:011:004:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Composition of Cloud Infrastructure and Database Systems",
"content": "Our cloud infrastructure primarily consists of industry-standard servers, networks and storage components. Our operating system is Linux and databases are MySQL and MariaDB.",
"type": "body",
"path": "000:011:004:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Hosting of Software-as-a-Service on Private and Public Clouds for Regulated Customers",
"content": "We host our full software-as-a-service experience on our own private cloud and intend to host it using public cloud service providers for certain highly regulated customers.",
"type": "body",
"path": "000:011:004:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Data Center Locations and High-Availability Configuration",
"content": "Our data centers operate in paired configurations to enable replication for high-availability and redundancy. We currently operate data centers in Australia, Brazil, Canada, Germany, Hong Kong, Japan, the Netherlands, Singapore, Switzerland, the United Kingdom and the United States, and we continuously evaluate our data center operations and capacity in existing and new geographies.",
"type": "body",
"path": "000:011:004:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Option for Customers to Deploy Services on Dedicated Hardware in Data Centers",
"content": "We offer customers the option to deploy our services on dedicated hardware in our data centers.",
"type": "body",
"path": "000:011:004:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Title: Internal or Third-Party Deployment Options for Regulatory and Security Compliance",
"content": "Our architecture also gives us the added flexibility to allow customers the option of deploying our services internally or under contract with a third party to host the software in order to support unique regulatory or security requirements, and, while there are some limitations on agility and flexibility as compared to our cloud offering, a minority of our customers have elected this alternative.",
"type": "container",
"path": "000:011:004:005",
"children": [
{
"index": 0,
"title": "",
"name": "Customer Support Equivalence for Self-Hosted and Managed Data Center Deployments",
"content": "The customer support we provide for self-hosted customers is similar to the support we provide to customers deployed in our managed data centers.",
"type": "body",
"path": "000:011:004:005:000",
"children": []
}
]
}
]
},
{
"index": 5,
"title": "Sales and Marketing",
"name": "",
"content": "",
"type": "container",
"path": "000:011:005",
"children": [
{
"index": 0,
"title": "",
"name": "Primary Sales Channels and Distribution Partnerships",
"content": "We sell our product offerings and services primarily through our global direct sales organization. We also sell services through managed services providers and resale partners.",
"type": "body",
"path": "000:011:005:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Marketing and Lead Generation Activities Overview",
"content": "Our marketing efforts and lead generation activities consist primarily of customer referrals, digital advertising (including via our website), trade shows, industry events, brand campaigns and press releases.",
"type": "body",
"path": "000:011:005:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Annual Knowledge User Conference and Other Educational User Forums",
"content": "We also host our annual Knowledge user conference, webinars and other user forums, including regional forums which we call Now@Work, where customers and partners both participate in and present on a variety of programs designed to educate them on industry best practices and help accelerate their success with our services.",
"type": "body",
"path": "000:011:005:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Expansion of Sales Capabilities in New Geographies Through Diverse Investments",
"content": "We continue to expand our sales capabilities in new geographies, including through investments in direct and indirect sales channels, professional services capabilities, customer support resources, post-sales customer support resources and strategic alliance and implementation partners.",
"type": "body",
"path": "000:011:005:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Planned Investment Increase in Existing Locations for Sales and Marketing Scale Efficiencies",
"content": "We also plan to increase our investment in our existing locations in order to achieve scale efficiencies in our sales and marketing efforts.",
"type": "body",
"path": "000:011:005:004",
"children": []
}
]
},
{
"index": 6,
"title": "Customers",
"name": "",
"content": "",
"type": "container",
"path": "000:011:006",
"children": [
{
"index": 0,
"title": "",
"name": "Primary Market and Deployment Services for Large Enterprise Customers",
"content": "We primarily sell our services to large enterprise customers, and we host and support large, enterprise-wide deployments for our customers.",
"type": "body",
"path": "000:011:006:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Customer Base as of December 31, 2019",
"content": "As of December 31, 2019, we had approximately 6,200 enterprise customers.",
"type": "body",
"path": "000:011:006:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Industry Diversity of Customer Base",
"content": "Our customers operate in a wide variety of industries, including government, financial services, healthcare, manufacturing, IT services, technology, oil and gas, telco, education and consumer products.",
"type": "body",
"path": "000:011:006:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Revenue Diversification Among Customers",
"content": "No single customer accounted for more than 10% of our revenues for any of the periods presented.",
"type": "body",
"path": "000:011:006:003",
"children": []
}
]
},
{
"index": 7,
"title": "Remaining Performance Obligations",
"name": "",
"content": "",
"type": "container",
"path": "000:011:007",
"children": [
{
"index": 0,
"title": "",
"name": "Remaining Performance Obligations (RPO) as of December 31, 2019 and 2018",
"content": "Our remaining performance obligations (RPO) were $6.6 billion and $4.9 billion as of December 31, 2019 and 2018, respectively. RPO represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods.",
"type": "body",
"path": "000:011:007:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "RPO as Indicator of Firm Customer Backlog Orders Aligned with Revenue Recognition Standard",
"content": "We believe RPO, which excludes customer deposits and time and materials contracts, is an indicator of customer backlog orders believed to be firm that is aligned with the current revenue recognition standard.",
"type": "body",
"path": "000:011:007:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Reference to Note 9 for Additional Information on Remaining Performance Obligations",
"content": "Refer to Note 9 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information on remaining performance obligations.",
"type": "body",
"path": "000:011:007:002",
"children": []
}
]
},
{
"index": 8,
"title": "Research and Development",
"name": "",
"content": "",
"type": "container",
"path": "000:011:008",
"children": [
{
"index": 0,
"title": "",
"name": "Research and Development Responsibilities and Focus Areas",
"content": "Our research and development organization is responsible for the design, development, testing and validation of our solutions. We focus on innovating and developing new services and core technologies and further enhancing the functionality, reliability and performance of our existing solutions.",
"type": "container",
"path": "000:011:008:000",
"children": [
{
"index": 0,
"title": "",
"name": "Utilization of Emerging Technologies to Anticipate Customer Demands and Expedite Market Introduction of New Services",
"content": "Using emerging technologies, we can anticipate customer demands and then bring new services and new versions of existing services to market quickly in order to remain competitive in the marketplace.",
"type": "body",
"path": "000:011:008:000:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Commitment to Ongoing Research and Development Investments",
"content": "We have made, and will continue to make, significant investments in research and development to strengthen our existing applications, expand the number of applications on our platform, enhance our user experience and develop additional mobile, automation and machine intelligence technologies.",
"type": "body",
"path": "000:011:008:000:001",
"children": []
}
]
}
]
},
{
"index": 9,
"title": "Acquisitions and Investments",
"name": "",
"content": "",
"type": "container",
"path": "000:011:009",
"children": [
{
"index": 0,
"title": "",
"name": "Strategic Acquisitions and Investments to Complement Technology and Expand Product Reach",
"content": "In addition to continuing to invest in our own research and development efforts, we have made acquisitions and investments in the past and will continue to assess opportunities for strategic acquisitions and investments to complement our technology and skill sets and expand our product reach.",
"type": "body",
"path": "000:011:009:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Strategic Platform and Product Development through Acquisitions and Investments to Meet Customer Needs",
"content": "Our focus is on building out our platform and products through both acquisitions and investments to support customer needs.",
"type": "body",
"path": "000:011:009:001",
"children": []
}
]
},
{
"index": 10,
"title": "Competition",
"name": "",
"content": "",
"type": "container",
"path": "000:011:010",
"children": [
{
"index": 0,
"title": "",
"name": "Competitive Market Dynamics and Anticipated Intensification",
"content": "We compete in markets that are rapidly evolving and highly competitive, with relatively low barriers to entry. As these markets continue to mature and new technologies and competitors enter such markets, we expect competition to intensify.",
"type": "body",
"path": "000:011:010:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "List of Current Competitors in the Market",
"content": "Our current competitors include:\n- large, well-established, enterprise application software vendors and large integrated systems vendors;\n- new entrants to the market developing technologies to solve similar problems in different ways;\n- solutions developed in-house by our potential customers or using integrations with other tools;\n- vendors of infrastructure-as-a-service, platform-as-a-service providers and development operations; and\n- established and emerging cloud vendors.",
"type": "body",
"path": "000:011:010:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Customer Reluctance to Migrate Due to Prior Investments in Enterprise Software",
"content": "Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current enterprise software into their businesses and therefore may be reluctant or unwilling to migrate away from their current solution to ours. Accordingly, we compete with both cloud-based and traditional, enterprise-application, software vendors.",
"type": "body",
"path": "000:011:010:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Anticipated Increase in Competition from Platform and Application Development Vendors",
"content": "Our competitors vary in size and in the breadth and scope of the products and services they offer. As we continue to expand the breadth of our services to include offerings in new markets, we expect increasing competition from platform and application development vendors focused on these markets.",
"type": "body",
"path": "000:011:010:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Key Factors Influencing Purchase Decisions and Competitive Positioning",
"content": "Various factors influence purchase decisions in our industry, including total cost of ownership, level of customer satisfaction, breadth and depth of product functionality, security, adherence to industry standards, brand awareness, flexibility and performance. We believe that we compete favorably with our competitors on each of these factors.",
"type": "body",
"path": "000:011:010:004",
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{
"index": 5,
"title": "",
"name": "Competitors' Superior Resources and Agility in Market Response",
"content": "However, many of our competitors have substantially greater financial, technical and other resources. They may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, customer requirements and buying practices.",
"type": "body",
"path": "000:011:010:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Risk of Competitors Introducing or Utilizing Technology to Reduce Demand for Our Services",
"content": "An existing competitor or potential competitor could introduce new technology, or more effectively utilize existing technology, that reduces demand for our services.",
"type": "body",
"path": "000:011:010:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Impact of Industry Consolidation on Competitive Position",
"content": "Acquisitions, integrations and consolidation by and among other companies in our industry may allow potential competitors to offer integrated or bundled products, enhanced functionality, or other advantages, which may impact our competitive position.",
"type": "body",
"path": "000:011:010:007",
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},
{
"index": 8,
"title": "",
"name": "Pricing Pressures Due to Competitors' Lower Prices and Bundling Flexibility",
"content": "In addition, some of our competitors offer their products or services at a lower price, which has resulted in pricing pressures. Larger competitors may also have the operating flexibility to bundle competing products and services with other offerings, which may enable them to offer their products and services at a lower price.",
"type": "body",
"path": "000:011:010:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Expectation of Ongoing or Increasing Pricing Competition Due to Market Intensification",
"content": "As competition intensifies, we expect pricing competition to continue or increase.",
"type": "body",
"path": "000:011:010:009",
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},
{
"index": 11,
"title": "Intellectual Property",
"name": "",
"content": "",
"type": "container",
"path": "000:011:011",
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{
"index": 0,
"title": "",
"name": "Intellectual Property Protection Measures and Legal Frameworks",
"content": "We rely upon a combination of U.S. and international copyright, trade secret, patent and trademark laws and confidentiality procedures and contractual restrictions, such as confidentiality and license agreements, to establish, protect and grow our intellectual property (IP) rights.",
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"path": "000:011:011:000",
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{
"index": 1,
"title": "",
"name": "Confidentiality and Proprietary Rights Agreements with Stakeholders and Access Control to IP",
"content": "In addition, we enter into confidentiality and proprietary rights agreements with our employees, partners, vendors, consultants and other third parties and control access to our IP and other proprietary information.",
"type": "body",
"path": "000:011:011:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Technology Acquisition and Licensing for Product Integration",
"content": "We also purchase or license technology that we incorporate into our products or services.",
"type": "body",
"path": "000:011:011:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Intellectual Property Rights in Partnership-Developed Technology on the Now Platform",
"content": "In certain of our partnership arrangements, our partners may develop technology on the Now Platform that may be subject to copyright or other intellectual property rights that we may agree to with the partner.",
"type": "body",
"path": "000:011:011:003",
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},
{
"index": 4,
"title": "",
"name": "Expansion of Global Patent Portfolio and IP Rights",
"content": "We continue to grow our global patent portfolio and IP rights that relate to our platform, applications, services, research and development and other activities.",
"type": "body",
"path": "000:011:011:004",
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},
{
"index": 5,
"title": "",
"name": "Dependence on Protecting Core Technology and Intellectual Property for Success",
"content": "Our success depends in part upon our ability to protect our core technology and IP.",
"type": "body",
"path": "000:011:011:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Patent Portfolio and Pending Applications Overview",
"content": "We have over 700 U.S. and foreign patents, including patents acquired from third parties, and over 780 pending patent applications.",
"type": "body",
"path": "000:011:011:006",
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},
{
"index": 7,
"title": "",
"name": "Assertion of Independence from Individual Patents or IP Rights",
"content": "We do not believe that our proprietary technology is dependent on any single patent or other IP right or group of related patents or IP rights.",
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"path": "000:011:011:007",
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},
{
"index": 8,
"title": "",
"name": "Uncertainty in Patent Application Outcomes and Value",
"content": "We file patent applications to protect our IP and have and may continue to acquire additional patents, patent portfolios, or patent applications. However, we cannot be certain that any of our patent applications will result in the issuance of a patent or whether the examination process will result in patents of value or applicability.",
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"path": "000:011:011:008",
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},
{
"index": 9,
"title": "",
"name": "Potential Challenges and Limitations of Patent Protection Enforcement",
"content": "In addition, any patents that have been or may be issued or acquired may be contested, circumvented, found unenforceable or invalidated, and we may not be able to prevent third parties from infringing upon them.",
"type": "body",
"path": "000:011:011:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Unauthorized Use and Policing Challenges of Proprietary Technology",
"content": "Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or obtain and use our technology to develop products and services that provide features and functionality similar to ours. Policing unauthorized use of our technology is difficult.",
"type": "body",
"path": "000:011:011:010",
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},
{
"index": 11,
"title": "",
"name": "Limited International Legal Protection for Proprietary Technology",
"content": "The laws of the countries in which we operate may offer little or no effective protection of our proprietary technology.",
"type": "body",
"path": "000:011:011:011",
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},
{
"index": 12,
"title": "",
"name": "Potential Competitor Developments and Limitations of IP Rights",
"content": "Our competitors could also independently develop services equivalent to ours, and our IP rights may not be broad enough for us to prevent competitors from utilizing their developments to compete with us.",
"type": "body",
"path": "000:011:011:012",
"children": []
},
{
"index": 13,
"title": "",
"name": "Risks of Reverse Engineering, Unauthorized Copying, and Misappropriation of Proprietary Technology",
"content": "Reverse engineering, unauthorized copying or other misappropriation of our proprietary technology could enable third parties to benefit from our technology without paying us for it, which would significantly harm our business.",
"type": "body",
"path": "000:011:011:013",
"children": []
},
{
"index": 14,
"title": "",
"name": "Frequent Claims and Litigation in the Industry Regarding Patent and IP Rights",
"content": "Our industry is characterized by frequent claims and related litigation regarding patent and other IP rights.",
"type": "body",
"path": "000:011:011:014",
"children": []
},
{
"index": 15,
"title": "",
"name": "Third-Party IP Claims Against Company and Affiliates",
"content": "From time to time, third parties may assert patent, copyright, trademark and other IP rights against us, our channel partners or our customers.",
"type": "body",
"path": "000:011:011:015",
"children": []
},
{
"index": 16,
"title": "",
"name": "Increased Risk of IP Infringement Claims Due to Public Company Status and Market Exposure",
"content": "In addition, based on our greater visibility, expanding solutions footprint, and market exposure as a public company, we face a higher risk of being the subject of IP infringement claims.",
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"path": "000:011:011:016",
"children": []
},
{
"index": 17,
"title": "",
"name": "Example of Patent Litigation Settlements and Related Financial Impact in 2016",
"content": "For example, in 2016 we settled two patent-related litigation matters and recorded a one-time charge of $270.0 million related to aggregate legal settlements. See \u201cRisk Factors\u2014Lawsuits against us by third parties that allege we infringe their intellectual property rights could harm our business and operating results\u201d for additional information.",
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"path": "000:011:011:017",
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"title": "Employees",
"name": "",
"content": "",
"type": "container",
"path": "000:011:012",
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{
"index": 0,
"title": "",
"name": "Employee Statistics and Labor Union Representation as of December 31, 2019",
"content": "As of December 31, 2019, we had 10,371 full-time employees worldwide. None of our U.S. employees are represented by a labor union. Employees in certain European countries are represented by workers\u2019 councils and have the benefits of collective bargaining arrangements at the national level.We have not experienced interruptions of operations or work stoppages due to labor disagreements.",
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"path": "000:011:012:000",
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{
"index": 13,
"title": "Available Information",
"name": "",
"content": "",
"type": "container",
"path": "000:011:013",
"children": [
{
"index": 0,
"title": "",
"name": "Availability of SEC Filings and Reports on Company Website",
"content": "You can obtain copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the SEC, and all amendments to these filings, free of charge from our website at www.servicenow.com\/company\/investor-relations\/sec-filings.html as soon as reasonably practicable following our filing of any of these reports with the SEC.",
"type": "body",
"path": "000:011:013:000",
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},
{
"index": 1,
"title": "",
"name": "Reference to SEC Internet Site for Electronic Filings and Reports",
"content": "The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.",
"type": "body",
"path": "000:011:013:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Incorporation Disclaimer for Website Contents and URL References",
"content": "The contents of these websites are not incorporated into this filing and our references to the URLs for these websites are intended to be inactive textual references only.",
"type": "body",
"path": "000:011:013:002",
"children": []
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},
{
"index": 12,
"title": "ITEM 1A. RISK FACTORS",
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"content": "",
"type": "container",
"path": "000:012",
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{
"index": 0,
"title": "",
"name": "Risk Disclosure and Considerations for Investors",
"content": "Investing in our securities involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes, before making an investment decision.",
"type": "body",
"path": "000:012:000",
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{
"index": 1,
"title": "",
"name": "Identification of Material Risks and Potential Adverse Effects on Business Operations",
"content": "We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations and future prospects. Our business could be harmed by any of these risks.",
"type": "body",
"path": "000:012:001",
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{
"index": 2,
"title": "",
"name": "Potential Decline in Stock Price and Investment Loss Due to Identified Risks",
"content": "Our stock price could decline due to any of these risks, and you may lose all or part of your investment.",
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"path": "000:012:002",
"children": []
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{
"index": 3,
"title": "Risks Related to Our Ability to Grow Our Business",
"name": "",
"content": "",
"type": "container",
"path": "000:012:003",
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{
"index": 0,
"title": "",
"name": "Competitive Market Participation and Impact on Business Performance",
"content": "We participate in intensely competitive markets, and if we do not compete effectively, our business and operating results will be harmed.",
"type": "container",
"path": "000:012:003:000",
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{
"index": 0,
"title": "",
"name": "Competitive Landscape and Market Entry Barriers for Enterprise Cloud Solutions",
"content": "The markets for our enterprise cloud solutions are rapidly evolving and highly competitive, with relatively low barriers to entry.",
"type": "body",
"path": "000:012:003:000:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Expected Intensification of Competition in the Maturing Digital Workflow Products Market",
"content": "As the market for digital workflow products matures and new technologies and competitors enter the market, we expect competition to intensify.",
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"path": "000:012:003:000:001",
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},
{
"index": 2,
"title": "",
"name": "List of Current Competitors in the Digital Workflow Market",
"content": "Our current competitors include:\n- large, well-established, enterprise application software vendors and large integrated systems vendors;\n- new entrants to the market developing technologies to solve similar problems in different ways;\n- solutions developed in-house by our potential customers or using integrations with other tools;\n- vendors of infrastructure-as-a-service, platform-as-a-service and development operations; and\n- established and emerging cloud vendors.",
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"path": "000:012:003:000:002",
"children": [
{
"index": 0,
"title": "",
"name": "Customer Reluctance Due to Existing Enterprise Software Investments",
"content": "Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current enterprise software into their businesses and therefore may be reluctant or unwilling to migrate away from their current solution to ours.",
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"path": "000:012:003:000:002:000",
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]
},
{
"index": 3,
"title": "",
"name": "Competitive Disadvantage Due to Competitors' Larger Size, Name Recognition, and Resources",
"content": "Many of our competitors and potential competitors are larger and have greater name recognition, longer operating histories, more established customer relationships (including at the executive level of large enterprises where decision-making authority is held), larger marketing budgets and greater resources than we do.",
"type": "body",
"path": "000:012:003:000:003",
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},
{
"index": 4,
"title": "",
"name": "Competitive Threats and Market Responses by Established Competitors",
"content": "While we believe that our platform and products can largely be complementary to large and established systems that traditionally operate as \u201csystems of record,\u201d competitors may try to enter our space. They may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, customer requirements and buying practices. They may utilize acquisitions, integrations or consolidations to offer integrated or bundled products, enhanced functionality or other advantages. They may reduce the price of products or subscriptions that compete with ours or may bundle them with other products and subscriptions, causing our products to appear relatively more expensive. They may also invest in industry-specific solutions that purport to provide a unique solution for that industry.",
"type": "body",
"path": "000:012:003:000:004",
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},
{
"index": 5,
"title": "",
"name": "Expanding Competition from Adjacent Markets and New Service Offerings",
"content": "Other potential competitors not currently offering competitive products may expand their services to compete with our services, or we may shift our products and services to compete with current and future competitors in adjacent markets. We have in the past expanded, and we expect to continue to expand the breadth of our services to include offerings in new markets and the use of our platform by developers of custom applications. As a result, we expect increasing competition from platform vendors and application development vendors focused on these other markets.",
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"path": "000:012:003:000:005",
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},
{
"index": 6,
"title": "",
"name": "Impact of Smaller Competitors and New Entrants on Pricing Pressure in ITSM Market",
"content": "Smaller competitors and new entrants may accelerate pricing pressures, including in the ITSM market, which is our more mature offering and from which we derive a large portion of our revenues.",
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"path": "000:012:003:000:006",
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},
{
"index": 7,
"title": "",
"name": "Potential Competitive Disadvantages and Business Impact Risks",
"content": "For all of these reasons, we may not be able to compete successfully, and competition could result in reduced sales, reduced margins, losses or the failure of our products to achieve or maintain market acceptance, any of which could harm our business.",
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"path": "000:012:003:000:007",
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},
{
"index": 8,
"title": "",
"name": "Impact of Privacy Laws, Cloud Computing Regulations, and Data Transfer Restrictions on Business",
"content": "Privacy laws and concerns, evolving regulation of cloud computing, cross-border data transfer restrictions, other foreign and domestic regulations and standards related to data and the Internet may adversely affect our business.",
"type": "body",
"path": "000:012:003:000:008",
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}
]
},
{
"index": 1,
"title": "",
"name": "Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services",
"content": "National and local governments or agencies have in the past adopted, and may in the future adopt, laws and regulations affecting data privacy, the use of the Internet as a commercial medium, the use of data in contexts referred to as artificial intelligence and machine learning, and data sovereignty requirements concerning the location of data centers that store and process data. As a cloud based service provider, we optimize performance of our products and services by utilizing data centers that may be located in different political jurisdictions.",
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"path": "000:012:003:001",
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{
"index": 0,
"title": "",
"name": "Utilization of Product Usage Data for Continuous Improvement",
"content": "In addition, we utilize data concerning the use of our products and services to continually improve our offering.",
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"path": "000:012:003:001:000",
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},
{
"index": 1,
"title": "",
"name": "Impact of Evolving Data Privacy Laws on Service Development and Deployment",
"content": "Changing laws, regulations and standards applying to the collection, transfer, processing, storage or use of data, including personal data, could affect our ability to develop our products and services to maximize their utility, as well as our customers\u2019 ability to use and share data, potentially restricting our ability to store, process and share data with our customers in connection with providing our services. In some cases, this could impact our ability to offer our services in certain locations or our customers\u2019 ability to deploy our services globally.",
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"path": "000:012:003:001:001",
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{
"index": 2,
"title": "",
"name": "Examples of Recent Regulatory Changes Affecting Data Handling",
"content": "Examples of recent changes include:",
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"path": "000:012:003:001:002",
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},
{
"index": 3,
"title": "",
"name": "Introduction of GDPR and Interpretation Variability",
"content": "- In 2016, the European Union (the EU) adopted the General Data Protection Regulation (the GDPR), which took effect in May 2018 and established new requirements applicable to the handling of personal data. The particular obligations imposed by GDPR are subject to interpretation, and different regulators may interpret requirements inconsistently.",
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"path": "000:012:003:001:003",
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{
"index": 0,
"title": "",
"name": "EU Proposed e-Privacy Regulation and Right to be Forgotten Requirements",
"content": "Further, laws such as the EU\u2019s proposed e-Privacy Regulation are increasingly aimed at the use of personal information , the tracking of individuals\u2019 online activities and the \u201cright to be forgotten,\u201d requiring a company to delete certain information about individuals upon their request in certain circumstances.",
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"path": "000:012:003:001:003:000",
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},
{
"index": 1,
"title": "",
"name": "Impact of Brexit on Compliance with EU and UK Privacy Regulations and Customer Uncertainty",
"content": "- In January 2020, Britain exited the EU (Brexit). Although we do not believe Brexit will require us to alter our operations in any material way to comply with privacy regulations in the EU and the United Kingdom (the UK), Brexit has and may continue to cause uncertainty for our customers.",
"type": "body",
"path": "000:012:003:001:003:001",
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{
"index": 2,
"title": "",
"name": "European Court of Justice Ruling on Privacy Shield and Standard Contractual Clauses Impact on Data Transfer",
"content": "- In early 2020, the European Court of Justice is expected to give its ruling on a case regarding the validity of the Privacy Shield framework and the Standard Contractual Clauses (the SCCs), which are lawful transfer mechanisms for transferring personal data from the EU to the US (under the Privacy Shield framework) and other third countries deemed to have inadequate protection by the European Commission (under the SCCs). While we do not believe there will be any material impact to our business if the Privacy Shield is invalidated, there may be an impact to our ability to process personal data in certain jurisdictions where we operate if the SCCs are invalidated by the European Court of Justice.",
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"path": "000:012:003:001:003:002",
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{
"index": 3,
"title": "",
"name": "Implementation and Impact of the California Consumer Privacy Act (CCPA) in January 2020",
"content": "- In January 2020, the California Consumer Privacy Act (the CCPA) in the US took effect and broadly defines personal information and provides California consumers increased privacy rights and protections. The CCPA, among other things, affords California consumers new abilities to opt out of certain sales of personal information. Legislators have amended the CCPA since it passed in 2018 and implementing regulations are yet to be finalized by the California Attorney General.",
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"path": "000:012:003:001:003:003",
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]
},
{
"index": 4,
"title": "",
"name": "Potential Future Legislation on Data Privacy and Localization by Various Jurisdictions",
"content": "In addition, other nations and U.S. states and the federal government have discussed, are passing or may pass, future legislation similar to the GDPR and\/or the CCPA, or with other data localization or sovereignty requirements.",
"type": "container",
"path": "000:012:003:001:004",
"children": [
{
"index": 0,
"title": "",
"name": "Consideration of AI and Machine Learning Regulation by US and Non-US Governments",
"content": "- Both US and non-US governments are considering the use of artificial intelligence and machine learning in both consumer and business contexts and whether there is any need for regulation in these areas.",
"type": "body",
"path": "000:012:003:001:004:000",
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]
},
{
"index": 5,
"title": "",
"name": "Compliance Costs and Obligations Under Data Privacy and Transfer Regulations",
"content": "The costs of compliance with, and other obligations imposed by, the GDPR, the e-Privacy Regulation, the CCPA and other privacy, data residency and data transfer laws, regulations and standards may cause us to incur substantial operational costs or require us to modify our data handling practices and\/or policies, may limit the development, use and adoption of our services and reduce overall demand for our services.",
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"path": "000:012:003:001:005",
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},
{
"index": 6,
"title": "",
"name": "Potential Consequences of Non-Compliance with Data Privacy Regulations",
"content": "In addition, non-compliance could result in proceedings or investigations against us by regulatory authorities or others, lead to significant fines or reputational harm and may otherwise adversely impact our business, financial condition and operating results.",
"type": "body",
"path": "000:012:003:001:006",
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},
{
"index": 7,
"title": "",
"name": "Potential Fines for GDPR Non-Compliance and Regulatory Interpretations",
"content": "For example, the GDPR imposes significant new obligations and compliance with these obligations depends in part on how particular regulators interpret and apply them. If we fail to comply with the GDPR or if regulators assert that we have failed to comply with the GDPR, we may be subject to fines of up to 4% of our worldwide annual revenue.",
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"path": "000:012:003:001:007",
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{
"index": 8,
"title": "",
"name": "Impact of Product Changes on Compliance Requirements",
"content": "Changes in our developed or acquired products and how such products utilize data could alter or increase our compliance requirements.",
"type": "body",
"path": "000:012:003:001:008",
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},
{
"index": 9,
"title": "",
"name": "Impact of Increased Privacy Regulation Compliance Costs on Innovation and Product Demand",
"content": "As a result, the cost of compliance with and other obligations imposed by privacy regulations could increase and our innovation and business drivers in developing or acquiring new and emerging technologies and the demand for our products could be impacted.",
"type": "body",
"path": "000:012:003:001:009",
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},
{
"index": 10,
"title": "",
"name": "Additional Obligations from Self-Regulatory Standards by Privacy and Industry Groups",
"content": "In addition to government activity, privacy advocacy groups and other technology and industry groups have established or may establish various new or different self-regulatory standards that may place additional obligations on us.",
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"path": "000:012:003:001:010",
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{
"index": 11,
"title": "",
"name": "Customer Expectations for Voluntary Certifications and Third-Party Standards Compliance",
"content": "Our customers may expect us to meet voluntary certifications or adhere to other standards established by third parties. If we are unable to maintain these certifications or meet these standards, it could reduce demand for our products and adversely affect our business.",
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"path": "000:012:003:001:011",
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]
},
{
"index": 2,
"title": "",
"name": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"content": "If we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological, market and customer developments, our competitive position and business prospects may be harmed. We compete in markets that continue to evolve rapidly.",
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{
"index": 0,
"title": "",
"name": "Acceleration of Innovation Driven by Digital Technology Adoption",
"content": "The pace of innovation will continue to accelerate as customers increasingly base their purchases on digital technologies and capabilities, including public and private cloud solutions and infrastructure, massively scalable databases, mobile, consumer product-like user experiences, social, collaboration, machine learning, artificial intelligence, Internet-connected devices, high-velocity robotic automation, security, cryptography, internal software development operations, and application and service awareness.",
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"path": "000:012:003:002:000",
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},
{
"index": 1,
"title": "",
"name": "Customer Decision-Making on Digital Technology Adoption",
"content": "Our customers and prospective customers must choose among competing imperatives to adopt digital technologies, or have been built on fully-digital, modern, dynamic IT technologies.",
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"path": "000:012:003:002:001",
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},
{
"index": 2,
"title": "",
"name": "Requirements for Competitive Effectiveness in Technology Market",
"content": "Accordingly, to compete effectively, we must:\n- identify and innovate in the right emerging technologies, knowing that we cannot make substantial investments in all of them;\n- accurately predict our customers\u2019 changing business needs, priorities and adoption practices, including their technology infrastructures and buying and budgetary practices;\n- invest in and continually optimize our own technology platform so that it continues to meet the very high performance expectations of our customers;\n- successfully deliver new, scalable platform and database technologies and products to meet these needs and priorities;\n- efficiently integrate with other technologies within our customers\u2019 digital environments;\n- expand our offerings into industries and to buyers who are not familiar with our offerings;\n- profitably market and sell products to companies and buyers in markets where our sales and marketing teams have less experience, including to companies built on fully-digital, modern, dynamic IT technologies that have not been strong buyers of ITSM and ITOM products; and\n- effectively deliver, either directly or through our partner ecosystem, the business process planning, IT systems architecture planning, and product implementation services that our customers require to be successful.",
"type": "body",
"path": "000:012:003:002:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Potential Risks of Failing to Meet Key Business Requirements",
"content": "If we fail to meet any of these requirements, our competitive position, strategic relevance and business prospects may be harmed.",
"type": "body",
"path": "000:012:003:002:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Impact of Product Release Delays and Defects on Technology Adoption and Customer Satisfaction",
"content": "Delays in the release of, or actual or perceived defects in, new or updated products may slow the adoption of our most recent technologies, reduce our ability to efficiently provide our services, decrease customer satisfaction, and adversely impact sales of additional products to our customers.",
"type": "body",
"path": "000:012:003:002:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Necessity for Successful Release of New Products and Updates and Associated Risk Management",
"content": "We must successfully continue to release new products and updates to existing products. The success of any release depends on a number of factors, including our ability to manage the risks associated with quality or other defects or deficiencies, delays in the timing of releases or the adoption of releases by customers, and other complications that may arise during the early stages of introduction.",
"type": "body",
"path": "000:012:003:002:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Impact of Delayed or Defective Product Releases on Customer Adoption and Business Growth",
"content": "If releases are delayed or if customers perceive that our releases contain bugs or other defects or are difficult to implement, customer adoption of our new products or updates may be adversely impacted, customer satisfaction may decrease, our ability to efficiently provide our services may be reduced, and our growth prospects may be harmed.",
"type": "body",
"path": "000:012:003:002:006",
"children": []
}
]
},
{
"index": 3,
"title": "",
"name": "Risks Associated with Government and Heavily-Regulated Organizational Contracts",
"content": "We do business with federal, state and local governments and agencies, and heavily-regulated U.S. and foreign organizations; as a result, we face risks related to the procurement process, budget decisions driven by statutory and regulatory determinations, termination of contracts, and compliance with government contracting requirements.",
"type": "container",
"path": "000:012:003:003",
"children": [
{
"index": 0,
"title": "",
"name": "Provision of Products and Services to Government and Regulated Entities Directly and Through Partners",
"content": "We provide products and services to the U.S. government, state and local governments and heavily-regulated organizations directly and through our partners.",
"type": "body",
"path": "000:012:003:003:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Investments in Government Sector Sales and Cloud Security Certifications",
"content": "We have made, and may continue to make, significant investments to support future sales opportunities in the federal, state and local government sectors. This includes obtaining additional cloud security certification requirements for the ServiceNow GovCommunityCloud, such as the U.S. Federal Risk and Authorization Management Program (FedRAMP) High Impact Provisional Authority to Operate (P-ATO) from the Joint Authorization Board, and the U.S. Department of Defense Impact Level 4 P-ATO in the Security Requirements Guide for cloud computing by the Defense Information Systems Agency.",
"type": "body",
"path": "000:012:003:003:001",
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},
{
"index": 2,
"title": "",
"name": "Potential Changes and Challenges in Maintaining Government Certifications",
"content": "However, government certification requirements may change, or we may be unable to achieve or sustain one or more government certifications, including those mentioned above.",
"type": "body",
"path": "000:012:003:003:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Impact of Certification Requirements on Government Sector Sales",
"content": "As a result, our ability to sell into the government sector could be restricted until we obtain such certifications.",
"type": "body",
"path": "000:012:003:003:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Sales to Government Entities Primarily Through Distributors and Resellers",
"content": "A substantial majority of our sales to date to government entities have been made indirectly through our distribution and reseller partners.",
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"path": "000:012:003:003:004",
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},
{
"index": 5,
"title": "",
"name": "Risks and Challenges in Government Procurement Process",
"content": "Doing business with government entities presents a variety of risks. The procurement process for governments and their agencies is highly competitive, time-consuming and may, in certain circumstances, be subject to political influence.",
"type": "body",
"path": "000:012:003:003:005",
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},
{
"index": 6,
"title": "",
"name": "Significant Up-Front Costs and Compliance Risks in Government Contract Bidding",
"content": "We incur significant up-front time and expense, such as through engaging lobbyists, which subjects us to additional compliance risks and costs, without any assurance that we (or a third-party distributor or reseller) will win a contract.",
"type": "body",
"path": "000:012:003:003:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Impact of Public Sector Budgetary Cycles and Federal Government Shutdown on Product and Service Demand",
"content": "Beyond this, demand for our products and services may be adversely impacted by public sector budgetary cycles and funding availability that in any given fiscal cycle may be reduced or delayed, including in connection with an extended federal government shutdown.",
"type": "body",
"path": "000:012:003:003:007",
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},
{
"index": 8,
"title": "",
"name": "Potential Challenges to Bid Awards by Competitive Bidders",
"content": "Further, if we are or our partner is successful in receiving a bid award, that award could be challenged by one or more competitive bidders.",
"type": "body",
"path": "000:012:003:003:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Impact of Bid Protests on Contract Award Expenses and Outcomes",
"content": "Bid protests may result in an increase in expenses related to obtaining contract awards or an unfavorable modification or loss of an award.",
"type": "body",
"path": "000:012:003:003:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Impact of Unsuccessful Bid Protests on Project Initiation and Financial Results",
"content": "In the event a bid protest is unsuccessful, the resulting delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated.12Table of Contents",
"type": "body",
"path": "000:012:003:003:010",
"children": []
},
{
"index": 11,
"title": "",
"name": "Termination Rights of Public Sector Customers for Convenience or Default",
"content": "In addition, public sector customers may have contractual, statutory or regulatory rights to terminate current contracts with us or our third-party distributors or resellers for convenience or due to a default, though such risk may be assumed by such third-party distributor or reseller.",
"type": "body",
"path": "000:012:003:003:011",
"children": []
},
{
"index": 12,
"title": "",
"name": "Termination for Convenience \u2013 Fee Collection Limitations",
"content": "If a contract is terminated for convenience, we may only be able to collect fees for products or services delivered prior to termination and settlement expenses.",
"type": "body",
"path": "000:012:003:003:012",
"children": []
},
{
"index": 13,
"title": "",
"name": "Liability for Excess Costs and Business Restrictions Upon Contract Termination Due to Default",
"content": "If a contract is terminated due to a default, we may be liable for excess costs incurred by the customer for procuring alternative products or services or be precluded from doing further business with government entities.",
"type": "body",
"path": "000:012:003:003:013",
"children": []
},
{
"index": 14,
"title": "",
"name": "Compliance Requirements and Legal Obligations for Government Contracting Entities",
"content": "Further, entities providing services to governments are required to comply with a variety of complex laws, regulations, and contractual provisions relating to the formation, administration, or performance of government contracts that give public sector customers substantial rights and remedies, many of which are not typically found in commercial contracts. These may include rights with respect to price protection, the accuracy of information provided to the government, contractor compliance with supplier diversity policies, and other terms that are particular to government contracts, such as termination rights. These rules may apply to us and\/or third-party resellers or distributors whose practices we may not control. Such parties\u2019 non-compliance could impose repercussions with respect to contractual and customer satisfaction issues.",
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"path": "000:012:003:003:014",
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},
{
"index": 15,
"title": "",
"name": "Government Audits and Potential Penalties for Non-Compliance with Contractual Requirements",
"content": "In addition, federal, state, and local governments routinely investigate and audit contractors for compliance with these requirements. If, as a result of an audit, it is determined that we have failed to comply with these requirements, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, cost associated with the triggering of price reduction clauses, fines, and suspensions or debarment from future government business, and we may suffer reputational harm.",
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"path": "000:012:003:003:015",
"children": []
}
]
},
{
"index": 4,
"title": "",
"name": "Expansion into Heavily Regulated Industries",
"content": "Further, we are increasingly doing business in heavily regulated industries, such as the financial services and health care industries.",
"type": "container",
"path": "000:012:003:004",
"children": [
{
"index": 0,
"title": "",
"name": "Regulatory Compliance Requirements for Customers in Heavily Regulated Industries",
"content": "Current and prospective customers, such as those in these industries, may be required to comply with more stringent regulations in connection with subscribing to and implementing our services or particular regulations regarding third-party vendors that may be interpreted differently by different customers.",
"type": "body",
"path": "000:012:003:004:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Regulatory Compliance Challenges for Third-Party Vendors and Our Company",
"content": "In addition, regulatory agencies may impose requirements toward third-party vendors generally, or our company in particular, that we may not be able to, or may not choose to, meet.",
"type": "body",
"path": "000:012:003:004:001",
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},
{
"index": 2,
"title": "",
"name": "Customer Audit Rights in Heavily-Regulated Areas",
"content": "In addition, customers in these heavily-regulated areas often have a right to conduct audits of our systems, products and practices.",
"type": "body",
"path": "000:012:003:004:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Regulatory Compliance Determination and Business Continuity Constraints",
"content": "In the event that one or more customers determines that some aspect of our business does not meet regulatory requirements, we may be limited in our ability to continue or expand our business.",
"type": "body",
"path": "000:012:003:004:003",
"children": []
}
]
},
{
"index": 5,
"title": "",
"name": "Risks Associated with Non-U.S. Government Customers in Emerging Markets",
"content": "Our customers also include a number of non-U.S. governments, to which similar procurement, budgetary, contract, and audit risks of U.S. government contracting also apply, particularly in certain emerging markets where our customer base is less established.",
"type": "container",
"path": "000:012:003:005",
"children": [
{
"index": 0,
"title": "",
"name": "Compliance Costs and Management Resource Consumption Due to Complex Regulations in Various Jurisdictions",
"content": "In addition, compliance with complex regulations and contracting provisions in a variety of jurisdictions can be expensive and consume significant management resources.",
"type": "body",
"path": "000:012:003:005:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Impact of Political and Non-Competitive Factors on Business Opportunities in Certain Jurisdictions",
"content": "In certain jurisdictions, our ability to win business may be constrained by political and other factors unrelated to our competitive position in the market.",
"type": "body",
"path": "000:012:003:005:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Potential Adverse Impact on Business and Operational Results",
"content": "Each of these difficulties could materially adversely affect our business and results of operations.",
"type": "body",
"path": "000:012:003:005:002",
"children": []
}
]
},
{
"index": 6,
"title": "",
"name": "Reliance on Partner Network and Potential Impact on Revenue and Growth",
"content": "We rely on our network of partners for an increasing portion of our revenues, and if these partners fail to perform, our ability to sell and distribute our products may be limited, and our operating results and growth rate may be harmed.",
"type": "container",
"path": "000:012:003:006",
"children": [
{
"index": 0,
"title": "",
"name": "Revenue Generation through Partner Network, Including Managed Service Providers and Resellers",
"content": "An increasing portion of our revenues is generated by sales through our network of partners, including managed service providers and resellers.",
"type": "body",
"path": "000:012:003:006:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Increasing Reliance on Partners for Professional Services and Customer Implementations",
"content": "In addition, we increasingly rely on our partners to provide professional services, including customer implementations.",
"type": "body",
"path": "000:012:003:006:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Effectiveness and Consistency of Partner Training Programs",
"content": "While we provide our partners with training and programs, including accreditations and certifications, these programs may not be effective or utilized consistently.",
"type": "body",
"path": "000:012:003:006:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Extensive Training and Resource Requirements for New Partners",
"content": "In addition, new partners may require extensive training and may require significant time and resources to achieve productivity.",
"type": "body",
"path": "000:012:003:006:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Partner-Related Legal Risks and Reputational Harm Due to Misrepresentation, Service Failures, or Policy Violations",
"content": "Our partners may subject us to lawsuits, potential liability, and reputational harm if, for example, any of our partners misrepresent the functionality of our platform or products to customers, fail to perform services to our customers\u2019 expectations, or violate laws or our corporate policies.",
"type": "body",
"path": "000:012:003:006:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Potential Competitive Threats and Intellectual Property Concerns from Partners",
"content": "In addition, our partners may utilize our platform to develop products and services that could potentially compete with products and services that we offer currently or in the future. Concerns over competitive matters or intellectual property ownership could constrain these partnerships.",
"type": "body",
"path": "000:012:003:006:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Impact of Partner Network Management and Service Quality on Business Performance",
"content": "If we fail to effectively manage and grow our network of partners, or properly monitor the quality and efficacy of their service delivery, our ability to sell our products and efficiently provide our services may be impacted, and our operating results and growth rate may be harmed.",
"type": "body",
"path": "000:012:003:006:006",
"children": []
}
]
},
{
"index": 7,
"title": "",
"name": "Impact of Unsuccessful International Market Penetration and Risk Management on Business and Operating Results",
"content": "If we are unsuccessful in increasing our penetration of international markets or managing the risks associated with foreign markets, our business and operating results will be adversely affected.",
"type": "container",
"path": "000:012:003:007",
"children": [
{
"index": 0,
"title": "",
"name": "Dependence on Increasing International Sales and Risks of Failing to Grow Internationally",
"content": "Sales outside of North America represented approximately 34% of our total revenues for each of the years ended December 31, 2019 and 2018. Our business and future prospects depend on increasing our international sales as a percentage of our total revenues. The failure to grow internationally will harm our business.",
"type": "body",
"path": "000:012:003:007:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Risks and Investments Associated with Operating in International Markets",
"content": "Additionally, operating in international markets requires significant investment and management attention and subjects us to different regulatory, political and economic risks from those in the United States (the US).",
"type": "body",
"path": "000:012:003:007:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Investment Uncertainty in New Geographic Markets",
"content": "We have made, and will continue to make, substantial investments in data centers, cloud computing infrastructure, sales, marketing, personnel and facilities as we enter and expand in new geographic markets. When we make these investments, it is typically unclear whether, and when, sales in the new market will justify our investments. We may significantly underestimate the level of investment and time required to be successful, or whether we will be successful.",
"type": "body",
"path": "000:012:003:007:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Lower Rate of Acquisition of Large Enterprise Customers in Less Established Markets Due to Regulatory and Operational Risks",
"content": "Our rate of acquisition of new large enterprise customers, a factor affecting our growth, has generally been lower in Africa, Asia, Eastern Europe, South America and other markets in which we are less established and where there may be increased or changing regulations and operational and intellectual property risks, as compared to North America, Australia and Western Europe.",
"type": "body",
"path": "000:012:003:007:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Emerging Markets Presence Among Prospective Large Enterprise Customers",
"content": "An increasing proportion of the large enterprises that are not yet our customers are located in emerging markets where we are less established.",
"type": "body",
"path": "000:012:003:007:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Challenges in Geographic Expansion and Foreign Operations Management",
"content": "We have experienced, and may continue to experience, difficulties in some of our investments in geographic expansion, including hiring qualified sales management personnel, penetrating the target market, anticipating and ensuring compliance with regulatory developments, and managing foreign operations in such locales.",
"type": "body",
"path": "000:012:003:007:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Risks Associated with International Market Expansion",
"content": "Risks inherent with making our products and services available in international markets include without limitation:\n- compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, competition, requirements to have local partner(s), local entity ownership limitations, technology transfer or sharing requirements, data residency and transfer laws and regulations, privacy and data protection laws and regulations, including the GDPR;\n- compliance by us and our business partners with international bribery and anti-corruption laws, including the UK Bribery Act and the U.S. Foreign Corrupt Practices Act of 1977, as amended (the FCPA);\n- the risk that illegal or unethical activities of our local employees or business partners will be attributed to or result in liability to us or damage to our reputation;\n- longer and potentially more complex sales and accounts receivable payment cycles and other collection difficulties;\n- tax treatment of revenues from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions;\n- different pricing and distribution environments;\n- foreign currency fluctuations, which may cause transactional and translational remeasurement losses;\n- potential changes in international trade policies, tariffs, agreements and practices, including the adoption and expansion of formal or informal trade restrictions or regulatory frameworks favoring local competitors;\n- potential threatening state-sponsored actions, including cybersecurity threats directed at local data centers, customers or end-users;\n- local business practices and cultural norms that may favor local competitors; and\n- localization of our services, including translation into foreign languages and associated expenses.",
"type": "body",
"path": "000:012:003:007:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Adverse Effects of Unmanaged International Market Risks on Business and Revenue Growth",
"content": "If we are unable to manage these risks, if our required investments in these international markets are greater than anticipated, or if we are unsuccessful in increasing sales in emerging markets, our revenue growth rate, business and operating results will be adversely affected.",
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"path": "000:012:003:007:007",
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}
]
},
{
"index": 8,
"title": "",
"name": "Potential Risks and Downsides of Acquisitions and Investments",
"content": "As we acquire or invest in companies and technologies, we may not realize the expected business or financial benefits and the acquisitions and investments may divert our management\u2019s attention and result in additional dilution to our stockholders.",
"type": "container",
"path": "000:012:003:008",
"children": [
{
"index": 0,
"title": "",
"name": "Past and Future Strategic Transactions: Acquisitions and Investments in Businesses, Technologies, Services, Products, and Assets",
"content": "We have acquired or invested in companies and technologies in the past as part of our business strategy and may continue to evaluate and execute potential strategic transactions, including acquisitions of or investments in businesses, technologies, services, products and other assets in the future.",
"type": "body",
"path": "000:012:003:008:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Potential Strategic Business Relationships for Expanding Services and International Capabilities",
"content": "We also may enter into relationships with other businesses to expand our service offerings, functionality or our ability to provide services in international locations, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies.",
"type": "body",
"path": "000:012:003:008:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Limitations of Due Diligence in Strategic Transactions",
"content": "Although we conduct reasonably extensive due diligence with each of the entities we engage for a strategic transaction, our due diligence efforts may not reveal every material concern that may exist either with respect to the target entity or our assumptions surrounding the resulting combination.",
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"path": "000:012:003:008:002",
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},
{
"index": 3,
"title": "",
"name": "Risks Associated with Strategic Transactions",
"content": "These strategic transactions involve numerous risks, including:\n- assimilating or integrating the businesses, technologies, products, personnel or operations of the acquired companies;\n- failing to achieve the expected benefits of the acquisition or investment;\n- potential loss of key employees of the acquired company;\n- inability to maintain relationships with customers and partners of the acquired business;\n- potential adverse tax consequences;\n- disruption to our business and diversion of management attention and other resources;\n- potential financial and credit risks associated with acquired customers;\n- dependence on acquired technologies or licenses for which alternatives may not be available to us without significant cost or complexity;\n- in the case of foreign acquisitions, the challenges associated with integrating operations across different cultures and languages and any currency and regulatory risks associated with specific countries;\n- increased data privacy or security compliance requirements resulting from integrating the acquired technology or company with ours; and\n- potential unknown liabilities associated with the acquired businesses.",
"type": "body",
"path": "000:012:003:008:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Potential Financial Impact of Future Acquisition Financing Methods",
"content": "In addition, we may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for any future acquisitions, each of which could adversely affect our financial condition or our stock price.",
"type": "body",
"path": "000:012:003:008:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Potential Dilution and Financial Constraints from Equity or Debt Financing of Acquisitions",
"content": "Furthermore, if we finance acquisitions by issuing equity, convertible or other debt securities or loans, our existing stockholders may be diluted, or we could face constraints related to the terms of and repayment obligation related to the incurrence of indebtedness that could affect our stock price.",
"type": "body",
"path": "000:012:003:008:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Potential Negative Impact on Business, Operating Results, and Financial Condition",
"content": "The occurrence of any of these risks could harm our business, operating results and financial condition.",
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"path": "000:012:003:008:006",
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}
]
}
]
},
{
"index": 4,
"title": "Risks Related to the Operation of Our Business",
"name": "",
"content": "",
"type": "container",
"path": "000:012:004",
"children": [
{
"index": 0,
"title": "",
"name": "Potential Liabilities and Business Impact of Cyber-Security Events",
"content": "If we or our third-party service providers suffer a cyber-security event, we may lose customers and incur significant liabilities, any of which would harm our business and operating results.",
"type": "container",
"path": "000:012:004:000",
"children": [
{
"index": 0,
"title": "",
"name": "Handling and Protection of Confidential and Sensitive Customer Data",
"content": "Our operations involve the storage, transmission and processing of our customers\u2019 confidential, proprietary and sensitive data, including personally identifiable information, protected health information, financial information and, in some cases, government information.",
"type": "body",
"path": "000:012:004:000:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Potential Breach of Security Measures and Unauthorized Data Access",
"content": "While we have security measures in place designed to protect customer information and prevent data loss, these measures may be breached because of employee error or third-party actions, including unintentional events or deliberate attacks by cyber criminals, and result in someone obtaining unauthorized access to our customers\u2019 data or our data, including our intellectual property and other confidential business information.",
"type": "body",
"path": "000:012:004:000:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Fraudulent Inducement and Phishing Risks by Third Parties",
"content": "In addition, third parties have attempted and may continue to attempt to fraudulently induce employees, contractors, or users to disclose information to gain access to our data or our customers\u2019 data, and we may be the target of email scams that attempt to acquire personal information or company assets.",
"type": "body",
"path": "000:012:004:000:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Lack of Control Over Third-Party Data Processing and Security Measures",
"content": "Additionally, because we do not control our third-party service providers or their processing of data, we cannot ensure the integrity or security of measures they take to protect customer information and prevent data loss.",
"type": "body",
"path": "000:012:004:000:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Prevalence and Recurrence of Cybersecurity Threats in Industry",
"content": "Computer malware, viruses, hacking, phishing and denial of service attacks by third parties have become more prevalent in our industry, and they have occurred on our and our third-party service providers\u2019 systems in the past and may occur again on these systems in the future.",
"type": "body",
"path": "000:012:004:000:004",
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},
{
"index": 5,
"title": "",
"name": "Inability to Anticipate and Prevent Evolving Cybersecurity Threats",
"content": "Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not detected until successfully launched against a target, we have been and may continue to be unable to anticipate these techniques or to implement adequate preventative measures.",
"type": "body",
"path": "000:012:004:000:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Ongoing Investment in Cyber-Security Measures and Potential Future Expenditures",
"content": "We devote significant financial and personnel resources to implement and maintain security measures; however, as cyber-security threats develop and grow more complex over time, it may be necessary to make significant further investments to protect data and infrastructure.",
"type": "body",
"path": "000:012:004:000:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Potential Consequences of Security Breaches and Cyber Attacks",
"content": "A security breach suffered by us or our third-party service providers, an attack against our service availability or unauthorized access or loss of data could result in a disruption to our service, litigation, the triggering of service availability, indemnification and other contractual obligations, regulatory investigations, government fines and penalties, reputational damage, loss of sales and customers, mitigation and remediation expenses and other significant costs and liabilities.",
"type": "body",
"path": "000:012:004:000:007",
"children": []
},
{
"index": 8,
"title": "",
"name": "Potential Costs and Operational Consequences of Security Incident Mitigation and Prevention",
"content": "In addition, we may incur significant costs and operational consequences of investigating, remediating, eliminating, complying with notice obligations and implementing additional measures designed to prevent actual or perceived security incidents.",
"type": "body",
"path": "000:012:004:000:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Uncertainty of Insurance Coverage for Security Incidents and Breaches",
"content": "We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage as to any future claim.",
"type": "body",
"path": "000:012:004:000:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Customer Responsibility for Data Access and Optional Use of Provided Security Tools and Practices",
"content": "Further, in most instances, our customers administer access to the data held in their particular instance for their employees and service providers. We offer tools and support for what we believe are best practices to maintain security utilizing our services, but customers are not required to utilize those tools or follow our suggested practices.",
"type": "body",
"path": "000:012:004:000:010",
"children": []
},
{
"index": 11,
"title": "",
"name": "Potential Economic, Operational, and Reputational Impact of Customer-Caused Cyber-Security Events",
"content": "As a result, or for other reasons, a customer may suffer a cyber-security event on its own systems, unrelated to our own, and allow a malicious actor to obtain access to the customer\u2019s information held on our platform.Even if such a breach is unrelated to our security programs or practices, such breach could result in our incurring significant economic and operational costs in investigating, remediating, eliminating and implementing additional measures to further protect our customers from their own vulnerabilities, and could result in reputational harm to us.",
"type": "body",
"path": "000:012:004:000:011",
"children": []
}
]
},
{
"index": 1,
"title": "",
"name": "Dependence on Key Employees and Impact on Business Operations",
"content": "If we lose key employees or are unable to attract and retain the employees we need, our business and operating results will be adversely affected. Our success depends largely upon the continued services of our management team, including our Chief Executive Officer and Chief Financial Officer, and many key individual contributors.",
"type": "container",
"path": "000:012:004:001",
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{
"index": 0,
"title": "",
"name": "Management Team Changes and Potential Impact on Business Operations",
"content": "From time to time in the ordinary course of business, there may be changes in our management team resulting from the hiring or departure of executives. For example, our current President and Chief Executive Officer was appointed in November 2019 and our current Chief Financial Officer was appointed in January 2020. While we seek to manage these transitions carefully, including by establishing strong processes and procedures and succession planning, such changes may result in a loss of institutional knowledge and cause disruptions to our business.",
"type": "body",
"path": "000:012:004:001:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Challenges in Attracting and Retaining Qualified Technology Industry Personnel",
"content": "In the technology industry, there is substantial and continuous competition for engineers with high levels of experience in designing, developing and managing software and Internet-related solutions, sales executives and operations personnel. We may not be successful in attracting and retaining qualified personnel, and we may experience increased compensation and training costs that may not be offset by either improved productivity or higher sales.",
"type": "body",
"path": "000:012:004:001:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Challenges in Hiring and Retaining Highly-Skilled Employees in Key Geographic Locations",
"content": "We have from time to time experienced, and we may continue to experience, difficulty in hiring and retaining highly-skilled employees with appropriate qualifications, and may not be able to fill positions in desired geographic areas or at all. In particular, competition for experienced software and cloud computing infrastructure engineers in the San Francisco Bay area, San Diego, Seattle, London, Amsterdam and Hyderabad, our primary operating locations, is intense.",
"type": "body",
"path": "000:012:004:001:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "At-Will Employment and Its Impact on Recruitment and Retention",
"content": "Many of our employees, including all of our executive officers, are employed \u201cat-will\u201d and may terminate their employment with us at any time. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be adversely affected.",
"type": "body",
"path": "000:012:004:001:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Importance of Corporate Culture in Retaining and Recruiting Personnel During Global Expansion",
"content": "In addition, we believe our corporate culture of fostering innovation, teamwork and employee satisfaction has been a key contributor to our success to date. As we continue to grow and expand globally, we may find it difficult to maintain important aspects of our corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future success.",
"type": "body",
"path": "000:012:004:001:004",
"children": []
}
]
},
{
"index": 2,
"title": "",
"name": "Impact of Natural Disasters and Catastrophic Events on Business Operations",
"content": "Natural disasters and other events beyond our control could harm our business. Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could have a negative effect on us.",
"type": "container",
"path": "000:012:004:002",
"children": [
{
"index": 0,
"title": "",
"name": "Risk of Business Interruption Due to Natural Disasters and Uncontrollable Events",
"content": "Our business operations are subject to interruption by natural disasters, flooding, fire, power shortages, pandemics such as the recent spread of the coronavirus, terrorism, political unrest, telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war, the effects of climate change (such as drought, wildfires, increased storm severity and sea level rise) and other events beyond our control. Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers, could decrease demand for our services, and could cause us to incur substantial expense.",
"type": "body",
"path": "000:012:004:002:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Insurance Coverage Insufficiency for Potential Losses and Expenses",
"content": "Our insurance may not be sufficient to cover losses or additional expense that we may sustain.",
"type": "body",
"path": "000:012:004:002:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Risk of Operational Disruption Due to Proximity to Seismic Faults in California and Washington",
"content": "The majority of our research and development activities, corporate offices, information technology systems, and other critical business operations are located near major seismic faults in California and Washington. Customer data could be lost, significant recovery time could be required to resume operations and our financial condition and operating results could be adversely affected in the event of a major natural disaster or catastrophic event.",
"type": "body",
"path": "000:012:004:002:002",
"children": []
}
]
},
{
"index": 3,
"title": "",
"name": "Factors Impacting Product Implementation Success and Business Dependence on Effective Customer Implementation",
"content": "Various factors, including our customers\u2019 business, integration, migration and security requirements, or errors by us, our partners, or our customers, may cause implementations of our products to be delayed, inefficient or otherwise unsuccessful. Our business depends upon the successful implementation of our products by our customers.",
"type": "container",
"path": "000:012:004:003",
"children": [
{
"index": 0,
"title": "",
"name": "Dependence on Partner Network for Implementation Services and Potential Shortage of Qualified Partners",
"content": "Increasingly, we and our customers rely on our network of partners to deliver implementation services, and there may not be enough qualified implementation partners available to meet customer demand.",
"type": "body",
"path": "000:012:004:003:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Potential Causes of Implementation Delays and Inefficiencies",
"content": "Further, our customers\u2019 business, integration, migration and security requirements, or errors by us, our partners, or our customers, or other factors may cause implementations to be delayed, inefficient or otherwise unsuccessful. For example, changes in the functional requirements of our customers, delays in timeline, or deviations from recommended best practices may occur during the course of an implementation project.",
"type": "body",
"path": "000:012:004:003:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Potential for Significant Implementation Costs Due to Various Risks",
"content": "As a result of these and other risks, we or our customers may incur significant implementation costs in connection with the purchase, implementation and enablement of our products.",
"type": "body",
"path": "000:012:004:003:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Customer Implementation Delays and Impact on Sales and Subscription Renewals",
"content": "Some customer implementations may take longer than planned or fail to meet our customers\u2019 expectations, which may delay our ability to sell additional products or result in customers canceling or failing to renew their subscriptions before our products have been fully implemented.",
"type": "body",
"path": "000:012:004:003:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Customer Capacity and Talent Limitations Impacting Digital Transformation Benefits",
"content": "Some customers may lack the employee talent or organizational capacity to manage a digital transformation such as our offering and, as a consequence, may be unable to see the benefits of our products.",
"type": "body",
"path": "000:012:004:003:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Risks of Unsuccessful, Lengthy, or Costly Customer Implementation and Integration Projects",
"content": "Unsuccessful, lengthy, or costly customer implementation and integration projects could result in claims from customers, reputational harm, and opportunities for competitors to displace our products, each of which could have an adverse effect on our business and operating results.",
"type": "body",
"path": "000:012:004:003:005",
"children": []
}
]
},
{
"index": 4,
"title": "",
"name": "Potential Liability and Reputational Damage from Service Disruptions or Defects",
"content": "Disruptions or defects in our services could damage our customers\u2019 businesses, subject us to substantial liability and harm our reputation and financial results.",
"type": "container",
"path": "000:012:004:004",
"children": [
{
"index": 0,
"title": "",
"name": "Potential for Defects in Services and Impact of Third-Party Software",
"content": "From time to time, we experience defects in our services, and new defects may be detected in the future. For example, we provide regular updates to our services, which frequently contain undetected defects when first released. Defects may also be introduced by our use of third-party software, including open source software.",
"type": "body",
"path": "000:012:004:004:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Potential Sources of Service Disruptions: Internal Errors and External Incidents",
"content": "Disruptions may result from errors we make in developing, delivering, configuring or hosting our services, or designing, installing, expanding or maintaining our cloud infrastructure. Disruptions in service can also result from incidents that are outside of our control, including denial of service attacks.",
"type": "body",
"path": "000:012:004:004:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Current and Future Data Center Management and Service Provision Strategy",
"content": "We currently serve our customers primarily using equipment managed by us and co-located in third-party data centers operated by several different providers located around the world, and we plan to serve certain of our customers using data center facilities operated by public cloud service providers.",
"type": "body",
"path": "000:012:004:004:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Vulnerability of Data Centers to Natural Disasters, Misconduct, and Operational Failures",
"content": "These data centers are vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, power loss and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct, equipment failure and adverse events caused by operator error or negligence.",
"type": "body",
"path": "000:012:004:004:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Potential Service Interruptions and Customer Data Loss Due to Data Center Issues",
"content": "Despite precautions taken at these centers, problems at these centers could result in lengthy interruptions in our services and the loss of customer data.",
"type": "body",
"path": "000:012:004:004:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Customer-Induced Service Disruption Risks",
"content": "In addition, our customers may use our services in ways that cause disruptions in service for other customers.",
"type": "body",
"path": "000:012:004:004:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Impact of Service Reliability on Customer Trust and Business Reputation",
"content": "Our customers use our services to manage important aspects of their businesses, and our reputation and business will be adversely affected if our customers and potential customers believe our services are unreliable.",
"type": "body",
"path": "000:012:004:004:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Impact of Service Disruptions or Defects on Revenue, Penalties, Litigation, Customer Retention, and New Customer Acquisition",
"content": "Disruptions or defects in our services may reduce our revenues, cause us to issue credits or pay penalties, subject us to claims and litigation, cause our customers to delay payment or terminate or fail to renew their subscriptions, and adversely affect our ability to attract new customers.",
"type": "body",
"path": "000:012:004:004:007",
"children": []
},
{
"index": 8,
"title": "",
"name": "Customer-Specific System Resiliency Requirements and Potential Non-Compliance",
"content": "Similarly, customers may have unique requirements for system resiliency that we may not be able to, or may not choose to, meet.",
"type": "body",
"path": "000:012:004:004:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Impacts of Claims and Breaches on Financial Liabilities and Litigation Risks",
"content": "The occurrence of payment delays, service credit, warranty or termination for material breach or other claims against us could result in an increase in our bad debt expense, an increase in collection cycles for accounts receivable, an increase to our service level credit accruals, other increased expenses or risks of litigation.",
"type": "body",
"path": "000:012:004:004:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Insufficient Insurance Coverage for Service Disruption Claims",
"content": "We may not have insurance sufficient to compensate us for the potentially significant losses that may result from claims arising from disruptions in our services.",
"type": "body",
"path": "000:012:004:004:010",
"children": []
}
]
}
]
},
{
"index": 5,
"title": "Risks Related to the Financial Performance or Financial Position of Our Business",
"name": "",
"content": "",
"type": "container",
"path": "000:012:005",
"children": [
{
"index": 0,
"title": "",
"name": "Potential Impact of Financial Performance on Common Stock Price",
"content": "Our operating results may vary significantly from period to period, and if we fail to meet the financial performance expectations of investors or securities analysts, the price of our common stock could decline substantially.",
"type": "body",
"path": "000:012:005:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Variability of Operating Results Due to Uncontrollable Factors",
"content": "Our operating results may vary significantly from period to period as a result of various factors, some of which are beyond our control.",
"type": "body",
"path": "000:012:005:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Risk of Financial Performance Not Meeting Guidance or Expectations of Analysts and Investors",
"content": "For any quarterly or annual period, there is a risk that our financial performance will not meet the financial guidance we have previously given for that period, or that we may otherwise fail to meet the financial performance expectations of the securities analysts who issue reports on our company and our common stock price, or of investors in our common stock. There is also a risk that we may issue forward-looking financial guidance for a quarterly or annual period that fails to meet the expectations of such securities analysts or investors.",
"type": "body",
"path": "000:012:005:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Potential Impact on Common Stock Price and Investor Losses Due to Unmet Financial Expectations",
"content": "If any of the foregoing occurs, for any reason, either within or outside of our control, the price of our common stock could decline substantially and investors in our common stock could incur substantial losses.",
"type": "body",
"path": "000:012:005:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"content": "Some of the important factors that may cause our financial performance to vary widely, or cause our forward-looking financial guidance to fall below the expectations of such securities analysts or investors, include:",
"type": "container",
"path": "000:012:005:004",
"children": [
{
"index": 0,
"title": "",
"name": "Ability to Attract, Retain, and Satisfy Customers",
"content": "- our ability to attract new customers, retain and increase sales to existing customers, and satisfy our customers\u2019 requirements;",
"type": "body",
"path": "000:012:005:004:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Changes in Product and Service Mix, Cloud vs. Self-Hosted Offerings, Market Penetration, and Customer Usage",
"content": "- changes in our mix of products and services, including changes in our mix of cloud and self-hosted offerings, market penetration of our products, or use of our products by our customers;",
"type": "body",
"path": "000:012:005:004:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Ability to Increase Sales of Emerging Products",
"content": "- our ability to increase sales of certain emerging products;",
"type": "body",
"path": "000:012:005:004:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Volatility in Foreign Currency Exchange Rates and Hedging Ability",
"content": "- volatility in foreign currency exchange rates and our ability to effectively hedge our foreign currency exposure;",
"type": "body",
"path": "000:012:005:004:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Sales Force Expansion, Retention, and Productivity Rate",
"content": "- the rate of expansion, retention and productivity of our sales force;",
"type": "body",
"path": "000:012:005:004:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Number of New Employees Added",
"content": "- the number of new employees added;",
"type": "body",
"path": "000:012:005:004:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Cost, Timing, and Management Effort for Development of New Products and Services",
"content": "- the cost, timing and management effort for our development of new products and services;",
"type": "body",
"path": "000:012:005:004:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "General Economic Conditions Impacting Customer Purchasing Decisions",
"content": "- general economic conditions that may adversely affect our customers\u2019 or a prospective customers\u2019 purchasing decisions;",
"type": "body",
"path": "000:012:005:004:007",
"children": []
},
{
"index": 8,
"title": "",
"name": "Operating Costs and Capital Expenditures: Amount and Timing Related to Business Operation and Expansion",
"content": "- the amount and timing of operating costs and capital expenditures related to the operation and expansion of our business;",
"type": "body",
"path": "000:012:005:004:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Seasonality of Customer Agreement Timings",
"content": "- seasonality in terms of when we enter into customer agreements;",
"type": "body",
"path": "000:012:005:004:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Length and Complexity of Sales Cycle and Certification Process for Services",
"content": "- the length and complexity of the sales cycle and certification process for our services, especially for sales to larger enterprises, government and regulated organizations;",
"type": "body",
"path": "000:012:005:004:010",
"children": []
},
{
"index": 11,
"title": "",
"name": "Changes in Customer Relationship Size and Complexity",
"content": "- changes in the size and complexity of our customer relationships;",
"type": "body",
"path": "000:012:005:004:011",
"children": []
},
{
"index": 12,
"title": "",
"name": "Changes to Management, Sales, and Account Management Teams Due to Scaling and Evolving Business Priorities",
"content": "- changes to our management, sales and account management teams as we scale and as a result of evolving business priorities;",
"type": "body",
"path": "000:012:005:004:012",
"children": []
},
{
"index": 13,
"title": "",
"name": "Changes in Pricing Policies of Company or Competitors",
"content": "- changes in our or our competitors\u2019 pricing policies;",
"type": "body",
"path": "000:012:005:004:013",
"children": []
},
{
"index": 14,
"title": "",
"name": "Significant Security Breaches, Technical Difficulties, or Service Interruptions",
"content": "- significant security breaches, technical difficulties or interruptions of our services;",
"type": "body",
"path": "000:012:005:004:014",
"children": []
},
{
"index": 15,
"title": "",
"name": "Competitor Introductions of New Solutions or Products",
"content": "- new solutions or products introduced by our competitors;",
"type": "body",
"path": "000:012:005:004:015",
"children": []
},
{
"index": 16,
"title": "",
"name": "Changes in Effective Tax Rates",
"content": "- changes in effective tax rates;",
"type": "body",
"path": "000:012:005:004:016",
"children": []
},
{
"index": 17,
"title": "",
"name": "Changes in Customer Agreement Terms and Billing Durations",
"content": "- changes in the average contract term of our customer agreements, timing of renewals, renewal rates, expansion within our existing customers and billings duration;",
"type": "body",
"path": "000:012:005:004:017",
"children": []
},
{
"index": 18,
"title": "",
"name": "Timing of Customer Payments and Payment Defaults",
"content": "- the timing of customer payments and payment defaults by customers;",
"type": "body",
"path": "000:012:005:004:018",
"children": []
},
{
"index": 19,
"title": "",
"name": "Extraordinary Expenses Including Litigation Costs and Settlement Payments",
"content": "- extraordinary expenses such as litigation costs or damages, including settlement payments;",
"type": "body",
"path": "000:012:005:004:019",
"children": []
},
{
"index": 20,
"title": "",
"name": "Costs of Acquiring New Businesses and Technologies, Integration, and Tax Effects of Acquisitions",
"content": "- the costs associated with acquiring new businesses and technologies and the follow-on costs of integration, including the tax effects of acquisitions;",
"type": "body",
"path": "000:012:005:004:020",
"children": []
},
{
"index": 21,
"title": "",
"name": "Changes in Laws or Regulations Impacting Service Delivery",
"content": "- changes in laws or regulations impacting the delivery of our services;",
"type": "body",
"path": "000:012:005:004:021",
"children": []
},
{
"index": 22,
"title": "",
"name": "Compliance with Privacy Laws and Regulations, Including GDPR and CCPA",
"content": "- our ability to comply with privacy laws and regulations, including the GDPR and the CCPA;",
"type": "body",
"path": "000:012:005:004:022",
"children": []
},
{
"index": 23,
"title": "",
"name": "Significant Litigation or Regulatory Actions Regarding Intellectual Property, Privacy Laws, Employment, or Other Significant Matters",
"content": "- significant litigation or regulatory actions relating to claims of intellectual property infringement, violation of privacy laws, employment matters or any other significant matter;",
"type": "body",
"path": "000:012:005:004:023",
"children": []
},
{
"index": 24,
"title": "",
"name": "Equity Awards and Related Financial Statement Expenses",
"content": "- the amount and timing of equity awards and the related financial statement expenses;",
"type": "body",
"path": "000:012:005:004:024",
"children": []
},
{
"index": 25,
"title": "",
"name": "Impact of New Accounting Pronouncements",
"content": "- the impact of new accounting pronouncements; and",
"type": "body",
"path": "000:012:005:004:025",
"children": []
},
{
"index": 26,
"title": "",
"name": "Estimation pr\u00e9cise du march\u00e9 total adressable pour nos produits et services",
"content": "- our ability to accurately estimate the total addressable market for our products and services.",
"type": "body",
"path": "000:012:005:004:026",
"children": []
},
{
"index": 27,
"title": "",
"name": "Risk of Intellectual Property Infringement Claims by Third Parties",
"content": "Lawsuits against us by third parties that allege we infringe their intellectual property rights could harm our business and operating results. There is considerable patent and other intellectual property development activity in our industry. Many companies in our industry, including our competitors, other third parties and non-practicing entities, own large numbers of patents, copyrights, trademarks and trade secrets, which they may use to assert claims of patent infringement, misappropriation or other violations of intellectual property rights against us.",
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"path": "000:012:005:004:027",
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{
"index": 28,
"title": "",
"name": "Disparity in Patent Portfolios and Increased Risk of Infringement Litigation",
"content": "Moreover, the patent portfolios of many of our competitors are larger than ours. This disparity may increase the risk that our competitors may sue us for patent infringement and may limit our ability to counterclaim for patent infringement or settle through patent cross-licenses.",
"type": "body",
"path": "000:012:005:004:028",
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},
{
"index": 29,
"title": "",
"name": "Potential Claims of Intellectual Property Infringement by Competitors and Third Parties",
"content": "From time to time, our competitors or other third parties, including patent holding companies seeking to monetize patents they have purchased or otherwise obtained, may claim that we are infringing upon their intellectual property rights.",
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"path": "000:012:005:004:029",
"children": []
},
{
"index": 30,
"title": "",
"name": "Example of Legal Settlement Charges and Fulfillment of Obligations with BMC and HPE",
"content": "For example, we recorded charges for aggregate legal settlements of $270.0 million in our consolidated statement of comprehensive loss during the year ended December 31, 2016. The charges covered the fulfillment by us of all financial obligations under settlement agreements with BMC and HPE, with no remaining financial obligations to BMC or HPE under either settlement.",
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},
{
"index": 5,
"title": "",
"name": "Potential Consequences and Costs of Intellectual Property Litigation",
"content": "In any intellectual property litigation, regardless of the scope or merits of the claims at issue, we may incur substantial attorney\u2019s fees and other litigation expenses and, if the claims are successfully asserted against us and we are found to be infringing upon the intellectual property rights of others, we could be required to:\n- pay substantial damages and\/or make substantial ongoing royalty payments;\n- cease offering our products and services;\n- modify our products and services;\n- comply with other unfavorable terms, including settlement terms; and\n- indemnify our customers and business partners and obtain costly licenses on their behalf and refund fees or other payments previously paid to us.",
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"path": "000:012:005:005",
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"index": 0,
"title": "",
"name": "Potential Intellectual Property Litigation Due to Expiration of Third-Party Agreements",
"content": "Further, upon expiration of the term of any third-party agreements that allow us to use their intellectual property, we may be unable to renew such agreements on favorable terms, if at all, in which case we may face intellectual property litigation.",
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"path": "000:012:005:005:000",
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{
"index": 1,
"title": "",
"name": "Impact of Litigation and Public Statements on Customer Satisfaction, Sales, and Stock Price",
"content": "The mere existence of any lawsuit, or any interim or final outcomes, and the course of its conduct and the public statements related to it (or absence of such statements) by the courts, press, analysts and litigants could be unsettling to our customers and prospective customers. This could cause an adverse impact to our customer satisfaction and related renewal rates, cause us to lose potential sales, and could also be unsettling to investors or prospective investors and cause a substantial decline in our stock price.",
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"path": "000:012:005:005:001",
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{
"index": 2,
"title": "",
"name": "Impact of Claims or Litigation on Management Focus and Financial Health",
"content": "Any claim or litigation against us could be costly, time-consuming and divert the attention of our management and key personnel from our business operations and harm our financial condition and operating results.",
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"path": "000:012:005:005:002",
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},
{
"index": 3,
"title": "",
"name": "Consequences of Non-Compliance with Anti-Corruption Laws and Trade Regulations",
"content": "If we fail to comply with anti-corruption laws, including the FCPA and similar laws of other countries, and general trade regulations, including but not limited to economic sanctions and embargoes, we could be subject to penalties and civil and\/or criminal sanctions and our business could be materially adversely affected.",
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"path": "000:012:005:005:003",
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},
{
"index": 4,
"title": "",
"name": "Compliance with FCPA, 18 U.S.C. \u00a7201, UK Bribery Act, and Other International Anti-Bribery Laws",
"content": "We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. \u00a7201, the UK Bribery Act, and possibly other anti-bribery laws in countries in which we conduct activities.",
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"path": "000:012:005:005:004",
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},
{
"index": 5,
"title": "",
"name": "Risks of Non-Compliance with FCPA and Anti-Corruption Laws",
"content": "We face significant risks if we fail to comply with the FCPA and other anti-corruption laws that prohibit companies and their employees and third-party intermediaries from promising, authorizing, offering, or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties, and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage.",
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"path": "000:012:005:005:005",
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},
{
"index": 6,
"title": "",
"name": "Liability for Third-Party Intermediaries' Corrupt Activities",
"content": "In addition, we use various third parties to sell our products and services and conduct our business both in the US and abroad. We or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and we can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.",
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"path": "000:012:005:005:006",
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{
"index": 7,
"title": "",
"name": "Anti-Corruption Compliance Program and Associated Risks of Employee and Agent Violations",
"content": "We have implemented and continue to update an anti-corruption compliance program but there is a risk that our employees and agents, as well as those companies to which we outsource certain of our business operations, could take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.",
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"path": "000:012:005:005:007",
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},
{
"index": 8,
"title": "",
"name": "Increased Scrutiny and Liability Due to Business Expansion in Countries with High Corruption Levels",
"content": "As we continue to expand our business internationally, we will inevitably do more business with large enterprises and the public sector in countries that are perceived to have heightened levels of public sector corruption. Increased business in countries perceived to have heightened levels of corruption could subject us and our officers and directors to increased scrutiny and increased liability from our business operations.",
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"path": "000:012:005:005:008",
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{
"index": 9,
"title": "",
"name": "Compliance with International Trade Regulations and Restrictions",
"content": "In addition, we are subject to compliance with general trade regulations relating to doing business outside the US, including certain restrictions on conducting trade in certain restricted countries or with certain entities or individuals.",
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"path": "000:012:005:005:009",
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{
"index": 10,
"title": "",
"name": "Consequences of Violating FCPA, Anti-Corruption Laws, or Trade Regulations",
"content": "Any violation of the FCPA, other anti-corruption laws or general trade regulations by our employees or our third-party intermediaries could result in regulatory investigations, whistleblower complaints, adverse media coverage and\/or severe criminal or civil sanctions, which could have a materially adverse effect on our reputation, business, operating results, and prospects.",
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"path": "000:012:005:005:010",
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},
{
"index": 11,
"title": "",
"name": "Impact of Enforcement Action Response on Management Focus and Defense Costs",
"content": "In addition, responding to any enforcement action may result in a significant diversion of management\u2019s attention and resources and significant defense costs.",
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"path": "000:012:005:005:011",
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}
]
},
{
"index": 6,
"title": "",
"name": "Potential Lack of Competitive Advantage and Significant Costs in Defending Intellectual Property",
"content": "Our intellectual property protections may not provide us with a competitive advantage, and defending our intellectual property may result in substantial expenses that harm our operating results.",
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"path": "000:012:005:006",
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},
{
"index": 7,
"title": "",
"name": "Dependence on Intellectual Property Protections for Success",
"content": "Our success depends to a significant degree on our ability to protect our proprietary technology and our brand under patent and other intellectual property protections of the US and other jurisdictions.",
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"path": "000:012:005:007",
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},
{
"index": 8,
"title": "",
"name": "Potential Limitations and Risks of Patent Protection",
"content": "Though we seek patent protection for our technology, we may not be successful in obtaining patent protection, and any patents acquired in the future may not provide us with competitive advantages, or may be successfully challenged by third parties.",
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"path": "000:012:005:008",
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},
{
"index": 9,
"title": "",
"name": "Uncertainty of Legal Standards for Intellectual Property Rights Validity and Enforceability",
"content": "Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain.",
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"path": "000:012:005:009",
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},
{
"index": 10,
"title": "",
"name": "Challenges and Invalidations of Intellectual Property Rights Through Administrative Processes or Litigation",
"content": "Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation.",
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"path": "000:012:005:010",
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},
{
"index": 11,
"title": "",
"name": "Availability of Intellectual Property Protection Across Different Countries",
"content": "Effective patent, trademark, copyright and trade secret protection may not be available in every country in which we offer services.",
"type": "body",
"path": "000:012:005:011",
"children": []
},
{
"index": 12,
"title": "",
"name": "Differences in Intellectual Property Protection and Enforcement in Foreign Countries",
"content": "The laws of some foreign countries may not be as protective of intellectual property rights as those in the US, and mechanisms for enforcement of intellectual property rights or available remedies may be inadequate.",
"type": "body",
"path": "000:012:005:012",
"children": []
},
{
"index": 13,
"title": "",
"name": "Monitoring and Protection of Intellectual Property Rights Expenditure",
"content": "We may be required to spend significant resources to monitor and protect our intellectual property rights.",
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"path": "000:012:005:013",
"children": []
},
{
"index": 14,
"title": "",
"name": "Potential Claims or Litigation for Infringement and Validation of Proprietary Rights",
"content": "We have initiated and, in the future, may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights.",
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"path": "000:012:005:014",
"children": []
},
{
"index": 15,
"title": "",
"name": "Potential Impact of Litigation on Company Resources and Risk of Counter-Claims",
"content": "Any litigation, whether or not resolved in our favor, could result in significant expense to us, divert the efforts of our technical and management personnel and may result in counter-claims with respect to infringement of intellectual property rights by us.",
"type": "body",
"path": "000:012:005:015",
"children": []
},
{
"index": 16,
"title": "",
"name": "Risk of Adverse Effects on Business Due to Intellectual Property Infringement and Defense Costs",
"content": "If we are unable to prevent third parties from infringing upon or misappropriating our intellectual property, or are required to incur substantial expenses defending our intellectual property rights, our business and operating results may be adversely affected.",
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"path": "000:012:005:016",
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},
{
"index": 17,
"title": "",
"name": "Risks Associated with Open Source Software Use",
"content": "Our use of open source software could harm our ability to sell our products and services and subject us to possible litigation.",
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"path": "000:012:005:017",
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},
{
"index": 18,
"title": "",
"name": "Incorporation of Third-Party Open Source Software in Products and Services",
"content": "Our products incorporate software licensed to us by third-party authors under open source licenses, and we expect to continue to incorporate open source software into other products and services in the future.",
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"path": "000:012:005:018",
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},
{
"index": 19,
"title": "",
"name": "Efforts to Monitor Open Source Software Usage and Mitigate Adverse Licensing Conditions",
"content": "We attempt to monitor our use of open source software in an effort to avoid subjecting our products and services to adverse licensing conditions. However, there can be no assurance that our efforts have been or will be successful.",
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"path": "000:012:005:019",
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},
{
"index": 20,
"title": "",
"name": "Uncertainty and Lack of Legal Precedent in Open Source License Interpretation",
"content": "There is little or no legal precedent governing the interpretation of the terms of open source licenses, and therefore the potential impact of these terms on our business is uncertain and enforcement of these terms may result in unanticipated obligations regarding our products and services.",
"type": "body",
"path": "000:012:005:020",
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},
{
"index": 21,
"title": "",
"name": "Potential Obligations Under Various Open Source Licenses",
"content": "For example, depending on which open source license governs open source software included within our products and services, we may be subjected to conditions requiring us to offer our products and services to users at no cost; make available the source code for modifications and derivative works based upon, incorporating or using the open source software; and license such modifications or derivative works under the terms of the particular open source license.",
"type": "body",
"path": "000:012:005:021",
"children": []
},
{
"index": 22,
"title": "",
"name": "Potential Legal Risks of Non-Compliance with Open Source Software Licenses",
"content": "Moreover, if an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal costs defending ourselves against such allegations, be subject to significant damages or be enjoined from distributing our products and services.",
"type": "body",
"path": "000:012:005:022",
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},
{
"index": 23,
"title": "",
"name": "Revenue Recognition and Impact of Subscription Fluctuations on Operating Results",
"content": "Because we generally recognize revenues from our subscription service over the subscription term, a decrease in new subscriptions or renewals during a reporting period may not be immediately reflected in our operating results for that period. We generally recognize revenues from customers ratably over the terms of their subscriptions. Net new annual contract value from new subscriptions and expansion contracts entered into during a period can generally be expected to generate revenues for the duration of the subscription term. As a result, most of the revenues we report in each period are derived from the recognition of deferred revenues relating to subscriptions entered into during previous periods. Consequently, a decrease in new or renewed subscriptions in any single reporting period will have a limited impact on our revenues for that period. In addition, our ability to adjust our cost structure in the event of a decrease in new or renewed subscriptions may be limited.",
"type": "body",
"path": "000:012:005:023",
"children": []
},
{
"index": 24,
"title": "",
"name": "Impact of Decline in Subscriptions and Renewals on Future Revenues",
"content": "Further, a decline in new subscriptions, expansion contracts or renewals in a given period may not be fully reflected in our revenues for that period, but they will negatively affect our revenues in future periods. Accordingly, the effect of significant downturns in sales and market acceptance of our services, and changes in our rate of renewals, may not be fully reflected in our results of operations until future periods.",
"type": "body",
"path": "000:012:005:024",
"children": []
},
{
"index": 25,
"title": "",
"name": "Impact of Subscription Model on Revenue Recognition and Growth",
"content": "Our subscription model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new customers are generally recognized over the applicable subscription term.",
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"path": "000:012:005:025",
"children": []
},
{
"index": 26,
"title": "",
"name": "Revenue Recognition Variability Due to Contract Complexity Under ASC 606",
"content": "Additionally, due to the complexity of certain of our customer contracts, the actual revenue recognition treatment required under Accounting Standards Update 2014-09, \u201cRevenue from Contracts with Customers (Topic 606)\u201d depends on contract-specific terms and may result in greater variability in revenues from period to period.",
"type": "body",
"path": "000:012:005:026",
"children": []
},
{
"index": 27,
"title": "",
"name": "Impact of Subscription and Contract Variability on Period Billings",
"content": "In addition, a decrease in new subscriptions, expansion contracts or renewals in a reporting period may not have an immediate impact on billings for that period due to factors that may offset the decrease, such as an increase in billings duration, the dollar value of contracts with future start dates, or the dollar value of collections in the current period related to contracts with future start dates.",
"type": "body",
"path": "000:012:005:027",
"children": []
},
{
"index": 28,
"title": "",
"name": "Expected Decline in Revenue Growth Rate and Potential Impact on Stock Price",
"content": "As our business grows, we expect our revenue growth rate to continue to decline. We have experienced significant revenue growth in prior periods; however, our longer-term revenue growth rate is declining, and we expect that it will continue to decline into the foreseeable future. We also expect our costs to increase in future periods as we continue to invest in our strategic priorities, which may not result in increased revenues or growth in our business. You should not rely on our revenue for any prior periods as any indication of our future revenue growth. If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile.",
"type": "body",
"path": "000:012:005:028",
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},
{
"index": 29,
"title": "",
"name": "Impact of Changes in Effective Tax Rate and Tax Position Rejection on Financial Results",
"content": "Changes in our effective tax rate or rejection of our tax position in jurisdictions outside the US could have a material impact on our financial position and results. We are subject to income taxes in the US and various foreign jurisdictions. We believe that our provision for income taxes is reasonable, but the ultimate tax outcome may differ from the amounts recorded in our consolidated financial statements and may materially affect our financial results in the period or periods in which such outcome is determined. Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses, the valuation of deferred tax assets and liabilities and the effects of acquisitions. Increases in our effective tax rate would reduce our profitability or in some cases increase our losses.",
"type": "body",
"path": "000:012:005:029",
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},
{
"index": 30,
"title": "",
"name": "Impact of Changes in Accounting Principles and Tax Laws on Future Effective Tax Rate",
"content": "Additionally, our future effective tax rate could be impacted by changes in accounting principles or changes in federal, state or international tax laws or tax rulings.",
"type": "body",
"path": "000:012:005:030",
"children": []
},
{
"index": 31,
"title": "",
"name": "Authority of the U.S. Department of Treasury to Issue Regulations and Interpretative Guidance Affecting Operational Results",
"content": "The U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how we will apply the law, which could affect our results of operations in the period issued.",
"type": "body",
"path": "000:012:005:031",
"children": []
},
{
"index": 32,
"title": "",
"name": "Consideration and Enactment of New Tax Laws by Various Countries and International Organizations",
"content": "Many countries and organizations such as the Organization for Economic Cooperation and Development are actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.",
"type": "body",
"path": "000:012:005:032",
"children": []
},
{
"index": 33,
"title": "",
"name": "Impact of Recent Global Tax Developments and Increased Scrutiny on Multinational Businesses",
"content": "Recent global tax developments applicable to multinational businesses and increased scrutiny under tax examinations could have a material impact on our business and negatively affect our financial results.",
"type": "body",
"path": "000:012:005:033",
"children": []
},
{
"index": 34,
"title": "",
"name": "Impact of Changes in Tax Laws or Rulings on Effective Tax Rate and Financial Results",
"content": "Any changes in federal, state or international tax laws or tax rulings may increase our worldwide effective tax rate and harm our financial position and results of operations.",
"type": "body",
"path": "000:012:005:034",
"children": []
},
{
"index": 35,
"title": "",
"name": "Potential for Global Income Tax Audits and Ambiguities in Cloud Computing Tax Treatment",
"content": "In addition, we may be subject to income tax audits by tax jurisdictions throughout the world, many of which have not established clear guidance on the tax treatment of cloud computing companies.",
"type": "body",
"path": "000:012:005:035",
"children": []
},
{
"index": 36,
"title": "",
"name": "Potential Impact of Adverse Resolution of Uncertain Tax Positions on Operational Results",
"content": "Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material impact on our results of operations for that period.",
"type": "body",
"path": "000:012:005:036",
"children": []
},
{
"index": 37,
"title": "",
"name": "Potential Tax Liabilities from International Intangible Assets and Inter-Company Agreements",
"content": "Further, many of our most important intangible assets are held outside the US and are subject to inter-company agreements regarding the development and distribution of those assets to other jurisdictions. While we believe that our position is appropriate and well founded, in the event that our position was to be successfully challenged by taxing authorities in other jurisdictions, we may become subject to significant tax liabilities, which could harm our financial position and financial results.",
"type": "body",
"path": "000:012:005:037",
"children": []
},
{
"index": 38,
"title": "",
"name": "Potential GAAP Losses Despite Historical Profitability",
"content": "We may incur losses in accordance with U.S. Generally Accepted Accounting Principles (GAAP) during future periods. Although we have reported results that were profitable on a GAAP basis for full-year 2019 and certain prior quarters, we have incurred net losses in all prior fiscal years since our inception.",
"type": "body",
"path": "000:012:005:038",
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},
{
"index": 39,
"title": "",
"name": "Potential Future GAAP Losses Due to Increased Costs and Unforeseen Expenses",
"content": "Even if our revenues continue to increase, we may incur losses in accordance with GAAP during future periods due to increased costs such as non-cash charges associated with equity awards, business combinations and other expenses. We may also encounter unforeseen operating expenses, difficulties, complications, delays and other unpredictable factors that may result in increased costs.",
"type": "body",
"path": "000:012:005:039",
"children": []
},
{
"index": 40,
"title": "",
"name": "Market Uncertainty and Competitive Dynamics Impacting Business Performance Predictability",
"content": "Furthermore, it is difficult to predict the size and growth rate of our market, customer demand for our products, customer adoption and renewal rates, and the entry of competitive products or the success of existing competitive products.",
"type": "body",
"path": "000:012:005:040",
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},
{
"index": 41,
"title": "",
"name": "Potential Negative Impact on Future Profitability and Cash Flow",
"content": "As a result of these and other factors, we may not maintain profitability in the future, and our gross margins and ability to generate cash flow from operations may be negatively impacted.",
"type": "body",
"path": "000:012:005:041",
"children": []
},
{
"index": 42,
"title": "",
"name": "Impact of Insufficient Revenue Growth on Business and Financial Performance",
"content": "If we fail to increase our revenues sufficiently to keep pace with our growing investments and other expenses, our business, operating results and growth prospects will be adversely affected.",
"type": "body",
"path": "000:012:005:042",
"children": []
},
{
"index": 43,
"title": "",
"name": "Impact of Ineffective Internal Control on Financial Reporting Accuracy and Timeliness",
"content": "If we are unable to maintain effective internal control over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected.",
"type": "body",
"path": "000:012:005:043",
"children": []
},
{
"index": 44,
"title": "",
"name": "Sarbanes-Oxley Act Annual and Quarterly Reporting Requirements for Internal Control and Disclosure Controls",
"content": "The Sarbanes-Oxley Act requires us, among other things, to assess and report on the effectiveness of our internal control over financial reporting annually and the reasonable assurance level of our disclosure controls and procedures quarterly.",
"type": "body",
"path": "000:012:005:044",
"children": []
},
{
"index": 45,
"title": "",
"name": "Annual Audit Requirement of Internal Control Effectiveness by Independent Accounting Firm under Section 404(b) of Sarbanes-Oxley Act",
"content": "In addition, our independent registered public accounting firm is required to audit the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act annually.",
"type": "body",
"path": "000:012:005:045",
"children": []
},
{
"index": 46,
"title": "",
"name": "Adverse Report Issuance by Independent Registered Public Accounting Firm Due to Unsatisfactory Control Levels",
"content": "Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.",
"type": "body",
"path": "000:012:005:046",
"children": []
},
{
"index": 47,
"title": "",
"name": "Potential Discovery of Material Weaknesses or Significant Deficiencies Through Testing",
"content": "Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal material weaknesses or significant deficiencies.",
"type": "body",
"path": "000:012:005:047",
"children": []
},
{
"index": 48,
"title": "",
"name": "Potential Consequences of Identifying Material Weaknesses or Non-Compliance with Section 404",
"content": "If material weaknesses are identified or we are not able to comply with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated or could subsequently require restatement, we could receive an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, we could be subject to investigations or sanctions by regulatory authorities and we could incur substantial expenses.",
"type": "body",
"path": "000:012:005:048",
"children": []
},
{
"index": 49,
"title": "",
"name": "Potential Delays in Implementing System and Process Changes for New Standards",
"content": "We may not be able to effectively implement system and process changes required for new standards on a timely basis. Any delays or failure to update our systems and processes could also lead to a material weakness or significant deficiency.",
"type": "body",
"path": "000:012:005:049",
"children": []
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]
},
{
"index": 6,
"title": "Risks Related to General Economic Conditions",
"name": "",
"content": "",
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{
"index": 0,
"title": "",
"name": "Impact of Global Economic Conditions on Business and Operations",
"content": "Global economic conditions may harm our industry, business and results of operations.",
"type": "body",
"path": "000:012:006:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Impact of Global Macroeconomic Conditions on Business and Revenues",
"content": "We operate globally and as a result our business and revenues are impacted by global macroeconomic conditions. Global financial developments seemingly unrelated to us or the software industry may harm us. From time to time, the US and other key international economies have been impacted by geopolitical and economic instability, high levels of credit defaults, international trade disputes, falling demand for various goods and services, high levels of persistent unemployment, wage and income stagnation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, international trade agreements, trade restrictions and overall economic uncertainty. These conditions can arise suddenly and affect the rate of information technology spending and could adversely affect our customers\u2019 or prospective customers\u2019 ability or willingness to purchase our services, delay purchasing decisions, reduce the value or duration of their subscriptions, or affect renewal rates, all of which could harm our operating results.",
"type": "body",
"path": "000:012:006:001",
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},
{
"index": 2,
"title": "",
"name": "Impact of 2020 Geopolitical and Economic Events on Business Operations",
"content": "In 2020, for example, the growth rate in the EU, China, or the US, tariffs or trade relations between the US and China or other countries, political uncertainty in the Middle East and other geopolitical events could directly or indirectly affect our business.",
"type": "body",
"path": "000:012:006:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Potential Impact of Brexit on UK and EU Economies and Businesses",
"content": "Additionally, in connection with Brexit, the impact of the UK\u2019s exit from the EU is still to be fully seen, with the applicable trade agreement to be negotiated before December 2020, or a type of \u201cno-deal\u201d exit would occur. This could be harmful to both the U.K. and E.U.economies and businesses operating there",
"type": "body",
"path": "000:012:006:003",
"children": []
},
{
"index": 4,
"title": "",
"name": "Impact of Global Financial Conditions on Business and Operational Judgments",
"content": "In addition, the effects, if any, of global financial conditions on our business can be difficult to distinguish from the effects on our business from product, pricing, and other developments in the markets specific to our products and our relative competitive strength. If we make incorrect judgments about our business for this reason, our business and results of operations could be adversely affected.",
"type": "body",
"path": "000:012:006:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Impact of Foreign Currency Exchange Rate Fluctuations on Financial Results",
"content": "Foreign currency exchange rate fluctuations could harm our financial results. We conduct significant transactions, including revenue transactions and intercompany transactions, in currencies other than the U.S. Dollar or the functional operating currency of the transactional entities. In addition, our international subsidiaries maintain significant net assets that are denominated in currencies other than the functional operating currencies of these entities. Accordingly, changes in the value of currencies relative to the U.S. Dollar may impact our consolidated revenues and operating results due to transactional and translational remeasurement that is reflected in our earnings.",
"type": "body",
"path": "000:012:006:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Risk of Unpredictable Currency Fluctuations on Financial Results",
"content": "It is particularly difficult to forecast any impact from exchange rate movements, so there is risk that unanticipated currency fluctuations could adversely affect our financial results or cause our results to differ from investor expectations or our own guidance in any future periods.",
"type": "body",
"path": "000:012:006:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Impact of Brexit Announcement and Uncertainty on Global Markets and Currency Volatility",
"content": "In addition, the announcement of Brexit and the continued uncertainty around the full impact of it and the exact trade arrangements upon exit has adversely impacted global markets, including currencies, and resulted in a decline and volatility in the value of the British pound and the Euro, as compared to the U.S. Dollar and other currencies.",
"type": "body",
"path": "000:012:006:007",
"children": []
},
{
"index": 8,
"title": "",
"name": "Expected Continued Volatility in Exchange Rates and Global Financial Markets Due to Brexit and Global Uncertainty",
"content": "Volatility in exchange rates and global financial markets is expected to continue due to a number of factors, including uncertainty surrounding Brexit trade arrangements and the recent political and economic uncertainty globally.",
"type": "body",
"path": "000:012:006:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Initiation of Derivative Instruments for Currency Exchange Rate Hedging in 2018",
"content": "In 2018, we began using derivative instruments, such as foreign currency forwards, to hedge certain exposures to fluctuations in foreign currency exchange rates. These hedging contracts may reduce, but cannot entirely eliminate, the impact of adverse currency exchange rate movements.",
"type": "body",
"path": "000:012:006:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Risk of Unanticipated Currency Exchange Rate Changes on Financial Performance",
"content": "Further, unanticipated changes in currency exchange rates may result in poorer overall financial performance than if we had not engaged in any such hedging transactions.",
"type": "body",
"path": "000:012:006:010",
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{
"index": 11,
"title": "",
"name": "Risk of Imperfect Correlation in Hedging Due to Limited Experience",
"content": "Moreover, for a number of reasons, including our limited experience with these hedging contracts, we may not seek or be able to establish a perfect correlation between such hedging instruments and the exposures being hedged.",
"type": "body",
"path": "000:012:006:011",
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},
{
"index": 12,
"title": "",
"name": "Risk of Loss Due to Imperfect Correlation in Hedging",
"content": "Any such imperfect correlation may prevent us from achieving the intended hedge, and could expose us to a greater overall risk of loss than if we had not hedged.",
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"path": "000:012:006:012",
"children": []
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},
{
"index": 7,
"title": "Risks Related to Our Convertible Senior Notes",
"name": "",
"content": "",
"type": "container",
"path": "000:012:007",
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{
"index": 0,
"title": "",
"name": "Potential Inability to Fund Cash Settlements or Repurchases of 2022 Convertible Senior Notes",
"content": "We may not have the ability to raise the funds necessary to settle conversions of our convertible senior notes due 2022 (the 2022 Notes) in cash or to repurchase the 2022 Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2022 Notes.",
"type": "body",
"path": "000:012:007:000",
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{
"index": 1,
"title": "",
"name": "Repurchase Rights of Holders Upon Fundamental Change",
"content": "Holders of the 2022 Notes have the right to require us to repurchase all or a portion of their 2022 Notes upon the occurrence of a fundamental change (as defined in the indenture for the 2022 Notes (the Indenture)) at a repurchase price equal to 100% of the principal amount of the 2022 Notes to be repurchased, plus accrued and unpaid special interest, if any.",
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"path": "000:012:007:001",
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{
"index": 2,
"title": "",
"name": "Adjustment to Conversion Rate upon Make-Whole Fundamental Change",
"content": "In addition, if a make-whole fundamental change (as defined in the Indenture) occurs prior to the maturity date of the 2022 Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2022 Notes in connection with such make-whole fundamental change.",
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{
"index": 3,
"title": "",
"name": "Cash Settlement Requirement and Potential Liquidity Constraints upon Conversion of 2022 Notes",
"content": "Upon conversion of the 2022 Notes, 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 shares), we will be required to make cash payments in respect of the 2022 Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2022 Notes surrendered therefor or pay cash with respect to the 2022 Notes being converted.",
"type": "body",
"path": "000:012:007:003",
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},
{
"index": 4,
"title": "",
"name": "Future Incurrence of Additional Debt by Company and Subsidiaries Subject to Future Debt Instrument Restrictions",
"content": "We and our subsidiaries may incur substantial additional debt in the future, subject to the restrictions contained in our future debt instruments, some of which may be secured debt.",
"type": "body",
"path": "000:012:007:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "No Restrictions on Incurring Additional Debt or Recapitalizing Existing Debt Under the Indenture",
"content": "We are not restricted under the terms of the Indenture from incurring additional debt, securing existing or future debt, recapitalizing our debt or taking a number of other actions that could have the effect of diminishing our ability to make payments on the 2022 Notes when due.",
"type": "body",
"path": "000:012:007:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Acquisition Prohibition and Obligations Assumption Clause",
"content": "Furthermore, the Indenture prohibits us from being acquired unless, among other things, the surviving entity assumes our obligations under the 2022 Notes and the Indenture. These and other provisions in the Indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to holders of the 2022 Notes.",
"type": "body",
"path": "000:012:007:006",
"children": []
},
{
"index": 7,
"title": "",
"name": "Limitations on Repurchase or Cash Payment upon Conversion of 2022 Notes Due to Legal and Regulatory Constraints",
"content": "In addition, our ability to repurchase or to pay cash upon conversion of the 2022 Notes may be limited by law, regulatory authority or agreements governing our future indebtedness.",
"type": "body",
"path": "000:012:007:007",
"children": []
},
{
"index": 8,
"title": "",
"name": "Failure to Repurchase or Pay Cash Upon Conversion of 2022 Notes Constitutes Default",
"content": "Our failure to repurchase the 2022 Notes at a time when the repurchase is required by the Indenture or to pay cash upon conversion of the 2022 Notes as required by the Indenture would constitute a default.",
"type": "body",
"path": "000:012:007:008",
"children": []
},
{
"index": 9,
"title": "",
"name": "Consequential Default Under Future Indebtedness Agreements",
"content": "A default under the Indenture or a fundamental change itself could also lead to a default under agreements governing our future indebtedness.",
"type": "body",
"path": "000:012:007:009",
"children": []
},
{
"index": 10,
"title": "",
"name": "Impact of Fundamental Change on Default and Indebtedness Repayment Obligations",
"content": "Moreover, the occurrence of a fundamental change could constitute an event of default under any such agreements.If the payment of the related indebtedness were accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2022 Notes, or to pay cash upon conversion of the 2022 Notes.",
"type": "body",
"path": "000:012:007:010",
"children": []
},
{
"index": 11,
"title": "",
"name": "Potential Adverse Impact of Conditional Conversion Feature on Financial Condition and Operating Results",
"content": "The conditional conversion feature of the 2022 Notes may adversely affect our financial condition and operating results.",
"type": "body",
"path": "000:012:007:011",
"children": []
},
{
"index": 12,
"title": "",
"name": "Conditions for Conversion of 2022 Notes Prior to February 1, 2022",
"content": "Prior to the business day immediately preceding February 1, 2022, the holders of the 2022 Notes may elect to convert their notes during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to $175.18 (the Conversion Condition).",
"type": "body",
"path": "000:012:007:012",
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},
{
"index": 13,
"title": "",
"name": "Conversion Eligibility of 2022 Notes Based on Conversion Condition Compliance",
"content": "The Conversion Condition for the 2022 Notes was met for all quarters ended June 30, 2018 through December 31, 2019, except for the quarter ended December 31, 2018. Therefore, our 2022 Notes became convertible at the holders\u2019 option beginning on July 1, 2018 and continue to be convertible through March 31, 2020, except for the quarter ended March 31, 2019 because the Conversion Condition for the 2022 Notes was not met for the quarter ended December 31, 2018.",
"type": "body",
"path": "000:012:007:013",
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},
{
"index": 14,
"title": "",
"name": "Cash Settlement of Immaterial Principal Amount of 2022 Notes for Year Ended December 31, 2019",
"content": "During the year ended December 31, 2019, we paid cash to settle an immaterial principal amount of the 2022 Notes.",
"type": "body",
"path": "000:012:007:014",
"children": []
},
{
"index": 15,
"title": "",
"name": "Expected Cash Settlement of 2022 Notes Conversion Requests for Q1 and Q2 2020",
"content": "Based on additional conversion requests we have received through the filing date, we expect to settle in cash an aggregate of approximately $2.5 million and $5.2 million in principal amount of the 2022 Notes during the first and second quarters of 2020, respectively. We may receive additional conversion requests that require settlement in the second quarter of 2020.",
"type": "body",
"path": "000:012:007:015",
"children": []
},
{
"index": 16,
"title": "",
"name": "Potential Liquidity Impact of Future 2022 Notes Conversions",
"content": "If more holders elect to convert their 2022 Notes in future periods, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we may settle all or a portion of our conversion obligation in cash, which could adversely affect our liquidity and result in a material adverse effect on our financial position, results of operations and cash flows.",
"type": "body",
"path": "000:012:007:016",
"children": []
},
{
"index": 17,
"title": "",
"name": "Recording a Loss on Early Conversions of 2022 Notes",
"content": "In addition, to the extent we receive conversion requests, we may also record a loss on early conversions of the 2022 Notes converted by note holders based on the difference between the fair market value allocated to the liability component on the settlement date and the net carrying amount of the liability component and unamortized debt issuance on the settlement date.",
"type": "body",
"path": "000:012:007:017",
"children": []
},
{
"index": 18,
"title": "",
"name": "Impact of Convertible Note Hedge and Warrant Transactions on 2022 Notes and Common Stock Value",
"content": "The convertible note hedge and warrant transactions may affect the value of the 2022 Notes and our common stock.",
"type": "body",
"path": "000:012:007:018",
"children": []
},
{
"index": 19,
"title": "",
"name": "Convertible Note Hedge and Warrant Transactions with Option Counterparties",
"content": "In connection with the sale of the 2022 Notes, we entered into convertible note hedge (the 2022 Note Hedge) transactions with certain financial institutions (option counterparties). We also entered into warrant transactions with the option counterparties pursuant to which we sold warrants for the purchase of our common stock (the 2022 Warrants).",
"type": "body",
"path": "000:012:007:019",
"children": []
},
{
"index": 20,
"title": "",
"name": "Purpose and Effect of the 2022 Note Hedge Transactions",
"content": "The 2022 Note Hedge is expected generally to reduce the potential dilution upon any conversion of the 2022 Notes and\/or offset any cash payments we are required to make in excess of the principal amount of converted 2022 Notes, as applicable.",
"type": "body",
"path": "000:012:007:020",
"children": []
},
{
"index": 21,
"title": "",
"name": "Potential Dilutive Effect and Share Issuance Mechanics of the 2022 Warrants",
"content": "The 2022 Warrant transactions could have a dilutive effect to the extent that our stock price exceeds the exercise price of the 2022 Warrants, which is $203.40. As the 2022 Warrants will be net share settled, the total number of shares of our common stock we will issue depends on the daily volume-weighted average stock prices over a 60-trading day period beginning on the first expiration date of the 2022 Warrants, which will be September 1, 2022.",
"type": "body",
"path": "000:012:007:021",
"children": []
},
{
"index": 22,
"title": "",
"name": "Expected Issuance of Additional Shares Upon Automatic Exercise of 2022 Warrants",
"content": "We expect to issue additional shares of our common stock in the second half of 2022 upon the automatic exercise of the 2022 Warrants. Based on the volume-weighted average stock price on December 31, 2019, the total number of shares of our common stock to be issued upon the automatic exercise of the 2022 Warrants would be approximately 1.6 million. The actual number of shares of our common stock issuable upon the automatic exercise of the 2022 Warrants, if any, is unknown at this time. Refer to Note 11 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.",
"type": "body",
"path": "000:012:007:022",
"children": []
},
{
"index": 23,
"title": "",
"name": "Potential Impact of Hedge Position Adjustments by Option Counterparties on Stock and 2022 Notes Prices",
"content": "The option counterparties and\/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 in secondary market transactions prior to the maturity of the 2022 Notes (and are likely to do so during any observation period related to a conversion of the 2022 Notes, or following any repurchase of the 2022 Notes by us on any fundamental change repurchase date (as defined in the Indenture) or otherwise). This activity could also cause or avoid an increase or a decrease in our stock price or the 2022 Notes price, which could affect note holders\u2019 ability to convert the 2022 Notes and, to the extent the activity occurs during any observation period related to a conversion of the 2022 Notes, it could affect the amount and value of the consideration that note holders will receive upon conversion of the 2022 Notes.",
"type": "body",
"path": "000:012:007:023",
"children": []
},
{
"index": 24,
"title": "",
"name": "Market Condition Dependency on Stock and Note Price Effects",
"content": "The potential effect, if any, of these transactions and activities on our stock price or the 2022 Notes price will depend in part on market conditions and cannot be ascertained at this time.",
"type": "body",
"path": "000:012:007:024",
"children": []
},
{
"index": 25,
"title": "",
"name": "Potential Adverse Effects on Common Stock and 2022 Notes Value and Conversion Ability",
"content": "Any of these activities could adversely affect the value of our common stock and the value of the 2022 Notes (and the resulting amount of cash and\/or number of shares, if any, that note holders would receive upon the conversion) and, under certain circumstances, the ability of the note holders to convert the 2022 Notes.",
"type": "body",
"path": "000:012:007:025",
"children": []
},
{
"index": 26,
"title": "",
"name": "Disclaimer on Potential Effects of Transactions on 2022 Notes and Common Stock Prices",
"content": "We do not make any representation or prediction as to the direction or magnitude of any potential effect that the transactions described above may have on the price of the 2022 Notes or our common stock.",
"type": "body",
"path": "000:012:007:026",
"children": []
},
{
"index": 27,
"title": "",
"name": "Non-Representation of Option Counterparties' Engagement and Continuity of Transactions",
"content": "In addition, we do not make any representation that the option counterparties will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.",
"type": "body",
"path": "000:012:007:027",
"children": []
},
{
"index": 28,
"title": "",
"name": "Counterparty Risk and Credit Exposure in the 2022 Note Hedge",
"content": "We are subject to counterparty risk with respect to the 2022 Note Hedge. The option counterparties are financial institutions, and we will be subject to the risk that any or all of them may default under the 2022 Note Hedge. Our exposure to the credit risk of the option counterparties will not be secured by any collateral.",
"type": "body",
"path": "000:012:007:028",
"children": []
},
{
"index": 29,
"title": "",
"name": "Impact of Recent Global Economic Conditions on Financial Institutions' Stability",
"content": "Recent global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions.",
"type": "body",
"path": "000:012:007:029",
"children": []
},
{
"index": 30,
"title": "",
"name": "Unsecured Creditor Status in Option Counterparty Insolvency Proceedings",
"content": "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 our transactions with that option counterparty.",
"type": "body",
"path": "000:012:007:030",
"children": []
},
{
"index": 31,
"title": "",
"name": "Correlation Between Exposure and Stock Price\/Volatility",
"content": "Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase in the stock price and in the volatility of our common stock.",
"type": "body",
"path": "000:012:007:031",
"children": []
},
{
"index": 32,
"title": "",
"name": "Potential Adverse Tax Consequences and Increased Dilution Due to Option Counterparty Default",
"content": "In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.",
"type": "body",
"path": "000:012:007:032",
"children": []
},
{
"index": 33,
"title": "",
"name": "No Assurance on Financial Stability or Viability of Option Counterparties",
"content": "We can provide no assurances as to the financial stability or viability of the option counterparties.",
"type": "body",
"path": "000:012:007:033",
"children": []
}
]
},
{
"index": 8,
"title": "Risks Related to Ownership of Our Common Stock",
"name": "",
"content": "",
"type": "container",
"path": "000:012:008",
"children": [
{
"index": 0,
"title": "",
"name": "Potential Litigation Due to Stock Price Volatility",
"content": "Our stock price has historically been and is likely to continue to be volatile and could subject us to litigation.",
"type": "body",
"path": "000:012:008:000",
"children": []
},
{
"index": 1,
"title": "",
"name": "Stock Price Volatility Due to Uncontrollable Factors",
"content": "Our stock price has been, and is likely to continue to be, volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.",
"type": "body",
"path": "000:012:008:001",
"children": []
},
{
"index": 2,
"title": "",
"name": "Technology Sector Stock Price and Trading Volume Volatility Disproportionate to Financial Performance",
"content": "In addition, technology companies in general have highly volatile stock prices, and the volatility in stock price and trading volume of securities is often unrelated or disproportionate to the financial performance of the companies issuing the securities.",
"type": "body",
"path": "000:012:008:002",
"children": []
},
{
"index": 3,
"title": "",
"name": "Factors Influencing Stock Price Volatility Beyond Company Control",
"content": "Factors affecting our stock price, some of which are beyond our control, include:\n- changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to cover our common stock;\n- announcements of new products, services or technologies, new applications or enhancements to services, strategic alliances, acquisitions, or other significant events by us or by our competitors;\n- fluctuations in the valuation of companies, such as high-growth or cloud companies, investors perceive to be comparable to us;\n- changes to our management team;\n- trading activity by directors, executive officers and significant stockholders, or the market\u2019s perception that large stockholders intend to sell their shares;\n- the inclusion, exclusion, or deletion of our stock from any trading indices, such as the S&P 500 Index;\n- the size of our market float;\n- the volume of trading in our common stock, including sales upon exercise of outstanding options or vesting of equity awards or sales and purchases of any common stock issued upon conversion of the 2022 Notes or in connection with the 2022 Note Hedge and 2022 Warrant transactions;\n- the economy as a whole, market conditions in our industry, and the industries of our customers; and\n- overall performance of the equity markets.",
"type": "container",
"path": "000:012:008:003",
"children": [
{
"index": 0,
"title": "",
"name": "Potential Impact of Securities Class Action Litigation Due to Market Price Volatility",
"content": "Following periods of volatility in the market price of a company\u2019s securities, securities class action litigation has often been brought against that company. Securities litigation could result in substantial costs and divert our management\u2019s attention and resources from our business. This could have a material adverse effect on our business, operating results, and financial condition.",
"type": "body",
"path": "000:012:008:003:000",
"children": []
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]
},
{
"index": 4,
"title": "",
"name": "Dividend Policy and Return on Stock Price",
"content": "We do not intend to pay dividends on our common stock, so any returns will be limited to changes in our stock price. We have never declared or paid any cash dividends on our common stock. We anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. In addition, our ability to pay cash dividends on our common stock may be prohibited or limited by the terms of any future debt financing arrangements. Any return to stockholders will therefore be limited to the increase, if any, of our stock price.",
"type": "body",
"path": "000:012:008:004",
"children": []
},
{
"index": 5,
"title": "",
"name": "Anti-Takeover Provisions and Their Impact on Stock Price",
"content": "Provisions in our charter documents, Delaware law, or our 2022 Notes might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress our stock price.",
"type": "body",
"path": "000:012:008:005",
"children": []
},
{
"index": 6,
"title": "",
"name": "Provisions in Restated Certificate of Incorporation and Bylaws Potentially Affecting Stock Price by Discouraging Changes in Control or Management",
"content": "Our restated certificate of incorporation and restated bylaws contain provisions that could depress our stock price by acting to discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous.",
"type": "body",
"path": "000:012:008:006",
"children": []
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"title": "",
"name": "",
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"name": "",
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"index": 2,
"title": "",
"name": "",
"content": "UNITED STATES\nSECURITIES AND EXCHANGE COMMISSION\nWashington, D.C. 20549",
"type": "other",
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"content": "Page",
"type": "other",
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"index": 4,
"title": "",
"name": "",
"content": "Table of Contents",
"type": "other",
"path": "000:013:004",
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{
"index": 5,
"title": "",
"name": "",
"content": "2 Table of Contents",
"type": "other",
"path": "000:013:005",
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"outline": "ITEM 1A. RISK FACTORS\n Risk Disclosure and Considerations for Investors.\n Identification of Material Risks and Potential Adverse Effects on Business Operations.\n Potential Decline in Stock Price and Investment Loss Due to Identified Risks.\n Risks Related to Our Ability to Grow Our Business\n Competitive Market Participation and Impact on Business Performance.\n Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services.\n Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes.\n Risks Associated with Government and Heavily-Regulated Organizational Contracts.\n Expansion into Heavily Regulated Industries.\n Risks Associated with Non-U.S. Government Customers in Emerging Markets.\n Reliance on Partner Network and Potential Impact on Revenue and Growth.\n Impact of Unsuccessful International Market Penetration and Risk Management on Business and Operating Results.\n Potential Risks and Downsides of Acquisitions and Investments.\n Risks Related to the Operation of Our Business\n Potential Liabilities and Business Impact of Cyber-Security Events.\n Dependence on Key Employees and Impact on Business Operations.\n Impact of Natural Disasters and Catastrophic Events on Business Operations.\n Factors Impacting Product Implementation Success and Business Dependence on Effective Customer Implementation.\n Potential Liability and Reputational Damage from Service Disruptions or Defects.\n Risks Related to the Financial Performance or Financial Position of Our Business\n Potential Impact of Financial Performance on Common Stock Price.\n Variability of Operating Results Due to Uncontrollable Factors.\n Risk of Financial Performance Not Meeting Guidance or Expectations of Analysts and Investors.\n Potential Impact on Common Stock Price and Investor Losses Due to Unmet Financial Expectations.\n Factors Influencing Financial Performance and Forward-Looking Guidance :\n Potential Consequences and Costs of Intellectual Property Litigation :\n Potential Lack of Competitive Advantage and Significant Costs in Defending Intellectual Property.\n Dependence on Intellectual Property Protections for Success.\n Potential Limitations and Risks of Patent Protection.\n Uncertainty of Legal Standards for Intellectual Property Rights Validity and Enforceability.\n Challenges and Invalidations of Intellectual Property Rights Through Administrative Processes or Litigation.\n Availability of Intellectual Property Protection Across Different Countries.\n Differences in Intellectual Property Protection and Enforcement in Foreign Countries.\n Monitoring and Protection of Intellectual Property Rights Expenditure.\n Potential Claims or Litigation for Infringement and Validation of Proprietary Rights.\n Potential Impact of Litigation on Company Resources and Risk of Counter-Claims.\n Risk of Adverse Effects on Business Due to Intellectual Property Infringement and Defense Costs.\n Risks Associated with Open Source Software Use.\n Incorporation of Third-Party Open Source Software in Products and Services.\n Efforts to Monitor Open Source Software Usage and Mitigate Adverse Licensing Conditions.\n Uncertainty and Lack of Legal Precedent in Open Source License Interpretation.\n Potential Obligations Under Various Open Source Licenses.\n Potential Legal Risks of Non-Compliance with Open Source Software Licenses.\n Revenue Recognition and Impact of Subscription Fluctuations on Operating Results.\n Impact of Decline in Subscriptions and Renewals on Future Revenues.\n Impact of Subscription Model on Revenue Recognition and Growth.\n Revenue Recognition Variability Due to Contract Complexity Under ASC 606.\n Impact of Subscription and Contract Variability on Period Billings.\n Expected Decline in Revenue Growth Rate and Potential Impact on Stock Price.\n Impact of Changes in Effective Tax Rate and Tax Position Rejection on Financial Results.\n Impact of Changes in Accounting Principles and Tax Laws on Future Effective Tax Rate.\n Authority of the U.S. Department of Treasury to Issue Regulations and Interpretative Guidance Affecting Operational Results.\n Consideration and Enactment of New Tax Laws by Various Countries and International Organizations.\n Impact of Recent Global Tax Developments and Increased Scrutiny on Multinational Businesses.\n Impact of Changes in Tax Laws or Rulings on Effective Tax Rate and Financial Results.\n Potential for Global Income Tax Audits and Ambiguities in Cloud Computing Tax Treatment.\n Potential Impact of Adverse Resolution of Uncertain Tax Positions on Operational Results.\n Potential Tax Liabilities from International Intangible Assets and Inter-Company Agreements.\n Potential GAAP Losses Despite Historical Profitability.\n Potential Future GAAP Losses Due to Increased Costs and Unforeseen Expenses.\n Market Uncertainty and Competitive Dynamics Impacting Business Performance Predictability.\n Potential Negative Impact on Future Profitability and Cash Flow.\n Impact of Insufficient Revenue Growth on Business and Financial Performance.\n Impact of Ineffective Internal Control on Financial Reporting Accuracy and Timeliness.\n Sarbanes-Oxley Act Annual and Quarterly Reporting Requirements for Internal Control and Disclosure Controls.\n Annual Audit Requirement of Internal Control Effectiveness by Independent Accounting Firm under Section 404(b) of Sarbanes-Oxley Act.\n Adverse Report Issuance by Independent Registered Public Accounting Firm Due to Unsatisfactory Control Levels.\n Potential Discovery of Material Weaknesses or Significant Deficiencies Through Testing.\n Potential Consequences of Identifying Material Weaknesses or Non-Compliance with Section 404.\n Potential Delays in Implementing System and Process Changes for New Standards.\n Risks Related to General Economic Conditions\n Impact of Global Economic Conditions on Business and Operations.\n Impact of Global Macroeconomic Conditions on Business and Revenues.\n Impact of 2020 Geopolitical and Economic Events on Business Operations.\n Potential Impact of Brexit on UK and EU Economies and Businesses\n Impact of Global Financial Conditions on Business and Operational Judgments.\n Impact of Foreign Currency Exchange Rate Fluctuations on Financial Results.\n Risk of Unpredictable Currency Fluctuations on Financial Results.\n Impact of Brexit Announcement and Uncertainty on Global Markets and Currency Volatility.\n Expected Continued Volatility in Exchange Rates and Global Financial Markets Due to Brexit and Global Uncertainty.\n Initiation of Derivative Instruments for Currency Exchange Rate Hedging in 2018.\n Risk of Unanticipated Currency Exchange Rate Changes on Financial Performance.\n Risk of Imperfect Correlation in Hedging Due to Limited Experience.\n Risk of Loss Due to Imperfect Correlation in Hedging.\n Risks Related to Our Convertible Senior Notes\n Potential Inability to Fund Cash Settlements or Repurchases of 2022 Convertible Senior Notes.\n Repurchase Rights of Holders Upon Fundamental Change.\n Adjustment to Conversion Rate upon Make-Whole Fundamental Change.\n Cash Settlement Requirement and Potential Liquidity Constraints upon Conversion of 2022 Notes.\n Future Incurrence of Additional Debt by Company and Subsidiaries Subject to Future Debt Instrument Restrictions.\n No Restrictions on Incurring Additional Debt or Recapitalizing Existing Debt Under the Indenture.\n Acquisition Prohibition and Obligations Assumption Clause.\n Limitations on Repurchase or Cash Payment upon Conversion of 2022 Notes Due to Legal and Regulatory Constraints.\n Failure to Repurchase or Pay Cash Upon Conversion of 2022 Notes Constitutes Default.\n Consequential Default Under Future Indebtedness Agreements.\n Impact of Fundamental Change on Default and Indebtedness Repayment Obligations.\n Potential Adverse Impact of Conditional Conversion Feature on Financial Condition and Operating Results.\n Conditions for Conversion of 2022 Notes Prior to February 1, 2022.\n Conversion Eligibility of 2022 Notes Based on Conversion Condition Compliance.\n Cash Settlement of Immaterial Principal Amount of 2022 Notes for Year Ended December 31, 2019.\n Expected Cash Settlement of 2022 Notes Conversion Requests for Q1 and Q2 2020.\n Potential Liquidity Impact of Future 2022 Notes Conversions.\n Recording a Loss on Early Conversions of 2022 Notes.\n Impact of Convertible Note Hedge and Warrant Transactions on 2022 Notes and Common Stock Value.\n Convertible Note Hedge and Warrant Transactions with Option Counterparties.\n Purpose and Effect of the 2022 Note Hedge Transactions.\n Potential Dilutive Effect and Share Issuance Mechanics of the 2022 Warrants.\n Expected Issuance of Additional Shares Upon Automatic Exercise of 2022 Warrants.\n Potential Impact of Hedge Position Adjustments by Option Counterparties on Stock and 2022 Notes Prices.\n Market Condition Dependency on Stock and Note Price Effects.\n Potential Adverse Effects on Common Stock and 2022 Notes Value and Conversion Ability.\n Disclaimer on Potential Effects of Transactions on 2022 Notes and Common Stock Prices.\n Non-Representation of Option Counterparties' Engagement and Continuity of Transactions.\n Counterparty Risk and Credit Exposure in the 2022 Note Hedge.\n Impact of Recent Global Economic Conditions on Financial Institutions' Stability.\n Unsecured Creditor Status in Option Counterparty Insolvency Proceedings.\n Correlation Between Exposure and Stock Price\/Volatility.\n Potential Adverse Tax Consequences and Increased Dilution Due to Option Counterparty Default.\n No Assurance on Financial Stability or Viability of Option Counterparties.\n Risks Related to Ownership of Our Common Stock\n Potential Litigation Due to Stock Price Volatility.\n Stock Price Volatility Due to Uncontrollable Factors.\n Technology Sector Stock Price and Trading Volume Volatility Disproportionate to Financial Performance.\n Factors Influencing Stock Price Volatility Beyond Company Control :\n Dividend Policy and Return on Stock Price.\n Anti-Takeover Provisions and Their Impact on Stock Price.\n Provisions in Restated Certificate of Incorporation and Bylaws Potentially Affecting Stock Price by Discouraging Changes in Control or Management.",
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Data for Continuous Improvement.\n Impact of Evolving Data Privacy Laws on Service Development and Deployment.\n Examples of Recent Regulatory Changes Affecting Data Handling :\n - Introduction of GDPR and Interpretation Variability.\n Potential Future Legislation on Data Privacy and Localization by Various Jurisdictions.\n Compliance Costs and Obligations Under Data Privacy and Transfer Regulations.\n Potential Consequences of Non-Compliance with Data Privacy Regulations.\n Potential Fines for GDPR Non-Compliance and Regulatory Interpretations.\n Impact of Product Changes on Compliance Requirements.\n Impact of Increased Privacy Regulation Compliance Costs on Innovation and Product Demand.\n Additional Obligations from Self-Regulatory Standards by Privacy and Industry Groups.\n Customer Expectations for Voluntary Certifications and Third-Party Standards Compliance.\n Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes.\n Acceleration of Innovation Driven by Digital Technology Adoption.\n Customer Decision-Making on Digital Technology Adoption.\n Requirements for Competitive Effectiveness in Technology Market :\n Potential Risks of Failing to Meet Key Business Requirements.\n Impact of Product Release Delays and Defects on Technology Adoption and Customer Satisfaction.\n Necessity for Successful Release of New Products and Updates and Associated Risk Management.\n Impact of Delayed or Defective Product Releases on Customer Adoption and Business Growth.\n Risks Associated with Government and Heavily-Regulated Organizational Contracts.\n Provision of Products and Services to Government and Regulated Entities Directly and Through Partners.\n Investments in Government Sector Sales and Cloud Security Certifications.\n Potential Changes and Challenges in Maintaining Government Certifications.\n Impact of Certification Requirements on Government Sector Sales.\n Sales to Government Entities Primarily Through Distributors and Resellers.\n Risks and Challenges in Government Procurement Process.\n Significant Up-Front Costs and Compliance Risks in Government Contract Bidding.\n Impact of Public Sector Budgetary Cycles and Federal Government Shutdown on Product and Service Demand.\n Potential Challenges to Bid Awards by Competitive Bidders.\n Impact of Bid Protests on Contract Award Expenses and Outcomes.\n Impact of Unsuccessful Bid Protests on Project Initiation and Financial Results\n Termination Rights of Public Sector Customers for Convenience or Default.\n Termination for Convenience \u2013 Fee Collection Limitations.\n Liability for Excess Costs and Business Restrictions Upon Contract Termination Due to Default.\n Compliance Requirements and Legal Obligations for Government Contracting Entities.\n Government Audits and Potential Penalties for Non-Compliance with Contractual Requirements.\n Expansion into Heavily Regulated Industries.\n Regulatory Compliance Requirements for Customers in Heavily Regulated Industries.\n Regulatory Compliance Challenges for Third-Party Vendors and Our Company.\n Customer Audit Rights in Heavily-Regulated Areas.\n Regulatory Compliance Determination and Business Continuity Constraints.\n Risks Associated with Non-U.S. Government Customers in Emerging Markets.\n Compliance Costs and Management Resource Consumption Due to Complex Regulations in Various Jurisdictions.\n Impact of Political and Non-Competitive Factors on Business Opportunities in Certain Jurisdictions.\n Potential Adverse Impact on Business and Operational Results.\n Reliance on Partner Network and Potential Impact on Revenue and Growth.\n Revenue Generation through Partner Network, Including Managed Service Providers and Resellers.\n Increasing Reliance on Partners for Professional Services and Customer Implementations.\n Effectiveness and Consistency of Partner Training Programs.\n Extensive Training and Resource Requirements for New Partners.\n Partner-Related Legal Risks and Reputational Harm Due to Misrepresentation, Service Failures, or Policy Violations.\n Potential Competitive Threats and Intellectual Property Concerns from Partners.\n Impact of Partner Network Management and Service Quality on Business Performance.\n Impact of Unsuccessful International Market Penetration and Risk Management on Business and Operating Results.\n Dependence on Increasing International Sales and Risks of Failing to Grow Internationally.\n Risks and Investments Associated with Operating in International Markets.\n Investment Uncertainty in New Geographic Markets.\n Lower Rate of Acquisition of Large Enterprise Customers in Less Established Markets Due to Regulatory and Operational Risks.\n Emerging Markets Presence Among Prospective Large Enterprise Customers.\n Challenges in Geographic Expansion and Foreign Operations Management.\n Risks Associated with International Market Expansion :\n Adverse Effects of Unmanaged International Market Risks on Business and Revenue Growth.\n Potential Risks and Downsides of Acquisitions and Investments.\n Past and Future Strategic Transactions: Acquisitions and Investments in Businesses, Technologies, Services, Products, and Assets.\n Potential Strategic Business Relationships for Expanding Services and International Capabilities.\n Limitations of Due Diligence in Strategic Transactions.\n Risks Associated with Strategic Transactions :\n Potential Financial Impact of Future Acquisition Financing Methods.\n Potential Dilution and Financial Constraints from Equity or Debt Financing of Acquisitions.\n Potential Negative Impact on Business, Operating Results, and Financial Condition.",
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"content": "The markets for our enterprise cloud solutions are rapidly evolving and highly competitive, with relatively low barriers to entry.",
"outline": "",
"path": "000:012:003:000:000",
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"name": "Expected Intensification of Competition in the Maturing Digital Workflow Products Market",
"content": "As the market for digital workflow products matures and new technologies and competitors enter the market, we expect competition to intensify.",
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"path": "000:012:003:000:001",
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"title": "",
"name": "List of Current Competitors in the Digital Workflow Market",
"content": "Our current competitors include:\n- large, well-established, enterprise application software vendors and large integrated systems vendors;\n- new entrants to the market developing technologies to solve similar problems in different ways;\n- solutions developed in-house by our potential customers or using integrations with other tools;\n- vendors of infrastructure-as-a-service, platform-as-a-service and development operations; and\n- established and emerging cloud vendors.",
"outline": "List of Current Competitors in the Digital Workflow Market :\n Customer Reluctance Due to Existing Enterprise Software Investments.",
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"title": "",
"name": "Customer Reluctance Due to Existing Enterprise Software Investments",
"content": "Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current enterprise software into their businesses and therefore may be reluctant or unwilling to migrate away from their current solution to ours.",
"outline": "",
"path": "000:012:003:000:002:000",
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"class": "Element",
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"title": "",
"name": "Competitive Disadvantage Due to Competitors' Larger Size, Name Recognition, and Resources",
"content": "Many of our competitors and potential competitors are larger and have greater name recognition, longer operating histories, more established customer relationships (including at the executive level of large enterprises where decision-making authority is held), larger marketing budgets and greater resources than we do.",
"outline": "",
"path": "000:012:003:000:003",
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"title": "",
"name": "Competitive Threats and Market Responses by Established Competitors",
"content": "While we believe that our platform and products can largely be complementary to large and established systems that traditionally operate as \u201csystems of record,\u201d competitors may try to enter our space. They may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, customer requirements and buying practices. They may utilize acquisitions, integrations or consolidations to offer integrated or bundled products, enhanced functionality or other advantages. They may reduce the price of products or subscriptions that compete with ours or may bundle them with other products and subscriptions, causing our products to appear relatively more expensive. They may also invest in industry-specific solutions that purport to provide a unique solution for that industry.",
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"path": "000:012:003:000:004",
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"title": "",
"name": "Expanding Competition from Adjacent Markets and New Service Offerings",
"content": "Other potential competitors not currently offering competitive products may expand their services to compete with our services, or we may shift our products and services to compete with current and future competitors in adjacent markets. We have in the past expanded, and we expect to continue to expand the breadth of our services to include offerings in new markets and the use of our platform by developers of custom applications. As a result, we expect increasing competition from platform vendors and application development vendors focused on these other markets.",
"outline": "",
"path": "000:012:003:000:005",
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"title": "",
"name": "Impact of Smaller Competitors and New Entrants on Pricing Pressure in ITSM Market",
"content": "Smaller competitors and new entrants may accelerate pricing pressures, including in the ITSM market, which is our more mature offering and from which we derive a large portion of our revenues.",
"outline": "",
"path": "000:012:003:000:006",
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"title": "",
"name": "Potential Competitive Disadvantages and Business Impact Risks",
"content": "For all of these reasons, we may not be able to compete successfully, and competition could result in reduced sales, reduced margins, losses or the failure of our products to achieve or maintain market acceptance, any of which could harm our business.",
"outline": "",
"path": "000:012:003:000:007",
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"title": "",
"name": "Impact of Privacy Laws, Cloud Computing Regulations, and Data Transfer Restrictions on Business",
"content": "Privacy laws and concerns, evolving regulation of cloud computing, cross-border data transfer restrictions, other foreign and domestic regulations and standards related to data and the Internet may adversely affect our business.",
"outline": "",
"path": "000:012:003:000:008",
"parentPath": "000:012:003:000",
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"title": "",
"name": "Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services",
"content": "National and local governments or agencies have in the past adopted, and may in the future adopt, laws and regulations affecting data privacy, the use of the Internet as a commercial medium, the use of data in contexts referred to as artificial intelligence and machine learning, and data sovereignty requirements concerning the location of data centers that store and process data. As a cloud based service provider, we optimize performance of our products and services by utilizing data centers that may be located in different political jurisdictions.",
"outline": "Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services.\n Utilization of Product Usage Data for Continuous Improvement.\n Impact of Evolving Data Privacy Laws on Service Development and Deployment.\n Examples of Recent Regulatory Changes Affecting Data Handling :\n - Introduction of GDPR and Interpretation Variability.\n EU Proposed e-Privacy Regulation and Right to be Forgotten Requirements.\n - Impact of Brexit on Compliance with EU and UK Privacy Regulations and Customer Uncertainty.\n - European Court of Justice Ruling on Privacy Shield and Standard Contractual Clauses Impact on Data Transfer.\n - Implementation and Impact of the California Consumer Privacy Act (CCPA) in January 2020.\n Potential Future Legislation on Data Privacy and Localization by Various Jurisdictions.\n - Consideration of AI and Machine Learning Regulation by US and Non-US Governments.\n Compliance Costs and Obligations Under Data Privacy and Transfer Regulations.\n Potential Consequences of Non-Compliance with Data Privacy Regulations.\n Potential Fines for GDPR Non-Compliance and Regulatory Interpretations.\n Impact of Product Changes on Compliance Requirements.\n Impact of Increased Privacy Regulation Compliance Costs on Innovation and Product Demand.\n Additional Obligations from Self-Regulatory Standards by Privacy and Industry Groups.\n Customer Expectations for Voluntary Certifications and Third-Party Standards Compliance.",
"path": "000:012:003:001",
"parentPath": "000:012:003",
"parentName": "Risks Related to Our Ability to Grow Our Business",
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"name": "Utilization of Product Usage Data for Continuous Improvement",
"content": "In addition, we utilize data concerning the use of our products and services to continually improve our offering.",
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"path": "000:012:003:001:000",
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"title": "",
"name": "Impact of Evolving Data Privacy Laws on Service Development and Deployment",
"content": "Changing laws, regulations and standards applying to the collection, transfer, processing, storage or use of data, including personal data, could affect our ability to develop our products and services to maximize their utility, as well as our customers\u2019 ability to use and share data, potentially restricting our ability to store, process and share data with our customers in connection with providing our services. In some cases, this could impact our ability to offer our services in certain locations or our customers\u2019 ability to deploy our services globally.",
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"path": "000:012:003:001:001",
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"title": "",
"name": "Examples of Recent Regulatory Changes Affecting Data Handling",
"content": "Examples of recent changes include:",
"outline": "",
"path": "000:012:003:001:002",
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"title": "",
"name": "Introduction of GDPR and Interpretation Variability",
"content": "- In 2016, the European Union (the EU) adopted the General Data Protection Regulation (the GDPR), which took effect in May 2018 and established new requirements applicable to the handling of personal data. The particular obligations imposed by GDPR are subject to interpretation, and different regulators may interpret requirements inconsistently.",
"outline": "- Introduction of GDPR and Interpretation Variability.\n EU Proposed e-Privacy Regulation and Right to be Forgotten Requirements.\n - Impact of Brexit on Compliance with EU and UK Privacy Regulations and Customer Uncertainty.\n - European Court of Justice Ruling on Privacy Shield and Standard Contractual Clauses Impact on Data Transfer.\n - Implementation and Impact of the California Consumer Privacy Act (CCPA) in January 2020.",
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"title": "",
"name": "EU Proposed e-Privacy Regulation and Right to be Forgotten Requirements",
"content": "Further, laws such as the EU\u2019s proposed e-Privacy Regulation are increasingly aimed at the use of personal information , the tracking of individuals\u2019 online activities and the \u201cright to be forgotten,\u201d requiring a company to delete certain information about individuals upon their request in certain circumstances.",
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"path": "000:012:003:001:003:000",
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"title": "",
"name": "Impact of Brexit on Compliance with EU and UK Privacy Regulations and Customer Uncertainty",
"content": "- In January 2020, Britain exited the EU (Brexit). Although we do not believe Brexit will require us to alter our operations in any material way to comply with privacy regulations in the EU and the United Kingdom (the UK), Brexit has and may continue to cause uncertainty for our customers.",
"outline": "",
"path": "000:012:003:001:003:001",
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"name": "European Court of Justice Ruling on Privacy Shield and Standard Contractual Clauses Impact on Data Transfer",
"content": "- In early 2020, the European Court of Justice is expected to give its ruling on a case regarding the validity of the Privacy Shield framework and the Standard Contractual Clauses (the SCCs), which are lawful transfer mechanisms for transferring personal data from the EU to the US (under the Privacy Shield framework) and other third countries deemed to have inadequate protection by the European Commission (under the SCCs). While we do not believe there will be any material impact to our business if the Privacy Shield is invalidated, there may be an impact to our ability to process personal data in certain jurisdictions where we operate if the SCCs are invalidated by the European Court of Justice.",
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"path": "000:012:003:001:003:002",
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"title": "",
"name": "Implementation and Impact of the California Consumer Privacy Act (CCPA) in January 2020",
"content": "- In January 2020, the California Consumer Privacy Act (the CCPA) in the US took effect and broadly defines personal information and provides California consumers increased privacy rights and protections. The CCPA, among other things, affords California consumers new abilities to opt out of certain sales of personal information. Legislators have amended the CCPA since it passed in 2018 and implementing regulations are yet to be finalized by the California Attorney General.",
"outline": "",
"path": "000:012:003:001:003:003",
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"title": "",
"name": "Potential Future Legislation on Data Privacy and Localization by Various Jurisdictions",
"content": "In addition, other nations and U.S. states and the federal government have discussed, are passing or may pass, future legislation similar to the GDPR and\/or the CCPA, or with other data localization or sovereignty requirements.",
"outline": "Potential Future Legislation on Data Privacy and Localization by Various Jurisdictions.\n - Consideration of AI and Machine Learning Regulation by US and Non-US Governments.",
"path": "000:012:003:001:004",
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"name": "Consideration of AI and Machine Learning Regulation by US and Non-US Governments",
"content": "- Both US and non-US governments are considering the use of artificial intelligence and machine learning in both consumer and business contexts and whether there is any need for regulation in these areas.",
"outline": "",
"path": "000:012:003:001:004:000",
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"name": "Compliance Costs and Obligations Under Data Privacy and Transfer Regulations",
"content": "The costs of compliance with, and other obligations imposed by, the GDPR, the e-Privacy Regulation, the CCPA and other privacy, data residency and data transfer laws, regulations and standards may cause us to incur substantial operational costs or require us to modify our data handling practices and\/or policies, may limit the development, use and adoption of our services and reduce overall demand for our services.",
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"path": "000:012:003:001:005",
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"name": "Potential Consequences of Non-Compliance with Data Privacy Regulations",
"content": "In addition, non-compliance could result in proceedings or investigations against us by regulatory authorities or others, lead to significant fines or reputational harm and may otherwise adversely impact our business, financial condition and operating results.",
"outline": "",
"path": "000:012:003:001:006",
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{
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"title": "",
"name": "Potential Fines for GDPR Non-Compliance and Regulatory Interpretations",
"content": "For example, the GDPR imposes significant new obligations and compliance with these obligations depends in part on how particular regulators interpret and apply them. If we fail to comply with the GDPR or if regulators assert that we have failed to comply with the GDPR, we may be subject to fines of up to 4% of our worldwide annual revenue.",
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"path": "000:012:003:001:007",
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{
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"properties": {
"title": "",
"name": "Impact of Product Changes on Compliance Requirements",
"content": "Changes in our developed or acquired products and how such products utilize data could alter or increase our compliance requirements.",
"outline": "",
"path": "000:012:003:001:008",
"parentPath": "000:012:003:001",
"parentName": "Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services",
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"title": "",
"name": "Impact of Increased Privacy Regulation Compliance Costs on Innovation and Product Demand",
"content": "As a result, the cost of compliance with and other obligations imposed by privacy regulations could increase and our innovation and business drivers in developing or acquiring new and emerging technologies and the demand for our products could be impacted.",
"outline": "",
"path": "000:012:003:001:009",
"parentPath": "000:012:003:001",
"parentName": "Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services",
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"name": "Additional Obligations from Self-Regulatory Standards by Privacy and Industry Groups",
"content": "In addition to government activity, privacy advocacy groups and other technology and industry groups have established or may establish various new or different self-regulatory standards that may place additional obligations on us.",
"outline": "",
"path": "000:012:003:001:010",
"parentPath": "000:012:003:001",
"parentName": "Government Regulations Impacting Data Privacy, Internet Usage, AI, and Data Sovereignty for Cloud Services",
"document": "abcd-1234",
"order": 10,
"type": "body"
}
},
{
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"properties": {
"title": "",
"name": "Customer Expectations for Voluntary Certifications and Third-Party Standards Compliance",
"content": "Our customers may expect us to meet voluntary certifications or adhere to other standards established by third parties. If we are unable to maintain these certifications or meet these standards, it could reduce demand for our products and adversely affect our business.",
"outline": "",
"path": "000:012:003:001:011",
"parentPath": "000:012:003:001",
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"order": 11,
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{
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"title": "",
"name": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"content": "If we do not accurately predict, prepare for, and respond promptly to rapidly evolving technological, market and customer developments, our competitive position and business prospects may be harmed. We compete in markets that continue to evolve rapidly.",
"outline": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes.\n Acceleration of Innovation Driven by Digital Technology Adoption.\n Customer Decision-Making on Digital Technology Adoption.\n Requirements for Competitive Effectiveness in Technology Market :\n Potential Risks of Failing to Meet Key Business Requirements.\n Impact of Product Release Delays and Defects on Technology Adoption and Customer Satisfaction.\n Necessity for Successful Release of New Products and Updates and Associated Risk Management.\n Impact of Delayed or Defective Product Releases on Customer Adoption and Business Growth.",
"path": "000:012:003:002",
"parentPath": "000:012:003",
"parentName": "Risks Related to Our Ability to Grow Our Business",
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},
{
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"title": "",
"name": "Acceleration of Innovation Driven by Digital Technology Adoption",
"content": "The pace of innovation will continue to accelerate as customers increasingly base their purchases on digital technologies and capabilities, including public and private cloud solutions and infrastructure, massively scalable databases, mobile, consumer product-like user experiences, social, collaboration, machine learning, artificial intelligence, Internet-connected devices, high-velocity robotic automation, security, cryptography, internal software development operations, and application and service awareness.",
"outline": "",
"path": "000:012:003:002:000",
"parentPath": "000:012:003:002",
"parentName": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"document": "abcd-1234",
"order": 0,
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{
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"title": "",
"name": "Customer Decision-Making on Digital Technology Adoption",
"content": "Our customers and prospective customers must choose among competing imperatives to adopt digital technologies, or have been built on fully-digital, modern, dynamic IT technologies.",
"outline": "",
"path": "000:012:003:002:001",
"parentPath": "000:012:003:002",
"parentName": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"document": "abcd-1234",
"order": 1,
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"title": "",
"name": "Requirements for Competitive Effectiveness in Technology Market",
"content": "Accordingly, to compete effectively, we must:\n- identify and innovate in the right emerging technologies, knowing that we cannot make substantial investments in all of them;\n- accurately predict our customers\u2019 changing business needs, priorities and adoption practices, including their technology infrastructures and buying and budgetary practices;\n- invest in and continually optimize our own technology platform so that it continues to meet the very high performance expectations of our customers;\n- successfully deliver new, scalable platform and database technologies and products to meet these needs and priorities;\n- efficiently integrate with other technologies within our customers\u2019 digital environments;\n- expand our offerings into industries and to buyers who are not familiar with our offerings;\n- profitably market and sell products to companies and buyers in markets where our sales and marketing teams have less experience, including to companies built on fully-digital, modern, dynamic IT technologies that have not been strong buyers of ITSM and ITOM products; and\n- effectively deliver, either directly or through our partner ecosystem, the business process planning, IT systems architecture planning, and product implementation services that our customers require to be successful.",
"outline": "",
"path": "000:012:003:002:002",
"parentPath": "000:012:003:002",
"parentName": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"document": "abcd-1234",
"order": 2,
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"title": "",
"name": "Potential Risks of Failing to Meet Key Business Requirements",
"content": "If we fail to meet any of these requirements, our competitive position, strategic relevance and business prospects may be harmed.",
"outline": "",
"path": "000:012:003:002:003",
"parentPath": "000:012:003:002",
"parentName": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
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},
{
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"title": "",
"name": "Impact of Product Release Delays and Defects on Technology Adoption and Customer Satisfaction",
"content": "Delays in the release of, or actual or perceived defects in, new or updated products may slow the adoption of our most recent technologies, reduce our ability to efficiently provide our services, decrease customer satisfaction, and adversely impact sales of additional products to our customers.",
"outline": "",
"path": "000:012:003:002:004",
"parentPath": "000:012:003:002",
"parentName": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"document": "abcd-1234",
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},
{
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"properties": {
"title": "",
"name": "Necessity for Successful Release of New Products and Updates and Associated Risk Management",
"content": "We must successfully continue to release new products and updates to existing products. The success of any release depends on a number of factors, including our ability to manage the risks associated with quality or other defects or deficiencies, delays in the timing of releases or the adoption of releases by customers, and other complications that may arise during the early stages of introduction.",
"outline": "",
"path": "000:012:003:002:005",
"parentPath": "000:012:003:002",
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"document": "abcd-1234",
"order": 5,
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}
},
{
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"title": "",
"name": "Impact of Delayed or Defective Product Releases on Customer Adoption and Business Growth",
"content": "If releases are delayed or if customers perceive that our releases contain bugs or other defects or are difficult to implement, customer adoption of our new products or updates may be adversely impacted, customer satisfaction may decrease, our ability to efficiently provide our services may be reduced, and our growth prospects may be harmed.",
"outline": "",
"path": "000:012:003:002:006",
"parentPath": "000:012:003:002",
"parentName": "Risk of Competitive Disadvantage Due to Rapid Technological and Market Changes",
"document": "abcd-1234",
"order": 6,
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},
{
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"properties": {
"title": "",
"name": "Risks Associated with Government and Heavily-Regulated Organizational Contracts",
"content": "We do business with federal, state and local governments and agencies, and heavily-regulated U.S. and foreign organizations; as a result, we face risks related to the procurement process, budget decisions driven by statutory and regulatory determinations, termination of contracts, and compliance with government contracting requirements.",
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"content": "We have experienced, and may continue to experience, difficulties in some of our investments in geographic expansion, including hiring qualified sales management personnel, penetrating the target market, anticipating and ensuring compliance with regulatory developments, and managing foreign operations in such locales.",
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"name": "Risks Associated with International Market Expansion",
"content": "Risks inherent with making our products and services available in international markets include without limitation:\n- compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, competition, requirements to have local partner(s), local entity ownership limitations, technology transfer or sharing requirements, data residency and transfer laws and regulations, privacy and data protection laws and regulations, including the GDPR;\n- compliance by us and our business partners with international bribery and anti-corruption laws, including the UK Bribery Act and the U.S. Foreign Corrupt Practices Act of 1977, as amended (the FCPA);\n- the risk that illegal or unethical activities of our local employees or business partners will be attributed to or result in liability to us or damage to our reputation;\n- longer and potentially more complex sales and accounts receivable payment cycles and other collection difficulties;\n- tax treatment of revenues from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions;\n- different pricing and distribution environments;\n- foreign currency fluctuations, which may cause transactional and translational remeasurement losses;\n- potential changes in international trade policies, tariffs, agreements and practices, including the adoption and expansion of formal or informal trade restrictions or regulatory frameworks favoring local competitors;\n- potential threatening state-sponsored actions, including cybersecurity threats directed at local data centers, customers or end-users;\n- local business practices and cultural norms that may favor local competitors; and\n- localization of our services, including translation into foreign languages and associated expenses.",
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"name": "Adverse Effects of Unmanaged International Market Risks on Business and Revenue Growth",
"content": "If we are unable to manage these risks, if our required investments in these international markets are greater than anticipated, or if we are unsuccessful in increasing sales in emerging markets, our revenue growth rate, business and operating results will be adversely affected.",
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"name": "Potential Risks and Downsides of Acquisitions and Investments",
"content": "As we acquire or invest in companies and technologies, we may not realize the expected business or financial benefits and the acquisitions and investments may divert our management\u2019s attention and result in additional dilution to our stockholders.",
"outline": "Potential Risks and Downsides of Acquisitions and Investments.\n Past and Future Strategic Transactions: Acquisitions and Investments in Businesses, Technologies, Services, Products, and Assets.\n Potential Strategic Business Relationships for Expanding Services and International Capabilities.\n Limitations of Due Diligence in Strategic Transactions.\n Risks Associated with Strategic Transactions :\n Potential Financial Impact of Future Acquisition Financing Methods.\n Potential Dilution and Financial Constraints from Equity or Debt Financing of Acquisitions.\n Potential Negative Impact on Business, Operating Results, and Financial Condition.",
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"name": "Past and Future Strategic Transactions: Acquisitions and Investments in Businesses, Technologies, Services, Products, and Assets",
"content": "We have acquired or invested in companies and technologies in the past as part of our business strategy and may continue to evaluate and execute potential strategic transactions, including acquisitions of or investments in businesses, technologies, services, products and other assets in the future.",
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"content": "We also may enter into relationships with other businesses to expand our service offerings, functionality or our ability to provide services in international locations, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies.",
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"name": "Limitations of Due Diligence in Strategic Transactions",
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"content": "These strategic transactions involve numerous risks, including:\n- assimilating or integrating the businesses, technologies, products, personnel or operations of the acquired companies;\n- failing to achieve the expected benefits of the acquisition or investment;\n- potential loss of key employees of the acquired company;\n- inability to maintain relationships with customers and partners of the acquired business;\n- potential adverse tax consequences;\n- disruption to our business and diversion of management attention and other resources;\n- potential financial and credit risks associated with acquired customers;\n- dependence on acquired technologies or licenses for which alternatives may not be available to us without significant cost or complexity;\n- in the case of foreign acquisitions, the challenges associated with integrating operations across different cultures and languages and any currency and regulatory risks associated with specific countries;\n- increased data privacy or security compliance requirements resulting from integrating the acquired technology or company with ours; and\n- potential unknown liabilities associated with the acquired businesses.",
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"name": "Potential Financial Impact of Future Acquisition Financing Methods",
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"name": "Potential Dilution and Financial Constraints from Equity or Debt Financing of Acquisitions",
"content": "Furthermore, if we finance acquisitions by issuing equity, convertible or other debt securities or loans, our existing stockholders may be diluted, or we could face constraints related to the terms of and repayment obligation related to the incurrence of indebtedness that could affect our stock price.",
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"outline": "Risks Related to the Operation of Our Business\n Potential Liabilities and Business Impact of Cyber-Security Events.\n Handling and Protection of Confidential and Sensitive Customer Data.\n Potential Breach of Security Measures and Unauthorized Data Access.\n Fraudulent Inducement and Phishing Risks by Third Parties.\n Lack of Control Over Third-Party Data Processing and Security Measures.\n Prevalence and Recurrence of Cybersecurity Threats in Industry.\n Inability to Anticipate and Prevent Evolving Cybersecurity Threats.\n Ongoing Investment in Cyber-Security Measures and Potential Future Expenditures.\n Potential Consequences of Security Breaches and Cyber Attacks.\n Potential Costs and Operational Consequences of Security Incident Mitigation and Prevention.\n Uncertainty of Insurance Coverage for Security Incidents and Breaches.\n Customer Responsibility for Data Access and Optional Use of Provided Security Tools and Practices.\n Potential Economic, Operational, and Reputational Impact of Customer-Caused Cyber-Security Events.\n Dependence on Key Employees and Impact on Business Operations.\n Management Team Changes and Potential Impact on Business Operations.\n Challenges in Attracting and Retaining Qualified Technology Industry Personnel.\n Challenges in Hiring and Retaining Highly-Skilled Employees in Key Geographic Locations.\n At-Will Employment and Its Impact on Recruitment and Retention.\n Importance of Corporate Culture in Retaining and Recruiting Personnel During Global Expansion.\n Impact of Natural Disasters and Catastrophic Events on Business Operations.\n Risk of Business Interruption Due to Natural Disasters and Uncontrollable Events.\n Insurance Coverage Insufficiency for Potential Losses and Expenses.\n Risk of Operational Disruption Due to Proximity to Seismic Faults in California and Washington.\n Factors Impacting Product Implementation Success and Business Dependence on Effective Customer Implementation.\n Dependence on Partner Network for Implementation Services and Potential Shortage of Qualified Partners.\n Potential Causes of Implementation Delays and Inefficiencies.\n Potential for Significant Implementation Costs Due to Various Risks.\n Customer Implementation Delays and Impact on Sales and Subscription Renewals.\n Customer Capacity and Talent Limitations Impacting Digital Transformation Benefits.\n Risks of Unsuccessful, Lengthy, or Costly Customer Implementation and Integration Projects.\n Potential Liability and Reputational Damage from Service Disruptions or Defects.\n Potential for Defects in Services and Impact of Third-Party Software.\n Potential Sources of Service Disruptions: Internal Errors and External Incidents.\n Current and Future Data Center Management and Service Provision Strategy.\n Vulnerability of Data Centers to Natural Disasters, Misconduct, and Operational Failures.\n Potential Service Interruptions and Customer Data Loss Due to Data Center Issues.\n Customer-Induced Service Disruption Risks.\n Impact of Service Reliability on Customer Trust and Business Reputation.\n Impact of Service Disruptions or Defects on Revenue, Penalties, Litigation, Customer Retention, and New Customer Acquisition.\n Customer-Specific System Resiliency Requirements and Potential Non-Compliance.\n Impacts of Claims and Breaches on Financial Liabilities and Litigation Risks.\n Insufficient Insurance Coverage for Service Disruption Claims.",
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"name": "Potential Liabilities and Business Impact of Cyber-Security Events",
"content": "If we or our third-party service providers suffer a cyber-security event, we may lose customers and incur significant liabilities, any of which would harm our business and operating results.",
"outline": "Potential Liabilities and Business Impact of Cyber-Security Events.\n Handling and Protection of Confidential and Sensitive Customer Data.\n Potential Breach of Security Measures and Unauthorized Data Access.\n Fraudulent Inducement and Phishing Risks by Third Parties.\n Lack of Control Over Third-Party Data Processing and Security Measures.\n Prevalence and Recurrence of Cybersecurity Threats in Industry.\n Inability to Anticipate and Prevent Evolving Cybersecurity Threats.\n Ongoing Investment in Cyber-Security Measures and Potential Future Expenditures.\n Potential Consequences of Security Breaches and Cyber Attacks.\n Potential Costs and Operational Consequences of Security Incident Mitigation and Prevention.\n Uncertainty of Insurance Coverage for Security Incidents and Breaches.\n Customer Responsibility for Data Access and Optional Use of Provided Security Tools and Practices.\n Potential Economic, Operational, and Reputational Impact of Customer-Caused Cyber-Security Events.",
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"name": "Handling and Protection of Confidential and Sensitive Customer Data",
"content": "Our operations involve the storage, transmission and processing of our customers\u2019 confidential, proprietary and sensitive data, including personally identifiable information, protected health information, financial information and, in some cases, government information.",
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"path": "000:012:004:000:000",
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"name": "Potential Breach of Security Measures and Unauthorized Data Access",
"content": "While we have security measures in place designed to protect customer information and prevent data loss, these measures may be breached because of employee error or third-party actions, including unintentional events or deliberate attacks by cyber criminals, and result in someone obtaining unauthorized access to our customers\u2019 data or our data, including our intellectual property and other confidential business information.",
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"path": "000:012:004:000:001",
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"name": "Fraudulent Inducement and Phishing Risks by Third Parties",
"content": "In addition, third parties have attempted and may continue to attempt to fraudulently induce employees, contractors, or users to disclose information to gain access to our data or our customers\u2019 data, and we may be the target of email scams that attempt to acquire personal information or company assets.",
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"name": "Lack of Control Over Third-Party Data Processing and Security Measures",
"content": "Additionally, because we do not control our third-party service providers or their processing of data, we cannot ensure the integrity or security of measures they take to protect customer information and prevent data loss.",
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"name": "Prevalence and Recurrence of Cybersecurity Threats in Industry",
"content": "Computer malware, viruses, hacking, phishing and denial of service attacks by third parties have become more prevalent in our industry, and they have occurred on our and our third-party service providers\u2019 systems in the past and may occur again on these systems in the future.",
"outline": "",
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"name": "Inability to Anticipate and Prevent Evolving Cybersecurity Threats",
"content": "Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not detected until successfully launched against a target, we have been and may continue to be unable to anticipate these techniques or to implement adequate preventative measures.",
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"path": "000:012:004:000:005",
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"name": "Ongoing Investment in Cyber-Security Measures and Potential Future Expenditures",
"content": "We devote significant financial and personnel resources to implement and maintain security measures; however, as cyber-security threats develop and grow more complex over time, it may be necessary to make significant further investments to protect data and infrastructure.",
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"path": "000:012:004:000:006",
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"name": "Potential Consequences of Security Breaches and Cyber Attacks",
"content": "A security breach suffered by us or our third-party service providers, an attack against our service availability or unauthorized access or loss of data could result in a disruption to our service, litigation, the triggering of service availability, indemnification and other contractual obligations, regulatory investigations, government fines and penalties, reputational damage, loss of sales and customers, mitigation and remediation expenses and other significant costs and liabilities.",
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"content": "In addition, we may incur significant costs and operational consequences of investigating, remediating, eliminating, complying with notice obligations and implementing additional measures designed to prevent actual or perceived security incidents.",
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"name": "Uncertainty of Insurance Coverage for Security Incidents and Breaches",
"content": "We also cannot be certain that our existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage as to any future claim.",
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"name": "Customer Responsibility for Data Access and Optional Use of Provided Security Tools and Practices",
"content": "Further, in most instances, our customers administer access to the data held in their particular instance for their employees and service providers. We offer tools and support for what we believe are best practices to maintain security utilizing our services, but customers are not required to utilize those tools or follow our suggested practices.",
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"path": "000:012:004:000:010",
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"name": "Potential Economic, Operational, and Reputational Impact of Customer-Caused Cyber-Security Events",
"content": "As a result, or for other reasons, a customer may suffer a cyber-security event on its own systems, unrelated to our own, and allow a malicious actor to obtain access to the customer\u2019s information held on our platform.Even if such a breach is unrelated to our security programs or practices, such breach could result in our incurring significant economic and operational costs in investigating, remediating, eliminating and implementing additional measures to further protect our customers from their own vulnerabilities, and could result in reputational harm to us.",
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"name": "Dependence on Key Employees and Impact on Business Operations",
"content": "If we lose key employees or are unable to attract and retain the employees we need, our business and operating results will be adversely affected. Our success depends largely upon the continued services of our management team, including our Chief Executive Officer and Chief Financial Officer, and many key individual contributors.",
"outline": "Dependence on Key Employees and Impact on Business Operations.\n Management Team Changes and Potential Impact on Business Operations.\n Challenges in Attracting and Retaining Qualified Technology Industry Personnel.\n Challenges in Hiring and Retaining Highly-Skilled Employees in Key Geographic Locations.\n At-Will Employment and Its Impact on Recruitment and Retention.\n Importance of Corporate Culture in Retaining and Recruiting Personnel During Global Expansion.",
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"name": "Management Team Changes and Potential Impact on Business Operations",
"content": "From time to time in the ordinary course of business, there may be changes in our management team resulting from the hiring or departure of executives. For example, our current President and Chief Executive Officer was appointed in November 2019 and our current Chief Financial Officer was appointed in January 2020. While we seek to manage these transitions carefully, including by establishing strong processes and procedures and succession planning, such changes may result in a loss of institutional knowledge and cause disruptions to our business.",
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"name": "Challenges in Attracting and Retaining Qualified Technology Industry Personnel",
"content": "In the technology industry, there is substantial and continuous competition for engineers with high levels of experience in designing, developing and managing software and Internet-related solutions, sales executives and operations personnel. We may not be successful in attracting and retaining qualified personnel, and we may experience increased compensation and training costs that may not be offset by either improved productivity or higher sales.",
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"name": "Challenges in Hiring and Retaining Highly-Skilled Employees in Key Geographic Locations",
"content": "We have from time to time experienced, and we may continue to experience, difficulty in hiring and retaining highly-skilled employees with appropriate qualifications, and may not be able to fill positions in desired geographic areas or at all. In particular, competition for experienced software and cloud computing infrastructure engineers in the San Francisco Bay area, San Diego, Seattle, London, Amsterdam and Hyderabad, our primary operating locations, is intense.",
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"path": "000:012:004:001:002",
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"name": "At-Will Employment and Its Impact on Recruitment and Retention",
"content": "Many of our employees, including all of our executive officers, are employed \u201cat-will\u201d and may terminate their employment with us at any time. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be adversely affected.",
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"path": "000:012:004:001:003",
"parentPath": "000:012:004:001",
"parentName": "Dependence on Key Employees and Impact on Business Operations",
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"name": "Importance of Corporate Culture in Retaining and Recruiting Personnel During Global Expansion",
"content": "In addition, we believe our corporate culture of fostering innovation, teamwork and employee satisfaction has been a key contributor to our success to date. As we continue to grow and expand globally, we may find it difficult to maintain important aspects of our corporate culture, which could negatively affect our ability to retain and recruit personnel who are essential to our future success.",
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"path": "000:012:004:001:004",
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"name": "Impact of Natural Disasters and Catastrophic Events on Business Operations",
"content": "Natural disasters and other events beyond our control could harm our business. Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce and the global economy, and thus could have a negative effect on us.",
"outline": "Impact of Natural Disasters and Catastrophic Events on Business Operations.\n Risk of Business Interruption Due to Natural Disasters and Uncontrollable Events.\n Insurance Coverage Insufficiency for Potential Losses and Expenses.\n Risk of Operational Disruption Due to Proximity to Seismic Faults in California and Washington.",
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"name": "Risk of Business Interruption Due to Natural Disasters and Uncontrollable Events",
"content": "Our business operations are subject to interruption by natural disasters, flooding, fire, power shortages, pandemics such as the recent spread of the coronavirus, terrorism, political unrest, telecommunications failure, vandalism, cyber-attacks, geopolitical instability, war, the effects of climate change (such as drought, wildfires, increased storm severity and sea level rise) and other events beyond our control. Although we maintain crisis management and disaster response plans, such events could make it difficult or impossible for us to deliver our services to our customers, could decrease demand for our services, and could cause us to incur substantial expense.",
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"path": "000:012:004:002:000",
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"name": "Insurance Coverage Insufficiency for Potential Losses and Expenses",
"content": "Our insurance may not be sufficient to cover losses or additional expense that we may sustain.",
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"name": "Risk of Operational Disruption Due to Proximity to Seismic Faults in California and Washington",
"content": "The majority of our research and development activities, corporate offices, information technology systems, and other critical business operations are located near major seismic faults in California and Washington. Customer data could be lost, significant recovery time could be required to resume operations and our financial condition and operating results could be adversely affected in the event of a major natural disaster or catastrophic event.",
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"name": "Factors Impacting Product Implementation Success and Business Dependence on Effective Customer Implementation",
"content": "Various factors, including our customers\u2019 business, integration, migration and security requirements, or errors by us, our partners, or our customers, may cause implementations of our products to be delayed, inefficient or otherwise unsuccessful. Our business depends upon the successful implementation of our products by our customers.",
"outline": "Factors Impacting Product Implementation Success and Business Dependence on Effective Customer Implementation.\n Dependence on Partner Network for Implementation Services and Potential Shortage of Qualified Partners.\n Potential Causes of Implementation Delays and Inefficiencies.\n Potential for Significant Implementation Costs Due to Various Risks.\n Customer Implementation Delays and Impact on Sales and Subscription Renewals.\n Customer Capacity and Talent Limitations Impacting Digital Transformation Benefits.\n Risks of Unsuccessful, Lengthy, or Costly Customer Implementation and Integration Projects.",
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"name": "Dependence on Partner Network for Implementation Services and Potential Shortage of Qualified Partners",
"content": "Increasingly, we and our customers rely on our network of partners to deliver implementation services, and there may not be enough qualified implementation partners available to meet customer demand.",
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"name": "Potential Causes of Implementation Delays and Inefficiencies",
"content": "Further, our customers\u2019 business, integration, migration and security requirements, or errors by us, our partners, or our customers, or other factors may cause implementations to be delayed, inefficient or otherwise unsuccessful. For example, changes in the functional requirements of our customers, delays in timeline, or deviations from recommended best practices may occur during the course of an implementation project.",
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"name": "Potential for Significant Implementation Costs Due to Various Risks",
"content": "As a result of these and other risks, we or our customers may incur significant implementation costs in connection with the purchase, implementation and enablement of our products.",
"outline": "",
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"name": "Customer Implementation Delays and Impact on Sales and Subscription Renewals",
"content": "Some customer implementations may take longer than planned or fail to meet our customers\u2019 expectations, which may delay our ability to sell additional products or result in customers canceling or failing to renew their subscriptions before our products have been fully implemented.",
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"title": "",
"name": "Customer Capacity and Talent Limitations Impacting Digital Transformation Benefits",
"content": "Some customers may lack the employee talent or organizational capacity to manage a digital transformation such as our offering and, as a consequence, may be unable to see the benefits of our products.",
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"name": "Risks of Unsuccessful, Lengthy, or Costly Customer Implementation and Integration Projects",
"content": "Unsuccessful, lengthy, or costly customer implementation and integration projects could result in claims from customers, reputational harm, and opportunities for competitors to displace our products, each of which could have an adverse effect on our business and operating results.",
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"name": "Potential Liability and Reputational Damage from Service Disruptions or Defects",
"content": "Disruptions or defects in our services could damage our customers\u2019 businesses, subject us to substantial liability and harm our reputation and financial results.",
"outline": "Potential Liability and Reputational Damage from Service Disruptions or Defects.\n Potential for Defects in Services and Impact of Third-Party Software.\n Potential Sources of Service Disruptions: Internal Errors and External Incidents.\n Current and Future Data Center Management and Service Provision Strategy.\n Vulnerability of Data Centers to Natural Disasters, Misconduct, and Operational Failures.\n Potential Service Interruptions and Customer Data Loss Due to Data Center Issues.\n Customer-Induced Service Disruption Risks.\n Impact of Service Reliability on Customer Trust and Business Reputation.\n Impact of Service Disruptions or Defects on Revenue, Penalties, Litigation, Customer Retention, and New Customer Acquisition.\n Customer-Specific System Resiliency Requirements and Potential Non-Compliance.\n Impacts of Claims and Breaches on Financial Liabilities and Litigation Risks.\n Insufficient Insurance Coverage for Service Disruption Claims.",
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"name": "Potential for Defects in Services and Impact of Third-Party Software",
"content": "From time to time, we experience defects in our services, and new defects may be detected in the future. For example, we provide regular updates to our services, which frequently contain undetected defects when first released. Defects may also be introduced by our use of third-party software, including open source software.",
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"name": "Potential Sources of Service Disruptions: Internal Errors and External Incidents",
"content": "Disruptions may result from errors we make in developing, delivering, configuring or hosting our services, or designing, installing, expanding or maintaining our cloud infrastructure. Disruptions in service can also result from incidents that are outside of our control, including denial of service attacks.",
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"name": "Current and Future Data Center Management and Service Provision Strategy",
"content": "We currently serve our customers primarily using equipment managed by us and co-located in third-party data centers operated by several different providers located around the world, and we plan to serve certain of our customers using data center facilities operated by public cloud service providers.",
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"name": "Vulnerability of Data Centers to Natural Disasters, Misconduct, and Operational Failures",
"content": "These data centers are vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, power loss and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct, equipment failure and adverse events caused by operator error or negligence.",
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"name": "Potential Service Interruptions and Customer Data Loss Due to Data Center Issues",
"content": "Despite precautions taken at these centers, problems at these centers could result in lengthy interruptions in our services and the loss of customer data.",
"outline": "",
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"name": "Customer-Induced Service Disruption Risks",
"content": "In addition, our customers may use our services in ways that cause disruptions in service for other customers.",
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"name": "Impact of Service Reliability on Customer Trust and Business Reputation",
"content": "Our customers use our services to manage important aspects of their businesses, and our reputation and business will be adversely affected if our customers and potential customers believe our services are unreliable.",
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"name": "Impact of Service Disruptions or Defects on Revenue, Penalties, Litigation, Customer Retention, and New Customer Acquisition",
"content": "Disruptions or defects in our services may reduce our revenues, cause us to issue credits or pay penalties, subject us to claims and litigation, cause our customers to delay payment or terminate or fail to renew their subscriptions, and adversely affect our ability to attract new customers.",
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"name": "Customer-Specific System Resiliency Requirements and Potential Non-Compliance",
"content": "Similarly, customers may have unique requirements for system resiliency that we may not be able to, or may not choose to, meet.",
"outline": "",
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"parentPath": "000:012:004:004",
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"name": "Impacts of Claims and Breaches on Financial Liabilities and Litigation Risks",
"content": "The occurrence of payment delays, service credit, warranty or termination for material breach or other claims against us could result in an increase in our bad debt expense, an increase in collection cycles for accounts receivable, an increase to our service level credit accruals, other increased expenses or risks of litigation.",
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"name": "Insufficient Insurance Coverage for Service Disruption Claims",
"content": "We may not have insurance sufficient to compensate us for the potentially significant losses that may result from claims arising from disruptions in our services.",
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"outline": "Risks Related to the Financial Performance or Financial Position of Our Business\n Potential Impact of Financial Performance on Common Stock Price.\n Variability of Operating Results Due to Uncontrollable Factors.\n Risk of Financial Performance Not Meeting Guidance or Expectations of Analysts and Investors.\n Potential Impact on Common Stock Price and Investor Losses Due to Unmet Financial Expectations.\n Factors Influencing Financial Performance and Forward-Looking Guidance :\n - Ability to Attract, Retain, and Satisfy Customers ;\n - Changes in Product and Service Mix, Cloud vs. Self-Hosted Offerings, Market Penetration, and Customer Usage ;\n - Ability to Increase Sales of Emerging Products ;\n - Volatility in Foreign Currency Exchange Rates and Hedging Ability ;\n - Sales Force Expansion, Retention, and Productivity Rate ;\n - Number of New Employees Added ;\n - Cost, Timing, and Management Effort for Development of New Products and Services ;\n - General Economic Conditions Impacting Customer Purchasing Decisions ;\n - Operating Costs and Capital Expenditures: Amount and Timing Related to Business Operation and Expansion ;\n - Seasonality of Customer Agreement Timings ;\n - Length and Complexity of Sales Cycle and Certification Process for Services ;\n - Changes in Customer Relationship Size and Complexity ;\n - Changes to Management, Sales, and Account Management Teams Due to Scaling and Evolving Business Priorities ;\n - Changes in Pricing Policies of Company or Competitors ;\n - Significant Security Breaches, Technical Difficulties, or Service Interruptions ;\n - Competitor Introductions of New Solutions or Products ;\n - Changes in Effective Tax Rates ;\n - Changes in Customer Agreement Terms and Billing Durations ;\n - Timing of Customer Payments and Payment Defaults ;\n - Extraordinary Expenses Including Litigation Costs and Settlement Payments ;\n - Costs of Acquiring New Businesses and Technologies, Integration, and Tax Effects of Acquisitions ;\n - Changes in Laws or Regulations Impacting Service Delivery ;\n - Compliance with Privacy Laws and Regulations, Including GDPR and CCPA ;\n - Significant Litigation or Regulatory Actions Regarding Intellectual Property, Privacy Laws, Employment, or Other Significant Matters ;\n - Equity Awards and Related Financial Statement Expenses ;\n - Impact of New Accounting Pronouncements\n - Estimation pr\u00e9cise du march\u00e9 total adressable pour nos produits et services.\n Risk of Intellectual Property Infringement Claims by Third Parties.\n Disparity in Patent Portfolios and Increased Risk of Infringement Litigation.\n Potential Claims of Intellectual Property Infringement by Competitors and Third Parties.\n Example of Legal Settlement Charges and Fulfillment of Obligations with BMC and HPE.\n Potential Consequences and Costs of Intellectual Property Litigation :\n Potential Intellectual Property Litigation Due to Expiration of Third-Party Agreements.\n Impact of Litigation and Public Statements on Customer Satisfaction, Sales, and Stock Price.\n Impact of Claims or Litigation on Management Focus and Financial Health.\n Consequences of Non-Compliance with Anti-Corruption Laws and Trade Regulations.\n Compliance with FCPA, 18 U.S.C. \u00a7201, UK Bribery Act, and Other International Anti-Bribery Laws.\n Risks of Non-Compliance with FCPA and Anti-Corruption Laws.\n Liability for Third-Party Intermediaries' Corrupt Activities.\n Anti-Corruption Compliance Program and Associated Risks of Employee and Agent Violations.\n Increased Scrutiny and Liability Due to Business Expansion in Countries with High Corruption Levels.\n Compliance with International Trade Regulations and Restrictions.\n Consequences of Violating FCPA, Anti-Corruption Laws, or Trade Regulations.\n Impact of Enforcement Action Response on Management Focus and Defense Costs.\n Potential Lack of Competitive Advantage and Significant Costs in Defending Intellectual Property.\n Dependence on Intellectual Property Protections for Success.\n Potential Limitations and Risks of Patent Protection.\n Uncertainty of Legal Standards for Intellectual Property Rights Validity and Enforceability.\n Challenges and Invalidations of Intellectual Property Rights Through Administrative Processes or Litigation.\n Availability of Intellectual Property Protection Across Different Countries.\n Differences in Intellectual Property Protection and Enforcement in Foreign Countries.\n Monitoring and Protection of Intellectual Property Rights Expenditure.\n Potential Claims or Litigation for Infringement and Validation of Proprietary Rights.\n Potential Impact of Litigation on Company Resources and Risk of Counter-Claims.\n Risk of Adverse Effects on Business Due to Intellectual Property Infringement and Defense Costs.\n Risks Associated with Open Source Software Use.\n Incorporation of Third-Party Open Source Software in Products and Services.\n Efforts to Monitor Open Source Software Usage and Mitigate Adverse Licensing Conditions.\n Uncertainty and Lack of Legal Precedent in Open Source License Interpretation.\n Potential Obligations Under Various Open Source Licenses.\n Potential Legal Risks of Non-Compliance with Open Source Software Licenses.\n Revenue Recognition and Impact of Subscription Fluctuations on Operating Results.\n Impact of Decline in Subscriptions and Renewals on Future Revenues.\n Impact of Subscription Model on Revenue Recognition and Growth.\n Revenue Recognition Variability Due to Contract Complexity Under ASC 606.\n Impact of Subscription and Contract Variability on Period Billings.\n Expected Decline in Revenue Growth Rate and Potential Impact on Stock Price.\n Impact of Changes in Effective Tax Rate and Tax Position Rejection on Financial Results.\n Impact of Changes in Accounting Principles and Tax Laws on Future Effective Tax Rate.\n Authority of the U.S. Department of Treasury to Issue Regulations and Interpretative Guidance Affecting Operational Results.\n Consideration and Enactment of New Tax Laws by Various Countries and International Organizations.\n Impact of Recent Global Tax Developments and Increased Scrutiny on Multinational Businesses.\n Impact of Changes in Tax Laws or Rulings on Effective Tax Rate and Financial Results.\n Potential for Global Income Tax Audits and Ambiguities in Cloud Computing Tax Treatment.\n Potential Impact of Adverse Resolution of Uncertain Tax Positions on Operational Results.\n Potential Tax Liabilities from International Intangible Assets and Inter-Company Agreements.\n Potential GAAP Losses Despite Historical Profitability.\n Potential Future GAAP Losses Due to Increased Costs and Unforeseen Expenses.\n Market Uncertainty and Competitive Dynamics Impacting Business Performance Predictability.\n Potential Negative Impact on Future Profitability and Cash Flow.\n Impact of Insufficient Revenue Growth on Business and Financial Performance.\n Impact of Ineffective Internal Control on Financial Reporting Accuracy and Timeliness.\n Sarbanes-Oxley Act Annual and Quarterly Reporting Requirements for Internal Control and Disclosure Controls.\n Annual Audit Requirement of Internal Control Effectiveness by Independent Accounting Firm under Section 404(b) of Sarbanes-Oxley Act.\n Adverse Report Issuance by Independent Registered Public Accounting Firm Due to Unsatisfactory Control Levels.\n Potential Discovery of Material Weaknesses or Significant Deficiencies Through Testing.\n Potential Consequences of Identifying Material Weaknesses or Non-Compliance with Section 404.\n Potential Delays in Implementing System and Process Changes for New Standards.",
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"name": "Potential Impact of Financial Performance on Common Stock Price",
"content": "Our operating results may vary significantly from period to period, and if we fail to meet the financial performance expectations of investors or securities analysts, the price of our common stock could decline substantially.",
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"name": "Variability of Operating Results Due to Uncontrollable Factors",
"content": "Our operating results may vary significantly from period to period as a result of various factors, some of which are beyond our control.",
"outline": "",
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"name": "Risk of Financial Performance Not Meeting Guidance or Expectations of Analysts and Investors",
"content": "For any quarterly or annual period, there is a risk that our financial performance will not meet the financial guidance we have previously given for that period, or that we may otherwise fail to meet the financial performance expectations of the securities analysts who issue reports on our company and our common stock price, or of investors in our common stock. There is also a risk that we may issue forward-looking financial guidance for a quarterly or annual period that fails to meet the expectations of such securities analysts or investors.",
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"name": "Potential Impact on Common Stock Price and Investor Losses Due to Unmet Financial Expectations",
"content": "If any of the foregoing occurs, for any reason, either within or outside of our control, the price of our common stock could decline substantially and investors in our common stock could incur substantial losses.",
"outline": "",
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"name": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"content": "Some of the important factors that may cause our financial performance to vary widely, or cause our forward-looking financial guidance to fall below the expectations of such securities analysts or investors, include:",
"outline": "Factors Influencing Financial Performance and Forward-Looking Guidance :\n - Ability to Attract, Retain, and Satisfy Customers ;\n - Changes in Product and Service Mix, Cloud vs. Self-Hosted Offerings, Market Penetration, and Customer Usage ;\n - Ability to Increase Sales of Emerging Products ;\n - Volatility in Foreign Currency Exchange Rates and Hedging Ability ;\n - Sales Force Expansion, Retention, and Productivity Rate ;\n - Number of New Employees Added ;\n - Cost, Timing, and Management Effort for Development of New Products and Services ;\n - General Economic Conditions Impacting Customer Purchasing Decisions ;\n - Operating Costs and Capital Expenditures: Amount and Timing Related to Business Operation and Expansion ;\n - Seasonality of Customer Agreement Timings ;\n - Length and Complexity of Sales Cycle and Certification Process for Services ;\n - Changes in Customer Relationship Size and Complexity ;\n - Changes to Management, Sales, and Account Management Teams Due to Scaling and Evolving Business Priorities ;\n - Changes in Pricing Policies of Company or Competitors ;\n - Significant Security Breaches, Technical Difficulties, or Service Interruptions ;\n - Competitor Introductions of New Solutions or Products ;\n - Changes in Effective Tax Rates ;\n - Changes in Customer Agreement Terms and Billing Durations ;\n - Timing of Customer Payments and Payment Defaults ;\n - Extraordinary Expenses Including Litigation Costs and Settlement Payments ;\n - Costs of Acquiring New Businesses and Technologies, Integration, and Tax Effects of Acquisitions ;\n - Changes in Laws or Regulations Impacting Service Delivery ;\n - Compliance with Privacy Laws and Regulations, Including GDPR and CCPA ;\n - Significant Litigation or Regulatory Actions Regarding Intellectual Property, Privacy Laws, Employment, or Other Significant Matters ;\n - Equity Awards and Related Financial Statement Expenses ;\n - Impact of New Accounting Pronouncements\n - Estimation pr\u00e9cise du march\u00e9 total adressable pour nos produits et services.\n Risk of Intellectual Property Infringement Claims by Third Parties.\n Disparity in Patent Portfolios and Increased Risk of Infringement Litigation.\n Potential Claims of Intellectual Property Infringement by Competitors and Third Parties.\n Example of Legal Settlement Charges and Fulfillment of Obligations with BMC and HPE.",
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"name": "Ability to Attract, Retain, and Satisfy Customers",
"content": "- our ability to attract new customers, retain and increase sales to existing customers, and satisfy our customers\u2019 requirements;",
"outline": "",
"path": "000:012:005:004:000",
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"name": "Changes in Product and Service Mix, Cloud vs. Self-Hosted Offerings, Market Penetration, and Customer Usage",
"content": "- changes in our mix of products and services, including changes in our mix of cloud and self-hosted offerings, market penetration of our products, or use of our products by our customers;",
"outline": "",
"path": "000:012:005:004:001",
"parentPath": "000:012:005:004",
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"name": "Ability to Increase Sales of Emerging Products",
"content": "- our ability to increase sales of certain emerging products;",
"outline": "",
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"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
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"name": "Volatility in Foreign Currency Exchange Rates and Hedging Ability",
"content": "- volatility in foreign currency exchange rates and our ability to effectively hedge our foreign currency exposure;",
"outline": "",
"path": "000:012:005:004:003",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
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"title": "",
"name": "Sales Force Expansion, Retention, and Productivity Rate",
"content": "- the rate of expansion, retention and productivity of our sales force;",
"outline": "",
"path": "000:012:005:004:004",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 4,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Number of New Employees Added",
"content": "- the number of new employees added;",
"outline": "",
"path": "000:012:005:004:005",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 5,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Cost, Timing, and Management Effort for Development of New Products and Services",
"content": "- the cost, timing and management effort for our development of new products and services;",
"outline": "",
"path": "000:012:005:004:006",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 6,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "General Economic Conditions Impacting Customer Purchasing Decisions",
"content": "- general economic conditions that may adversely affect our customers\u2019 or a prospective customers\u2019 purchasing decisions;",
"outline": "",
"path": "000:012:005:004:007",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 7,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Operating Costs and Capital Expenditures: Amount and Timing Related to Business Operation and Expansion",
"content": "- the amount and timing of operating costs and capital expenditures related to the operation and expansion of our business;",
"outline": "",
"path": "000:012:005:004:008",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 8,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Seasonality of Customer Agreement Timings",
"content": "- seasonality in terms of when we enter into customer agreements;",
"outline": "",
"path": "000:012:005:004:009",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 9,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Length and Complexity of Sales Cycle and Certification Process for Services",
"content": "- the length and complexity of the sales cycle and certification process for our services, especially for sales to larger enterprises, government and regulated organizations;",
"outline": "",
"path": "000:012:005:004:010",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 10,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Changes in Customer Relationship Size and Complexity",
"content": "- changes in the size and complexity of our customer relationships;",
"outline": "",
"path": "000:012:005:004:011",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 11,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Changes to Management, Sales, and Account Management Teams Due to Scaling and Evolving Business Priorities",
"content": "- changes to our management, sales and account management teams as we scale and as a result of evolving business priorities;",
"outline": "",
"path": "000:012:005:004:012",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 12,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Changes in Pricing Policies of Company or Competitors",
"content": "- changes in our or our competitors\u2019 pricing policies;",
"outline": "",
"path": "000:012:005:004:013",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 13,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Significant Security Breaches, Technical Difficulties, or Service Interruptions",
"content": "- significant security breaches, technical difficulties or interruptions of our services;",
"outline": "",
"path": "000:012:005:004:014",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 14,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Competitor Introductions of New Solutions or Products",
"content": "- new solutions or products introduced by our competitors;",
"outline": "",
"path": "000:012:005:004:015",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 15,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Changes in Effective Tax Rates",
"content": "- changes in effective tax rates;",
"outline": "",
"path": "000:012:005:004:016",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 16,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Changes in Customer Agreement Terms and Billing Durations",
"content": "- changes in the average contract term of our customer agreements, timing of renewals, renewal rates, expansion within our existing customers and billings duration;",
"outline": "",
"path": "000:012:005:004:017",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 17,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Timing of Customer Payments and Payment Defaults",
"content": "- the timing of customer payments and payment defaults by customers;",
"outline": "",
"path": "000:012:005:004:018",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 18,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Extraordinary Expenses Including Litigation Costs and Settlement Payments",
"content": "- extraordinary expenses such as litigation costs or damages, including settlement payments;",
"outline": "",
"path": "000:012:005:004:019",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 19,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Costs of Acquiring New Businesses and Technologies, Integration, and Tax Effects of Acquisitions",
"content": "- the costs associated with acquiring new businesses and technologies and the follow-on costs of integration, including the tax effects of acquisitions;",
"outline": "",
"path": "000:012:005:004:020",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 20,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Changes in Laws or Regulations Impacting Service Delivery",
"content": "- changes in laws or regulations impacting the delivery of our services;",
"outline": "",
"path": "000:012:005:004:021",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 21,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Compliance with Privacy Laws and Regulations, Including GDPR and CCPA",
"content": "- our ability to comply with privacy laws and regulations, including the GDPR and the CCPA;",
"outline": "",
"path": "000:012:005:004:022",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 22,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Significant Litigation or Regulatory Actions Regarding Intellectual Property, Privacy Laws, Employment, or Other Significant Matters",
"content": "- significant litigation or regulatory actions relating to claims of intellectual property infringement, violation of privacy laws, employment matters or any other significant matter;",
"outline": "",
"path": "000:012:005:004:023",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 23,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Equity Awards and Related Financial Statement Expenses",
"content": "- the amount and timing of equity awards and the related financial statement expenses;",
"outline": "",
"path": "000:012:005:004:024",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 24,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Impact of New Accounting Pronouncements",
"content": "- the impact of new accounting pronouncements; and",
"outline": "",
"path": "000:012:005:004:025",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 25,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Estimation pr\u00e9cise du march\u00e9 total adressable pour nos produits et services",
"content": "- our ability to accurately estimate the total addressable market for our products and services.",
"outline": "",
"path": "000:012:005:004:026",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 26,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Risk of Intellectual Property Infringement Claims by Third Parties",
"content": "Lawsuits against us by third parties that allege we infringe their intellectual property rights could harm our business and operating results. There is considerable patent and other intellectual property development activity in our industry. Many companies in our industry, including our competitors, other third parties and non-practicing entities, own large numbers of patents, copyrights, trademarks and trade secrets, which they may use to assert claims of patent infringement, misappropriation or other violations of intellectual property rights against us.",
"outline": "",
"path": "000:012:005:004:027",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 27,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Disparity in Patent Portfolios and Increased Risk of Infringement Litigation",
"content": "Moreover, the patent portfolios of many of our competitors are larger than ours. This disparity may increase the risk that our competitors may sue us for patent infringement and may limit our ability to counterclaim for patent infringement or settle through patent cross-licenses.",
"outline": "",
"path": "000:012:005:004:028",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 28,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Potential Claims of Intellectual Property Infringement by Competitors and Third Parties",
"content": "From time to time, our competitors or other third parties, including patent holding companies seeking to monetize patents they have purchased or otherwise obtained, may claim that we are infringing upon their intellectual property rights.",
"outline": "",
"path": "000:012:005:004:029",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 29,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Example of Legal Settlement Charges and Fulfillment of Obligations with BMC and HPE",
"content": "For example, we recorded charges for aggregate legal settlements of $270.0 million in our consolidated statement of comprehensive loss during the year ended December 31, 2016. The charges covered the fulfillment by us of all financial obligations under settlement agreements with BMC and HPE, with no remaining financial obligations to BMC or HPE under either settlement.",
"outline": "",
"path": "000:012:005:004:030",
"parentPath": "000:012:005:004",
"parentName": "Factors Influencing Financial Performance and Forward-Looking Guidance",
"document": "abcd-1234",
"order": 30,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Potential Consequences and Costs of Intellectual Property Litigation",
"content": "In any intellectual property litigation, regardless of the scope or merits of the claims at issue, we may incur substantial attorney\u2019s fees and other litigation expenses and, if the claims are successfully asserted against us and we are found to be infringing upon the intellectual property rights of others, we could be required to:\n- pay substantial damages and\/or make substantial ongoing royalty payments;\n- cease offering our products and services;\n- modify our products and services;\n- comply with other unfavorable terms, including settlement terms; and\n- indemnify our customers and business partners and obtain costly licenses on their behalf and refund fees or other payments previously paid to us.",
"outline": "Potential Consequences and Costs of Intellectual Property Litigation :\n Potential Intellectual Property Litigation Due to Expiration of Third-Party Agreements.\n Impact of Litigation and Public Statements on Customer Satisfaction, Sales, and Stock Price.\n Impact of Claims or Litigation on Management Focus and Financial Health.\n Consequences of Non-Compliance with Anti-Corruption Laws and Trade Regulations.\n Compliance with FCPA, 18 U.S.C. \u00a7201, UK Bribery Act, and Other International Anti-Bribery Laws.\n Risks of Non-Compliance with FCPA and Anti-Corruption Laws.\n Liability for Third-Party Intermediaries' Corrupt Activities.\n Anti-Corruption Compliance Program and Associated Risks of Employee and Agent Violations.\n Increased Scrutiny and Liability Due to Business Expansion in Countries with High Corruption Levels.\n Compliance with International Trade Regulations and Restrictions.\n Consequences of Violating FCPA, Anti-Corruption Laws, or Trade Regulations.\n Impact of Enforcement Action Response on Management Focus and Defense Costs.",
"path": "000:012:005:005",
"parentPath": "000:012:005",
"parentName": "Risks Related to the Financial Performance or Financial Position of Our Business",
"document": "abcd-1234",
"order": 5,
"type": "container"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Potential Intellectual Property Litigation Due to Expiration of Third-Party Agreements",
"content": "Further, upon expiration of the term of any third-party agreements that allow us to use their intellectual property, we may be unable to renew such agreements on favorable terms, if at all, in which case we may face intellectual property litigation.",
"outline": "",
"path": "000:012:005:005:000",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 0,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Impact of Litigation and Public Statements on Customer Satisfaction, Sales, and Stock Price",
"content": "The mere existence of any lawsuit, or any interim or final outcomes, and the course of its conduct and the public statements related to it (or absence of such statements) by the courts, press, analysts and litigants could be unsettling to our customers and prospective customers. This could cause an adverse impact to our customer satisfaction and related renewal rates, cause us to lose potential sales, and could also be unsettling to investors or prospective investors and cause a substantial decline in our stock price.",
"outline": "",
"path": "000:012:005:005:001",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 1,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Impact of Claims or Litigation on Management Focus and Financial Health",
"content": "Any claim or litigation against us could be costly, time-consuming and divert the attention of our management and key personnel from our business operations and harm our financial condition and operating results.",
"outline": "",
"path": "000:012:005:005:002",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 2,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Consequences of Non-Compliance with Anti-Corruption Laws and Trade Regulations",
"content": "If we fail to comply with anti-corruption laws, including the FCPA and similar laws of other countries, and general trade regulations, including but not limited to economic sanctions and embargoes, we could be subject to penalties and civil and\/or criminal sanctions and our business could be materially adversely affected.",
"outline": "",
"path": "000:012:005:005:003",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 3,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Compliance with FCPA, 18 U.S.C. \u00a7201, UK Bribery Act, and Other International Anti-Bribery Laws",
"content": "We are subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. \u00a7201, the UK Bribery Act, and possibly other anti-bribery laws in countries in which we conduct activities.",
"outline": "",
"path": "000:012:005:005:004",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 4,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Risks of Non-Compliance with FCPA and Anti-Corruption Laws",
"content": "We face significant risks if we fail to comply with the FCPA and other anti-corruption laws that prohibit companies and their employees and third-party intermediaries from promising, authorizing, offering, or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties, and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person, or securing any advantage.",
"outline": "",
"path": "000:012:005:005:005",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 5,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Liability for Third-Party Intermediaries' Corrupt Activities",
"content": "In addition, we use various third parties to sell our products and services and conduct our business both in the US and abroad. We or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and we can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.",
"outline": "",
"path": "000:012:005:005:006",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 6,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Anti-Corruption Compliance Program and Associated Risks of Employee and Agent Violations",
"content": "We have implemented and continue to update an anti-corruption compliance program but there is a risk that our employees and agents, as well as those companies to which we outsource certain of our business operations, could take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.",
"outline": "",
"path": "000:012:005:005:007",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 7,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Increased Scrutiny and Liability Due to Business Expansion in Countries with High Corruption Levels",
"content": "As we continue to expand our business internationally, we will inevitably do more business with large enterprises and the public sector in countries that are perceived to have heightened levels of public sector corruption. Increased business in countries perceived to have heightened levels of corruption could subject us and our officers and directors to increased scrutiny and increased liability from our business operations.",
"outline": "",
"path": "000:012:005:005:008",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 8,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Compliance with International Trade Regulations and Restrictions",
"content": "In addition, we are subject to compliance with general trade regulations relating to doing business outside the US, including certain restrictions on conducting trade in certain restricted countries or with certain entities or individuals.",
"outline": "",
"path": "000:012:005:005:009",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 9,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Consequences of Violating FCPA, Anti-Corruption Laws, or Trade Regulations",
"content": "Any violation of the FCPA, other anti-corruption laws or general trade regulations by our employees or our third-party intermediaries could result in regulatory investigations, whistleblower complaints, adverse media coverage and\/or severe criminal or civil sanctions, which could have a materially adverse effect on our reputation, business, operating results, and prospects.",
"outline": "",
"path": "000:012:005:005:010",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 10,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Impact of Enforcement Action Response on Management Focus and Defense Costs",
"content": "In addition, responding to any enforcement action may result in a significant diversion of management\u2019s attention and resources and significant defense costs.",
"outline": "",
"path": "000:012:005:005:011",
"parentPath": "000:012:005:005",
"parentName": "Potential Consequences and Costs of Intellectual Property Litigation",
"document": "abcd-1234",
"order": 11,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Potential Lack of Competitive Advantage and Significant Costs in Defending Intellectual Property",
"content": "Our intellectual property protections may not provide us with a competitive advantage, and defending our intellectual property may result in substantial expenses that harm our operating results.",
"outline": "",
"path": "000:012:005:006",
"parentPath": "000:012:005",
"parentName": "Risks Related to the Financial Performance or Financial Position of Our Business",
"document": "abcd-1234",
"order": 6,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Dependence on Intellectual Property Protections for Success",
"content": "Our success depends to a significant degree on our ability to protect our proprietary technology and our brand under patent and other intellectual property protections of the US and other jurisdictions.",
"outline": "",
"path": "000:012:005:007",
"parentPath": "000:012:005",
"parentName": "Risks Related to the Financial Performance or Financial Position of Our Business",
"document": "abcd-1234",
"order": 7,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Potential Limitations and Risks of Patent Protection",
"content": "Though we seek patent protection for our technology, we may not be successful in obtaining patent protection, and any patents acquired in the future may not provide us with competitive advantages, or may be successfully challenged by third parties.",
"outline": "",
"path": "000:012:005:008",
"parentPath": "000:012:005",
"parentName": "Risks Related to the Financial Performance or Financial Position of Our Business",
"document": "abcd-1234",
"order": 8,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Uncertainty of Legal Standards for Intellectual Property Rights Validity and Enforceability",
"content": "Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain.",
"outline": "",
"path": "000:012:005:009",
"parentPath": "000:012:005",
"parentName": "Risks Related to the Financial Performance or Financial Position of Our Business",
"document": "abcd-1234",
"order": 9,
"type": "body"
}
},
{
"class": "Element",
"properties": {
"title": "",
"name": "Challenges and Invalidations of Intellectual Property Rights Through Administrative Processes or Litigation",
"content": "Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation.",
"outline": "",
"path": "000:012:005:010",
"parentPath": "000:012:005",
"parentName": "Risks Related to the Financial Performance or Financial Position of Our Business",
"document": "abcd-1234",
"order": 10,
"type": "body"
}
},
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"name": "Availability of Intellectual Property Protection Across Different Countries",
"content": "Effective patent, trademark, copyright and trade secret protection may not be available in every country in which we offer services.",
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"name": "Differences in Intellectual Property Protection and Enforcement in Foreign Countries",
"content": "The laws of some foreign countries may not be as protective of intellectual property rights as those in the US, and mechanisms for enforcement of intellectual property rights or available remedies may be inadequate.",
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"name": "Monitoring and Protection of Intellectual Property Rights Expenditure",
"content": "We may be required to spend significant resources to monitor and protect our intellectual property rights.",
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"name": "Potential Claims or Litigation for Infringement and Validation of Proprietary Rights",
"content": "We have initiated and, in the future, may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights.",
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"name": "Potential Impact of Litigation on Company Resources and Risk of Counter-Claims",
"content": "Any litigation, whether or not resolved in our favor, could result in significant expense to us, divert the efforts of our technical and management personnel and may result in counter-claims with respect to infringement of intellectual property rights by us.",
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"name": "Risk of Adverse Effects on Business Due to Intellectual Property Infringement and Defense Costs",
"content": "If we are unable to prevent third parties from infringing upon or misappropriating our intellectual property, or are required to incur substantial expenses defending our intellectual property rights, our business and operating results may be adversely affected.",
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"name": "Risks Associated with Open Source Software Use",
"content": "Our use of open source software could harm our ability to sell our products and services and subject us to possible litigation.",
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"name": "Incorporation of Third-Party Open Source Software in Products and Services",
"content": "Our products incorporate software licensed to us by third-party authors under open source licenses, and we expect to continue to incorporate open source software into other products and services in the future.",
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"name": "Efforts to Monitor Open Source Software Usage and Mitigate Adverse Licensing Conditions",
"content": "We attempt to monitor our use of open source software in an effort to avoid subjecting our products and services to adverse licensing conditions. However, there can be no assurance that our efforts have been or will be successful.",
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"name": "Uncertainty and Lack of Legal Precedent in Open Source License Interpretation",
"content": "There is little or no legal precedent governing the interpretation of the terms of open source licenses, and therefore the potential impact of these terms on our business is uncertain and enforcement of these terms may result in unanticipated obligations regarding our products and services.",
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"name": "Potential Obligations Under Various Open Source Licenses",
"content": "For example, depending on which open source license governs open source software included within our products and services, we may be subjected to conditions requiring us to offer our products and services to users at no cost; make available the source code for modifications and derivative works based upon, incorporating or using the open source software; and license such modifications or derivative works under the terms of the particular open source license.",
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"name": "Potential Legal Risks of Non-Compliance with Open Source Software Licenses",
"content": "Moreover, if an author or other third party that distributes such open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal costs defending ourselves against such allegations, be subject to significant damages or be enjoined from distributing our products and services.",
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"name": "Revenue Recognition and Impact of Subscription Fluctuations on Operating Results",
"content": "Because we generally recognize revenues from our subscription service over the subscription term, a decrease in new subscriptions or renewals during a reporting period may not be immediately reflected in our operating results for that period. We generally recognize revenues from customers ratably over the terms of their subscriptions. Net new annual contract value from new subscriptions and expansion contracts entered into during a period can generally be expected to generate revenues for the duration of the subscription term. As a result, most of the revenues we report in each period are derived from the recognition of deferred revenues relating to subscriptions entered into during previous periods. Consequently, a decrease in new or renewed subscriptions in any single reporting period will have a limited impact on our revenues for that period. In addition, our ability to adjust our cost structure in the event of a decrease in new or renewed subscriptions may be limited.",
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"name": "Impact of Decline in Subscriptions and Renewals on Future Revenues",
"content": "Further, a decline in new subscriptions, expansion contracts or renewals in a given period may not be fully reflected in our revenues for that period, but they will negatively affect our revenues in future periods. Accordingly, the effect of significant downturns in sales and market acceptance of our services, and changes in our rate of renewals, may not be fully reflected in our results of operations until future periods.",
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"name": "Impact of Subscription Model on Revenue Recognition and Growth",
"content": "Our subscription model also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new customers are generally recognized over the applicable subscription term.",
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"name": "Revenue Recognition Variability Due to Contract Complexity Under ASC 606",
"content": "Additionally, due to the complexity of certain of our customer contracts, the actual revenue recognition treatment required under Accounting Standards Update 2014-09, \u201cRevenue from Contracts with Customers (Topic 606)\u201d depends on contract-specific terms and may result in greater variability in revenues from period to period.",
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"name": "Impact of Subscription and Contract Variability on Period Billings",
"content": "In addition, a decrease in new subscriptions, expansion contracts or renewals in a reporting period may not have an immediate impact on billings for that period due to factors that may offset the decrease, such as an increase in billings duration, the dollar value of contracts with future start dates, or the dollar value of collections in the current period related to contracts with future start dates.",
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"name": "Expected Decline in Revenue Growth Rate and Potential Impact on Stock Price",
"content": "As our business grows, we expect our revenue growth rate to continue to decline. We have experienced significant revenue growth in prior periods; however, our longer-term revenue growth rate is declining, and we expect that it will continue to decline into the foreseeable future. We also expect our costs to increase in future periods as we continue to invest in our strategic priorities, which may not result in increased revenues or growth in our business. You should not rely on our revenue for any prior periods as any indication of our future revenue growth. If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile.",
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"name": "Impact of Changes in Effective Tax Rate and Tax Position Rejection on Financial Results",
"content": "Changes in our effective tax rate or rejection of our tax position in jurisdictions outside the US could have a material impact on our financial position and results. We are subject to income taxes in the US and various foreign jurisdictions. We believe that our provision for income taxes is reasonable, but the ultimate tax outcome may differ from the amounts recorded in our consolidated financial statements and may materially affect our financial results in the period or periods in which such outcome is determined. Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses, the valuation of deferred tax assets and liabilities and the effects of acquisitions. Increases in our effective tax rate would reduce our profitability or in some cases increase our losses.",
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"name": "Impact of Changes in Accounting Principles and Tax Laws on Future Effective Tax Rate",
"content": "Additionally, our future effective tax rate could be impacted by changes in accounting principles or changes in federal, state or international tax laws or tax rulings.",
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"name": "Authority of the U.S. Department of Treasury to Issue Regulations and Interpretative Guidance Affecting Operational Results",
"content": "The U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how we will apply the law, which could affect our results of operations in the period issued.",
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"name": "Consideration and Enactment of New Tax Laws by Various Countries and International Organizations",
"content": "Many countries and organizations such as the Organization for Economic Cooperation and Development are actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.",
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"path": "000:012:005:032",
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"name": "Impact of Recent Global Tax Developments and Increased Scrutiny on Multinational Businesses",
"content": "Recent global tax developments applicable to multinational businesses and increased scrutiny under tax examinations could have a material impact on our business and negatively affect our financial results.",
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"path": "000:012:005:033",
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"title": "",
"name": "Impact of Changes in Tax Laws or Rulings on Effective Tax Rate and Financial Results",
"content": "Any changes in federal, state or international tax laws or tax rulings may increase our worldwide effective tax rate and harm our financial position and results of operations.",
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"title": "",
"name": "Potential for Global Income Tax Audits and Ambiguities in Cloud Computing Tax Treatment",
"content": "In addition, we may be subject to income tax audits by tax jurisdictions throughout the world, many of which have not established clear guidance on the tax treatment of cloud computing companies.",
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"path": "000:012:005:035",
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"name": "Potential Impact of Adverse Resolution of Uncertain Tax Positions on Operational Results",
"content": "Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material impact on our results of operations for that period.",
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"name": "Potential Tax Liabilities from International Intangible Assets and Inter-Company Agreements",
"content": "Further, many of our most important intangible assets are held outside the US and are subject to inter-company agreements regarding the development and distribution of those assets to other jurisdictions. While we believe that our position is appropriate and well founded, in the event that our position was to be successfully challenged by taxing authorities in other jurisdictions, we may become subject to significant tax liabilities, which could harm our financial position and financial results.",
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"name": "Potential GAAP Losses Despite Historical Profitability",
"content": "We may incur losses in accordance with U.S. Generally Accepted Accounting Principles (GAAP) during future periods. Although we have reported results that were profitable on a GAAP basis for full-year 2019 and certain prior quarters, we have incurred net losses in all prior fiscal years since our inception.",
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"name": "Potential Future GAAP Losses Due to Increased Costs and Unforeseen Expenses",
"content": "Even if our revenues continue to increase, we may incur losses in accordance with GAAP during future periods due to increased costs such as non-cash charges associated with equity awards, business combinations and other expenses. We may also encounter unforeseen operating expenses, difficulties, complications, delays and other unpredictable factors that may result in increased costs.",
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"name": "Market Uncertainty and Competitive Dynamics Impacting Business Performance Predictability",
"content": "Furthermore, it is difficult to predict the size and growth rate of our market, customer demand for our products, customer adoption and renewal rates, and the entry of competitive products or the success of existing competitive products.",
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"path": "000:012:005:040",
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"name": "Potential Negative Impact on Future Profitability and Cash Flow",
"content": "As a result of these and other factors, we may not maintain profitability in the future, and our gross margins and ability to generate cash flow from operations may be negatively impacted.",
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"path": "000:012:005:041",
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"name": "Impact of Insufficient Revenue Growth on Business and Financial Performance",
"content": "If we fail to increase our revenues sufficiently to keep pace with our growing investments and other expenses, our business, operating results and growth prospects will be adversely affected.",
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"name": "Impact of Ineffective Internal Control on Financial Reporting Accuracy and Timeliness",
"content": "If we are unable to maintain effective internal control over financial reporting, the accuracy and timeliness of our financial reporting may be adversely affected.",
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"class": "Element",
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"name": "Sarbanes-Oxley Act Annual and Quarterly Reporting Requirements for Internal Control and Disclosure Controls",
"content": "The Sarbanes-Oxley Act requires us, among other things, to assess and report on the effectiveness of our internal control over financial reporting annually and the reasonable assurance level of our disclosure controls and procedures quarterly.",
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"name": "Annual Audit Requirement of Internal Control Effectiveness by Independent Accounting Firm under Section 404(b) of Sarbanes-Oxley Act",
"content": "In addition, our independent registered public accounting firm is required to audit the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act annually.",
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"name": "Adverse Report Issuance by Independent Registered Public Accounting Firm Due to Unsatisfactory Control Levels",
"content": "Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.",
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"name": "Potential Discovery of Material Weaknesses or Significant Deficiencies Through Testing",
"content": "Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal material weaknesses or significant deficiencies.",
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"path": "000:012:005:047",
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{
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"name": "Potential Consequences of Identifying Material Weaknesses or Non-Compliance with Section 404",
"content": "If material weaknesses are identified or we are not able to comply with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated or could subsequently require restatement, we could receive an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, we could be subject to investigations or sanctions by regulatory authorities and we could incur substantial expenses.",
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{
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"name": "Potential Delays in Implementing System and Process Changes for New Standards",
"content": "We may not be able to effectively implement system and process changes required for new standards on a timely basis. Any delays or failure to update our systems and processes could also lead to a material weakness or significant deficiency.",
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"path": "000:012:005:049",
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{
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"outline": "Risks Related to General Economic Conditions\n Impact of Global Economic Conditions on Business and Operations.\n Impact of Global Macroeconomic Conditions on Business and Revenues.\n Impact of 2020 Geopolitical and Economic Events on Business Operations.\n Potential Impact of Brexit on UK and EU Economies and Businesses\n Impact of Global Financial Conditions on Business and Operational Judgments.\n Impact of Foreign Currency Exchange Rate Fluctuations on Financial Results.\n Risk of Unpredictable Currency Fluctuations on Financial Results.\n Impact of Brexit Announcement and Uncertainty on Global Markets and Currency Volatility.\n Expected Continued Volatility in Exchange Rates and Global Financial Markets Due to Brexit and Global Uncertainty.\n Initiation of Derivative Instruments for Currency Exchange Rate Hedging in 2018.\n Risk of Unanticipated Currency Exchange Rate Changes on Financial Performance.\n Risk of Imperfect Correlation in Hedging Due to Limited Experience.\n Risk of Loss Due to Imperfect Correlation in Hedging.",
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{
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"name": "Impact of Global Economic Conditions on Business and Operations",
"content": "Global economic conditions may harm our industry, business and results of operations.",
"outline": "",
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"name": "Impact of Global Macroeconomic Conditions on Business and Revenues",
"content": "We operate globally and as a result our business and revenues are impacted by global macroeconomic conditions. Global financial developments seemingly unrelated to us or the software industry may harm us. From time to time, the US and other key international economies have been impacted by geopolitical and economic instability, high levels of credit defaults, international trade disputes, falling demand for various goods and services, high levels of persistent unemployment, wage and income stagnation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies, international trade agreements, trade restrictions and overall economic uncertainty. These conditions can arise suddenly and affect the rate of information technology spending and could adversely affect our customers\u2019 or prospective customers\u2019 ability or willingness to purchase our services, delay purchasing decisions, reduce the value or duration of their subscriptions, or affect renewal rates, all of which could harm our operating results.",
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"name": "Impact of 2020 Geopolitical and Economic Events on Business Operations",
"content": "In 2020, for example, the growth rate in the EU, China, or the US, tariffs or trade relations between the US and China or other countries, political uncertainty in the Middle East and other geopolitical events could directly or indirectly affect our business.",
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"name": "Potential Impact of Brexit on UK and EU Economies and Businesses",
"content": "Additionally, in connection with Brexit, the impact of the UK\u2019s exit from the EU is still to be fully seen, with the applicable trade agreement to be negotiated before December 2020, or a type of \u201cno-deal\u201d exit would occur. This could be harmful to both the U.K. and E.U.economies and businesses operating there",
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"name": "Impact of Global Financial Conditions on Business and Operational Judgments",
"content": "In addition, the effects, if any, of global financial conditions on our business can be difficult to distinguish from the effects on our business from product, pricing, and other developments in the markets specific to our products and our relative competitive strength. If we make incorrect judgments about our business for this reason, our business and results of operations could be adversely affected.",
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"name": "Impact of Foreign Currency Exchange Rate Fluctuations on Financial Results",
"content": "Foreign currency exchange rate fluctuations could harm our financial results. We conduct significant transactions, including revenue transactions and intercompany transactions, in currencies other than the U.S. Dollar or the functional operating currency of the transactional entities. In addition, our international subsidiaries maintain significant net assets that are denominated in currencies other than the functional operating currencies of these entities. Accordingly, changes in the value of currencies relative to the U.S. Dollar may impact our consolidated revenues and operating results due to transactional and translational remeasurement that is reflected in our earnings.",
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"name": "Risk of Unpredictable Currency Fluctuations on Financial Results",
"content": "It is particularly difficult to forecast any impact from exchange rate movements, so there is risk that unanticipated currency fluctuations could adversely affect our financial results or cause our results to differ from investor expectations or our own guidance in any future periods.",
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"name": "Impact of Brexit Announcement and Uncertainty on Global Markets and Currency Volatility",
"content": "In addition, the announcement of Brexit and the continued uncertainty around the full impact of it and the exact trade arrangements upon exit has adversely impacted global markets, including currencies, and resulted in a decline and volatility in the value of the British pound and the Euro, as compared to the U.S. Dollar and other currencies.",
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"content": "Volatility in exchange rates and global financial markets is expected to continue due to a number of factors, including uncertainty surrounding Brexit trade arrangements and the recent political and economic uncertainty globally.",
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"name": "Initiation of Derivative Instruments for Currency Exchange Rate Hedging in 2018",
"content": "In 2018, we began using derivative instruments, such as foreign currency forwards, to hedge certain exposures to fluctuations in foreign currency exchange rates. These hedging contracts may reduce, but cannot entirely eliminate, the impact of adverse currency exchange rate movements.",
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"name": "Risk of Unanticipated Currency Exchange Rate Changes on Financial Performance",
"content": "Further, unanticipated changes in currency exchange rates may result in poorer overall financial performance than if we had not engaged in any such hedging transactions.",
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"name": "Risk of Imperfect Correlation in Hedging Due to Limited Experience",
"content": "Moreover, for a number of reasons, including our limited experience with these hedging contracts, we may not seek or be able to establish a perfect correlation between such hedging instruments and the exposures being hedged.",
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"name": "Risk of Loss Due to Imperfect Correlation in Hedging",
"content": "Any such imperfect correlation may prevent us from achieving the intended hedge, and could expose us to a greater overall risk of loss than if we had not hedged.",
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"content": "We may not have the ability to raise the funds necessary to settle conversions of our convertible senior notes due 2022 (the 2022 Notes) in cash or to repurchase the 2022 Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2022 Notes.",
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"name": "Repurchase Rights of Holders Upon Fundamental Change",
"content": "Holders of the 2022 Notes have the right to require us to repurchase all or a portion of their 2022 Notes upon the occurrence of a fundamental change (as defined in the indenture for the 2022 Notes (the Indenture)) at a repurchase price equal to 100% of the principal amount of the 2022 Notes to be repurchased, plus accrued and unpaid special interest, if any.",
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"name": "Adjustment to Conversion Rate upon Make-Whole Fundamental Change",
"content": "In addition, if a make-whole fundamental change (as defined in the Indenture) occurs prior to the maturity date of the 2022 Notes, we will in some cases be required to increase the conversion rate for a holder that elects to convert its 2022 Notes in connection with such make-whole fundamental change.",
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"name": "Cash Settlement Requirement and Potential Liquidity Constraints upon Conversion of 2022 Notes",
"content": "Upon conversion of the 2022 Notes, 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 shares), we will be required to make cash payments in respect of the 2022 Notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the 2022 Notes surrendered therefor or pay cash with respect to the 2022 Notes being converted.",
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"name": "Future Incurrence of Additional Debt by Company and Subsidiaries Subject to Future Debt Instrument Restrictions",
"content": "We and our subsidiaries may incur substantial additional debt in the future, subject to the restrictions contained in our future debt instruments, some of which may be secured debt.",
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"name": "No Restrictions on Incurring Additional Debt or Recapitalizing Existing Debt Under the Indenture",
"content": "We are not restricted under the terms of the Indenture from incurring additional debt, securing existing or future debt, recapitalizing our debt or taking a number of other actions that could have the effect of diminishing our ability to make payments on the 2022 Notes when due.",
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"name": "Acquisition Prohibition and Obligations Assumption Clause",
"content": "Furthermore, the Indenture prohibits us from being acquired unless, among other things, the surviving entity assumes our obligations under the 2022 Notes and the Indenture. These and other provisions in the Indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to holders of the 2022 Notes.",
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"name": "Limitations on Repurchase or Cash Payment upon Conversion of 2022 Notes Due to Legal and Regulatory Constraints",
"content": "In addition, our ability to repurchase or to pay cash upon conversion of the 2022 Notes may be limited by law, regulatory authority or agreements governing our future indebtedness.",
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"name": "Failure to Repurchase or Pay Cash Upon Conversion of 2022 Notes Constitutes Default",
"content": "Our failure to repurchase the 2022 Notes at a time when the repurchase is required by the Indenture or to pay cash upon conversion of the 2022 Notes as required by the Indenture would constitute a default.",
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"name": "Consequential Default Under Future Indebtedness Agreements",
"content": "A default under the Indenture or a fundamental change itself could also lead to a default under agreements governing our future indebtedness.",
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"name": "Impact of Fundamental Change on Default and Indebtedness Repayment Obligations",
"content": "Moreover, the occurrence of a fundamental change could constitute an event of default under any such agreements.If the payment of the related indebtedness were accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2022 Notes, or to pay cash upon conversion of the 2022 Notes.",
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"name": "Potential Adverse Impact of Conditional Conversion Feature on Financial Condition and Operating Results",
"content": "The conditional conversion feature of the 2022 Notes may adversely affect our financial condition and operating results.",
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"name": "Conditions for Conversion of 2022 Notes Prior to February 1, 2022",
"content": "Prior to the business day immediately preceding February 1, 2022, the holders of the 2022 Notes may elect to convert their notes during any calendar quarter (and only during such calendar quarter) if the last reported sale price of our common stock for at least 20 trading days during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to $175.18 (the Conversion Condition).",
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"name": "Conversion Eligibility of 2022 Notes Based on Conversion Condition Compliance",
"content": "The Conversion Condition for the 2022 Notes was met for all quarters ended June 30, 2018 through December 31, 2019, except for the quarter ended December 31, 2018. Therefore, our 2022 Notes became convertible at the holders\u2019 option beginning on July 1, 2018 and continue to be convertible through March 31, 2020, except for the quarter ended March 31, 2019 because the Conversion Condition for the 2022 Notes was not met for the quarter ended December 31, 2018.",
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"name": "Cash Settlement of Immaterial Principal Amount of 2022 Notes for Year Ended December 31, 2019",
"content": "During the year ended December 31, 2019, we paid cash to settle an immaterial principal amount of the 2022 Notes.",
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"name": "Expected Cash Settlement of 2022 Notes Conversion Requests for Q1 and Q2 2020",
"content": "Based on additional conversion requests we have received through the filing date, we expect to settle in cash an aggregate of approximately $2.5 million and $5.2 million in principal amount of the 2022 Notes during the first and second quarters of 2020, respectively. We may receive additional conversion requests that require settlement in the second quarter of 2020.",
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"name": "Potential Liquidity Impact of Future 2022 Notes Conversions",
"content": "If more holders elect to convert their 2022 Notes in future periods, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we may settle all or a portion of our conversion obligation in cash, which could adversely affect our liquidity and result in a material adverse effect on our financial position, results of operations and cash flows.",
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"name": "Recording a Loss on Early Conversions of 2022 Notes",
"content": "In addition, to the extent we receive conversion requests, we may also record a loss on early conversions of the 2022 Notes converted by note holders based on the difference between the fair market value allocated to the liability component on the settlement date and the net carrying amount of the liability component and unamortized debt issuance on the settlement date.",
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"name": "Impact of Convertible Note Hedge and Warrant Transactions on 2022 Notes and Common Stock Value",
"content": "The convertible note hedge and warrant transactions may affect the value of the 2022 Notes and our common stock.",
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"name": "Convertible Note Hedge and Warrant Transactions with Option Counterparties",
"content": "In connection with the sale of the 2022 Notes, we entered into convertible note hedge (the 2022 Note Hedge) transactions with certain financial institutions (option counterparties). We also entered into warrant transactions with the option counterparties pursuant to which we sold warrants for the purchase of our common stock (the 2022 Warrants).",
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"name": "Purpose and Effect of the 2022 Note Hedge Transactions",
"content": "The 2022 Note Hedge is expected generally to reduce the potential dilution upon any conversion of the 2022 Notes and\/or offset any cash payments we are required to make in excess of the principal amount of converted 2022 Notes, as applicable.",
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"name": "Potential Dilutive Effect and Share Issuance Mechanics of the 2022 Warrants",
"content": "The 2022 Warrant transactions could have a dilutive effect to the extent that our stock price exceeds the exercise price of the 2022 Warrants, which is $203.40. As the 2022 Warrants will be net share settled, the total number of shares of our common stock we will issue depends on the daily volume-weighted average stock prices over a 60-trading day period beginning on the first expiration date of the 2022 Warrants, which will be September 1, 2022.",
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"name": "Expected Issuance of Additional Shares Upon Automatic Exercise of 2022 Warrants",
"content": "We expect to issue additional shares of our common stock in the second half of 2022 upon the automatic exercise of the 2022 Warrants. Based on the volume-weighted average stock price on December 31, 2019, the total number of shares of our common stock to be issued upon the automatic exercise of the 2022 Warrants would be approximately 1.6 million. The actual number of shares of our common stock issuable upon the automatic exercise of the 2022 Warrants, if any, is unknown at this time. Refer to Note 11 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.",
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"name": "Potential Impact of Hedge Position Adjustments by Option Counterparties on Stock and 2022 Notes Prices",
"content": "The option counterparties and\/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 in secondary market transactions prior to the maturity of the 2022 Notes (and are likely to do so during any observation period related to a conversion of the 2022 Notes, or following any repurchase of the 2022 Notes by us on any fundamental change repurchase date (as defined in the Indenture) or otherwise). This activity could also cause or avoid an increase or a decrease in our stock price or the 2022 Notes price, which could affect note holders\u2019 ability to convert the 2022 Notes and, to the extent the activity occurs during any observation period related to a conversion of the 2022 Notes, it could affect the amount and value of the consideration that note holders will receive upon conversion of the 2022 Notes.",
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"name": "Market Condition Dependency on Stock and Note Price Effects",
"content": "The potential effect, if any, of these transactions and activities on our stock price or the 2022 Notes price will depend in part on market conditions and cannot be ascertained at this time.",
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