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Antitrust, ascribed, Bravo, carrier, Circuit, confirmation, contemplated, CS, customary, delisted, Exhibit, half, holdback, irrevocable, mutual, panel, pendency, pending, pursuit, Putative, ready, receipt, recommendation, remanded, retired, subsidiary, text, Thoma, true, unanimously, waiting, waived, waiver, wholly, XV
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Financial report summary
?Risks
- We cannot be sure if or when the Merger will be completed.
- Lawsuits may be filed against us and the members of our board of directors arising out of the proposed Merger, which may delay or prevent the proposed Merger.
- Weakened global economic conditions, including those from macro-trends, global events and the COVID-19 pandemic, may harm our industry, business and results of operations.
- We have a limited operating history at our current scale, which makes it difficult to predict our future operating results.
- We have experienced rapid growth and expect our growth to continue and if we fail to manage our growth effectively, we may be unable to execute our business plan, maintain high levels of service or adequately address competitive challenges.
- Acquisitions could be difficult to identify, pose integration challenges, divert the attention of management, disrupt our business, dilute stockholder value, and adversely affect our operating results and financial condition.
- If we cannot maintain our company culture as we grow, we could lose the innovation, teamwork, passion and focus on execution that we believe contribute to our success and our business may be harmed.
- Our aspirations and commitments to environmental, social and governance (“ESG”) matters expose us to risks that could adversely affect our reputation and performance.
- If we are unable to attract new customers, the growth of our revenues will be adversely affected.
- Because our platform is sold to large enterprises with complex operating environments and who often demand more configuration and integration services or customized features and functions, we encounter long and unpredictable sales cycles, which could adversely affect our operating results in a given period.
- The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be adversely affected.
- Our business depends significantly on our customers renewing their subscriptions. Any decline in our customer renewals would harm our future operating results.
- Our customers may fail to pay us in accordance with the terms of their agreements, necessitating action by us to compel payment.
- If we fail to develop widespread brand awareness cost-effectively, our business may suffer.
- Failure to effectively develop and expand our marketing and sales capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.
- If we cannot continue to expand the use of our platform, our ability to grow our business may be harmed and the growth rate of our revenues may decline.
- The profitability of our customer relationships may fluctuate.
- The loss of one or more of our key customers could negatively affect our ability to market our platform.
- Contractual disputes with our customers could be costly, time-consuming and harm our reputation.
- Our business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, data security breaches or terrorism.
- Our growth depends in part on the success of our strategic relationships with third parties.
- Our estimates of market opportunity and forecasts of market growth that we have publicly disclosed may prove to be inaccurate, and even if the market in which we compete achieves the forecasted growth, our business could fail to grow at similar rates.
- We depend on our senior management team and the loss of our chief executive officer or one or more key employees or an inability to attract and retain highly skilled employees could adversely affect our business.
- Our international operations and sales to customers outside the United States or with international operations expose us to risks inherent in international sales.
- We may face exposure to foreign currency exchange rate fluctuations, which could adversely affect our business, results of operations and financial condition.
- If our security measures are breached or unauthorized access to customer data is otherwise obtained, we may experience disruption in service, our platform may be perceived as not being secure, customers may reduce the use of or stop using our platform and we may incur significant liabilities.
- If we are not able to provide successful and timely enhancements, new features and modifications for our platform and solutions, we may lose existing customers or fail to attract new customers and our revenues and financial performance may suffer.
- We rely on Amazon Web Services to deliver our platform and solutions to our customers, and any disruption in service from Amazon Web Services or material change to our arrangement with Amazon Web Services could adversely affect our business.
- If we fail to manage our technical operations infrastructure, our existing customers may experience service outages and our new customers may experience delays in the implementation of our platform.
- Our business could be adversely affected if our customers are not successful with the implementation services provided by us or our partners.
- We typically provide service level commitments under our customer contracts. If we fail to meet these contractual commitments, we could be obligated to provide credits or refunds for prepaid amounts related to unused subscription services or face contract terminations, which could adversely affect our revenues.
- If we fail to integrate our platform with a variety of third-party technologies, our platform may become less marketable and less competitive or obsolete and our operating results may be harmed.
- Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and our financial results.
- If our platform fails to perform properly, our reputation could be adversely affected, our market share could decline and we could be subject to liability claims.
- We may be sued by third parties for various claims including alleged infringement of their proprietary rights.
- Any failure to protect our intellectual property rights could impair the value of our proprietary technology and damage our brand.
- Our platform utilizes open source software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect our business.
- We employ third-party licensed software for use in or with our platform, and the inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which could adversely affect our business.
- Our quarterly results may fluctuate significantly and may not fully reflect the underlying performance of our business.
- Because we recognize subscription revenues over the term of the contract, fluctuations in new sales and renewals may not be immediately reflected in our operating results and may be difficult to discern.
- We have a history of cumulative losses, and we do not expect to be profitable for the foreseeable future.
- If we are unable to maintain effective internal controls over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.
- Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
- Changes in privacy laws, regulations, and standards may cause our business to suffer.
- We are subject to the tax laws of various jurisdictions, which are subject to unanticipated changes and to interpretation, which could harm our future results.
- We may not be able to utilize a significant portion of our net operating loss or research tax credit carryforwards, which could adversely affect our potential profitability.
- Our customers include governmental agencies and entities (at both the federal, state and local level), and as a result we are subject to risks related to government contracts and procurement regulations, as well as other challenges unique to governmental customers.
- We have incurred substantial indebtedness that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur substantially more debt, which may adversely affect our operations and financial results.
- Servicing our debt will require a significant amount of cash. We may not have sufficient cash flow from our business to pay our substantial debt, and we may not have the ability to raise the funds necessary to settle conversions of the Convertible Notes in cash or to repurchase the Convertible Notes upon a fundamental change, which could adversely affect our business and results of operations.
- The conditional conversion feature of the Convertible Notes, when triggered, may adversely affect our financial condition and operating results.
- The accounting method for convertible debt securities that may be settled in cash, such as the Convertible Notes, could have a material effect on our reported financial results.
- The capped call transactions may affect the value of the Convertible Notes and our common stock.
- Conversion of the Convertible Notes will dilute the ownership interest of existing stockholders, including holders who had previously converted their Convertible Notes, or may otherwise depress the price of our common stock.
- Our stock price has been subject to fluctuations, and will likely continue to be subject to fluctuations and decline, due to factors beyond our control and you may lose all or part of your investment.
- Sales of a substantial number of shares of our common stock in the public market, or the perception that they might occur, could cause the price of our common stock to decline.
- If securities or industry analysts do not continue to publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
- We may not realize the anticipated long-term stockholder value of our Share Repurchase Program and any failure to repurchase our common stock after we have announced our intention to do so may negatively impact our stock price.
- We do not intend to pay dividends for the foreseeable future.
- Delaware law, provisions in our amended and restated certificate of incorporation (“Restated Certificate”) and amended and restated bylaws (“Restated Bylaws”), and provisions in the indentures for our Convertible Notes could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock and Convertible Notes.
- Our Restated Certificate provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
- We continue to face financial and operational risks related to the COVID-19 pandemic.
- We have incurred and will continue to incur significantly increased costs and devote substantial management time as a result of operating as a public company.
- Climate change may have a long-term negative impact on our business.
Management Discussion
- Total revenues were $217.3 million for the three months ended October 31, 2022 compared to $185.8 million for the three months ended October 31, 2021, an increase of $31.5 million, or 17%.
- Subscription revenues were $198.4 million, or 91% of total revenues, for the three months ended October 31, 2022, compared to $164.7 million, or 89% of total revenues, for the three months ended October 31, 2021. The increase of $33.7 million was fully ascribed to the increase in the number of customers with annualized subscription revenue above $100,000, which was 1,560 as of October 31, 2022, compared to 1,315 as of October 31, 2021.
- Professional services and other revenues were $18.9 million for the three months ended October 31, 2022 compared to $21.1 million for the three months ended October 31, 2021. The decrease of $2.2 million, or 10%, was primarily due to the migration from Coupa-led implementations to partner-led implementations.