UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October 31, 2020~~April 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from________to________

Commission File Number 001-38069

CLOUDERA, INC.

(Exact name of registrant as specified in its charter)


Delaware			26-2922329
(State or other jurisdiction of incorporation or organization)			(I.R.S. employer identification no.)

5470 Great America Parkway

Santa Clara, CA 95054

(650) 362-0488

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.00005 par value	CLDR	The New York Stock Exchange

Indicate 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. Yes x No ¨

Indicate 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by checkmark if the registrant has not elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act

☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 30, 2020,~~May 31, 2021, there ~~were 312,754,747~~were 292,214,572 shares of the registrant’s common stock outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
	Part I. Financial Information
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~October 31, 2020~~April 30, 2021 and January 31, ~~2020~~2021	1
	Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2021 and 2020 ~~and 2019~~	2
	Condensed Consolidated Statements of Comprehensive Loss for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2021 and 2020 ~~and 2019~~	3
	Condensed Consolidated Statements of Stockholders’ Equity for the three ~~and nine~~ months ended ~~October 31,~~April 3 0 , 2021 and 2020 ~~and 2019~~	4
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~ three months ended ~~October 31, 2020~~April 3 0 , 202 1 and ~~2019~~20 20	65
	Notes to Condensed Consolidated Financial Statements	87

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2524
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3432
Item 4.	Controls and Procedures	3432

	Part II. Other Information
Item 1.	Legal Proceedings	3533
Item 1A.	Risk Factors	3634
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6135



Item 6.	Exhibits	6237
Signatures

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CLOUDERA, INC.	CLOUDERA, INC.					CLOUDERA, INC.
Condensed Consolidated Balance Sheets	Condensed Consolidated Balance Sheets					Condensed Consolidated Balance Sheets
(in thousands, except share data)	(in thousands, except share data)					(in thousands, except share data)

		October 31, 2020		January 31, 2020			April 30, 2021		January 31, 2021
		(unaudited)					(unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	96,114	$	107,638	Cash and cash equivalents	$	169,101	$	298,672
Marketable securities	Marketable securities	298,711		253,361		Marketable securities	348,712		297,721
Accounts receivable, net	Accounts receivable, net	172,424		249,971		Accounts receivable, net	131,408		316,098

Deferred costs		44,922		54,776
Deferred contract costs						Deferred contract costs	49,308		53,048
Prepaid expenses and other current assets	Prepaid expenses and other current assets	28,502		42,155		Prepaid expenses and other current assets	32,763		32,382
Total current assets	Total current assets	640,673		707,901		Total current assets	731,292		997,921
Property and equipment, net	Property and equipment, net	20,247		21,988		Property and equipment, net	17,470		18,065
Marketable securities, non-current	Marketable securities, non-current	169,324		122,193		Marketable securities, non-current	381,326		173,281
Intangible assets, net	Intangible assets, net	551,835		605,236		Intangible assets, net	514,979		532,630
Goodwill	Goodwill	599,291		590,361		Goodwill	599,291		599,291
Deferred costs, non-current		30,365		35,260
Deferred contract costs, non-current						Deferred contract costs, non-current	27,053		31,170

Operating lease right-of-use assets	Operating lease right-of-use assets	187,469		204,642		Operating lease right-of-use assets	138,994		146,424
Other assets	Other assets	10,961		12,209		Other assets	10,206		9,819
TOTAL ASSETS	TOTAL ASSETS	$	2,210,165	$	2,299,790	TOTAL ASSETS	$	2,420,611	$	2,508,601
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	2,556	$	3,858	Accounts payable	$	1,477	$	2,713
Accrued compensation	Accrued compensation	56,029		61,826		Accrued compensation	52,351		56,643
Other contract liabilities		7,895		12,225
Other accrued liabilities	Other accrued liabilities	22,902		22,297		Other accrued liabilities	32,431		30,196
Operating lease liabilities	Operating lease liabilities	29,422		19,181		Operating lease liabilities	19,550		19,574
Deferred revenue		401,943		460,561
Contract liabilities						Contract liabilities	505,977		553,983
Total current liabilities	Total current liabilities	520,747		579,948		Total current liabilities	611,786		663,109
Long-term debt						Long-term debt	486,176		487,089
Operating lease liabilities, non-current	Operating lease liabilities, non-current	176,244		192,324		Operating lease liabilities, non-current	162,356		169,296
Deferred revenue, non-current		57,958		81,926
Contract liabilities, non-current						Contract liabilities, non-current	43,032		54,414

Other accrued liabilities, non-current	Other accrued liabilities, non-current	5,683		7,223		Other accrued liabilities, non-current	6,290		6,763
TOTAL LIABILITIES	TOTAL LIABILITIES	760,632		861,421		TOTAL LIABILITIES	1,309,640		1,380,671

STOCKHOLDERS’ EQUITY:	STOCKHOLDERS’ EQUITY:					STOCKHOLDERS’ EQUITY:
Preferred stock, $0.00005 par value; 20,000,000 shares authorized, 0 shares issued and outstanding as of October 31, 2020 and January 31, 2020		0		0
Common stock $0.00005 par value; 1,200,000,000 shares authorized as of October 31, 2020 and January 31, 2020; 312,718,408 and 295,167,761 shares issued and outstanding as of October 31, 2020 and January 31, 2020, respectively		16		15
Preferred stock, $0.00005 par value; 20,000,000 shares authorized, 0 shares issued and outstanding as of April 30, 2021 and January 31, 2021						Preferred stock, $0.00005 par value; 20,000,000 shares authorized, 0 shares issued and outstanding as of April 30, 2021 and January 31, 2021	0		0
Common stock $0.00005 par value; 1,200,000,000 shares authorized as of April 30, 2021 and January 31, 2021; 293,061,577 and 291,220,735 shares issued and outstanding as of April 30, 2021 and January 31, 2021, respectively						Common stock $0.00005 par value; 1,200,000,000 shares authorized as of April 30, 2021 and January 31, 2021; 293,061,577 and 291,220,735 shares issued and outstanding as of April 30, 2021 and January 31, 2021, respectively	15		15
Additional paid-in capital	Additional paid-in capital	3,044,290		2,923,905		Additional paid-in capital	2,800,559		2,776,690
Accumulated other comprehensive (loss) income		(195)		273
Accumulated other comprehensive income						Accumulated other comprehensive income	153		580
Accumulated deficit	Accumulated deficit	(1,594,578)		(1,485,824)		Accumulated deficit	(1,689,756)		(1,649,355)
TOTAL STOCKHOLDERS’ EQUITY	TOTAL STOCKHOLDERS’ EQUITY	1,449,533		1,438,369		TOTAL STOCKHOLDERS’ EQUITY	1,110,971		1,127,930
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,210,165	$	2,299,790	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,420,611	$	2,508,601

See accompanying notes to condensed consolidated financial statements.

Table of Contents

CLOUDERA, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019				2021		2020
Revenue:	Revenue:									Revenue:
Subscription	Subscription	$	197,355	$	166,932	$	575,962	$	485,872	Subscription		$	200,656	$	187,085
Services	Services	20,544		31,360		66,733		96,599		Services		23,627		23,375
Total revenue	Total revenue	217,899		198,292		642,695		582,471		Total revenue		224,283		210,460
Cost of revenue:(1) (2)	Cost of revenue:(1) (2)									Cost of revenue:(1) (2)
Subscription	Subscription	25,243		30,224		81,808		88,636		Subscription		23,592		28,636
Services	Services	16,804		27,404		64,119		87,355		Services		19,526		25,605
Total cost of revenue	Total cost of revenue	42,047		57,628		145,927		175,991		Total cost of revenue		43,118		54,241
Gross profit	Gross profit	175,852		140,664		496,768		406,480		Gross profit		181,165		156,219
Operating expenses:(1) (2)	Operating expenses:(1) (2)									Operating expenses:(1) (2)
Research and development	Research and development	56,306		66,657		182,826		196,572		Research and development		65,825		64,216
Sales and marketing	Sales and marketing	97,952		117,783		316,847		349,657		Sales and marketing		107,828		113,135
General and administrative	General and administrative	33,923		38,691		101,765		135,568		General and administrative		41,264		34,675
Total operating expenses	Total operating expenses	188,181		223,131		601,438		681,797		Total operating expenses		214,917		212,026
Loss from operations	Loss from operations	(12,329)		(82,467)		(104,670)		(275,317)		Loss from operations		(33,752)		(55,807)
Interest income		1,201		2,756		4,886		9,203
Other income (expense), net		(1,398)		(46)		(2,915)		291
Interest (expense) income, net										Interest (expense) income, net		(3,483)		2,241
Other expense, net										Other expense, net		(700)		(2,497)
Loss before provision for income taxes	Loss before provision for income taxes	(12,526)		(79,757)		(102,699)		(265,823)		Loss before provision for income taxes		(37,935)		(56,063)
Provision for income taxes	Provision for income taxes	(1,419)		(2,365)		(5,257)		(6,472)		Provision for income taxes		(2,466)		(1,951)
Net loss	Net loss	$	(13,945)	$	(82,122)	$	(107,956)	$	(272,295)	Net loss		$	(40,401)	$	(58,014)
Net loss per share, basic and diluted	Net loss per share, basic and diluted	$	(0.04)	$	(0.29)	$	(0.36)	$	(0.98)	Net loss per share, basic and diluted		$	(0.14)	$	(0.20)
Weighted-average shares used in computing net loss per share, basic and diluted	Weighted-average shares used in computing net loss per share, basic and diluted	311,009		283,267		302,185		277,260		Weighted-average shares used in computing net loss per share, basic and diluted		292,535		295,293

(1) Amounts include stock-based compensation expense as follows (in thousands):


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019				2021		2020
Cost of revenue – subscription	Cost of revenue – subscription	$	3,384	$	4,306	$	11,060	$	12,314	Cost of revenue – subscription		$	4,292	$	3,992
Cost of revenue – services	Cost of revenue – services	2,372		4,620		9,363		13,076		Cost of revenue – services		2,695		3,987
Research and development	Research and development	16,372		19,697		53,253		55,991		Research and development		21,261		19,824
Sales and marketing	Sales and marketing	11,806		17,400		41,660		46,199		Sales and marketing		15,855		15,823
General and administrative	General and administrative	7,922		8,191		26,575		37,238		General and administrative		14,521		9,812

(2) Amounts include amortization of acquired intangible assets as follows (in thousands):


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019				2021		2020

Cost of revenue – subscription	Cost of revenue – subscription	$	3,144	$	2,761	$	9,303	$	8,358	Cost of revenue – subscription		$	1,023	$	3,079
Sales and marketing	Sales and marketing	16,605		17,264		49,798		51,764		Sales and marketing		16,628		16,597

See accompanying notes to condensed consolidated financial statements.

Table of Contents

CLOUDERA, INC.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019				2021		2020
Net loss	Net loss	$	(13,945)	$	(82,122)	$	(107,956)	$	(272,295)	Net loss		$	(40,401)	$	(58,014)
Other comprehensive (loss) income, net of tax:	Other comprehensive (loss) income, net of tax:									Other comprehensive (loss) income, net of tax:
Foreign currency translation (loss) gain		(241)		473		(1,162)		(157)
Foreign currency translation gain (loss)										Foreign currency translation gain (loss)		235		(836)
Unrealized (loss) gain on investments	Unrealized (loss) gain on investments	(717)		375		694		1,177		Unrealized (loss) gain on investments		(662)		852
Total other comprehensive (loss) income, net of tax	Total other comprehensive (loss) income, net of tax	(958)		848		(468)		1,020		Total other comprehensive (loss) income, net of tax		(427)		16
Comprehensive loss	Comprehensive loss	$	(14,903)	$	(81,274)	$	(108,424)	$	(271,275)	Comprehensive loss		$	(40,828)	$	(57,998)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

CLOUDERA, INC.

Condensed Consolidated Statements of Stockholders' Equity

(in thousands)

(unaudited)


		Three Months Ended October 31, 2020												Three Months Ended April 30, 2021
		Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
		Shares	Amount											Shares	Amount
Balance as of July 31, 2020		309,234	$	15	$	3,008,394	$	763	$	(1,580,633)	$	1,428,539
Balance as of January 31, 2021													Balance as of January 31, 2021	291,221	$	15	$	2,776,690	$	580	$	(1,649,355)	$	1,127,930
Shares issued under employee stock plans	Shares issued under employee stock plans	124			392		—		—		392		Shares issued under employee stock plans	370			2,246		—		—		2,246
Vested restricted stock units converted into shares		3,939	1		—		—		—		1
Shares issued from restricted stock units vesting													Shares issued from restricted stock units vesting	4,448	—		—		—		—		—

Repurchases of common stock													Repurchases of common stock	(1,542)	—		(18,945)		—		—		(18,945)
Stock-based compensation expense	Stock-based compensation expense	—	—		41,856		—		—		41,856		Stock-based compensation expense	—	—		58,624		—		—		58,624

Shares withheld related to net settlement of restricted stock units		(579)			(6,352)		—		—		(6,352)
Shares withheld related to net settlement of equity awards													Shares withheld related to net settlement of equity awards	(1,435)			(18,056)		—		—		(18,056)
Unrealized loss on investments	Unrealized loss on investments	—	—		—		(717)		—		(717)		Unrealized loss on investments	—	—		—		(662)		—		(662)
Foreign currency translation loss		—	—		—		(241)		—		(241)
Foreign currency translation gain													Foreign currency translation gain	—	—		—		235		—		235

Net loss	Net loss	—	—		—		—		(13,945)		(13,945)		Net loss	—	—		—		—		(40,401)		(40,401)
Balance as of October 31, 2020		312,718	$	16	$	3,044,290	$	(195)	$	(1,594,578)	$	1,449,533
Balance as of April 30, 2021													Balance as of April 30, 2021	293,062	$	15	$	2,800,559	$	153	$	(1,689,756)	$	1,110,971


		Three Months Ended October 31, 2019												Three Months Ended April 30, 2020
		Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
		Shares	Amount											Shares	Amount
Balance as of July 31, 2019		279,595	$	14	$	2,814,767	$	130	$	(1,339,415)	$	1,475,496
Balance as of January 31, 2020													Balance as of January 31, 2020	295,168	$	15	$	2,923,905	$	273	$	(1,485,824)	$	1,438,369
Shares issued under employee stock plans	Shares issued under employee stock plans	1,845	—		5,856		—		—		5,856		Shares issued under employee stock plans	154	—		443		—		—		443
Vested restricted stock units converted into shares		6,378	—		—		—		—		0
Shares issued from restricted stock units vesting													Shares issued from restricted stock units vesting	5,852	—		—		—		—		—

Repurchases of common stock													Repurchases of common stock	(3,945)	—		(25,974)		—		—		(25,974)
Stock-based compensation expense	Stock-based compensation expense	—	—		54,214		—		—		54,214		Stock-based compensation expense	—	—		53,438		—		—		53,438

Shares withheld related to net settlement of restricted stock units		(700)	—		(5,431)		—		—		(5,431)
Shares withheld related to net settlement of equity awards													Shares withheld related to net settlement of equity awards	(1,880)	—		(14,017)		—		—		(14,017)
Unrealized gain on investments	Unrealized gain on investments	—	—		—		375		—		375		Unrealized gain on investments	—	—		—		852		—		852
Foreign currency translation gain		—	—		—		473		—		473
Foreign currency translation loss													Foreign currency translation loss	—	—		—		(836)		—		(836)
Cumulative effect of accounting change													Cumulative effect of accounting change	—	—		—		—		(798)		(798)
Net loss	Net loss	—	—		—		—		(82,122)		(82,122)		Net loss	—	—		—		—		(58,014)		(58,014)
Balance as of October 31, 2019		287,118	$	14	$	2,869,406	$	978	$	(1,421,537)	$	1,448,861
Balance as of April 30, 2020													Balance as of April 30, 2020	295,349	$	15	$	2,937,795	$	289	$	(1,544,636)	$	1,393,463

See accompanying notes to condensed consolidated financial statements.

~~Table of Contents~~

~~CLOUDERA, INC.~~

~~Condensed Consolidated Statements of Stockholders' Equity~~

~~(in thousands)~~

~~(unaudited)~~

Nine Months Ended October 31, 2020
Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity
Shares Amount
Balance as of January 31, 2020 295,168 $ 15 $ 2,923,905 $ 273 $ (1,485,824) 1,438,369
Shares issued under employee stock plans 7,961 — 26,353 — — 26,353
Vested restricted stock units converted into shares 16,035 1 — — — 1
Shares issued under employee stock purchase plan 800 — 7,730 — — 7,730
Repurchases of common stock (3,945) — (25,974) — — (25,974)
Stock-based compensation expense — — 141,911 — — 141,911
Shares withheld related to net settlement of restricted stock units (3,301) — (29,635) — — (29,635)
Unrealized gain on investments — — — 694 — 694
Foreign currency translation loss — — — (1,162) — (1,162)
Cumulative effect of accounting change — — — — (798) (798)
Net loss — — — — (107,956) (107,956)
Balance as of October 31, 2020 312,718 $ 16 $ 3,044,290 $ (195) $ (1,594,578) $ 1,449,533

Nine Months Ended October 31, 2019
Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity
Shares Amount
Balance as of January 31, 2019 268,819 $ 13 $ 2,711,340 $ (42) $ (1,149,242) $ 1,562,069
Shares issued under employee stock plans 3,776 1 10,743 — — 10,744
Vested restricted stock units converted into shares 16,558 — — — — 0
Shares issued under employee stock purchase plan 735 — 3,590 — — 3,590
Stock-based compensation expense — — 164,818 — — 164,818
Shares withheld related to net settlement of restricted stock units (2,770) — (21,085) — — (21,085)
Unrealized gain on investments — — — 1,177 — 1,177
Foreign currency translation loss — — — (157) — (157)
Net loss — — — — (272,295) (272,295)
Balance as of October 31, 2019 287,118 $ 14 $ 2,869,406 $ 978 $ (1,421,537) $ 1,448,861

~~See accompanying notes to condensed consolidated financial statements.~~

Table of Contents

CLOUDERA, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


		Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019			2021		2020

CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	Net loss	$	(107,956)	$	(272,295)	Net loss	$	(40,401)	$	(58,014)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Adjustments to reconcile net loss to net cash provided by operating activities:						Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	67,016		69,123		Depreciation and amortization	19,628		22,573
Non-cash lease expense	Non-cash lease expense	34,208		33,897		Non-cash lease expense	11,051		11,301
Stock-based compensation expense	Stock-based compensation expense	141,911		164,818		Stock-based compensation expense	58,624		53,438

Amortization of deferred costs		50,750		33,579
Amortization of deferred contract costs						Amortization of deferred contract costs	16,620		16,625

Other	Other	8,387		(1,903)		Other	1,182		3,522

Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable	Accounts receivable	76,067		78,952		Accounts receivable	185,514		81,828

Prepaid expenses and other assets	Prepaid expenses and other assets	14,508		(3,754)		Prepaid expenses and other assets	(3,777)		10,526
Deferred costs		(36,001)		(37,200)
Deferred contract costs						Deferred contract costs	(8,763)		(10,623)
Accounts payable	Accounts payable	(2,098)		4,193		Accounts payable	(891)		307
Accrued compensation	Accrued compensation	(10,225)		(2,323)		Accrued compensation	(8,568)		(18,412)
Other accrued liabilities	Other accrued liabilities	(3,447)		4,904		Other accrued liabilities	1,764		(2,895)
Other contract liabilities		(4,330)		(9,445)
Operating lease liabilities	Operating lease liabilities	(24,731)		(27,898)		Operating lease liabilities	(10,571)		(2,508)
Deferred revenue		(84,889)		(62,058)
Net cash provided by (used in) operating activities		119,170		(27,410)
Contract liabilities						Contract liabilities	(59,202)		(39,311)
Net cash provided by operating activities						Net cash provided by operating activities	162,210		68,357
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of marketable securities	Purchases of marketable securities	(395,200)		(392,497)		Purchases of marketable securities	(382,013)		(80,860)
Proceeds from sale of marketable securities	Proceeds from sale of marketable securities	110,322		56,741		Proceeds from sale of marketable securities	2,900		66,059
Maturities of marketable securities	Maturities of marketable securities	191,670		331,630		Maturities of marketable securities	120,854		36,794
Cash used in business combinations, net of cash acquired		(12,358)		(4,500)

Capital expenditures	Capital expenditures	(7,305)		(6,488)		Capital expenditures	(1,575)		(1,089)

Net cash used in investing activities		(112,871)		(15,114)
Net cash (used in) provided by investing activities						Net cash (used in) provided by investing activities	(259,834)		20,904
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Repurchases of common stock	Repurchases of common stock	(25,974)		0		Repurchases of common stock	(18,945)		(25,974)
Principal repayment of debt						Principal repayment of debt	(1,250)		0
Taxes paid related to net share settlement of restricted stock units	Taxes paid related to net share settlement of restricted stock units	(29,635)		(21,085)		Taxes paid related to net share settlement of restricted stock units	(18,056)		(14,017)
Proceeds from employee stock plans	Proceeds from employee stock plans	38,191		19,633		Proceeds from employee stock plans	6,489		4,977

Net cash used in financing activities	Net cash used in financing activities	(17,418)		(1,452)		Net cash used in financing activities	(31,762)		(35,014)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(405)		(1,508)		Effect of exchange rate changes on cash, cash equivalents and restricted cash	(185)		(960)
Net decrease in cash, cash equivalents and restricted cash		(11,524)		(45,484)
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(129,571)		53,287
Cash, cash equivalents and restricted cash — Beginning of period	Cash, cash equivalents and restricted cash — Beginning of period	110,990		162,039		Cash, cash equivalents and restricted cash — Beginning of period	302,024		110,990
Cash, cash equivalents and restricted cash — End of period	Cash, cash equivalents and restricted cash — End of period	$	99,466	$	116,555	Cash, cash equivalents and restricted cash — End of period	$	172,453	$	164,277





SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Purchases of property and equipment, accrued but not yet paid	$	0	$	606
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,833	$	476

SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Purchases of property and equipment, accrued but not yet paid $ 60 $ 138
Right-of-use assets obtained in exchange for new operating lease liabilities $ 8,040 $ 3,741

See accompanying notes to condensed consolidated financial statements.

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CLOUDERA, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


		As of October 31,					As of April 30,
		2020		2019			2021		2020
Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows	Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows					Reconciliation of cash, cash equivalents and restricted cash as shown in the statement of cash flows
Cash and cash equivalents	Cash and cash equivalents	$	96,114	$	113,203	Cash and cash equivalents	$	169,101	$	160,925
Restricted cash included in Other assets	Restricted cash included in Other assets	3,352		3,352		Restricted cash included in Other assets	3,352		3,352
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	99,466	$	116,555	Total cash, cash equivalents and restricted cash	$	172,453	$	164,277

See accompanying notes to condensed consolidated financial statements.

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CLOUDERA, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Summary of Business and Significant Accounting Policies

Description of Business

Cloudera, Inc. was incorporated in the state of Delaware on June 27, 2008 and is headquartered in Santa Clara, California. Cloudera is an enterprise data cloud company. We sell software subscriptions and public cloud services for the ~~recently released~~ Cloudera Data Platform (CDP) solution-set and software subscriptions for our traditional on-premises data platforms. Subscriptions include software access rights and technical support. We also provide professional services for the implementation and use of our software subscriptions, machine learning expertise and consultation, training and education services. Our offerings are based predominantly on open source software, utilizing data stored natively in public cloud object stores as well as in various open source data stores. Unless the context requires otherwise, the words “we,” “us,” “our”and “Cloudera” refer to Cloudera, Inc. and its subsidiaries taken as a whole.

Agreement and Plan of Merger

On June 1, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sky Parent Inc., a Delaware corporation (“Parent”), and Project Sky Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will be merged with and into Cloudera, Inc., with Cloudera, Inc. surviving the merger as a wholly-owned subsidiary of Parent (the “Merger”). Parent and Merger Sub are subsidiaries of investment funds advised by Clayton, Dubilier & Rice, LLC (“CD&R”) and Kohlberg Kravis Roberts & Co. L.P. (“KKR”), US-based private equity firms. See Note 17 for further details.

Basis of ~~Presentation~~Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States and the applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. The condensed consolidated financial statements include the results of Cloudera, Inc. and its wholly owned subsidiaries, which are located in various countries, including the United States, Australia, China, India, Germany, Ireland, The Netherlands, Singapore, Hungary and the United Kingdom. All intercompany balances and transactions have been eliminated upon consolidation. The consolidated balance sheet as of January 31, ~~2020~~2021 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The information contained herein reflects all adjustments necessary for a fair presentation of our results of operations, financial position, stockholders’ equity and cash flows. All such adjustments are of a normal, recurring nature. The results of operations for the three ~~and nine~~ months ended ~~October 31, 2020~~April 30, 2021 are not necessarily indicative of results to be expected for the full year ending January 31, ~~2021~~2022 or for any other interim periods or for any other future years.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K ~~and Form 10-K/A~~ for the year ended January 31, ~~2020,~~2021, filed with the SEC on March ~~27, 2020, October 26, 2020, and November 6, 2020, respectively.~~25, 2021. There have been no material changes in our significant accounting policies as described in our Annual Report on Form 10-K ~~as amended,~~ for the year ended January 31, ~~2020 other than as noted below under “New Accounting Policies". We have enhanced the disclosure specific to our subscription revenue policy below under "Subscription Revenue".~~

~~Fiscal Year~~2021.

Our fiscal year ends on January 31. References to fiscal ~~2021,~~2022, for example, refer to the fiscal year ending January 31, ~~2021.~~2022.

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Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include the useful lives of property and equipment and intangible assets, allowance for credit losses, stock-based compensation expense, bonus attainment, self-insurance costs incurred, the fair value and useful lives of tangible and intangible assets acquired and liabilities assumed resulting from business combinations, the evaluation for impairment of goodwill, intangible assets and ~~goodwill,~~other long-lived assets including operating lease right-of-use assets, the estimated period of benefit for deferred contract costs, estimates related to ~~our~~ revenue recognition, such as the assessment of elements in a multi-element arrangement and the value assigned to each element, contingencies, and the incremental borrowing rate used in discounting our lease liabilities. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates.

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Due to the COVID-19 Coronavirus pandemic (COVID-19 or COVID-19 pandemic), there has been uncertainty and disruption in the global economy and financial markets. We are not aware of any specific event or circumstance that would require an update to our estimates or judgments or a revision of the carrying value of our assets or liabilities as of October 31, 2020. While there was not a material impact to our condensed consolidated financial statements as of and for the three and nine months ended October 31, 2020, these estimates may change, as new events occur and additional information is obtained, as well as other factors related to COVID-19 pandemic that could result in material impacts to our condensed consolidated financial statements in future reporting periods.

Segments

We operate as 2 operating segments – subscription and services. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, who is our chief executive officer, in deciding how to allocate resources and assess performance.

Concentrations of Credit Risk and Significant Customers

Financial instruments that subject us to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, restricted cash and accounts receivable. Our cash is deposited with high credit quality financial institutions. At times, such deposits may be in excess of the Federal Depository Insurance Corporation insured limits. We have not experienced any losses on these deposits.

Our trade receivables are recorded at the invoice amount, net of an allowance for credit losses, which is not material. The allowance for credit losses reflects our best estimate of probable losses inherent in the receivable portfolio determined based on various factors including historical experience, credit quality of the customer, current economic conditions and management’s expectations of future economic conditions. Receivables are written-off and charged against the recorded allowance when we have exhausted collection efforts without success.

The COVID-19 pandemic and the recent economic downturn prompted us to perform additional credit reviews of our existing customers. After performing our additional reviews, we determined that, while we may experience delays in our collections, the risk of credit loss on our trade receivables as of October 31, 2020 is not expected to materially differ from prior periods.

As of ~~October 31, 2020 and January 31, 2020,~~April 30, 2021, no 0 s~~single~~ingle customer represented more than 10% of accounts receivable. As of January 31, 2021, 1 customer represented more than 10% of account receivable. For each of the three ~~and nine~~ months ended ~~October 31,~~April 30, 2021 and 2020 ~~and 2019~~, no single customer accounted for 10% or more of revenue.

Recently Adopted Accounting ~~Standards~~Standard

We adopted the ~~following~~ accounting ~~standards~~standard updated (ASU) 2020-08 Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs as of February 1, ~~2020:~~

•~~ASU No. 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment;~~

•~~ASU No. 2018-13,~~ ~~Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which amends ASC 820,~~ ~~Fair Value Measurement;~~ ~~and~~

• ~~ASU No. 2018-15,~~ Intangibles-Goodwill and Other - Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force)

2021. The adoption of the ~~above listed~~ accounting ~~standards~~standard did not have a material impact on our condensed consolidated financial statements as of and for the three ~~and nine~~ months ended ~~October 31, 2020.~~

~~In June 2016, the Financial Accounting Standards Board issued ASU No. 2016-13,~~ April 30, 2021.~~Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ (ASU 2016-13), which requires an entity to utilize a new impairment model known as the current expected credit loss model in place of the currently used incurred loss method. Under this update, on initial recognition and at each reporting period, an entity will be required to recognize an allowance that reflects the entity’s current estimate of credit losses expected to be incurred over the life of the financial instrument. For trade receivables, loans, and other financial instruments, an entity will be required to use a forward-looking expected loss model to recognize credit losses that are probable. It also eliminates the concept of other-than-temporary impairment and requires

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~~credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. We adopted~~ ~~ASU 2016-13~~ ~~using the modified retrospective approach as of February 1, 2020. As a result of the adoption, we recorded a $0.8 million adjustment to our beginning accumulated deficit balance to reflect the cumulative effect of the accounting change~~. The impact of the adoption was not material to our consolidated financial statements as credit losses are not expected to be significant based on historical collection trends, the financial condition of payment partners and external market factors. We will continue to actively monitor the impact of the recent COVID-19 pandemic on expected credit losses.

~~Recently Issued Accounting Standards~~

~~In October 2020, the FASB issued ASU No. 2020-08,~~ ~~Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs~~ ~~(ASU 2020-08) to provide further clarification and update the previously issued guidance in ASU 2017-08,~~ ~~Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20: Premium Amortization on Purchased Callable Debt Securities~~” (ASU 2017-08). ASU 2017-08 shortened the amortization period for certain callable debt securities purchased at a premium by requiring that the premium be amortized to the earliest call date. ASU 2020-08 requires that at each reporting period, to the extent that the amortized cost of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess premium shall be amortized to the next call date. ASU 2020-08 is effective for annual reporting periods and interim periods within those years, beginning after December 15, 2020 and to be applied prospectively. We do not anticipate that ASU 2020-08 will have a material impact on our consolidated financial statements.

~~New Accounting Policies~~

~~Derivative contracts~~

During the first quarter of fiscal year 2021, we implemented a currency risk management program. We use derivative financial instruments as a part of our strategy to manage exposure related to foreign currency denominated monetary assets and liabilities. These derivative contracts consist of foreign currency forward contracts and are not designated as hedging instruments under the applicable accounting guidance. Accordingly, they are carried at fair value as either assets or liabilities on our condensed consolidated balance sheets. The changes in the fair value are included in Other income (expense), net within our condensed consolidated statements of operations and are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities.

Our foreign currency forward contracts are classified within Level 2 of the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, including currency spot and forward rates.

~~Subscription Revenue~~

We sell subscriptions and services for an integrated suite of data analytics and management products. Our subscription offerings are based predominantly on open source software including Spark, Impala, Hive, HBase, Kafka, Hadoop, and more. The open source software is available from the Apache Software Foundation ("ASF”) or available through an Affero General Public License (“AGPL“). Certain subscriptions also include licenses of proprietary software that provide additional features and functionality not included in the open source software.

Subscription revenue relates to term (or time-based) subscriptions to our platform, which can include both open source and proprietary software and related support. Subscriptions include internet, email and phone support, bug fixes, and the right to receive unspecified software updates and upgrades released when and if available during the subscription term. Within our subscription arrangements, we account for the license to the proprietary software, if any, and support as two separate performance obligations. As the open source software is publicly available at no cost to the customer, we have determined that there is no value to be assigned to the open source software in our subscription arrangements. The proprietary software license represents a promise to provide a license to use functional intellectual property that is recognized at a point in time on the date access to the software is made available to the customer and the license period has begun. We have concluded the support is a stand-ready performance obligation that consists of a series of distinct days of service that are satisfied ratably over time as the services are provided. We use a time-based output method to measure progress because our efforts are expended evenly throughout the period given the nature of the promise is a stand-ready service. We recognize support revenue ratably, typically beginning on the start of the contractual term of the arrangement.

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As part of our support offered under a subscription, we stand ready to help customers resolve technical issues related to the installed platform. The subscriptions are designed to assist throughout a customer’s lifecycle from development to proof-of-concept, to quality assurance and testing, to production and development. Our subscriptions are generally offered under renewable, fixed fee contracts where payments are typically due annually in advance and may have a term of one year or multiple years. The contracts generally do not contain refund provisions for fees earned related to services performed. Unearned subscription revenue is included in deferred revenue and other contract liabilities. On occasion, we may sell engineering services and/or a premium subscription agreement that provides a customer with development input and the opportunity to work more closely with our developers.

2. Revenue from Contracts with Customers

~~The following table reflects our contract liabilities balances (in thousands):~~

October 31,
2020 January 31,
2020
Deferred revenue $ 401,943 $ 460,561
Other contract liabilities 7,895 12,225
Deferred revenue, non-current 57,958 81,926
Total contract liabilities $ 467,796 $ 554,712

Significant changes in the contract liabilities ~~balances~~ during the period ended ~~October 31, 2020~~April 30, 2021 are as follows (in thousands):


		Contract Liabilities
January 31, ~~2020~~2021		$	~~554,712~~608,397
Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period		~~(165,645)~~(188,443)
Increases due to invoicing prior to satisfaction of performance obligations		~~125,655~~129,055
April 30, ~~2020~~2021		~~514,722~~ $
~~Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period~~		~~(166,692)~~
~~Increases due to invoicing prior to satisfaction of performance obligations~~		~~137,941~~549,009

~~July 31, 2020~~		~~485,971~~
~~Performance obligations satisfied during the period that were included in the contract liability balance at the beginning of the period~~		~~(172,525)~~
~~Increases due to invoicing prior to satisfaction of performance obligations~~		~~154,350~~
~~October 31, 2020~~		$
	~~467,796~~

Remaining Performance Obligations

The transaction price allocated to remaining performance obligations represents contracted revenue that has been billed but not recognized, and unbilled non-cancelable amounts that will be recognized as revenue in future periods. Transaction

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price allocated to the remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals and average contract terms.

During the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, net revenue recognized from our remaining performance obligations satisfied in previous periods was not material.

As of ~~October 31, 2020,~~April 30, 2021, approximately ~~$827.4~~$876.3 million of revenue is expected to be recognized from remaining performance obligations in the amount of approximately ~~$548.5~~$623.1 million over the next 12 months and approximately ~~$278.9~~$253.2 million thereafter.

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Contract Assets

Contract assets consist of the right to consideration in exchange for product offerings that we have transferred to a customer when that right is conditional on something other than the passage of time (e.g., performance prior to invoicing on fixed fee service arrangements with substantive acceptance terms). We record unbilled accounts receivable related to revenue recognized in excess of amounts invoiced as we have an unconditional right to invoice and receive payment in the future related to those fulfilled obligations. As of ~~October 31, 2020~~April 30, 2021 and January 31, ~~2020,~~2021, contract assets were ~~$3.0~~$3.5 million and ~~$4.6~~$5.0 million, respectively, which are included in prepaid expenses and other current assets.

3. ~~Business Combinations~~

On October 8, 2020, we acquired 100% voting interest in Eventador Labs, Inc. (Eventador), a provider of cloud-native services for enterprise-grade stream processing, for aggregate cash consideration of $18.0 million. We believe Eventador will accelerate innovation in our Cloudera DataFlow streaming platform and deliver more business value to our customers in real-time streaming analytics applications.

Under the terms of the agreement, $3.5 million of the aggregate consideration is payable to the former employees and is contingent upon their continued employment. As a result, these payments will be recorded as compensation expense over the contractual term of three years. Purchase consideration of $14.5 million has been preliminarily allocated primarily to goodwill and intangible assets of $8.9 million and $5.7 million, respectively. The intangible assets are being amortized over their respective useful lives ranging from 4 to 5 years.

~~The results of operations of Eventador have been included in our consolidated statements of operations from the acquisition date and were not material.~~

4. Cash Equivalents and Marketable Securities

The following are the fair values of our cash equivalents and marketable securities as of ~~October 31, 2020~~April 30, 2021 (in thousands):


		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value			Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	27,618	$	—	$	—	$	27,618	Money market funds	$	67,704	$	—	$	—	$	67,704

Certificates of deposit										Certificates of deposit	13,001		—		—		13,001

Marketable securities:	Marketable securities:									Marketable securities:
U.S. agency obligations	U.S. agency obligations	65,965		51		(32)		65,984		U.S. agency obligations	83,963		50		(7)		84,006
Asset-backed securities		2,907		14		0		2,921

Corporate notes and obligations	Corporate notes and obligations	226,352		1,634		(14)		227,972		Corporate notes and obligations	353,276		983		(277)		353,982
Commercial paper	Commercial paper	51,171		26		(2)		51,195		Commercial paper	67,445		9		(2)		67,452
Municipal securities	Municipal securities	18,284		156		(5)		18,435		Municipal securities	87,298		201		(128)		87,371
Certificates of deposit	Certificates of deposit	57,999		60		0		58,059		Certificates of deposit	86,049		29		(8)		86,070
U.S. treasury securities	U.S. treasury securities	43,413		59		(3)		43,469		U.S. treasury securities	51,143		15		(1)		51,157

Total cash equivalents and marketable securities	Total cash equivalents and marketable securities	$	493,709	$	2,000	$	(56)	$	495,653	Total cash equivalents and marketable securities	$	809,879	$	1,287	$	(423)	$	810,743

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The following are the fair values of our cash equivalents and marketable securities as of January 31, ~~2020~~2021 (in thousands):


		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value			Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	34,596	$	—	$	—	$	34,596	Money market funds	$	186,127	$	—	$	—	$	186,127

Certificates of deposit										Certificates of deposit	4,000		—		—		4,000

Marketable securities:	Marketable securities:									Marketable securities:

U.S. agency obligations										U.S. agency obligations	68,972		76		(4)		69,044
Asset-backed securities	Asset-backed securities	68,194		235		0		68,429		Asset-backed securities	2,901		2		0		2,903
Corporate notes and obligations	Corporate notes and obligations	199,226		891		0		200,117		Corporate notes and obligations	210,321		1,215		(72)		211,464
Commercial paper	Commercial paper	46,460		7		0		46,467		Commercial paper	48,212		19		(6)		48,225
Municipal securities	Municipal securities	20,865		65		0		20,930		Municipal securities	40,031		213		(5)		40,239
Certificates of deposit	Certificates of deposit	14,996		19		0		15,015		Certificates of deposit	60,749		53		0		60,802
U.S. treasury securities	U.S. treasury securities	24,563		33		0		24,596		U.S. treasury securities	38,291		34		0		38,325

Total cash equivalents and marketable securities	Total cash equivalents and marketable securities	$	408,900	$	1,250	$	0	$	410,150	Total cash equivalents and marketable securities	$	659,604	$	1,612	$	(87)	$	661,129

The contractual maturities of investments in available-for-sale securities were as follows (in thousands):


		October 31, 2020				January 31, 2020					April 30, 2021				January 31, 2021
		Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value			Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	Due within one year	$	325,444	$	326,329	$	273,582	$	274,058	Due within one year	$	429,183	$	429,417	$	487,201	$	487,848
Due after one year through five years	Due after one year through five years	168,265		169,324		135,318		136,092		Due after one year through five years	380,696		381,326		172,403		173,281
Total investments in marketable securities		$	493,709	$	495,653	$	408,900	$	410,150
Total cash equivalents and marketable securities										Total cash equivalents and marketable securities	$	809,879	$	810,743	$	659,604	$	661,129

The unrealized loss for each of these fixed rate marketable securities was not material as of ~~October 31, 2020~~April 30, 2021 and January 31, ~~2020.~~2021. The unrealized losses on these investments were primarily due to changes in market interest rates. We expect to receive the full principal and interest on all of these marketable securities and have the ability and intent to hold these investments until a recovery of fair value. We determined that no c~~redit~~allowance for credit losses related to our marketable securities was required for the three ~~and nine~~ months ended ~~October 31, 2020~~April 30, 2021 and ~~2019.~~2020.

Realized gains and realized losses on our cash equivalents and marketable securities are included in other income (expense), net on the condensed consolidated statement of operations and were not material for the three ~~and nine~~ months ended ~~October 31, 2020~~April 30, 2021 and ~~2019.~~2020.

Reclassification adjustments out of accumulated other comprehensive income into net loss ~~were~~were not material for the three ~~and nine~~ months ended ~~October 31, 2020~~April 30, 2021 and ~~2019.~~2020.

5.4. Fair Value Measurement

Our financial assets and liabilities consist principally of cash and cash equivalents, marketable securities, accounts receivable and accounts payable. We measure and record certain financial assets and liabilities at fair value on a recurring basis. The estimated fair value of accounts receivable and accounts payable approximates their carrying value due to their short-term nature. Cash equivalents and marketable securities are recorded at estimated fair value.

All of our cash equivalents and marketable securities are classified within Level 1 or Level 2 because the cash equivalents and marketable securities are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs.

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We follow a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1 Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table represents our financial assets and liabilities according to the fair value hierarchy, measured at fair value as of ~~October 31, 2020~~April 30, 2021 (in thousands):


		Level 1		Level 2		Total			Level 1		Level 2		Total
Financial assets	Financial assets							Financial assets

Money market funds	Money market funds	$	27,618	$	0	$	27,618	Money market funds	$	67,704	$	0	$	67,704
U.S. agency obligations	U.S. agency obligations	0		65,984		65,984		U.S. agency obligations	0		84,006		84,006
Asset-backed securities		0		2,921		2,921

Corporate notes and obligations	Corporate notes and obligations	0		227,972		227,972		Corporate notes and obligations	0		353,982		353,982
Commercial paper	Commercial paper	0		51,195		51,195		Commercial paper	0		67,452		67,452
Municipal securities	Municipal securities	0		18,435		18,435		Municipal securities	0		87,371		87,371
Certificates of deposit	Certificates of deposit	0		58,059		58,059		Certificates of deposit	0		99,071		99,071
U.S. treasury securities	U.S. treasury securities	0		43,469		43,469		U.S. treasury securities	0		51,157		51,157

Total financial assets	Total financial assets	$	27,618	$	468,035	$	495,653	Total financial assets	$	67,704	$	743,039	$	810,743

The following table represents our financial assets according to the fair value hierarchy, measured at fair value as of January 31, ~~2020~~2021 (in thousands):


		Level 1		Level 2		Total			Level 1		Level 2		Total
Financial assets	Financial assets							Financial assets
Money market funds	Money market funds	$	34,596	$	0	$	34,596	Money market funds	$	186,127	$	0	$	186,127

U.S. agency obligations								U.S. agency obligations	0		69,044		69,044
Asset-backed securities	Asset-backed securities	0		68,429		68,429		Asset-backed securities	0		2,903		2,903
Corporate notes and obligations	Corporate notes and obligations	0		200,117		200,117		Corporate notes and obligations	0		211,464		211,464
Commercial paper	Commercial paper	0		46,467		46,467		Commercial paper	0		48,225		48,225
Municipal securities	Municipal securities	0		20,930		20,930		Municipal securities	0		40,239		40,239
Certificates of deposit	Certificates of deposit	0		15,015		15,015		Certificates of deposit	0		64,802		64,802
U.S. treasury securities	U.S. treasury securities	0		24,596		24,596		U.S. treasury securities	0		38,325		38,325

Total financial assets	Total financial assets	$	34,596	$	375,554	$	410,150	Total financial assets	$	186,127	$	475,002	$	661,129

We value our Level 1 assets using quoted prices in active markets for identical instruments. We value our Level 2 assets with the help of a third-party pricing service using quoted market prices for similar instruments, non-binding market prices that are corroborated by observable market data, or pricing models such as discounted cash flow techniques. We use such pricing data as the primary input, to which we have not made any material adjustments during the periods presented, to make our determination and assessments as to the ultimate valuation of these assets.

Our foreign currency forward contract liabilities and assets are classified within Level 2 in the fair value hierarchy as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, including currency spot and forward rates. The fair value of these contracts were not material as of April 30, 2021.

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We have no Level 1 or 3 liabilities and no Level 3 ~~assets.~~assets measured on a recurring basis.

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Assets Measured at Fair Value on a Nonrecurring Basis

Certain of our long-lived assets, including intangible assets, goodwill, and ~~goodwill,~~operating lease right-of-use assets are measured at fair value on a nonrecurring basis when ~~they~~there are ~~deemed to be other-than temporarily impaired.~~indicators of impairment. There were no0 material impairment charges recognized during the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, and ~~2019.~~2020.

5. Goodwill and Intangible Assets

Goodwill

Goodwill balance was $599.3 million for both periods ending April 30, 2021 and January 31, 2021.

Intangible Assets

Intangible assets consisted of the following as of April 30, 2021 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in years)
Developed technology	$	14,350	$	(7,417)	$	6,933	3.3
Customer relationships and other acquired intangible assets	663,146		(155,100)		508,046		7.6

Total	$	677,496	$	(162,517)	$	514,979	7.5

Intangible assets consisted of the following as of January 31, 2021 (in thousands):


	Gross Fair Value		Accumulated Amortization		Net Book Value		Weighted Average Remaining Useful Life (in years)
Developed technology	$	22,770	$	(14,814)	$	7,956	3.3
Customer relationships and other acquired intangible assets	671,947		(147,273)		524,674		7.9
Unbilled contracts	18,300		(18,300)		0		—
Total	$	713,017	$	(180,387)	$	532,630	7.8

Amortization expense for intangible assets was $17.7 million and $19.7 million for the three months ended April 30, 2021 and 2020, respectively.

The expected future amortization expense of these intangible assets as of April 30, 2021 is as follows (in thousands):


Remaining nine months of fiscal 2022	$	52,588
fiscal 2023	67,887
fiscal 2024	67,376
fiscal 2025	67,286
fiscal 2026	66,875
fiscal 2027 and thereafter	192,967
Total amortization expense	$	514,979

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6. Derivative Contracts

We generate revenues and incur expenses in numerous currencies and are exposed to foreign currency risk. InTo mitigate the ~~first quarter~~impact of ~~fiscal year 2021,~~changes in foreign currency rates, we ~~implemented a currency risk management program, executing~~execute foreign currency forward contracts to offset the gains and losses on foreign currency denominated monetary assets and liabilities. The duration of our foreign currency forward contracts is less than 12 months. We do not enter into any derivatives for trading or speculative purposes.

~~Our foreign currency forward contract liabilities and assets are classified within Level 2 in the three-level valuation hierarchy. The fair value of these contracts were not material.~~ During the ~~three and~~ ~~nine~~three months ended ~~October 31,~~April 30, 2021 and 2020, we recorded a ~~gain o~~lo~~f $0.2~~ss of $0.3 million and ~~a loss of $0.8~~$0.5 million, respectively, in other ~~income (expense),~~expense, net within our condensed consolidated statements of operations and isare reported as part of other adjustments to reconcile net loss to net cash provided by operating activities in the condensed consolidated statements of cash flows. As of ~~October~~April 30, 2021 and January 31, ~~2020,~~2021, we had outstanding foreign currency forward contracts not designated as hedges with a total notional value of ~~$13.7 million.~~$20.5 million and $18.7 million, respectively.

7. Balance Sheet Components

Property and Equipment, Net

The cost and accumulated depreciation ~~and amortization~~ of property and equipment are as follows (in thousands):


		As of					As of
		October 31, 2020		January 31, 2020			April 30, 2021		January 31, 2021

Computer equipment and software	Computer equipment and software	$	24,313	$	22,489	Computer equipment and software	$	26,253	$	24,974
Office furniture and equipment	Office furniture and equipment	13,636		12,672		Office furniture and equipment	13,195		13,352
Leasehold improvements	Leasehold improvements	26,680		24,236		Leasehold improvements	24,224		24,719

Property and equipment, gross	Property and equipment, gross	64,629		59,397		Property and equipment, gross	63,672		63,045
Less: accumulated depreciation and amortization		(44,382)		(37,409)
Less: accumulated depreciation						Less: accumulated depreciation	(46,202)		(44,980)
Property and equipment, net	Property and equipment, net	$	20,247	$	21,988	Property and equipment, net	$	17,470	$	18,065

Depreciation ~~and amortization~~ expense was ~~$2.3~~$2.0 million and $2.9 million for the three months ended ~~October 31,~~April 30, 2021 and 2020, ~~and 2019, respectively, and~~ ~~$7.9 million~~ ~~and~~ ~~$9.0 million for the~~ ~~nine months ended October 31, 2020 and 2019,~~ respectively.

~~Intangible Assets~~

~~Intangible assets consisted of the following as of October 31, 2020 (in thousands):~~

Gross Fair
Value Accumulated
Amortization Net Book
Value Weighted Average
Remaining Useful Life
(in years)
Developed technology $ 22,770 $ (13,762) $ 9,008 3.4
Customer relationships and other acquired intangible assets 671,947 (130,645) 541,302 8.2
Unbilled contracts 18,300 (16,775) 1,525 0.2
Total $ 713,017 $ (161,182) $ 551,835 8.1

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~~Intangible assets consisted of the following as of January 31, 2020 (in thousands):~~

Gross Fair
Value Accumulated
Amortization Net Book
Value Weighted Average
Remaining Useful Life
(in years)
Developed technology $ 17,570 $ (11,321) $ 6,249 2.0
Customer relationships and other acquired intangible assets 671,447 (80,847) 590,600 8.9
Unbilled contracts 18,300 (9,913) 8,387 0.9
Total $ 707,317 $ (102,081) $ 605,236 8.7

~~Amortization expense for intangible assets was~~ ~~$19.7 million~~ ~~and~~ ~~$20.0 million~~ ~~for the three months ended October 31, 2020 and 2019, respectively, and~~ ~~$59.1 million~~ ~~and~~ ~~$60.1 million for the~~ ~~nine months ended October 31, 2020 and 2019, respectively.~~

~~The expected future amortization expense of these intangible assets as of October 31, 2020 is as follows (in thousands):~~


~~Remaining three months of fiscal 2021~~	$	~~19,205~~
~~fiscal 2022~~	~~70,239~~
~~fiscal 2023~~	~~67,887~~
~~fiscal 2024~~	~~67,376~~
~~fiscal 2025~~	~~67,286~~
~~fiscal 2026 and thereafter~~	~~259,842~~
~~Total amortization expense~~	$	~~551,835~~

~~Goodwill~~

~~The following table represents the changes to goodwill (in thousands):~~


~~Balance at January 31, 2020~~	$	~~590,361~~
~~Eventador acquisition~~	~~8,930~~
~~Balance at October 31, 2020~~	$	~~599,291~~

Accrued Compensation

Accrued compensation consists of the following (in thousands):


		As of					As of
		October 31, 2020		January 31, 2020			April 30, 2021		January 31, 2021
Accrued salaries, benefits and commissions	Accrued salaries, benefits and commissions	$	19,671	$	27,067	Accrued salaries, benefits and commissions	$	18,099	$	22,538
Accrued bonuses	Accrued bonuses	12,271		13,409		Accrued bonuses	13,078		14,956
Accrued compensation-related taxes	Accrued compensation-related taxes	11,930		15,205		Accrued compensation-related taxes	10,825		10,834
Employee stock purchase plan withholdings	Employee stock purchase plan withholdings	6,840		2,732		Employee stock purchase plan withholdings	6,877		2,634
Other(1)	Other(1)	5,317		3,413		Other(1)	3,472		5,681
Total accrued compensation	Total accrued compensation	$	56,029	$	61,826	Total accrued compensation	$	52,351	$	56,643

(1) Other consists primarily of amounts owed for employment~~severance-related~~-related benefits.

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Other Accrued Liabilities

Other accrued liabilities consist of the following (in thousands):


		As of					As of
		October 31, 2020		January 31, 2020			April 30, 2021		January 31, 2021
Accrued professional costs	Accrued professional costs	$	4,323	$	6,182	Accrued professional costs	$	6,782	$	3,790
Current portion of debt						Current portion of debt	3,613		3,610
Accrued taxes	Accrued taxes	4,236		5,164		Accrued taxes	3,823		5,596

Accrued self-insurance costs	Accrued self-insurance costs	4,425		1,743		Accrued self-insurance costs	4,862		4,720
Acquisition related holdback payments (1)	Acquisition related holdback payments (1)	3,075		0		Acquisition related holdback payments (1)	2,660		3,368
Other (2)	Other (2)	6,843		9,208		Other (2)	10,691		9,112
Total other accrued liabilities	Total other accrued liabilities	$	22,902	$	22,297	Total other accrued liabilities	$	32,431	$	30,196

(1) Business combination related payments held by Cloudera for indemnification purposes.

(2) Other relates primarily to amounts owed to third-party vendors that provide marketing, ~~corporate event planning,~~ cloud-computing services and travel costs.

8. Debt

On December 22, 2020, we entered into a senior secured credit agreement (the “Credit Agreement”). The Credit Agreement provides for a seven years senior secured institutional term loan "B" for an aggregate principal amount of $500.0 million (the "Term Loan"). The Term Loan amortizes at a per annum rate equal to 1.0% payable quarterly, with the balance payable at maturity on December 22, 2027. The proceeds of the Term Loan will be used for general corporate purposes, including to fund repurchases of our common stock and to pay transaction costs and expenses in connection therewith.

At our option, the Term Loan will bear interest at a per annum rate equal to a Eurocurrency Rate plus 2.50% or a Base Rate plus 1.50%, both subject to a 3.25% floor. As of April 30, 2021, the Term Loan is bearing interest at a per annum rate of 3.25%. During three months ended April 30, 2021, we recognized interest expense of $4.1 million.

The Credit Agreement contains usual and customary representations and warranties, optional and mandatory prepayment provisions, and affirmative and negative covenants, including limitations on liens, investments, restricted payments, additional indebtedness, transactions with affiliates and asset sales and mergers. The Credit Agreement does not contain any financial covenants. Our obligations under the Credit Agreement may be accelerated upon customary events of default, including non-payment of principal, interest, fees and other amounts, inaccuracy of representations and warranties, violation of covenants, cross default and cross acceleration to material third party indebtedness, voluntary and involuntary bankruptcy or insolvency proceedings, inability to pay debts as they become due, material judgments, ERISA events, actual or asserted invalidity of security documents or guarantees and change in control.

We incurred debt discount and issuance costs of approximately $9.5 million in connection with obtaining our Term Loan. These debt discount and issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the contractual term of the arrangement. Amortization of debt discount and issuance costs during the three months ended April 30, 2021 was immaterial.

As of April 30, 2021, the Term Loan had a carrying value of $489.8 million, of which $3.6 million is classified as current and recorded in other accrued liabilities and $486.2 million is classified as non-current on the condensed consolidated balance sheet.

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As of April 30, 2021, the expected future principal payments under the Term Loan are due as follows (in thousands):


Remaining nine months of fiscal 2022	$	3,750
2023	5,000
2024	5,000
2025	5,000
2026	5,000
2027 and thereafter	475,000
Total	$	498,750

9.Leases

We have entered into various non-cancelable operating lease agreements for our facilities. Our leases have various expiration dates ~~through~~through September 2031. Many leases include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement.

Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease term is determined to be the non-cancelable period including any lessee renewal options which are considered to be reasonably certain of exercise. The interest rate implicit in the lease contracts is typically not readily determinable. As such, we utilized the appropriate incremental borrowing rate based on information available at the commencement date, which is the rate incurred to borrow on a collateralized basis over a similar term in a similar economic environment.

Components of lease expense are summarized as follows (in thousands):


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019			2021		2020
Operating lease cost	Operating lease cost	$	11,516	$	10,999	$	34,208	$	33,897	Operating lease cost	$	11,051	$	11,301
Short-term lease cost	Short-term lease cost	457		600		1,416		1,799		Short-term lease cost	327		479
Sublease income	Sublease income	(3,606)		(3,893)		(11,133)		(11,816)		Sublease income	(3,579)		(3,922)
Net lease cost	Net lease cost	$	8,367	$	7,706	$	24,491	$	23,880	Net lease cost	$	7,799	$	7,858

Lease term and discount rate information are summarized as follows:


		As of					As of
		October 31, 2020		January 31, 2020			April 30, 2021		January 31, 2021
Weighted Average Remaining Lease Term (years)	Weighted Average Remaining Lease Term (years)	6.2		6.8		Weighted Average Remaining Lease Term (years)	5.9		6.1
Weighted Average Discount Rate	Weighted Average Discount Rate	5.9	%	6.0	%	Weighted Average Discount Rate	5.9	%	5.9	%

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Maturities of lease liabilities as of ~~October 31, 2020~~April 30, 2021 are as follows (in thousands):


	Minimum Lease Payments, Gross
Remaining ~~three~~nine months of fiscal ~~2021~~2022	$	~~7,176~~
~~fiscal 2022~~	~~42,090~~19,572
fiscal 2023	~~37,914~~38,599
fiscal 2024	~~37,764~~38,054
fiscal 2025	~~36,921~~36,679
fiscal 2026	32,883
fiscal 2027 and thereafter	~~88,272~~52,823
Total lease payments	$	~~250,137~~218,610
Less imputed interest	~~(44,471)~~(36,704)
Present value of lease liabilities	$	~~205,666~~181,906

We expect to receive sublease rental proceeds of $8.5 million in the next nine months of fiscal 2022 and $28.5 million thereafter.

There were no material lease related right-of-use asset impairment losses in the three months ended April 30, 2021 or 2020.

9.10. Commitments and Contingencies

Letters of Credit

As of ~~October 31, 2020~~April 30, 2021 and January 31, ~~2020,~~2021, we had a total of ~~$19.7~~$19.1 million and ~~$19.9~~$19.4 million, respectively, in letters of credit outstanding in favor of certain landlords for office space. These letters of credit renew annually and expire at various dates through 2027.

Legal Proceedings

On June 7, 2019, a purported class action complaint was filed in the United States District Court for the Northern District of California, entitled Christie v. Cloudera, Inc., et al.al., Case No. 5:19-cv-3221-LHK. The complaint named as defendants Cloudera, its former Chief Executive Officer, its Chief Financial Officer and a former officer and director, asserting alleged class claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (Exchange Act) and SEC Rule 10b-5. Two substantially similar class action complaints, entitled Zarantonello v. Cloudera, Inc., et al.al., Case No. 5:19-cv-4007-LHK, and Dvornic v. Cloudera, Inc., et al.al., Case No. 5:19-cv-4310-LHK, were subsequently filed against the same defendants in the same court on July 12, 2019 and July 26, 2019, respectively. The suits have been consolidated under the name, In re Cloudera, Inc. Securities Litigation, Case No. 5:19-cv-3221-LHK. The court subsequently appointed lead plaintiffs and lead counsel, and a consolidated complaint was filed on February 14, 2020. On March 18, 2020, the court vacated its prior order appointing lead plaintiffs and lead counsel and reopened the lead plaintiff process. On July 27, 2020, the court appointed new lead plaintiffs and lead counsel. On September 22, 2020, lead plaintiffs filed a consolidated amended complaint. The consolidated amended complaint ~~asserts~~asserted claims against Cloudera and 4 individual defendants under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, based on allegedly false and misleading statements between April 28, 2017 and June 5, 2019. The consolidated amended complaint also ~~asserts~~asserted claims against Cloudera, Intel Corporation, and 14 current and former officers and directors under the Securities Act of 1933, on behalf of all persons who acquired Cloudera stock pursuant or traceable to the S-4 registration statement filed in connection with Cloudera’s January 2019 merger with Hortonworks, and ~~alleges~~alleged that the registration statement contained untrue statements of material fact and omitted material facts. On ~~October 16, 2020,~~April 2, 2021, the Court denied a motion filed by 2 additional plaintiffs ~~filed a motion to intervene~~ seeking permission to file an additional class action complaint alleging claims under the Securities Act of 1933. ~~The court has not yet ruled on that motion.~~ On ~~October 27, 2020, Cloudera filed a motion~~May 25, 2021, the Court granted defendants’ motions to dismiss the consolidated amended complaint with leave to amend. Plaintiffs have until June 24, 2021 to file an amended complaint. ~~Cloudera believes that the allegations in the lawsuits are without merit.~~

On June 7, 2019, a purported class action complaint was filed in the Superior Court of California, County of Santa Clara, entitled Lazard v. Cloudera, Inc., et al., Case No. 19CV348674. The complaint named as defendants Cloudera, 13 individuals who are current or former directors or officers of Cloudera, and Intel Corporation. ~~The complaint alleged that the registration statement contained untrue statements of material fact and omitted material facts.~~ Two substantially similar suits, entitled Franchi v. Cloudera, Inc., et al., Case No. 19CV348790, and Cannizzo v. Cloudera, Inc., et al., Case No.

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19CV348974, were subsequently filed in the same court on June 11, 2019 and June 14, 2019, respectively. The suits have been consolidated under the name In re Cloudera, Inc. Securities Litigation, Lead Case No. 19CV348674 and the consolidated amended complaint purports to assert claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 on

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behalf of all persons who acquired Cloudera stock pursuant or traceable to the S-4 registration statement filed in connection with Cloudera’s January 2019 merger with ~~Hortonworks, and~~Hortonworks. The consolidated amended complaint alleges that the registration statement contained untrue statements of material fact and omitted material facts. Plaintiffs seek, among other things, an award of damages and attorneys’ fees and costs. On July 1, 2020, the court overruled Cloudera's demurrer to the consolidated amended complaint. On August 18, 2020, a purported shareholder class action captioned Stahl v. Cloudera, Inc., et al., Case No. 20CV369480 was filed in the Superior Court of California, County of Santa Clara, and was subsequently consolidated into the lead case. On November 5, 2020, the court entered a stipulated order certifying a class consisting of all persons who acquired Cloudera common stock in exchange for Hortonworks securities pursuant to the registration statement and prospectus issued in connection with Cloudera’s January 2019 merger and acquisition of Hortonworks. A further case management conference is currently scheduled for June 9, 2021. Cloudera believes that the allegations in the lawsuits are without merit.

On July 30, 2019, a purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware, entitled Lee, et al. v. Cole, et al., Case No. 1:19-cv-01422-LPS. The complaint names as defendants 11 individuals who are current or former directors or officers of Cloudera, names Cloudera as a nominal defendant, and purports to assert claims on Cloudera’s behalf against the individual defendants for breach of fiduciary duty, unjust enrichment, and alleged violation of Sections 10(b) and 20(a) of the Exchange Act. On September 5, 2019, a purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware, entitled Slattery v. Reilly, et al., Case No. 1:19-cv-01662-LPS. The complaint names as defendants 13 individuals who are current or former directors or officers of Cloudera, names Cloudera as a nominal defendant, and purports to assert claims on Cloudera’s behalf against the individual defendants for breach of fiduciary duty, unjust enrichment, and alleged violations of Section 10(b), 14 and 20(a) of the Exchange Act. On October 16, 2019, a purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware, entitled Frentzel v. Bearden, et al., Case No. 1:19-cv-01962-LPS. The complaint names as defendants 13 individuals who are current or former directors or officers of Cloudera, and names Cloudera as a nominal ~~defendant, and~~defendant. The complaint purports to assert claims on Cloudera’s behalf against the individual defendants for breach of fiduciary duty, alleged violations of Section 14 of the Exchange Act, insider selling and misappropriation of information. All 3 derivative actions are based on allegations that are substantially similar to those in the class actions filed in the United States District Court for the Northern District of California, described above. All 3 derivative actions seek, among other things, an award of damages on behalf of Cloudera, corporate governance reforms and attorneys’ fees and costs. The Slattery and Frentzel actions additionally seek disgorgement on behalf of Cloudera. The suits have been consolidated under the name, In re Cloudera, Inc. Stockholder Derivative Litigation, Case No. 1:19-cv-01422-LPS. A consolidated amended complaint has not yet been ~~filed.~~filed and the case is currently stayed.

On September 3, 2019, a purported shareholder derivative complaint was filed in the United States District Court for the Northern District of California, entitled Chen v. Reilly, et al., Case No. 5:19-cv-05536-LHK. That complaint names as defendants 13 individuals who are current or former directors or officers of Cloudera, names Cloudera as a nominal defendant, and purports to assert claims on Cloudera’s behalf against the individual defendants for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and alleged violation of Section 14(a) of the Exchange Act. On September 10, 2019, a purported shareholder derivative complaint that is substantially similar to the Chen action and is brought against the same defendants, was filed in the United States District Court for the Northern District of California, entitled Fu v. Reilly, et al., Case No. 5:19-cv-05705-LHK. Both derivative actions are based on allegations that are substantially similar to those in the class actions filed in the United States District Court for the Northern District of California, described above. Both derivative actions seek, among other things, an award of damages on behalf of Cloudera, corporate governance reforms and attorneys’ fees and costs. The suits have been consolidated under the name, In re Cloudera, Inc. Derivative Litigation, Case No. 5:19-cv-05536-LHK. A consolidated amended complaint has not yet been filed, and the case is currently stayed.

In the ordinary course of business, we are or may be involved in a variety of litigation matters, suits, investigations, and proceedings, including actions with respect to intellectual property claims, government investigations, labor and employment claims, breach of contract claims, tax, and other matters. Regardless of the outcome, these litigation matters can have an adverse impact on us because of defense costs, diversion of management resources, harm to reputation, and other factors. Future litigation may be necessary to defend ourselves, or our customers or partners on indemnity matters, by determining the scope, enforceability and validity of third-party proprietary rights or by establishing our proprietary rights. Further, the ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on us because of defense costs, potential negative publicity, diversion of management resources and other factors. While we are not

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aware of other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our business, consolidated financial position, results of operations or cash flows, our analysis of whether a claim may proceed to litigation cannot be predicted with certainty, nor can the results of litigation be predicted with certainty. Accordingly, there can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows in a particular period or subject us to an injunction that could seriously harm our business.

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We record a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to our outstanding legal matters, our management believes that the amount or estimable range of possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us for amounts in excess of management’s expectations, our results of operations and financial condition including in a particular reporting period, could be materially adversely affected.

Indemnification

From time to time, we enter into certain types of contracts that contingently require us to indemnify various parties against claims from third parties. These contracts primarily relate to (i) certain real estate leases under which we may be required to indemnify property owners for environmental and other liabilities and other claims arising from our use of the applicable premises, (ii) our amended and restated bylaws, under which we must indemnify directors and executive officers, and may indemnify other officers and employees, for liabilities arising out of their relationship with us, (iii) contracts under which we must indemnify directors and certain officers for liabilities arising out of their relationship with us, (iv) contracts under which we may be required to indemnify customers or partners against certain claims, including claims from third parties asserting, among other things, infringement of their intellectual property rights, and (v) procurement, consulting, or license agreements under which we may be required to indemnify vendors, consultants or licensors for certain claims, including claims that may be brought against them arising from our acts or omissions with respect to the supplied products, technology or services. From time to time, we may receive indemnification claims under these contracts in the normal course of business. In addition, under these contracts we may have to modify the accused infringing intellectual property and/or refund amounts received.

In the event that one or more of these matters were to result in a claim against us, an adverse outcome, including a judgment or settlement, may cause a material adverse effect on our future business, operating results or financial condition. It is not possible to determine the maximum potential amount under these contracts due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and certain officers.

To date, we have not incurred any material costs, and have not accrued any material liabilities inin the condensed consolidated financial statements as a result of these provisions.

~~10.~~11. Common Stock Repurchases

~~On March 3, 2020, our~~Our board of directors have authorized a share ~~repurchase program~~repurchases of up to $600.0 million ~~$100.0 million~~of our outstanding shares of common ~~stock. Share repurchases~~stock. For the three months ended April 30, 2021, we used $18.9 million to repurchase 1.5 million shares of common stock at an average repurchase price of $12.29 per share under the repurchase program. For the three months ended April 30, 2020, we used $26.0 million to repurchase 3.9 million shares of common stock at an average repurchase price of $6.56 per share under the repurchase program. As of April 30, 2021, there was approximately $240.9 million of authorized funds remaining under the repurchase programs.

Under the share repurchase programs, shares may be ~~made~~repurchased through open market purchases, block trades and/or privately negotiated transactions in compliance with Rule 10b-18 promulgated under the Exchange Act, subject to market conditions, applicable legal requirements, and other relevant factors. Repurchases may also be made under Rule 10b5-1 plans, which permit shares of common stock to be repurchased through pre-determined criteria. The timing, volume and nature of ~~the~~any repurchases will be at the discretion of our management based on their evaluation of our capital needs, market conditions, applicable legal requirements and other factors. The ~~program does~~programs do not have an expiration date and it may be suspended or discontinued at any ~~time. For the nine months ended October 31, 2020, we used $26.0 million~~time and do not obligate us to repurchase ~~3.9 million shares of common stock at an average repurchase price of $6.56 per share u~~nder the repurchase program. As of October 31, 2020, there was approximately $74.0 million of authorized funds remaining under the repurchase program. NaN shares were repurchased during the three months ended October 31, 2020.

~~On December 2, 2020, our board of directors authorized the repurchase of up to an additional $500 million of our outstanding shares of common stock as discussed in~~ ~~Note 16~~ ~~of our Notes to Condensed Consolidated Financial Statements.~~any shares.

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~~11.~~Pursuant to the Merger Agreement (see Note 17 for details), our share purchase programs are suspended.

12. Stock-Based Compensation

We maintain 2 stock-based compensation plans: the 2017 Equity Incentive Plan (2017 Plan) and the 2008 Equity Incentive Plan (2008 Plan), collectively referred to as the Stock Plans. We do not expect to grant any additional awards under the 2008 Plan. Outstanding awards under the 2008 Plan continue to be subject to the terms and conditions of the 2008 Plan.

The number of shares reserved for issuance under our 2017 Plan increases automatically on the first day of February of each calendar year during the term of the 2017 Plan by a number of shares of common stock equal to the lesser of (i) 5% of the total outstanding shares of our common stock as of the immediately preceding January 31 or (ii) a number of shares determined by our board of directors. On February 1, ~~2020,~~2021, the number of shares reserved for issuance under the 2017 Plan increased automatically by ~~14,758,388~~14,561,036 additional shares. As of ~~October 31, 2020,~~April 30, 2021, there were ~~23,523,822~~24,594,562 shares of common stock reserved and available for future issuance under the Stock Plans.

On June 1, 2021, we entered into a definitive agreement to be acquired by affiliates of CD&R and KKR. See Note 17 for details of the merger and description of resulting changes to our equity award programs.

Stock Options

Stock options granted generally have a maximum term of ten years from the grant date, are exercisable upon vesting unless otherwise designated for early exercise by the board of directors at the time of grant, and generally vest over a period of ~~three~~ ~~to four years, with 25% vesting after one year and then ratably on a monthly basis for the remaining~~ ~~two~~ ~~to three years.~~

The following table summarizes stock option activity and related information under the Stock Plans:


		Options Outstanding							Options Outstanding
		Number of Shares (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)			Number of Shares (in thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Balance — January 31, 2020		13,530	$	5.96	2.1	$	70,057

Balance — January 31, 2021								Balance — January 31, 2021	3,383	$	9.27	3.0	$	21,982
Exercised	Exercised	(7,961)	3.31		—	—		Exercised	(370)	6.07		—	—
Canceled	Canceled	(874)	14.10		—	—		Canceled	(76)	16.44		—	—
Balance — October 31, 2020		4,695	8.94		3.2	13,052
Balance — April 30, 2021								Balance — April 30, 2021	2,937	9.49		2.9	12,919

~~The unamortized stock-based compensation expense for stock options was immaterial as of October 31, 2020.~~

Restricted Stock Units

~~We issue restricted stock units~~ (RSUs) to employees and directors under the Stock Plans. For new employee grants, the RSUs generally meet the service-based condition over a four-year period, with 25% met after one year and then ratably on a quarterly basis for the remaining three years. For continuing employee grants, the RSUs generally meet the service-based condition pro-rata quarterly over a period of three years to four years.

The following table summarizes ~~RSU~~RSUs activity and related information under the Stock Plans:


		Restricted Stock Units Outstanding				RSUs Outstanding
		Number of RSUs (in thousands)	Weighted-Average Grant Date Fair Value Per Share			Number of Shares (in thousands)	Weighted-Average Grant Date Fair Value Per Share
Balance — January 31, 2020		38,584	$	10.85
Balance — January 31, 2021					Balance — January 31, 2021	34,764	$	11.91
Granted	Granted	10,392	9.60		Granted	4,508	16.34
Canceled	Canceled	(5,396)	11.39		Canceled	(1,584)	11.94
Vested and converted to shares	Vested and converted to shares	(16,035)	9.95		Vested and converted to shares	(4,448)	11.99
Balance — October 31, 2020		27,545	10.80
Balance — April 30, 2021					Balance — April 30, 2021	33,240	$	12.50

The unamortized stock-based compensation expense for RSUs of ~~$266.0~~$381.1 million as of ~~October 31, 2020~~April 30, 2021 will be recognized over the weighted average remaining vesting period of ~~2.1~~2.2 years.

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Performance Restricted Stock Units (PRSUs)

In February 2021, our Compensation Committee authorized the granting of PRSUs to certain executive officers under the 2017 Plan. One twelfth of the PRSUs shall vest and be settled on each quarterly anniversary date following the vesting commencement date. The PRSUs will vest based on Cloudera's achievement of certain performance goals during the performance period commencing on February 1, 2021 and ending on January 31, 2024. Upon achievement of performance goals, up to 1/6th of the PRSUs shall vest each half fiscal year subject to the executive’s continued service to Cloudera on the last day of the applicable half fiscal year. The number of PRSUs that will ultimately vest and be converted into shares of common stock will depend on Cloudera’s: (i) EBITDA excluding stock-based compensation; and (ii) Revenue.

During the three months ended April 30, 2021, 2.2 million shares of PRSUs were granted at a weighted average grant date fair value of $17.29 per share. All shares were outstanding at April 30, 2021. The unamortized stock-based compensation expense for PRSUs of $35.9 million as of April 30, 2021 will be recognized over the weighted average remaining vesting period of 1.5 years.

Employee Stock Purchase Plan

In March 2017, we adopted our 2017 Employee Stock Purchase Plan (ESPP). Each offering period consists of a six-month purchase period (commencing each June 21 and December 21).

We initially reserved 3,000,000 shares of our common stock for issuance under our ESPP. The number of shares reserved for issuance under our ESPP increases automatically on February 1 of each of the first 10 calendar years following the first offering date by the number of shares equal to the lesser of (i) 1% of the total outstanding shares of our common stock as of the immediately preceding January 31 (rounded to the nearest whole share) or (ii) a number of shares of our common stock determined by our board of directors. On February 1, ~~2020,~~2021, the number of shares reserved for issuance under the ESPP increased automatically by ~~2,951,677~~2,912,207 additional shares. As of ~~October 31, 2020,~~April 30, 2021, the total number shares available for grant under the ESPP was ~~5,057,542~~7,256,365 shares.

As part of the planned merger discussed in Note 17, our ESPP will be suspended after our current offering period ending June 21, 2021.

1213. Income Taxes

Our quarterly income taxes reflect an estimate of our corresponding year’s annual effective tax rate and include, when applicable, adjustments for discrete items. For the three months ended ~~October 31,~~April 30, 2021 and 2020, ~~and 2019, our tax provision was $1.4 million and $2.4 million, respectively. For the nine months ended October 31, 2020 and 2019,~~ our tax provision was ~~$5.3~~$2.5 million and ~~$6.5~~$2.0 million, respectively. Our tax provision for the three ~~and nine~~ months ended ~~October 31, 2020~~April 30, 2021 was primarily ~~attributable~~related to foreign income and withholding taxes.

In June 2019, the Ninth Circuit Court of Appeals issued a new opinion in the case of Altera Corp. v. Commissioner, which upheld Department of Treasury regulations which require related parties in an intercompany cost-sharing arrangement to share expenses related to stock-based compensation. In February 2020, Altera Corp. filed a petition to appeal the decision with the Supreme Court of the United States. In June 2020, the Supreme Court denied the petition. ~~We have reviewed this decision and determined no adjustment is required to our condensed consolidated financial statements as a result of this development.~~

~~13.~~14. Related Party Transactions

Certain members of our board of directors currently serve on the board of directors or as an executive officer of certain companies that are our customers. The aggregate revenue we recognized from these customers was ~~$2.2~~$1.6 million and ~~$2.0~~$1.9 million for the three months ended ~~October 31,~~April 30, 2021 and 2020, ~~and 2019, respectively, and $6.2 million and $14.2 million for the nine months ended October 31, 2020 and 2019,~~ respectively. There was ~~$2.8~~$0.8 million and ~~$1.2~~$2.2 million in accounts receivable due from these customers as of ~~October 31, 2020~~April 30, 2021 and January 31, ~~2020,~~2021, respectively.

~~14.~~15. Segment Information

The results of the reportable segments are derived directly from our management reporting system and are based on our methods of internal reporting which are not necessarily in conformity with GAAP. Our management measures the performance of each segment based on several metrics, including contribution margin, as defined below. Our management does not use asset information to assess performance and make decisions regarding allocation of resources. Therefore, depreciation and amortization expense is not allocated among segments.

Contribution margin is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Segment contribution margin includes segment revenue less the related cost of sales excluding certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level. These unallocated costs include stock-based compensation expense, amortization of acquired intangible assets, impairment of real estate lease

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related assets, direct sales and marketing costs, research and development costs, corporate general and administrative costs, such as legal and accounting, interest income, interest expense, and other income and expense.

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Financial information for each reportable segment was as follows (in thousands):


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019			2021		2020
Revenue:	Revenue:									Revenue:
Subscription	Subscription	$	197,355	$	166,932	$	575,962	$	485,872	Subscription	$	200,656	$	187,085
Services	Services	20,544		31,360		66,733		96,599		Services	23,627		23,375
Total revenue	Total revenue	$	217,899	$	198,292	$	642,695	$	582,471	Total revenue	$	224,283	$	210,460


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019			2021		2020
Contribution margin:	Contribution margin:									Contribution margin:
Subscription	Subscription	$	178,640	$	143,775	$	514,517	$	417,908	Subscription	$	182,379	$	165,520
Services	Services	6,112		8,576		11,977		22,320		Services	6,796		1,757
Total segment contribution margin	Total segment contribution margin	$	184,752	$	152,351	$	526,494	$	440,228	Total segment contribution margin	$	189,175	$	167,277

The reconciliation of segment financial information to our loss from operations is as follows (in thousands):


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019			2021		2020
Segment contribution margin	Segment contribution margin	$	184,752	$	152,351	$	526,494	$	440,228	Segment contribution margin	$	189,175	$	167,277
Amortization of acquired intangible assets	Amortization of acquired intangible assets	(19,749)		(20,025)		(59,101)		(60,122)		Amortization of acquired intangible assets	(17,651)		(19,676)
Stock-based compensation expense	Stock-based compensation expense	(41,856)		(54,214)		(141,911)		(164,818)		Stock-based compensation expense	(58,624)		(53,438)

Corporate costs, such as research and development, corporate general and administrative and other	Corporate costs, such as research and development, corporate general and administrative and other	(135,476)		(160,579)		(430,152)		(490,605)		Corporate costs, such as research and development, corporate general and administrative and other	(146,652)		(149,970)
Loss from operations	Loss from operations	$	(12,329)	$	(82,467)	$	(104,670)	$	(275,317)	Loss from operations	$	(33,752)	$	(55,807)

Sales outside of the United States represented approximately ~~40%~~43% and ~~39%~~40% of our total revenue for the three months ended ~~October 31,~~April 30, 2021 and 2020, ~~and 2019, respectively, and 40% and 38% for the nine months ended October 31, 2020 and 2019, respectively.~~ respectively. No in ~~individual~~dividual foreign country represented more than 10% of revenue in any period presented. All revenues from external customers are attributed to individual countries on an end-customer basis, based on domicile of the purchasing entity, if known, or the location of the customer’s headquarters if the specific purchasing entity within the customer is unknown.

As of ~~October 31, 2020~~April 30, 2021 and January 31, ~~2020,~~2021, property and equipment, net located outside of the United States represented approximately ~~27%~~29% and ~~22%~~31% of total property and equipment, net, respectively.

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~~15.~~16. Net Loss Per Share

The following table sets forth the calculation of basic and diluted net loss per share during the periods presented (in thousands, except per share data):


		Three Months Ended October 31,				Nine Months Ended October 31,					Three Months Ended April 30,
		2020		2019		2020		2019				2021		2020
Numerator:	Numerator:									Numerator:
Net loss	Net loss	$	(13,945)	$	(82,122)	$	(107,956)	$	(272,295)	Net loss		$	(40,401)	$	(58,014)
Denominator:	Denominator:									Denominator:
Weighted-average shares used in computing net loss, per share basic and diluted	Weighted-average shares used in computing net loss, per share basic and diluted	311,009		283,267		302,185		277,260		Weighted-average shares used in computing net loss, per share basic and diluted		292,535		295,293
Net loss per share, basic and diluted	Net loss per share, basic and diluted	$	(0.04)	$	(0.29)	$	(0.36)	$	(0.98)	Net loss per share, basic and diluted		$	(0.14)	$	(0.20)

The following outstanding shares of common stock equivalents were excluded from the computation of the diluted net loss per share attributable to common stockholders for the periods presented because their effect would have been anti-dilutive (in thousands):


		As of October 31,			As of April 30,
		2020	2019		2021	2020

Stock options to purchase common stock	Stock options to purchase common stock	4,695	14,502	Stock options to purchase common stock	2,937	13,125
Restricted stock units		27,545	33,330
Restricted stock awards				Restricted stock awards	35,476	36,595
Shares issuable pursuant to the ESPP	Shares issuable pursuant to the ESPP	731	2,620	Shares issuable pursuant to the ESPP	723	909
Total	Total	32,971	50,452	Total	39,136	50,629

~~16.~~17. Subsequent Events

Business Combinations

On ~~December 2, 2020,~~June 1, 2021, we entered into definitive agreements to acquire 100% of the outstanding shares of Datacoral Inc. and Cazena Inc. for cash consideration. Datacoral delivers fast and easy data transformations and integrations for any type of data via a robust multi-tenant SaaS architecture. Cazena delivers instant cloud data lakes, making it easier to operate and use CDP Public Cloud. The acquisitions are expected to close during our second quarter of fiscal 2022, subject to customary closing conditions.

Agreement and Plan of Merger

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”), and as a result of the Merger:

•each share of our common stock, par value $0.00005 per share (“Common Stock”) outstanding immediately prior to the Effective Time (subject to certain exceptions, including for shares of Common Stock owned by stockholders who have not voted in favor of the adoption of the Merger Agreement and have properly exercised appraisal rights in accordance with Section 262 of the General Corporation Law of the State of Delaware) will, at the Effective Time, automatically be converted into the right to receive $16.00 in cash (the “Merger Consideration”), subject to applicable withholding taxes;

•each then-outstanding, vested and unexercised option to purchase Common Stock (each a “Company Option”) shall be cancelled, with the holder of such Company Option becoming entitled to receive, in full satisfaction of the rights of such holder with respect thereto, an amount in cash, less applicable tax withholdings, equal to the product obtained by multiplying (i) the excess of the Merger Consideration over the per share exercise price of such

Company Option, by (ii) the number of shares of Common Stock covered by such Company Option immediately prior to the Effective Time;

•each award of restricted stock units granted under any of our equity incentive plans (“Company Restricted Stock Unit Award”) that is outstanding immediately prior to the Effective Time and that vests upon the occurrence of the Effective Time by its terms and without any action by us shall be cancelled, with the holder of such Company Restricted Stock Unit Award becoming entitled to receive, in full satisfaction of the rights of such holder with respect thereto, an amount in cash, less applicable tax withholdings, equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the number of shares of Common Stock covered by such Company Restricted Stock Unit Award immediately prior to the Effective Time; and

•each Company Restricted Stock Unit Award and each performance-based restricted stock unit (“Company Performance Stock Unit Award”), in each case, that is outstanding immediately prior to the Effective Time and that does not vest upon the occurrence of the Effective Time by its terms and without any action by us shall, in each case, be cancelled and be converted into the contractual right to receive a payment in an amount in cash (the “Cash Based Award”) equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the number of shares of Company common stock covered by such Company Restricted Stock Unit Award or Company Performance Stock Unit Award immediately prior to the Effective Time (in the case of any Company Performance Stock Unit Award, based on 100% of the shares of Common Stock underlying such award), which Cash Based Award shall be subject to the terms and conditions applicable to such Cash Based Award (except as otherwise provided in the Merger Agreement), including the time-based vesting conditions and any accelerated vesting provisions applicable to such Company Restricted Stock Unit Award or Company Performance Stock Unit Award.

Our board of directors has ~~authorized~~unanimously approved and declared to be in the ~~repurchase~~best interest of upthe company and its stockholders, the Merger Agreement and the transactions contemplated thereby, including the Merger, and resolved to recommend that our stockholders adopt the Merger Agreement.

The total consideration for the Merger is approximately $5.3 billion. Closing of the deal is subject to customary closing conditions, including the approval of Cloudera shareholders and antitrust approval. Assuming the satisfaction of the conditions set forth in the Merger Agreement, we expect the Merger to close in the second half of 2021.

The Merger Agreement contains certain termination rights for both the Company and Parent. If the Merger Agreement is terminated in connection with Cloudera entering into an ~~additional $500 million~~alternative acquisition agreement in respect of ~~our outstanding shares of common stock, through open market purchases, block trades and/or in privately negotiated transactions, pursuant~~a Superior Proposal entered into during the “go-shop” period, the termination fee payable by Cloudera to ~~Rule 10b5-1 plans, or other repurchase mechanisms, in compliance with applicable securities laws and other legal requirements. The timing, volume and nature of any repurchases~~Parent will be ~~determined by our management based on their evaluation~~approximately $92.5 million. Upon termination of the ~~capital needs~~Merger Agreement under specified circumstances, including with respect to Cloudera’s entry into an agreement with respect to a Superior Proposal other than described in the preceding sentence, the board of directors of Cloudera changing its recommendation or if Cloudera breaches its representations, warranties or covenants in a manner that would cause the related closing conditions to not be met, Cloudera will be required to pay Parent a termination fee of approximately $171.7 million.

In addition to the foregoing termination rights, and subject to certain limitations, Cloudera or Parent may terminate the Merger Agreement if the Merger is not consummated by March 1, 2022 (the “Termination Date”).

The forgoing description of the business, market conditions, applicable legal requirements and other factors. No time limit was set for the completion of the repurchase program, the program may be suspended or discontinued at any time and the programMerger Agreement does not ~~obligate Cloudera~~purport to ~~purchase any shares. The amount of shares Cloudera has been authorized~~be complete and is qualified in its entirety by reference to ~~repurchase may be increased or decreased at any time by~~the Merger Agreement, which was filed as Exhibit 2.1 to our board of directors. The repurchase program is conditioned upon the closing of an institutional term loan. Cloudera currently expects to fund the repurchase program using proceeds from this term loan, and/or with our existing cash or cash generated from operations.Current Report on Form 8-K filed on June 1, 2021.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. This ~~Quarterly Report on Form 10-Q~~report contains “forward-looking statements” w~~ithin~~within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that ~~could~~might cause or contribute to such differences include, but are not limited to, those ~~identified herein, including the impact of the current COVID-19 pandemic on our business and future financial performance, and those~~ discussed inunder the section ~~titled~~ “Risk ~~Factors,” set forth~~Factors” in Part ~~II,~~I, Item 1A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 25, 2021 and in this Quarterly Report on Form 10-Q. You should carefully review the risks described in our Annual Report filed with the SEC on March 25, 2021, in this Quarterly Report on Form 10-Q, and in ~~our~~ other ~~SEC filings.~~documents we file from time to time with the SEC. You should review the risk factors for a more complete understanding of the risks associated with an investment in our securities. We disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. Our fiscal year end is January 31, and references throughout this ~~Quarterly Report on Form 10-Q~~report to a given fiscal year are to the twelve months ended on that date.

Overview

At Cloudera, we believe that data can make what is impossible today, possible tomorrow. We empower people to transform complex data into clear and actionable insights. Powered by the relentless innovation of the open source community, we advance digital transformation for the world’s largest enterprises. We deliver ~~a modern~~an enterprise data ~~platform to manage and secure the~~cloud for any data, ~~lifecycle~~anywhere, from the Edge to ~~AI, spanning any cloud or data center.~~AI. We are an enterprise data cloud company.

We pioneered the creation of the enterprise data cloud category. An enterprise data cloud is multi-function, hybrid and multi-cloud, secure and governed, and open and extensible. An enterprise data cloud offers cloud-native agility, elasticity and ease-of-use.

We generate revenue from subscriptions and services. Please see “Components of Results of Operations - Revenue” for further details.

We market and sell our platform to a broad range of organizations, although we focus our selling efforts on the largest enterprises globally. We target these organizations because they capture and manage the vast majority of the world’s data and operate in highly complex information technology environments. We market our platform primarily through a direct sales force while benefiting from business driven by our ecosystem of technology partners, resellers, original equipment manufacturers (OEMs), managed service providers, independent software vendors and systems integrators.

We have a broad customer base that spans industries and geographies. For the three ~~and nine~~ months ended ~~October 31,~~April 30, 2021 and 2020 ~~and 2019~~, no ~~cust~~customer ~~omer~~ accounted for more than 10% of our total revenue. We have significant revenue in the industries of banking and financial services, manufacturing, technology, business services, telecommunications, public sector, consumer and retail, and healthcare and life sciences verticals, and continue to ~~expand~~expand our penetration across many other data-intensive industries. Sales outside of the United States represented approximately ~~40%~~43% and ~~39%~~40% of our total revenue for the three months ended ~~October 31,~~April 30, 2021 and 2020, ~~and 2019, respectively, and 40% and 38% for the nine months ended October 31, 2020 and 2019,~~ respectively.

Our business model is based on a “land and expand” strategy designed to use the initial sale as a foothold to increase revenue per customer by increasing the amount of data and number of use cases each customer runs through our platform. After an initial purchase of our platform, we work with our customers to identify new use cases that can be developed on or moved to our platform, ultimately increasing the amount of data managed on our platform as well as the number and size of our platform deployments.

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Agreement and Plan of Merger

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), we believe the following non-GAAP financial measures are useful in evaluating our operating performance.

Annualized Recurring Revenue (ARR) is the primary metric that management uses to monitor customer retention and growth and to make operational decisions related to our business. ARR equals the annualized value of all recurring subscription contracts with active entitlements as of the end of the applicable period. ARR provides a normalized and

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composite view of customer retention, renewal and expansion as well as growth from new customers, that is a supplement to reported revenue.

As of Change
October 31, 2020 October 31, 2019 Amount %
(in thousands, except percentages)
Annualized Recurring Revenue $ 755,568 $ 674,896 $ 80,672 12 %


	As of				Change
	April 30, 2021		April 30, 2020		Amount		%
	(in thousands, except percentages)
Annualized Recurring Revenue	$	805,336	$	720,692	$	84,644	12	%

Approximately 98 percentage points of the 12% increase in ARR was due to existing customers expanding their use of Cloudera ~~products.~~products with the remainder of the increase due to new customers.

Non-GAAP operating income is our income from operations before stock-based compensation expense, amortization of acquired intangible assets and non-cash real estate impairment charges. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measure, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, operating results or future outlook. Our management uses, and believes that investors benefit from referring to, this non-GAAP financial measure in evaluating our operating results, as well as when planning, forecasting, budgeting and analyzing future periods. We also use non-GAAP operating income in conjunction with traditional GAAP measures to communicate with our board of directors regarding our financial performance.


	Three Months Ended April 30,				Change
	2021		2020		Amount		%

	(in thousands, except percentages)

Non-GAAP operating income	$	42,523	$	17,307	$	25,216	146	%

We believe non-GAAP operating income provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period to period comparisons of operations. We believe non-GAAP operating income is useful in evaluating our operating performance compared to that of other companies in our industry as this metric generally eliminates the effects of certain items that may vary for different companies for reasons unrelated to overall operating performance. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish this or similar metrics. Thus, our non-GAAP operating income should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing investors and other users of our financial information a reconciliation of loss from operations, the related GAAP financial measure, to non-GAAP operating income. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view non-GAAP operating income in conjunction with loss from operations. The following table provides a reconciliation of loss from operations to non-GAAP operating income:

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	Three Months Ended April 30,				Change
	2021		2020		Amount		%

	(in thousands, except percentages)
Loss from operations	$	(33,752)	$	(55,807)	$	22,055	(40)	%
Stock-based compensation expense	58,624		53,438		5,186		10
Amortization of acquired intangible assets	17,651		19,676		(2,025)		(10)

Non-GAAP operating income	$	42,523	$	17,307	$	25,216	146	%

For the reasons set forth below, we believe that excluding the components described provides useful information to investors and others in understanding and evaluating our operating results and future prospects in the same manner as we do and in comparing our financial results across accounting periods and to financial results of peer companies.

•Stock-based compensation expense. We exclude stock-based compensation expense from our non-GAAP financial measures consistent with how we evaluate our operating results and prepare our operating plans, forecasts and budgets. Further, when considering the impact of equity award grants, we focus on overall stockholder dilution rather than the accounting charges associated with such equity grants. The exclusion of the expense facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long-term performance of our business.

•Amortization of acquired intangible assets. We exclude the amortization of acquired intangible assets from our non-GAAP financial measures. Although the purchase accounting for an acquisition necessarily reflects the accounting value assigned to intangible assets, our management team excludes the GAAP impact of acquired intangible assets when evaluating our operating results. Likewise, our management team excludes amortization of acquired intangible assets from our operating plans, forecasts and budgets. The exclusion of the expense facilitates the comparison of results and business outlook for future periods with results for prior periods in order to better understand the long-term performance of our business.

COVID-19 Update

The United States and the global communities in which we operate ~~are facing a~~continue to face severe ~~challenge~~challenges posed by the COVID-19 Coronavirus pandemic (COVID-19 or COVID-19 pandemic). In response to ~~this challenge~~these challenges, we ~~like many companies,~~ have ~~implemented~~accelerated our transformation efforts and ~~continue to focus on cost reduction initiatives in all aspects of our business,~~reduced costs, including, but not limited to, reduced travel for employees, decreases in employee-related expenses, minimizing use of outside contractors and consultants, temporary closure of our offices and, since mid-March 2020, a requirement that our employees work remotely. We have been operating effectively under our remote work model, which we anticipate continuing for some time to ensure the safety and well-being of our employees.

We do not believe there has been a material impact from the effects of the COVID-19 pandemic on our business and operations, results of operations, financial condition, cash flows, liquidity and capital resources as of and during the three ~~and nine~~ months ended ~~October 31, 2020.~~April 30, 2021.

The full extent of the future impact of the COVID-19 pandemic on our business and operating results is currently uncertain and will depend on certain developments, including the duration and spread of the outbreak; government responses to the pandemic; the speed of vaccination delivery and effectiveness; the impact on our customers and our sales cycles; the impact on our customer, the industry or employee events; the extent of delays in hiring and onboarding new employees; and the effect on our partners and vendors, all of which are uncertain and difficult to predict. We anticipate ~~some~~continued near-term impact on our services business since interacting directly with customers in either a sales setting or an on-site professional services setting is difficult in this environment. However, the majority of our revenues are subscription-based which we believe offers significant protection from the COVID-19 pandemic’s economic disruptions in the short term. Accordingly, we believe that our existing financial position will allow us to manage the impact of the COVID-19 pandemic for the foreseeable future.

Components of Results of Operations

Revenue

We generate revenue from subscriptions and services. Subscription revenue relates to term (or time-based) subscription agreements for both open source and propriety software, including support. Subscription arrangements are typically one to

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three years in length but may be up to seven years in limited cases. Arrangements with our customers typically do not include general rights of return. Services revenue relates to professional services for the implementation and use of our subscriptions, machine learning expertise and consultation, training and education services and related reimbursable travel costs. We price our subscription offerings based on the number of servers in a cluster, or nodes, core or edge devices, data under management and/or the scope of support provided. Our consulting services are priced primarily on a time and materials basis, and to a lesser extent, a fixed fee basis, and education services are generally priced based on attendance.

Cost of Revenue

Cost of revenue for subscriptions primarily consists of personnel costs including salaries, bonuses, travel costs, benefits and stock-based compensation for employees providing technical support for our subscription customers, allocated shared costs (including rent and information technology) and amortization of certain acquired intangible assets from business combinations. Cost of revenue for services primarily consists of personnel costs including salaries, bonuses, benefits and stock-based compensation, fees to subcontractors associated with service contracts, travel costs and allocated shared costs (including rent and information technology).

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Operating Expenses

Research and Development. Research and development expenses primarily consist of personnel costs including salaries, bonuses, travel costs, benefits and stock-based compensation for our research and development employees, contractor fees, allocated shared costs (including rent and information technology), supplies, and depreciation of equipment associated with the continued development of our platform prior to establishment of technological feasibility and the related maintenance of the existing ~~technology.~~technology

Sales and Marketing. Sales and marketing expenses primarily consist of personnel costs including salaries, bonuses, travel costs, sales-based incentives, benefits and stock-based compensation for our sales and marketing employees. In addition, sales and marketing expenses also include costs for advertising, promotional events, corporate communications, product marketing and other brand-building activities, allocated shared costs (including rent and information technology) and amortization of certain acquired intangible assets from business combinations. Most sales-based incentives are capitalized and expensed over the period of benefit from the underlying contracts.

General and Administrative. General and administrative expenses primarily consist of personnel costs including salaries, bonuses, travel costs, benefits and stock-based compensation for our executive, finance, legal, human resources, information technology and other administrative employees. In addition, general and administrative expenses include fees for third-party professional services, including consulting, legal and accounting services, ~~merger related costs,~~ other corporate expenses, and allocated shared costs (including rent and information technology).

Interest (Expense) Income, net

Interest income primarily relates to amounts earned on our cash and cash equivalents and marketable securities. Interest expense primarily relates to interest incurred on our debt and related amortization of debt discount and issuance costs.

Other ~~Income (Expense),~~Expense, net

Other ~~income (expense),~~expense, net primarily relates to gains and losses from foreign currency transactions and forward contracts, realized gains and losses on our ~~foreign currency forward contracts,~~ marketable securities and other non-operating gains or losses.

Provision for Income Taxes

Provision for income taxes primarily consists of withholding taxes on sales to international customers and income taxes ~~for certain~~in foreign jurisdictions ~~in which~~wherein we conduct business. A valuation allowance is established, when necessary, for any portion of deferred income tax assets where it is considered more likely than not that itsuch deferred tax assets will not be realized.

Results of Operations

Revenue

Our total revenues for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2021 and 2020 ~~and 2019~~ were as follows:

Three Months Ended October 31, Change Nine Months Ended October 31, Change
2020 2019 Amount % 2020 2019 Amount %
(in thousands, except percentages)
Subscription $ 197,355 $ 166,932 $ 30,423 18 % $ 575,962 $ 485,872 $ 90,090 19 %
Services 20,544 31,360 (10,816) (34) % 66,733 96,599 (29,866) (31) %
Total revenue $ 217,899 $ 198,292 $ 19,607 10 % $ 642,695 $ 582,471 $ 60,224 10 %
As a percentage of total revenue:
Subscription 91 % 84 % 90 % 83 %
Services 9 % 16 % 10 % 17 %
Total revenue 100 % 100 % 100 % 100 %

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	Three Months Ended April 30,	Change
		2021			2020			Amount		%
		(in thousands, except percentages)
Subscription		$	200,656		$	187,085		$	13,571	7	%
Services		23,627			23,375			252		1	%
Total revenue		$	224,283		$	210,460		$	13,823	7	%
As a percentage of total revenue:
Subscription		89		%	89		%
Services		11		%	11		%
Total revenue		100		%	100		%

The increase in subscription revenue for the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same ~~periods~~period in the prior fiscal year, was primarily attributable to an increase in subscription sales to existing customers and the remainder driven by new customers, with international customers expanding faster than our U.S. customers.

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T~~he decrease in services~~Services revenue for the three ~~and nine~~ months ended ~~October 31, 2020, as~~April 30, 2021 was relatively flat compared to the same ~~periods~~period in the prior fiscal ~~year, was attributable~~year. Both periods were negatively impacted by COVID-19, due to lower services demand partially as a result of COVID-19 related customer budget restrictions as well as COVID-19 related limitations for on-site service delivery.

Cost of Revenue, Gross Profit and Gross Margin


		Three Months Ended October 31,						Change				Nine Months Ended October 31,						Change					Three Months Ended April 30,	Change
		2020			2019			Amount		%		2020			2019			Amount		%				2021			2020			Amount		%
		(in thousands, except percentages)																						(in thousands, except percentages)
Cost of revenue:	Cost of revenue:																					Cost of revenue:
Subscription	Subscription	$	25,243		$	30,224		$	(4,981)	(16)	%	$	81,808		$	88,636		$	(6,828)	(8)	%	Subscription		$	23,592		$	28,636		$	(5,044)	(18)	%
Services	Services	16,804			27,404			(10,600)		(39)	%	64,119			87,355			(23,236)		(27)	%	Services		19,526			25,605			(6,079)		(24)	%
Total cost of revenue	Total cost of revenue	$	42,047		$	57,628		$	(15,581)	(27)	%	$	145,927		$	175,991		$	(30,064)	(17)	%	Total cost of revenue		$	43,118		$	54,241		$	(11,123)	(21)	%
Gross profit	Gross profit	$	175,852		$	140,664		$	35,188	25	%	$	496,768		$	406,480		$	90,288	22	%	Gross profit		$	181,165		$	156,219		$	24,946	16	%
Gross margin:	Gross margin:																					Gross margin:
Subscription	Subscription	87		%	82		%					86		%	82		%					Subscription		88		%	85		%
Services	Services	18		%	13		%					4		%	10		%					Services		17		%	(10)		%
Total gross margin	Total gross margin	81		%	71		%					77		%	70		%					Total gross margin		81		%	74		%
Cost of revenue, as a percentage of total revenue:	Cost of revenue, as a percentage of total revenue:																					Cost of revenue, as a percentage of total revenue:
Subscription	Subscription	11		%	15		%					13		%	15		%					Subscription		10		%	14		%
Services	Services	8		%	14		%					10		%	15		%					Services		9		%	12		%
Total cost of revenue	Total cost of revenue	19		%	29		%					23		%	30		%					Total cost of revenue		19		%	26		%

The decrease in subscription cost of revenue for the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same ~~periods~~period in the prior fiscal year, was primarily due to a $2.1 million reduction in acquired intangible asset amortization expense, as a result of acquired developed technologies that are now fully amortized. The remainder is mainly attributable to lower payroll costs and facility allocations as an increased portion of our support resources are now employed outside of the United ~~States resulting in~~ ~~a decrease of~~ ~~$4.0 mi~~llion and $6.1 million, respectively, in payroll and payroll related costs including reductions to salaries, stock-based compensation, retention bonuses, and travel. Facility costs also decreased by $1.1 million and $2.2 million, respectively, due mainly to lower office lease allocations. These costs were partially offset by increased amortization of acquired intangible assets.States.

The decrease in services cost of revenue for the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same ~~periods~~period in the prior fiscal year, was primarily due to a decrease of ~~$8.2~~$3.9 million in payroll and ~~$17.2 million, respectively, mainly from lower headcount resulting in reductions to salary~~payroll related costs including salaries, stock-based compensation, ~~travel, retention bonuses~~payroll taxes and ~~IT allocations,~~benefits as a result of decreased headcount and a decrease of ~~$1.8~~$1.9 million ~~and $4.7 million, respectively,~~ in ~~third party contractor services.~~travel cost.

Subscription gross margin increased for the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same ~~periods~~period in the prior fiscal year, due to growth in the business and improved margin as a result of reduced ~~costs, and one-time valuation adjustments made in prior fiscal year related to deferred subscription revenue obligations from our merger with Hortonworks.~~costs.

Services gross margin increased for the three months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same period in the prior fiscal year, primarily due to a ~~decrease~~24% reduction in ~~services revenue by 34% while~~ cost of services revenue decreased by 39%. Services gross margin decreased for the nine months ended October 31, 2020, as compared to the same period in the prior fiscal year, primarily due to a decrease in services revenue by 31% while the cost of services revenue decreased by 27%.revenue.

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Operating Expenses


		Three Months Ended October 31,						Change				Nine Months Ended October 31,						Change					Three Months Ended April 30,	Change
		2020			2019			Amount		%		2020			2019			Amount		%				2021			2020			Amount		%
		(in thousands, except percentages)																						(in thousands, except percentages)
Research and development	Research and development	$	56,306		$	66,657		$	(10,351)	(16)	%	$	182,826		$	196,572		$	(13,746)	(7)	%	Research and development		$	65,825		$	64,216		$	1,609	3	%
Sales and marketing	Sales and marketing	97,952			117,783			(19,831)		(17)	%	316,847			349,657			(32,810)		(9)	%	Sales and marketing		107,828			113,135			(5,307)		(5)	%
General and administrative	General and administrative	33,923			38,691			(4,768)		(12)	%	101,765			135,568			(33,803)		(25)	%	General and administrative		41,264			34,675			6,589		19	%
Total operating expenses	Total operating expenses	$	188,181		$	223,131		$	(34,950)	(16)	%	$	601,438		$	681,797		$	(80,359)	(12)	%	Total operating expenses		$	214,917		$	212,026		$	2,891	1	%
Operating expenses, as a percentage of total revenue:	Operating expenses, as a percentage of total revenue:																					Operating expenses, as a percentage of total revenue:
Research and development	Research and development	26		%	34		%					29		%	34		%					Research and development		29		%	31		%
Sales and marketing	Sales and marketing	45		%	59		%					49		%	60		%					Sales and marketing		48		%	54		%
General and administrative	General and administrative	15		%	20		%					16		%	23		%					General and administrative		19		%	16		%
Total operating expenses	Total operating expenses	86		%	113		%					94		%	117		%					Total operating expenses		96		%	101		%

Research and Development

The ~~decrease~~increase in research and development expenses for the ~~three and~~ ~~nine months ended October 31, 2020, as compared to the same periods in the prior fiscal year, was primarily due to reductions to~~ payroll and payroll related costs, cloud computing, and facility allocations. Payroll and payroll related costs decreased by $4.8 million and $4.4 million, respectively, mainly from reductions in stock-based compensation, retention bonuses, and travel expenses. Cloud computing costs decreased by $2.1 million and $3.8 million, respectively and facility allocations were down $2.7 million and $2.6 million, respectively.

~~Sales and Marketing~~

~~The decrease in sales and marketing expenses for the three and~~ ~~nine months ended October 31, 2020~~, as compared to the same periods in the prior fiscal year, was primarily due to reduced cost related to travel, marketing programs and events, stock-based compensation expense, and lower headcount. Travel cost declined by $4.3 million and $14.3 million, respectively, of which a majority is due to COVID-19 related travel restrictions. Cost related to marketing programs and events declined by $4.0 million and $10.7 million, respectively, due partially to synergies from our merger with Hortonworks enabling us to combine and eliminate certain programs and events. Stock-based compensation decreased by $5.6 million and $4.5 million, respectively. Payroll and payroll related costs, excluding variable compensation, decreased due to reduced headcount. These reductions were partially offset by increased variable compensation from one-time valuation adjustments made in the prior fiscal year related to deferred commission expenses from our merger with Hortonworks.

~~General and Administrative~~

~~The decrease in general and administrative expenses for the~~ three months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same period in the prior fiscal year, was primarily due to ~~reduced cost~~an increase of $3.7 million in payroll and payroll related ~~to consulting~~costs including salaries and ~~contractor services,~~stock-based compensation as a result of increased headcount, partially offset by ~~increased~~a decrease of $2.3 million in facility ~~related costs. Consulting~~allocations.

Sales and contractor services were down $8.2 million mainly driven by higher cost related to post-merger activities in prior fiscal year. Facility costs increased by $3.3 million due mainly to higher office lease allocations.Marketing

The decrease in ~~general~~sales and ~~administrative~~marketing expenses for the ~~nine~~three months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same period in the prior fiscal year, was primarily due to ~~reduced~~a reduction of $4.7 million in travel costs, ~~related to consulting and contractor services and~~a reduction of $3.8 million in payroll and payroll related costs, ~~mainly from reduced stock-based compensation. Consulting and contractor services were~~

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~~down $21.2~~$1.0 million ~~mainly driven by higher cost related to post-merger activities~~ in prior fiscal year. Payroll and payroll related costs declined $17.0 million with stock-based compensation representing $10.7 million, retention bonuses $3.8 million and travel $1.7 million of the decline. Stock-based compensation was down primarily due to charges incurred with the departure of our former CEO in the second quarter of fiscal 2020. These reductions werefacility allocations, partially offset by ~~facility costs, which increased $4.4~~an increase of $5.0 million ~~due mainly to higher office lease allocations.~~

~~Interest Income~~

Three Months Ended October 31, Change Nine Months Ended October 31, Change
2020 2019 Amount % 2020 2019 Amount %
(in thousands, except percentages)
Interest income $ 1,201 $ 2,756 $ (1,555) (56) % $ 4,886 $ 9,203 $ (4,317) (47) %

~~Interest income for the three and nine months ended October 31, 2020, as compared to the same periods~~ in ~~the prior fiscal year, decreased mainly due~~ ~~to a decline in interest rates, increased funds held as cash and cash equivalents due to greater market volatility, and the decline in weighted average maturities as we re-invested in securities with shorter maturities during fiscal 2021.~~marketing costs.

~~Other Income (Expense), Net~~

Three Months Ended October 31, Change Nine Months Ended October 31, Change
2020 2019 Amount % 2020 2019 Amount %
(in thousands, except percentages)
Other income (expense), net $ (1,398) $ (46) $ (1,352) NM $ (2,915) $ 291 $ (3,206) NM

~~(NM = Not meaningful)~~General and Administrative

The increase in ~~other expense, net~~general and administrative expenses for the three months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same period in the prior fiscal year, was primarily due to higher stock-based compensation, facilities and professional services expenses. Stock-based compensation expense increased by $4.7 million primarily from equity awards granted during the first quarter of fiscal year 2022. Facilities expense increased by $4.0 million primarily due to the absorption of COVID-19 related vacated real estate in general and administrative expenses beginning mid-fiscal 2021. Legal related professional services increased by $2.8 million primarily related to on-going legal proceeding services. These increases were partially offset by a $2.5 million reduction to bad debt expense and a $1.1 million ~~loss on the disposal of facility lease~~reduction in severance related ~~fixed assets.~~costs.

~~Other~~Interest (Expense) Income, net


	Three Months Ended April 30,	Change
		2021		2020		Amount		%
		(in thousands, except percentages)
Interest (expense) income, net		$	(3,483)	$	2,241	$	(5,724)	(255)	%

Interest expense, net ~~of $2.9 million for the nine months ended October 31, 2020, as~~ compared to ~~other~~interest income, net ~~of $0.3 million during~~in the same period in the prior fiscal year, ~~was primarily~~is mainly due to interest expense of $4.1 million incurred on our December 2020 term loan which were not incurred in the comparable period and a lower yield on our marketable securities from a decline in interest rates.

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Other Expense, Net


	Three Months Ended April 30,	Change
		2021		2020		Amount		%
		(in thousands, except percentages)
Other expense, net		$	(700)	$	(2,497)	$	1,797	(72)	%

Other expense, net decreased as compared to the same period in the prior fiscal year, mainly due to a $2.0 million impairment charge incurred in the first quarter of fiscal 2021 to write off our investment in equity securities of a privately held ~~company and a $1.1 million loss on the disposal of facility lease related fixed assets.~~company.

Provision for Income Taxes

Three Months Ended October 31, Change Nine Months Ended October 31, Change
2020 2019 Amount % 2020 2019 Amount %
(in thousands, except percentages)
Provision for income taxes $ (1,419) $ (2,365) $ 946 (40) % $ (5,257) $ (6,472) $ 1,215 (19) %


	Three Months Ended April 30,	Change
		2021		2020		Amount		%
		(in thousands, except percentages)
Provision for income taxes		$	(2,466)	$	(1,951)	$	(515)	26	%

The ~~decrease~~increase in provision for income taxes for the three ~~and nine~~ months ended ~~October 31, 2020,~~April 30, 2021, as compared to the same ~~periods~~period in the prior fiscal year, was primarily due to ~~lower~~ increased foreign ~~income taxes.~~withholding taxes on international sales.

Seasonality

We have seasonal and end-of-quarter concentration of our sales, which impacts our ability to plan and manage cash flows and margins. Our sales vary by season with the fourth quarter typically being our strongest sales quarter, and the first quarter typically being our largest collections and operating cash flow quarter. In addition, within each quarter, most sales occur in the last month of that quarter.

~~See “Risk Factors—Our sales cycles can be long, unpredictable and vary seasonally, particularly with respect to large subscriptions, and our sales efforts require considerable time and expense.”~~

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Liquidity and Capital Resources

As of ~~October 31, 2020,~~April 30, 2021, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling ~~$564.1~~$899.1 million which were held for working capital purposes. Our cash equivalents are comprised primarily of money market funds and our marketable securities are comprised of ~~asset-backed securities,~~ corporate notes and obligations, U.S. agency obligations, certificates of deposit, commercial paper, municipal securities ~~certificates of deposit~~ and U.S. treasury securities. ~~Our~~To date, our principal ~~source~~sources of ~~cash~~ liquidity ishas been payments ~~we receive~~received from customers ~~for~~in addition to amounts raised as a result of our ~~subscriptions~~December 2020 term loan and ~~services.~~our equity offerings.

On ~~March 3,~~December 22, 2020, we entered into a senior secured credit facility, which provides for a $500 million term loan facility with a syndicate of lenders (Term Loan) and borrowed the full amount on December 22, 2020 to be used for general corporate purposes, including to fund repurchases of our common stock and to pay transaction costs and expenses in connection therewith. Repayments made under the Term Loan are equal to 1.0% of the principal amount in equal quarterly installments for the life of the Term Loan, with the remainder due at maturity on December 22, 2027. At our option, the Term Loan will bear interest at a per annum rate equal to a Eurocurrency Rate plus 2.50% or a Base Rate plus 1.50%, both subject to a 3.25% floor. For further discussion, see Note 8 in the "Notes to Condensed Consolidated Financial Statements” included in this report.

Our board of directors have authorized a share ~~repurchase program~~repurchases of up to ~~$100~~$600 million of our outstanding shares of common stock. Share repurchases may be made through open market purchases, block trades and/or privately negotiated transactions in compliance with Rule 10b-18 promulgated under the Exchange Act, subject to market conditions, applicable legal requirements, and other relevant factors. Repurchases may also be made under Rule 10b5-1 plans, which permit shares of common stock to be repurchased through pre-determined criteria. The timing, volume and nature of the repurchases will be at the discretion of our management basedFor further discussion on ~~their evaluation of our capital needs, market conditions, applicable legal requirements and other factors. The program does not have an expiration date, and it may be suspended or discontinued at any time.~~ ~~For the nine months ended October 31, 2020, we used $26.0 million to~~ repurchase 3.9 million shares of common stock at an average repurchase price of $6.56 per share under the repurchase program. As of October 31, 2020, there was approximately $74.0 million of authorized funds remaining under the repurchase program. No shares were repurchased during the three months ended October 31, 2020.

~~On December 2, 2020, our board of directors authorized the repurchase of up to an additional $500 million of our outstanding shares of our common stock as discussed in~~activity, see Note 16 11 ~~of our “Notes~~in the "Notes to Condensed Consolidated Financial Statements” included in ~~Part I, Item 1 of~~ this ~~Quarterly Report on Form 10-Q.~~report.

We have non-cancelable contractual obligations related to our facilities leases as further discussed in Note 9 in the "Notes to Condensed Consolidated Financial Statements” included in this report.

We believe that our currently available resources will be sufficient to meet our cash requirements for at least the next twelve months. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including ~~the COVID-19 pandemic,~~ our ~~net~~ expansion ~~rate,~~of annual recurring revenue, the timing and extent of spending on research and development efforts, the expansion of sales and marketing activities, the continuing market acceptance of our subscriptions and services and ongoing investments to support the growth of our business. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies and intellectual property rights. From time to time, we may explore additional financing sources which could include equity, equity-linked and debt financing arrangements. We cannot ~~be assured~~

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assure you that any additional financing will be available on terms favorable to us, or at all. If adequate funds are not available on acceptable terms, or at all, we may not be able to adequately fund our business plans ~~and it~~which could have a negative effect on our operating cash flows and financial condition.

The following table summarizes our cash flows for the periods indicated:

Nine Months Ended October 31,
2020 2019
(in thousands)
Net cash provided by (used in) operating activities $ 119,170 $ (27,410)
Net cash used in investing activities (112,871) (15,114)
Net cash used in financing activities (17,418) (1,452)
Effect of exchange rate changes (405) (1,508)
Net decrease in cash, cash equivalents and restricted cash $ (11,524) $ (45,484)


	Three Months Ended April 30,
	2021		2020
	(in thousands)
Net cash provided by operating activities	$	162,210	$	68,357
Net cash (used in) provided by investing activities	(259,834)		20,904
Net cash used in financing activities	(31,762)		(35,014)
Effect of exchange rate changes	(185)		(960)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(129,571)	$	53,287

Cash Provided by ~~(Used in)~~ Operating Activities

Our largest source of operating cash flows is cash collections from our customers following the purchase and renewal of their subscription agreements. Payments from customers for these subscription agreements are generally received near the

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beginning of the annual contract period. We also generate cash from the sales of our services offerings. Our primary uses of cash from operating activities are for employee related expenditures and leased facilities.

Operating cash flow increased during the ~~nine~~three months ended ~~October 31, 2020~~April 30, 2021 mainly due to cash collections on increased sales of our subscription-based ~~offerings and lower nonrecurring costs incurred in the first half of fiscal 2020 associated with combining the Cloudera and Hortonworks businesses.~~offerings.

For the ~~nine~~three months ended ~~October 31, 2020,~~April 30, 2021, net cash provided by operating activities mainly consisted of our net loss of ~~$108.0~~$40.4 million, adjusted for stock-based compensation expense of ~~$141.9~~$58.6 million, depreciation and amortization ~~expenses~~expense of ~~$67.0~~$19.6 million, amortization of deferred contract costs of ~~$50.8~~$16.6 million, non-cash lease expense of ~~$34.2~~$11.1 million, and net cash ~~outflow~~inflow of ~~$75.1~~$95.5 million from changes in assets and liabilities. The ~~outflow~~inflow from changes in assets and liabilities was primarily due to a decrease in ~~deferred revenue~~accounts receivable of ~~$84.9 million, an increase of~~ ~~$36.0 million~~ ~~in deferred costs related to sales commissions, cash payments of~~ ~~$24.7 million~~ ~~for operating lease liabilities,~~ ~~a net cash outflow of $5.6~~$185.5 million from ~~changes in other operating assets and liabilities,~~ strong collections, partially offset by a decrease in ~~accounts receivable~~contract liabilities of ~~$76.1~~$59.2 million, cash payments of $10.6 million for operating lease liabilities, an increase of $8.8 million in deferred contract costs related to sales commissions, and a net cash outflow of $11.5 million from ~~strong collections~~.changes in all other operating assets and liabilities.

For the ~~nine~~three months ended ~~October 31, 2019,~~April 30, 2020, net cash used in operating activities mainly consisted of our net loss of ~~$272.3~~$58.0 million, adjusted for stock-based compensation expense of ~~$164.8~~$53.4 million, depreciation and amortization ~~expenses~~expense of ~~$69.1~~$22.6 million, amortization of deferred contract costs of $16.6 million, non-cash lease expense of ~~$33.9 million, amortization of deferred costs of $33.6~~$11.3 million, and net cash outflow of ~~$54.6~~$18.9 million from changes in assets and liabilities. The ~~outflow~~inflow from changes in assets and liabilities was due to a decrease in ~~deferred revenue~~accounts receivable of ~~$62.1~~$81.8 million, partially offset by a decrease in contract liabilities of $39.3 million, an increase of $10.6 million in deferred contract costs ~~of $37.2 million,~~related to sales commissions, cash payments of ~~$27.9~~$2.5 million for operating lease liabilities, and a net cash outflow of ~~$6.4~~$10.5 million from changes in all other operating assets and ~~liabilities, partially offset by a decrease in accounts receivable of $79.0 million.~~liabilities.

Cash ~~Used in~~(Used in) Provided by Investing Activities

The changes in cash flows from investing activities primarily relate to the timing of our purchases, maturities and sales of our investments in marketable securities, ~~cash acquired or used for business combinations,~~ and investments in capital and other assets to support our growth.

For the ~~nine~~three months ended ~~October 31, 2020,~~April 30, 2021, net cash used in investing activities consisted of purchases of marketable securities of ~~$395.2 million, cash used in a business combination of $12.4~~$382.0 million, and capital expenditures for the purchases of property and equipment of ~~$7.3~~$1.6 million, partially offset by sales and maturities of marketable securities of ~~$302.0~~$123.8 million.

For the ~~nine~~three months ended ~~October 31, 2019,~~April 30, 2020, net cash ~~used in~~provided by investing activities consisted of sales and maturities of marketable securities of $102.9 million, partially offset by purchases of marketable securities of ~~$392.5~~$80.9 million and capital expenditures for the purchases of property and equipment of ~~$6.5 million, and $4.5 million used for a business combination, partially offset by sales and maturities of marketable securities of $388.4~~$1.1 million.

Cash Used in Financing Activities

The changes in cash flows from financing activities primarily relate to ~~net~~ proceeds from ~~or used for~~ employee stock plans, taxes paid related to net share settlement of equity awards, principal repayment of debt and proceeds used for common stock

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repurchased under our share repurchase ~~program~~programs as further discussed in Note 1011 toof our “Notes to Condensed Consolidated Financial Statements” included in ~~Part I, Item 1 of~~ this ~~Quarterly Report on Form 10-Q.~~report.

For the ~~nine~~three months ended ~~October 31, 2020,~~April 30, 2021, net cash used in financing activities consisted of repurchases of common stock of $18.9 million, taxes paid related to the net share settlement of restricted stock units of ~~$29.6~~$18.1 million, ~~repurchases~~repayment of ~~common stock~~term loan of ~~$26.0~~$1.3 million, partially offset by proceeds from the exercise of stock options and employee stock purchase plan withholding of ~~$38.2~~$6.5 million.

For the ~~nine~~three months ended ~~October 31, 2019,~~April 30, 2020, net cash used in financing activities consisted of repurchases of common stock of $26.0 million, taxes paid related to the net share settlement of restricted stock units of ~~$21.1~~$14.0 million, partially offset by proceeds from the exercise of stock options and employee stock purchase plan withholding of ~~$19.6~~$5.0 million.

~~Off-Balance Sheet Arrangements~~

~~We have not entered into any off-balance sheet arrangements and do not have any holdings in variable interest entities.~~

~~Contractual Obligations and Commitments~~

~~There have been no material changes in our contractual obligations and commitments, as disclosed in the Annual Report on Form 10-K, as amended, for the year ended January 31, 2020. S~~ee ~~Note 8~~ ~~to our “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a table of our minimum lease payments as of October 31, 2020.~~

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Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles ~~(GAAP)~~ in the United ~~States.~~States (GAAP). The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material. We refer to accounting estimates of this type as critical accounting policies and estimates.

~~Due to COVID-19, there has been uncertainty~~We believe that the assumptions, judgments and ~~disruption~~estimates involved in the ~~global economy~~accounting for revenue recognition, business combinations, goodwill and intangible assets and impairment of long-lived assets to have the greatest potential impact on our condensed consolidated financial ~~markets. We~~statements. These areas are ~~not aware~~key components of ~~any specific event or circumstance that would require updates~~our results of operations and are based on complex rules requiring us to make judgments and estimates, and consequently, we consider these to be our critical accounting policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results.

There have been no significant changes in our critical accounting policies and estimates ~~or judgments or require us~~during the three months ended April 30, 2021, as compared to ~~revise~~ the ~~carrying value~~critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our ~~assets or liabilities as of December 4, 2020, the date of filing this Quarterly~~Annual Report on Form ~~10-Q. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.~~10-K for the year ended January 31, 2021.

Recent Accounting Pronouncements

See Note 1 toof our “Notes to Condensed Consolidated Financial Statements” included in ~~Part I, Item 1 of~~ this ~~Quarterly Report on Form 10-Q~~report for recently adopted accounting ~~standards and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.~~standards.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

WeThere have ~~operations both within the United States and internationally, and we are exposed to market risks~~been no material changes in ~~the ordinary course of~~ our ~~business. Our~~ market risk ~~exposure is primarily a result of fluctuations~~exposures for the three months ended April 30, 2021 as compared to those discussed in ~~interest rates and foreign currency exchange rates. Information relating to quantitative and qualitative disclosures about these markets risks is described below.~~

~~Interest Rate Risk~~

Our primary exposure to market risk relates to interest rate changes. We had cash and cash equivalents and marketable securities totaling $564.1 million as of October 31, 2020 and $483.2 million as of January 31, 2020, which were held for working capital purposes. Our cash equivalents are comprised primarily of money market funds and our marketable securities are comprised of asset-backed securities, corporate notes and obligations, commercial paper, municipal securities, certificates of deposit and U.S. treasury securities. Our investments are made for capital preservation purposes. We do not hold or issue financial instruments for trading or speculative purposes. A hypothetical 100 basis point change in interest rates would not have a material impact on the fair value of our investments in marketable securities as of October 31, 2020.

~~Foreign Currency Risk~~

Our revenue and expenses are primarily denominated in U.S. dollars. For our non-U.S. operations, the majority of our revenue and expenses are denominated in currencies such as the Euro, British Pound Sterling, Australian Dollar, Chinese Yuan, Hungarian Forint, Singapore Dollar and Indian Rupee. Fluctuations in international currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into U.S. dollars. As the U.S. dollar fluctuates against certain international currencies, the amounts of revenue and deferred revenue that we report in U.S. dollars for foreign subsidiaries that transact in international currencies may also fluctuate relative to what we would have reported using a constant currency rate.

To manage exposures to currency fluctuations, we entered into foreign currency forward contracts to offset the gains and losses on our foreign currency denominated monetary assets and liabilities beginning in the first quarter of fiscal year 2021. ~~They are intended to offset the foreign currency gains or losses associated with the underlying monetary assets and liabilities. See~~ ~~Note 6~~ ~~in the “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly~~Annual Report on Form ~~10-Q, which is incorporated herein by reference.~~ For the three and nine months ended October 31, 2020, foreign exchange transaction gains and losses recorded as part of other income (expense), net within our condensed consolidated statements of operations wer~~e not material. The effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would not have a material impact on our condensed consolidated financial statements~~10-K for the ~~three and nine months~~fiscal year ended ~~October~~January 31, ~~2020 and 2019.~~2021.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of ~~Disclosure Controls~~disclosure controls and ~~Procedures~~procedures.

~~Our~~We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In accordance with Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and ~~our~~ Chief Financial Officer, ~~has evaluated~~of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), means controls and other procedures of a company that are designed10-Q, were effective to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms at theprovide reasonable assurance level. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as ~~of October 31, 2020, our disclosure controls and procedures were effective.~~

~~Changes in Internal Control over Financial Reporting~~assurance.

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Changes in internal control over financial reporting.

There was no change in our internal control over financial reporting that occurred during the quarter ended ~~October 31, 2020~~April 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting even though most of our employees are working remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the impact of the COVID-19 pandemic on our internal controls to minimize the impact on the operating effectiveness.

Inherent ~~Limitation~~limitation on the ~~Effectiveness of Internal Control~~

~~The~~ effectiveness of ~~any system of~~internal control.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls or procedures or our internal control over financial reporting ~~including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating~~will prevent all errors and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that anyall fraud. A control system, ~~of internal control over financial reporting, including ours,~~ no matter how well ~~designed~~conceived and operated, can provide only ~~provide~~ reasonable, not absolute, assurance that the objectives of ~~achieving~~ the ~~desired~~ control ~~objectives. In addition,~~system are met. Further, the design of ~~disclosure controls and procedures~~a control system must reflect the fact that there are resource constraints, and ~~that management is required to apply its judgment in evaluating~~ the benefits of ~~possible~~ controls ~~and procedures~~must be considered relative to their costs. ~~Moreover, projections~~Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any ~~evaluation~~system of ~~effectiveness to~~controls also is based in part upon certain assumptions about the likelihood of future ~~periods are subject to the risk~~events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or ~~that~~ the degree of compliance with ~~the~~ policies or procedures may deteriorate. ~~We intend~~Because of the inherent limitations in a cost-effective control system, misstatements due to ~~continue to monitor~~error or fraud may occur and ~~upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will~~not be ~~sufficient to provide us with effective internal control over financial reporting.~~detected.

PART II. – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a discussion of legal proceedings, see Note 910 inof the “Notes to Condensed Consolidated Financial Statements” included in ~~Part I, Item 1 of~~ this ~~Quarterly Report on Form 10-Q,~~report, which is incorporated herein by reference.

Further, from time to time, we are a party to or act as an indemnitor to our customers, partners, directors or officers on various litigation matters, and we, our customers, partners, or our directors or officers are subject to claims that arise in the ordinary course of business. In addition, we or our customers or partners have received, and may in the future receive, various types of claims including potential claims from third parties asserting, among other things, infringement of their intellectual property rights.

Future litigation may be necessary to defend ourselves, or our customers or partners on indemnity matters, by determining the scope, enforceability and validity of third-party proprietary rights or by establishing our proprietary rights. Further, the ultimate outcome of any litigation is uncertain and, regardless of outcome, litigation can have an adverse impact on us because of defense costs, potential negative publicity, diversion of management resources and other factors. While we are not aware of other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our business, consolidated financial position, results of operations or cash flows, our analysis of whether a claim may proceed to litigation cannot be predicted with certainty, nor can the results of litigation be predicted with certainty. Accordingly, there can be no assurance that existing or future legal proceedings arising in the ordinary course of business or otherwise will not have a material adverse effect on our business, consolidated financial position, results of operations or cash flows.

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~~ITEM~~ITEM 1A. RISK FACTORS

~~Our operations and financial results are subject to various~~Investing in our securities involves a high degree of risk. You should consider carefully the risks and uncertainties described under the section “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on March 25, 2021 and all of the other information in this Quarterly Report on Form 10-Q, including ~~those described below,~~our condensed consolidated financial statements and related notes, before making an investment decision. The risk factors in our Annual Report are not repeated in this Quarterly Report, unless the underlying risks have materially changed. The section “Risk Factors” in our Annual Report on Form 10-K for the year ended January 31, 2021, which was filed with the SEC on March 25, 2021, identified the risks and uncertainties that ~~could adversely affect~~may have a material adverse effect on our business, financial condition, results of operations, cash flows, growth prospects, ~~and~~ the trading price of our common ~~stock.~~stock, and future prospects. Our business could be harmed by any of these risks or additional risks and uncertainties not currently known to us. Our stock price could decline due to any of these risks, and you may lose all or part of your investment.

Risks Related to the Proposed Merger

The Merger Agreement was unanimously approved by our ~~Business~~board of directors. The description of the Merger Agreement in these Risk Factors does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to our Current Report on Form 8-K filed on June 1, 2021.

We ~~have a history of losses,~~may fail to consummate the Merger, and ~~we may not become profitable in the future.~~

~~We have incurred net losses since our founding in 2008, including net losses of $108.0 million~~ ~~and $336.6 million for the nine months ended October 31, 2020 and the year ended January 31, 2020, respectively, and expect to continue to incur net losses for the foreseeable future. As a result, we had an accumulated deficit~~ ~~of $1.6 billion as of~~ ~~October 31, 2020. These~~ losses and accumulated deficit reflect the substantial investments we made to acquire new customers, commercialize our platform, participate in the open source development community and develop our proprietary software components, and continue to develop our platform. In addition, as a result of our merger with Hortonworks, we have incurred substantial transaction and purchased intangible amortization costs. Furthermore, to the extent we are successful in increasing our customer base, we may also incur increased losses because customer acquisition costs and upfront costs associated with new customers are higher in the first year than the aggregate revenue we recognize from those new customers in the first year.

~~We expect to continue to make significant future expenditures~~uncertainties related to the ~~development and expansion of our business, including:~~

•~~investments in our research and development team and in the development of new solutions and enhancements of our platform, including contributions to the open source data management ecosystem;~~

•~~investments in sales and marketing, including expanding our sales force, increasing our customer base, increasing market awareness of our platform and development of new technologies;~~

•~~expanding of our operations and infrastructure, including internationally;~~

•~~hiring additional employees; and~~

•~~incurring costs associated with general administration, including legal, accounting and other expenses related to being a public company.~~

As a result of these increased expenses, we will have to generate and sustain increased revenue to be profitable in future periods. Further, in future periods, our revenue growth rate could decline, and we may not be able to generate sufficient revenue to offset higher costs and achieve or sustain profitability. If we fail to achieve, sustain or increase profitability, our business and operating results could be adversely affected.

~~If the market for our data management, machine learning and analytics platform develops more slowly than we expect, our growth may slow or stall, and our operating results could be harmed.~~

The market for a data management, machine learning and analytics platform is relatively new, rapidly evolving and unproven. Our future success will depend in large part on our ability to penetrate the existing market for data management, machine learning and analytics platforms, as well as the continued growth and expansion of that market. It is difficult to predict customer adoption and renewals of our subscriptions, customer demand for our platform, the size, growth rate and expansion of this market, the entry of competitive products or the success of existing competitive products. Our ability to penetrate the existing market for data management, machine learning and analytics platforms and any expansion of that market depends on a number of factors, including the cost, performance and perceived value associated with our platform, as well as potential customers’ willingness to adopt an alternative approach to data collection, storage and processing. If we or other data management providers experience security incidents, loss of customer data, disruptions in delivery or other problems, the market for data management, machine learning and analytics platforms as a whole, including our solutions, may be negatively affected. Furthermore, many potential customers have made significant investments in legacy data collection, storage and processing software and may be unwilling to invest in new solutions. If data management, machine learning and analytics platforms do not achieve widespread adoption, or there is a reduction in demand caused by a lack of customer acceptance, technological challenges, weakening economic conditions, security or privacy concerns, competing technologies and products, decreases in corporate spending or otherwise, it could result in decreased revenue and our business could be adversely affected.

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~~We face intense competition and could lose market share to our competitors, which could adversely affect our business, financial condition and results of operations.~~

The market for data management, machine learning and analytics platforms is intensely competitive and characterized by rapid changes in technology, customer requirements, industry standards and frequent new product introductions and improvements. We anticipate continued challenges from current competitors, which in many cases are more established and enjoy greater resources than us, as well as by new entrants into the industry. If we are unable to anticipate or effectively react to these competitive challenges, our competitive position could weaken, and we could experience a decline in our growth rate or revenue that could adversely affect our business and results of operations.

~~Our main sources of current and potential competition fall into five categories:~~

•~~public cloud providers who include proprietary data management, machine learning and analytics offerings, such as Amazon Web Services, Google Cloud Platform and Microsoft Azure;~~

•~~legacy data management product providers such as HP, IBM, Oracle and Teradata;~~

•strategic and technology partners who may also offer our competitors’ technology or otherwise partner with them, including our strategic partners who provide Partner Solutions (as defined below) as they may offer a substantially similar solution based on a competitor’s technology;

•~~cloud-only data management companies and open source companies; and~~

•~~internal IT organizations that provide open source self-support for their enterprises.~~

~~Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages such as:~~

•~~greater name recognition, longer operating histories and larger customer bases;~~

•~~larger sales and marketing budgets and resources and the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products;~~

•~~broader, deeper or otherwise more established relationships with technology, channel and distribution partners and customers;~~

•~~wider geographic presence or greater access to larger customer bases;~~

•~~greater focus in specific geographies;~~

•~~greater ease of use for cloud-only deployments;~~

•~~lower labor and research and development costs;~~

•~~larger and more mature intellectual property portfolios; and~~

•~~substantially greater financial, technical and other resources to provide support, to make acquisitions and to develop and introduce new products.~~

In addition, some of our larger competitors have substantially broader and more diverse product and service offerings and may be able to leverage their relationships with distribution partners and customers based on other products or incorporate functionality into existing products to gain business in a manner that discourages users from purchasing our platform, including by selling at zero or negative margins, product bundling or offering closed technology platforms. Potential customers may also prefer to purchase from their existing suppliers rather than a new supplier regardless of platform performance or features. As a result, even if the features of our platform are superior, customers may not purchase our solutions. These larger competitors often have broader product lines and market focus or greater resources and may therefore not be as susceptible to economic downturns or other significant reductions in capital spending by customers. If we are unable to sufficiently differentiate our solutions from the integrated or bundled products of our competitors, such as by offering enhanced functionality, performance or value, we may see a decrease in demand for those solutions, which could adversely affect our business, operating results and financial condition.

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In addition, new innovative start-up companies, including emerging cloud-only data management companies, and larger companies that are making significant investments in research and development, may introduce products that have greater performance or functionality, are easier to implement or use, or incorporate technological advances that we have not yet developed or implemented or may invent similar or superior products and technologies that compete with our platform. Our current and potential competitors may also establish cooperative relationships among themselves or with third parties that may further enhance their resources.

Some of our competitors have made or could make acquisitions of businesses or enter into partnerships that allow them to offer more competitive and comprehensive solutions. As a result of such arrangements, our current or potential competitors may be able to accelerate the adoption of new technologies that better address customer needs, devote greater resources to bring these products and services to market, initiate or withstand substantial price competition, or develop and expand their product and service offerings more quickly than we do. These competitive pressures in our market or our failure to compete effectively may result in fewer orders, reduced revenue and gross margins and loss of market share. In addition, it is possible that industry consolidation may impact customers’ perceptionsconsummation of the ~~viability of smaller or even mid-size software firms and consequently customers’ willingness to purchase from such firms.~~

We may not compete successfully against our current or potential competitors. If we are unable to compete successfully, or if competing successfully requires us to take costly actions in response to the actions of our competitors, our business, financial condition and results of operations could be adversely affected. In addition, companies competing with usMerger may have an entirely different pricing or distribution model. Increased competition could result in fewer customer orders, price reductions, reduced revenue and gross margins and loss of market share. Further, we may be required to make substantial additional investments in research, development, marketing and sales in order to respond to such competitive threats, and we cannot assure you that we will be able to compete successfully in the future.

~~The outbreak of COVID-19 pandemic could have an~~a material adverse effect on our business, results of operations and financial ~~condition.~~

~~The COVID-19 coronavirus pandemic (COVID-19 or COVID-19 pandemic) has caused significant volatility in financial markets~~condition and ~~has raised~~negatively impact the prospect of an extended global recession. Public health problems resulting from COVID-19 and precautionary measures instituted by governments and businesses to mitigate its spread, including travel restrictions and quarantines, have contributed to a general slowdown in the global economy, and could adversely impact our customers and business partners and disrupt our operations. Changes in our operations in response to COVID-19 or employee illnesses resulting from the pandemic may result in inefficiencies or delays, including in sales and product development efforts and additional costs related to business continuity initiatives, that cannot be fully mitigated through succession planning, employees working remotely or teleconferencing technologies. Our management team is focused on mitigating the adverse effects of the COVID-19 pandemic, which has required and will continue to require an investment of time and resources, thereby diverting their attention from other priorities that existed prior to the outbreak of the pandemic. If these conditions worsen, or last for an extended period of time, our ability to manage our business may be impaired, and operational risks, cybersecurity risks and other risks facing us even prior to the pandemic may be elevated.

COVID-19 and related governmental reactions have had, and may continue to have a negative impact on our business, liquidity, results of operations, and stock price due to the occurrence of some or all of the following events or circumstances among others:

•~~We may not be able to manage our business effectively due to key employees becoming ill, working from home inefficiently and being unable to travel to our facilities;~~

•~~We and our business partners may be prevented from operating worksites, due to employee illness or reluctance to appear at work and “stay-at-home” regulations;~~

•~~The operations of our sales force may be disrupted, which may impact our ability to add new customers and increase sales to existing customers;~~

•~~We may suffer a reduced demand for our products and services, including due to any prolonged economic downturn that may occur;~~

•~~The market~~ price of our common ~~stock may drop or remain volatile; and~~

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•~~We may incur significant employee health care costs under our insurance programs.~~stock.

The ~~extent~~Merger is subject to the satisfaction of a number of conditions beyond our control, including receiving stockholder approval and other customary closing conditions. Failure to satisfy the conditions to the Merger could prevent or delay the completion of the ~~impact~~Merger. Further, regulators may impose conditions, obligations or restrictions on the Merger that may have the effect of ~~COVID-19 on our business~~delaying or preventing its completion.

The efforts and ~~financial results will depend largely on future developments, including~~costs to satisfy the ~~duration~~closing conditions of the ~~spread of the pandemic, the impact~~Merger, may place a significant burden on ~~capital~~management and ~~financial markets~~internal resources, and the Merger and related impact on the financial circumstances of our customers, business partners and vendors, all of which are highly uncertain and cannot be predicted. This situation is changing rapidly, and additional impacts may arise that we aretransactions, whether or not ~~aware of currently.~~

We may acquire or invest in companies and technologies, which may divert our management’s attention, and result in additional dilution to our stockholders. We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions or investments.

As part of our business strategy, we have acquired companies in the past and may evaluate and consider potential strategic transactions, including acquisitions of, or investments in, businesses, technologies, services, products and other assets in the future. For example, on January 3, 2019, we completed our merger with Hortonworks. We also may enter into relationships with other businesses to expand our solutions or our ability to provide services. An acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us, their technology is not easily adapted to work with ours, or we have difficulty retaining the customers of any acquired business due to changes in ownership, management or otherwise. Negotiating these transactions can be time-consuming, difficult and expensive, and our ability to close these transactions may often be subject to conditions or approvals that are beyond our control. Consequently, these transactions, even if undertaken and announced, may not close.

Even if we are able to complete acquisitions or enter into alliances and joint ventures that we believe will be successful, such transactions are inherently risky. Acquisitions, including the completed merger with Hortonworks, involve many risks, including the following:

•~~an acquisition may negatively impact our results of operations because it:~~

– may require us to incur charges, including integration and restructuring costs, both one-time and ongoing, as well as substantial debt or liabilities, including unanticipated and unknown liabilities,

~~– may cause adverse tax consequences, substantial depreciation or deferred compensation charges,~~

~~– in the future may require the amortization, goodwill and other intangible assets, and~~

~~– may not generate sufficient financial returns for us to offset our acquisition costs;~~

•we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel or operations of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us;

•an acquisition and the related integration process may be complex, expensive and time consuming, and may disrupt our ongoing business, divert resources, increase our expenses and distract our management;

•~~an acquisition~~consummated, may result in a ~~delay or reduction~~diversion of ~~customer purchases for both us~~management’s attention from day-to-day operations. Any significant diversion of management’s attention away from ongoing business and ~~the company acquired due to customer uncertainty about continuity and effectiveness of service from either company;~~

•~~an acquisition may result in increased regulatory and compliance requirements;~~

•an acquisition may result in increased uncertainty if we enter into businesses, markets or business models in which we have limited or no prior experience and in which competitors have stronger market positions;

•~~we may encounter~~ difficulties ~~in maintaining the key business relationships and the reputations of the businesses we acquire, and we may be dependent on unfamiliar affiliates and partners of the companies we acquire;~~

•~~we may fail to maintain sufficient controls, policies and procedures, including integrating any acquired business into our control environment;~~

•~~we may fail to achieve anticipated synergies, including with respect to complementary software or services;~~

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•~~we may obtain unanticipated or unknown liabilities, including intellectual property or other claims, or become exposed to unanticipated risks in connection with any acquisition; and~~

•~~an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience.~~

~~If we are unable to address these difficulties and challenges or other problems~~ encountered in ~~connection with any future acquisition or investment, we might not realize~~ the ~~anticipated benefits of that acquisition or investment, we might incur unanticipated liabilities or we might otherwise suffer harm to our business generally.~~

To the extent we pay the consideration for any future acquisitions or investments in cash, the payment would reduce the amount of cash available to us for other purposes. The merger with Hortonworks resulted in, and future acquisitions or investments could also result in, dilutive issuances of our equity securities or the incurrence of debt, contingent liabilities, amortization expenses, or impairment charges against goodwill on our balance sheet, any of which could harm our financial condition and negatively impact our stockholders.

~~We have invested significantly in our Cloudera Data Platform (CDP) offering and if it fails to achieve market adoption our business, results of operations and financial condition could be harmed.~~

We introduced CDP Public Cloud in September 2019, Data Center (now known as CDP Private Cloud Base) in November 2019, and CDP Private Cloud in August 2020. We have less experience with marketing, determining pricing for and selling CDP, and we are continuing to refine our approach to selling, marketing, pricing and supporting adoption of this offering. We have directed, and intend to continue to direct, a significant portion of our financial and operating resources to develop and grow CDP, including offering trials to existing and potential customers. We cannot guarantee that CDP will be adopted broadly. If we are unsuccessful in our efforts to drive customer adoption of CDP, which may be adversely impacted by the current COVID-19 pandemic, or if we do so in a way that is not profitable or fails to compete successfully against our current or future competitors, our business, results of operations and financial condition could be harmed.

Because of the characteristics of open source software, there may be fewer technology barriers to entry in the open source market by new competitors and it may be relatively easy for new and existing competitors with greater resources than we have to compete with us.

One of the characteristics of open source software is that the governing license terms generally allow liberal modifications of the code and distribution thereof to a wide group of companies and/or individuals. As a result, others could easily develop new software products or services based upon those open source programs that compete with existing open source software that we support and incorporate into our platform. Our recently announced licensing model changes might be ineffective to slow or alter these competitive dynamics. Such competition with use of the open source projects that we utilize can materialize without the same degree of overhead and lead time required by us, particularly if the customers do not value the differentiation of our proprietary components. It is possible for new and existing competitors, including those with greater resources than ours, to develop their own open source software or hybrid proprietary and open source software offerings, potentially reducing the demand for, and putting price pressure on, our platform. In addition, some competitors make open source software available for free download or use or may position competing open source software as a loss leader. We cannot guarantee that we will be able to compete successfully against current and future competitors or that competitive pressure and/or the availability of open source software will not result in price reductions, reduced revenue and gross margins and loss of market share, any one of which could seriously harm our business.

~~If our customers do not renew or expand their subscriptions, or if they renew on less favorable terms, our future revenue and operating results will be harmed.~~

Our future success depends, in part, on our ability to sell renewals of subscriptions and expand the deployment of our platform with existing customers. While we generally offer subscriptions of up to three years in length, our customers often purchase one-year subscriptions which generally do not provide for automatic renewal or a right to terminate the subscription early. Our customers may not renew or expand the use of their subscriptions after the expiration of their current subscription agreements. In addition, our customers may opt for a lower priced edition of our platform or decrease their usage of our platform. Our existing customers generally have no contractual obligation to expand or renew their subscriptions after the expiration of the committed subscription period and given our limited operating history, we may not be able to accurately predict customer renewal rates. Our customers’ renewal and/or expansion pricing rates may decline or fluctuate as a result of factors, including, but not limited to, their satisfaction with our platform including CDP, and our customer support, the frequency and severity of software and implementation errors, our platform’s reliability, the pricing of our subscriptions and

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services or of competing solutions or services, the effects of global economic conditions, such as those caused by the current COVID-19 pandemic and their ability to continue their operations and spending levels. If our customers renew their subscriptions, they may renew for shorter contract lengths, less usage or on other terms that are less economically beneficial to us. Our implementation of a “pay wall” for the distribution of some of our software solutions might prove ineffective at improving our renewal and/or expansion rates with existing customers or deal close rates with new customers. We have limited historical data with respect to rates of customer subscription renewals, so we may not accurately predict future renewal trends. We cannot assure you that our customers will renew or expand their subscriptions, and if our customers do not renew their agreements or renew on less favorable terms or for less usage, our revenue may grow more slowly than expected or decline and our business could suffer.

Achieving renewal or expansion of subscriptions may require us to increasingly engage in sophisticated and costly sales efforts that may not result in additional sales. In addition, the rate at which our customers expand the deployment of our platform depends on a number of factors, including general economic conditions, such as the global macroeconomic impact of the current COVID-19 pandemic, the functioning of our solutions, the ability of our field organization, together with our partner ecosystem, to assist our customers in identifying new use cases, modernizing their data architectures, and achieving success with data-driven initiatives and our customers’ satisfaction with our customer support. If our efforts to expand penetration within our customers are not successful, our business may suffer.

~~We have a limited operating history, which makes it difficult to predict our future results of operations.~~

We have a limited operating history, which limits our ability to forecast our future results of operations and subjects us to a number of uncertainties, including our ability to plan for and anticipate future growth. Our historical revenue growth should not be considered indicative of our future performance. Further, in future periods, our revenue growth could slow or our revenue could decline for a number of reasons, including slowing demand for our solutions, increasing competition, a decrease in the growth of our overall market, or our failure, for any reason, to continue to capitalize on growth opportunities and merger integration plans. We have also encountered and will encounter risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as determining appropriate investments of our limited resources, market reception of our platform and open source model, competition from other companies, attracting and retaining customers, hiring, integrating, training and retaining skilled personnel, developing new solutions and unforeseen expenses. If our assumptions regarding these risks and uncertainties, which we use to plan our business, are incorrect or change, or if we do not address these risks successfully, our operating and financial results could be adversely affected.

~~Our sales cycles can be long, unpredictable and vary seasonally, particularly with respect to large subscriptions, and our sales efforts require considerable time and expense.~~

Our results of operations may fluctuate, in part, because of the resource-intensive nature of our sales efforts, the length and variability of the sales cycle for our platform and the difficulty in making short-term adjustments to our operating expenses. The timing of our sales is difficult to predict. The length of our sales cycle, from initial evaluation to payment for our subscriptions is generally four to nine months, but can vary substantially from customer to customer. Our sales cycle can extend to more than 18 months for some customers. Our sales efforts involve educating our customers about the use, technical capabilities and benefits of our platform, solutions and open source model. Customers often undertake a prolonged evaluationMerger process which frequently involves not only our platform but also those of other companies. Some of our customers initially deploy our platform on a limited basis, with no guarantee that these customers will deploy our platform widely enough across their organization to justify our substantial pre-sales investment. As a result, it is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers. Large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. In addition, our sales efforts may be interrupted as a result of the current COVID-19 pandemic, which may impact our ability to sell and market our products and services to customers. If our sales cycle lengthens or our substantial upfront investments do not result in sufficient revenue to justify our investments, our operating results could be adversely affected.

We have seasonal and end-of-quarter concentration of our sales, which impacts our ability to plan and manage cash flows and margins. Our sales vary by season, with the fourth quarter typically being our largest. In addition, within each quarter, most sales occur in the last month of that quarter. Therefore, it is difficult to determine whether we are achieving our quarterly expectations until near the end of the quarter, with seasonality magnifying the difficulty for determining whether we will achieve annual expectations. Most of our expenses require time to adjust. Therefore, if expectations for our business are not accurate, we may not be able to adjust our cost structure on a timely basis and margins and cash flows may differ from expectations.

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We do not have an adequate history with our subscription or pricing models to accurately predict the long-term rate of customer adoption or renewal, or the impact these will have on our revenue or operating results.

We have limited experience with respect to determining the optimal prices and pricing models for our solutions, especially as we develop and sell new offerings such as the CDP. As the markets for our solutions mature, or as new competitors introduce new products or services that compete with ours, we may be unable to attract new customers at the same price or based on the same pricing model as we have used historically. Moreover, large customers, which are the focus of our sales efforts, may demand greater price concessions. Additionally, the renewal rate of our large customers may have more significant impact period to period on our revenue and operating results. As a result, in the future we may be required to reduce our prices, which could adversely affect our revenue, gross margin, profitability, financial position and cash flow. In addition, as an increasing amount of our business may move to our cloud-based solutions for transient workloads and the use of our consumption-based pricing model may represent a greater share of our revenue, our revenue may be less predictable or more variable than our historical revenue from a time period-based subscription pricing model. Moreover, a consumption-based subscription pricing model may ultimately result in lower total cost to our customers over time, or may cause our customers to limit usage in order to stay within the limits of their existing subscriptions, reducing overall revenue or making it more difficult for us to compete in our markets.

~~Our results may fluctuate significantly from period to period, which could adversely impact the value of our common stock.~~

Our results of operations, including our revenue, net revenue expansion rate, gross margin, profitability and cash flows, may vary significantly in the future, and period-to-period comparisons of our operating results may not be meaningful. Accordingly, our results for any particular period should not be relied upon as an indication of future performance. Our financial results may fluctuate from period to period as a result of a variety of factors, many of which are outside of our control. Fluctuation in periodic results may adversely impact the value of our common stock. Factors that may cause fluctuations in our periodic financial results include, without limitation, those listed elsewhere in this “Risk Factors” section and those listed below:

•the budgeting cycles and purchasing practices of our customers, including their tendency to purchase in the fourth quarter of our fiscal year, near the end of each quarter, and the timing of subsequent contract renewals;

•~~the achievement of milestones in connection with delivery of services, impacting the timing of services revenue recognition, especially due to the impact of the current COVID-19 pandemic;~~

•~~subscriptions from large enterprises;~~

•~~price competition;~~

•~~our ability to attract and retain new customers;~~

•~~our ability to expand penetration within our existing customer base;~~

•~~the timing and success of new solutions by us and our competitors;~~

•~~the timing and success of our product releases;~~

•~~changes in customer requirements or market needs and our ability to make corresponding changes to our business;~~

•~~changes in the competitive landscape, including consolidation among our competitors or customers;~~

•~~general economic conditions, both domestically and in our foreign markets, including the domestic and global macroeconomic impact of the current COVID-19 pandemic;~~

•~~natural disasters, acts of war, terrorism, epidemics, or pandemics and other health crises;~~

•~~the timing and amount of certain payments and expenses, such as research and development expenses, sales commissions and stock-based compensation;~~

•~~our inability to adjust certain fixed costs and expenses, particularly in research and development, for changes in demand;~~

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•increases or decreases in our revenue and expenses caused by fluctuations in foreign currency exchange rates, as an increasing portion of our revenue is collected, and expenses are incurred and paid in currencies other than the U.S. dollar;

•~~the cost of and potential outcomes of existing and future claims or litigation, which could have a material adverse effect on our business;~~

•~~potential impairment of goodwill and intangible assets;~~

•~~future accounting pronouncements and changes in our accounting policies; and~~

•~~changes in tax laws, tax regulations and governmental regulations.~~

Any one of the factors above or the cumulative effect of some of the factors above may result in significant fluctuations in our operating results. This variability and unpredictability could result in our failure to meet our revenue or other operating result expectations or those of investors for a particular period. The failure to meet or exceed such expectations could have a material adverse effect on our business, results of operations and financial ~~condition~~condition.

There also is no assurance that ~~could ultimately adversely affect our stock price.~~the Merger and the other transactions contemplated by the Merger Agreement will occur on the terms and timeline currently contemplated or at all.

~~Because we derive substantially all~~If the proposed Merger is not completed or the Merger Agreement is terminated, the price of our ~~revenue from~~common stock may decline, including to the extent that the current market price of our common stock reflects an assumption that the Merger and the other transactions contemplated by the Merger Agreement will be consummated without further delays, which could have a ~~single software platform, failure~~material adverse effect on our business, results of ~~this platform~~operations and financial condition. If the Merger Agreement is terminated and we determine to ~~satisfy customer demands~~seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

If the Merger Agreement is terminated, we may, under certain circumstances, be obligated to ~~achieve increased market acceptance~~pay a termination fee to Parent. These costs could require us to use available cash that would have otherwise been available for other uses.

If the Merger is not completed, in certain circumstances, we could be required to pay a termination fee of up to $171.7 million. If the Merger Agreement is terminated, the termination fee we may be required to pay, if any, under the Merger Agreement may require us to use available cash that would have otherwise been available for general corporate purposes or other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business, results of operations or financial condition, ~~and growth prospects.~~

We derive and expect to continue to derive substantially all of our revenue from our data management, machine learning and analytics platform. As such, the market acceptance of our platform is critical to our continued success. Demand for our platform is affected by a number of factors beyond our control, including continued market acceptance, the timing of development and release of new products by our competitors, technological change, any developments or disagreements with the open source community, growth or contractionwhich in our market and general economic conditions. We expect the growth and proliferation of data to lead to an increase in the data analysis demands of our customers, and our platform may not be able to scale and perform to meet those demands or may not be chosen by users for those needs. If we are unable to continue to meet customer demands or to achieve more widespread market acceptance of our platform and solutions, our business operations, financial results and growth prospects will beturn would materially and adversely ~~affected.~~

~~Security and privacy breaches may hurt our business.~~

~~Any security breach, including those resulting from a cybersecurity attack, or any unauthorized access, unauthorized usage, virus or similar breach or disruption could result in~~affect the ~~loss of confidential information, damage to our reputation, early termination~~price of our ~~contracts, litigation, regulatory investigations or other liabilities. If our security measures or~~common stock.

We are subject to various uncertainties and restrictions on the ~~security measures we have provided to customers are breached as a result~~conduct of ~~third-party action, employee error, malfeasance or otherwise and, as a result, someone obtains unauthorized access to our customers’ confidential information, our reputation may be damaged,~~ our business ~~may suffer and we~~while the Merger is pending, which could ~~incur significant liability.~~

Techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived security breach occurs, the market perception of our security measures could be harmed and we could lose sales and customers.

~~In addition, many of our customers use our platform to store and process vast quantities of private and otherwise sensitive data that are critical to their businesses. They may~~ have a ~~greater sensitivity to security defects in~~material adverse effect on our ~~products than to defects in other, less critical, software products. An actual or perceived security breach or theft~~business, results of the business-critical data of one of our customers, regardless of whether the breach is attributable to the failure of our products or services, could adversely affect the market’s perception of our security products. Moreover, if a high-profile security breach occurs with respect to another data management, machine learningoperations and analytics platform provider, our customers and potential customers may lose trust in the security of data management, machine learning and analytics platforms generally, which could adversely impact our ability to retain existing customers or attract new ones.financial condition.

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~~We have been,~~Uncertainty about the pendency of the Merger and ~~may in~~ the ~~future be, subject to intellectual property rights claims by~~effect of the Merger on employees, customers, vendors, communities and other third parties ~~which are extremely costly to defend, could require~~who deal with us ~~to pay significant damages and could limit our ability to use certain technologies.~~

Companies in the software and technology industries, including some of our current and potential competitors, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. In addition, many of these companies have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them. The litigation may involve patent holding companies or other adverse patent owners that have no relevant product revenue and against which our patents may therefore provide little or no deterrence. From time-to-time, third parties, including certain other companies, have asserted and may assert patent, copyright, trademark or other intellectual property rights against us, our partners or our customers. We or our customers have received, and may in the future receive, notices that claim we have misappropriated, misused or infringed other parties’ intellectual property rights, and, to the extent we gain greater market visibility, we face a higher risk of being the subject of intellectual property infringement claims, which is not uncommon with respect to the enterprise software market.

There may be third-party intellectual property rights, including issued or pending patents, that cover significant aspects of our technologies, or the technologies in our platform or business methods. We may be exposed to increased risk of being the subject of intellectual property infringement claims as a result of acquisitions, such as our merger with Hortonworks, and our incorporation of open source software into our platform, as, among other things, we have a lower level of visibility into the development process with respect to such technology or the care taken to safeguard against infringement risks. Any intellectual property claims, with or without merit, could be very time-consuming, could be expensive to settle or litigate and could divert our management’s attention and other resources. These claims could also subject us to significant liability for damages, potentially including treble damages if we are found to have willfully infringed patents or copyrights. These claims could also result in our having to stop using, distributing or supporting technology found to be in violation of a third-party’s rights. We might be required to seek a license for the intellectual property, which may not be available on reasonable terms or at all. Even if a license were available, we could be required to pay significant royalties, which would increase our operating expenses. As a result, we may be required to develop alternative non-infringing technology, which could require significant effort and expense. If we cannot license or develop technology for any infringing aspect of our business, we could be forced to limit or stop sales of our offerings and may be unable to compete effectively. Any of these results could adversely affect our business operations and financial results.

Third parties may also assert such claims against our customers or partners whom we typically indemnify against claims that our solutions infringe, misappropriate or otherwise violate the intellectual property rights of third parties, including in the third-party open source components included in our platform, as well as our own open source and proprietary components. As the numbers of products and competitors in our market increase and overlaps occur, claims of infringement, misappropriation and other violations of intellectual property rights may increase. Also, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or have divulged proprietary or other confidential information.

~~Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.~~

Our success depends, in part, on our ability to protect proprietary methods and technologies that we develop under patent and other intellectual property laws of the United States and other jurisdictions outside of the United States so that we can prevent others from using our inventions and proprietary information. If we fail to protect our intellectual property rights adequately, our competitors may gain access to our technology, and our business may be harmed. In addition, defending our intellectual property rights may entail significant expense. Any of our patents, trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. While we have patents and patent applications pending, we may be unable to obtain patent protection for the technology covered in our patent applications or the patent protection may not be obtained quickly enough to meet our business needs. In addition, our existing patents and any patents issued in the future may not provide us with competitive advantages, or may be successfully challenged by third parties.

Moreover, despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our platform or offerings or obtain and use information that we regard as proprietary. We generally enter into confidentiality or license agreements with our employees, consultants, vendors and customers, and generally limit access to and distribution of our proprietary information. However, we cannot be certain that we have entered into such agreements with all parties who may have or have had access to our confidential information or that the agreements we have entered into will not be

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~~breached. We cannot guarantee that any of the measures we have taken will prevent misappropriation of our technology. Because we may be an attractive target for cybersecurity attacks, we~~ may have a ~~greater risk of unauthorized access to, and misappropriation of, our proprietary information.~~

Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain, and we also may face proposals to change the scope of protection for some intellectual property right. Effective patent, trademark, copyright and trade secret protection may not be available to us in every country in which our products or services are available. The laws of some countries may not be as protective of intellectual property rights as those in the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Also, our involvement in standard setting activity or the need to obtain licenses from others may require us to license our intellectual property. Accordingly, despite our efforts, we may be unable to prevent third parties from using our intellectual property.

We may be required to spend significant resources to monitor and protect our intellectual property rights and we may conclude that in at least some instances the benefits of protecting our intellectual property rights may be outweighed by the expense. We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not it is resolved in our favor, could result in significant expense to us and divert the efforts of our technical and management personnel.

We do not control and may be unable to predict the future course of open source technology development, including the ongoing development of open source components used in our platform, which could reduce the market appeal of our platform and damage our reputation.

We do not control many aspects of the development of the open source technology in our platform. Different groups of open source software programmers collaborate with one another to develop the software projects in our platform. Given the disparate inputs from various developers, we cannot control entirely how an open source project develops and matures. Also, different open source projects may overlap or compete with the ones that we incorporate into our platform. The technology developed by one group for one project may become more widely used than that developed by others. If we acquire or adopt a new technology and incorporate it into our platform but a competing technology becomes more widely used or accepted, the market appeal of our platform may be reduced and that could harm our reputation, diminish our brand and result in decreased revenue.

If open source software programmers, many of whom we do not employ, or our own internal programmers do not continue to develop and enhance open source technologies, we may be unable to develop new technologies, adequately enhance our existing technologies or meet customer requirements for innovation, quality and price.

We rely to a significant degree on a number of open source software programmers, or committers and contributors, to develop and enhance components of our platform. Additionally, members of the corresponding open source project management committees, many of whom are not employed by us, are primarily responsible for the oversight and evolution of the codebases of important components of the open source data management ecosystem. If the open source data management committers and contributors fail to adequately further develop and enhance open source technologies, or if the committees fail to oversee and guide the evolution of open source data management technologies in the manner that we believe is appropriate to maximize the market potential of our solutions, then we would have to rely on other parties, or we would need to expend additional resources, to develop and enhance our platform. We also must devote adequate resources to our own internal programmers to support their continued development and enhancement of open source technologies, and if we do not do so, we may have to turn to third parties or experience delays in developing or enhancing open source technologies. We cannot predict whether further developments and enhancements to these technologies would be available from reliable alternative sources. In either event, our development expenses could be increased and our technology release and upgrade schedules could be delayed. Delays in developing, completing or delivering new or enhanced components to our platform could cause our offerings to be less competitive, impair customer acceptance of our solutions and result in delayed or reduced revenue for our solutions.

Our software development and licensing model could be negatively impacted if the Apache License, Version 2.0 is not enforceable or is modified so as to become incompatible with other open source licenses.

Important components of our platform have been provided under the Apache License, Version 2.0. This license states that any work of authorship licensed under it, and any derivative work thereof, may be reproduced and distributed provided that certain conditions are met. It is possible that a court would hold this license to be unenforceable or that someone could assert a claim for proprietary rights in a program developed and distributed under it. Any ruling by a court that this license is not enforceable, or that open source components of our platform may not be reproduced or distributed, may negatively impact

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our distribution or development of all or a portion of our solutions. In addition, at some time in the future it is possible that important components of the open source projects in our platform that may be distributed under a different license or the Apache License, Version 2.0, which governs Hadoop, Spark and other current elements of our platform, may be modified, which could, among other consequences, negatively impact our continuing development or distribution of the software code subject to the new or modified license.

Further, full utilization of our platform may depend on software, applications, hardware and services from various third parties, and these items may not be compatible with our platform and its development or available to us or our customers on commercially reasonable terms, or at all, which could harm our business.

~~Our use of open source software in our solutions could negatively affect our ability to sell our platform and subject us to possible litigation.~~

Our solutions include software covered by open source licenses, which may include, by way of example, GNU General Public License and the Apache License. We do not own all of the open source technology in our platform and the ownership of the open source technology in our platform may not be easily determinable by us. Rather, we rely on the Apache Software Foundation (ASF) as well as certain other third-party open source contributors to ensure that the open source contributions to our platform are properly owned by the committers and contributors who contribute the open source technology and that such contributions do not infringe on other parties’ intellectual property rights. Moreover, the terms of certain of the open source licenses have not been interpreted by United States courts or other courts, and there is a risk that such licenses could be construed in a manner that is incompatible with our current business model, imposing unanticipated conditions or restrictions on our ability to market our solutions. We, our customers and the ASF may have received, or may in the future receive, notices that claim we have misappropriated, misused or infringed other parties’ intellectual property rights, and, to the extent products based on the open source data management ecosystem gain greater market visibility, we, our customers, and the ASF, face a higher risk of being the subject of intellectual property infringement claims. In addition, we or our customers could be subject to lawsuits by parties claiming ownership of (or that different license terms apply to) what we believe to be open source software, or seeking to enforce the terms of an open source license. By the terms of certain open source licenses, we could be required to release the source code of our proprietary software, and to make our proprietary software available under open source licenses, if we combine our proprietary software with open source software in a certain manner. In the event that portions of our proprietary software are determined to be impacted by an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our technologies, or otherwise be limited in the licensing of our technologies and services, each of which could reduce or eliminate the value of our technologies and cause us to have to significantly alter our current business model. These claims could also result in litigation (including litigation against our customers or partners, which could result in us being obligated to indemnify our customers or partners against such litigation), require us to purchase a costly license or require us to devote additional research and development resources to change our solutions, any of which could have a negative effect on our business and operating results. In addition, if the license terms for the open source code change, we may be forced to re-engineer our solutions or incur additional costs to find alternative tools. Further, changes in our software licensing model may impact future revenue growth rates.

In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties, support, indemnity or assurance of title or controls on origin of the software. Further, some open source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis. Many of these risks associated with usage of open source software, such as the lack of warranties or assurances of title, cannot be eliminated, and could, if not properly addressed, negatively affect the performance of our platform and our business. In addition, we are often required to absorb these risks in our customer and partner relationships by agreeing to provide warranties, support and indemnification with respect to such third-party open source software. While we have established processes intended to alleviate these risks, we cannot assure that these measures will reduce these risks.

Because our business relies on the Apache Software Foundation, our business could be harmed by the decisions made by the ASF or claims or disputes directed at the ASF or reputational harm otherwise suffered by the ASF.

Our business relies on the ASF, a non-profit corporation that supports Apache open source software projects. We do not control nor can we predict the decisions the ASF will make with respect to the further development and enhancement of open source technologies which may impact our business. For example, the reduction or elimination of support of Hadoop, Spark or other technologies by the ASF, the migration of Hadoop, Spark and other open source data management technology to an organization other than the ASF, or any other actions taken by the ASF or the Hadoop project may impact our business

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model. Moreover, if the ASF is subject to claims, disputes or otherwise suffers reputational harm, our business, results of operations, financial condition and growth prospects could be harmed if customers perceive our solutions to be risky or inferior to data management solutions which do not rely on the ASF for continued development and enhancement of open source technologies.

~~Real or perceived errors, failures, bugs or disruptions in our platform and solutions could adversely affect our reputation and business could be harmed.~~

Our platform and solutions are very complex and have contained and may contain undetected defects or errors, especially when solutions are first introduced or enhanced, or as we develop new platform such as CDP. In addition, our platform employs open source software and to the extent that our solutions depend upon the successful operation of open source software in conjunction with our solutions, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our solutions, delay new solutions’ introductions, result in a failure of our solutions, result in liability to our customers, and injure our reputation.

If our platform is not implemented or used correctly or as intended, inadequate performance and disruption in service may result. Moreover, as we acquire companies, such as through our merger with Hortonworks, and integrate new open source data management projects, we may encounter difficulty in incorporating the newly-obtained technologies into our platform and maintaining the quality standards that are consistent with our reputation.

Since our customers use our platform and solutions for important aspects of their business, any errors, defects, disruptions in service or other performance problems could hurt our reputation and may damage our customers’ businesses. Furthermore, defects in our platform and solutions may require us to implement design changes or software updates. Any defects or errors in our platform and solutions, or the perception of such defects or errors, could result in:

•~~expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate or work around errors or defects;~~

•~~loss of existing or potential customers or channel partners;~~

•~~delayed or lost revenue;~~

•~~delay or failure to attain market acceptance;~~

•~~delay in the development or release of new solutions or services;~~

•~~negative publicity, which will harm our reputation;~~

•~~warranty claims against us, which could result in an increase in our provision for doubtful accounts;~~

•~~an increase in collection cycles for accounts receivable or the expense and risk of litigation; and~~

•~~harm to our results of operations.~~

Although we have contractual protections, such as warranty disclaimers and limitation of liability provisions, in our standard terms and conditions of sale, they may not fully or effectively protect us from claims by customers, partners or other third parties. Any insurance coverage we may have may not adequately cover all claims asserted against us, or cover only a portion of such claims. In addition, even claims that ultimately are unsuccessful could result in our expenditure of funds in litigation and divert management’s time and other resources.

~~If we are unable to hire, retain, train and motivate qualified personnel and senior management, our business could be harmed.~~

Our future success depends, in part, on our ability to continue to attract, integrate and retain qualified and highly skilled personnel. In particular, we are substantially dependent on the continued service of our existing engineering personnel because of the complexity of our platform and are also highly dependent on the contributions of our executive team. The loss of any key personnel could make it more difficult to manage our operations and research and development activities, reduce our employee retention and revenue, disrupt our relationships with our employees, customers and vendors, and impair our ability to compete. Any significant leadership change or senior management transition involves inherent risk and any failure to ensure the timely and suitable replacement and a smooth transition could hinder our strategic planning, execution and future performance. Although we have entered into employment offer letters with our key personnel, these agreements have

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no specific duration and constitute at-will employment. We do not maintain key person life insurance policies on any of our employees. The loss of one or more of our key employees could seriously harm our business. If we are unable to attract, integrate, or retain the qualified and highly skilled personnel required to fulfill our current or future needs, our business, financial condition and operating results could be harmed.~~Moreover, if key personnel become ill due to the current COVID-19 pandemic, we may not be able to manage our business effectively and, as a result, our business and operating results could be harmed.~~

Our senior management has substantially changed over the last fiscal year, including, for example, the recent departures of our former chief executive officer, Thomas Reilly and interim chief executive officer, Martin Cole. We have a new chief executive officer, Robert Bearden, who started in January 2020.

Competition for highly skilled personnel is often intense, especially in the San Francisco Bay Area where we have a substantial presence and need for highly skilled personnel. We may not be successful in attracting, integrating or retaining qualified personnel to fulfill our current or future needs. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our common stock declines, it may adversely affect our ability to hire or retain highly skilled employees. In addition, we may periodically change our equity compensation practices, which may include reducing the number of employees eligible for equity awards or reducing the size of equity awards granted per employee. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects could be harmed.

~~We have experienced rapid growth in recent periods and expect our growth to continue. If we fail to effectively manage our growth, our business and operating results could be adversely affected.~~

We have experienced and may continue to experience rapid growth in our headcount and operations, which has placed and will continue to place significant demands on our managerial, administrative, operational, financial and other resources. For example, our employee headcount increased from 1,648 employees as of January 31, 2018 to 2,713 employees as of October 31, 2020. This growth has placed, and any future growth will place, significant demands on our management and our operational and financial infrastructure. To manage this growth effectively, we must continue to improve our operational, financial and management systems and controls by, among other things:

•~~recruiting, training, integrating and retaining new employees, particularly for our sales and research and development teams;~~

•~~developing and improving our internal administrative infrastructure, particularly our financial, operational, compliance, recordkeeping, communications and other internal systems;~~

•~~managing our international operations and the risks associated therewith;~~

•~~maintaining high levels of satisfaction with our platform among our customers; and~~

•~~effectively managing expenses related to any future growth.~~

If we fail to manage our growth, or if we fail to implement improvements or maintain effective internal controls, our costs and expenses may increase more than we plan and our ability to expand our customer base, enhance our platform, develop new solutions, expand penetration within existing customers, respond to competitive pressures or otherwise execute our business plan, our business and operating results could be adversely affected.

Because we recognize a substantial portion of our subscription revenue from our platform over the subscription term, downturns or upturns in new sales and renewals will not be immediately reflected in our operating results.

We generally recognize subscription revenue ratably over the term of the subscription period. As a result, most of the revenue we report in each quarter is derived from the recognition of deferred revenue relating to subscriptions entered into during previous quarters. Consequently, a decline in new or renewed subscriptions, or a reduction in expansion rates, in any single quarter could have only a small impact on our revenue results during that quarter or subsequent period. Such a decline or deceleration, however, will negatively affect our revenue or revenue growth rates in future quarters. Accordingly, the effect of these changes or events may not be fully reflected in our results of operations until future periods. Given the ratable nature of our revenue recognition, our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period. We may be unable to adjust our cost structure to reflect the changes in revenue. In

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addition, a significant majority of our costs are expensed as incurred, while revenue is generally recognized over the life of the customer agreement. As a result, increased growth in the number of our customers could result in our recognition of more costs than revenue in the earlier periods of the terms of our agreements.

~~Our revenue growth depends in part on the success of our strategic relationships with third parties and their continued performance.~~

We seek to grow our partner ecosystem as a way to grow our business. To grow our business, we anticipate that we will continue to establish and maintain relationships with third parties, such as resellers, OEMs, system integrators, independent software and hardware vendors and platform and cloud service providers. In addition, we work closely with select vendors (Partner Solutions) to design solutions to specifically address the needs of certain industry verticals or use cases within those verticals. As our agreements with strategic partners terminate or expire, we may be unable to renew or replace these agreements on comparable terms, or at all. Moreover, especially given the possible impact of the current COVID-19 pandemic, we cannot guarantee that the companies with which we have strategic relationships will continue to devote the resources necessary to expand our reach, increase our distribution and increase the number of Partner Solutions and associated use cases. In addition, customer satisfaction with Partner Solutions may be less than anticipated, negatively impacting anticipated revenue growth and results of operations. Further, some of our strategic partners offer competing products and services or also work with our competitors. As a result of these factors, many of the companies with which we have strategic alliances may choose to pursue alternative technologies and develop alternative products and services in addition to or in lieu of our platform, either on their own or in collaboration with others, including our competitors. If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our operating results may suffer. Even if we are successful in establishing and maintaining these relationships with third parties, we cannot assure you that these relationships will result in increased customer usage of our platform or increased revenue.

~~The sum of our revenue and changes in contract liabilities or remaining performance obligations (RPO) may not be an accurate indicator of business activity within a period.~~

Investors or analysts sometimes look to the sum of the revenue and changes in contract liabilities or RPO as indicators of business activity in a period for businesses such as ours. They may use this information to estimate billings or bookings. However, these measures may significantly differ from underlying business activity for a number of reasons including:

•Since a relatively large number of transactions occur at the end of the quarter, and invoicing or enablement of those transactions may or may not occur before the end of the quarter based on a number of factors including receipt of information from the customer, volume of transactions and holidays, a shift of a few days has little economic impact on our business, but may shift contract liabilities or RPO from one period into the next;

•~~multi-year upfront billings that may distort trends;~~

•~~subscriptions that have deferred start dates;~~

•~~services that are invoiced upon delivery; and~~

•~~changes in revenue recognition resulting from ASC 606 adoption.~~

Accordingly, we do not believe that estimated billings is an accurate indicator of future revenue for any given period of time. However, many companies that provide subscriptions report changes in estimated billings as a key operating or financial metric, and it is possible that analysts or investors may view this metric as important. Thus, any changes in our estimated billings could adversely affect the market price of our common stock. Moreover, estimating bookings from RPO is a newer analytical technique, and it may not be an accurate indicator of future revenue for our company for any given period of time.

~~If our new products, components or enhancements to our platform do not achieve sufficient market acceptance, our financial results and competitive position will suffer.~~

We spend substantial amounts of time and money to research and develop new products, such as CDP. In addition, we spend time and money to research and develop new components and enhancements of our platforms to incorporate additional features, improve functionality or add other enhancements in order to meet our customers’ rapidly evolving demands. When we develop a new product, component or enhancement to our platform, whether open source or proprietary, we typically incur expenses and expend resources upfront to develop, market and promote the new component. Therefore, when we

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develop and introduce new products, components or enhancements to our platform, they must achieve high levels of market acceptance in order to justify the amount of our investment in developing and bringing them to market.

We may experience delays in the development and introduction of new or enhanced products due to the direct and indirect effects of the current COVID-19 pandemic. In addition, our new products, components or enhancements to our platform and changes to our platform could fail to attain sufficient market acceptance for many reasons, including:

•~~our failure to predict market demand accurately in terms of platform functionality, including curating new open source projects, and to supply a platform that meets this demand in a timely fashion;~~

•~~delays in releasing to the market our new components or enhancements to our platform to the market;~~

•~~defects, errors or failures;~~

•~~complexity in the implementation or utilization of the new components and enhancements;~~

•~~negative publicity about the platform’s performance or effectiveness;~~

•~~introduction or anticipated introduction of competing platforms by our competitors;~~

•~~poor business conditions for our end-customers, causing them to delay IT purchases, such as those caused by the current COVID-19 pandemic; and~~

•~~reluctance of customers to purchase platforms incorporating open source software or to purchase hybrid platforms.~~

If our new products, such as CDP, or our new components or enhancements and changes do not achieve adequate acceptance in the market, our competitive position will be impaired, and our revenue will be diminished. Thematerial adverse effect on our financial results may be particularly acute because of the significant research, development, marketing, sales and other expenses we will have incurred in connection with the new solutions or enhancements.

If we do not effectively hire, retain, train and oversee our direct sales force, we may be unable to add new customers or increase sales to our existing customers, and our business may be adversely affected.

We continue to be substantially dependent on our direct sales force to obtain new customers and increase sales with existing customers. There is significant competition for sales personnel with the skills and technical knowledge that we require. Our ability to achieve significant revenue growth will depend, in large part, on our success in recruiting, training and retaining sufficient numbers of sales personnel to support our growth. In addition, a large percentage of our sales force is relatively new to our company. New hires require significant training and may take significant time before they achieve full productivity, especially as new offerings are developed and released. Our recent hires and planned hires may not become productive as quickly as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals in the markets where we do business or plan to do business. In addition, growth of our direct sales force leads to increasing difficulty and complexity in its organization, management and leadership, at which we may prove unsuccessful. If we are unable to hire and train a sufficient number of effective sales personnel, we are ineffective at overseeing a growing sales force, or the sales personnel we hire are otherwise unsuccessful in obtaining new customers or increasing sales to our existing customer base, our business will be adversely affected.

~~As we expand internationally, our business will become more susceptible to risks associated with international operations.~~

We have expanded internationally and intend to continue such international expansion. For example, we sell the various editions of our platform through our direct sales force, which is comprised of inside sales and field sales personnel, and is located in a variety of geographic regions, including the United States, Europe and Asia, and have customers located in approximatel~~y 100~~ ~~countries as of January 31, 2020. We intend to continue to expand internationally.~~

~~Conducting international operations subjects us to risks that we have not generally faced in the United States. These risks include:~~

•~~challenges caused by distance, language, cultural and ethical differences and the competitive environment;~~

•heightened risks of unethical, unfair or corrupt business practices, actual or claimed, in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, and irregularities in, financial statements;

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•foreign exchange restrictions and fluctuations in currency exchange rates, including that, because a majority of our international contracts are denominated in U.S. dollars, an increase in the strength of the U.S. dollar may make doing business with us less appealing to a non-U.S. dollar denominated customer;

•~~application of multiple and conflicting laws and regulations, including complications due to unexpected changes in foreign laws and regulatory requirements;~~

•risks associated with trade restrictions and foreign import requirements, including the importation, certification and localization of our solutions required in foreign countries, as well as changes in trade, tariffs, restrictions or requirements;

•~~new and different sources of competition;~~

•~~potentially different pricing environments, longer sales cycles and longer accounts receivable payment cycles and collections issues;~~

•~~management communication and integration problems resulting from cultural differences and geographic dispersion;~~

•potentially adverse tax consequences, including multiple and possibly overlapping tax structures, the complexities of foreign value-added tax systems, restrictions on the repatriation of earnings and changes in tax rates;

•~~greater difficulty in enforcing contracts, accounts receivable collection and longer collection periods;~~

•the uncertainty and limitation of protection for intellectual property rights in some countries and the risk of potential theft or compromises of our technology, data or intellectual property in connection with our international operations, whether by state-sponsored malfeasance or other foreign entities or individuals;

•~~increased financial accounting and reporting burdens and complexities;~~

•~~lack of familiarity with local laws, customs and practices, and laws and business practices favoring local competitors or partners;~~

•~~increased exposure to natural disasters, acts of war, terrorism, epidemics, or pandemics and other health crises, including the current COVID-19 pandemic; and~~

•~~political, social and economic instability abroad, terrorist attacks and security concerns in general.~~

The occurrence of any one of these risks could harm our international business and, consequently, our results of operations. Additionally, operating in international markets requires significant management attention and financial resources. We cannot be certain that the investment and additional resources required to operate in other countries will produce desired levels of revenue or profitability.

Some of our business partners also have international operations and are subject to the risks described above. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage these risks.

~~Our business in countries with a history of corruption and transactions with foreign governments increase the risks associated with our international activities.~~

As we operate and sell internationally, we are subject to the Foreign Corrupt Practices Act (FCPA), the United Kingdom Bribery Act of 2010 (the UK Bribery Act), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties for the purpose of obtaining or retaining business. We have operations, deal with and make sales to governmental customers in countries known to experience corruption, particularly certain emerging countries in Africa, East Asia, Eastern Europe, South America and the Middle East. Our activities in these countries create the risk of unauthorized payments or offers of payments by one of our employees, consultants, sales agents or channel partners that could be in violation of various anti-corruption laws, even though these parties may not be under our control. While we have implemented policies and controls intended to prevent these practices by our employees, consultants, sales agents and channel partners, our existing safeguards and any future improvements may prove to be less than effective, and our employees, consultants, sales agents or channel partners may engage in conduct for which we might be held responsible. Violations of the FCPA, the UK Bribery Act and other laws may result in severe criminal or civil sanctions, including

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~~suspension or debarment from U.S. government contracting, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.~~

~~We are subject to governmental export control, sanctions and import laws and regulations that could subject us to liability or impair our ability to compete in international markets.~~

Because we incorporate encryption functionality into our platform (including any products comprising the platform), we are subject to certain U.S. export control laws that apply to encryption items. As such, our platform may be exported outside the United States through an export license exception; an export license is required to certain countries, end-users and end-uses. If we were to fail to comply with such U.S. export controls laws, U.S. customs regulations, U.S. economic sanctions, or other similar laws, we could be subject to both civil and criminal penalties, including substantial fines, possible incarceration for employees and managers for willful violations, and the possible loss of our export or import privileges. Obtaining the necessary export license for a particular sale or offering may not be possible and may be time-consuming and may result in the delay or loss of sales opportunities. Furthermore, U.S. export control laws and economic sanctions prohibit the export of products to certain U.S. embargoed or sanctioned countries, governments and persons, as well as for prohibited end-uses. Monitoring and ensuring compliance with these complex U.S. export control laws is particularly challenging because our platform and related services are widely distributed throughout the world and are available for download without registration. Even though we take precautions to ensure that we and our reseller partners comply with all relevant export control laws and regulations, any failure by us or our reseller partners to comply with such laws and regulations could have negative consequences for us, including reputational harm, government investigations and penalties.

In addition, various countries regulate the import of certain encryption technology, including through import permit and license requirements, and have enacted laws that could limit our ability to distribute our platform or could limit our end-customers’ ability to implement our products in those countries. Changes in our products or changes in export and import regulations in such countries may create delays in the introduction of our platform into international markets, prevent our end-customers with international operations from deploying our products globally or, in some cases, prevent or delay the export or import of our platform to certain countries, governments or persons altogether. Any change in export or import laws or regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing export, import or sanctions laws or regulations, or change in the countries, governments, persons, or technologies targeted by such export, import or sanctions laws or regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell our platform to, existing or potential end-customers with international operations. Any decreased use of our platform or limitation on our ability to export to or sell our platform in international markets could adversely affect our business, financial condition and operating results.

~~We are exposed to fluctuations in currency exchange rates, which could negatively affect our operating results.~~

Our sales contracts are primarily denominated in U.S. dollars, and therefore most of our revenue is not subject to foreign currency risk. However, a strengthening of the U.S. dollar could increase the real cost of our platform to our customers outside of the United States, which could adversely affect our operating results. In addition, an increasing portion of our operating expenses is incurred and an increasing portion of our assets is held outside the United States. These operating expenses and assets are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. If we are not able to successfully hedge against the risks associated with currency fluctuations, our operating results could be adversely affected.

~~Our failure to raise additional capital could reduce our ability to compete and could harm our business.~~

We expect that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for the foreseeable future. However, if we change our business strategy, we may need to raise additional funds in the future, and we may not be able to obtain additional debt or equity financing on favorable terms, if at all. If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the per share value of our common stock could decline. Furthermore, if we engage in debt financing, the holders of debt would have priority over the holders of common stock, and we may be required to accept terms that restrict our ability to incur additional indebtedness. We may also be required to take other actions that would otherwise be in the interests of the debt holders and force us to maintain specified liquidity or other ratios, any of which could harm our business, operating results and financial condition.

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~~We are exposed to the credit risk of some of our resellers and customers and to credit exposure in weakened markets, which could result in material losses.~~

Most of our sales are on an unsecured basis. Although we seek to mitigate these risks, we cannot be certain that these efforts will be effective in reducing our credit risks, especially as we expand our business internationally and some of our resellers or customers may be impacted by the current COVID-19 pandemic. If we are unable to adequately control these risks, our business, results of operations and financial ~~condition~~condition. These uncertainties may impair our ability to attract, retain and motivate key personnel pending the consummation of the Merger, as such personnel may experience uncertainty about their future roles following the consummation of the Merger. Additionally, these uncertainties could ~~be harmed.~~

~~Federal, state, foreign government and industry regulations, as well as self-regulation related to privacy and data security concerns, pose the threat of lawsuits~~cause customers, distributors, vendors and other ~~liability.~~

~~We collect and utilize demographic and other information, including personally identifiable information, from and about our employees and our~~third parties who deal with us to seek to change existing ~~and potential customers and partners. Such information may be collected from our customers and partners when they visit our website~~business relationships with us or ~~through their use of our products and interactions~~fail to extend an existing relationship with our company and employees such as when signing up for certain services, registering for training seminars, participating in a survey, participating in polls or signing up to receive e-mail newsletters.

A wide variety of domestic and international laws and regulations (including, for example, the General Data Protection Regulation that became effective in May 2018, and the California Consumer Privacy Act that became effective on January 1, 2020) apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data. These data protection and privacy-related laws and regulations are evolving and may result in regulatory and public scrutiny and escalating levels of enforcement and sanctions. Our failure to comply with applicable laws and regulations, or to protect such data, could result in enforcement action against us, ~~including fines, claims for damages by customers and other affected individuals, damage to our reputation and loss of goodwill (both in relation to existing customers and prospective customers), any~~all of which could have a material adverse effect on our business, results of operations, financial ~~performance~~condition and business. Evolving and changing definitions of personal data and personal information within the European Union, the United States, and elsewhere may limit or inhibit our ability to operate or expand our business. Even the perception of privacy concerns, whether or not valid, may harm our reputation, inhibit adoption of our products by current and future customers or adversely impact our ability to attract and retain workforce talent.

Loss, retention or misuse of certain information and alleged violations of laws and regulations relating to privacy and data security, and any relevant claims, may expose us to potential liability and may require us to expend significant resources on data security and in responding to and defending such allegations and claims. In addition, future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations could impair our customers’ ability to collect, use or disclose data relating to individuals, which could decrease demand for our platform, increase our costs and impair our ability to maintain and grow our customer base and increase our revenue.

~~A portion of our revenue is generated by sales to government entities and heavily regulated organizations, which are subject to a number of challenges and risks.~~

A portion of our sales are to governmental entities. Additionally, many of our current and prospective customers, such as those in the financial services and health care industries, are highly regulated and may be required to comply with more stringent regulations in connection with subscribing to and deploying our platform. Selling to these entities can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that these efforts will result in a sale. Government and highly regulated entities often require contract terms that differ from our standard arrangements and impose compliance requirements that are complicated, require preferential pricing or “most favored nation” terms and conditions, or are otherwise time consuming and expensive to satisfy. If we undertake to meet special standards or requirements and do not meet them, we could be subject to increased liability from our customers or regulators. Even if we do meet them, the additional costs associated with providing our services to government and highly regulated customers could harm our margins. Moreover, changes in the underlying regulatory conditions that affect these types of customers could harm our ability to efficiently provide our services to them and to grow or maintain our customer base.

Additionally, government certification requirements for platforms like ours may change and in doing so restrict our ability to sell into certain government sectors until we have attained the revised certification. Government demand and payment for our solutions may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our solutions. Additionally, government entities routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the

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government entity refusing to continue buying our solutions, a reduction of revenue, fines or civil or criminal liability if the audit uncovers improper or illegal activities, which could adversely impact our operating results. Furthermore, engaging in sales activities to foreign governments introduces additional compliance risks specific to the FCPA, the UK Bribery Act and other similar statutory requirements prohibiting bribery and corruption in the jurisdictions in which we operate.

~~The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.~~

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the Exchange Act), the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the rules and regulations of the listing standards of the New York Stock Exchange and other applicable securities rules and regulations. Compliance with these rules and regulations have increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources, particularly since we are no longer an “emerging growth company.”

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

The rules and regulations applicable to public companies make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

As a result of disclosure of information in this Quarterly Report on Form 10-Q and in filings required of a public company, our business and financial condition are more visible, which has resulted in litigation, and may continue to result in additional threatened or actual litigation in the future, including by competitors and other third parties. If such claims are successful, our business and operating results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and adversely affect our business and operating results.

~~If we fail to maintain an effective system of internal controls, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.~~

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the rules and regulations of the listing standards of the New York Stock Exchange. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is

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recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive officer and principal financial officer. We are also continuing to improve our internal control over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.

Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we are required to include in our periodic reports that are filed with the SEC.

Our independent registered public accounting firm is required to formally attest to the effectiveness of our internal control over financial reporting as of the end of our fiscal year. Our independent registered public accounting firm has to issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material and adverse effect on our business and operating results and could cause a decline in themarket price of our common stock.

If we have material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated. Moreover, failure to demonstrate continued compliance with Section 404 of the Sarbanes-Oxley Act could subject us to regulatory scrutiny and sanctions, impair our ability to raise revenue, cause investors to lose confidence in the accuracy and completeness of our financial reports, subject us to stockholder or other third-party litigation as well as investigations and delisting, as applicable, by the New York Stock Exchange, the SEC, or other regulatory authorities, and negatively affect the trading price of our common stock.

~~Our financial results may be adversely affected by changes in accounting principles applicable to us.~~

Generally accepted accounting principles in the United States (GAAP) are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC, and other various bodies formed to promulgate and interpret appropriate accounting principles. For example, in ~~February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~ ~~(Topic 842)~~, which became effective for us on February 1, 2019. Under the Topic 842 standard, most leases are required to be recognized on the balance sheet as right-of-use assets and corresponding lease liabilities. Refer to Note 2 in the notes to our consolidated financial statements included in the Annual Report on Form 10-K, as amended, for our fiscal year ended January 31, 2020 filed with the SEC on March 27, 2020 for additional information on Topic 842 and its impact on our consolidated financial statements. ~~Additionally, in May 2014, the FASB issued accounting standards update No. 2014-09 (Topic 606),~~ ~~Revenue from Contracts with Customers~~, which became effective for our annual reporting period for the year ended January 31, 2019. Under Topic 606, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The adoption of Topic 606 has had a material impact on the amount and timing of revenue recognition. See Note 2 in the “Notes to Consolidated Financial Statements” included in Part II, Item 8 of our Annual Report on Form 10-K, as amended, for the fiscal year ended January 31, 2019 filed with the SEC on March 29, 2019 regarding the effect of new accounting pronouncements on our consolidated financial statements. These or other changes in accounting principles could adversely affect our financial results. Any difficulties in implementing these pronouncements could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors’ confidence in us.

~~Changes in our provision for income taxes or adverse outcomes resulting from examination of our income tax returns could adversely affect our results.~~

~~We are subject to income taxation in the United States and numerous foreign jurisdictions. Determining our provision for income taxes requires significant management judgment.~~ In addition, ~~our provision for income taxes~~the Merger Agreement restricts us from taking certain actions without Parent’s consent while the Merger is ~~subject to volatility~~pending. These restrictions and could be adversely affected by many factors, including, among other things, changes to our operating or holding structure, changes in the amounts of earnings in jurisdictions with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws. We could be subject to tax examinations in various jurisdictions.

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Tax authorities may disagree with our use of research and development tax credits, intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. While we regularly assess the likely outcomes of these examinations to determine the adequacy of our provision for income taxes, there can be no assurance that the outcomes of such examinations will not have a material impact on our operating results and cash flows.

In addition, we may be subject to the examination of our income tax returns by the U.S. Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our results of operations.

The enactment of legislation implementing changes in the United States of taxation of international business activities or the adoption of other tax reform policies could materially impact our financial position and results of operations.

Recent changes to United States tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to United States tax laws that may be enacted in the future, could impact the tax treatment of our foreign earnings. Due to expansion of our international business activities, any changes in the United States taxation of such activities may increase our worldwide effective tax rate and adversely affect our financial position and results of operations.

~~Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.~~

In general, under Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the Code), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change net operating losses (NOLs) to offset future taxable income. If our NOLs are subject to limitations arising from previous ownership changes, our ability to utilize NOLs could be limited by Section 382 of the Code. Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Furthermore, our ability to utilize NOLs of companies that we may acquire in the future may be subject to limitations. There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to offset future income tax liabilities. Under the 2017 Tax Cuts and Jobs Act (the Tax Act), tax losses generated in taxable years beginning after December 31, 2017 may be utilized to offset no more than 80% of taxable income annually. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security, or CARES Act, was signed into law. For taxable years beginning before January 1, 2021, the CARES Act eliminates the limitation on the deduction of NOLs to 80% of current year taxable income. However, that limitation remains for later taxable years. It is also uncertain if and to what extent various states will conform to the Tax Act, as modified by the CARES Act. For these reasons, we may not be able to utilize a portion of the NOLs reflected on our balance sheet, even if we attain profitability.

~~We have business and customer relationships with certain entities who are stockholders or are affiliated with our directors, or both, and conflicts of interest may arise because of such relationships.~~

Some of our customers and other business partners are affiliated with certain of our directors or hold shares of our capital stock, or both. For example, we have entered into strategic relationships and/or customer relationships with Intel Corporation (Intel). Our director, Rosemary Schooler, is an employee of Intel, and Intel is a stockholder. We believe that the transactions and agreements that we have entered into with related parties are on terms that are at least as favorable as could reasonably have been obtained at such time from third parties and our board of directors has determined that Ms. Schooler as “independent” under the applicable rules, regulations and listing standards of New York Stock Exchange and the applicable rules and regulations promulgated by the SEC. However, these relationships could create, or appear to create, potential conflicts of interest when our board of directors is faced with decisions that could have different implications for us and these other parties or their affiliates. In addition, conflicts of interest may arise between us and these other parties and their affiliates. The appearance of conflicts, even if such conflicts do not materialize, might adversely affect the public’s perception of us, as well as our relationship with other companies and our ability to enter into new relationships in the future, including with competitors of such related parties, which could harm our business and results of operations.

~~Adverse economic conditions may negatively impact our business.~~

Our business depends on the overall demand for information technology and on the economic health of our current and prospective customers. Any significant weakening of the economy in the United States or Europe and of the global economy, more limited availability of credit, a reduction in business confidence and activity, decreased government spending, economic uncertainty and other difficulties, such as the current COVID-19 pandemic, may have affected, and may continue to affect, one or more of the sectors or countries in which we sell our applications. In addition, geopolitical developments, such as

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existing and potential trade wars, and other events beyond our control, such as the current COVID-19 pandemic, can increase levels of political and economic unpredictability globally and the volatility of global financial markets. For example, in response to the COVID-19 pandemic, we have shifted certain of our customer events to virtual-only experiences and we may deem it advisable to similarly alter, postpone or cancel entirely additional customer, employee or industry events in the future. Moreover, global economic and political uncertainties such as those due to the current COVID-19 pandemic, may cause some of our customers or potential customers to curtail spending, and may ultimately result in new regulatory and cost challenges to our international operations. In addition, a strong dollar could reduce demand for our products in countries with relatively weaker currencies. These adverse conditions could result in reductions in sales of our applications, longer sales cycles, reductions in subscription duration and value, slower adoption of new technologies and increased price competition. Any of these events could have an adverse effect on our business, operating results and financial position.

~~Our business is subject to the risks of epidemic or pandemic events, earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by man-made problems such as terrorism.~~

~~A significant health crisis, epidemic or pandemic (including the current COVID-19 pandemic), or a natural disaster, such as an earthquake, fire or a flood, or a significant power outage~~ could have a material adverse impact on our business, financial condition and results of operations. Our corporate headquarters are located in Santa Clara, California, in a region known for seismic activity, and we have significant offices in ~~San Francisco, Austin and New York City i~~n the United States and internationally in Bangalore, Budapest, London, Ireland and Singapore. Further, if an epidemic or pandemic or a natural disaster or terrorist event occurs in a region from which we derive a significant portion of our revenue, customers in that region may delay or forego purchases of our products, which may materially and adversely impact our results of operations for a particular period. For example, the west coast of the United States contains active earthquake zones and the eastern seaboard is subject to seasonal hurricanes while New York and the United Kingdom have suffered significant terrorist attacks. Additionally, we rely on our network and third-party infrastructure and enterprise applications, internal technology systems and our website for our development, marketing, finance, customer support, operational support, hosted services and sales activities. In the event of a major epidemic or pandemic, earthquake, hurricane or catastrophic event such as fire, power loss, floods, telecommunications failure, cyber-attack, war or terrorist attack, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our development of solutions, lengthy interruptions in our services, breaches of data security and loss of critical data, all of which could have an adverse effect on our operating results. All of the aforementioned risks may be augmented if the business continuity plans for us and our service providers prove to be inadequate. To the extent that any of the above results in delays or cancellations of customer orders, or the delay in the deployment of our products, our business, financial condition and results of operations could be adversely affected.

~~Risks Related to Ownership of Our Common Stock~~

~~The stock price of our common stock has been, and may continue to be, volatile or may decline regardless of our operating performance.~~

The market price for our common stock has been, and may continue to be, volatile. Since shares of our common stock were sold in our initial public offering in April 2017 at a price of $15.00 per share, our stock price has ranged from $4.76 to $23.35, through October 31, 2020. The market price of the common stock of many technology companies have fluctuated significantly since the outbreak of COVID-19. The extent to which and for how long COVID-19 may impact the market price of common stock is unclear.

The market price of our common stock may continue to fluctuate significantly in response to numerous factors, many of which are beyond our control, including the factors included in this Risk Factors section as well as:

•~~COVID-19 and any associated economic downturn;~~

•~~overall performance of the equity markets;~~

•~~actual or anticipated fluctuations in our operating results or net revenue expansion rate;~~

•~~changes in the financial projections we may provide to the public or our failure to meet these projections;~~

•failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors, even if we meet our own projections;

•~~recruitment or departure of key personnel;~~

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•~~the economy as a whole and market conditions in our industry;~~

•~~rumors and market speculation involving us or other companies in our industry;~~

•~~announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;~~

•~~actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally;~~

•~~developments or disputes concerning our intellectual property or our offerings, or third-party proprietary rights;~~

•~~announced or completed acquisitions of businesses or technologies by us or our competitors;~~

•~~dilution associated with mergers and acquisitions;~~

•~~changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;~~

•~~changes in accounting standards, policies, guidelines, interpretations or principles;~~

•~~new laws or regulations or new interpretations of existing laws or regulations applicable to our business;~~

•~~lawsuits threatened or filed against us;~~

•~~other events or factors, including those resulting from war, incidents of terrorism, pandemics, or responses to these events; and~~

•~~repurchases of shares of our common stock by us and sales of shares of our common stock by us or our stockholders.~~

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. Stockholders have, from time to time, instituted securities class action litigation following periods of stock price volatility. For example, after we announced earnings for the quarter ended April 30, 2019, our stock price dropped and several securities litigation lawsuits were initiated. The current securities litigation cases, as well as any future securities litigation that we may become involved in, could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, results of operations and ~~cash flows.~~financial condition.

~~If securities~~We and our directors and officers may be subject to lawsuits relating to the Merger.

Litigation is very common in connection with the sale of public companies, regardless of whether the claims have any merit. One of the conditions to consummating the Merger is that no order preventing or ~~industry analysts do not publish research~~otherwise prohibiting the consummation of the Merger shall have been issued by any court. Consequently, if any lawsuit challenging the Merger is successful in obtaining an order preventing the consummation of the Merger, that order may delay or ~~publish inaccurate or unfavorable research about our business, our stock price~~prevent the Merger from being completed. While we will evaluate and ~~trading volume could decline.~~

~~The trading market for our common stock depends in part on~~defend against any lawsuits, the ~~research~~time and ~~reports that securities or industry analysts publish about us or~~costs of defending against litigation relating to the Merger may adversely affect our business.

We do not have any control over these analysts. If one or more of the analysts initiate research with an unfavorable rating or downgrade our common stock, provide a more favorable recommendation about our competitors, publish inaccurate or unfavorable research about our business or cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.

~~Our directors, executive officers and principal stockholders~~will continue to ~~have~~incur substantial ~~control over us, which could limit your ability to influence~~transaction-related costs in connection with the ~~outcome of key transactions, including a change of control.~~

~~Our directors, executive officers and our stockholders who own greater than 5% of our outstanding common stock, together with their affiliates, beneficially own, in the aggregate, approximately 40.2%~~ of our outstanding common stock, based on the number of shares outstanding as of November 30, 2020. As a result, these stockholders, if acting together, have the ability to influence or control matters requiring approval by our stockholders, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. In addition, these stockholders, acting together, have the ability to influence or control the governance, management and affairs of our company. They may also have interests that differ from yours and may vote in a way with which you disagree, and which may be adverse to your interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of our company,

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~~could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might ultimately affect the market price of our common stock.~~

Icahn Enterprises L.P. and certain of its affiliates (collectively, the Icahn Group) holds approximately 16.7% of our outstanding common stock, based on the number of shares outstanding as of November 30, 2020. Intel holds approximately 8.3% of our outstanding common stock, based on the number of shares outstanding as of November 30, 2020. As such, the Icahn Group and Intel could have considerable influence over matters such as approving a potential acquisition of us. The Icahn Group and Intel’s investment in and position in our company, including the various agreements we entered into with them respectively, could also discourage others from pursuing any potential acquisition of us, which could have the effect of depriving the holders of our common stock of the opportunity to sell their shares at a premium over the prevailing market price.

~~We do not intend to pay dividends for the foreseeable future.~~Merger.

We have ~~never declared or paid any cash dividends on our common stock~~incurred significant legal, advisory and ~~do not intend~~financial services fees in connection with Merger. We have incurred, and expect to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determinationcontinue to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Defensive measures in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Our restated certificate of incorporation and amended and restated bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it difficult for stockholders to elect directors who are not nominated by the current members of our board of directors or take other corporate actions, including effecting changes in our management. These provisions include:

•~~a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;~~

•the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

•the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors;

•~~a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;~~

•the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors, our chief executive officer, our lead director, if any, or a majority vote of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

•~~the requirement for the affirmative vote of holders of at least 66~~2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend the provisions of our restated certificate of incorporation relating to the issuance of preferred stock and management of our business or our amended and restated bylaws, which may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;

•the ability of our board of directors to amend our amended and restated bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the amended and restated bylaws to facilitate an unsolicited takeover attempt;

•the requirement that in order for a stockholder to be eligible to propose a nomination or other business to be considered at an annual meeting of our stockholders, such stockholder must have continuously beneficially owned at

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least 1% of our outstanding common stock for a period of one year before giving such notice, which may discourage, delay or deter stockholders or a potential acquirer from conducting a solicitation of proxies to elect their own slate of directors or otherwise attempting to obtain control of us or influence over our business; and

•advance notice procedures with which stockholders must comply in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage, delay or deter stockholders or a potential acquirer from conducting a solicitation of proxies to elect their own slate of directors or otherwise attempting to obtain control of us or influence over our business.

In addition, because we are incorporated in Delaware, we are governed by the provisions of the anti-takeover provisions of the Delaware General Corporation Law, which may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. Although we believe these provisions collectively provide for an opportunity to obtain greater value for stockholders by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer rejected by our board was considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

Our restated certificate of incorporation and amended and restated bylaws contain exclusive forum provisions for certain claims, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.

Moreover, Section 22 of the Securities Act of 1933, as amended (Securities Act) creates concurrent jurisdiction for federal and state courts over all claims brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder and in March 2020, we amended and restated our restated bylaws to provide that the federal district courts of the United States will, to the fullest extent permitted by law, be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (a Federal Forum Provision). Our decision to adopt a Federal Forum Provision followed a decision by the Supreme Court of the State of Delaware holding that such provisions are facially valid under Delaware law. While there can be no assurance that federal or state courts will follow the holding of the Delaware Supreme Court or determine that the Federal Forum Provision should be enforced in a particular case, application of the Federal Forum Provision means that suits brought by our stockholders to enforce any duty or liability created by the Securities Act must be brought in federal court and cannot be brought in state court. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder and neither the exclusive forum provision nor the Federal Forum Provision applies to suits brought to enforce any duty or liability created by the Exchange Act. Accordingly, actions by our stockholders to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder must be brought in federal courts. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the regulations promulgated thereunder.

Any person or entity purchasing or otherwise acquiring or holding any interest in any of our securities shall be deemed to have notice of and consented to our exclusive forum provisions, including the Federal Forum Provision. These provisions may limit our stockholders’ ability to bring a claim in a judicial forum they find favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our restated certificate of incorporation and/or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur, additional costs ~~associated~~in connection with ~~resolving such action~~the satisfaction of the various conditions to closing of the Merger, including seeking approval from our stockholders and from applicable regulatory agencies. If there is any delay in ~~other jurisdictions, which~~the consummation of the Merger, these costs could ~~harm our business, operating results and financial condition.~~increase significantly.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

~~On March 3, 2020, our~~Our board of directors have authorized a share ~~repurchase program of the our common stock~~repurchases of up to ~~$100~~$600 million ~~(the “Share Repurchase Program”), as announced~~of our outstanding shares of common stock. For further discussion on ~~March 10, 2020 and further discussed in~~repurchase activity, see Note 1011 in the ~~“Notes~~"Notes to Condensed Consolidated Financial Statements” included in ~~Part I, Item 1~~this report.

The following table provides a summary of ~~this Quarterly Report on Form 10-Q. No shares were repurchased~~repurchases of our common stock during the three months ended ~~October 31, 2020. As~~April 30, 2021 (in millions, except per share amounts):



Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
February 1 - February 28, 2021	—	$	—	—	$	259.9
March 1 - March 31, 2021	0.9	$	12.12	0.9	$	248.5
April 1 - April 30, 2021	0.6	$	12.55	0.6	$	240.9
Total	1.5			1.5

(1) No shares were purchased outside of ~~October 31, 2020, there was approximately $74.0 million of authorized funds remaining under the repurchase~~a publicly announced plan or program.~~This Share Repurchase Program does not have an expiration date.~~

~~On December 2, 2020, our board of directors authorized the repurchase of up to an additional $500 million of our outstanding shares of common stock as discussed in~~ ~~Note 16~~ ~~of our “Notes to Condensed Consolidated Financial Statements” included in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~

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Exhibit Index

Incorporated by Reference

Filed Herewith

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

31.01

Certification of Robert Bearden, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.02

Certification of Jim Frankola, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.01*

Certification of Robert Bearden, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.02*

Certification of Jim Frankola, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CLOUDERA, INC.

~~December~~June 4, ~~2020~~2021

By:

/s/ Robert Bearden

Robert Bearden

Chief Executive Officer and Director

(Principal Executive Officer)

~~December~~June 4, ~~2020~~2021

By:

/s/ Jim Frankola

Jim Frankola

Chief Financial Officer

(Principal Financial Officer)


	Nine Months Ended October 31, 2020
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of January 31, 2020	295,168	$	15	$	2,923,905	$	273	$	(1,485,824)	1,438,369
Shares issued under employee stock plans	7,961	—		26,353		—		—		26,353
Vested restricted stock units converted into shares	16,035	1		—		—		—		1
Shares issued under employee stock purchase plan	800	—		7,730		—		—		7,730
Repurchases of common stock	(3,945)	—		(25,974)		—		—		(25,974)
Stock-based compensation expense	—	—		141,911		—		—		141,911

Shares withheld related to net settlement of restricted stock units	(3,301)	—		(29,635)		—		—		(29,635)
Unrealized gain on investments	—	—		—		694		—		694
Foreign currency translation loss	—	—		—		(1,162)		—		(1,162)
Cumulative effect of accounting change	—	—		—		—		(798)		(798)
Net loss	—	—		—		—		(107,956)		(107,956)
Balance as of October 31, 2020	312,718	$	16	$	3,044,290	$	(195)	$	(1,594,578)	$	1,449,533


	Nine Months Ended October 31, 2019
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of January 31, 2019	268,819	$	13	$	2,711,340	$	(42)	$	(1,149,242)	$	1,562,069
Shares issued under employee stock plans	3,776	1		10,743		—		—		10,744
Vested restricted stock units converted into shares	16,558	—		—		—		—		0
Shares issued under employee stock purchase plan	735	—		3,590		—		—		3,590
Stock-based compensation expense	—	—		164,818		—		—		164,818

Shares withheld related to net settlement of restricted stock units	(2,770)	—		(21,085)		—		—		(21,085)
Unrealized gain on investments	—	—		—		1,177		—		1,177
Foreign currency translation loss	—	—		—		(157)		—		(157)
Net loss	—	—		—		—		(272,295)		(272,295)
Balance as of October 31, 2019	287,118	$	14	$	2,869,406	$	978	$	(1,421,537)	$	1,448,861