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Financial report summary
?Risks
- We rely on indirect sales channels, such as value-added resellers, systems integrators, corporate resellers, distributors, and OEMs, for the distribution of our solutions, and the failure of these channels to effectively sell our solutions could have a material adverse effect on our revenues and results of operations.
- If the cost for maintenance and support agreements, or our term-based subscription licenses, with our customers is not competitive in the market or if our customers do not renew their agreements either at all, or on terms that are less favorable to us, our business and financial performance might be adversely impacted.
- In periods of volatile economic conditions, our exposure to credit risk and payment delinquencies on our accounts receivable significantly increases.
- We develop solutions that interoperate with certain products, operating systems and hardware developed by others, and if the developers of those operating systems and hardware do not cooperate with us or we are unable to devote the necessary resources so that our solutions interoperate with those systems, our development efforts may be delayed or foreclosed and our business and results of operations may be adversely affected.
- We depend on growth in the data protection solutions market, and lack of growth or contraction in this market could have a material adverse effect on our sales and financial condition.
- Our as-a-service offerings require costly and continual infrastructure investments and if these investments do not yield the expected return, our business and financial performance might be adversely impacted.
- We rely on third-party hosting providers to deliver our as-a-service offerings. Therefore, any disruption or interference with our use of these services could adversely affect our business.
- Our complex solutions may contain undetected errors, which could adversely affect not only their performance but also our reputation and the acceptance of our solutions in the market.
- We may not receive significant revenues from our current research and development efforts for several years, if at all.
- We implemented a restructuring program in fiscal 2022, which we cannot guarantee will achieve its intended result.
- We have engaged, and may continue to engage, in strategic acquisitions or transactions, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
- We are subject to several local, state, federal and foreign laws and regulations regarding privacy and data protection, and any actual or perceived failure by us to comply with such laws and regulations could adversely affect our business.
- Changes in senior management or key personnel could cause disruption in the Company and have a material effect on our business.
- Borrowing against our revolving credit facility could adversely affect our operations and financial results.
- If we are unable to effectively manage certain risks and challenges related to our India operations, our business could be harmed.
- Volatility in the global economy could adversely impact our continued growth, results of operations and our ability to forecast future business.
- We may experience fluctuations in foreign currency exchange rates that could adversely impact our results of operations.
- Our international sales and operations are subject to factors that could have an adverse effect on our results of operations.
- We may be subject to IT system failures, network disruptions and breaches in data security.
- We have been, and may in the future become, involved in litigation that may have a material adverse effect on our business.
- Our effective tax rate is difficult to project, and changes in such tax rate or adverse results of tax examinations could adversely affect our operating results.
- Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.
- Goodwill represents a portion of our assets and any impairment of these assets could negatively impact our results of operations.
- We may experience a decline in revenues or volatility in our quarterly operating results, which may adversely affect the market price of our common stock.
- The price of our common stock may be highly volatile and may decline regardless of our operating performance.
- Although we believe we currently have adequate internal control over financial reporting, we are required to assess our internal control over financial reporting on an annual basis, and any future adverse results from such assessment could result in a loss of investor confidence in our financial reports and have an adverse effect on our stock price.
- Certain provisions of our certificate of formation and our amended and restated bylaws or Delaware law could prevent or delay a potential acquisition of control of our Company, which could decrease the trading price of our common stock.
- Our business could be materially and adversely affected as a result of natural disasters, terrorism or other catastrophic events.
- We currently, and may in the future, have assets held at financial institutions that may exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (“FDIC”), the loss of which would have a severe negative affect on our operations and liquidity.
Management Discussion
- Amounts reported in millions are rounded based on the amounts in thousands. As a result, the sum of the components reported in millions may not equal the total amount reported in millions due to rounding.
- –Total revenues increased $21.7 million, or 11% year over year, driven primarily by an increase in subscription revenue, partially offset by a decrease in perpetual license revenue. We remain focused on selling subscription arrangements through both term-based software licenses and SaaS offerings.
- –Subscription revenue increased $26.9 million, or 31% year over year, driven primarily by a 91% increase in our SaaS revenue. Term-based license revenue increased 16%, due to an increase in larger term-based license transactions (deals greater than $0.1 million) period over period. Subscription revenue accounted for 53% of total revenues for the three months ended December 31, 2023 compared to 45% for the three months ended December 31, 2022.