Content analysis
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Legalese | ||
Litigous | ||
Readability |
H.S. junior Good
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New words:
antitrust, assumption, back, Belgium, Bravo, calendar, CDPA, clearance, Colorado, compartive, CPA, freely, impression, Ireland, Italy, LLC, Metal, outlook, pendency, requisite, restraining, Rodino, sponsorship, superior, surrender, Thoma, timeframe, Virginia, waiting, Zealand
Removed:
proportionate, representing, shareholder, traded, unit
Financial report summary
?Risks
- The announcement and pendency of our agreement to be acquired by affiliates of Thoma Bravo may have an adverse effect on our business results and our failure to complete the Merger could have a material adverse effect on our business, results of operations, financial condition and stock price.
- While the Merger is pending, we are subject to business uncertainties and contractual restrictions that could harm our business relationships, financial condition, operating results, and business.
- Litigation may arise in connection with the Merger, which could be costly, prevent consummation of the Merger, divert management’s attention and otherwise materially harm our business.
- The extent to which the COVID-19 pandemic, including the resulting global economic uncertainty, and measures taken in response to the pandemic could continue to impact our business and future results of
- operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict.
- We have incurred significant net losses in recent years, we expect to incur losses in the future, and we may not be able to generate sufficient revenue to achieve and maintain profitability.
- We derive, have derived and expect to continue to derive, the substantial majority of our revenue from subscriptions to our platform. Any failure of our platform to satisfy customer demands, achieve increased market acceptance or adapt to changing market dynamics would adversely affect our business, results of operations, financial condition and growth prospects.
- If we fail to effectively manage our growth and organizational change, our business and results of operations could be harmed.
- The market for experience management solutions is new and rapidly evolving, and if this market develops more slowly than we expect or declines, or develops in a way that we do not expect, our business could be adversely affected.
- If we are unable to attract new customers in a manner that is cost-effective and assures customer success, then our business, results of operations and financial condition would be adversely affected.
- Our business depends on our customers renewing their subscriptions and expanding their use of our platform. Any decline in our customer renewals or expansion would harm our business, results of operations and financial condition.
- The market in which we participate is new and rapidly evolving, and if we do not compete effectively, our results of operations and financial condition could be harmed.
- If we are not able to effectively develop platform enhancements, introduce new products or keep pace with technological developments, our business, results of operations and financial condition could be adversely affected.
- Any failure by us or our partners to offer high-quality customer service and support may adversely affect our relationships with our existing and prospective customers, and in turn adversely affect our business reputation, results of operations and financial condition.
- The majority of our customer base consists of large and mid-sized enterprises, and we currently generate a significant portion of our revenue from a relatively small number of enterprises, the loss of any of which could harm our business, results of operations and financial condition.
- If we or any of the third parties we work with experience a security breach or other incident or unauthorized parties otherwise obtain access to our customers’ data, our data or our platform, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may be reduced and we may incur significant liabilities.
- Interruptions or suboptimal performance associated with our technology and infrastructure may adversely affect our business, results of operations and financial condition.
- Our business and growth depend in part on the success of our strategic relationships with third parties, as well as on the continued availability and quality of feedback data from third parties over whom we do not have control.
- We rely on our technology infrastructure, including third-party data centers, and any interruption or delay in service from these facilities could impair the delivery of our platform and harm our business.
- We depend and rely upon SaaS technologies from third parties to operate our business, and interruptions or performance problems with these technologies may adversely affect our business and results of operations.
- Real or perceived defects or errors on our platform could harm our reputation, result in significant costs to us, and impair our ability to sell subscriptions to our platform and related services.
- We depend on our management team and key employees, and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could adversely affect our business.
- Our revenue growth rate has fluctuated in prior periods and may decline again in the future.
- We invest significantly in research and development, and to the extent our research and development investments do not translate into new solutions or material enhancements to our current solutions, or if we do not use those investments efficiently, our business and results of operations would be harmed.
- We may fail to accurately predict the optimal pricing strategies necessary to attract new customers, retain existing customers and respond to changing market conditions.
- If our investments to increase adoption of our platform by small and medium-sized businesses are not successful, our business, results of operations and financial condition may be adversely affected.
- Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our platform.
- Our sales cycle with enterprise, international and public sector clients can be long and unpredictable.
- If we are unable to effectively operate on or capture data from mobile devices, our business could be adversely affected.
- If we are unable to develop and maintain successful relationships with channel partners, our business, results of operations, and financial condition could be adversely affected.
- Disputes with our customers and other third parties could be costly, time-consuming and harm our business and reputation.
- If we are not able to maintain and enhance our brand, our business, results of operations and financial condition may be adversely affected.
- Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, which could harm our business.
- We recognize revenue over the term of our customers’ contracts. Consequently, increases or decreases in new sales may not be immediately reflected in our results of operations and may be difficult to discern.
- Our customers may fail to pay us in accordance with the terms of their agreements, at times necessitating action by us to attempt to compel payment.
- Certain of our results of operations, key metrics and other financial metrics may be difficult to predict.
- Our results of operations may be difficult to predict as a result of seasonality.
- Our estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, or at all.
- We may be sued by third parties for alleged infringement of their proprietary rights.
- Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.
- Our platform utilizes open source software, which may subject us to litigation, require us to re-engineer our platform or otherwise divert resources away from our development efforts.
- Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.
- If we fail to integrate our platform with a variety of software applications, operating systems, platforms, and hardware that are developed by others, our platform may become less marketable, less competitive or obsolete and our business and results of operations would be harmed.
- We may acquire or invest in companies, 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.
- Our international sales and operations subject us to additional risks and challenges that can adversely affect our business, results of operations and financial condition.
- We believe our success depends on continuing to invest in the growth of our worldwide operations by entering new geographic markets. If our investments in these markets are greater than anticipated, or if our customer growth or sales in these markets do not meet our expectations, our results of operations and financial condition may be adversely affected.
- Risks associated with operating in Argentina could have an impact on our results of operations.
- We face exposure to foreign currency exchange rate fluctuations, and if foreign currency exchange rates fluctuate substantially in the future, our results of operations and financial condition, which are reported in U.S. dollars, could be adversely affected.
- Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.
- Privacy concerns and laws or other domestic or foreign regulations may reduce the effectiveness of our platform and adversely affect our business.
- We are subject to governmental export and import controls and economic sanctions laws and regulations that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.
- Failure to comply with anti-bribery, anti-corruption and anti-money laundering laws could subject us to penalties and other adverse consequences.
- Taxing authorities may successfully assert that we should have collected or in the future should collect sales and use, value added or similar taxes, and we could be subject to liability with respect to past or future sales, which could adversely affect our results of operations.
- Our international operations subject us to potentially adverse tax consequences.
- Changes in, or interpretations of, tax rules and regulations may adversely affect our effective tax rates.
- We are subject to potential tax examinations of our tax returns by the Internal Revenue Service (the IRS), and other domestic and foreign tax authorities. An adverse outcome of any such audit or examination by the IRS or other tax authority could have a material adverse effect on our results of operations and financial condition.
- Our business could be adversely impacted by changes in laws and regulations related to the Internet or changes in access to the Internet generally.
- Servicing our current and future debt may require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our indebtedness. Our payment obligations under such indebtedness may limit the funds available to us, and the terms of our debt agreements may restrict our flexibility in operating our business or otherwise adversely affect our results of operations.
- We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.
- The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results.
- We are subject to counterparty risk with respect to the capped call transactions.
- The terms of the Wells Fargo Credit Facility require us to meet certain operating and financial covenants and place restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.
- The nature of our business requires the application of complex accounting rules, and any significant changes in current rules could affect our financial statements and results of operations.
- If our judgments or estimates relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could fall below expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.
- If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
- The market price of our common stock could be volatile, and you could lose all or part of your investment.
- Our directors, executive officers and holders of 5% or more of our common stock beneficially own approximately 44.0% of our common stock and are able to exert significant control over us, which limits your ability to influence the outcome of important transactions, including a change of control.
- Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
- The capped call transactions may affect the value of the Notes and our common stock.
- If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our market, or if they change their recommendations regarding our common stock adversely, the market price and trading volume of our common stock could decline.
- Substantial future sales could depress the market price of our common stock.
- We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, results of operations and financial condition.
- Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the market price of our common stock and the Notes.
- Our amended and restated bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers or employees.
- Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.
- We could be subject to securities class action litigation.
- Unfavorable conditions in our industry or the economy more generally or reductions in information technology spending could limit our ability to grow our business and adversely affect our results of operations and financial condition.
- Our business is subject to the risks of earthquakes, fire, floods, public health crises and other natural catastrophes and to interruption by man-made problems such as power disruptions, computer viruses, data security breaches or other incidents or terrorism.
Management Discussion
- Total revenue was $477.2 million for the year ended January 31, 2021 compared to $402.5 million for the year ended January 31, 2020, which is an increase of $74.8 million, or 19%.
- Subscription revenue accounted for 80% of total revenue the year ended January 31, 2021 and 78% of total revenue for the year ended January 31, 2020, respectively. Subscription revenue increased by $70.4 million, or 23%, for the year ended January 31, 2021 compared to the year ended January 31, 2020. The increases were primarily due to cross-sell with existing customers and expansions as reflected in our dollar-based net revenue retention rate of 115% for the year ended January 31, 2021. The increases were also driven by revenue from new customers, as the number of enterprise customers increased to 1,077 as of January 31, 2021 from 757 as of January 31, 2020, representing a 42% increase. The expansions and cross-sell with existing customers and revenue from new customers, including our 700 small and mid-market customers, also helped drive growth in our subscription billings, which increased to $411.5 million for the year ended January 31, 2021 from $360.8 million for the year ended January 31, 2020, representing a 14% increase.
- Professional services revenue increased by $4.4 million, or 5%, for the year ended January 31, 2021 compared to the year ended January 31, 2020. The increases were driven by higher managed and implementation services.