1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-KxxAnnual Report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934For the fiscal year ended December 31,2015ORooTransition report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934Commis
2、sion File Number:001-35838Marin Software Incorporated(Exact name of registrant as specified in its charter)Delaware20-4647180(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification Number)123 Mission Street,27th FloorSan Francisco,CA 94105(415)399-2580(Address,incl
3、uding zip code,and telephone number,including area code,of registrants principal executive offices)Securities registered pursuant to Section 12(b)of the Act:Title of each class Name of each exchange on which registeredCommon stock,par value$0.001 per share New York Stock Exchange,Securities register
4、ed pursuant to section 12(g)of the Act:Not applicableIndicatebycheckmarkiftheRegistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesoNoxIndicatebycheckmarkiftheRegistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)ofAct.YesoNoxIndicatebycheckmarkwhethertheRegist
5、rant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheRegistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days:YesxNooIndicatebycheckmarkwhethertheRegistranthassu
6、bmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheRegistrantwasrequiredtosubmitandpostsuchfiles).YesxNooIndicatebycheckmarkifdis
7、closureofdelinquentfilerspursuanttoItem405ofRegulationS-K(229.405ofthischapter)isnotcontainedherein,andwillnotbecontained,tothebestofRegistrantsknowledge,indefinitiveproxyorinformationstatementsincorporatedbyreferenceinPartIIIofthisForm10-KoranyamendmenttothisForm10-K.xIndicatebycheckmarkwhethertheR
8、egistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfilerorasmallerreportingcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler”and“smallerreportingcompany”inRule12b-2oftheExchangeAct.(Checkone):Largeacceleratedfiler o Acceleratedfiler xNon-acceleratedfiler o Smalle
9、rreportingcompany oIndicatebycheckmarkwhethertheRegistrantisashellcompany(asdefinedinRule12b-2oftheAct).YesoNoxBasedontheclosingpriceoftheRegistrantsCommonStockontheNewYorkStockExchangeof$6.74onthelastbusinessdayoftheRegistrantsmostrecentlycompletedsecondfiscalquarter,whichwasJune30,2015,theaggregat
10、emarketvalueofitssharesheldbynon-affiliateswasapproximately$153million.SharesoftheRegistrantsCommonStockheldbyeachexecutiveofficeranddirectorandbyeachentityorpersonthatowned5percentormoreoftheRegistrantsoutstandingCommonStockwereexcludedinthatsuchpersonsmaybedeemedtobeaffiliates.Thisdeterminationofa
11、ffiliatestatusisnotnecessarilyaconclusivedeterminationforotherpurposes.AsofFebruary16,2016,therewereapproximately37.9millionsharesoftheRegistrantsCommonStockoutstanding.DOCUMENTS INCORPORATED BY REFERENCEPortionsoftheRegistrantsdefinitiveproxystatementforits2016AnnualMeetingofStockholders(“ProxyStat
12、ement”),tobefiledwithin120daysoftheRegistrantsfiscalyearendedDecember31,2015,areincorporatedbyreferenceinPartIIIofthisAnnualReportonForm10-K.ExceptwithrespecttoinformationspecificallyincorporatedbyreferenceinthisForm10-K,theProxyStatementisnotdeemedtobefiledaspartofthisAnnualReportonForm10-K.MARIN S
13、OFTWARE INCORPORATEDFORM 10-KFor the Fiscal Year Ended December 31,2015TABLE OF CONTENTS Page PART I.4Item1.Business4Item1A.RiskFactors8Item1B.UnresolvedStaffComments25Item2.Properties25Item3.LegalProceedings25Item4.MineSafetyDisclosures25PART II.26Item5.MarketforRegistrantsCommonEquity,RelatedStock
14、holderMattersandIssuerPurchasesofEquitySecurities26Item6.SelectedConsolidatedFinancialData29Item7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations31Item7A.QuantitativeandQualitativeDisclosuresAboutMarketRisk49Item8.FinancialStatementsandSupplementaryData50Item9.Changesinand
15、DisagreementswithAccountantsonAccountingandFinancialDisclosure50Item9A.ControlsandProcedures50Item9B.OtherInformation51PART III.52Item10.Directors,ExecutiveOfficersandCorporateGovernance52Item11.ExecutiveCompensation52Item12.SecurityOwnershipofCertainBeneficialOwnersandManagementandRelatedStockholde
16、rMatters52Item13.CertainRelationshipsandRelatedTransactions,andDirectorIndependence52Item14.PrincipalAccountantFeesandServices52PART IV.53Item15.ExhibitsandFinancialStatementSchedules53IndextoConsolidatedFinancialStatements54Signatures812SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThisAnnualRep
17、ortonForm10-K,includingthe“ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations,”containsforward-lookingstatementsregardingfutureeventsandourfutureresults,includingstatementsregardingthecapabilitiesofourtechnologyplatformandupgradestotheplatform,productcapabilitiesandtheirbenef
18、itsforourcustomers,andexpectationsastofinancialperformance,thataresubjecttothesafeharborscreatedundertheSecuritiesActof1933,asamended,andtheSecuritiesExchangeActof1934,asamended.AllstatementscontainedinthisAnnualReportonForm10-Kotherthanstatementsofhistoricalfact,includingstatementsregardingourfutur
19、eresultsofoperationsandfinancialposition,ourbusinessstrategyandplans,andourobjectivesforfutureoperations,areforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Thewords“believe,”“may,”“potentially,”“will,”“estimate,”“continue,”“anticipate,”“intend,”“could,”“shoul
20、d,”“would,”“project,”“plan,”“predict,”“expect,”“seek,”andsimilarexpressionsareintendedtoidentifyforward-lookingstatements.Wehavebasedtheseforward-lookingstatementslargelyonourcurrentexpectations,estimatesandprojectionsaboutfutureeventsandtrendsthatwebelievemayaffectourfinancialcondition,resultsofope
21、rations,businessstrategy,short-termandlong-termbusinessoperationsandobjectives,andfinancialneeds.ThesestatementsreflectourbeliefsandcertainassumptionsbaseduponinformationavailabletousatthetimewefilethisAnnualReportonForm10-Korthetimeofthedocumentsincorporatedbyreference.Suchforward-lookingstatements
22、areonlypredictions,whichmaydiffermateriallyfromactualresultsorfutureevents.Althoughwebelievethatourexpectations,estimatesandprojectionsreflectedintheforward-lookingstatementsarereasonable,wecannotbesurethattheywillbeachieved.Theseforward-lookingstatementsaresubjecttoanumberofrisks,uncertaintiesandas
23、sumptions,includingthosedescribedinthe“RiskFactors”section.Moreover,weoperateinaverycompetitiveandrapidlychangingenvironment.Newrisksemergefromtimetotime.Itisnotpossibleforourmanagementtopredictallrisks,norcanweassesstheimpactofallfactorsonourbusinessortheextenttowhichanyfactor,orcombinationoffactor
24、s,maycauseactualresultstodiffermateriallyfromthosecontainedinanyforward-lookingstatementswemaymake.Inlightoftheserisks,uncertaintiesandassumptions,thefutureeventsandtrendsdiscussedinthisreportmaynotoccurandactualresultscoulddiffermateriallyandadverselyfromthoseanticipatedorimpliedintheforward-lookin
25、gstatements.Weundertakenoobligationtoreviseorpubliclyreleasetheresultsofanyrevisiontotheseforward-lookingstatements,exceptasrequiredbylaw.Giventheserisksanduncertainties,readersarecautionednottoplaceunduerelianceonsuchforward-lookingstatements.Asusedinthisreport,theterms“Marin,”“Registrant,”“we,”“us
26、,”“our,”and“theCompany”meanMarinSoftwareIncorporatedanditssubsidiariesunlessthecontextindicatesotherwise.3PART IITEM 1.BUSINESSWeprovidealeadingcross-channeladvertisingcloudplatformthatenablesdigitalmarketerstoimproveperformanceoftheironlineadvertisingcampaignsacrossdevices,realizeefficienciesandtim
27、esavings,andmakebetterbusinessdecisions.Ourintegratedplatformisasoftware-as-a-service,orSaaS,analytics,workflowandoptimizationsolutionformarketingprofessionals,allowingthemtoeffectivelymanagetheirdigitaladvertisingspendacrosssearch,socialanddisplaychannels.Oursoftwaresolutionisdesignedtohelpourcusto
28、mers:measuretheeffectivenessoftheiradvertisingcampaignsthroughourproprietaryreportingandanalyticscapabilities;manageandexecutecampaignsthroughourintuitiveuserinterfaceandunderlyingtechnologythatstreamlinesandautomateskeyfunctions,suchasadcreationandbidding,acrossmultiplepublishersandchannels;andopti
29、mizecampaignsacrossmultiplepublishersandchannelsbasedonmarketandbusinessdatatoachievedesiredrevenueoutcomesusingourpredictivebidmanagementtechnology.Advertisersuseourplatformtocreate,targetandconvertpreciseaudiencesbasedonrecentbuyingsignalsfromuserssearch,socialanddisplayinteractions.Ourplatformisi
30、ntegratedwithleadingpublisherssuchasBaidu,Bing,Facebook,Google,Twitter,Yahoo!,Yahoo!JapanandYandex.Additionally,wehaveintegrationswithmorethan50leadingwebanalyticsandad-servingsolutionsandkeyenterpriseapplications,enablingourcustomerstomoreaccuratelymeasurethereturnoninvestmentoftheirmarketingprogra
31、ms.Oursoftwareplatformservesasanintegrationpointforadvertisingperformance,salesandrevenuedata,allowingadvertiserstoconnectthedotsbetweenadvertisingspendandrevenueoutcomes.Throughanintuitiveinterface,weenableourcustomerstosimultaneouslyrunlarge-scaledigitaladvertisingcampaignsacrossmultiplepublishers
32、andchannels,makingiteasyformarketerstocreate,publish,modifyandoptimizecampaigns.Ourpredictivebidmanagementandoptimizationtechnologyalsoallowsadvertiserstoforecastoutcomesandoptimizecampaignsacrossmultiplepublishersandchannelstoachievetheirbusinessgoals.Ouroptimizationtechnologycanhelpadvertisersincr
33、easeadspendonthosecampaigns,publishersandchannelsthatareperformingwellwhilereducinginvestmentinthosethatarenot.Thiscategoryofsolutions,whichwerefertoascross-channelbidandcampaignoptimization,helpsbusinessesintelligentlyandefficientlymeasure,manage,andoptimizetheirdigitaladvertisingspendtoachievedesi
34、redbusinessresults.WecompletedouracquisitionsofSocialMoovS.A.S.,orSocialMoov,andNowSpots,Inc.,whichconductedbusinessasPerfectAudience,orPerfectAudience,inFebruary2015andJune2014,respectively,tocomplementourproductofferings.SocialMoovprovidesasoftwareplatformthatoffersadvertisersandagenciesnovelsocia
35、ladvertisingtoolsdesignedtoincreaseengagementandreturnoninvestment,includingFacebookvideoadvertising,Twitterapplicationprograminterface,orAPI,integrationandtelevisionsynchronization.PerfectAudienceoffersadvertisersaSaaSdemand-sideplatformtopurchasedisplayimpressionsandretargetaudiencesacrosstheweb,F
36、acebookandTwitter.PerfectAudienceexpandedourcross-channelcapabilitiesbyaddingnewprogrammaticdisplayandsocialadvertisingfunctionalitywhileexpandingouraudienceretargetingtools.TheseacquisitionsaremorefullydescribedinNote3totheConsolidatedFinancialStatements.HeadquarteredinSanFrancisco,wewerefoundedin2
37、006.Themailingaddressofourheadquartersis123MissionStreet,27thFloor,SanFrancisco,California94105andourtelephonenumberatthatlocationis(415)399-2580.AsofDecember31,2015,ourcustomerscollectivelymanagedmorethan$7.8billioninannualizedadspendonourplatform,whichwebelievemakesusthelargestproviderofindependen
38、tadvertisingcloudsolutions.Offered SolutionsOurcloud-basedplatformhelpsourcustomerstomeasure,manageandoptimizetheirdigitalmarketingcampaignstoimproveperformanceoftheironlineadvertisingcampaigns,realizeefficienciesandtimesavings,andmakebetterbusinessdecisions.Weoffersolutionsfordirectadvertisersofall
39、sizesandtheagenciesthatrepresentthem,includingenterprise,mid-marketorsmallbusinesses.WeofferSaaSsolutionsforsearch,socialanddisplayaswellasmanagedservicesfordisplayandsocial.4SearchWeoffertwoeditionsofoursearchplatformthatleveragethesameunderlyingtechnology.EnterpriseEdition.Targetinglargeadvertiser
40、sandagencies,MarinEnterpriseisdesignedtoprovidedigitaladvertiserswiththepower,scaleandflexibilityrequiredtomanagelarge-scaleadvertisingcampaigns.ProfessionalEdition.Targetingmid-marketadvertisersandagencies,MarinProfessionalisdesignedforrapiddeploymentandofferscustomersacompleteworkflow,analysisando
41、ptimizationsolutionformanagingdigitaladvertising.Oursearchplatformiscomprisedofthefollowingmodules:Optimization.OurOptimizationmodulehelpadvertisersmanagebidsacrosspublisherstomeetrevenuegoalsandidentifyopportunitiesforcampaignimprovements,whichwebelievecanimprovefinancialperformanceandefficiencies.
42、ReportingandAnalytics.OurReportingandAnalyticsmoduleenablesadvertiserstoreportresultsatabusinesslevelandanalyzecross-channelperformancetrends,whichwebelievecanleadtoimprovedvisibilityandgeneratesignificanttimesavings.CampaignManagement.OurCampaignManagementmoduleprovidesthedigitaladvertiserwithaunif
43、iedinterfacetocreate,manageandoptimizecampaignsacrossabroadrangeofpublishers,creatinggreaterefficienciesandincreasingflexibility.Connect.OurConnectmoduleenablesadvertiserstoautomateandstreamlinethecaptureofrevenue,costandaudiencedatafromarangeofsourcessuchasadservers,analyticssystems,CRMplatforms,pu
44、blishersandthirdpartydatabases.Throughintegrationsacrossmultipledatasources,ourConnectmodulecanhelpadvertisershaveaholisticpictureoftheirdigitaladvertisingcampaigns.SocialTargetingagenciesandadvertisersofallsizes,MarinSocialisdesignedtoprovidedigitalmarketerswiththepower,scaleandflexibilitytoexecute
45、advertisingcampaignsacrossmultiplesocialnetworks.DisplayWeoffertwoeditionsofourdisplayplatformthatleveragethesameunderlyingtechnology.MarinDisplay.Targetinglargeadvertisersandagencies,MarinDisplayisdesignedtoprovidedigitaladvertiserswiththepower,scaleandflexibilityrequiredtomanagelarge-scaleadvertis
46、ingcampaignsacrossallmajornetworksandacrossdevices.PerfectAudience.Targetingsmallbusinesses,PerfectAudienceisdesignedforrapiddeploymentandofferscustomersandeasy-to-useinterfacetoimplementandoptimizecampaignsacrossallmajornetworksandacrossdevices.Technology&Supporting PlatformWedesignedourcloud-based
47、platformtosupportlargeglobaladvertisers.ThemajorityofoursoftwareiswritteninJava.Ourhardwareconsistsofindustry-standardserversandnetworkinfrastructure.OurstandardoperatingsystemisLinux.Oursoftwareplatformischaracter-set,language,currency,andtime-zoneindependent.Ourtechnologyplatformhasthefollowingkey
48、benefits:Scalability.Ourplatformisdesignedtohandlebillionsofadunitsacrossthousandsofadvertisers,whiledeliveringaresponsivebrowsingandeditingexperience.Asthenumberofadvertisersandresultingcomputingandstoragerequirementsgrow,wecanaddhardwaretoourplatformtoaccommodategrowingdemand.Availability.Ourcusto
49、mersarehighlydependentontheavailabilityofourplatform,whichisdesignedtobeavailable24x7,365daysayear.Weoperateourownhardwareandusethird-partydatacentersthatofferserverredundancy,back-upcommunicationsandpowerandphysicalsecurity.Security.Ourplatformmanagesalargequantityofcustomerdata.Weemploytechnologie
50、s,policiesandprocedurestoprotectcustomerdata.Ourprimarythird-partydatacenterhasSSAE16attestations.Weareintheprocessofupgradingoursoftwareplatform,whichwebelievewillcost-effectivelyextendthescalability,speed,resiliencyandavailabilityofourservicesandfacilitateourabilitytoaddnewfeaturestoourproducts.5C
51、ustomersWemarketandselloursolutionstoadvertisersdirectlyandthroughadvertisingagenciesthatuseourplatformonbehalfoftheircustomers.Advertisersthatweservethroughourrelationshipswithagencieshavehistoricallyrepresentedabouthalfourrevenues.Therewerenocustomersthataccountedforgreaterthan10%ofourrevenues,net
52、in2015,2014or2013.CompetitionThedigitaladvertisingcloudmarketishighlycompetitive,fragmented,andsubjecttochangesinbothtechnologyandcustomerbehavior.Wefacesignificantcompetitiontodayandexpectcompetitiontointensifyinthefuture.Tomaintainandimproveourcompetitiveposition,wemustkeeppacewiththeevolvingneeds
53、ofourcustomersandcontinuetodevelopandintroducenewmodules,featuresandservicesinatimelyandefficientmanner.Wecurrentlycompetewithlarge,well-establishedcompanies,suchasAdobeSystemsIncorporatedandGoogleInc.(throughitswholly-ownedsubsidiaryDoubleClick),andprivately-heldcompanies,suchasKenshooLtd.Wealsocom
54、petewithin-houseproprietarytools,toolsfrompublishersandcustomsolutions,includingspreadsheets.Webelievetheprincipalcompetitivefactorsinourmarketincludethefollowing:solutionquality,breadth,stability,flexibilityandfunctionality;tangibleplatformbenefits;levelofcustomersatisfactionandourabilitytorespondt
55、ocustomerneedsrapidly;breadthandqualityofadvertiserandagencyrelationships;abilitytoinnovateanddevelopneworimprovedproductsandfeatureswhilemaintainingplatformspeedandstability;abilitytorespondtochangesinpublishersAPIs;brandawarenessandreputation;andsizeofcustomerbase.Apartfromcross-channelplatformcom
56、petitors,wealsocompetewithchannelsolutionsinthedisplayandsocialadvertisingmarkets.CompetitorsinthedisplayadvertisingmarketincludepubliccompaniessuchasCriteoS.A.andRocketFuelInc.,aswellasprivatelyheldcompaniessuchasAdRollInc.andMediaMath,Inc.,whileinthesocialadvertisingmarketwecompetewithpubliccompan
57、iessuchasS(throughitswholly-ownedsubsidiaryS),andprivately-heldcompaniessuchasNanigans,Inc.Ourabilitytoremaincompetitivewilllargelydependonourongoingperformanceintheareasofoursolutionbreadthanddepthaswellascustomersupport.Sales and MarketingWeselloursolutionsdirectlytoadvertisersandtoagenciesinawide
58、rangeofindustriesthroughourglobalsalesteam.Oursalescyclecanvarysubstantiallybyadvertiserandagency,butcantakeuptoninemonths.Wehaveanumberofaccountexecutivesalesteamsorganizedbygeographyandmarketsegments.Wealsohavecustomersuccessprofessionalswhoareresponsibleforlong-termcustomersatisfactionandretentio
59、n,renewal,supportanddrivinganincreaseinthevolumeofmediamanagedbycustomersonourplatform.Ourmarketingteamisfocusedondrivingawarenessanddemandgenerationacrossmajormarkets.Thisteamprovidesthoughtleadershipintheformofwhitepapers,benchmarkingreports,bylines,presentingatindustryconferencesandspeakingtothep
60、ress.Inaddition,theyareresponsibleforthecreationoffieldenablementassetssuchascasestudies,blogpostsandcorporateandproductcollateral.Research and DevelopmentOurresearchanddevelopmentteamisresponsibleforthedesign,development,andmaintenanceofourplatform.Ourresearchanddevelopmentprocessemphasizesfrequent
61、,iterativeandincrementaldevelopmentcycles.Withinourresearchanddevelopmentorganizations,wehaveseveralprojectteamsthatfocusonplatformandfeaturedevelopmentforourintegratedverticalofferingsaspartofouradvertisingcloudsolutions.Eachoftheseprojectteamsincludesengineers,qualityengineersandproductmanagers,as
62、needed,responsiblefortheinitialandongoingdevelopmentfortheirprojects.Totalresearchanddevelopmentexpensewas$33.3million,$28.8millionand$20.7millionandfortheyearsendedDecember31,2015,2014and2013,respectively.6EmployeesAsofDecember31,2015,wehadatotalof511regularfull-timeemployees,including203employeesl
63、ocatedoutsidetheUnitedStates.Althoughwehavestatutoryemployeerepresentationobligationsincertaincountries,ourUnitedStatesemployeesarenotrepresentedbyalaborunion.Wehavenotexperiencedanyworkstoppages,andweconsiderourrelationswithouremployeestobegood.Intellectual PropertyOurintellectualpropertyrightsarea
64、keycomponentofoursuccess.Werelyonacombinationofpatent,trademark,copyright,unfaircompetitionandtradesecretlaws,aswellasconfidentialityproceduresandcontractualrestrictions,toestablish,maintainandprotectourproprietaryrights.AsofDecember31,2015,wehadtwoissuedpatentsandninepatentapplicationspendingintheU
65、nitedStates.Weownandusetrademarksonorinconnectionwithourproductsandservices,includingonetrademarkregisteredwiththeEuropeanUnionandAustraliaandunregisteredcommonlawmarksandpendingtrademarkapplicationsintheUnitedStates,China,JapanandSingapore.WehavealsoregisterednumerousInternetdomainnames.Available I
66、nformationThemailingaddressofourheadquartersis123MissionStreet,27thFloor,SanFrancisco,California94105andourtelephonenumberatthatlocationis(415)399-2580.O.ThroughalinkontheInvestorCentersectionofourwebsite,wemakeavailablethefollowingfilingsassoonasreasonablypracticableaftertheyareelectronicallyfiledw
67、ithorfurnishedtotheSecuritiesandExchangeCommission(the“SEC”):ourAnnualReportonForm10-K,QuarterlyReportsonForm10-Q,CurrentReportsonForm8-K,andanyamendmentstothosereportsfiledorfurnishedpursuanttoSection13(a)or15(d)oftheSecuritiesExchangeActof1934,asamended.Allsuchfilingsarefreeofcharge.Theinformation
68、postedtoourwebsiteisnotincorporatedintothisAnnualReportonForm10-K.ThepublicmayreadandcopyanymaterialsthatwefilewiththeSECattheSECsPublicReferenceRoomat100FStreet,NE,Washington,DC20549.ThepublicmayobtaininformationontheoperationofthePublicReferenceRoombycallingtheSECat1-800-SEC-0330.TheSECalsomaintai
69、nsanInternetsitethatcontainsreports,proxyandinformationstatements,andotherinformationregardingissuersthatfileelectronicallywiththeSECatwww.sec.gov.7ITEM 1A.RI SK FACTORSOuroperationsandfinancialresultsaresubjecttovariousrisksanduncertainties,includingthosedescribedbelow,whichcouldadverselyaffectourb
70、usiness,resultsofoperations,cashflows,financialconditions,andthetradingpriceofourcommonstock.Risks Related to Our BusinessWehaveahistoryoflossesandwemaynotachieveorsustainprofitabilityinthefuture.Wehaveincurredsignificantlossesineachfiscalyearsinceourincorporationin2006.Weexperiencednetlossesof$33.3
71、millionand$33.2millionduring2015and2014,respectively.AsofDecember31,2015,wehadanaccumulateddeficitof$179.7million.Thelossesandaccumulateddeficitwereduetothesubstantialinvestmentswemadetogrowourbusinessandacquirecustomers.Weanticipatethatourcostofrevenuesandoperatingexpenseswillincreaseintheforeseeab
72、lefutureaswecontinuetoinvesttogrowourbusinessandacquirecustomersanddevelopourplatformandnewfunctionality.Theseeffortsmayprovemoreexpensivethanwecurrentlyanticipate,andwemaynotsucceedinincreasingourrevenuessufficientlytooffsetthesehigherexpenses.Manyofoureffortstogeneraterevenuesfromourbusinessarenew
73、andunproven,andanyfailuretoincreaseourrevenuesorgeneraterevenuesfromnewsolutionscouldpreventusfromattainingorincreasingprofitability.Furthermore,totheextentwearesuccessfulinincreasingourcustomerbase,wealsocouldincurincreasedlossesbecausecostsassociatedwithenteringintocustomercontractsaregenerallyinc
74、urredupfront,whilecustomersarebilledoverthetermofthecontractgenerallythroughourusage-basedpricingmodel.Wedonotexpecttobeprofitablein2016onthebasisofgenerallyacceptedaccountingprinciplesintheUnitedStates,orGAAP,andwecannotbecertainthatwewillbeabletoattainprofitabilityonaquarterlyorannualbasis,orifwed
75、o,thatwewillsustainprofitability.Ourlimitedoperatinghistorymakesitdifficulttoevaluateourcurrentbusinessandfutureprospects.AlthoughwebeganouroperationsinMarch2006,wedidnotbegingeneratingsubstantialrevenuesuntil2009.Ourlimitedoperatinghistorymaymakeitdifficulttoevaluateourcurrentbusinessandourfuturepr
76、ospects.Wehaveencounteredandwillcontinuetoencounterrisksanddifficultiesfrequentlyexperiencedbygrowingcompaniesinrapidlydevelopingandchangingindustries,includingchallengesinforecastingaccuracy,hiringandretainingqualifiedemployees,determiningappropriateinvestmentsofourlimitedresources,marketacceptance
77、ofourexistingandfuturesolutions,effectivelyintegratingacquiredproducts,competitionfromestablishedcompanieswithgreaterfinancialandtechnicalresources,acquiringandretainingcustomers,managingcustomerdeployments,makingimprovementstoourexistingproductsanddevelopingnewsolutions.Ourcurrentoperationsinfrastr
78、ucturemayrequirechangesinorderforustoachieveprofitabilityandscaleouroperationsefficiently.Forexample,wemayneedtoautomateportionsofoursolutiontodecreaseourcosts,ensureourmarketinginfrastructureisdesignedtodrivehighlyqualifiedleadscosteffectivelyandimplementchangesinoursalesmodeltoimprovethepredictabi
79、lityofoursalesandreduceoursalescycle.Ifwefailtoimplementthesechangesonatimelybasisorareunabletoimplementthemduetofactorsbeyondourcontrol,ourbusinessmaysuffer,ourrevenuemaydeclineandwemaynotbeabletoachievefurthergrowthorprofitability.Wecannotassureyouthatwewillbesuccessfulinaddressingtheseandothercha
80、llengeswemayfaceinthefuture.Ourusage-basedpricingmodelmakesitdifficulttoforecastrevenuesfromourcurrentcustomersandfutureprospects.Weprimarilyhaveausage-basedpricingmodelinwhichmostofourfeesarecalculatedasapercentageofcustomersadvertisingspendmanagedonourplatform.Thispricingmodelmakesitdifficulttoacc
81、uratelyforecastrevenuesbecauseourcustomersadvertisingspendmanagedbyourplatformmayvaryfrommonthtomonthbasedonthevarietyofindustriesinwhichouradvertisersoperate,theseasonalityofthoseindustriesandfluctuationsinourcustomersadvertisingbudgetsorotherfactors.Oursubscriptioncontractswithourdirectadvertiserc
82、ustomersgenerallycontainaminimummonthlyplatformfee,whichisgenerallygreaterthanone-halfofourestimatedmonthlyrevenuesfromthecustomeratthetimethecontractissigned,and,asaresult,theminimummonthlyplatformfeemaynotbeagoodindicatorofourrevenuesfromthatcustomer.Inaddition,advertisersthatuseourplatformthrough
83、ouragencycustomerstypicallydonothaveaminimummonthlyspendamountoraminimumtermduringwhichtheymustuseourplatform,andasaresult,ourabilitytoforecastrevenuesfromtheseadvertisersisdifficult.Ifweincorrectlyforecastrevenuesfortheseadvertisersandtheamountofrevenueislessthanprojectionsweprovidetoinvestors,thep
84、riceofourcommonstockcoulddeclinesubstantially.Additionally,ifweoverestimateusage,wemayincuradditionalexpensesinaddinginfrastructure,withoutacommensurateincreaseinrevenues,whichwouldharmourgrossmarginsandotheroperatingresults.8Ifthemarketforadvertisingcloudsolutionsgrowsmorethaninrecentyears,ourbusin
85、ess,growthprospectsandfinancialconditionwouldbeadverselyaffected.Themarketforadvertisingcloudsolutionssuchasoursisnotasmatureasthemarketforon-premisesenterprisesoftware.Oursuccesswilldependtoasubstantialextentonthecontinuedgrowthofcloudcomputingingeneralandadvertisingviacloud-basedadvertisingchannel
86、sinparticular.Whilesearchanddisplayadvertisinghasbeenusedsuccessfullyforseveralyears,marketingvianewcloud-basedadvertisingchannelssuchasmobileandsocialmediaisnotaswellestablished.Thefuturegrowthofourbusinesscouldbeconstrainedbythelevelofacceptanceandexpansionofemergingcloud-basedadvertisingchannels,
87、aswellasthecontinueduseandgrowthofexistingchannels,suchassearchanddisplayadvertising.Evenifthesechannelsbecomewidelyadopted,advertisersandagenciesmaynotmakesignificantinvestmentsinsolutionssuchasoursthathelpthemmanagetheirdigitaladvertisingspendacrosspublisherplatformsandadvertisingchannels.Itisdiff
88、iculttopredictcustomeradoptionrates,customerdemandforourplatform,thefuturegrowthrateandsizeoftheadvertisingcloudsolutionsmarketortheentryofcompetitivesolutions.Thecontinuedexpansionofthemarketforadvertisingcloudsolutionsdependsonanumberoffactors,includingthecontinuedgrowthofthecloud-basedadvertising
89、market,thegrowthofsocialandmobileasadvertisingchannelsandthecost,performanceandperceivedvalueassociatedwithadvertisingcloudsolutions,aswellastheabilityofcloudcomputingcompaniestoaddresssecurityandprivacyconcerns.Further,thecloudcomputingmarketislessdevelopedinmanyjurisdictionsoutsideoftheUnitedState
90、s.Ifweorothercloudcomputingprovidersexperiencesecurityincidents,lossofcustomerdata,disruptionsindeliveryorotherproblems,themarketforcloudcomputingasawhole,includingourapplications,maybenegativelyaffected.Ifthereisareductionindemandfordigitaladvertisingcausedbyweakeningeconomicconditions,decreasesinc
91、orporatespending,securityorprivateconcernscompetingtechnologyorotherwise,itcouldresultinreducedusage,whichcoulddecreaserevenuesorotherwiseadverselyaffectourbusiness.Ifweareunabletomaintainourrelationshipswith,andaccessto,publishers,advertisingexchangeplatformsandotherplatformsthataggregatethesupplyo
92、fadvertisinginventory,ourbusinesswillsuffer.Wecurrentlydependonrelationshipswithvariouspublishers,includingBaidu,Bing,Facebook,Google,Twitter,Yahoo!,Yahoo!JapanandYandex,aswellasadvertisingexchangeplatformsandaggregatorsofadvertisinginventory,includingGooglesDoubleClickAdExchange,Yahoo!sRightMedia,F
93、acebooksExchange,MicrosoftsAdExchange,TwittersMoPubandAppNexus.OursubscriptionservicesinterfacewiththesepublishersplatformsthroughAPIs,suchastheGoogleAdWordsAPIorFacebookAPI.WearesubjecttotherespectiveplatformsstandardAPItermsandconditions,whichgoverntheuseanddistributionofdatafromtheseplatforms.Our
94、businesssignificantlydependsonhavingaccesstotheseAPIs,particularlytheGoogleAdWordsAPI,whichthesubstantialmajorityofourcustomersuse,oncommerciallyreasonabletermsandourbusinesswouldbeharmedifanyofthesepublishers,advertisingexchangesoraggregatorsofadvertisinginventorydiscontinuesorlimitsaccesstotheirpl
95、atforms,modifiestheirtermsofuseorotherpoliciesorplaceadditionalrestrictionsonusasAPIusers,orchargesAPIlicensefeesforAPIaccess.Moreover,someofthesepublishers,suchasGoogle,marketcompetitivesolutionsfortheirplatforms.BecausetheadvertisinginventorysupplierscontroltheirAPIs,theymaydevelopcompetitiveoffer
96、ingsthatarenotsubjecttothelimitsimposedonusthroughtheAPItermsandconditions.Currently,restrictionsintheseAPIagreementslimitourabilitytoimplementcertainfunctionality,requireustoimplementfunctionalityinaparticularmannerorrequireustoimplementcertainrequiredminimumfunctionality,causingustodevotedevelopme
97、ntresourcestoimplementcertainfunctionalitythatwewouldnototherwiseincludeinoursubscriptionservicesandtoincurcostsforpersonneltoprovideservicestoimplementfunctionalitythatweareprohibitedfromautomating.Publishers,advertisingexchangesandadvertisinginventoryaggregatorsupdatetheirAPItermsofusefromtimetoti
98、meandnewversionsofthesetermscouldimposeadditionalrestrictionsonus.Inaddition,publishers,advertisingexchangesandadvertisinginventoryaggregatorscontinuallyupdatetheirAPIsandmayupdateormodifyfunctionality,whichrequiresustomodifyoursoftwaretoaccommodatethesechangesandtodevotetechnicalresourcesandpersonn
99、eltotheseeffortswhichcouldotherwisebeusedtofocusonotherpriorities.Anyoftheseoutcomescouldcausedemandforourproductstodecrease,ourresearchanddevelopmentcoststoincrease,andourresultsofoperationsandfinancialconditiontobeharmed.Ourgrowthdependsinpartonthesuccessofourrelationshipswithadvertisingagencies.O
100、urfuturegrowthwilldepend,inpart,onourabilitytoenterintosuccessfulrelationshipswithadvertisingagencies.Identifyingagenciesandnegotiatinganddocumentingrelationshipswiththemrequiressignificanttimeandresources.Theserelationshipsmaynotresultinadditionalcustomersorenableustogeneratesignificantrevenues.Our
101、contractsfortheserelationshipsaretypicallynon-exclusiveanddonotprohibittheagencyfromworkingwithourcompetitorsorfromofferingcompetingservices.Frequently,theseagenciesdoinfactworkwithourcompetitorsandcompetewithus.Inaddition,weoftenworkwith,orseektoworkwith,high-profilebrandsdirectly.Thismaynotbepossi
102、blewhere,forexample,thosebrandsobtainadvertisingservicesexclusivelyorprimarilyfromadvertisingagencies.9Wegenerallybillagenciesfortheircustomersuseofourplatform,butinmostcasestheagencyscustomerhasnodirectcontractualcommitmenttomakepaymenttous.Furthermore,someoftheseagencycontractsincludeprovisionswhe
103、rebytheagencyisnotliableformakingpaymenttousforoursubscriptionservicesiftheagencydoesnotreceiveacorrespondingpaymentfromitsclientonwhosebehalfthesubscriptionserviceswererendered.Theseprovisionsmayresultinlongercollectionsperiodsorourinabilitytocollectpaymentforsomeofoursubscriptionservices.Ifweareun
104、successfulinestablishingormaintainingourrelationshipswiththeseagenciesoncommerciallyreasonableterms,oriftheserelationshipsarenotprofitableforus,ourabilitytocompeteinthemarketplaceortogrowourrevenuescouldbeimpairedandouroperatingresultswouldsuffer.Wemaynotbeabletocompetesuccessfullyagainstcurrentandf
105、uturecompetitors.Theoverallmarketforadvertisingcloudsolutionsisrapidlyevolving,highlycompetitive,complex,fragmented,andsubjecttochangingtechnologyandshiftingcustomerneeds.Wefacesignificantcompetitioninthismarketandweexpectcompetitiontointensifyinthefuture.Wecurrentlycompetewithlarge,well-established
106、companies,suchasAdobeSystemsIncorporatedandGoogleInc.(throughitswholly-ownedsubsidiaryDoubleClick),andprivately-heldcompanies,suchasKenshooLtd.Wealsocompetewithchannel-specificofferings,in-houseproprietarytools,toolsfrompublishersandcustomsolutions,includingspreadsheets.Increasedcompetitionmayresult
107、inreducedpricingforoursolutions,longersalescyclesoradecreaseofourmarketshare,anyofwhichcouldnegativelyaffectourrevenuesandfutureoperatingresultsandourabilitytogrowourbusiness.Anumberofcompetitivefactorscouldcauseustolosepotentialsalesortoselloursolutionsatlowerpricesoratreducedmargins,including,amon
108、gothers:potentialcustomersmaychoosetodeveloporcontinuetouseinternalsolutionsratherthanpayingforoursolutionsormaychoosetouseacompetitorssolutionthathasdifferentoradditionaltechnicalcapabilities;companiesmayenterourmarketbyexpandingtheirplatformsoracquiringacompetitor;someofourcompetitors,suchasAdobea
109、ndGoogle,havegreaterfinancial,marketingandtechnicalresourcesthanwedo,allowingthemtoleveragealargerinstalledcustomerbase,adoptmoreaggressivepricingpolicies,anddevotegreaterresourcestothedevelopment,promotionandsaleoftheirproductsandservicesthanwecan;channel-specificcompetitors,suchasAdRollInc,CriteoS
110、.A.,MediaMath,Inc.,Nanigans,Inc.,RocketFuelInc.andS(throughitswholly-ownedsubsidiaryS),maydevotegreaterresourcestothedevelopment,promotionandsaleoftheirchannel-specificproductsandservicesthanwecan;andpublishersgenerallyoffertheirtoolsforfree,oratareducedprice,astheirprimarycompensationisviathesaleof
111、advertisingontheirownorsyndicatedwebsites.Wecannotassureyouthatwewillbeabletocompetesuccessfullyagainstcurrentandfuturecompetitors.Ifwecannotcompetesuccessfully,ourbusiness,resultsofoperationsandfinancialconditioncouldbenegativelyimpacted.Ourbusinessdependsonourcustomerscontinuedwillingnesstomanagea
112、dvertisingspendonourplatform.Inorderforustoimproveouroperatingresults,itisimportantthatourcustomerscontinuetomanagetheiradvertisingspendonourplatform,increasetheirusageandalsopurchaseadditionalsolutionsfromus.Inthecaseofourdirectadvertisercustomers,weofferoursolutionsprimarilythroughsubscriptioncont
113、ractsandgenerallybillcustomersovertherelatedsubscriptionperiod,whichisgenerallyoneyearorlonger.Duringthetermoftheircontracts,ourdirectadvertisercustomersgenerallyhavenoobligationtomaintainorincreasetheiradvertisingspendonourplatformbeyondaspecifiedminimummonthlyplatformfee,whichistypicallysetattheti
114、methecontractissignedandisgenerallygreaterthanhalfofthemonthlyamountweanticipatethecustomerwillspend.Ourdirectadvertisercustomersgenerallyhavenorenewalobligationaftertheinitialorthen-currentrenewalsubscriptionperiodexpires,andevenifcustomersrenewcontracts,theymaydecreasetheleveloftheirdigitaladverti
115、singspendmanagedthroughourplatform,resultinginlowerrevenuesfromthatcustomer.Advertisersthatweservethroughourarrangementswithouradvertisingagenciesgenerallydonothaveanycontractualcommitmenttouseourplatform.Ourcustomersusagemaydeclineorfluctuateasaresultofanumberoffactors,including,butnotlimitedto,the
116、irsatisfactionwithourplatformandourcustomersupport,thefrequencyandseverityofoutages,thepricingofour,orcompeting,solutions,theeffectsofglobaleconomicconditionsandreductionsinspendinglevelsorchangesinourcustomersstrategiesregardingdigitaladvertising.Duetoourlimitedhistoricalexperience,wemaynotbeableto
117、accuratelypredictfutureusagetrends.Ifourcustomersrenewonlessfavorabletermsorreducetheiradvertisingspendonourplatform,ourrevenuesmaygrowmoreslowlythanexpectedordecline.10Weincurupfrontcostsassociatedwithonboardingadvertiserstoourplatformandmaynotrecoupourinvestmentifwedonotmaintaintheadvertiserrelati
118、onshipovertime.Ouroperatingresultsmaybenegativelyaffectedifweareunabletorecoupourupfrontcostsforonboardingnewadvertiserstoourplatform.Upfrontcostswhenaddingnewadvertisersgenerallyincludesalescommissionsforoursalesforce,expensesassociatedwithenteringcustomerdataintoourplatformandotherimplementation-r
119、elatedcosts.Becauseourcustomers,includingdirectadvertisersandagencies,arebilledoverthetermofthecontract,ifnewcustomerssigncontractswithshortinitialsubscriptionperiodsanddonotrenewtheirsubscriptions,orotherwisedonotcontinuetouseourplatformtoalevelthatgeneratesrevenuesinexcessofourupfrontexpenses,ouro
120、peratingresultscouldbenegativelyimpacted.Incasesinwhichtheimplementationprocessisparticularlycomplex,therevenuesresultingfromthecustomerunderourcontractmaynotcovertheupfrontinvestment,soifasignificantnumberofthesecustomersdonotrenewtheircontracts,itcouldnegativelyaffectouroperatingresults.Becauseweg
121、enerallybillourcustomersoverthetermofthecontract,neartermdeclineinneworrenewedsubscriptionsmaynotbereflectedimmediatelyinouroperatingresults.Mostofourrevenuesineachquarterarederivedfromcontractsenteredintowithourcustomersduringpreviousquarters.Consequently,adeclineinneworrenewedsubscriptionsinanyone
122、quartermaynotbefullyreflectedinourrevenuesforthatquarter.Suchdeclines,however,wouldnegativelyaffectourrevenuesinfutureperiodsandtheeffectofsignificantdownturnsinsalesandmarketacceptanceofoursolutions,andpotentialchangesinourrateofrenewalsorrenewalterms,maynotbefullyreflectedinourresultsofoperationsu
123、ntilfutureperiods.Inaddition,wemaybeunabletoadjustourcoststructurerapidly,oratall,totakeaccountofreducedrevenues.Oursubscriptionmodelalsomakesitdifficultforustorapidlyincreaseourtotalrevenuesthroughadditionalsalesinanyperiod,asrevenuesfromnewcustomersmustbeearnedovertheapplicablesubscriptiontermbase
124、donthevalueoftheirmonthlyadvertisingspend.Wehavebeendependentonourcustomersuseofsearchadvertising.Anydecreaseintheuseofsearchadvertisingorourinabilitytofurtherpenetratesocialanddisplayadvertisingchannelswouldharmourbusiness,growthprospects,operatingresultsandfinancialcondition.Historically,ourcustom
125、ershaveprimarilyusedoursolutionsformanagingtheirsearchadvertising,includingmobilesearchadvertising,andthesubstantialmajorityofourrevenuesarederivedfromadvertisersthatuseourplatformtomanagetheirsearchadvertising.Weexpectthatsearchadvertisingwillcontinuetobetheprimarychannelusedbyourcustomersforthefor
126、eseeablefuture.Shouldourcustomersloseconfidenceinthevalueoreffectivenessofsearchadvertising,orifsearchadvertisinggrowthmoderatesordeclines,thedemandforoursolutionsmaydecline,anditmaynegativelyimpactourrevenues.Inaddition,ourfailuretoachievemarketacceptanceofoursolutionforthemanagementofsocialanddisp
127、layadvertisingspendwouldharmourgrowthprospects,operatingresultsandfinancialcondition.Oursalescyclecanbelongandunpredictableandrequireconsiderabletimeandexpense,whichmaycauseouroperatingresultstofluctuate.Thesalescycleforoursolutions,frominitialcontactwithapotentialleadtocontractexecutionandimplement
128、ation,varieswidelybycustomer,butcantakeuptoninemonths.Someofourcustomersundertakeasignificantevaluationprocessthatfrequentlyinvolvesnotonlyoursolutionsbutalsothoseofourcompetitors,whichhasinthepastresultedinextendedsalescycles.Oursaleseffortsinvolveeducatingourcustomersabouttheuse,technicalcapabilit
129、iesandbenefitsofourplatform.Inaddition,undercertaincircumstances,wesometimesofferaninitialterm,typicallyofafewmonthsinduration,tonewcustomerswhomayterminatetheirsubscriptionatanytimeduringthisinitialperiodbeforethefixedtermcontractcommences.Wehavenoassurancethatthesubstantialtimeandmoneyspentonoursa
130、leseffortswillproduceanysales.Ifoursaleseffortsresultinanewcustomersubscription,thecustomermayterminateitssubscriptionduringtheinitialperiod,afterwehaveincurredtheexpensesassociatedwithenteringthecustomersdatainourplatformandrelatedtrainingandsupport.Ifsalesexpectedfromacustomerarenotrealizedintheti
131、meperiodexpectedornotrealizedatall,orifacustomerterminatesduringtheinitialperiod,ourbusiness,operatingresultsandfinancialconditioncouldbeadverselyaffected.Ourabilitytogeneraterevenuedependsonourcollectionofsignificantamountsofdatafromvarioussources.Ourabilitytooptimizethedeliveryofinternetadvertisem
132、entsforourcustomersdependsonourabilitytosuccessfullyleveragedata,includingdatathatwecollectfromourcustomersaswellasdataprovidedbypublishersandfromthirdparties.Usingcookiesandsimilartrackingtechnologies,wecollectinformationabouttheinteractionofuserswithouradvertisersandpublisherswebsites.Ourabilityto
133、successfullyleveragesuchdataisdependentuponourcontinuedabilitytoaccessandutilizesuchdata.Ourabilitytoaccessandusesuchdatacouldberestrictedbyanumberoffactors,includingconsumerchoice,restrictionsimposedbyadvertisersandpublishers,changesintechnology,andnewdevelopmentsinlaws,regulations,andindustrystand
134、ards.11Ifconsumerresistancetothecollectionandsharingofthedatausedtodelivertargetedadvertising,increasedvisibilityofconsent/DoNotTrackmechanismsasaresultofindustryregulatoryand/orlegaldevelopments,and/orthedevelopmentanddeploymentofnewtechnologiesresultinamaterialimpactonourabilitytocollectdata,thisw
135、illmateriallyimpairtheresultsofouroperations.Materialdefectsorerrorsinoursoftwareplatformcouldharmourreputation,resultinsignificantcoststousandimpairourabilitytoselloursubscriptionservices.Thesoftwareapplicationsunderlyingoursubscriptionservicesareinherentlycomplexandmaycontainmaterialdefectsorerror
136、s,whichmaycausedisruptionsinavailability,misallocationofadvertisingspendorotherperformanceproblems.Anysucherrors,defects,disruptionsinserviceorotherperformanceproblemswithoursoftwareplatform,includingthoseresultingfromnewversionsorupdates,couldnegativelyimpactourcustomersbusinessesorthesuccessofthei
137、radvertisingcampaignsandcauseharmtoourreputation.Ifwehaveanyerrors,defects,disruptionsinserviceorotherperformanceproblemswithoursoftwareplatform,customerscouldelectnottoreneworreducetheirusageordelayorwithholdpaymenttous,whichcouldresultinanincreaseinourprovisionfordoubtfulaccountsoranincreaseinthel
138、engthofcollectioncyclesforaccountsreceivable.Errors,defects,disruptionsinserviceorotherperformanceproblemscouldalsoresultincustomersmakingwarrantyorotherclaimsagainstus,ourgivingcreditstoourcustomerstowardfutureadvertisingspendorcostlylitigation.Asaresult,materialdefectsorerrorsinourplatformcouldhav
139、eamaterialadverseimpactonourbusinessandfinancialperformance.Thecostsincurredincorrectinganymaterialdefectsorerrorsinoursoftwareplatformmaybesubstantialandcouldadverselyaffectouroperatingresults.Afterthereleaseofnewversionsofoursoftware,defectsorerrorsmaybeidentifiedfromtimetotimebyourinternalteamand
140、byourcustomers.Weimplementbugfixesandupgradesaspartofourregularlyscheduledsystemmaintenance.Ifwedonotcompletethismaintenanceaccordingtoscheduleorifcustomersareotherwisedissatisfiedwiththefrequencyand/ordurationofourmaintenanceservices,customerscouldelectnottorenew,ordelayorwithholdpaymenttous,orcaus
141、eustoissuecredits,makerefundsorpaypenalties.Weprimarilyderiveourrevenuesfromasinglesoftwareplatformandanyfactoradverselyaffectingsubscriptionstoourplatformcouldharmourbusinessandoperatingresults.Weprimarilyderiveourrevenuesfromsalesofasinglesoftwareplatform.Assuch,anyfactoradverselyaffectingsubscrip
142、tionstoourplatform,includingproductreleasecycles,marketacceptance,productcompetition,performanceandreliability,reputation,pricecompetition,andeconomicandmarketconditions,couldharmourbusinessandoperatingresults.Ifmobileconnecteddevices,theiroperatingsystemsorcontentdistributionchannels,includingthose
143、controlledbyourcompetitors,developinwaysthatpreventouradvertisingcampaignsfrombeingdeliveredtotheirusers,ourabilitytogrowourbusinesswillbeimpaired.Oursuccessinthemobilechanneldependsupontheabilityofourtechnologyplatformtointegratewithmobileinventorysuppliersandprovideadvertisingformostmobileconnecte
144、ddevices,aswellasthemajoroperatingsystemsthatrunonthemandtheapplicationsthataredownloadedontothem.Thedesignofmobiledevicesandoperatingsystemsiscontrolledbythirdpartieswithwhomwedonothaveanyformalrelationships.Thesepartiesfrequentlyintroducenewdevices,andfromtimetotimetheymayintroducenewoperatingsyst
145、emsormodifyexistingones.Networkcarriersmayalsoimpacttheabilitytoaccessspecifiedcontentonmobiledevices.Ifoursolutionwereunabletoworkonthesedevicesoroperatingsystems,eitherbecauseoftechnologicalconstraintsorbecauseanoperatingsystemorappdeveloper,devicemakerorcarrierwishedtoimpairourabilitytopurchasein
146、ventoryandprovideadvertisements,ourabilitytogeneraterevenuecouldbesignificantlyharmed.Weprimarilyuseasinglethird-partydatacentertodeliverourservices.Anydisruptionofserviceatthisfacilitycouldharmourbusiness.Whileweutilizetwothird-partydatacentersintotal,wemanageasignificantportionofourservicesandserv
147、esubstantiallyallofourcustomersfromonlyasinglethird-partydatacenterfacility.Whilewecontroltheactualcomputer,networkandstoragesystemsuponwhichourplatformruns,anddeploythemtothedatacenterfacility,wedonotcontroltheoperationofthefacility.Theownerofthefacilityhasnoobligationtorenewtheagreementwithusoncom
148、merciallyreasonableterms,oratall.Ifweareunabletorenewtheagreementoncommerciallyreasonableterms,wemayberequiredtotransfertoanewfacilityorfacilities,andwemayincursignificantcostsandpossibleserviceinterruptioninconnectionwithdoingso.12Thefacilityisvulnerabletodamageorserviceinterruptionresultingfromhum
149、anerror,intentionalbadacts,earthquakes,hurricanes,floods,fires,war,terroristattacks,powerlosses,hardwarefailures,systemsfailures,telecommunicationsfailuresandsimilarevents.Moreover,whilewehaveadisasterrecoveryplaninplace,wedonotmaintaina“hotfailover”instanceofoursoftwareplatformpermittingustoimmedia
150、telyswitchoverintheeventofdamageorserviceinterruptionatourdatacenter.Theoccurrenceofanaturaldisasteroranactofterrorism,anyoutagesorvandalismorothermisconduct,oradecisiontoclosethefacilitywithoutadequatenoticeorotherunanticipatedproblemscouldresultinlengthyinterruptionsinourservices.Anychangesinservi
151、celevelsatthefacilityoranyerrors,defects,disruptionsorotherperformanceproblemsatorrelatedtothefacilitythataffectourservicescouldharmourreputationandmaydamageourcustomersbusinesses.Interruptionsinourservicesmightreduceourrevenues,subjectustopotentialliability,orresultinreducedusageofourplatform.Inadd
152、ition,someofourcustomercontractsrequireustoissuecreditsfordowntimeinexcessofcertainlevelsandinsomeinstancesgiveourcustomerstheabilitytoterminatetheirsubscriptions.Wealsodependonthird-partyInternet-hostingprovidersandcontinuousanduninterruptedaccesstotheInternetthroughthird-partybandwidthproviderstoo
153、perateourbusiness.IfwelosetheservicesofoneormoreofourInternet-hostingorbandwidthprovidersforanyreasonoriftheirservicesaredisrupted,forexampleduetovirusesor“denial-of-service”orotherattacksontheirsystems,orduetohumanerror,intentionalbadacts,powerloss,hardwarefailures,telecommunicationsfailures,fires,
154、wars,terroristattacks,floods,earthquakes,hurricanes,tornadoesorsimilarevents,wecouldexperiencedisruptioninourabilitytoofferoursolutionsorwecouldberequiredtoretaintheservicesofreplacementproviders,whichcouldincreaseouroperatingcostsandharmourbusinessandreputation.Ifwecannotefficientlyimplementoursolu
155、tionsforcustomers,wemaylosecustomers.Ourcustomershaveavarietyofdifferentdataformats,enterpriseapplicationsandinfrastructureandourplatformmustsupportourcustomersdataformatsandintegratewithcomplexenterpriseapplicationsandinfrastructures.Ifourplatformdoesnotcurrentlysupportacustomersrequireddataformato
156、rappropriatelyintegratewithacustomersapplicationsandinfrastructure,thenwemaychoosetoconfigureourplatformtodoso,whichwouldincreaseourexpenses.Additionally,wedonotcontrolourcustomersimplementationschedules.Asaresult,aswehaveexperiencedinthepast,ifourcustomersdonotallocateinternalresourcesnecessarytome
157、ettheirimplementationresponsibilitiesorifwefaceunanticipatedimplementationdifficulties,theimplementationmaybedelayed.Further,inthepast,ourimplementationcapacityhasattimesconstrainedourabilitytosuccessfullyimplementoursolutionsforourcustomersinatimelymanner,particularlyduringperiodsofhighdemand.Ifthe
158、customerimplementationprocessisnotexecutedsuccessfullyorifexecutionisdelayed,wecouldincursignificantcosts,customerscouldbecomedissatisfiedanddecidenottoincreaseusageofourplatform,nottouseourplatformbeyondaninitialperiodpriortotheirtermcommitmentandrevenuerecognitioncouldbedelayed.Inaddition,competit
159、orswithmoreefficientoperatingmodelswithlowerimplementationcostscouldpenetrateourcustomerrelationships.Additionally,largecustomersmayrequestorrequirespecificfeaturesorfunctionsuniquetotheirparticularbusinessprocesses,whichincreaseourupfrontinvestmentinsalesanddeploymenteffortsandtherevenuesresultingf
160、romthecustomersunderourtypicalcontractlengthmaynotcovertheupfrontinvestments.Ifprospectivelargecustomersrequirespecificfeaturesorfunctionsthatwedonotoffer,thenthemarketforoursolutionwillbemorelimitedandourbusinesscouldsuffer.Inaddition,supportinglargecustomerscouldrequireustodevotesignificantdevelop
161、mentservicesandsupportpersonnelandstrainourpersonnelresourcesandinfrastructure.Ifweareunabletoaddresstheneedsofthesecustomersinatimelyfashionorfurtherdevelopandenhanceoursolution,thesecustomersmaynotrenewtheirsubscriptions,seektoterminatetheirrelationshipwithus,renewonlessfavorableterms,orreducethei
162、radvertisingspendonourplatform.Ifanyoftheseweretooccur,ourrevenuesmaydeclineandouroperatingresultscouldbeadverselyaffected.Ifweareunabletomaintainorexpandoursalesandmarketingcapabilities,wemaynotbeabletogenerateanticipatedrevenues.Increasingourcustomerbaseandachievingbroadermarketacceptanceofoursoft
163、wareplatformwilldependtoasignificantextentonourabilitytoexpandoursalesandmarketingoperationsandactivities.Wearesubstantiallydependentonoursalesforcetoobtainnewcustomers.Wemayexpandoursalesteaminordertoincreaserevenuesfromnewandexistingcustomersandtofurtherpenetrateourexistingmarketsandexpandintonewm
164、arkets,butmaynotbeabletoattractandhirequalifiedsalespersonnelquicklyenoughoratall.Oursolutionsrequireasophisticatedsalesforcewithspecificsalesskillsandtechnicalknowledge.Competitionforqualifiedsalespersonnelisintense,andwemaynotbeabletoretainourexistingsalespersonnelorattract,integrateorretainsuffic
165、ienthighlyqualifiedsalespersonnel.13Ourabilitytoachieverevenuegrowthinthefuturewilldepend,inlargepart,onoursuccessinrecruiting,trainingandretainingsufficientnumbersofsalespersonnel.Thesenewemployeesrequiresignificanttrainingandexperiencebeforetheyachievefullproductivity.Asaresult,thecostofhiringandc
166、arryingnewrepresentativescannotbeoffsetbytherevenuestheyproduceforasignificantperiodoftime.Ourrecenthiresandplannedhiresmaynotbecomeproductiveasquicklyaswewouldlike,andwemaynotbeabletohireorretainsufficientnumbersofqualifiedindividualsinthemarketswherewedobusiness.Ourbusinesswillbeseriouslyharmedift
167、heseexpansioneffortsdonotworkasplannedorgenerateacorrespondingsignificantincreaseinrevenues.Anyfailuretoofferhigh-qualitytechnicalsupportservicesmayadverselyaffectourrelationshipswithourcustomersandharmourfinancialresults.Ourcustomersdependonoursupportorganizationtoresolveanytechnicalissuesrelatingt
168、ooursolutions.Inaddition,oursalesprocessishighlydependentonthequalityofoursolutions,ourbusinessreputationandonstrongrecommendationsfromourexistingcustomers.Anyfailuretomaintainhigh-qualitytechnicalsupport,oramarketperceptionthatwedonotmaintainhigh-qualitysupport,couldharmourreputation,adverselyaffec
169、tourabilitytoselloursolutionstoexistingandprospectivecustomers,andharmourbusiness,operatingresultsandfinancialcondition.Weoffertechnicalsupportserviceswithoursolutionsandmaybeunabletorespondquicklyenoughtoaccommodateshort-termincreasesincustomerdemandforsupportservices.Wealsomaybeunabletomodifythefo
170、rmatofoursupportservicestocompetewithchangesinsupportservicesprovidedbycompetitors.Itisdifficulttopredictcustomerdemandfortechnicalsupportservicesandifcustomerdemandincreasessignificantly,wemaybeunabletoprovidesatisfactorysupportservicestoourcustomers.Additionally,increasedcustomerdemandfortheseserv
171、ices,withoutcorrespondingrevenues,couldincreasecostsandadverselyaffectouroperatingresults.Ifoursecuritymeasuresarebreachedorunauthorizedaccesstocustomerdataorourdataisotherwiseobtained,oursolutionsmaybeperceivedasnotbeingsecure,customersmayreducetheuseoforstopusingoursolutionsandwemayincursignifican
172、tliabilities.Intheordinarycourseofourbusiness,wemaintainsensitivedataonournetworks,includingourintellectualpropertyandproprietaryorconfidentialbusinessinformationrelatingtoourbusinessandthatofourcustomersandbusinesspartners.Thesecuremaintenanceofthisinformationiscriticaltoourbusinessandreputation.We
173、believethatcompanieshavebeenincreasinglysubjecttoawidevarietyofsecurityincidents,cyber-attacksandotherattemptstogainunauthorizedaccess.Thesethreatscancomefromavarietyofsources,ranginginsophisticationfromanindividualhackertoastate-sponsoredattack.Cyberthreatsmaybegeneric,ortheymaybecustom-craftedagai
174、nstourinformationsystems.Overthepastyear,cyber-attackshavebecomemoreprevalentandmuchhardertodetectanddefendagainst.Ournetworkandstorageapplicationsmaybesubjecttounauthorizedaccessbyhackersorbreachedduetooperatorerror,malfeasanceorothersystemdisruptions.Itisoftendifficulttoanticipateorimmediatelydete
175、ctsuchincidentsandthedamagecausedbysuchincidents.Thesedatabreachesandanyunauthorizedaccessordisclosureofourinformationorintellectualpropertycouldresultinthelossofinformation,litigation,indemnityobligationsandotherliability.Whilewehavesecuritymeasuresinplace,oursystemsandnetworksaresubjecttoongoingth
176、reatsandthereforethesesecuritymeasuresmaybebreachedasaresultofthird-partyaction,includingcyber-attacksorotherintentionalmisconductbycomputerhackers,employeeerror,malfeasanceorotherwise.Thiscouldresultinoneormorethirdpartiesobtainingunauthorizedaccesstoourcustomersdataorourdata,includingintellectualp
177、ropertyandotherconfidentialbusinessinformation.Becausetechniquesusedtoobtainunauthorizedaccessortosabotagesystemschangefrequentlyandgenerallyarenotrecognizeduntillaunchedagainstatarget,wemaybeunabletoanticipatethesetechniquesortoimplementadequatepreventativemeasures.Thirdpartiesmayalsoattempttofraud
178、ulentlyinduceemployeesorcustomersintodisclosingsensitiveinformationsuchasusernames,passwordsorotherinformationinordertogainaccesstoourcustomersdataorourdata,includingintellectualpropertyandotherconfidentialbusinessinformation.Ifanactualorperceivedbreachofoursecurityoccurs,themarketperceptionoftheeff
179、ectivenessofoursecuritymeasurescouldbeharmed,wecouldlosepotentialsalesandexistingcustomersorwecouldincurotherliabilities,whichcouldadverselyaffectourbusiness.Wemustdevelopandintroduceenhancementsandnewfeaturesthatachievemarketacceptanceorthatkeeppacewithtechnologicaldevelopmentstoremaincompetitivein
180、ourevolvingindustry.Weoperateinadynamicmarketcharacterizedbyrapidlychangingtechnologiesandindustryandlegalstandards.Theintroductionofnewadvertisingcloudsolutionsbyourcompetitors,themarketacceptanceofsolutionsbasedonneworalternativetechnologies,ortheemergenceofnewindustrystandardscouldrenderourplatfo
181、rmobsolete.Ourabilitytocompetesuccessfully,attractnewcustomersandincreaserevenuesfromexistingcustomersdependsinlargepartonourabilitytoenhanceandimproveourexistingcross-channelperformanceadvertisingcloudplatformandtocontinuallyintroduceoracquirenewfeaturesthatareindemandbythemarketweserve.Wealsomustu
182、pdateoursoftwaretoreflectchangesinpublishersAPIsandtermsofuse.Thesuccessofanyenhancementornewsolutiondependsonseveralfactors,includingtimelycompletion,adequatequalitytesting,appropriateintroductionandmarketacceptance.Anynewplatformorfeaturethatwedeveloporacquiremaynotbeintroducedinatimelyorcost-effe
183、ctivemanner,maycontaindefectsormaynotachievethebroadmarketacceptancenecessarytogeneratesignificant14revenues.Ifweareunabletoanticipateortimelyandsuccessfullydeveloporacquirenewofferingsorfeaturesorenhanceourexistingplatformtomeetcustomerrequirements,ourbusinessandoperatingresultswillbeadverselyaffec
184、ted.Ourgrowthdependsinpartonthesuccessofourstrategicrelationshipswiththirdparties.Ourfuturegrowthwilldependonourabilitytoenterintosuccessfulstrategicrelationshipswiththirdparties.Forexample,weareseekingtoestablishrelationshipswiththirdpartiestodevelopintegrationswithcomplementarytechnologyandcontent
185、.Theserelationshipsmaynotresultinadditionalcustomersorenableustogeneratesignificantrevenues.Identifyingpartnersandnegotiatinganddocumentingrelationshipswiththemrequiresignificanttimeandresources.Ourcontractsfortheserelationshipsaretypicallynon-exclusiveanddonotprohibittheotherpartyfromworkingwithour
186、competitorsorfromofferingcompetingservices.Ifweareunsuccessfulinestablishingormaintainingourrelationshipswiththesethirdparties,ourabilitytocompeteinthemarketplaceortogrowourrevenuescouldbeimpairedandouroperatingresultswouldsuffer.Asaresultofourcustomersincreasedusageofoursoftwareplatform,wewillneedt
187、ocontinuallyimproveourhostinginfrastructuretoavoidserviceinterruptionsorslowersystemperformance.Wehaveexperiencedcontinuedgrowthinthenumberofadvertisers,transactionsanddatathatourhostinginfrastructuresupports.Weseektomaintainsufficientexcesscapacityinourinfrastructuretomeettheneedsofallofourcustomer
188、s.Wealsoseektomaintainexcesscapacitytofacilitatetherapidprovisionofnewcustomerdeploymentsandtheexpansionofexistingcustomerdeployments.Forexample,ifwesecurealargecustomeroragroupofcustomersthatrequiresignificantamountsofbandwidthorstorage,wemayneedtoincreasebandwidth,storage,powerorotherelementsofour
189、applicationarchitectureandourinfrastructure,andourexistingsystemsmaynotbeabletoscaleinamannersatisfactorytoourexistingorprospectivecustomers.Theamountofinfrastructureneededtosupportourcustomersisbasedonourestimatesofanticipatedusage.Ifweweretoexperienceunforeseenincreasesinusage,wecouldberequiredtoi
190、ncreaseourinfrastructureinvestmentsresultinginincreasedcostsorreducedgrossmargins,andifwedonotaccuratelypredictourinfrastructurecapacityrequirements,ourcustomerscouldexperienceserviceoutagesthatmaysubjectustofinancialpenaltiesandliabilitiesandresultincustomerlosses.Ifourhostinginfrastructurecapacity
191、failstokeeppacewithincreasedsales,customersmayexperienceserviceinterruptionsorslowersystemperformanceasweseektoobtainadditionalcapacity,whichcouldharmourreputationandadverselyaffectourrevenuegrowth.Asuseofoursoftwareplatformgrowsandascustomersuseitformorecomplicatedtasks,wewillneedtodevoteadditional
192、resourcestoimprovingourapplicationarchitectureandourinfrastructureinordertomaintaintheperformanceofoursoftwareplatform.Wemayneedtoincuradditionalcoststoupgradeorexpandourcomputersystemsandarchitectureinordertoaccommodateincreaseddemandifoursystemscannothandlecurrentorhighervolumesofusage.Inaddition,
193、increasingoursystemsandinfrastructureinadvanceofnewcustomerswouldcauseustohaveincreasedcostofrevenues,whichcanadverselyaffectourgrossmarginsuntilweincreaserevenuesthatarespreadovertheincreasedcosts.Anyfailuretoprotectourintellectualpropertyrightscouldimpairourabilitytoprotectourproprietarytechnology
194、andourbrand.Oursuccessandabilitytocompetedependsinpartuponourintellectualproperty.Weprimarilyrelyonacombinationofcopyright,tradesecretandtrademarklaws,aswellasconfidentialityproceduresandcontractualrestrictionswithouremployees,customers,partnersandotherstoestablishandprotectourintellectualpropertyri
195、ghts.However,thestepswetaketoprotectourintellectualpropertyrightsmaybeinadequateorwemaybeunabletosecureintellectualpropertyprotectionforallofoursolutions.Inparticular,wehavetwoissuedUnitedStatespatents.Ifweareunabletoprotectourintellectualproperty,ourcompetitorscoulduseourintellectualpropertytomarke
196、tproductsandservicessimilartooursandourabilitytocompeteeffectivelywouldbeimpaired.Moreover,othersmayindependentlydeveloptechnologiesthatarecompetitivetooursorinfringeourintellectualproperty.Theenforcementofourintellectualpropertyrightsdependsonourlegalactionsagainsttheseinfringersbeingsuccessful,but
197、wecannotbesuretheseactionswillbesuccessful,evenwhenourrightshavebeeninfringed.Inaddition,defendingourintellectualpropertyrightsmightentailsignificantexpenseanddiversionofmanagementresources.Anyofourintellectualpropertyrightsmaybechallengedbyothersorinvalidatedthroughadministrativeprocessesorlitigati
198、on.Anypatentsissuedinthefuturemaynotprovideuswithcompetitiveadvantagesormaybesuccessfullychallengedbythirdparties.Furthermore,legalstandardsrelatingtothevalidity,enforceabilityandscopeofprotectionofintellectualpropertyrightsareuncertain.Effectiveprotectionofourintellectualpropertymaynotbeavailableto
199、usineverycountryinwhichoursolutionsareavailable.ThelawsofsomeforeigncountriesmaynotbeasprotectiveofintellectualpropertyrightsasthoseintheUnitedStates,andmechanismsforenforcementofintellectualpropertyrightsmaybeinadequate.Accordingly,despiteourefforts,wemaybeunabletopreventthirdpartiesfrominfringingu
200、ponormisappropriatingourintellectualproperty.15Wemightberequiredtospendsignificantresourcestomonitorandprotectourintellectualpropertyrights,andoureffortstoenforceourintellectualpropertyrightsmaybemetwithdefenses,counterclaimsandcountersuitsattackingthevalidityandenforceabilityofourintellectualproper
201、tyrights.Litigationtoprotectandenforceourintellectualpropertyrightscouldbecostly,time-consuminganddistractingtomanagement,whetherornotitisresolvedinourfavor,andcouldultimatelyresultintheimpairmentorlossofportionsofourintellectualproperty.Wecouldincursubstantialcostsasaresultofanyclaimofinfringemento
202、fanotherpartysintellectualpropertyrights.Inrecentyears,therehasbeensignificantlitigationintheUnitedStatesinvolvingpatentsandotherintellectualpropertyrights.CompaniesintheInternetandtechnologyindustriesareincreasinglybringingandbecomingsubjecttosuitsalleginginfringementofproprietaryrights,particularl
203、ypatentrights,andourcompetitorsmayholdpatentsorhavependingpatentapplications,whichcouldberelatedtoourbusiness.Theseriskshavebeenamplifiedbytheincreaseinthirdparties,whichwerefertoasnon-practicingentities,whosesoleprimarybusinessistoassertsuchclaims.Wehavereceivedinthepast,andexpecttoreceiveinthefutu
204、re,noticesthatclaimweorourcustomersusingoursolutionshavemisappropriatedormisusedotherpartiesintellectualpropertyrights.Ifwearesuedbyathirdpartythatclaimsthatourtechnologyinfringesitsrights,thelitigationcouldbeexpensiveandcoulddivertourmanagementresources.Wedonotcurrentlyhaveanextensivepatentportfoli
205、oofourown,whichmaylimitthedefensesavailabletousinanysuchlitigation.Inaddition,inmostinstances,wehaveagreedtoindemnifyourcustomersagainstcertainclaimsthatoursubscriptionservicesinfringetheintellectualpropertyrightsofthirdparties.Ourbusinesscouldbeadverselyaffectedbyanysignificantdisputesbetweenusando
206、urcustomersastotheapplicabilityorscopeofourindemnificationobligationstothem.Theresultsofanyintellectualpropertylitigationtowhichwemightbecomeaparty,orforwhichwearerequiredtoprovideindemnification,mayrequireustodooneormoreofthefollowing:ceaseofferingorusingtechnologiesthatincorporatethechallengedinte
207、llectualproperty;makesubstantialpaymentsforlegalfees,settlementpaymentsorothercostsordamages;obtainalicense,whichmaynotbeavailableonreasonableterms,tosellorusetherelevanttechnology;orredesigntechnologytoavoidinfringement.Ifwearerequiredtomakesubstantialpaymentsorundertakeanyoftheotheractionsnotedabo
208、veasaresultofanyintellectualpropertyinfringementclaimsagainstusoranyobligationtoindemnifyourcustomersforsuchclaims,suchpaymentsorcostscouldhaveamaterialadverseeffectuponourbusinessandfinancialresults.Ouruseofopensourcetechnologycouldimposelimitationsonourabilitytocommercializeoursoftwareplatform.Weu
209、seopensourcesoftwareinourplatform.Someopensourcesoftwarelicensesrequireuserswhodistributeopensourcesoftwareaspartoftheirsoftwaretopubliclydiscloseallorpartofthesourcecodetosuchsoftwareand/ormakeavailableanyderivativeworksoftheopensourcecodeonunfavorabletermsoratnocost.Thetermsofvariousopensourcelice
210、nseshavenotbeeninterpretedbytheUnitedStatescourts,andthereisariskthatsuchlicensescouldbeconstruedinamannerthatimposesunanticipatedconditionsorrestrictionsonourabilitytomarketoursoftwareplatform.Whilewemonitorouruseofopensourcesoftwareandtrytoensurethatnoneisusedinamannerthatwouldrequireustodiscloseo
211、ursourcecodeorthatwouldotherwisebreachthetermsofanopensourceagreement,suchusecouldinadvertentlyoccurandwemayberequiredtoreleaseourproprietarysourcecode,paydamagesforbreachofcontract,re-engineerourapplications,discontinuesalesintheeventre-engineeringcannotbeaccomplishedonatimelybasisortakeotherremedi
212、alactionthatmaydivertresourcesawayfromourdevelopmentefforts,anyofwhichcouldcauseustobreachcustomercontracts,harmourreputation,resultincustomerlossesorclaims,increaseourcostsorotherwiseadverselyaffectourbusinessandoperatingresults.16Becauseourlong-termsuccessdepends,inpart,onourabilitytoexpandoursale
213、stocustomersoutsidetheUnitedStates,ourbusinesswillbesusceptibletorisksassociatedwithinternationaloperations.Wecurrentlymaintainofficesand/orhavepersonnelinAustralia,China,England,France,Germany,IrelandandJapan,aswellastheUnitedStates.AswecontinuetoexpandourcustomerbaseoutsidetheUnitedStates,ourbusin
214、esswillbeincreasinglysusceptibletorisksassociatedwithinternationaloperations.However,wehavealimitedoperatinghistoryoutsidetheUnitedStates,andourabilitytomanageourbusinessandconductouroperationsinternationallyrequiresconsiderablemanagementattentionandresourcesandissubjecttoparticularchallengesofsuppo
215、rtingarapidlygrowingbusinessinanenvironmentofdiversecultures,languages,customs,taxlaws,legalsystems,alternatedisputesystemsandregulatorysystems.Therisksandchallengesassociatedwithinternationalexpansioninclude:theneedtosupportandintegratewithlocalpublishersandpartners;continuedlocalizationofourplatfo
216、rm,includingtranslationintoforeignlanguagesandassociatedexpenses;competitionwithcompaniesthathavegreaterexperienceinthelocalmarketsthanwedoorwhohavepre-existingrelationshipswithpotentialcustomersinthosemarkets;compliancewithmultiple,potentiallyconflictingandchanginggovernmentallawsandregulations,inc
217、ludingemployment,tax,privacyanddataprotectionlawsandregulations;compliancewithanti-briberylaws,includingcompliancewiththeForeignCorruptPracticesAct;difficultiesininvoicingandcollectinginforeigncurrenciesandassociatedforeigncurrencyexposure;difficultiesinstaffingandmanagingforeignoperationsandtheincr
218、easedtravel,infrastructureandlegalcompliancecostsassociatedwithinternationaloperations;differentorlesserprotectionofourintellectualpropertyrights;difficultiesinenforcingcontractsandcollectingaccountsreceivable,longerpaymentcyclesandothercollectiondifficulties;restrictionsonrepatriationofearnings;and
219、regionaleconomicandpoliticalconditions.Wehavelimitedexperienceinmarketing,sellingandsupportingoursubscriptionservicesinternationally,whichincreasestheriskthatanypotentialfutureexpansioneffortsthatwemayundertakewillnotbesuccessful.Fluctuationsintheexchangerateofforeigncurrenciescouldresultincurrencyt
220、ransactionslosses.WecurrentlyhaveforeignsalesdenominatedinAustralianDollars,BritishPoundSterling,CanadianDollars,ChineseYuan,Euros,JapaneseYenandSingaporeDollars.Inaddition,weincuraportionofouroperatingexpensesinthecurrenciesofthecountrieswherewehaveoffices.Wefaceexposuretoadversemovementsincurrency
221、exchangerates,whichmaycauseourrevenuesandoperatingresultstodiffermateriallyfromexpectations.IftheU.S.Dollarstrengthensrelativetoforeigncurrenciesasithasduring2015,ournon-U.S.revenueswouldbeadverselyaffected.Conversely,adeclineintheU.S.Dollarrelativetoforeigncurrencieswouldincreaseournon-U.S.revenues
222、whentranslatedintoU.S.Dollars.Ouroperatingresultscouldbenegativelyimpacteddependingontheamountofexpensedenominatedinforeigncurrencies.Asexchangeratesvary,revenues,costofrevenues,operatingexpensesandotheroperatingresults,whentranslated,maydiffermateriallyfromexpectations.Inaddition,ourrevenuesandoper
223、atingresultsaresubjecttofluctuationifourmixofUnitedStatesandforeigncurrencydenominatedtransactionsorexpenseschangesinthefuturebecausewedonotcurrentlyhedgeourforeigncurrencyexposure.Evenifweweretoimplementhedgingstrategiestomitigateforeigncurrencyrisk,thesestrategiesmightnoteliminateourexposuretofore
224、ignexchangeratefluctuationsandwouldinvolvecostsandrisksoftheirown,suchasongoingmanagementtimeandexpertise,externalcoststoimplementthestrategiesandpotentialaccountingimplications.Ifwefailtodevelopwidespreadbrandawarenesscost-effectively,ourbusinessmaysuffer.Webelievethatdevelopingandmaintainingwidesp
225、readawarenessofourbrandinacost-effectivemanneriscriticaltoachievingwidespreadacceptanceofoursolutionandattractingnewcustomers.Weexpectsalesandmarketingexpensestoincreaseasaresultofourmarketingandbrandpromotionactivities.Wemaynotgeneratecustomerawarenessorincreaserevenuesenoughtooffsettheincreasedexp
226、ensesweincurinbuildingourbrand.Ifwefailtosuccessfullypromoteandmaintainourbrand,orincursubstantialmarketingandsalesexpenses,whicharenotoffsetbyincreasedrevenues,wemayfailtoattractorretaincustomersnecessarytorealizeasufficientreturnonourbrand-buildingefforts,ortoachievethewidespreadbrandawarenessthat
227、isessentialforbroadcustomeradoptionofoursolution.17Unfavorableconditionsinthemarketfordigitaladvertisingortheglobaleconomyorreductionsindigitaladvertisingspendcouldlimitourabilitytogrowourbusinessandnegativelyaffectouroperatingresults.Revenuegrowthandpotentialprofitabilityofourbusinessdependsondigit
228、aladvertisingspendbyadvertisersinthemarketsweserve.Ouroperatingresultsmayvarybasedonchangesinthemarketfordigitaladvertisingortheglobaleconomy.Totheextentthatweakeconomicconditionscauseourcustomersandpotentialcustomerstofreezeorreducetheiradvertisingbudgets,particularlydigitaladvertising,demandforour
229、solutionmaybenegativelyaffected.Historically,economicdownturnshaveresultedinoverallreductionsinadvertisingspend.Ifeconomicconditionsdeteriorateortheriseofgeopoliticalinstabilityandmilitaryhostilitiescauseseconomicuncertainty,ourcustomersandpotentialcustomersmayelecttodecreasetheiradvertisingbudgetso
230、rdeferorreconsidersoftwareandservicepurchases,whichwouldlimitourabilitytogrowourbusinessandnegativelyaffectouroperatingresults.Ourbusinessdependsonretainingandattractingqualifiedpersonnel,andturnovermayresultinoperationalinefficienciesthatcouldnegativelyaffectourbusiness.Oursuccessdependsuponthecont
231、inuedserviceofourtalentedmanagement,operationalandkeytechnicalemployees,aswellasourabilitytocontinuetoattractadditionalhighlyqualifiedtalent.Turnoveramongstouremployeescouldresultinoperationalandadministrativeinefficienciesandaddedcosts,whichcouldadverselyimpactourresultsofoperations,stockpriceandcu
232、stomerrelationships.Inaddition,wemustsuccessfullyintegrateanynewpersonnelthatwehirewithinourorganizationinordertoachieveouroperatingobjectives,andchangesinotherkeypositionsmaytemporarilyaffectourfinancialperformanceandresultsofoperationsasnewemployeesbecomefamiliarwithourbusiness.Further,ourmanageme
233、ntteamhasonlyworkedtogetherforashortperiodoftime,includingourthreeexecutiveofficerswhoeachjoinedwithinthelasttwoyears,andanylossofanyothermemberofourmanagementteamcouldadverselyaffectourbusiness.Wedonotmaintainkeypersonlifeinsurancepoliciesonanyofouremployees.Eachofourexecutiveofficers,keytechnicalp
234、ersonnelandotheremployeescouldterminatehisorherrelationshipwithusatanytime.Ourbusinessalsorequiresskilledtechnical,salesandotherpersonnel,whoareinhighdemandandareoftensubjecttocompetingoffers.Asweexpandintoadditionalgeographicmarkets,wewillrequirepersonnelwithexpertiseinthesenewareas.Competitionforq
235、ualifiedemployeesisintenseinourindustryandparticularlyinSanFrancisco,California,wheremostofouremployeesarebased.Aninabilitytoretain,attract,relocateandmotivateemployeesrequiredforourbusiness,includingtheplannedexpansionofourbusiness,coulddelayorpreventtheachievementofourbusinessobjectivesandcouldmat
236、eriallyharmourbusinessandourcustomerrelationships.Ourbusinessandoperationshaveexperiencedrapidgrowthinrecentperiods,whichhasplaced,andmaycontinuetoplace,significantdemandsonourmanagementandinfrastructure.Ifwefailtomanageourgrowtheffectively,wemaybeunabletoexecuteourbusinessplan,maintainhighlevelsofs
237、erviceoraddresscompetitivechallengesadequately.Weincreasedournumberoffull-timeemployeesfrom285asofDecember31,2011to511asofDecember31,2015.Ourgrowthhasplaced,andmaycontinuetoplace,asignificantstrainonourmanagerial,administrative,operational,financialandotherresources.Creatingaglobalorganizationandman
238、agingageographicallydispersedworkforcewillrequiresubstantialmanagementeffort,theallocationofvaluablemanagementresourcesandsignificantadditionalinvestmentinourinfrastructure.Wewillberequiredtocontinuetoimproveouroperational,financialandmanagementcontrolsandourreportingproceduresandwemaynotbeabletodos
239、oeffectively.Moreover,wemayfromtimetotimedecidetoundertakecostsavingsinitiatives,suchasadditionalrestructurings,disposingof,and/orotherwisediscontinuingcertainproducts,inanefforttofocusourresourcesonkeystrategicinitiativesandstreamlineourbusiness.Further,toaccommodateourexpectedgrowthwemustcontinual
240、lyimproveandmaintainourtechnology,systemsandnetworkinfrastructure.Assuch,wemaybeunabletomanageourexpenseseffectivelyinthefuture,whichmaynegativelyimpactourgrossmarginsoroperatingexpensesinanyparticularquarter.Ifwefailtomanageouranticipatedgrowthorchangeinamannerthatdoesnotpreservethekeyaspectsofourc
241、orporateculture,thequalityofoursolutionsmaysuffer,whichcouldnegativelyaffectourbrandandreputationandharmourabilitytoretainandattractcustomers.Domesticandforeigngovernmentregulationandenforcementofdatapracticesanddatatrackingtechnologiesisexpansive,notclearlydefinedandrapidlyevolving.Suchregulationco
242、ulddirectlyrestrictportionsofourbusinessorindirectlyaffectourbusinessbyconstrainingourcustomersuseofourplatformorlimitingthegrowthofourmarkets.Federal,state,municipaland/orforeigngovernmentsandagencieshaveadoptedandcouldinthefutureadopt,modify,applyorenforcelaws,policies,andregulationscoveringuserpr
243、ivacy,datasecurity,technologiessuchascookiesthatareusedtocollect,storeand/orprocessdata,thetaxationofproductsandservices,unfairanddeceptivepractices,and/orthecollection,use,processing,transfer,storageand/ordisclosureofdataassociatedwithauniqueindividual.Thecategoriesofdataregulatedundertheselawsvary
244、widelyandareoftenill-definedandsubjecttonewapplicationsorinterpretationbyregulators.Oursubscriptionservicesenableourcustomerstoservedigitaladstotargetedpopulationsegments,aswellascollect,manageandstoredataregardingthemeasurement18andvaluationoftheirdigitaladvertisingandmarketingcampaigns,whichmayinc
245、ludedatathatisdirectlyorindirectlyobtainedorderivedthroughtheactivitiesofonlineormobilevisitors.Theuncertaintyandinconsistencyamongtheselaws,coupledwithalackofguidanceastohowtheselawswillbeappliedtocurrentandemergingInternetandmobileanalyticstechnologies,createsariskthatregulators,lawmakersorotherth
246、irdparties,suchaspotentialplaintiffs,mayassertclaims,pursueinvestigationsoraudits,orengageincivilorcriminalenforcement.Theseactionscouldlimitthemarketforoursubscriptionservicesorimposeburdensomerequirementsonourservicesand/orcustomersuseofourservices,therebyrenderingourbusinessunprofitable.Somefeatu
247、resofoursubscriptionservicesusecookies,whichtriggerthedataprotectionrequirementsofcertainforeignjurisdictions,suchastheEUCookieDirectiveandtheEUDataPrivacyDirective.Inaddition,ourservicescollectdataaboutvisitorsinteractionswithouradvertiserclientsthatmaybesubjecttoregulationundercurrentorfuturelawso
248、rregulations.Ifourprivacyordatasecuritymeasuresfailtocomplywiththesecurrentorfuturelawsandregulationsinanyofthejurisdictionsinwhichwecollectinformation,wemaybesubjecttolitigation,regulatoryinvestigations,civilorcriminalenforcement,auditsorotherliabilitiesinsuchjurisdictions,orouradvertisersmaytermin
249、atetheirrelationshipswithus.Inaddition,foreigncourtjudgmentsorregulatoryactionscouldimpactourabilitytotransfer,processand/orreceivetransnationaldatathatiscriticaltoouroperations,includingdatarelatingtousers,clients,orpartnersoutsidetheUnitedStates.Suchjudgmentsoractionscouldaffectthemannerinwhichwep
250、rovideourservicesoradverselyaffectourfinancialresultsifforeignclientsandpartnersarenotabletolawfullytransferdatatous.Thisareaofthelawiscurrentlyunderintensegovernmentscrutinyandmanygovernments,includingtheUnitedStatesgovernment,areconsideringavarietyofproposedregulationsthatwouldrestrictorimpactthec
251、onditionsunderwhichdataobtainedfromorthroughtheactivitiesofvisitorscouldbecollected,processedorstored.Inaddition,regulatorssuchastheFederalTradeCommissionandtheCaliforniaAttorneyGeneralarecontinuallyproposingnewregulationsandinterpretingandapplyingexistingregulationsinnewways.Changestoexistinglawsor
252、newlawsregulatingthesolicitation,collectionorprocessingofpersonalandconsumerinformation,truth-in-advertisingandconsumerprotectioncouldaffectourcustomersutilizationofdigitaladvertisingandmarketing,potentiallyreducingdemandforoursubscriptionservices,orimposerestrictionsthatmakeitmoredifficultorexpensi
253、veforustoprovideourservices.IflegislationdampensthegrowthinwebandmobileusageoraccesstotheInternet,ourresultsofoperationscouldbeharmed.Legislationenactedinthefuturecoulddampenthegrowthinwebandmobileusageanddecreaseitsacceptanceasamediumofcommunicationsandcommerceorresultinincreasedadoptionofnewmodeso
254、fcommunicationandcommercethatmaynotbeservicedbyourproducts.Inaddition,governmentagenciesorprivateorganizationsmaybegintoimposetaxes,feesorotherchargesforaccessingtheInternet,whichcouldresultinslowergrowthoradecreaseinecommerce,useofsocialmediaand/oruseofmobiledevices.Anyoftheseoutcomescouldcausedema
255、ndforourplatformtodecrease,ourcoststoincrease,andourresultsofoperationsandfinancialconditiontobeharmed.Ifourcustomersfailtoabidebyapplicableprivacylawsortoprovideadequatenoticeand/orobtainconsentfromendusers,wecouldbesubjecttolitigationorenforcementactionorreduceddemandforourservices.Industryself-re
256、gulatorystandardsmaybeimplementedinthefuturethatcouldaffectdemandforourplatformandourabilitytoaccessdataweusetoprovideourplatform.Ourcustomersutilizeourservicestosupportandmeasuretheirdirectinteractionswithvisitors,andalthoughweprovidenoticeandchoicemechanismsonourwebsitesforoursubscriptionservices,
257、wealsomustrelyonourcustomerstoimplementandadministernoticeandchoicemechanismsrequiredunderapplicablelaws.Ifweorourcustomersfailtoabidebytheselaws,itcouldresultinlitigationorregulatoryorenforcementactionagainstourcustomersoragainstusdirectly.Inaddition,self-regulatoryorganizations(suchastheDigitalAdv
258、ertisingNetworkorNetworkAdvertisingInitiative)towhichourcustomers,partnersandsuppliersmaybelong,mayimposeopt-inoropt-outrequirementsonourcustomers,whichmayinthefuturerequireourcustomerstoprovidevariousmechanismsforuserstoopt-inoropt-outofthecollectionofanydata,includinganonymousdata,withrespecttosuc
259、huserswebormobileactivities.Theonlineand/ormobileindustriesmayadopttechnicalorindustrystandards,orfederal,state,localorforeignlawsmaybeenactedthatallowuserstoopt-inoropt-outofdatathatisnecessarytoourbusiness.Inparticular,somegovernmentregulatorsandstandard-settingorganizationshavesuggesteda“DoNotTra
260、ck”standardthatallowsuserstoexpressapreference,independentofcookiesettingsintheirbrowser,nottohavewebsitebrowsingrecorded.Allthemajorinternetbrowsershaveimplementedsomeversionofa“DoNotTrack”setting.Furthermore,publishersmayimplementalternativetrackingtechnologiesthatmakeitmoredifficulttoaccessthedat
261、anecessarytoourbusinessormakeitmoredifficultforustocompetewiththepublishersownadvertisingmanagementsolutions.Ifanyoftheseeventsweretooccurinthefuture,itcouldhaveamaterialeffectonourabilitytoprovideservicesandforourcustomerstocollectthedatathatisnecessarytouseourservices.19Ourrevenuesmaybeadverselyaf
262、fectedifwearerequiredtochargesalestaxesinadditionaljurisdictionsorothertaxesforoursolutions.Wecollectorhaveimposeduponussalesorothertaxesrelatedtothesolutionswesellincertainstatesandotherjurisdictions.Additionalstates,countriesorotherjurisdictionsmayseektoimposesalesorothertaxcollectionobligationson
263、usinthefuture,orstatesorjurisdictionsinwhichwealreadypaytaxmayincreasetheamountoftaxeswearerequiredtopay.Asuccessfulassertionbyanystate,countryorotherjurisdictioninwhichwedobusinessthatweshouldbecollectingsalesorothertaxesonthesaleofourproductsandservicescould,amongotherthings,createsignificantadmin
264、istrativeburdensforus,resultinsubstantialtaxliabilitiesforpastsales,discourageclientsfrompurchasingsolutionsfromusorotherwisesubstantiallyharmourbusinessandresultsofoperations.Wemayexperiencequarterlyfluctuationsinouroperatingresultsduetoanumberoffactorswhichmakeourfutureresultsdifficulttopredictand
265、couldcauseouroperatingresultstofallbelowexpectationsorourguidance.Ourquarterlyoperatingresultsmayfluctuateduetoavarietyoffactors,manyofwhichareoutsideofourcontrol.Asaresult,comparingouroperatingresultsonaperiod-to-periodbasismaynotbemeaningful.Youshouldnotrelyonourpastresultsasindicativeofourfuturep
266、erformance.Ifourrevenuesoroperatingresultsfallbelowtheexpectationsofinvestorsorsecuritiesanalysts,orbelowanyguidancewemayprovidetothemarket,thepriceofourcommonstockcoulddeclinesubstantially.Inadditiontootherriskfactorslistedinthissection,factorsthatmayaffectourquarterlyoperatingresultsincludethefoll
267、owing:thelevelofadvertisingspendmanagedthroughourplatformforaparticularquarter;customerrenewalrates,andthepricingandusageofourplatforminanyrenewalterm;demandforourplatformandthesizeandtimingofoursales;customersdelayingpurchasingdecisionsinanticipationofnewreleasesbyusorofnewproductsbyourcompetitors;
268、networkoutages,platformdowntime,softwarebugsorsecuritybreachesandanyassociatedcredits,warrantyclaimsorotherexpenses;changesinthecompetitivedynamicsofourindustry,includingconsolidationamongcompetitorsorcustomers;marketacceptanceofourcurrentandfuturesolutions;changesinspendingondigitaladvertisingorinf
269、ormationtechnologyandsoftwarebyourcurrentand/orprospectivecustomers;budgetingcyclesofourcustomers;ourpotentiallylengthysalescycle;ourabilitytocontrolcosts,includingouroperatingexpenses;theamountandtimingofinfrastructurecostsandoperatingexpensesrelatedtothemaintenanceandexpansionofourbusiness,operati
270、onsandinfrastructure;restructuringofourbusinessandhiringorseparationofemployees;foreigncurrencyexchangeratefluctuations;andgeneraleconomicandpoliticalconditionsinourdomesticandinternationalmarkets.Baseduponallofthefactorsdescribedabove,wehavealimitedabilitytoforecastourfuturerevenues,costsandexpense
271、s,andasaresult,ouroperatingresultsmayfromtimetotimefallbelowourestimatesortheexpectationsofpublicmarketanalystsandinvestors.Wemightrequireadditionalcapitaltosupportbusinessgrowth,andthiscapitalmightnotbeavailableonacceptableterms,ifatall.Weintendtocontinuetomakeinvestmentstosupportourbusinessgrowtha
272、ndmayrequireadditionalfundstorespondtobusinesschallenges,includingtheneedtodevelopnewfeaturesorenhanceourexistingplatform,improveouroperatinginfrastructureoracquirecomplementarybusinessesandtechnologies.Accordingly,wemayneedtoengageinequityordebtfinancingstosecureadditionalfunds.Ifweraiseadditionalf
273、undsthroughfurtherissuancesofequityorconvertibledebtsecurities,ourexistingstockholderscouldsuffersignificantdilution,andanynewequitysecuritiesweissuecouldhaverights,preferencesandprivilegessuperiortothoseofholdersofourcommonstock.Anydebtfinancingsecuredbyusinthefuturecouldinvolverestrictivecovenants
274、relatingtoourcapitalraisingactivitiesandotherfinancialandoperationalmatters,whichmaymakeitmoredifficultforustoobtain20additionalcapitalandtopursuebusinessopportunities,includingpotentialacquisitions.Inaddition,wemaynotbeabletoobtainadditionalfinancingontermsfavorabletous,ifatall.Ifweareunabletoobtai
275、nadequatefinancingorfinancingontermssatisfactorytous,whenwerequireit,ourabilitytocontinuetosupportourbusinessgrowthandtorespondtobusinesschallengescouldbesignificantlyimpaired.Futureacquisitions,strategicinvestments,partnershipsoralliancescouldbedifficulttointegrate,diverttheattentionofkeymanagement
276、personnel,disruptourbusiness,diluteshareholdervalueandadverselyaffectourresultsofoperationsandfinancialcondition.WeacquiredSocialMoovS.A.S.(“SocialMoov”)inFebruary2015,andNowSpots,Inc.,doingbusinessasPerfectAudience(“PerfectAudience”)inJune2014andmayseektoacquireadditionalbusinesses,productsortechno
277、logiesinthefuture.However,thesearetheonlytwoacquisitionsinthehistoryofourcompanyandwehavelimitedexperienceinacquiringandintegratingbusinesses,productsandtechnologies.Ifweidentifyanappropriateacquisitioncandidate,wemaynotbesuccessfulinnegotiatingthetermsand/orfinancingoftheacquisition,andourduedilige
278、ncemayfailtoidentifyalloftheproblems,liabilitiesorothershortcomingsorchallengesofanacquiredbusiness,productortechnology,includingissuesrelatedtointellectualproperty,productqualityorarchitecture,regulatorycompliancepractices,revenuerecognitionorotheraccountingpracticesoremployeeorclientissues.Anyacqu
279、isitionorinvestmentmayrequireustousesignificantamountsofcash,issuepotentiallydilutiveequitysecuritiesorincurdebt.Inaddition,acquisitions,includingouracquisitionsofSocialMoovandPerfectAudience,involvenumerousrisks,anyofwhichcouldharmourbusiness,including:regulatoryandcommercialrisksrelatingtoretarget
280、ingofonlineadvertisingandsocialadvertising,theprimarybusinessesofPerfectAudienceandSocialMoov,respectively;difficultiesinintegratingtheoperations,technologies,servicesandpersonnelofacquiredbusinesses,especiallyifthosebusinessesoperateoutsideofourcorecompetencyand/orinforeigncountries;culturalchallen
281、gesassociatedwithintegratingemployeesfromtheacquiredcompanyintoourorganization;reputationandperceptionrisksassociatedwiththeacquiredproductortechnologybythegeneralpublic;ineffectivenessorincompatibilityofacquiredtechnologiesorservices;potentiallossofkeyemployeesofacquiredbusinesses;inabilitytomainta
282、inthekeybusinessrelationshipsandthereputationsofacquiredbusinesses;diversionofmanagementsattentionfromotherbusinessconcerns;litigationforactivitiesoftheacquiredcompany,includingclaimsfromterminatedemployees,clients,formershareholdersorotherthirdparties;failuretoidentifyalloftheproblems,liabilitiesor
283、othershortcomingsorchallengesofanacquiredcompany,technology,orsolution,includingissuesrelatedtointellectualproperty,solutionqualityorarchitecture,regulatorycompliancepractices,revenuerecognitionorotheraccountingpracticesoremployeeorclientissues;inthecaseofforeignacquisitionssuchasSocialMoov,theneedt
284、ointegrateoperationsacrossdifferentculturesandlanguagesandtoaddresstheparticulareconomic,currency,politicalandregulatoryrisksassociatedwithspecificcountries;costsnecessarytoestablishandmaintaineffectiveinternalcontrolsforacquiredbusinesses;failuretosuccessfullyfurtherdeveloptheacquiredtechnologyinor
285、dertorecoupourinvestment;andincreasedfixedcosts.IfweareunabletosuccessfullyintegrateSocialMoovorPerfectAudience,oranyfuturebusiness,productortechnologyweacquire,ourbusinessandresultsofoperationsmaysuffer.Inaddition,asignificantportionofthepurchasepriceofcompaniesweacquiremaybeallocatedtoacquiredgood
286、willandotherintangibleassets,whichmustbeassessedforimpairmentatleastannually.Ifouracquisitionsdonotyieldexpectedreturns,wemayberequiredtotakechargestoouroperatingresultsbasedonthisimpairmentassessmentprocess,whichcouldadverselyaffectourresultsofoperations.21Acquisitionscouldalsoresultindilutiveissua
287、ncesofequitysecuritiesortheincurrenceofdebt,whichcouldadverselyaffectouroperatingresults.Forinstance,inconnectionwithouracquisitionofPerfectAudience,weissued1.7millionsharesofourcommonstock,andinconnectionwithouracquisitionofSocialMoov,weissuedacombinedtotalof1.1millionsharesinFebruary2015andFebruar
288、y2016,andareobligatedtoissueuptoanadditional0.5millionsharesofourcommonstock,subjecttocertaincontingenciesinFebruary2017.Ifweareunabletoimplementandmaintaineffectiveinternalcontroloverfinancialreportinginthefuture,investorsmayloseconfidenceintheaccuracyandcompletenessofourfinancialreportsandthemarke
289、tpriceofourcommonstockmaybenegativelyaffected.Asapubliccompany,wearerequiredtomaintaininternalcontroloverfinancialreportingandtoreportanymaterialweaknessesinsuchinternalcontrol.Section404oftheSarbanes-OxleyActof2002(the“Sarbanes-OxleyAct”)requiresthatweevaluateanddeterminetheeffectivenessofourintern
290、alcontroloverfinancialreportingandprovideamanagementreportontheinternalcontroloverfinancialreportingandareportbyourindependentregisteredpublicaccountingfirmtotheextentwedecidenottoavailourselvesoftheexemptionprovidedtoanemerginggrowthcompany,asdefinedbyTheJumpstartOurBusinessActof2012.Ifwehaveamater
291、ialweaknessinourinternalcontroloverfinancialreporting,wemaynotdetecterrorsonatimelybasisandourfinancialstatementsmaybemateriallymisstated.Inaddition,inthefutureifweidentifymaterialweaknessesinourinternalcontroloverfinancialreporting,ifweareunabletocomplywiththerequirementsofSection404inatimelymanner
292、,ifweareunabletoassertthatourinternalcontroloverfinancialreportingiseffectiveorifourindependentregisteredpublicaccountingfirmisunabletoexpressanopinionastotheeffectivenessofourinternalcontroloverfinancialreporting,investorsmayloseconfidenceintheaccuracyandcompletenessofourfinancialreportsandthemarke
293、tpriceofourcommonstockcouldbenegativelyaffected,andwecouldbecomesubjecttoinvestigationsbythestockexchangeonwhichoursecuritiesarelisted,theSEC,orotherregulatoryauthorities,whichcouldrequireadditionalfinancialandmanagementresources.Weareanemerginggrowthcompany,andwecannotbecertainifthereduceddisclosur
294、erequirementsapplicabletoemerginggrowthcompanieswillmakeourcommonstocklessattractivetoinvestors.Foraslongaswecontinuetobeanemerginggrowthcompany,weintendtotakeadvantageofcertainexemptionsfromvariousreportingrequirementsthatareapplicabletootherpubliccompaniesincluding,butnotlimitedto,theexemptionfrom
295、therequirementofareportonourinternalcontroloverfinancialreportingbyourindependentregisteredpublicaccountingfirm,reduceddisclosureobligationsregardingexecutivecompensationinourperiodicreportsandproxystatements,andexemptionsfromtherequirementsofholdinganonbindingadvisoryvoteonexecutivecompensationands
296、tockholderapprovalofanygoldenparachutepaymentsnotpreviouslyapproved.Wecannotpredictifinvestorswillfindourcommonstocklessattractivebecausewewillrelyontheseexemptions.Ifsomeinvestorsfindourcommonstocklessattractiveasaresult,theremaybealessactivetradingmarketforourcommonstockandourstockpricemaybemorevo
297、latile.Wewillremainanemerginggrowthcompanyuntiltheearliestof(i)theendofthefiscalyearinwhichthemarketvalueofourcommonstockthatisheldbynon-affiliatesexceeds$700millionasofJune30,(ii)theendofthefiscalyearinwhichwehavetotalannualgrossrevenuesof$1billionormoreduringsuchfiscalyear,(iii)thedateonwhichweiss
298、uemorethan$1billioninnon-convertibledebtinathree-yearperiodor(iv)March21,2018.Wemaynotbeabletoutilizeasignificantportionofournetoperatinglossorresearchtaxcreditcarryforwards,whichcouldadverselyaffectourprofitability.AsofDecember31,2015,wehadfederalandstatenetoperatinglosscarryforwardsduetopriorperio
299、dlosses,whichifnotutilizedwillbegintoexpirein2026and2016forfederalandstatepurposes,respectively.Wealsohavefederalresearchtaxcreditcarryforwards,whichifnotutilizedwillbegintoexpirein2026.Thesenetoperatinglossandresearchtaxcreditcarryforwardscouldexpireunusedandbeunavailabletooffsetfutureincometaxliab
300、ilities,whichcouldadverselyaffectourprofitability.Inaddition,underSection382oftheInternalRevenueCodeof1986,asamended(the“Code”),ourabilitytoutilizenetoperatinglosscarryforwardsorothertaxattributes,suchasresearchtaxcredits,inanytaxableyearmaybelimitedifweexperiencean“ownershipchange.”ASection382“owne
301、rshipchange”generallyoccursifoneormorestockholdersorgroupsofstockholderswhoownatleast5%ofourstockincreasetheirownershipbymorethan50percentagepointsovertheirlowestownershippercentagewithinarollingthree-yearperiod.Similarrulesmayapplyunderstatetaxlaws.Futureissuancesofourstockcouldcausean“ownershipcha
302、nge.”Itispossiblethatanyfutureownershipchangecouldhaveamaterialeffectontheuseofournetoperatinglosscarryforwardsorothertaxattributes,whichcouldadverselyaffectourprofitability.22OurreportedfinancialresultsmaybeadverselyaffectedbychangesinaccountingprinciplesgenerallyacceptedintheUnitedStates.Generally
303、acceptedaccountingprinciplesintheUnitedStatesaresubjecttointerpretationbytheFinancialAccountingStandardsBoard(“FASB”),theSEC,andvariousbodiesformedtopromulgateandinterpretappropriateaccountingprinciples.Achangeintheseprinciplesorinterpretationscouldhaveasignificanteffectonourreportedfinancialresults
304、,andcouldaffectthereportingoftransactionscompletedbeforetheannouncementofachange.Risks Related to the Ownership of Our Common StockThetradingpricesofthesecuritiesoftechnologycompanieshavebeenhighlyvolatile.Accordingly,themarketpriceofourcommonstockhasbeen,andislikelytocontinuetobe,subjecttowidefluct
305、uationsandcouldsubjectustolitigation.Sinceourinitialpublicoffering,theclosingsalespriceofourcommonstockontheNewYorkStockExchangehasbeenvolatile.Factorsaffectingthemarketpriceofourcommonstockinclude:variationsin,orforwardlookingguidanceregarding,ourrevenues,grossmargin,operatingresults,freecashflow,l
306、osspershare,numberofactiveadvertisers,revenueretentionrates,annualizedadvertisingspendonourplatform,adjustedEBITDAandhowtheseresultscomparetoanalystexpectations;announcementsoftechnologicalinnovations,newproductsorservices,strategicalliances,acquisitionsorsignificantagreementsbyusorbyourcompetitors;
307、disruptionsinourcloud-basedoperationsorservicesordisruptionsofotherprominentcloud-basedoperationsorservices;theeconomyasawhole,marketconditionsinourindustry,andtheindustriesofourcustomers;andanyotherfactorsdiscussedherein.Inaddition,thestockmarketingeneralhasexperiencedsubstantialpriceandvolumevolat
308、ilitythatisoftenseeminglyunrelatedtotheoperatingresultsofanyparticularcompanies.Moreover,ifthemarketfortechnologystocks,especiallysoftwareandcloudcomputing-relatedstocks,orthestockmarketingeneralexperiencesuneveninvestorconfidence,themarketpriceofourcommonstockcoulddeclineforreasonsunrelatedtoourbus
309、iness,operatingresultsorfinancialcondition.Themarketpriceforourstockmightalsodeclineinreactiontoeventsthataffectothercompanieswithin,oroutside,ourindustry,eveniftheseeventsdonotdirectlyaffectus.Somecompaniesthathaveexperiencedvolatilityinthetradingpriceoftheirstockhavebeensubjectofsecuritieslitigati
310、on.Ifwearethesubjectofsuchlitigation,itcouldresultinsubstantialcostsandadiversionofmanagementsattentionandresources.FromJanuary1,2015throughDecember31,2015,theclosingsalespriceofourcommonstockontheNewYorkStockExchangerangedfrom$3.11to$8.56pershare,andhasalowclosingpriceof$2.70pershareduringtheperiod
311、fromJanuary1,2016throughFebruary12,2016.Becauseourstockpricehasbeenvolatile,investinginourcommonstockisrisky.Wedonotintendtopaydividendsfortheforeseeablefuture.Wehaveneverdeclarednorpaidcashdividendsonourcapitalstock.Wecurrentlyintendtoretainanyfutureearningstofinancetheoperationandexpansionofourbus
312、iness,andwedonotexpecttodeclareorpayanydividendsintheforeseeablefuture.Consequently,stockholdersmustrelyonsalesoftheircommonstockafterpriceappreciation,whichmayneveroccur,astheonlywaytorealizeanyfuturegainsontheirinvestment.Iftherearesubstantialsalesofsharesofourcommonstock,thepriceofourcommonstockc
313、oulddecline.Salesofasubstantialnumberofsharesofourcommonstockinthepublicmarket,ortheperceptionthatthesesalesmightoccurcoulddepressthemarketpriceofourcommonstockandmaymakeitmoredifficultforyoutosellyourcommonstockatatimeandpricethatyoudeemappropriate.Weareunabletopredicttheeffectthatsalesmayhaveonthe
314、prevailingmarketpriceofourcommonstock.WehavecurrentlyeffectiveRegistrationStatementsonFormS-3registeringforsaleapproximately1.6millionand1.7millionsharesofourcommonstockissuedortobeissuedinconnectionwithouracquisitionsofSocialMoovandPerfectAudience,respectively.Iftheholdersofthesesharesseektosellthe
315、irholdings,particularlyinsignificantamountsincompressedtimeframes,thetradingpriceofourcommonstockcouldbeadverselyimpacted.AportionofthesharesregisteredinconnectionwiththeacquisitionofSocialMoovwillnotbeissued,ifatall,untilthetwoyearanniversaryoftheclosingoftheacquisition.Afterourinitialpublicofferin
316、ginMarch2013,theholdersofanaggregateof18.8millionsharesofourcommonstockhadrights,subjecttosomeconditions,torequireustofileregistrationstatementscoveringtheirsharesortoincludetheirsharesinregistrationstatementsthatwemayfileforourselvesorourstockholders.Totheextenttheholdersofsuchshareshavenotsoldthes
317、haresotherwise,suchholdersmaycontinuetohaveregistrationrights.RegistrationofthesesharesundertheSecuritiesActwouldresultinthesharesbecoming23freelytradablewithoutrestrictionundertheSecuritiesAct.Anysalesofsecuritiesbyexistingstockholderscouldadverselyaffectthetradingpriceofourcommonstock.Delawarelawa
318、ndprovisionsinourrestatedcertificateofincorporationandrestatedbylawscouldmakeamerger,tenderoffer,orproxycontestdifficult,therebydepressingthetradingpriceofourcommonstock.OurstatusasaDelawarecorporationandtheanti-takeoverprovisionsoftheDelawareGeneralCorporationLawmaydiscourage,delay,orpreventachange
319、incontrolbyprohibitingusfromengaginginabusinesscombinationwithaninterestedstockholderforaperiodofthreeyearsafterthepersonbecomesaninterestedstockholder,evenifachangeofcontrolwouldbebeneficialtoourexistingstockholders.Inaddition,ourrestatedcertificateofincorporationandrestatedbylawscontainprovisionst
320、hatmaymaketheacquisitionofourCompanymoredifficult,includingthefollowing:ourboardofdirectorsareclassifiedintothreeclassesofdirectorswithstaggeredthree-yeartermsanddirectorscanonlyberemovedfromofficeforcause;onlyourboardofdirectorshastherighttofillavacancycreatedbytheexpansionofourboardofdirectorsorth
321、eresignation,deathorremovalofadirector,whichpreventsstockholdersfrombeingabletofillvacanciesonourboardofdirectors;onlyourchairmanoftheboard,ourleadindependentdirector,ourchiefexecutiveofficer,ourpresident,oramajorityofourboardofdirectorsisauthorizedtocallaspecialmeetingofstockholders;certainlitigati
322、onagainstuscanonlybebroughtinDelaware;ourrestatedcertificateofincorporationauthorizesundesignatedpreferredstock,thetermsofwhichmaybeestablished,andsharesofwhichmaybeissued,withouttheapprovaloftheholdersofcommonstock;andadvancenoticeproceduresapplyforstockholderstonominatecandidatesforelectionasdirec
323、torsortobringmattersbeforeanannualmeetingofstockholders.Ifsecuritiesorindustryanalystsdonotpublishresearchorpublishinaccurateorunfavorableresearchaboutourbusiness,ourstockpriceandtradingvolumecoulddecline.Thetradingmarketforourcommonstockdependsinpartontheresearchandreportsthatsecuritiesorindustryan
324、alystspublishaboutusorourbusiness.Ifoneormoreoftheanalystswhocoverusdowngradeourcommonstockorpublishinaccurateorunfavorableresearchaboutourbusiness,ourcommonstockpricewouldlikelydecline.Ifoneormoreoftheseanalystsceasecoverageofusorfailtopublishreportsonusregularly,demandforourcommonstockcoulddecreas
325、e,whichmightcauseourcommonstockpriceandtradingvolumetodecline.24ITEM 1B.UNRESOLV ED STAFF COMMENTSNone.ITEM 2.PROPERTIESOurcorporateheadquartersarelocatedinSanFrancisco,California,whereweoccupyfacilitiestotalingapproximately43,000squarefeetunderaleasewhichexpiresinJuly2022.Weusethesefacilitiesforadm
326、inistration,salesandmarketing,researchanddevelopment,engineering,customersupportandprofessionalservices.InDecember2015,weenteredintoanagreementtosubleaseapproximately14,300squarefeetofthispropertytoanunrelatedthirdpartythroughDecember2017.WealsoleaseofficespaceinAustin,ChicagoandNewYorkintheUnitedSt
327、ates,andAustralia,England,France,Germany,Ireland,andJapan,whichweuseprincipallyforsalesandmarketing,administration,customersupportandtodeliverprofessionalserviceslocally.WealsoleaseofficespaceinPortland,OregonandShanghai,China,whichweuseprincipallyforengineering.Weoperatetwodatacentersatthird-partyf
328、acilitieslocatedintheUnitedStatesandIreland.Webelieveourfacilitiesareingoodconditionandadequateforourcurrentneedsandfortheforeseeablefuture.SeeNote16totheConsolidatedFinancialStatementsand“ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsContractualObligationsandCommitments”
329、forinformationregardingourleaseobligations.ITEM 3.LEGAL PROCEEDINGSFromtimetotime,wemaybecomeinvolvedinlegalproceedingsarisingintheordinarycourseofourbusiness.Wearenotpresentlyapartytoanylegalproceedingsthat,ifdeterminedadverselytous,wouldindividuallyortakentogetherhaveamaterialadverseeffectonourbus
330、iness,operatingresults,financialconditionorcashflows.ITEM 4.MINE SAFETY DISCLOSURESNotapplicable.25PART IIITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESMarket Price of Our Common StockOurcommonstockhastradedontheNewYorkStockExchange(“
331、NYSE”)sinceMarch22,2013,underthesymbolMRIN.Priortothisdate,therewasnopublicmarketforourcommonstock.Thefollowingtablessetforth,fortheperiodsindicated,thehighandlowsalespriceofourcommonsharesasreportedbytheNYSE.High Low YearEndedDecember31,2015 FirstQuarter$8.56$5.94SecondQuarter$7.58$5.47ThirdQuarter
332、$6.76$3.11FourthQuarter$4.04$3.15High Low YearEndedDecember31,2014 FirstQuarter$12.57$9.17SecondQuarter$12.65$8.41ThirdQuarter$12.14$7.30FourthQuarter$9.68$7.79Holders of our Common StockAsofFebruary16,2016,therewere93stockholdersofrecord.Theactualnumberofstockholdersisgreaterthanthenumberofrecordho
333、lders,andincludesstockholderswhoarebeneficialowners,butwhosesharesareheldinstreetnamebybrokersandothernominees.Thenumberofholdersofrecordalsodoesnotincludestockholderswhosesharesmaybeheldintrustbyotherentities.Dividend PolicyWehaveneverdeclaredorpaidanycashdividendsonourcommonstock.Wecurrentlyintendtoretainanyfutureearningsanddonotexpecttopayanycashdividendsonourcommonstockfortheforeseeablefuture.
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