1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2020OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Commissi
2、on File Number 001-36720Upland Software,Inc.(Exactnameofregistrantasspecifiedinitscharter)Delaware27-2992077(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)401 Congress Ave.,Suite 1850Austin,Texas 78701(512)960-1010(Address,including zip code,and t
3、elephone number,including area code,of registrants principal executive offices)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommonStock,parvalue$0.0001pershareUPLDTheNasdaqGlobalMarketSecurities registered pursuan
4、t to Section 12(g)of the Act:NoneIndicatebycheckmarkiftheregistrantisawell-knownseasonedissuer,asdefinedinRule405oftheSecuritiesAct.YesxNoIndicatebycheckmarkiftheregistrantisnotrequiredtofilereportspursuanttoSection13orSection15(d)oftheAct.YesNoxIndicatebycheckmarkwhethertheregistrant(1)hasfiledallr
5、eportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesxNoIndicatebycheckmarkwhethertheregistranthassubmittedelectronicall
6、yandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).YesxNoIndicatebycheckmarkwhethertheregistrantisalar
7、geacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.LargeacceleratedfilerxAcceleratedfilerNon-accel
8、eratedfilerSmallerreportingcompanyEmerginggrowthcompanyIfanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.Indicatebycheckmarkwhethertheregis
9、tranthasfiledareportonandattestationtoitsmanagementsassessmentoftheeffectivenessofitsinternalcontroloverfinancialreportingunderSection404(b)oftheSarbanes-OxleyAct(15U.S.C.7262(b)bytheregisteredpublicaccountingfirmthatpreparedorissueditsauditreport.Indicatebycheckmarkwhethertheregistrantisashellcompa
10、ny(asdefinedinRule12b-2oftheAct).YesNoxTheaggregatemarketvalueoftheregistrantscommonstockheldbynon-affiliatesoftheregistrantwasapproximately$738millionbasedupontheclosingpriceof$34.76ofsuchcommonstockontheNasdaqGlobalMarketonJune30,2020(thelastbusinessdayoftheregistrantsmostrecentlycompletedsecondfi
11、scalquarter).SharesofcommonstockheldasofJune30,2020byeachdirectorandexecutiveofficeroftheregistrant,aswellassharesheldbyeachholderof10%ofthecommonstockknowntotheregistrant,havebeenexcludedforpurposesoftheforegoingcalculation.Thisdeterminationofaffiliatestatusisnotaconclusivedeterminationforotherpurp
12、oses.AsofFebruary19,2021,29,987,114sharesoftheregistrantsCommonStockwereoutstanding.Documents incorporated by reference:Certainportions,asexpresslydescribedinthisAnnualReportonForm10-K,oftheregistrantsProxyStatementforthe2021AnnualMeetingoftheStockholders,tobefilednotlaterthan120daysaftertheendofthe
13、yearcoveredbythisAnnualReport,areincorporatedbyreferenceintoPartIIIofthisAnnualReportwhereindicated.TABLE OF CONTENTS PART IItem1.Business4Item1A.RiskFactors10Item1B.UnresolvedStaffComments30Item2.Properties30Item3.LegalProceedings31Item4.MineSafetyDisclosures31PART IIItem5.MarketforRegistrantsCommo
14、nEquity,RelatedStockholderMattersandIssuerPurchasesofEquitySecurities32Item6.SelectedFinancialData33Item7.ManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperations33Item7A.QuantitativeandQualitativeDisclosuresaboutMarketRisk55Item8.FinancialStatementsandSupplementaryData57ReportofIn
15、dependentRegisteredPublicAccountingFirm58ConsolidatedFinancialStatements60ConsolidatedBalanceSheets60ConsolidatedStatementsofOperations61ConsolidatedStatementsofComprehensiveLoss62ConsolidatedStatementsofCommonStockholdersEquity(Deficit)63ConsolidatedStatementsofCashFlows64NotestotheConsolidatedFina
16、ncialStatements65Item9.ChangesinandDisagreementswithAccountantsonAccountingandFinancialDisclosure99Item9A.ControlsandProcedures99Item9B.OtherInformation100PART IIIItem10.Directors,ExecutiveOfficersandCorporateGovernance104Item11.ExecutiveCompensation104Item12.SecurityOwnershipofCertainBeneficialOwne
17、rsandManagementandRelatedStockholderMatters104Item13.CertainRelationshipsandRelatedTransactionsandDirectorIndependenceItem14.PrincipalAccountantFeesandServices104PART IVItem15.ExhibitsandFinancialStatementSchedules104Item16.Form10-KSummary104SIGNATURES1081PART ISpecial Note Regarding Forward Looking
18、 StatementsThisAnnualReportonForm10-Kcontains“forward-lookingstatements”withinthemeaningofSection27AoftheSecuritiesAct,andSection21EoftheSecuritiesExchangeActof1934,asamended(the“ExchangeAct”).Forward-lookingstatementsgenerallyrelatetofutureeventsorourfuturefinancialoroperatingperformance.Forward-lo
19、okingstatementsmaybeidentifiedbytheuseofforward-lookingwordssuchas“anticipate,”“believe,”“may,”“will,”“continue,”“seek,”“estimate,”“intend,”“hope,”“predict,”“could,”“should,”“would,”“project,”“plan,”“expect”orthenegativeorpluralofthesewordsorsimilarexpressions,althoughnotallforward-lookingstatements
20、containthesewords.Theseforward-lookingstatementsinclude,butarenotlimitedto,statementsconcerningthefollowing:ourfinancialperformanceandourabilitytoachieveorsustainprofitabilityorpredictfutureresults;ourplansregardingfutureacquisitionsandourabilitytoconsummateandintegrateacquisitions;ourabilitytoexpan
21、dourgotomarketoperations,includingourmarketingandsalesorganization,andsuccessfullyincreasesalesofourproducts;ourabilitytoobtainfinancinginthefutureonacceptabletermsoratall;ourexpectationswithrespecttorevenue,costofrevenueandoperatingexpensesinfutureperiods;ourabilitytoadapttotheimpactsontheglobaleco
22、nomyassociatedwiththeongoingCOVID-19pandemic;ourabilitytoattractandretaincustomers;ourabilitytosuccessfullyenternewmarketsandmanageourinternationalexpansion;ourabilitytocomplywithprivacylawsandregulations;ourabilitytodeliverhigh-qualitycustomerservice;thegrowthofdemandforenterpriseworkmanagementappl
23、ications;ourplansregarding,andourabilitytoeffectivelymanage,ourgrowth;maintainingourseniormanagementteamandkeypersonnel;theperformanceofourresellers;ourabilitytoadapttochangingmarketconditionsandcompetition;ourabilitytoadapttotechnologicalchangeandcontinuetoinnovate;economicandfinancialconditions;ou
24、rabilitytointegrateourapplicationswithothersoftwareapplications;maintainingandexpandingourrelationshipswiththirdparties;costsassociatedwithdefendingintellectualpropertyinfringementandotherclaims;ourabilitytomaintain,protectandenhanceourbrandandintellectualproperty;ourexpectationswithregardtotrends,s
25、uchasseasonality,whichaffectourbusiness;ourexpectationswithregardtorevenuefromperpetuallicensesandprofessionalservices;ourplanswithrespecttoforeigncurrencyexchangeriskandinflation;ourbeliefsregardinghowourapplicationsbenefitcustomersandwhatourcompetitivestrengthsare;theoperation,reliabilityandsecuri
26、tyofourthird-partydatacenters;theriskthatwedidnotconsideranothercontingencyincludedinthislist;ourexpectationsastothepaymentofdividends;andotherriskfactorsincludedunder“RiskFactors”inthisAnnualReportonForm10-K.2Youshouldnotrelyuponforward-lookingstatementsaspredictionsoffutureevents.Wehavebasedthefor
27、ward-lookingstatementscontainedinthisAnnualReportonForm10-Kprimarilyonourcurrentexpectationsandprojectionsaboutfutureeventsandtrendsthatwebelievemayaffectourbusiness,financialcondition,resultsofoperations,andprospects.Theoutcomeoftheeventsdescribedintheseforward-lookingstatementsissubjecttorisks,unc
28、ertainties,andotherfactors,includingthosedescribedinthesectiontitled“RiskFactors”andelsewhereinthisAnnualReportonForm10-K.Moreover,weoperateinaverycompetitiveandrapidlychangingenvironment.Newrisksanduncertaintiesemergefromtimetotime,anditisnotpossibleforustopredictallrisksanduncertaintiesthatcouldha
29、veanimpactontheforward-lookingstatementscontainedinthisAnnualReportonForm10-K.Wecannotassureyouthattheresults,events,andcircumstancesreflectedintheforward-lookingstatementswillbeachievedoroccur,andactualresults,events,orcircumstancescoulddiffermateriallyfromthosedescribedintheforward-lookingstatemen
30、ts.Theforward-lookingstatementsmadeinthisAnnualReportonForm10-Krelateonlytoeventsasofthedateonwhichthestatementsaremade.Weundertakenoobligationtoupdateanyforward-lookingstatementsmadeinthisAnnualReportonForm10-KtoreflecteventsorcircumstancesafterthedateofthisAnnualReportonForm10-Kortoreflectnewinfor
31、mationortheoccurrenceofunanticipatedevents,exceptasrequiredbylaw.Wemaynotactuallyachievetheplans,intentions,orexpectationsdisclosedinourforward-lookingstatementsandyoushouldnotplaceunduerelianceonourforward-lookingstatements.Ourforward-lookingstatementsdonotreflectthepotentialimpactofanyfutureacquis
32、itions,mergers,dispositions,jointventures,orinvestmentswemaymake.Allreferencesto“Upland,”“we,”“us”or“our”meanUplandSoftware,Inc.3Item 1.BusinessUplandprovidescloud-basedsoftwarethatenablesourcustomerstodrivedigitaltransformationinthefollowingbusinessfunctions:Marketing.Digitalmarketing,e-commerce,an
33、dcustomerserviceteamsuseourapplicationstointeractwithconsumersacrossmultiplechannelstoacquirenewcustomers,driveproductandserviceutilization,resolveissues,andbuildbrandloyalty.Ourapplicationsdelivervaluetothecustomerexperience,orCX,focusedorganizationsacrossavarietyofusecasesincludingmobilemessaging,
34、mobileapplicationmarketing,VoiceofCustomerengagement,orVoC,emailmarketing,knowledgemanagementandcallcenterproductivity.Ourteamsbringdeepindustryexperienceinorchestratingcampaignsandinteractionsthatconsumerswantandvalue.Sales.Salesteamsemployourapplicationstodrivegrowththroughdeepercustomerengagement
35、,reducedsalescycletimes,andoverallimprovedcollaborationbetweensales,marketing,andothercustomer-facingfunctions.Weofferapplicationsthathelporganizationsoptimizetheirsalesopportunityandaccountmanagementprocesses,coordinateproposalandreferenceactivities,collaborateonthecreationandpublicationofdigitalco
36、ntent,andgainincreasedcontroloverkeysalesandmarketingworkflows,activities,andbudgets.Contact Center.Customerserviceandsupportenvironmentsuseourapplicationstoenableagentstoresolveissuesandengagecustomers.Weofferapplicationsthatimprovecustomerexperienceandreducecallvolumeandcycletimesthroughcustomerse
37、lf-serviceproductsandVoCtechnologythatcapturescustomersentimentinreal-time.Uplandalsooffersproductsthatimprovecallcenteragentproductivitybyprovidingmoredirectaccesstoknowledgeandtocustomersentimenttherebyimprovingbothinboundcalloutcomesandproactiveoutboundsuccess.Additionalsolutionshelpcallcenterlea
38、dershiptomanageagentperformanceandmeasurereal-timeperformancerelativetocallresolutionandcustomersentiment,improveperformancethroughgamification,andgatheragentfeedbacktokeepemployeeengagementhigh.Project Management.BusinessleadersandProjectManagementOffices,orPMOs,useourapplicationstooptimizeprojectp
39、ortfolios,balancecapacityagainstdemand,improvefinancial-baseddecisionmaking,alignexecutionofprojectstostrategyacrosslargeorganizations,andmanagetheentireprojectdeliverylifecycle.Ourapplicationsdelivervaluetoprojectmanagementacrossavarietyofusecasesincludingcontinuousimprovement,enterpriseinformation
40、technology,orIT,newproductdevelopment,andservicesdepartmentsalongwithindustrydepthinhighereducation,publicsector,andhealthcareIT.Information Technology.ITdepartmentsuseourapplicationstomanageavarietyofITactivitiesandresourcesacrosstheenterprise.Ourapplicationshelpinformationtechnologydepartmentsensu
41、retheyaredeliveringagainsttheobjectivesofthebusinessbyhelpingthemselectandprioritizetherightinvestments,gaingreatercontrolofresourcedemandandallocation,andtrackandreportbenefitrealization.OurapplicationsenableexecutivestogainbetterinsightintoITspendingtohelppreventcostoverrunsandunderstandthenatureo
42、fconsumption.Business Operations.Multiplefunctionaldepartmentsuseourapplicationstostreamlineoperationsandacceleratebusinessperformanceacrosstheirvaluechains.Uplandsolutionsinthisarearangefromsupplychaincollaborationandfactorymanagement,backofficedocumentandvendormanagement,toapplicationsthatimproves
43、alesresponsiveness.Human Resources and Legal.Humanresources,orHR,legaldepartments,andlawfirmsuseourapplicationstoimprovecollaborationandoperationalcontrolandstreamlineroutineprocesses.Weofferapplicationsthatautomatedocumentmanagementandworkflowincluding,contracts,records,andotherdocumentationthatreq
44、uireenhancedsecurityandcompliancerequirements.OtherapplicationssupportHR-specificworkflowsincludingonboarding,employeemanagement,termination,HRsupport,andtimeandexpensemanagement.Throughaseriesofacquisitionsandintegrations,wehavebuiltadiversefamilyofsoftwareapplicationsundertheUplandbrand.Forthetwel
45、vemonthsendedDecember31,2020,comparedtothetwelvemonthsendedDecember31,2019,ourtotalrevenuegrewfrom$222.6millionto$291.8million,representinga31%period-over-periodgrowthrate.ForthetwelvemonthsendedDecember31,2020,comparedtothetwelvemonthsendedDecember31,2019,oursubscriptionandsupportrevenuegrewfrom$20
46、3.9millionto$277.5million,representinga36%period-over-periodgrowthrate.SeeNote13RevenueRecognition,inthenotestoconsolidatedfinancialstatementsformoreinformationregardingourrevenueasitrelatestodomesticandforeignoperations.4Tosupportcontinuedgrowth,weintendtocontinuetopursueacquisitionswithinourcorecl
47、oudofferingsofcomplementarytechnologiesandbusinesses.Weexpectthatthiswillexpandourcustomerbaseandmarketaccess,resultinginincreasedbenefitsofscale.Consistentwithourgrowthstrategy,wehavemadeatotalof26acquisitionsinthe9yearsendingDecember31,2020.Theoperatingplatformweusetotransformacquiredcompaniesinor
48、dertomaintainaconsistentlyhighlevelofoperatingperformanceiscalledUplandOne.Thisplatformconsistsofsixkeyareas:High-Touch Customer Success Program.WehaveinstitutionalizedasetofuniquecustomercommitmentsanddeliverableswecalltheUplandCustomerSuccessProgramthatincludesonboardingandtraining,adedicatedcusto
49、mersuccessrepresentative,upgradedsuccessplans,quarterlyvirtualuserconferences,periodicexecutiveoutreach,andNetPromoterScore,orNPS,surveys,andanongoingcustomerfeedbackloop.Quality-Focused R&D.OurapproachtoR&DatUplandisstraight-forward:prioritizecustomerneed,leverageametrics-drivenagileapproachwithvis
50、ibilityandaccountability,anddeployup-to-datedevelopmentsystemstoensurequalityisbuiltintoeverystepofdevelopment.Customer-Driven Innovation.CustomerfeedbackisattheheartoftheUplandcustomerexperience.Newfeaturesareaddedandprioritizedinourproductroadmaps,andthenfine-tuned,basedondirectcustomerinput.Reque
51、stsfromourPremierSuccessPlancustomersaregivenadditionalpriorityweightingfornewfeaturesandminorissueresolution.Productfeedbackoutletsincludecustomersuccessaccountmanagement,quarterlyvirtualuserconferences,annualcustomeradvisoryboards,andUplandsonlinecommunities.Expert Professional Services.Throughour
52、ProfessionalServicesorganization,UplandiscommittedtodeliveringthemostvaluefromacustomersUplandinvestmentintheshortestpossibletime.Onceweengageonaproject,wededicateateamtotheplanning,configuration,integration,launch,administration,andmaintenanceoftheapplication.24x7 Global Support.UplandGlobalsupport
53、includes:prioritizedissueescalationandresolution;onlineandphonesupport,24/7/365;accesstoacommunitytoshareanddiscussbestpractices,supporttips,trainingmaterials,andcustomreports;a knowledge-basewithalerts,servicerecommendations,andtroubleshootingcontent;unlimitedcasesubmissionsandreal-timecaseupdates;
54、and fullsupportacrosstheglobe.Forcustomersthathavemoreurgentsupportrequirements,UplandPremierSuccessPlansprovideenhancedresponsetimesandavailabilityforthemostseveresupportrequests.Enterprise Cloud Platform.Uplandsproductsrunonanenterprise-classcloudenvironment-deliveringpower,reliability,andflexibil
55、ity.WeutilizeAmazonWebServices,orAWS,forallourcloud-basedproductsandmoveacquiredproductstoAWSinconnectionwithouracquisitionintegrationprogram.Uplandscloudtechnologygivescustomersthefreedomfromlegacyapplicationswithouthavingtocompromisesecurityorscalability.Ourapplicationsarescalableandcansupportlarg
56、edeploymentswhilemaintainingrequiredperformancelevels.Ouroperatingresultsinagivenperiodcanfluctuatebasedonthemixofsubscriptionandsupport,perpetuallicense,andprofessionalservicesrevenue.ForthetwelvemonthsendedDecember31,2020,2019and2018,oursubscriptionandsupportrevenuerepresented95%,92%,and91%oftotal
57、revenue,respectively.Historically,wehavesoldcertainofourapplicationsunderperpetuallicenses,whichalsoarepaidinadvance.ForthetwelvemonthsendedDecember31,2020,2019,and2018,ourperpetuallicenserevenuerepresented1%,3%,and3%oftotalrevenue,respectively.Thesupportagreementsrelatedtoourperpetuallicensesaretyp
58、icallyone-yearindurationandentitlethecustomertosupportandunspecifiedupgrades.Therevenuerelatedtosuchsupportagreementsisincludedaspartofoursubscriptionandsupportrevenue.Professionalservicesrevenueconsistsoffeesrelatedtoimplementation,dataextraction,integrationandconfiguration,andtrainingonourapplicat
59、ions.ForthetwelvemonthsendedDecember31,2020,2019,and2018,ourprofessionalservicesrevenuerepresented4%,5%,and6%oftotalrevenue,respectively.Our Competitive StrengthsWebelievethefollowingcompetitivestrengthsarekeystooursuccess:Large,diversified customer base.Ourcustomerbaseishighlydiverseandspansabroada
60、rrayofindustries,includingfinancialservices,consultingservices,technology,manufacturing,media,telecommunications,governmentandpolitical,non-profit,healthcareandlifesciences,retail,andhospitality.Weservicecustomersofvaryingsize,rangingfromlargeglobalcorporationsandgovernmentagenciestomedium-sizedbusi
61、nesses.Wehavemorethan10,000customers,withnocustomerrepresentingmorethan10%ofourrevenue.5Diversified family of cloud applications.Weofferafamilyofcloud-basedenterpriseworkmanagementapplicationsthataddressesabroadrangeofenterpriseneeds.Webelievethisbenefitsourcustomersascomparedtomanyofourcloud-basedc
62、ompetitorswhoofferonlyasinglepointsolutionforamorelimitedanddiscreteneed.Recurring revenue model with high visibility.Webelievewehaveanattractiveoperatingmodelduetotherecurringnatureofoursubscriptionrevenue,whichresultsingreatervisibilityandpredictabilityoffuturerevenueandenhancesourabilitytoeffecti
63、velymanageourbusiness.Inaddition,thecloud-basednatureofourmodelaccommodatessignificantadditionalbusinessvolumewithlimitedincrementalcosts,providinguswithopportunitiestoimproveouroperatingmargins.Proven M&A capability.Wehaveaprovenabilitytosuccessfullyidentify,acquire,andintegratecomplementarybusines
64、sestogrowourcompany,asevidencedbythe26acquisitionswehavecompletedsincethebeginningof2012throughDecember31,2020.Webelievethatouracquisitionexperienceandstrategygiveusacompetitiveadvantageinidentifyingadditionalopportunitiestoexpandourfamilyofsoftwareapplicationstobetterserveourcustomers.Experienced,p
65、roven management team.Ourmanagementteamhassignificantoperatingexperienceandpreviouslyoccupiedkeyleadershiprolesatbothprivateandpubliccompanies.Inaddition,ourmanagementsextensiveknowledgeoftheindustryandexperienceinbuildingbusinesseshasenabledustoestablishaleadingpositionwithintheenterprisesoftwarema
66、rket.Cloud-based delivery.Wedeliveroursoftwareapplicationsandfunctionalityprimarilythroughthecloud,withnohardwareorsoftwareinstallationrequiredbyourcustomers.Thisdeliverymodelallowsustoprovidereliable,cost-effectiveapplicationstoourcustomers,addsubscriberswithminimalincrementaleffortanddeploynewfunc
67、tionalityandupgradesquicklyandefficiently.Webelieveourcloud-baseddeliverymodelprovidesuswithacompetitiveadvantageoverlegacyprocessesandon-premisesystems.Commitment to customer success.Wehaveadedicatedcustomersuccessorganizationwhosemissionistodriveadoption,valuerealization,retention,andloyaltyacross
68、ourcustomerbase.Ourfocusonenablingourcustomerssuccessisakeyreasonourannualnetdollarretentionrate,asdefinedin“Item7.-ManagementsDiscussionandAnalysis”herein,was94%asofDecember31,2020.Ourcommitmenttocustomersuccesshasenabledustoexpandourfootprintwithincustomerorganizationsandfacilitatetheongoingadopti
69、onofourenterprisesoftwareapplications.WeutilizeNPSmethodologytotrackourprogressanddrivecontinuousimprovement.Our Strategy for GrowthWebelievethekeyelementsofourstrategyforgrowthareasfollows:Acquire complementary software businesses.Weintendtocontinuetopursueacquisitionsofcomplementarytechnologies,pr
70、oducts,andbusinessestoexpandourproductfamiliesandcustomerbase,andtoprovideaccesstonewmarketsandincreasedbenefitsofscale.Ourexperiencedcorporatedevelopmentteamcontinuallymonitorsapipelineofpotentialacquisitioncandidates.Webelievethatouracquisitionexperienceandstrategygiveusacompetitiveadvantageiniden
71、tifyingadditionalopportunitiestoexpandourfamilyofcloud-basedapplicationstobetterserveourcustomers.Weintendtoprioritizeacquisitionswithinthesolutioncategorieswecurrentlyoffer.Increase sales to existing customers.Webelievethereisasignificantopportunitytoexpandtheadoptionofourapplicationswithinourexist
72、ingcustomerorganizations,particularlywithindivisionsordepartmentsthathavenotpreviouslyusedourapplications.Wealsointendtocross-selladditionalapplicationstoourexistingcustomers,asveryfewofourcustomerscurrentlyusemorethanoneofourapplications.Inaddition,weintendtoaddnewapplicationstoourfamilyofapplicati
73、onsthatwilladdressadditionalfunctionswithintheenterprisespectrum.Webelievetheseinitiativeswillsignificantlyincreasethevalueofourplatformtoourcustomers,furtherstrengthenourcompetitiveposition,anddriveincreasedadoptionofmultipleapplicationsbyourcustomers.Add new customers.Wemaintaindirectsalesandmarke
74、tingcapabilitiestofurthergrowourcustomerbase.Wealsomaintainindirectsaleschannelsthroughallianceswithstrategicpartnersthatcanleverageourapplicationswiththeircomplementaryservicesandtechnologies.Inaddition,wecontinuetoexpandtherangeofintegrationsbetweenoursoftwareandthird-partyapplicationsandplatforms
75、,whichwebelievemakeourapplicationsmoreattractivetoabroaderaudienceofpotentialcustomers.6Improve and enhance applications.Weintendtocontinuetoinvestinresearchanddevelopmentandworkcloselywithourcustomerstoidentifyandimproveapplications,featuresandfunctionalitiesthataddresscustomerrequirementsacrossthe
76、enterprisespectrum.Wealsointendtocontinuetoexpandthebreadthofourapplicationswithadditionalanalytics,third-partyintegrations,andsocialandmobilecapabilitiestomeettheevolvingneedsoftodaysknowledgeworkers.CustomersWeservicecustomersrangingfromlargeglobalcorporationsandvariousgovernmentagenciesaswellasme
77、dium-sizedbusinesses.Ourcustomersoperateinawidevarietyofindustries,includingfinancialservices,consultingservices,technology,manufacturing,media,telecommunications,governmentandpolitical,non-profit,healthcareandlifesciences,retail,andhospitality.FortheyearendedDecember31,2020,approximately90%ofourrec
78、urringrevenuewasgeneratedfromwhatweconsidertobemajoraccounts,thosecustomerswithcontractedannualrecurringrevenueof$25,000ormore.SalesWesellprimarilythroughadirectsalesorganizationcomprisedofinsidesalesandfieldsalespersonnel.Inadditiontoourdirectsalesorganization,wehaveanindirectsalesorganizationthats
79、ellstodistributorsandvalue-addedresellers.Weemployaland-and-expandgo-to-marketstrategy.Afterwedemonstratethevalueofaninitialapplicationtoacustomer,oursalesandaccountmanagementteamsworktoexpandtheadoptionofthatinitialapplicationacrossthecustomer,andcross-selladditionalapplicationstoaddressotherenterp
80、riseworkmanagementneedsofthecustomer.Ourcustomersuccessorganizationsupportsourdirectsaleseffortsbymanagingthepost-salecustomerlifecycle.Oursubscriptionagreementsaretypicallysoldeitheronaper-seatbasisoronaminimumcontractedvolumebasiswithoveragefeesbilledinarrears,dependingontheapplicationbeingsold.Co
81、ntracttermstypicallyrangefromonetothreeyearsandareprepaidannuallyinadvance.MarketingOurmarketingactivitiesaredesignedtobuildawarenessoftheUplandbrandandthesolutionsweoffer,generatethoughtleadership,andcreatedemand,resultinginleadsandopportunitiesforoursalesorganizations.Wefocusasignificantportionofo
82、urmarketingactivitiesonourexistingcustomerstodriveexpansionandcross-sellopportunities.Ourmarketingprogramstargetdecisionmakersandinfluencerswhoparticipateinabuyingcycle,includingthechiefinformationofficer,thechiefprocurementofficer,thechiefmarketingofficer,thechiefdigitalofficer,thechieffinancialoff
83、icer,thedirectorofprocessexcellence,andotherkeytechnologyandbusinessmanagers.Ourprincipalmarketingprogramsinclude:useofourwebsitetoprovideinformationaboutusandoursoftwareapplications,aswellaseducationalopportunitiesforpotentialcustomers;fieldmarketingeventsforcustomersandprospectivecustomers;partici
84、pationin,andsponsorshipof,executiveevents,tradeshows,andindustryevents;ouronlinevirtualuserconferences;integrateddigitalmarketingcampaigns,includingemail,onlineadvertising,blogs,andwebinars;publicrelations,analystrelations,andsocialmediainitiatives;andsalesrepresentativeswhorespondtoincomingleadstoc
85、onvertthemintonewsalesopportunities.Customer SuccessOurcustomersuccessorganizationisstructuredtomanageallaspectsofourpost-salecustomerlifecycle.Thisorganizationconsistsofdedicatedteamswithamissiontodriveadoptionofourproducts,valuerealization,retention,andloyaltyacrossourcustomerbase.Ourcustomersucce
86、ssorganizationhasthreecorefunctionalareaswithstrategicfocusoncustomerrelationshipmanagement:Customer Success Management.OurCSMteampartnerswithcustomersthroughouttheirlifecyclewiththeUplandfamilyofproductstoensurethecustomerisgettingthemostoutoftheirtechnologyinvestment.CSMsareexpertsinmatchinguseofU
87、plandproductstoacustomersindividualbusinesscontextsometimesbringinginorcoordinatingacrossotherteamsandinternalresourceswherenecessarytoachievethecustomersgoals.7Professional Services.OurprofessionalservicesteamprovidescriticalexpertiseinUplandsproductareasthroughoutthecustomerjourney.Duringimplement
88、ation,thisteamisresponsibleforcoordinatingallactivitiesrelatingtotheimplementation,transition,andon-boardingofnewcustomersandassistingnewcustomerswiththeadditionofnewproductstotheiraccounts.Typicalimplementationprofessionalservicesengagementsvaryinlengthfromafewweekstoseveralmonthsdependingonthesize
89、andscopeoftheengagementandareinadditiontoservicesprovidedunderourstandardcustomeragreementandarefee-based.Beyondimplementation,thisteamalsoprovidesadvisoryandconsultingservices,integrationservicesandconfigurationchangeservicesasacustomersbusinessneedschangeovertime.Customer Support.Ourcustomersuppor
90、tteamisconvenientlyavailablethroughmultiplechannelstohelpourcustomersmaximizethereturnontheirinvestmentinourtechnology.Wealsoprovide24/7/365coveragetohelpensureoursoftwareproductsmaintainglobalavailability.Inaddition,ourcustomersupportteammanagesandadministerstheUplandcustomercommunitytoprovideanout
91、standingknowledgebaseandself-serviceexperience.Ourcustomersuccessorganizationmanagesprogramstoreinforcetheongoingbusinessvalueofourapplications.Theseserviceofferingsinclude:Healthchecksandbusinessreviewswhereweengagecoreusersandbusinessbuyersponsorstodeliveradetailedscorecardandrecommendationsondriv
92、ingproductadoptionandbusinessvalue.Consumptionreviewandrecommendationsdesignedtodeliverbestpracticerecommendationsforimplementationstrategyandaroadmapproposalforaligningthesystemwithcustomersevolvingprocessmaturitytoincreaseapplicationusage.Premiersuccessplansthatprovideabundledservices,support,andp
93、roductexperienceofferingwithtwotiers(goldandplatinum)designedtoprovidemaximumcustomervalue.ExecutiveoutreachwherewepromoteopencommunicationbetweentheUplandleadershipteam,whichisfullycommittedtomakingsurecustomersaredelightedwiththeirUplandexperience,andcustomerexecutives.Technology and OperationsOur
94、cloud-basedfamilyofapplicationsutilizesamulti-tenantarchitectureandourcustomersaccessourapplicationsusingasecureInternetconnectionthroughastandardwebbrowser.Ourapplicationsareeasytodeploy,highlyconfigurable,scalable,flexible,andsecure,andprovideourcustomerswithamodernandintuitiveuserexperience.Wehav
95、epartneredwithAWStoprovidethehardwareandinfrastructurenecessarytoprovideourservicestoourcustomers.AWSfacilitiesprovide24/7/365security,biometricaccesscontrols,redundantnetworking,powerandenvironmentalsystems,andmonitoring.UplandSoftwaredesignsandoperatestheinfrastructurearchitecturewithfullyredundan
96、tsubsystems,highlyavailableconfigurations,anddefenseindepthsecurityzones.Ourapplicationsarebuiltonhighlyavailableandmodulararchitecturesthatbalancecustomerworkloadsacrossmultipleservers.Thisallowsustoprovideaflexiblemethodforscalingcustomerswithoutimpactingotherpartsofthearchitecturalenvironmentwhil
97、emaintainingthehighlevelsofuptimeourcustomersrequire.Ourfamilyofapplicationsoffershighlevelsofsecuritythroughlogicaldatasegregationofeachcustomersdatafromthedataofothercustomersandthroughlimitingaccesstoourplatformtoonlythoseindividualsauthorizedbyourcustomers.Inaddition,sensitivecustomerdataisencry
98、pted“atrest”and“intransit”oversecureconnectionstoredundantstorageinasecondarylocation.Wemaintainaformalandcomprehensivesecurityprogramdesignedtohelppreservethesecurityandintegrityofcustomerdata,protectagainstsecuritythreatsordatabreaches,andpreventunauthorizedaccesstodata.8CompetitionTheoverallmarke
99、tsweservearerapidlyevolvingandsubjecttochangingtechnology,shiftingcustomerneeds,andfrequentintroductionsofnewapplications.Theintensityandnatureofourcompetitionvariessignificantlyacrossourrangeofenterpriseapplications.WecompeteagainstlargerenterprisesoftwarecompaniesthatprovideafullsuiteofSoftwareasa
100、Service,orSaaS,solutionsfocusedonthefunctionalareasweserveortheproblemsourcloudofferingsaddress.Wefacecompetitionbothfrompointsolutionproviders,includinglegacyon-premiseenterprisesystems,andothercloud-basedsoftwarevendorsthatmayaddressoneormoreofthefunctionalelementsofourapplications.Inaddition,wefa
101、cecompetitionfrommanualprocessesandtraditionaltools,suchaspaper-basedprocedures,spreadsheets,andemail.Webelievetheprincipalcompetitivefactorsinourmarketincludethefollowing:breadthanddepthofapplicationfunctionality;easeofdeploymentanduseofapplications;totalcostofownership;levelsofcustomersupportsatis
102、faction;brandawarenessandreputation;capabilityforconfiguration,integration,scalability,andreliabilityofapplications;abilitytoinnovateandrespondtocustomerneedsrapidly;andlevelofintegrationamongapplicationsandwithotherenterprisesystems.Webelievethatwecompetefavorablyonthesefactors.Ourabilitytoremainco
103、mpetitivewilllargelydependonthestrengthofourapplications,theeffectivenessofoursalesandmarketingefforts,thequalityofourcustomersuccessorganization,andourabilitytoacquirecomplementarytechnologies,products,andbusinessestoenhancethefeaturesandfunctionalityofourapplications.Intellectual Property and Prop
104、rietary RightsWerelyonacombinationoftrademark,copyright,tradesecret,andpatentlawsintheUnitedStatesandotherjurisdictionsaswellasconfidentialityproceduresandcontractualprovisionstoprotectourintellectualproperty.Human CapitalWebelievethatourabilitytoattractandretainhighlyskilledemployeesiscriticaltoour
105、success.AsofDecember31,2020,wehad810employees,withthemajorityofouremployeeslocatedintheUnitedStates,Canada,IrelandandtheUnitedKingdom.Noneofouremployeesarecoveredbyacollectivebargainingagreement.Wehaveneverexperiencedastrikeorsimilarworkstoppage,andweconsiderourrelationswithouremployeestobegood.Huma
106、ncapitalmeasuresandobjectivesUplandfocusesoninmanagingitsbusinessincludethefollowing:Recognition of Collaborative Problem Solvers.Wehaveclearlydefinedcompanyvaluesthathighlighttheimportanceofcollaboration,clearcommunication,andsolvingproblems.Wehaveannualawardsthatcelebratethesevalueswithbothpeerand
107、managementnominationsatthebusinessunit,function,andcompany-widelevels.Employee Talent Acquisition and Retention.Uplandhasalwayssupporteda“workanywhere”philosophythatallowsustorecruitandretaintoptalentthroughouttheworld.Ourteammembershavetheflexibilitytoworkremotely,inanofficewhereavailable,orahybrid
108、accordingtotheirpreferences.Ourtotalcompensationandbenefitspackagesaremarketcompetitive.Additionally,wemaintainasystemforprovidingourpersonnelanopportunitytoexpressgrievancesorconcerns,whichincludesananonymouswhistleblowerhotline.Development and Promotion of Leaders.Uplandshighannualgrowthprovidesco
109、nsistentpromotionopportunitiesforourteammembers.Inaddition,teammembersthatjoinusthroughregularacquisitionshaveaccesstocareerdevelopmentandpromotionopportunitiesthatwouldnothavebeenavailableattheirsmallercompanies.Weareintheprocessofdeployingmanagementtrainingaspartofour2021Developmentinitiatives.Cre
110、ating a Culture of Customer Value and Improvement.DeliveringcustomervalueiscoretotheUplandmission.OurUplandOneoperatingprocessesfocusonquantifyingcustomersatisfactionthroughNetPromoterScore(NPS)surveys,maintainingcustomer-drivensoftwareroadmaps,andempoweringourteammemberstoleverageexpertresourcesfro
111、macrossthecompanytodrivebusinesssuccessforourcustomers.9AsaresultoftheCOVID-19pandemic,Uplandhastakencertainmeasurestosupportthehealthandwell-beingofouremployees,customers,partnersandcommunitiesduringthistimeofuncertainty.Priortothewide-spreadimplementationofstay-at-homemeasures,approximately60perce
112、ntofouremployeeandcontractorworkforcewasalreadyremote.Thisenabledustoquicklyconverttheentirecompanytoremoteworkstatustoensurethesafetyofouremployees,whilestillallowingustocontinueservingourcustomerswithoutdisruption.Available InformationWewereincorporatedinDelawarein2010.Ourprincipalexecutiveoffices
113、arelocatedat401CongressAvenue,Suite1850,Austin,TX78701.Ourmaintelephonenumberis(512)960-1010.O.Informationonourwebsiteisnotpartofthisreportandshouldnotberelieduponindeterminingwhethertomakeaninvestmentdecision.Theinclusionofourwebsiteaddressinthisreportdoesnotincludeorincorporatebyreferenceintothisr
114、eportanyinformationonourwebsite.OurannualreportsonForm10-K,quarterlyreportsonForm10-Q,currentreportsonForm8-KandamendmentstothosereportsfiledorfurnishedpursuanttoSection13(a)or15(d)oftheSecuritiesExchangeActof1934,asamended,areavailablefreeofchargethroughourwebsiteassoonasreasonablypracticableaftert
115、heyareelectronicallyfiledwithorfurnishedtotheSEC.Additionally,theSECmaintainsaninternetsitethatcontainsreports,proxy,informationstatements,andotherinformation.TheaddressoftheSECswebsiteiswww.sec.gov.10Item 1A.Risk FactorsRisk Factor SummaryOurbusinessissubjecttonumerousrisks.Youshouldcarefullyconsid
116、erthefollowingrisks,aswellasgeneraleconomicandbusinessrisks,andalloftheotherinformationcontainedinthisAnnualReport,togetherwithanyotherdocumentswefilewiththeSEC.Anyofthefollowingriskscouldhaveamaterialadverseeffectonourbusiness,operatingresultsandfinancialconditionandcausethetradingpriceofourcommons
117、tocktodecline.Amongtheseimportantrisksarethefollowing:Ourgrowthdependsonourabilitytoretainexistingcustomersandsecureadditionalsubscriptionsandcross-sellopportunitiesfromexistingcustomers.Anyfailuretoofferhigh-qualitycustomerservicemayadverselyaffectourrelationshipswithourcustomersandourfinancialresu
118、lts.Ifwefailtomanageourgrowtheffectively,wemaybeunabletoexecuteourbusinessplanandmaintainhighlevelsofcustomersatisfaction.Wehavemade,andexpecttocontinuetomake,acquisitionsasaprimarycomponentofourgrowthstrategy.Wemaynotbeabletoidentifysuitableacquisitioncandidatesorconsummateacquisitionsonacceptablet
119、erms,orwemaybeunabletosuccessfullyintegrateacquisitions,whichcoulddisruptouroperationsandadverselyimpactourbusinessandoperatingresults.Failuretomaintainandexpandoursalesorganizationmaynegativelyimpactourrevenuegrowth.Wedependonourseniormanagementteamandthelossofoneormorekeypersonnel,oraninabilitytoa
120、ttractandretainhighlyskilledpersonnelmayimpairourabilitytogrowourbusiness.Wedependonourseniormanagementteamandthelossofoneormorekeypersonnel,oraninabilitytoattractandretainhighlyskilledpersonnelmayimpairourabilitytogrowourbusiness.Ourgrowthandlong-termsuccessdepends,inpart,onourabilitytoexpandourint
121、ernationalsalesandoperations.Oursalescyclescanbelengthyandvariable,whichmaycausechangesinouroperatingresults.Perpetuallicenserevenueisunpredictable,andamaterialincreaseordecreaseinperpetuallicenserevenuefromperiodtoperiodcanproducesubstantialvariationinthetotalrevenueandearningswerecognizeinagivenpe
122、riod.Wemaybeforcedtochangethepriceswechargeforourapplicationsorthepricingmodelsuponwhichtheyarebased.Anydisruptionofserviceatthedatacentersthathouseourequipmentanddeliverourapplicationsorwithourhostingserviceprovidercouldharmourbusiness.Actualorperceivedsecurityvulnerabilitiesinoursolutionsandservic
123、esorcyberattacksonournetworkscouldhaveamaterialadverseimpactonourbusiness,resultsofoperationsandfinancialcondition.Oursuccessdependsonourabilitytoadapttotechnologicalchangeandcontinuetoinnovate.Ifourapplicationscontainseriouserrorsordefects,wemayloserevenueandmarketacceptance,andwemayincurcoststodef
124、endorsettleproduct-relatedclaims.Ifwefailtointegrateourapplicationswithothersoftwareapplicationsandcompetitiveoradjacentofferingsthataredevelopedbyothers,orfailtomakeourapplicationsavailableonmobileandotherhandhelddevices,ourapplicationsmaybecomelessmarketable,lesscompetitiveorobsolete,andouroperati
125、ngresultscouldbeharmed.Ouruseofopensourcesoftwarecouldnegativelyaffectourabilitytosellourapplicationsandsubjectustopossiblelitigation.Certainofouroperatingresultsandfinancialmetricsaredifficulttopredictasaresultofseasonality.Wecouldincursubstantialcostsasaresultofanyclaimofinfringementofanotherparty
126、sintellectualpropertyrights.Wecouldincursubstantialcostsinprotectingourintellectualpropertyfrominfringement,andanyfailuretoprotectourintellectualpropertycouldimpairourbusiness.Werelyonthird-partysoftwarethatisrequiredforthedevelopmentanddeploymentofourapplications,whichmaybedifficulttoobtainorwhichc
127、ouldcauseerrorsorfailuresofourapplications.Themarketsinwhichweparticipateareintenselycompetitive,andifwedonotcompeteeffectively,ouroperatingresultscouldbeadverselyaffected.11Mergersof,orotherstrategictransactionsby,ourcompetitorscouldweakenourcompetitivepositionorreduceourrevenue.Ourquarterlyoperati
128、ngresultsmayfluctuateinthefuture.Asaresult,wemayfailtomeetorexceedtheexpectationsofresearchanalystsorinvestors,whichcouldcauseourstockpricetodecline,andyoumaylosepartorallofyourinvestment.Wemayneedfinancinginthefuture,andanyadditionalfinancingmayresultinrestrictionsonouroperationsorsubstantialdiluti
129、ontoourstockholders.Wemayseektorenegotiateorrefinanceourloanfacility,andwemaybeunabletodosoonacceptabletermsoratall.Ourloanfacilitycontainsoperatingandfinancialcovenantsthatmayrestrictourbusinessandfinancingactivities.Fluctuationsintheexchangerateofforeigncurrenciescouldresultinlossesoncurrencytrans
130、actions.Ifweareunabletoimplementandmaintaineffectiveinternalcontrolsoverfinancialreportinginthefuture,investorsmayloseconfidenceintheaccuracyandcompletenessofourfinancialreports,andthemarketpriceofourcommonstockmaybenegativelyaffected.Ourabilitytouseournetoperatinglosscarryforwardsandcertainothertax
131、attributesmaybelimited.Unanticipatedchallengesbytaxauthoritiescouldharmourfutureresults.Taxingauthoritiesmaysuccessfullyassertthatweshouldhavecollectedor,inthefuture,shouldcollectadditionalsalesandusetaxes,andwecouldbesubjecttoliabilitywithrespecttopastorfuturesales,whichcouldadverselyaffectourresul
132、tsofoperations.OuroperatingresultscouldbeadverselyaffectedbyanincreaseinoureffectivetaxrateasaresultofU.S.andforeigntaxlawchanges,outcomesofcurrentorfuturetaxexaminations,orbymaterialdifferencesbetweenourforecastedandactualeffectivetaxrates.Taxlaws,regulations,andcompliancepracticesareevolvingandmay
133、haveamaterialadverseeffectonourresultsofoperations,cashflowsandfinancialposition.Taxingauthoritiescouldreallocateourtaxableincomeamongoursubsidiaries,whichcouldincreaseourconsolidatedtaxliability.WearesubjecttoprivacyanddatasecurityobligationsintheUnitedStates,UnitedKingdomandotherforeignjurisdictio
134、ns.Anyfailuretocomplywithapplicablelaws,regulationsorcontractualobligationsmayharmourbusiness,resultsofoperationsandfinancialcondition.Anyfailuretocomplywithgovernmentalexportandimportcontrollawsandregulationscouldadverselyaffectourbusiness.Ourbusinessissubjecttocomplexandevolvingforeignlawsandregul
135、ationsregardingprivacy,dataprotectionandothermattersrelatingtoinformationcollection.TheuncertaintysurroundingtheimplementationandeffectofBrexitmaycauseincreasedeconomicvolatility,affectingouroperationsandbusiness.TheongoingCOVID-19pandemiccouldadverselyaffectourbusiness,resultsofoperationsandfinanci
136、alcondition.Adverseeconomicconditions,includingthoserelatedtotheCOVID-19pandemic,mayreduceourcustomersabilitytospendmoneyoninformationtechnologyorenterpriseworkmanagementsoftware,orourcustomersmayotherwisechoosetoreducetheirspendingoninformationtechnologyorenterpriseworkmanagementsoftware,whichmayad
137、verselyimpactourbusiness.Themarketpriceofourcommonstockmaybevolatile,whichcouldresultinsubstantiallossesforinvestors.Ifsecuritiesorindustryanalystsdonotpublish,orceasepublishing,researchorreportsaboutus,ourbusinessorourmarket,iftheypublishnegativeevaluationsofourstock,orifwefailtomeettheexpectations
138、ofanalysts,thepriceofourstockandtradingvolumecoulddecline.Becausewedonotexpecttopayanydividendsonourcommonstockfortheforeseeablefuture,ourinvestorsmayneverreceiveareturnontheirinvestment.Anti-takeoverprovisionsinouramendedandrestatedcertificateofincorporationandouramendedandrestatedbylaws,aswellaspr
139、ovisionsofDelawarelaw,mightdiscourage,delayorpreventachangeincontrolofourcompanyorchangesinourboardofdirectorsormanagementand,therefore,depressthetradingpriceofourcommonstock.12Risks Related to Our BusinessOur growth depends on our ability to retain existing customers and secure additional subscript
140、ions and cross-sell opportunities from existing customers.Inordertoimproveouroperatingresults,itisimportantthatourcustomersreneworupgradetheiragreementswithuswhentheapplicablecontracttermexpires,andalsopurchaseadditionalapplicationsfromus.Typicallycontracttermsareonetothreeyearsforsubscriptionagreem
141、ents.Uponexpiration,customerscanrenewtheirexistingsubscriptions,upgradetheirsubscriptionstoaddmoreseatsoradditionalminimumcontractedvolume,downgradetheirsubscriptionstofewerseatsorlowerminimumcontractedvolume,ornotrenew.Arenewalconstitutesrenewinganexistingcontractforanapplicationunderthesameterms,a
142、ndanupgradeincludespurchasingadditionalseatsorvolumeunderanexistingcontract.Wemayalsocross-selladditionalapplicationstoexistingcustomers.Ourabilitytogrowrevenueandachieveprofitabilitydepends,inpart,oncustomerrenewals,customerupgrades,andcross-salestoexistingcustomersexceedingdowngradesandnon-renewal
143、s.However,wemaynotbeabletoincreaseourpenetrationwithinourexistingcustomerbaseasanticipated,andwemaynototherwiseretainsubscriptionsfromexistingcustomers.Ourcustomersmaychoosetonotreneworupgradetheirsubscriptions,ormaydowngrade,becauseofseveralfactors,includingdissatisfactionwithourprices,featuresorpe
144、rformancerelativetocompetitiveofferings,reductionsinourcustomersspendinglevels,unusedseatsorvolume,orlimitedadoptionoruseofourapplications.Inaddition,wemaynotbesuccessfulincross-sellingnewapplicationstoourexistingcustomers.Ifourcustomersdonotupgradeorrenewtheirsubscriptionsorpurchaseadditionalapplic
145、ationsfromus,oriftheydowngradetheirsubscriptions,ourrevenuemaygrowmoreslowlythanexpectedormaydecline,andourfinancialperformancemaybeadverselyaffected.Any failure to offer high-quality customer service may adversely affect our relationships with our customers and our financial results.Ourcustomersdep
146、endonourcustomersuccessorganizationtomanagethepost-salecustomerlifecycle,includingtoimplementnewapplicationsforourcustomers,providetrainingandongoingeducationservices,andresolvetechnicalissuesrelatingtoourapplications.Wemaybeunabletorespondquicklyenoughtoaccommodateshort-termincreasesindemandforourc
147、ustomersuccessservices.Wealsomaybeunabletomodifytheformatofourcustomersuccessservicestocompetewithchangesinsimilarservicesprovidedbyourcompetitors.Increasedcustomerdemandfortheseservices,withoutcorrespondingrevenue,couldincreasecostsandadverselyaffectouroperatingresults.Inaddition,oursalesprocessish
148、ighlydependentonthereliablefunctionaloperationofourapplications,ourbusinessreputation,andpositiverecommendationsfromourexistingcustomers.Anyfailuretomaintainhigh-qualitycustomerservice,oramarketperceptionthatwedonotmaintainhigh-qualitycustomerservice,couldadverselyaffectourreputation,ourabilitytosel
149、lourapplicationstoexistingandprospectivecustomers,andourbusiness,operatingresults,andfinancialposition.If we fail to manage our growth effectively,we may be unable to execute our business plan and maintain high levels of customer satisfaction.Acquisitionsareaprimarycomponentofourgrowthstrategy,andas
150、aresult,weanticipatethatwewillcontinuetoexperiencefurtherrapidgrowthinourpersonnelandoperationsinthefuture.Ourgrowthhasplaced,andfuturegrowthwillplace,asignificantstrainonourmanagerial,administrative,operational,financial,andotherresources.Forexample,eachacquisitionweconsummaterequiresustodevotepers
151、onnelattentiontotheintegrationoftheacquiredcompany,whichincreasesourcostsanddivertsattentionfromourexistingbusiness.Tomanagetheexpectedgrowthofourpersonnelandoperations,wehavedevelopedanintegrationstrategythatisintendedtostreamlineourintegrationeffortsandweintendtocontinuetoimproveouroperational,fin
152、ancialandmanagementcontrols,andourreportingsystemsandprocedures.Failuretoeffectivelymanageourgrowthcouldresultindifficultyordelaysindeployingourapplications,declinesinqualityorcustomersatisfaction,increasesincosts,anddifficultiesinintroducingnewfeaturesorotheroperationaldifficulties,andanyofthesedif
153、ficultiescouldadverselyimpactourbusinessperformanceandresultsofoperations.We have made,and expect to continue to make,acquisitions as a primary component of our growth strategy.We may not be able to identify suitableacquisition candidates or consummate acquisitions on acceptable terms,or we may be u
154、nable to successfully integrate acquisitions,which could disrupt ouroperations and adversely impact our business and operating results.Aprimarycomponentofourgrowthstrategyhasbeentoacquirecomplementarybusinessestogrowourcompany.Wehavecompleted26acquisitionssince2012throughDecember31,2020.Weintendtoco
155、ntinuetopursueacquisitionsofcomplementarytechnologies,products,andbusinessesasaprimarycomponentofourgrowthstrategytoenhancethefeaturesandfunctionalityofourapplications,expandourcustomerbase,provideaccesstonewmarkets,andincreasebenefitsofscale.Acquisitionsinvolvecertainknownandunknownrisksthatcouldca
156、useouractualgrowthoroperatingresultstodifferfromourexpectations.Generally,ouracquisitionactivitypresentsthreeareasofrisktoourbusiness,risksrelatedto:13identifyingthecorrectcandidatesforacquisition,completingtheacquisitionofidentifiedtargets,andintegratingacquiredcompaniesfollowingclosingoftheacquisi
157、tion.Acquisition Candidate IdentificationAsweseektofindthebestcandidatesforacquisition:wemaynotbeabletoidentifysuitableacquisitioncandidatesortoconsummateacquisitionsonacceptableterms;wemaypursueinternationalacquisitions,whichinherentlyposemorerisksthandomesticacquisitions;wecompetewithotherstoacqui
158、recomplementaryproducts,technologies,andbusinesses,whichmayresultindecreasedavailabilityof,orincreasedpricefor,suitableacquisitioncandidates;wemaynotbeabletoobtainthenecessaryfinancing,onfavorabletermsoratall,tofinanceanyorallofourpotentialacquisitions;wemayultimatelyfailtoconsummateanacquisitioneve
159、nifweannouncethatweplantoacquireatechnology,product,orbusiness;andacquiredtechnologies,products,orbusinessesmaynotperformasweexpect,andwemayfailtorealizeanticipatedrevenueandprofits.Inaddition,ouracquisitionstrategymaydivertmanagementsattentionawayfromourexistingbusiness,resultinginthelossofkeycusto
160、mersoremployees,andexposeustounanticipatedproblemsorlegalliabilities,includingresponsibilityasasuccessorforundisclosedorcontingentliabilitiesofacquiredbusinessesorassets.Consummation of Targeted AcquisitionsIfwefailtoconductduediligenceonourpotentialtargetseffectively,wemaynotidentifyproblemsattarge
161、tcompaniesorfailtorecognizeincompatibilitiesorotherobstaclestosuccessfulintegration.Additionally,theconsummationofacquisitiontransactionsinvolvesthecoordinationofmultiplepersonnelwithinUplandandatthethirdpartypartnersthatassistouracquisitionstrategy.Ifweareunabletoproperlycoordinateamongstthesegroup
162、sandindividuals,ourabilitytoeffectivelymanageouracquisitionactivitymaybecompromised.Further,inthecourseofacquiringcompanies,wemay:issuecommonstockthatwoulddiluteourcurrentstockholdersownershippercentage;useasubstantialportionofourcashresources;increaseourinterestexpense,leverage,anddebtservicerequir
163、ementsifweincuradditionaldebttopayforanacquisition;assumeliabilitiesforwhichwedonothaveindemnificationfromtheformerowners;further,indemnificationobligationsmaybesubjecttodisputeorconcernsregardingthecreditworthinessoftheformerowners;recordgoodwillandnon-amortizableintangibleassetsthataresubjecttoimp
164、airmenttestingandpotentialimpairmentcharges;experiencevolatilityinearningsduetochangesincontingentconsiderationrelatedtoacquisitionearn-outliabilityestimates;incuramortizationexpensesrelatedtocertainintangibleassets;loseexistingorpotentialcontractsasaresultofconflictofinterestissues;becomesubjecttoa
165、dversetaxconsequencesordeferredcompensationcharges;incurlargeandimmediatewrite-offs;orbecomesubjecttolitigation.Integration of Acquired CompaniesOurinabilitytosuccessfullyintegratefutureacquisitionscouldimpedeusfromrealizingallofthebenefitsofthoseacquisitionsandcouldseverelyweakenourbusinessoperatio
166、ns.Theintegrationprocessmaydisruptourbusinessand,ifnewtechnologies,products,orbusinessesarenotimplementedeffectively,mayprecludetherealizationofthefullbenefitsexpectedbyusandcouldharmourresultsoroperations.Inaddition,theoverallintegrationofnewtechnologies,products,orbusinessesmayresultinunanticipate
167、dproblems,expenses,liabilities,andcompetitiveresponses.Thedifficultiesofintegratinganacquisitioninclude,amongotherthings:issuesinintegratingthetargetcompanystechnologies,products,orbusinesseswithours;14incompatibilityofmarketingandadministrationmethods;maintainingemployeemoraleandretainingkeyemploye
168、es;integratingtheculturesofbothcompanies;preservingimportantstrategiccustomerrelationships;consolidatingcorporateandadministrativeinfrastructuresandeliminatingduplicativeoperations;andcoordinatingandintegratinggeographicallyseparateorganizations.Inaddition,eveniftheoperationsofanacquisitionareintegr
169、atedsuccessfully,wemaynotrealizethefullbenefitsoftheacquisition,includingthesynergies,costsavings,orgrowthopportunitiesthatweexpect.Thesebenefitsmaynotbeachievedwithintheanticipatedtimeframe,oratall.Failure to maintain and expand our sales organization may negatively impact our revenue growth.Wesell
170、ourapplicationsprimarilythroughadirectsalesorganizationcomprisedofinsidesalesandfieldsalespersonnel.Inaddition,wehaveanindirectsalesorganization,whichsellstodistributorsandvalue-addedresellers.Growingsalestobothnewandexistingcustomersis,inpart,dependentonourabilitytomaintainandexpandoursalesforce.Id
171、entifying,recruitingandtrainingadditionalsalespersonnelrequiressignificanttime,expense,andattention.Itcantakeseveralquartersorlongerbeforeoursalesrepresentativesarefully-trainedandproductive.Ourbusinessmaybeadverselyaffectedifoureffortstoexpandandtrainoursalesorganizationdonotgenerateacorrespondingi
172、ncreaseinrevenue.Inparticular,ifweareunabletohire,develop,andretainsalespersonnel,orifournewsalespersonnelareunabletoachieveexpectedsalesproductivitylevelsinareasonableperiodoftimeoratall,ourrevenuemaygrowmoreslowlythanexpectedordeclineandourbusinessmaybeharmed.We depend on our senior management tea
173、m and the loss of one or more key personnel,or an inability to attract and retain highly skilled personnel may impairour ability to grow our business.Oursuccessdepends,inpart,uponthecontinuedserviceofourkeyexecutiveofficers,aswellasotherkeypersonnel.Theemploymentagreementswithourexecutiveofficersand
174、otherkeypersonneldonotrequirethemtocontinuetoworkforusforanyspecifiedperiod;therefore,theymayterminateemploymentwithusatanytimewithnoadvancenotice.Thereplacementofourseniormanagementteamorotherkeypersonnellikelywouldinvolvesignificanttimeandcosts,andthelossoftheseemployeesmaysignificantlydelayorprev
175、enttheachievementofourbusinessobjectives.Wefaceintensecompetitionforqualifiedindividualsfromnumeroustechnologyandsoftwarecompanies.Ifwefailtoattractandretainsuitablyqualifiedindividuals,includingsoftwareengineersandsalespersonnel,ourabilitytoimplementourbusinessplananddevelopandmaintainourapplicatio
176、nscouldbeadverselyaffected.Asaresult,ourabilitytocompetewoulddecrease,ouroperatingresultswouldsuffer,andourrevenuewoulddecrease.Because we generally recognize revenue from our customers over the terms of their agreements,downturns or upturns in our business may not be immediatelyreflected in our ope
177、rating results.Werecognizerevenuefromcustomeragreementsoverthetermsoftheseagreements.Asaresult,asignificantportionoftherevenuewereportineachquarterisgeneratedfromcustomeragreementsenteredintoduringpreviousperiods,whichisreflectedasdeferredrevenueonourbalancesheet.Consequently,adeclineinneworreneweda
178、greements,oradowngradeofrenewedagreementstofewerseatsorlessminimumcontractedvolume,inanyonequartermaynotbefullyreflectedinourrevenueinthatquarter.Suchadecline,however,willnegativelyaffectourrevenueinfuturequarters.Accordingly,theeffectofsignificantdownturnsinsalesandmarketacceptanceofourapplications
179、,andpotentialchangesinourpricingpoliciesorratesofrenewals,maynotbefullyreflectedinourresultsofoperationsuntilfutureperiods.Similarly,itwouldbedifficultforustorapidlyincreaseourrevenuethroughnewsales,renewals,andupgradesofexistingcustomeragreements,orthroughadditionalcross-sellingopportunities,inagiv
180、enperiodduetothetimingofrevenuerecognitioninherentinoursubscriptionmodel.Our growth and long-term success depends,in part,on our ability to expand our international sales and operations.Asouroperationshaveexpanded,wehaveestablishedandcurrentlymaintainofficesintheUnitedStates,Canada,andtheUnitedKingd
181、om.Wehavelimitedexperienceinoperatinginforeignjurisdictionsandexpecttocontinuetoexpandourrelationshipwithinternationalcustomers.Managingaglobalorganizationisdifficult,time-consumingandexpensive.Becauseofourlimitedexperienceswithinternationaloperations,anyinternationaleffortsthatwemayundertakemaynotb
182、esuccessfulincreatingdemandforourapplicationsoutsideoftheU.S.orineffectivelysellingsubscriptionstoourcloudofferingsinalloftheinternationalmarketsthatweenter.Inaddition,conductinginternationaloperationssubjectsustorisks,includingthefollowing:uncertainpoliticalandeconomicclimates,includingthoserelated
183、totheCOVID-19pandemic;15lackoffamiliarityandburdensofcomplyingwithforeignlaws,accountingandlegalstandards,regulatoryrequirements,tariffsandotherbarriers;unexpectedchangesinregulatoryrequirements,taxes,tradelaws,tariffs,exportquotas,customdutiesorothertraderestrictions;lackofexperienceinconnectionwit
184、hthelocalizationofourapplications,includingtranslationintoforeignlanguagesandadaptationforlocalpractices,andassociatedexpensesandregulatoryrequirements;difficultiesinadaptingtodifferingtechnologystandards;differentpricingenvironments,longersalescyclesandaccountsreceivablepaymentcyclesanddifficulties
185、incollectingaccountsreceivable;difficultiesinmanagingandstaffinginternationaloperations,includingdifferinglegalandculturalexpectationsforemployeerelationships,andincreasedtravel,infrastructureandlegalcompliancecostsassociatedwithinternationaloperations;fluctuationsinexchangeratesthatmayincreasethevo
186、latilityofourforeign-basedrevenueandexpenses;potentiallyadversetaxconsequences,includingthecomplexitiesofforeignvalue-addedtax,goodsandservicestaxandothertransactionaltaxes;reducedorvariedprotectionforintellectualpropertyrightsinsomecountries;difficultiesinmanagingandadaptingtodifferingculturesandcu
187、stoms;dataprivacylawsthatrequirecustomerdatatobestoredandprocessedinadesignatedterritorysubjecttolawsdifferentthantheUnitedStates;salesandcustomerservicechallengesassociatedwithoperatingindifferentcountries;dataprivacylawsthatrequirecertainopt-instepsandrestrictuseandsharingofpersonallyidentifiablei
188、nformationthanthoserequiredbytheU.S.privacylaws;newanddifferentsourcesofcompetitionaswellaslawsandbusinesspracticesfavoringlocalcompetitorsandlocalemployees;compliancewithanti-briberylaws,includingcompliancewiththeForeignCorruptPracticesAct;increasedfinancialaccountingandreportingburdensandcomplexit
189、ies;andrestrictionsontherepatriationofearnings.Further,ourinternationalexpansioneffortsmaybehinderedbylowerlevelsofcloudadoptionandincreasedpricesensitivityforourapplicationsorothercloud-basedofferingsininternationalmarkets.Asaresultoftheseandotherfactors,internationalexpansionmaybemoredifficult,tak
190、elonger,andnotgeneratetheresultsweanticipate,whichcouldnegativelyimpactourgrowthandbusiness.Our sales cycles can be lengthy and variable,which may cause changes in our operating results.Oursalescyclecanvarysubstantiallyfromcustomertocustomer.Anumberoffactorsinfluencethelengthandvariabilityofoursales
191、cycles,including,forexample:theneedtoeducatepotentialcustomersabouttheusesandbenefitsofourapplications;thedurationofthecommitmentcustomersmakeintheiragreementswithus,whicharetypicallyonetothreeyears;thediscretionarynatureofpotentialcustomerspurchasingandbudgetcyclesanddecisions;thecompetitivenatureo
192、fpotentialcustomersevaluationandpurchasingprocesses;thefunctionalitydemandsofpotentialcustomers;fluctuationsintheenterpriseworkmanagementneedsofpotentialcustomers;theannouncementorplannedintroductionofnewproductsbyusorourcompetitors;andthepurchasingapprovalprocessesofpotentialcustomers.Oursalescycle
193、scanmakeitdifficulttopredictthequarterinwhichrevenuefromanewcustomermayfirstberecognized.Wemayincursignificantsalesandmarketingexpensesandinvestsignificanttimeandeffortinanticipationofasalethatmayneveroccuroronlyoccurinasmalleramountoratalaterdatethananticipated.Delaysinherenttooursalescyclescouldca
194、usesignificantvariabilityinourrevenueandoperatingresultsforanyparticularperiod.16Perpetual license revenue is unpredictable,and a material increase or decrease in perpetual license revenue from period to period can produce substantialvariation in the total revenue and earnings we recognize in a give
195、n period.Perpetuallicenserevenuereflectstherevenuerecognizedfromsalesofperpetuallicensesrelatingtoourworkflowautomationandenterprisecontentmanagementapplicationstonewcustomersandadditionallicensesforsuchapplicationstoexistingcustomers.Wegenerallyrecognizethelicensefeeportionofthearrangementatthetime
196、ofdelivery.Perpetuallicensesofourworkflowautomationandenterprisecontentmanagementapplicationsaresoldthroughthird-partyresellers,andassuch,thetimingofsalesofperpetuallicensesisdifficulttopredictwiththetimingofrecognitionofassociatedrevenueunpredictable.Amaterialincreaseordecreaseinthesaleofperpetuall
197、icensesfromperiodtoperiodcouldproducesubstantialvariationintherevenuewerecognize.Accordingly,comparingourperpetuallicenserevenueonaperiodtoperiodbasismaynotbeameaningfulindicatorofatrendorfutureresults.We may be forced to change the prices we charge for our applications or the pricing models upon wh
198、ich they are based.Wehavelimitedexperiencewithrespecttodeterminingtheoptimalpricesandpricingmodelsforcertainofourapplicationsandcertaingeographicmarkets.Asthemarketsforourapplicationsmature,orascompetitorsintroduceproductsorservicesthatcompetewithours,includingbundlingcompetingofferingswithadditiona
199、lproductsorservices,wemaybeunabletoattractnewcustomersatthesamepriceorbasedonthesamepricingmodelsaswehaveusedhistorically.Asaresult,inthefuturewemayberequiredtoreduceourprices,whichcouldadverselyaffectourfinancialperformance.Inaddition,wemayoffervolumepricediscountsbasedonthenumberofseatspurchasedby
200、acustomerorthenumberofourapplicationspurchasedbyacustomer,whichwouldeffectivelyreducethepriceswechargeforourapplications.Also,wemaybeunabletorenewexistingcustomeragreementsorenterintonewcustomeragreementsatthesamepricesoruponthesametermsthatwehavehistorically,whichcouldhaveamaterialadverseeffectonou
201、rfinancialposition.Any disruption of service at the data centers that house our equipment and deliver our applications or with our hosting service provider could harm ourbusiness.Ourreputationandabilitytoattract,retain,andserveourcustomerisdependentuponthereliableperformanceofourcomputersystemsandth
202、oseofthirdpartiesthatweutilizeinouroperations.Thesesystemsmaybesubjecttodamageorinterruptionfromearthquakes,adverseweatherconditions,othernaturaldisasters,terroristattacks,powerloss,telecommunicationsfailures,vendorlimitations,computerviruses,computerdenialofserviceattacks,orotherattemptstoharmthese
203、systems.Interruptionsinthesesystems,orwiththeInternetingeneral,couldmakeourserviceunavailableordegradedorotherwisehinderourabilitytodeliverapplicationdatatoourcustomers.Serviceinterruptions,errorsinoursoftware,ortheunavailabilityofcomputersystemsusedinouroperationscoulddiminishtheoverallattractivene
204、ssofourapplicationstoexistingandpotentialcustomers.Ourserversandthoseofthirdpartiesweuseinouroperationsarevulnerabletocomputerviruses,physicalorelectronicbreak-ins,andsimilardisruptions.Wehaveimplementedsecurityprotocolswithinourapplications;however,wehavenoassurancethatoursystemsarecompletelysecure
205、.Ourinsurancedoesnotcoverexpensesrelatedtodisruptionstoourserviceorunauthorizedaccesstoourapplications.Anysignificantdisruptiontoourserviceoraccesstooursystemscouldresultinalossofcustomersandadverselyaffectourbusinessandresultsofoperation.Weprimarilyutilizecommunicationsandcomputerhardwaresystemsope
206、ratedbythird-partyWebhostingproviders.Inaddition,weutilizethird-partyhostingservicesinconnectionwithourbusinessoperationsandhavemigratedmostofourapplicationstoAmazonWebServices(AWS),athird-partyhostingplatform.Problemsfacedbyusorourthird-partyhostingproviders,includingtechnologicalorbusiness-related
207、disruptions,couldadverselyimpacttheexperienceofourcustomers.Actual or perceived security vulnerabilities in our solutions and services or cyberattacks on our networks could have a material adverse impact on ourbusiness,results of operations and financial condition.Ourapplicationsinvolvethestorageand
208、transmissionofourcustomersproprietaryandconfidentialinformation,includingpersonaloridentifyinginformationregardingtheiremployeesandcustomers.Anysecuritybreaches,unauthorizedaccess,unauthorizedusage,virus,orsimilarbreachordisruptioncouldresultinlossofconfidentialinformation,damagetoourreputation,earl
209、yterminationofourcontracts,litigation,regulatoryinvestigations,indemnityobligations,orotherliabilities.Ifoursecuritymeasuresorthoseofourthird-partysoftwareprovidersanddatacenters(suchasAmazonWebServices)arebreachedasaresultofthird-partyaction,employeeerror,malfeasanceorotherwise,resultinginunauthori
210、zedaccesstocustomerdata,ourreputationwillbedamaged,ourbusinessmaysuffer,andwecouldincursignificantliability.Unauthorizedpartiesmayattempttomisappropriateorcompromiseourconfidentialinformationorthatofthirdparties,createsystemdisruptions,productorservicevulnerabilitiesorcauseshutdowns.Theseperpetrator
211、sofcyberattacksalsomaybeabletodevelopanddeployviruses,worms,malwareandothermalicioussoftwareprogramsthatdirectlyorindirectlyattackourproducts,servicesorinfrastructure(includingourthirdpartycloudserviceproviders).Becausethetechniquesusedtoobtainunauthorizedaccessorsabotagesystemschangefrequentlyandge
212、nerallyarenotidentifieduntiltheyarelaunched17againstatarget,wemaybeunabletoanticipatethesetechniquesortoimplementadequatepreventativemeasures.Anyoralloftheseissuescouldnegativelyaffectourabilitytoattractnewcustomers,causeexistingcustomerstoelectnottoreneworupgradetheirsubscriptions,resultinreputatio
213、naldamage,orsubjectustothird-partylawsuits,regulatoryfines,orotheractionorliability,whichcouldadverselyaffectouroperatingresults.Inaddition,totheextentwearedivertingourresourcestoaddressandmitigatethesevulnerabilities,itmayhinderourabilitytodeliverandsupportoursolutionsandcustomersinatimelymanner.De
214、spiteoureffortstobuildsecureservices,wecanmakenoassurancethatwewillbeabletodetect,prevent,timelyandadequatelyaddress,ormitigatethenegativeeffectsofcyberattacksorothersecuritybreaches.Our success depends on our ability to adapt to technological change and continue to innovate.Theoverallmarketforenter
215、priseworkmanagementsoftwareisrapidlyevolvingandsubjecttochangingtechnology,shiftingcustomerneeds,andfrequentintroductionsofnewapplications.Ourabilitytoattractnewcustomersandincreaserevenuefromexistingcustomerswilldepend,inlargepart,onourabilitytodeveloporacquirenewapplicationsandenhanceandimproveexi
216、stingapplications.Toachievemarketacceptanceforourapplications,wemusteffectivelyanticipateandofferapplicationsthatmeetchangingcustomerdemandsinatimelymanner.Customersmayrequirefeaturesandcapabilitiesnotofferedbyourcurrentapplications.Wemayexperiencedifficultiesthatcoulddelayorpreventourdevelopment,ac
217、quisition,orimplementationofnewapplicationsandenhancements.Ifweareunabletosuccessfullydeveloporacquirenewenterpriseworkmanagementcapabilitiesandfunctionality,enhanceourexistingapplicationstoanticipateandmeetcustomerpreferences,sellourapplicationsintonewmarkets,oradapttochangingindustrystandardsinent
218、erpriseworkmanagement,ourrevenueandresultsofoperationswouldbeadverselyaffected.If our applications contain serious errors or defects,we may lose revenue and market acceptance,and we may incur costs to defend or settle product-relatedclaims.Complexsoftwareapplicationssuchasoursoftencontainerrorsordef
219、ects,particularlywhenfirstintroducedorwhennewversionsorenhancementsarereleased.Ourcurrentandfutureapplicationsmaycontainseriousdefects.Sinceourcustomersuseourapplicationsforcriticalbusinesspurposes,defectsorotherperformanceproblemscouldnegativelyimpactourcustomersandcouldresultin:lossordelayedmarket
220、acceptanceandsales;breachofwarrantyorotherclaimsfordamages;salescreditsorrefundsforprepaidamountsrelatedtounusedsubscriptionservices;canceledcontractsandlossofcustomers;diversionofdevelopmentandcustomerserviceresources;andinjurytoourreputation.Thecostsincurredincorrectinganymaterialerrorsordefectsmi
221、ghtbesubstantialandcouldadverselyaffectouroperatingresults.Althoughourcustomeragreementstypicallycontainprovisionsdesignedtolimitourexposuretocertainoftheclaimsabove,existingorfuturelawsorunfavorablejudicialdecisionscouldnegatetheselimitations.Evenifnotsuccessful,abreachofwarrantyorotherclaimbrought
222、againstuswouldlikelybeadistractiontomanagement,time-consumingandcostlytoresolve,andcouldseriouslydamageourreputationinthemarketplace,makingitharderforustosellourapplications.Additionally,ourerrorsandomissionsinsurancemaybeinadequateormaynotbeavailableinthefutureonacceptableterms,oratall,andourpolicy
223、maynotcoverallclaimsmadeagainstus.Further,defendingasuit,regardlessofitsmerit,couldbecostlyanddivertmanagementsattention.If we fail to integrate our applications with other software applications and competitive or adjacent offerings that are developed by others,or fail to make ourapplications availa
224、ble on mobile and other handheld devices,our applications may become less marketable,less competitive or obsolete,and our operatingresults could be harmed.Ourapplicationsintegratewithavarietyofothersoftwareapplications,andalsowithcompetingandadjacentthird-partyofferings.Weneedtocontinuouslymodifyand
225、enhanceourplatformtoadapttochangesincloud-enabledhardware,software,networking,browseranddatabasetechnologies.Anyfailureofourapplicationstointegrateeffectivelywithothersoftwareapplicationsandproductofferingscouldreducethedemandforourapplicationsorresultincustomerdissatisfactionandharmtoourbusiness.If
226、weareunabletorespondtochangesintheapplicationsandtoolswithwhichourapplicationsintegrateinacost-effectivemanner,ourapplicationsmaybecomelessmarketable,lesscompetitive,orobsolete.Competitorsmayalsoimpedeourattemptstocreateintegrationbetweenourapplicationsandcompetitiveofferings,whichmaydecreasedemandf
227、orourapplications.Inaddition,anincreasingnumberofindividualswithinorganizationsareutilizingdevicesother18thanpersonalcomputers,suchasmobilephones,tabletsandotherhandhelddevices,toaccesstheInternetandcorporateresourcesandtoconductbusiness.Ifwecannoteffectivelymakeourapplicationsavailableonthesedevice
228、s,wemayexperiencedifficultyattractingandretainingcustomers.Our use of open source software could negatively affect our ability to sell our applications and subject us to possible litigation.Aportionofourapplicationsincorporateopensourcesoftware,andweexpecttocontinuetoincorporateopensourcesoftwareint
229、hefuture.Fewofthelicensesapplicabletoopensourcesoftwarehavebeeninterpretedbycourts,andtheirapplicationtotheopensourcesoftwareintegratedintoourproprietarysoftwaremaybeuncertain.Moreover,wecannotprovideanyassurancethatwehavenotincorporatedadditionalopensourcesoftwareinourapplicationsinamannerthatisinc
230、onsistentwiththetermsofthelicenseorourcurrentpoliciesandprocedures.Ifwefailtocomplywiththeselicenses,wemaybesubjecttocertainrequirements,includingrequirementsthatweofferourapplicationsthatincorporatetheopensourcesoftwarefornocost,thatwemakeavailablesourcecodeformodificationsorderivativeworkswecreate
231、basedupon,incorporatingorusingtheopensourcesoftware,andthatwelicensesuchmodificationsorderivativeworksunderthetermsofapplicableopensourcelicenses.Ifanauthororotherthirdpartythatdistributessuchopensourcesoftwareweretoallegethatwehadnotcompliedwiththeconditionsofoneormoreoftheselicenses,wecouldberequi
232、redtoincursignificantlegalexpensesdefendingagainstsuchallegationsandcouldbesubjecttosignificantdamages,enjoinedfromthesaleofourapplicationsthatcontainedtheopensourcesoftware,andrequiredtocomplywiththeforegoingconditions,whichcoulddisruptthedistributionandsaleofsomeofourapplications.Inaddition,thereh
233、avebeenclaimschallengingtheownershipofopensourcesoftwareagainstcompaniesthatincorporateopensourcesoftwareintotheirproducts.Asaresult,wecouldbesubjecttosuitsbypartiesclaiminginfringementduetothereliancebyourapplicationsoncertainopensourcesoftware.Litigationcouldbecostlyforustodefend,haveanegativeeffe
234、ctonouroperatingresultsandfinancialcondition,orrequireustodevoteadditionalresearchanddevelopmentresourcestochangeourapplications.Certain of our operating results and financial metrics are difficult to predict as a result of seasonality.Wehavehistoricallyexperiencedseasonalityintermsofwhenweenterinto
235、customeragreements.Wesignasignificantlyhigherpercentageofagreementswithnewcustomers,andrenewagreementswithexistingcustomers,inthefourthquarterofeachcalendaryearasourcustomerstendtofollowbudgetingcyclesattheendofthecalendaryear.Ourcashflowfromoperationshashistoricallybeenhigherinthefirstquarterofeach
236、calendaryearthaninotherquarters.Thisseasonalityisreflectedtoamuchlesserextent,andsometimesisnotimmediatelyapparent,inourrevenue,duetothefactthatwedeferrevenuerecognition.Inaddition,seasonalitymaybedifficulttoobserveinourfinancialresultsduringperiodsinwhichweacquirebusinesses,assuchresultstypicallyar
237、emostsignificantlyimpactedbysuchacquisitions.Weexpectthisseasonalitytocontinue,orpossiblyincreaseinthefuture,whichmaycausefluctuationsinouroperatingresultsandfinancialmetrics.Ifourquarterlyoperatingresultsoroutlookfallbelowtheexpectationsofresearchanalystsorinvestors,thepriceofourcommonstockcoulddec
238、linesubstantially.We could incur substantial costs as a result of any claim of infringement of another partys intellectual property rights.Inrecentyears,therehasbeensignificantlitigationinvolvingpatentsandotherintellectualpropertyrightsinourindustry.Companiesprovidingsoftwareareincreasinglybringinga
239、ndbecomingsubjecttosuitsalleginginfringementofproprietaryrights,particularlypatentrights,andtotheextentwegaingreatermarketvisibility,wefaceahigherriskofbeingthesubjectofintellectualpropertyinfringementclaims.Wedonothaveasignificantpatentportfolio,whichcouldpreventusfromdeterringpatentinfringementcla
240、imsthroughourownpatentportfolio,andourcompetitorsandothersmaynowandinthefuturehavesignificantlylargerandmorematurepatentportfoliosthanwehave.Theriskofpatentlitigationhasbeenamplifiedbytheincreaseinthenumberofatypeofpatentholder,whichwerefertoasanon-practicingentity,whosesolebusinessistoassertsuchcla
241、imsandagainstwhomourownintellectualpropertyportfoliomayprovidelittledeterrentvalue.Wecouldincursubstantialcostsinprosecutingordefendinganyintellectualpropertylitigation.Ifwesuetoenforceourrightsoraresuedbyathird-partythatclaimsthatourapplicationsinfringeitsrights,thelitigationcouldbeexpensiveandcoul
242、ddivertourmanagementresources.Moreover,ouracquisitionstrategycouldexposeustoadditionalriskofintellectualpropertylitigationasweacquirenewbusinesseswithdiversesoftwareofferingsandintellectualpropertyassets.Inaddition,inmostinstances,wehaveagreedtoindemnifyourcustomersagainstclaimsthatourapplicationsin
243、fringetheintellectualpropertyrightsofthirdparties.Ourbusinesscouldbeadverselyaffectedbyanysignificantdisputesbetweenusandourcustomersastotheapplicabilityorscopeofourindemnificationobligationstothem.Anyintellectualpropertylitigationtowhichwemightbecomeaparty,orforwhichwearerequiredtoprovideindemnific
244、ation,mayrequireustodooneormoreofthefollowing:ceasesellingorusingapplicationsthatincorporatetheintellectualpropertythatweallegedlyinfringe;makesubstantialpaymentsforlegalfees,settlementpaymentsorothercostsordamages;19obtainalicense,whichmaynotbeavailableonreasonabletermsoratall,tosellorusetherelevan
245、ttechnology;orredesigntheallegedlyinfringingapplicationstoavoidinfringement,whichcouldbecostly,time-consumingorimpossible.Ifwearerequiredtomakesubstantialpaymentsorundertakeanyoftheotheractionsnotedaboveasaresultofanyintellectualpropertyinfringementclaimsagainstusoranyobligationtoindemnifyourcustome
246、rsforsuchclaims,suchpaymentsoractionscouldharmourbusiness.We could incur substantial costs in protecting our intellectual property from infringement,and any failure to protect our intellectual property could impair ourbusiness.Oursuccessandabilitytocompetedepend,inpart,uponourintellectualproperty.We
247、seektoprotectthesourcecodeforourproprietarysoftwareandotherproprietarytechnologyandinformationunderacombinationofcopyright,tradesecrets,andpatentlaw,andweseektoprotectourbrandsthroughtrademarklaw.Ourpolicyistoenterintoconfidentialityagreements,oragreementswithconfidentialityprovisions,withouremploye
248、es,consultants,vendors,andcustomers,andtocontrolaccesstooursoftware,documentation,andotherproprietaryinformation.Despitetheseprecautions,itmaybepossibleforunauthorizedpartiestocopyoursoftwareorotherproprietarytechnologyorinformation,ortodevelopsimilarsoftwareindependently.Despiteoureffortstoprotecto
249、urproprietaryrights,unauthorizedpartiesmayattempttocopyaspectsofourapplicationsortoobtainanduseinformationthatweregardasproprietary.Policingunauthorizeduseofourapplicationsisdifficult,andweareunabletodeterminetheextenttowhichpiracyofoursoftwareexistsorwilloccurinthefuture.Litigationmaybenecessaryint
250、hefuturetoenforceourintellectualpropertyrights,protectourtradesecrets,determinethevalidityandscopeoftheproprietaryrightsofothers,ordefendagainstclaimsofinfringementorinvalidity.Suchlitigationcouldbecostly,time-consuming,anddistractingtomanagement,resultinadiversionofresourcesorthenarrowingorinvalida
251、tionofportionsofourintellectualproperty,andhaveamaterialadverseeffectonourbusiness,operatingresults,andfinancialcondition.Furthermore,oureffortstoenforceourintellectualpropertyrightsmaybemetwithdefenses,counterclaims,andcountersuitsattackingthevalidityandenforceabilityofourintellectualpropertyrights
252、orallegingthatweinfringethecounterclaimantsownintellectualproperty.Thesestepsmaybeinadequatetoprotectourintellectualproperty.Thirdpartiesmaychallengethevalidityorownershipofourintellectualproperty,andthesechallengescouldcauseustoloseourrights,inwholeorinpart,tosuchintellectualpropertyornarrowitsscop
253、esuchthatitnolongerprovidesmeaningfulprotection.Wewillnotbeabletoprotectourintellectualpropertyifweareunabletoenforceourrightsorifwedonotdetectunauthorizeduseofourintellectualproperty.Despiteourprecautions,itmaybepossibleforunauthorizedthirdpartiestocopyourproductsanduseinformationthatweregardasprop
254、rietarytocreateproductsandservicesthatcompetewithours.Somelicenseprovisionsprotectingagainstunauthorizeduse,copying,transfer,anddisclosureofourapplicationsmaybeunenforceableunderthelawsofcertainjurisdictionsandforeigncountries.Further,thelawsofsomecountriesdonotprotectproprietaryrightstothesameexten
255、tasthelawsoftheUnitedStates.Totheextentweexpandourinternationalactivities,ourexposuretounauthorizedcopying,transfer,anduseofourapplicationsandproprietarytechnologyorinformationmayincrease.Therecanbenoassurancethatourmeansofprotectingourproprietaryrightswillbeadequateorthatourcompetitorswillnotindepe
256、ndentlydevelopsimilartechnology.Ifwefailtomeaningfullyprotectourintellectualproperty,ourbusiness,brands,operatingresultsandfinancialconditioncouldbemateriallyharmed.We rely on third-party software that is required for the development and deployment of our applications,which may be difficult to obtai
257、n or which could causeerrors or failures of our applications.Werelyonsoftwarelicensedfromorhostedbythirdpartiestoofferourapplications.Inaddition,wemayneedtoobtainlicensesfromthirdpartiestouseintellectualpropertyassociatedwiththedevelopmentofourapplications,whichmightnotbeavailabletousonacceptableter
258、ms,oratall.Anylossoftherighttouseanysoftwarerequiredforthedevelopment,maintenance,anddeliveryofourapplicationscouldresultindelaysintheprovisionofourapplicationsuntilequivalenttechnologyiseitherdevelopedbyusor,ifavailable,isidentified,obtainedandintegrated,whichcouldharmourbusiness.Anyerrorsordefects
259、inthird-partysoftwarecouldresultinerrorsorafailureofourapplications,whichcouldharmourbusiness.20Market RisksThe markets in which we participate are intensely competitive,and if we do not compete effectively,our operating results could be adversely affected.Theoverallmarketforenterpriseworkmanagement
260、softwareisrapidlyevolvingandsubjecttochangingtechnology,shiftingcustomerneedsandfrequentintroductionsofnewapplications.Theintensityandnatureofourcompetitionvariessignificantlyacrossourfamilyofenterpriseworkmanagementsoftwareapplications.Manyofourcompetitorsandpotentialcompetitorsarelargerandhavegrea
261、terbrandnamerecognition,longeroperatinghistories,largermarketingbudgets,andsignificantlygreaterresourcesthanwedo.Someofoursmallercompetitorsmayofferapplicationsonastand-alonebasisatalowerpricethanourpriceduetoloweroverheadorotherfactors,whilesomeofourlargercompetitorsmayofferapplicationsatalowerpric
262、einanattempttocross-selladditionalproductsinthefutureorretainacustomerusingadifferentapplication.Webelievetherearealimitednumberofdirectcompetitorsthatprovideacomprehensiveenterpriseworkmanagementsoftwareoffering.However,wefacecompetitionbothfrompointsolutionproviders,includinglegacyon-premiseenterp
263、risesystems,andothercloud-basedworkmanagementsoftwarevendorsthatmayaddressoneormoreofthefunctionalelementsofourapplications,butarenotdesignedtoaddressabroadrangeofenterpriseworkmanagementneeds.Inaddition,wefacecompetitionfrommanualprocessesandtraditionaltools,suchaspaper-basedtechniques,spreadsheets
264、,andemail.Ifourcompetitorsproducts,service,ortechnologiesbecomemoreacceptedthanourenterpriseworkmanagementapplications,iftheyaresuccessfulinbringingtheirproductsorservicestomarketearlierthanours,oriftheirproductsorservicesaremoretechnologicallycapablethanours,ourrevenuescouldbeadverselyaffected.Merg
265、ers of,or other strategic transactions by,our competitors could weaken our competitive position or reduce our revenue.Ifoneormoreofourcompetitorsweretomergeorpartnerwithanotherofourcompetitors,thechangeinthecompetitivelandscapecouldadverselyaffectourabilitytocompeteeffectively.Inordertotakeadvantage
266、ofcustomerdemandforcloud-basedsoftwareapplications,vendorsoflegacysystemsareexpandingtheircloud-basedenterpriseworkplacemanagementapplicationsthroughacquisitionsandinternaldevelopment.Apotentialresultofsuchexpansionisthatcertainofourcurrentorpotentialcompetitorsmaybeacquiredbythirdpartieswithgreater
267、availableresourcesandtheabilitytofurtherinvestinproductimprovementsandinitiateorwithstandsubstantialpricecompetition.Ourcompetitorsalsomayestablishorstrengthencooperativerelationshipswithourcurrentorfuturevalue-addedresellers,third-partyconsultingfirmsorotherpartieswithwhomwehaverelationships,thereb
268、ylimitingourabilitytopromoteourapplications.Disruptionsinourbusinesscausedbytheseeventscouldreduceourrevenue.Our quarterly operating results may fluctuate in the future.As a result,we may fail to meet or exceed the expectations of research analysts or investors,whichcould cause our stock price to de
269、cline,and you may lose part or all of your investment.Ourquarterlyoperatingresultsmayfluctuateasaresultofavarietyoffactors,manyofwhichareoutsideofourcontrol.Accordingly,theresultsofanyonequartermaynotfullyreflecttheunderlyingperformanceofourbusinessandshouldnotberelieduponasanindicationoffutureperfo
270、rmance.Ifourquarterlyoperatingresultsoroutlookfallbelowtheexpectationsofresearchanalystsorinvestors,thepriceofourcommonstockcoulddeclinesubstantially.Fluctuationsinourquarterlyoperatingresultsoroutlookmaybeduetoanumberoffactors,including,butnotlimitedto:theextenttowhichourexistingcustomerspurchasead
271、ditionalseatsorvolumeforourapplications,andthetimingandtermsofthosepurchases;theextenttowhichourexistingcustomersrenewtheircustomeragreementsforourapplicationsandthetimingandtermsofthoserenewals;theextenttowhichwecross-selladditionalapplicationstoourexistingcustomersandthetimingandtermsofsuchcross-s
272、elling;theadditionorlossofcustomers,includingthroughacquisitionsorconsolidations;theextenttowhichnewcustomersareattractedtoourapplicationstosatisfytheirenterpriseworkmanagementneeds;therateofadoptionandmarketacceptanceofenterpriseworkmanagementapplications;themixofourrevenue,particularlybetweenprodu
273、ctandprofessionalservicesrevenue,forwhichthetimingofrevenuerecognitionissubstantiallydifferent;21changesinthegrossprofitwerealizeonourapplicationsandprofessionalservicesduetoourdifferingrevenuerecognitionpoliciesapplicabletosubscription,product,andprofessionalservicesrevenueandothervariables;theexte
274、nttowhichweenterintomulti-yearcontracts,inwhichthesupportfeesaretypicallypaidinadvance;theannouncementoradoptionofnewregulationsandpolicymandatesorchangestoexistingregulationsandpolicymandates;futureaccountingpronouncementsorchangesinouraccountingpolicies;unforeseenlitigationandintellectualpropertyi
275、nfringement;thenumberandsizeofnewcustomersandthenumberandsizeofrenewalsinaparticularperiod;changesinourpricingpoliciesorthoseofourcompetitors;themixofapplicationssoldduringaperiod;thetimingandexpensesrelatedtotheacquisitionoftechnologies,products,orbusinesses,andpotentialfuturechargesforimpairmentof
276、goodwillfromsuchacquisitions;theamountandtimingofoperatingexpenses,includingthoserelatedtothemaintenanceandexpansionofourbusiness,operationsandinfrastructure;theamountandtimingofexpensesrelatedtothedevelopmentofnewproductsandtechnologies,includingenhancementstoourapplications;theamountandtimingofcom
277、missionsearnedbyoursalespersonnel;thetimingandsuccessofnewapplicationsintroducedbyusornewofferingsofferedbyourcompetitors;thelengthofoursalescycles;changesinthecompetitivedynamicsofourindustry,includingconsolidationamongcompetitors,customers,orstrategiccollaborators;ourabilitytomanageourexistingbusi
278、nessandfuturegrowth,includingincreasesinthenumberofcustomersusingourapplications;theseasonalityofourbusinessorcyclicalfluctuationsinourindustry;thetimingandexpensesrelatedtoanyinternationalexpansioneffortswemayundertakeandthesuccessofsuchefforts;variousfactorsrelatedtodisruptionsinaccessanddeliveryo
279、fourcloud-basedapplications,errorsordefectsinourapplications,privacyanddatasecurity,andexchangeratefluctuations,eachofwhichisdescribedelsewhereintheseriskfactors;andgeneraleconomic,industry,andmarketconditions.Financial RisksWe may need financing in the future,and any additional financing may result
280、 in restrictions on our operations or substantial dilution to our stockholders.Wemay seek to renegotiate or refinance our loan facility,and we may be unable to do so on acceptable terms or at all.Wehavefundedouroperationssinceinceptionprimarilythroughequityfinancings,cashfromoperations,andcashavaila
281、bleunderourloanfacility.Wemayneedtoraisefundsinthefuture,forexample,toexpandourbusiness,acquirecomplementarybusinesses,developnewtechnologies,respondtocompetitivepressures,orreacttounanticipatedsituations.Wemaytrytoraiseadditionalfundsthroughpublicorprivatefinancings,strategicrelationships,orotherar
282、rangements.Ourabilitytoobtaindebtorequityfundingwilldependonanumberoffactors,includingmarketconditions,ouroperatingperformance,andinvestorinterest.Additionalfundingmaynotbeavailabletousonacceptabletermsoratall.Ifadequatefundsarenotavailable,wemayberequiredtoreduceexpenditures,includingcurtailingourg
283、rowthstrategies,reducingourproduct-developmentefforts,orforegoingacquisitions.Ifwesucceedinraisingadditionalfundsthroughtheissuanceofequityorconvertiblesecurities,itcouldresultinsubstantialdilutiontoexistingstockholders.Ifweraiseadditionalfundsthroughtheissuanceofdebtsecuritiesorpreferredstock,these
284、newsecuritieswouldhaverights,preferences,andprivilegesseniortothoseoftheholdersofourcommonstock.Inaddition,anydebtfinancingobtainedbyusinthefutureorissuanceofpreferredstockcouldinvolverestrictivecovenantsrelatingtoourcapitalraisingactivitiesandotherfinancialandoperationalmatters,whichmaymakeitmoredi
285、fficultforustoobtainadditionalcapitalandtopursuebusinessopportunities,includingpotentialacquisitions.Additionally,wemayneedtorenegotiatethetermsofourloanfacility,andourlendermaybeunwillingtodoso,ormayagreetosuchchangessubjecttoadditionalrestrictivecovenantsonouroperationsandabilitytoraisecapital.22O
286、ur loan facility contains operating and financial covenants that may restrict our business and financing activities.Ourfacilityiscomprisedof$540.0millionintermloansanda$60.0millionrevolvingcreditfacility.Ourobligationsundertheloanfacilityaresecuredbyasecurityinterestinsubstantiallyallofourassetsanda
287、ssetsoftheco-borrowersandofanyguarantors,includingintellectualproperty.Thetermsofthecreditfacilitylimits,amongotherthings,ourabilitytoIncuradditionalindebtednessorguaranteeindebtednessofothers;Createliensontheirassets;Makeinvestments,includingcertainacquisitions;Enterintomergersorconsolidations;Disp
288、oseofassets;PaydividendsandmakeotherdistributionsontheCompanyscapitalstock,andredeemandrepurchasetheCompanyscapitalstock;Enterintotransactionswithaffiliates;andPrepayindebtednessormakechangestocertainagreements.Furthermore,theloanfacilityrequiresusandoursubsidiariestocomplywithcertainfinancialcovena
289、ntsifgreaterthan30%ofrevolvingcreditfacilityisdrawn.Theoperatingandotherrestrictionsandcovenantsintheloanfacility,andinanyfuturefinancingarrangementsthatwemayenterinto,mayrestrictourabilitytofinanceouroperations,engageincertainbusinessactivities,orexpandorfullypursueourbusinessstrategies,orotherwise
290、limitourdiscretiontomanageourbusiness.Ourabilitytocomplywiththeserestrictionsandcovenantsmaybeaffectedbyeventsbeyondourcontrol,andwemaynotbeabletomeetthoserestrictionsandcovenants.Abreachofanyoftherestrictionsandcovenantscouldresultinadefaultundertheloanfacilityoranyfuturefinancingarrangements,which
291、couldcauseanyoutstandingindebtednessundertheloanfacilityorunderanyfuturefinancingarrangementstobecomeimmediatelydueandpayable,andresultintheterminationofcommitmentstoextendfurthercredit.Fluctuations in the exchange rate of foreign currencies could result in losses on currency transactions.Ourcustome
292、rsaregenerallyinvoicedinthecurrencyofthecountryinwhichtheyarelocated.Inaddition,weincuraportionofouroperatingexpensesinforeigncurrencies,includingCanadiandollars,BritishpoundsandEuros,andinthefuture,asweexpandintootherforeigncountries,weexpecttoincuroperatingexpensesinotherforeigncurrencies.Asaresul
293、t,weareexposedtoforeignexchangeratefluctuationsasthefinancialresultsofourinternationaloperationsandourrevenueandoperatingresultscouldbeadverselyaffected.Wehavenotpreviouslyengagedinforeigncurrencyhedging.Ifwedecidetohedgeourforeigncurrencyexchangerateexposure,wemaynotbeabletohedgeeffectivelyduetolac
294、kofexperience,unreasonablecosts,orilliquidmarkets.If we are unable to implement and maintain effective internal controls over financial reporting in the future,investors may lose confidence in the accuracyand completeness of our financial reports,and the market price of our common stock may be negat
295、ively affected.Asapubliccompany,wearerequiredtomaintaininternalcontrolsoverfinancialreportingandtoreportanymaterialweaknessesinsuchinternalcontrols.Section404oftheSarbanes-OxleyActrequiresthatweevaluateanddeterminetheeffectivenessofourinternalcontrolsoverfinancialreportingandthatourindependentregist
296、eredpublicaccountingfirmissueanattestationreportannuallyregardingtheeffectivenessofourinternalcontroloverfinancialreporting.Wehaveidentifiedmaterialweaknessesinourinternalcontrolsoverfinancialreportinginthepastandifwehaveamaterialweaknessinourinternalcontrolsoverfinancialreporting,wemaynotdetecterro
297、rsonatimelybasis,andourfinancialstatementsmaybemateriallymisstated.Wemayneedadditionalfinanceandaccountingpersonnelwithcertainskillsetstoassistuswiththereportingrequirementswewillencounterasapubliccompanyandtosupportouranticipatedgrowth.Inaddition,implementinginternalcontrolsmaydistractourofficersan
298、demployees,entailsubstantialcoststomodifyourexistingprocesses,andtakesignificanttimetocomplete.Ifweidentifymaterialweaknessesinourinternalcontrolsoverfinancialreporting,ifweareunabletoassertthatourinternalcontrolsoverfinancialreportingareeffective,orifourindependentregisteredpublicaccountingfirmisun
299、abletoexpressanopinionastotheeffectivenessofourinternalcontrolsoverfinancialreporting,investorsmayloseconfidenceintheaccuracyandcompletenessofourfinancialreports;themarketpriceofourcommonstockcouldbenegativelyaffected;andwecouldbecomesubjecttoinvestigationsbythestockexchangeonwhichoursecuritiesareli
300、sted,theSecuritiesandExchange23Commission(the“SEC”),orotherregulatoryauthorities,whichcouldrequireadditionalfinancialandmanagementresources.Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.AsofDecember31,2020theCompanyhadtotalnetoperatinglosscar
301、ryforwardsofapproximately$344.5millionconsistingof$318.6millionand$25.9millionrelatedtotheU.Sfederalandforeignnetoperatinglosscarryforwards,respectively.Inaddition,asofDecember31,2020,theCompanyhadresearchanddevelopmentcreditcarryforwardsofapproximately$3.0million.TheU.S.federalnetoperatinglossandcr
302、editcarryforwardswillexpirebeginningin2021,ifnotutilized.Approximately$23.8millionoftheforeignnetoperatinglosscarryforwardscarryforwardindefinitelywiththeremainderexpiringbeginningin2039.UnderSections382and383oftheInternalRevenueCodeof1986,asamended,ortheCode,ifacorporationundergoesan“ownershipchang
303、e,”thecorporationsabilitytouseitspre-changenetoperatinglosscarryforwardsandotherpre-changetaxattributes,suchasresearchtaxcredits,tooffsetitspost-changeincomeandtaxesmaybelimited.Ingeneral,an“ownershipchange”occursifthereisacumulativechangeinourownershipby“5%shareholders”thatexceeds50percentagepoints
304、overarollingthree-yearperiod.Similarrulesapplyunderstatetaxlaws.Basedonanalysisofacquirednetoperatinglossesandcredits,utilizationofournetoperatinglossesandresearchanddevelopmentcreditswillbesubjecttoannuallimitations.Theannuallimitationwillresultintheexpirationof$133.9millionoffederalnetoperatinglos
305、sesand$3.0millionofresearchanddevelopmentcreditcarryforwardsbeforeutilization.Intheeventthatitisdeterminedthatwehaveinthepastexperiencedadditionalownershipchanges,orifweexperienceoneormoreownershipchangesasaresultoffuturetransactionsinourstock,thenwemaybefurtherlimitedinourabilitytouseournetoperatin
306、glosscarryforwardsandothertaxassetstoreducetaxesowedonthenettaxableincomethatweearn.Anysuchlimitationsontheabilitytouseournetoperatinglosscarryforwardsandothertaxassetscouldadverselyimpactourbusiness,financialcondition,andoperatingresults.Legal and Regulatory RisksUnanticipated challenges by tax aut
307、horities could harm our future results.WearesubjecttoincometaxesintheUnitedStatesandvariousnon-U.S.jurisdictions.Wemaybesubjecttoincometaxauditsbyvarioustaxjurisdictionsthroughouttheworld,manyofwhichhavenotestablishedclearguidanceonthetaxtreatmentofcloud-basedcompanies.Theapplicationoftaxlawsinsuchj
308、urisdictionsmaybesubjecttodivergingandsometimesconflictinginterpretationsbytaxauthoritiesinthesejurisdictions.Althoughwebelieveourincometaxliabilitiesarereasonablyestimatedandaccountedforinaccordancewithapplicablelawsandprinciples,anadverseresolutionofoneormoreuncertaintaxpositionsinanyperiodcouldha
309、veamaterialimpactontheresultsofoperationsforthatperiod.Taxing authorities may successfully assert that we should have collected or,in the future,should collect additional sales and use taxes,and we could be subjectto liability with respect to past or future sales,which could adversely affect our res
310、ults of operations.Wehavenothistoricallyfiledsalesandusetaxreturnsorcollectedsalesandusetaxesinalljurisdictionsinwhichwehavesales,basedonourbeliefthatsuchtaxesarenotapplicable.Whileoperationsofthesejurisdictionsaremanagedbasedonourinterpretationoflocalregulations,achangeinregulationsorinterpretation
311、soflegislationmayresultinanobligationthatwearenotawareof.Taxingauthoritiesmayseektoimposesuchtaxesonus,includingforpastsales,whichcouldresultinpenaltiesandinterest.Anysuchtaxassessmentsmayadverselyaffecttheresultsofouroperations.Our operating results could be adversely affected by an increase in our
312、 effective tax rate as a result of U.S.and foreign tax law changes,outcomes of currentor future tax examinations,or by material differences between our forecasted and actual effective tax rates.OuroperationsaresubjecttoincomeandtransactiontaxesintheUnitedStatesandinmultipleforeignjurisdictions,witha
313、significantamountofourforeignearningsgeneratedbyoursubsidiariesorganizedinCanada,IrelandandtheUnitedKingdom.Anysignificantchangeinourfutureeffectivetaxratescouldadverselyimpactourresultsofoperationsforfutureperiods.Ourfutureeffectivetaxratescouldbeadverselyaffectedbythefollowing:changesintaxlawsorth
314、einterpretationofsuchtaxlawsasappliedtoourbusinessandcorporatestructureintheUnitedStates,Canada,theUnitedKingdom,Ireland,Israel,Australia,orotherinternationallocationswherewehaveoperations;earningsbeinglowerthananticipatedincountrieswherewearetaxedatlowerratesascomparedtotheUnitedStatesfederalandsta
315、testatutorytaxrates;anincreaseinexpensesnotdeductiblefortaxpurposes;24changesintaxbenefitsfromstock-basedcompensation;changesinthevaluationallowanceagainstourdeferredtaxassets;changesinjudgmentfromtheevaluationofnewinformationthatresultsinarecognition,derecognitionorchangeinmeasurementofataxposition
316、takeninapriorperiod;increasestointerestorpenaltyexpensesclassifiedinthefinancialstatementsasincometaxes;newaccountingstandardsorinterpretationsofsuchstandards;orresultsofexaminationsbytheInternalRevenueService(“IRS”),state,andforeigntaxorothergovernmentalauthorities.TheIRSandothertaxauthoritiesregul
317、arlyexamineourincometaxreturnsandothernon-incometaxreturns,suchaspayroll,sales,use,value-added,networthorfranchise,property,goodsandservices,consumption,import,stamp,andexcisetaxes,inboththeUnitedStatesandforeignjurisdictions.Thecalculationofourprovisionforincometaxesandouraccrualsforothertaxesrequi
318、resustousesignificantjudgmentandinvolvesdealingwithuncertaintiesintheapplicationofcomplextaxlawsandregulations.Indeterminingtheadequacyofourprovisionforincometaxes,weregularlyassessthepotentialsettlementoutcomesresultingfromincometaxexaminations.However,thefinaloutcomeoftaxexaminations,includingthet
319、otalamountpayableorthetimingofanysuchpaymentsuponresolutionoftheseissues,cannotbeestimatedwithcertainty.Inaddition,wecannotbecertainthatsuchamountwillnotbemateriallydifferentfromtheamountthatisreflectedinourhistoricalincometaxprovisionsandaccrualsforothertaxes.ShouldtheIRSorothertaxauthoritiesassess
320、additionaltaxes,penaltiesorinterestasaresultofacurrentorafutureexamination,wemayberequiredtorecordchargestooperationsinfutureperiodsthatcouldhaveamaterialimpactonourresultsofoperations,financialpositionorcashflowsintheapplicableperiodorperiods.Forecastsofourannualeffectivetaxratearecomplexandsubject
321、touncertaintybecauseourincometaxpositionforeachyearcombinestheeffectsofestimatingourannualincomeorloss,themixofprofitsandlossesearnedbyusandoursubsidiariesintaxjurisdictionswithabroadrangeofincometaxrates,aswellasbenefitsfromavailabledeferredtaxassets,theimpactofvariousaccountingrules,ourinterpretat
322、ionsofchangesintaxlawsandresultsoftaxaudits.Forecastsofourannualeffectivetaxratedonotincludetheanticipationoffuturetaxlawchanges.Inaddition,wereportforcertaintaxbenefitsfromstock-basedcompensationintheperiodthestockcompensationvestsorissettled,whichmaycauseincreasedvariabilityinourquarterlyeffective
323、taxrates.Iftherewereamaterialdifferencebetweenforecastedandactualtaxrates,itcouldhaveamaterialimpactonourresultsofoperations.Tax laws,regulations,and compliance practices are evolving and may have a material adverse effect on our results of operations,cash flows and financialposition.TheU.S.TaxCutsa
324、ndJobsAct(the“TaxAct”)wasenactedinDecember2017,andsignificantlyaffectedU.S.taxlawbychanginghowtheUnitedStatesimposesincometaxonmultinationalcorporations.TheU.S.DepartmentofTreasuryhasbroadauthoritytoissueregulationsandinterpretativeguidancethatmaysignificantlyimpacthowwewillapplythelawandimpactourre
325、sultsofoperations.Asadditionalinterpretativeguidanceisissuedbytheapplicableauthorities,wemayneedtoreviseourprovision(benefit)forincometaxesinfutureperiods.Theserevisionscouldmateriallyaffectourresultsofoperations,cashflowandfinancialposition.Taxlaws,regulations,andadministrativepracticesinvariousjur
326、isdictionsareevolvingandmaybesubjecttosignificantchangesduetoeconomic,politicalandotherconditions.Therearemanytransactionsthatoccurduringtheordinarycourseofbusinessforwhichtheultimatetaxdeterminationisuncertain,andsignificantjudgmentisrequiredinevaluatingandestimatingourprovisionandaccrualsfortheset
327、axes.Governmentsareincreasinglyfocusedonwaystoincreasetaxrevenues,particularlyfrommultinationalcorporations,whichmayleadtoanincreaseinauditactivityandharsherpositionstakenbytaxauthorities.Wearecurrentlysubjecttotaxauditsinvariousjurisdictionsandthesejurisdictionsmayassessadditionaltaxliabilitiesagai
328、nstus.TheOrganisationforEconomicCo-operationandDevelopment(“OECD”),aninternationalassociationofcountries,includingtheUnitedStates,releasedthefinalreportsfromitsBaseErosionandProfitShifting(“BEPS”)ActionPlans,whichaimtostandardizeandmodernizeglobaltaxpolicies.TheBEPSActionPlansproposerevisionstonumer
329、oustaxrules,includingcountry-by-countryreporting,permanentestablishment,hybridentitiesandinstruments,transferpricing,andtaxtreaties.TheBEPSActionPlanshavebeenorarebeingenactedbycountrieswherewehaveoperations.TheEuropeanCommission(“EC”)hasconductedinvestigationsinmultiplecountriesfocusingonwhetherloc
330、alcountrytaxrulingsprovidepreferentialtaxtreatmentthatviolatesEuropeanUnionstateaidrulesandconcludedthatcertaincountries,includingIreland,haveprovidedillegalstateaidincertaincases.TheECandOECDhavealsobeenevaluatingnewrulesonthetaxationofthedigitaleconomytoprovidegreatertaxingrightstojurisdictionswhe
331、recustomersorusersarelocatedandtoaddressadditionalbaseerosionandprofitsshiftingissues.Inaddition,manycountrieshaverecentlyintroducednewlawsor25proposalstotaxdigitaltransactions.Thesedevelopmentsintaxlawsandregulations,andcompliancewiththeserules,couldhaveamaterialadverseeffectonouroperatingresults,f
332、inancialpositionandcashflows.Taxing authorities could reallocate our taxable income among our subsidiaries,which could increase our consolidated tax liability.Weconductintegratedoperationsinternationallythroughsubsidiariesinvarioustaxjurisdictionspursuanttotransferpricingarrangementsbetweenoursubsid
333、iariesandbetweenoursubsidiariesandus.Iftwoormoreaffiliatedcompaniesarelocatedindifferentcountries,thetaxlawsorregulationsofeachcountrygenerallyrequirethattransferpricesbethesameasthosebetweenunrelatedcompaniesdealingatarmslengthandthatcontemporaneousdocumentationismaintainedtosupportthetransferprices.Whilewebelievethatweoperateincompliancewithapplicabletransferpricinglawsandintendtocontinuetodoso,
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