美国
证券交易委员会
华盛顿特区20549
形式
(Mark一）
根据1934年《证券交易法》第13或15（d）条的季度报告 |
截至季度
或
根据1934年《证券交易所法》第13或15（d）条提交的过渡报告 |
从 到
委员会文件号：
（注册人章程中指定的确切名称）
（州或其他司法管辖区 成立或组织） |
（国税局雇主 |
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（主要行政办公室地址） |
(Zip代码） |
注册人的电话号码，包括地区代码：（
根据该法第12（b）条登记的证券：
每个班级的标题 |
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交易 符号 |
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注册的每个交易所的名称 |
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通过勾选标记标明注册人是否（1）在过去12个月内（或在注册人被要求提交此类报告的较短期限内）提交了1934年证券交易法第13或15（d）条要求提交的所有报告，以及（2）在过去90天内是否已遵守此类提交要求。
通过勾选标记检查注册人是否已在过去12个月内（或在注册人被要求提交此类文件的较短期限内）以电子方式提交了根据S-t法规第405条（本章第232.405条）要求提交的所有交互数据文件。
用复选标记表示注册人是大型加速申报公司、加速申报公司、非加速申报公司、较小的报告公司或新兴成长型公司。请参阅《交易法》第120亿.2条规则中“大型加速申报公司”、“加速申报公司”、“较小报告公司”和“新兴成长型公司”的定义。
大型加速文件夹 |
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加速文件管理器 |
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☒ |
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小型上市公司 |
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新兴成长型公司 |
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如果是新兴成长型公司，请通过勾选标记表明注册人是否选择不利用延长的过渡期来遵守根据《交易法》第13（a）条规定的任何新的或修订的财务会计准则。
用复选标记表示注册人是否是空壳公司(如《交易法》第120亿.2条所定义)。是☐不是
截至2024年10月31日，登记人已d
T内容能力
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页面 |
第一部分. |
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项目1. |
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项目2. |
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项目3. |
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项目4. |
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第二部分. |
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项目1. |
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项目1A. |
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项目2. |
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项目3. |
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项目4. |
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项目5. |
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i
呈列基准
某些定义
如本报告所用，除非明确说明或上下文另有要求，否则提及：
ii
风险因素总结
我们的业务面临许多风险和不确定性，包括本报告题为“风险因素”的部分中强调的风险和不确定性。以下是我们面临的主要风险摘要：
iii
我们的风险因素并不保证截至本报告之日不存在此类条件，并且不应被解释为此类风险或条件尚未全部或部分实现的肯定声明。
iv
FO前瞻性声明
本报告包含联邦证券法含义内的前瞻性陈述，这些陈述涉及重大风险和不确定性。前瞻性陈述通常与未来事件或我们未来的财务或运营业绩有关。在某些情况下，您可以识别前瞻性陈述，因为它们包含“可能”、“将”、“应该”、“预期”、“计划”、“预期”、“可能”、“意图”、“目标”、“项目”、“考虑”、“相信”、“估计”、“预测”、“潜在”或“继续”等词语的负面内容或涉及我们预期的其他类似术语或表达，战略、计划或意图。本报告中包含的前瞻性陈述包括有关以下方面的陈述：
我们警告您，上述列表可能不包含本报告中的所有前瞻性陈述。
v
你不应该依赖前瞻性陈述作为对未来事件的预测。本报告中包含的前瞻性陈述主要基于我们目前对未来事件和趋势的预期和预测，我们认为这些事件和趋势可能会影响我们的业务、经营业绩、财务状况和前景。这些前瞻性陈述中描述的事件的结果受风险、不确定因素和其他因素的影响，包括“风险因素”一节和本报告其他部分所描述的那些因素。此外，我们的运营环境竞争激烈，变化迅速。新的风险和不确定因素不时出现，我们无法预测可能对本报告所载前瞻性陈述产生影响的所有风险和不确定因素。我们不能向您保证前瞻性表述中反映的结果、事件和情况将会实现或发生，实际结果、事件或情况可能与前瞻性表述中所描述的大不相同。
本报告中的前瞻性陈述仅与截至陈述之日的事件有关。我们没有义务更新本报告中的任何前瞻性陈述以反映本报告日期之后的事件或情况，或者反映新信息或非预期事件的发生，法律要求的除外。您不应过度依赖我们的前瞻性陈述。我们的前瞻性陈述并不反映我们未来可能进行的任何收购、合并、处置、合资企业或投资的潜在影响。
此外，“我们相信”的声明和类似声明反映了我们对相关主题的信念和观点。这些声明基于截至本报告日期我们可用的信息，虽然我们相信此类信息构成了此类声明的合理基础，但此类信息可能是有限的或不完整的，并且我们的声明不应被解读为表明我们已经对所有潜在可用的相关信息进行了详尽的调查或审查。这些陈述本质上是不确定的，警告投资者不要过度依赖这些陈述。
vi
第一部分-财务信息
项目1.财务报表（未经审计）
ONEUTE，Inc.
浓缩合并Balance SheetS
(in数千人，股份金额除外）
(未经审计)
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自.起 |
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2024年9月30日 |
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2023年12月31日 |
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资产 |
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流动资产： |
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现金和现金等价物 |
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$ |
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$ |
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应收账款，净额 |
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未开票应收账款 |
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延期佣金 |
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预付费用和其他流动资产 |
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流动资产总额 |
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未开票应收账款，非流动 |
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递延佣金，非流动 |
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经营租赁使用权资产 |
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财产和设备，净值 |
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无形资产，净额 |
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— |
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商誉 |
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— |
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其他非流动资产 |
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总资产 |
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$ |
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$ |
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负债和股东/成员权益 |
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流动负债： |
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应付账款 |
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$ |
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$ |
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应计报酬 |
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应计佣金 |
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递延收入，当前 |
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经营租赁负债，流动 |
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其他应计费用和流动负债 |
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流动负债总额 |
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递延收入，非流动 |
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非流动经营租赁负债 |
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其他非流动负债 |
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— |
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总负债 |
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(Note 6） |
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股东/成员权益： |
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成员的兴趣 |
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— |
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优先股，美元 |
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— |
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A类普通股，美元 |
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— |
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b类普通股，美元 |
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— |
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— |
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C类普通股(1), $ |
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— |
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D类普通股(1), $ |
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— |
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借记资本公积 |
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— |
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累计其他综合损失 |
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( |
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( |
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累计赤字 |
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( |
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— |
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归属于OneStream，Inc.的股东权益总额/成员股权 |
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非控股权益 |
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— |
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股东/成员权益总额 |
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负债总额和股东/成员权益 |
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$ |
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$ |
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附注是这些简明综合财务报表的组成部分。
1
ONEUTE，Inc.
浓缩合并州运营理念
(in千，份额和每股金额除外）
(未经审计)
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截至9月30日的三个月， |
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截至9月30日的9个月， |
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2024 |
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2023 |
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2024 |
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2023 |
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收入： |
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订阅 |
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$ |
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$ |
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$ |
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$ |
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许可证 |
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专业服务和其他 |
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总收入 |
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收入成本： |
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订阅 |
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专业服务和其他 |
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收入总成本 |
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毛利 |
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运营费用： |
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销售和市场营销 |
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研发(1) |
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一般和行政 |
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总运营支出 |
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（损失）经营收入 |
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( |
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( |
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利息收入，净 |
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其他收入（费用），净额 |
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( |
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所得税前（损失）收入 |
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( |
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( |
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( |
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所得税（福利）准备金 |
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( |
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净（损失）收入 |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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减去：非控股权益应占净亏损 |
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( |
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— |
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( |
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— |
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应占OneStream，Inc.的净（亏损）收入 |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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A类和D类普通股每股净亏损-基本和稀释(2) |
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( |
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A类和D类普通股的加权平均股表现出色-基本和稀释(2) |
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附注是这些简明综合财务报表的组成部分。
2
ONEUTE，Inc.
简明综合损益表综合收入（损失）
(单位：千)
(未经审计)
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截至9月30日的三个月， |
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截至9月30日的9个月， |
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2024 |
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2023 |
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2024 |
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2023 |
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净（损失）收入 |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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其他全面（损失）收益： |
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外币折算 |
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综合（损失）收入 |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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减：归属于非控股权益的全面损失 |
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( |
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— |
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( |
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— |
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应占OneStream，Inc.的全面（亏损）收入 |
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$ |
( |
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$ |
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$ |
( |
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$ |
( |
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附注是这些简明综合财务报表的组成部分。
3
ONEUTE，Inc.
浓缩合并声明股东人数’ /会员权益
(in千，份额/单位金额除外）
(未经审计)
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OneStream公司股东/成员权益 |
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累计 |
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总 |
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议员的 |
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其他内容 |
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累计 |
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非控制性 |
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兴趣 |
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股份 |
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量 |
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股份 |
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量 |
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股份 |
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量 |
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股份 |
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量 |
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资本 |
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损失 |
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赤字 |
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利益 |
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股权 |
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截至2023年12月31日余额 |
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净亏损 |
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基于股权的薪酬 |
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外币折算 |
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截至2024年3月31日余额 |
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$ |
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净亏损 |
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— |
|
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
基于股权的薪酬 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
与收购相关发行的单位 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
外币折算 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
( |
) |
|
— |
|
|
— |
|
|
( |
) |
截至2024年6月30日余额 |
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
( |
) |
$ |
( |
) |
$ |
— |
|
$ |
|
||
IPO和重组交易前的活动： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
|
( |
) |
基于股权的薪酬 |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
外币折算 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
||
截至2024年7月23日余额 |
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
( |
) |
$ |
( |
) |
$ |
— |
|
$ |
|
||
IPO和重组交易的影响： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
重组交易的影响 |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
基于股权的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
首次公开发行中出售的A类普通股的发行，扣除承销折扣、佣金和发行成本 |
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
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— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
||||
股票期权练习 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|||
回购LLC单位 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
将股权分配给非控股权益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
— |
|
|||
IPO和重组交易后的活动： |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
( |
) |
|
( |
) |
|
( |
) |
基于股权的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|||
股票期权练习 |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|||
外币折算 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
|
|||
截至2024年9月30日余额 |
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
$ |
( |
) |
$ |
( |
) |
$ |
|
$ |
|
|||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
ONEUTE，Inc.
股东合并报表’ /会员权益
(in千，份额/单位金额除外）
(未经审计)
|
|
OneStream Software LLC（重组交易之前） |
|
|||||||||||||||||||||||||
|
|
敞篷车 |
|
|
成员的兴趣 |
|
|
累计 |
|
|
累计 |
|
|
总 |
|
|||||||||||||
|
|
单位 |
|
|
量 |
|
|
单位 |
|
|
量 |
|
|
损失 |
|
|
赤字 |
|
|
股权 |
|
|||||||
截至2022年12月31日余额 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
基于股权的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
公共单位选项的行使 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
外币折算 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
截至2023年3月31日余额 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
净亏损 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
基于股权的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
外币折算 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
截至2023年6月30日余额 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||||
净收入 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
基于股权的薪酬 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
外币折算 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
截至2023年9月30日余额 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
附注是这些简明综合财务报表的组成部分。
5
ONEUTE，Inc.
浓缩合并州现金流金额
(单位：千)
(未经审计)
|
|
截至9月30日的9个月， |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
经营活动产生的现金流量： |
|
|
|
|
|
|
||
净亏损 |
|
$ |
( |
) |
|
$ |
( |
) |
将净亏损与（用于）提供的净现金进行调节 |
|
|
|
|
|
|
||
折旧及摊销 |
|
|
|
|
|
|
||
非现金经营租赁费用 |
|
|
|
|
|
|
||
延期佣金摊销 |
|
|
|
|
|
|
||
基于股权的薪酬 |
|
|
|
|
|
|
||
其他非现金经营活动，净额 |
|
|
( |
) |
|
|
|
|
经营资产和负债变化： |
|
|
|
|
|
|
||
应收账款，净额 |
|
|
|
|
|
( |
) |
|
延期佣金 |
|
|
( |
) |
|
|
( |
) |
预付费用和其他资产 |
|
|
( |
) |
|
|
( |
) |
应付账款 |
|
|
|
|
|
( |
) |
|
递延收入 |
|
|
|
|
|
|
||
应计负债和其他负债 |
|
|
( |
) |
|
|
|
|
经营活动提供（用于）的净现金 |
|
|
|
|
|
( |
) |
|
投资活动产生的现金流量： |
|
|
|
|
|
|
||
购买财产和设备 |
|
|
( |
) |
|
|
( |
) |
收购业务，扣除收购现金 |
|
|
( |
) |
|
|
— |
|
出售有价证券 |
|
|
— |
|
|
|
|
|
投资活动提供的净现金（用于） |
|
|
( |
) |
|
|
|
|
融资活动产生的现金流量： |
|
|
|
|
|
|
||
融资租赁义务本金付款 |
|
|
— |
|
|
|
( |
) |
首次公开募股收益，扣除承销折扣和佣金 |
|
|
|
|
|
— |
|
|
回购LLC单位 |
|
|
( |
) |
|
|
— |
|
延期发行成本的支付 |
|
|
( |
) |
|
|
— |
|
期权练习的收益 |
|
|
|
|
|
|
||
偿还循环信贷安排的借款 |
|
|
— |
|
|
|
( |
) |
融资活动提供（用于）的净现金 |
|
|
|
|
|
( |
) |
|
汇率变动对现金及现金等价物的影响 |
|
|
|
|
|
( |
) |
|
现金及现金等价物净增加情况 |
|
|
|
|
|
|
||
现金及现金等值物-年初 |
|
|
|
|
|
|
||
现金及现金等值物-期末 |
|
$ |
|
|
$ |
|
||
非现金投资和融资活动的补充披露 |
|
|
|
|
|
|
||
购买包括在负债中的财产和设备 |
|
$ |
|
|
$ |
|
||
获得使用权资产产生的租赁负债 |
|
$ |
— |
|
|
$ |
|
|
应计但未付的递延发行成本 |
|
$ |
|
|
$ |
— |
|
|
附注是这些简明综合财务报表的组成部分。
6
ONEUTE，Inc.
浓缩合并注释财务报表
(未经审计)
注1-业务的组织和说明
OneStream，Inc.(本公司或OneStream)于2021年10月15日作为控股公司在特拉华州注册成立，目的是促进首次公开募股(IPO)和其他相关交易，以开展OneStream Software LLC的业务。OneStream Software LLC成立于2012年，是密歇根州的一家有限责任公司(LLC)，并于2019年2月5日转变为特拉华州有限责任公司。OneStream提供了一个统一的、支持人工智能和可扩展的软件平台-数字金融云-将核心金融功能以及更广泛的运营数据和流程统一在一个平台内。OneStream的客户遍布世界各地，但他们主要位于北美和欧洲。OneStream总部设在密歇根州伯明翰，在澳大利亚、欧洲和新加坡设有国际办事处。
首次公开募股
2024年7月25日，公司完成首次公开募股
该公司的某些现有股东出售了
重组交易
关于首次公开募股，本公司和OneStream Software LLC完成了一系列组织交易(重组交易)，包括：
7
ONEUTE，Inc.
作为OneStream Software LLC的唯一经理，该公司控制OneStream Software LLC的所有业务运营、事务和管理。因此，OneStream，Inc.合并OneStream Software LLC的财务业绩，并在其简明合并资产负债表中报告持续成员LLC部门的非控股权益。
有关首次公开募股后生效的2024年股权激励计划（“2024年计划”）以及截至2024年9月30日止三个月内记录的与首次公开募股相关的股权薪酬费用的信息，请参阅注11。
附注2--重要会计政策
重大会计政策
除以下新增的有关业务合并、商誉及其他无形资产、非控股权益及每股净亏损的政策，以及对现有股权补偿政策的更新外，OneStream，Inc.于2024年7月23日提交予美国证券交易委员会(美国证券交易委员会)的招股说明书(首次公开招股说明书)中所述的截至2023年12月31日经审核综合财务报表及附注所述的重大会计政策并无变动，该等政策对简明综合财务报表及附注产生重大影响。
呈列基准
所附未经审核简明综合财务报表乃根据美国公认会计原则及美国证券交易委员会有关中期财务报告的适用规则及规定编制。简明综合财务报表包括本公司及其全资子公司的业绩。由于重组交易被视为在共同控制下的实体之间的交易，首次公开募股和重组交易前的财务报表已进行调整，以合并以前独立的实体进行列报。在重组交易之前，OneStream，Inc.没有任何业务。所有重大的公司间交易和余额在合并期间都已冲销。
本文包括的截至2023年12月31日的综合资产负债表是从截至该日的经审计的财务报表中得出的，但不包括所有披露，包括GAAP要求的某些经常性注释。未经审核简明综合财务报表已按与年度财务报表相同的基准编制，并反映公平列报中期资产负债表、营运报表、全面损益表、股东/成员权益表及现金流量表所需的所有正常经常性调整，但不一定显示全年或任何其他未来期间的预期结果。
该等未经审核简明综合财务报表应与本公司截至2023年12月31日止年度的经审核综合财务报表及招股章程所载附注一并阅读。
预算的使用
根据公认会计原则编制公司简明综合财务报表要求管理层作出估计和假设，以影响截至简明综合财务报表日期的资产和负债额以及或有资产和负债的披露，以及报告期内已报告的收入和支出金额。管理层根据过往经验及管理层认为在当时情况下合理的其他各种特定市场及相关假设作出估计。实际结果可能与这些估计大相径庭。
递延发售成本
递延发售成本主要包括与公司首次公开募股相关的会计、法律和其他费用。于截至2023年9月30日止九个月内，本公司因外部市况而放弃先前的首次公开招股准备，并减值$
8
ONEUTE，Inc.
业务合并
根据财务会计准则委员会(FASB)、会计准则编纂(ASC)805、企业合并(ASC 805)，公司对包括投入和流程并有能力创建作为业务组合的产出的实体进行会计处理。收购的资产和承担的负债(如有)按收购日的估计公允价值计量。购买价格超过这些公允价值的部分被记录为商誉。在自收购日期起计最长一年的计量期内，本公司可记录对收购资产和承担的负债的调整，并与商誉进行相应的抵销。于计量期结束或收购资产或承担负债的价值最终确定后(以先到者为准)，任何后续调整均记入简明综合经营报表。
在确定可确认资产的公允价值时，管理层需要对预计收入和成本、未来预期现金流和贴现率等做出某些假设和估计。虽然本公司相信其于过往作出的假设及估计均属合理及恰当，但该等估计乃基于过往经验及从被收购公司管理层取得的资料而作出，本身并不确定。
商誉及其他无形资产
该公司在第四季度至少每年进行一次商誉减值测试，如果事件或情况变化表明可能存在减值，则更频繁地测试商誉减值。当量化评估得出商誉的账面价值超过公允价值时，确认商誉减值。
其他无形资产包括收购的已开发技术，公司按估计使用年限直线摊销这些技术，并在情况发生变化时对减值进行审查。
风险和重要客户的集中
使公司面临集中信用风险的金融工具主要包括现金和现金等价物以及应收账款。该公司在具有投资级评级的优质金融机构保持现金存款。该公司的大部分现金余额都存放在美国的银行，并按照联邦存款保险公司的规定投保。
于呈列任何期间，无客户占总收入的10%以上，亦无客户占应收账款总额的10%以上。
该公司依赖数量有限的第三方托管云计算供应商为客户提供服务，并运营其服务的某些方面，如生产环境和开发使用。有鉴于此，托管基础设施合作伙伴的任何中断或干扰都将影响本公司的运营，并可能对本公司的业务造成不利影响。
非控制性权益
重组交易完成后，本公司将合并OneStream Software LLC的财务业绩。因此，本公司在简明综合资产负债表上根据持续成员拥有的有限责任公司单位报告非控股权益。归属于非控股权益的净亏损以期内未偿还的加权平均有限责任公司单位为基础，不包括受归属条件限制的有限责任公司单位，并在简明综合经营报表及全面亏损中列报。有关详情，请参阅附注10，非控股权益。
9
ONEUTE，Inc.
基于股权的薪酬
公司以限制性股票单位(RSU)和股票期权的形式向员工发放基于股权的奖励，在重组交易之前，OneStream Software LLC发行了激励性薪酬单位(ICU)和普通单位期权，如附注11所述。公司根据授予日期的公允价值对基于股权的奖励进行核算。确定授予日期股权奖励的公允价值需要管理层作出假设和判断。这些假设反映了该公司的最佳估计，但它们涉及基于市场状况的内在不确定性。因此，如果使用其他假设，基于股权的薪酬成本可能会受到实质性影响。对于仅具有服务归属条件的奖励，基于股权的薪酬支出以直线基础确认，而具有绩效条件的奖励则使用加速归因法确认。没收是按发生的情况计算的。有关本公司股权薪酬奖励的更多详情，请参阅附注11，股权薪酬。
每股净亏损
每股净亏损的计算方法是将重组交易后一段时间内OneStream公司的净亏损除以同期已发行的A类普通股和D类普通股的加权平均数。稀释每股净亏损是根据重组交易后期间的所有潜在加权平均稀释股份计算的，包括在赎回持续成员持有的有限责任公司单位时可发行的D类普通股的额外股份，以及根据已发行股票期权和RSU以及根据2024年员工购股计划(ESPP)可发行的A类普通股(如适用)。列报所有期间的每股摊薄净亏损与每股基本净亏损相同，因为纳入潜在的可发行股份将具有反摊薄作用。
首次公开募股前一段时间的所有亏损和收益均可完全分配给OneStream Software LLC。由于重组交易的影响，本公司首次公开招股前及上市后的资本结构不可比较。因此，列报首次公开发售及重组交易前的每股净(亏损)收益并无意义，本文只列报首次公开发售及重组交易后各期间的每股净亏损。
10
ONESTREAM, INC.
附注3-业务组合
数据感知获取
于2024年5月1日(收购日期)，本公司与关联方DataSense LLC(DataSense)及其唯一股权持有人DataSense Holdings LLC(DataSense Holdings)订立会员权益购买协议，DataSense Holdings LLC(DataSense Holdings)为DataSense创办人成立的控股公司，据此，本公司收购DataSense其余已发行及尚未发行的会员权益。此次收购使公司能够继续专注于构建人工智能(AI)和机器学习能力，并继续开发支持AI的解决方案。这些能力提高了数字金融云对公司现有客户的价值主张，并进一步使公司有别于竞争对手。
购买协议项下的总对价为#美元。
本公司按照FASB ASC 805，企业合并的会计处理方法，对收购DataSense剩余股权进行会计处理。作为收购的一部分，公司取消确认其先前持有的DataSense股权，该权益已作为权益法投资入账，并计入其他非流动资产，金额为#美元。
下表汇总了转移的总对价(以千计)：
|
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2024年5月1日 |
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现金 |
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$ |
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存入托管的金额 |
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|
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股权对价的公允价值 |
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卖方交易费用由公司支付 |
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|
|
|
收购前存在的应付款项的结算 |
|
|
( |
) |
先前持有的所有权权益的公允价值 |
|
|
|
|
总代价 |
|
$ |
|
|
收购价格已于收购日初步分配。所收购的资产和所承担的负债根据管理层的估计、可用信息和管理层认为合理的支持性假设以估计公允价值记录。公司预计将尽快完成估值，但不得迟于收购日起一年。
11
ONEUTE，Inc.
下表汇总了根据截至购置日的购入资产和承担的负债的公允价值分配的总购置价，包括计算法期间调整(以千计)：
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|
2024年5月1日 |
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|
现金 |
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$ |
|
|
无形资产--开发的技术 |
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|
|
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预付费用和其他流动资产 |
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商誉 |
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其他应计费用和流动负债 |
|
|
( |
) |
总代价 |
|
$ |
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|
购买价格超过净资产估计公允价值的部分确认为商誉。商誉包括公司预期的未来经济收益，这些收益将从DataSense与其现有业务合并后预期的未来运营协同效应中产生，并且不能从税务目的中扣除。
商誉和可确认的无形资产采用收益法进行估值。管理层使用第三方评估公司协助确定初步采购会计公允价值；然而，管理层最终监督第三方评估公司，以确保交易特定假设适用于本公司。
DataSense自收购之日起的经营业绩(不是实质性的)已包括在公司的简明综合经营报表中。在截至2024年9月30日的九个月期间，与收购相关的成本并不重要。所有与收购有关的成本均在已发生时计入费用，并在所附的简明综合经营报表中计入一般和行政费用。
注4-良好资产和其他无形资产
商誉
截至2024年9月30日，善意的公允价值为美元
其他无形资产
该公司收购的无形资产的总账面价值为美元
自.起2024年9月30日，随后五个财年中每个财年的无形资产摊销费用估计总额如下（单位：千）：
财年： |
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2024年剩余时间 |
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$ |
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2025 |
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2026 |
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2027 |
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2028 |
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— |
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预计摊销费用总额 |
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$ |
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|
12
ONEUTE，Inc.
注5 -财产和设备
公司的财产和设备净值包括以下内容（以千计）：
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自.起 |
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|||||
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2024年9月30日 |
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2023年12月31日 |
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租赁权改进 |
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$ |
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$ |
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资本化软件成本 |
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家具和设备 |
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在建工程 |
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财产和设备毛额 |
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减去：累计折旧和摊销 |
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( |
) |
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|
( |
) |
财产和设备，净值 |
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$ |
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$ |
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||
折旧和摊销费用为 $
附注6--承付款和或有事项
承诺
该公司根据不可撤销的经营租赁租赁办公空间，到期日期为2024年至2034年。
公司根据租赁、服务协议和其他合同承诺的未来最低承诺 2024年9月30日如下（以千计）：
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操作 |
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未来 |
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||
截至12月31日的年份， |
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2024年（剩余3个月） |
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$ |
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$ |
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||
2025 |
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2026 |
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2027 |
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— |
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2028 |
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— |
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2029年及其后 |
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— |
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付款总额 |
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$ |
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||
减：估算利息 |
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( |
) |
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减：租赁少于12个月 |
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( |
) |
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租赁总负债 |
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$ |
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||
2022年6月，公司签订
担保和弥偿
公司的云计算和许可软件销售协议通常包括赔偿条款，用于赔偿因第三方声称其产品侵犯第三方知识产权而导致的客户责任。截至目前，本公司并无因该等赔偿而产生任何重大成本，亦未在其综合财务报表中应计任何与该等责任有关的负债。该公司的某些销售协议还包括因违反保密规定而产生的客户责任的赔偿条款。公司的云计算服务提供商赔偿公司因数据泄露而支付的长达24个月的费用。不可能确定这些赔偿协议下的最高潜在数额，因为以前的赔偿要求的历史有限且不常见，而且每项特定的协议都涉及独特的事实和情况。
13
ONEUTE，Inc.
该公司包括对其客户的服务水平承诺，通常涉及正常运行时间和性能的某些水平，如果公司未能达到这些水平，客户可以获得信用，在有限的情况下，他们将终止与公司的关系。到目前为止，本公司尚未因该等承诺而产生任何重大成本。
由于各种原因，公司有时需要在正常业务过程中与第三方达成财务担保，其中包括代表与其有业务往来的各方的信用证担保。该等协议对本公司未经审计的简明综合财务报表并无实质影响。
本公司亦同意就任何此等人士因其担任董事会成员或高级管理人员服务或应本公司要求向任何其他公司或企业提供服务而成为或可能成为任何诉讼或法律程序当事人的任何费用、开支、判决、罚款及和解金额相关的费用，向其董事会及高级管理人员作出赔偿，包括本公司的任何诉讼。本公司维持董事会成员及高级职员的保险范围，使本公司能够收回未来支付的任何款项的一部分。在某些情况下和在某些司法管辖区内，公司还可能因其员工的行为而受到法律的赔偿义务。
附注7--债务
循环信贷安排
2020年1月，本公司与一家银行签订了循环信贷安排，允许本公司借入最多#美元。
根据信贷安排的条款，本公司可选择以有担保隔夜融资利率(SOFR)贷款或备用基本利率(ABR)贷款的形式借入资金。在信贷安排上提取的任何预付款都会产生相当于SOFR加的年利率
根据信贷安排的条款，公司必须遵守某些消极和积极的契约，包括与发生其他债务、发生重大不利变化、处置资产、合并、收购和投资、授予留置权和支付股息有关的财务契约和契约。
附注8--所得税
就所得税而言，该公司被视为一家公司，并就OneStream Software LLC的任何净应税收入的可分配份额缴纳联邦、州和地方税。
14
ONESTREAM, INC.
OneStream Software LLC是一家有限责任公司，出于所得税目的被视为合伙企业，其应纳税所得额或亏损转嫁给其成员，包括本公司。OneStream Software LLC的海外子公司在其经营所在的外国司法管辖区纳税，此类税收的应计项目包括在公司的简明综合财务报表中。在重组交易和首次公开募股之前，报告的所得税代表OneStream Software，LLC的所得税。
该公司通过将其估计的年度有效税率应用于年初至今的所得税前亏损来计算其中期准备金。本公司亦记录某些离散、不寻常或不经常发生项目的税务影响，包括有关估值免税额的判断改变，以及税法或税率的改变对递延税项结余的影响。此外，我们在哪些司法管辖区经营时，本年度的预计亏损或年初至今的亏损并不能确认税项优惠，则不包括在估计的年度有效税率内。
该公司的所得税拨备为#美元。
许多国家同意发表一项声明，支持经济合作与发展组织(OECD)的示范规则，该规则提议将全球最低税率定为
应收税金协议
关于重组交易，公司与OneStream Software LLC、某些前成员和继续成员签订了应收税金协议(TRA)。根据TRA，该公司将保留
未来交换或赎回有限责任公司单位给本公司带来的任何税收优惠的金额将取决于许多因素，包括但不限于未来任何赎回或交换的时间以及该等未来赎回或交换时A类普通股的股票价格。公司只会在“更有可能”实现税收优惠的情况下，才会在财务报告中确认DTA。
附注9--股东/成员权益
公司注册证书的修订及重述
关于重组交易，对OneStream，Inc.的公司注册证书进行了修改和重述，以便除其他事项外，规定授权(I)
A类普通股、B类普通股、C类普通股和D类普通股持有人的权利相同，但投票权、转换权和经济权除外。
15
ONEUTE，Inc.
OneStream Software LLC的资本重组
关于重组交易和经修订的有限责任公司协议，OneStream Software LLC的所有成员权益被重新分类为单一类别的有限责任公司单位。以下为与重组交易有关的重新分类证券摘要：
此外，该公司还发行了
上述经修订及重述的公司注册证书及经修订的有限责任公司协议要求本公司及OneStream Software LLC在任何时候均须：(I)
优先股
截至2024年9月30日，有
注10 -非控制性权益
就重组交易而言，OneStream，Inc.成为OneStream Software LLC的独家经理，并相应巩固OneStream Software LLC的运营业绩。公司简明合并资产负债表上的非控股权益余额代表持续成员拥有的LLC单位部分。净（亏损）收入归属于非控股权益，基于期内未发行LLC单位的加权平均所有权百分比，不包括受归属条件约束的LLC单位。截至2024年9月30日，OneStream Software LLC拥有非控股权益
|
|
2024年9月30日 |
|
|||||
|
|
单位 |
|
|
所有权百分比 |
|
||
OneStream公司 |
|
|
|
|
|
% |
||
永久会员(1) |
|
|
|
|
|
% |
||
总 |
|
|
|
|
|
% |
||
(1)
16
ONEUTE，Inc.
附注11--基于权益的薪酬
2019年通用单位选项计划
2019年通用单位选项计划(2019计划)最初由OneStream Software LLC的董事会通过，并由OneStream Software LLC当时的成员批准。2019年计划允许OneStream Software LLC为符合条件的员工、经理和顾问提供通用单位选项。
在重组交易前，本公司并未确认根据2019年计划授予的普通单位期权的股权补偿开支，因为该等开支包含一项没收条款，根据该条款，当期权持有人自愿终止服务时，本公司有权要求期权持有人(I)将购股权持有人收购的任何普通单位的全部或部分出售予本公司，其价格相等于(A)该等普通单位于回购当日的总公平价值及(B)为收购该等共同单位而支付的总行使价及(Ii)交出所有未偿还的共同单位期权，包括既得期权，未经考虑而由该受选人持有的。
2024年7月12日，OneStream Software LLC的经理董事会和公司董事会批准了一项修改尚未完成的共同单位期权的条款，以取消没收条款，并在重组交易完成后立即生效。根据ASC 718，这项修正被认为是一项“不可能到可能”的修改，补偿-股票补偿，据此计算截至修改日期2024年7月12日(期权修改日期)的未偿还普通单位期权的公允价值。重组交易完成时，因修改而产生的业绩条件得到满足，公司对股权薪酬支出进行了累计调整，总额为$
与重组交易前授予的未归属普通单位期权相关的剩余未确认权益补偿支出将在剩余的必要服务期内采用加速归属法确认，即每一批归属部分的补偿成本从服务开始日期至该部分的归属日期按比例确认。关于重组交易，2019年计划由OneStream，Inc.承担，并因授予新期权而终止。此外，所有未偿还的普通单位期权均转换为以一对一方式购买A类普通股的期权。
下表汇总了2019年计划下的选项活动截至2024年9月30日的9个月(单位为千，不包括每股数据)：
|
|
选项 |
|
|
加权- |
|
|
加权- |
|
|||
截至2023年12月31日未完成 |
|
|
|
|
$ |
|
|
|
|
|||
授予 |
|
|
|
|
|
|
|
|
|
|||
被没收/取消 |
|
|
( |
) |
|
|
|
|
|
|
||
行使 |
|
|
( |
) |
|
|
|
|
|
|
||
截至2024年9月30日未完成 |
|
|
|
|
$ |
|
|
|
|
|||
自2024年9月30日起已获授权并可行使 |
|
|
|
|
$ |
|
|
|
|
|||
17
ONEUTE，Inc.
本公司使用包含提前行权倍数和归属后终止率的二项式网格模型，估计于期权修改日期根据2019年计划修订的股票期权的公允价值。用作二项格子模型一部分的假设和估计如下：
A类普通股的公允价值：根据2019年计划授予的期权相关的A类普通股的公允价值被确定为截至期权修改日期的预期IPO价格区间的中点。
预期期限：预期期限是二项式网格模型的派生输出，代表股票期权预计将保持未偿还的加权平均期间。
预期波动率：预期波动率是根据几家指导公司在相当于预期期限的期间内的历史和隐含股价波动率估计的。
无风险利率：无风险利率是根据格子中每个时间步的内插美国国债收益率曲线计算的。
预期股息收益率：由于公司目前不打算在可预见的未来宣布股息，估计股息收益率为零。
作为根据《2019年计划》授予并在期权修改日期修改的期权的二项点阵模型的一部分使用的假设和估计数如下：
A类普通股的公允价值 |
|
$ |
|
|
预计期限（年） |
|
|
||
预期波幅 |
|
|
% |
|
无风险利率 |
|
|
||
预期股息率 |
|
|
— |
|
激励单位
在重组交易和首次公开募股之前，OneStream Software LLC的经理董事会不时根据利润利息单位授予协议向某些董事、高级管理人员和其他员工授予激励单位(ICU)。关于重组交易，
本公司将未归属的有限责任公司单位(以及相应的C类普通股)归类为在其简明综合资产负债表上的已发行股份，因为它们在法律上尚未发行；然而，在计算OneStream Software LLC的非控股权益应占净亏损时，这些未归属有限责任公司单位不包括在计算期间内已发行的加权平均有限责任公司单位，因为在归属之前，它们的分配权可被没收。
在对已发行的未归属ICU重新分类后，已发行的未归属有限责任公司单位(以及C类普通股)摘要如下(单位：千，不包括每股数据)：
|
|
股份 |
|
|
加权- |
|
||
紧接重组交易完成后未归属及未清偿 |
|
|
|
|
$ |
|
||
重组交易完成后归属 |
|
|
|
|
|
|
||
截至2024年9月30日的未归属和未偿还 |
|
|
|
|
$ |
|
||
18
ONEUTE，Inc.
作为重组交易的一部分，该公司对ICU的重新分类进行了评估，并得出结论，这对基于股权的薪酬支出的影响并不大。截至2024年9月30日，与C类普通股和未归属有限责任公司单位的未归属股份相关的未确认股权薪酬总额为$
2024年股权激励计划
关于此次IPO，公司董事会通过了《2024年股权激励计划》(《2024年计划》)，该计划生效时初始准备金为
根据2024年计划可供发行的股票数量还包括每年在每个财政年度的第一天增加，从2025年1月1日开始，直至我们董事会批准2024年计划之日的十周年，金额相当于(I)中的最小值。
股票期权
在截至2024年9月30日的三个月内，公司向某些董事、高管和其他员工授予
下表汇总了2024年计划下的选项活动截至2024年9月30日的9个月(单位为千，不包括每股数据)：
|
|
选项 |
|
|
加权- |
|
|
加权- |
|
|||
截至2023年12月31日未完成 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
授予 |
|
|
|
|
|
|
|
|
|
|||
被没收/取消 |
|
|
( |
) |
|
|
|
|
|
|
||
行使 |
|
|
— |
|
|
|
— |
|
|
|
|
|
截至2024年9月30日未完成 |
|
|
|
|
$ |
|
|
|
|
|||
自2024年9月30日起已获授权并可行使 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
公司使用布莱克-斯科尔斯期权定价模型估计了根据2024年计划授予的期权在授予日期的公允价值。作为布莱克-斯科尔斯期权定价模型一部分使用的假设和估计如下：
A类普通股的公允价值：根据2024年计划授予的期权所依据的A类普通股的公允价值被确定为IPO价格。
预期期限：由于公司缺乏历史锻炼活动，预计期限使用简化方法估算。简化方法将预期期限计算为授予日期和合同到期日期之间的中点。
19
ONEUTE，Inc.
预期波动率：预期波动率是根据几家指导公司在相当于预期期限的期间内的历史和隐含股价波动率估计的。
无风险利率：无风险利率基于授予期权期间有效的美国国债收益率曲线。
预期股息收益率：由于公司目前不打算在可预见的未来宣布股息，估计股息收益率为零。
Black-Scholes期权定价模型中用于根据2024年计划授予的期权的输入如下：
A类普通股的公允价值 |
|
$ |
|
|
预计期限（年） |
|
|
||
预期波幅 |
|
|
% |
|
无风险利率 |
|
|
% |
|
预期股息率 |
|
|
— |
|
限制性股票单位(RSU)
重组交易和首次公开募股后，公司已根据2024年计划向某些员工授予受限制股份单位。RSU代表在指定的未来日期接收A类普通股股份的权利。RSU受基于服务的归属条件约束，该条件通常在四年内得到满足。与受限制单位相关的股权补偿费用在剩余必要服务期内以直线法确认。
下表总结了截至2024年9月30日的九个月内RSU活动（以千计，每股数据除外）：
|
|
股份单位 |
|
|
加权- |
|
||
截至2023年12月31日未完成 |
|
|
— |
|
|
$ |
— |
|
授予 |
|
|
|
|
|
|
||
既得 |
|
|
— |
|
|
|
— |
|
被没收/取消 |
|
|
( |
) |
|
|
|
|
截至2024年9月30日未完成 |
|
|
|
|
$ |
|
||
截至2024年9月30日，与RSU相关的未确认补偿成本为美元
2024年员工购股计划
在IPO方面，公司董事会采用了ESPP。共
ESPP下可供发行的股票数量还包括从2025年1月1日开始的每个财年第一天的年度增加，金额等于（i）中的最小值
20
ONEUTE，Inc.
股份 上一会计年度最后一天的所有系列公司普通股，或(Iii)管理人决定的其他数字。
DataSense公共单位奖
作为2024年5月1日收购DataSense的一部分，如附注3所述，DataSense的创始人获得了
在重组交易方面，授予DataSense创始人的普通股被重新分类为同等数量的有限责任公司单位，DataSense控股公司获得了同等数量的C类普通股。作为重组交易的一部分，该公司对这些共同单位的重新分类进行了评估，并得出结论，这对基于股权的薪酬支出的影响并不大。由于未归属普通股重新分类而发行的所有有限责任公司单位(以及相应的C类普通股)仍须遵守重组交易之前存在的相同归属要求。未归属的有限责任公司单位(以及相应的C类普通股)在本公司的简明综合资产负债表上被归类为已发行股份，因为它们在法律上尚未发行；然而，在计算OneStream Software LLC的非控股权益所应占的净亏损时，这些未归属有限责任公司单位不包括在计算期间内已发行的加权平均有限责任公司单位，因为它们的分配权在归属之前是可以没收的。截至2024年9月30日，
本公司根据其估计授予日期的公允价值对这些公共单位进行会计处理。共同单位的公允价值是由OneStream Software LLC的管理委员会在考虑第三方估值和管理层的意见后确定的。共同单位的估值是根据《美国注册会计师协会执业援助》中概述的准则确定的，作为补偿发行的私人持股公司股权证券的估值。在对共同单位进行估值时，OneStream Software LLC的公允价值或企业价值是采用市场法下的各种方法确定的，包括准则上市公司和类似的交易方法。
在截至2024年9月30日的三个月和九个月内，公司确认以股权为基础的薪酬支出为$
股权薪酬分配的分类
基于股权的薪酬费用在随附的未经审计简明综合经营报表中分类如下（以千计）：
|
|
截至三个月 |
|
|
止九个月 |
|
||||||||||
|
|
9月30日， |
|
|
9月30日， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
订阅费用 |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
专业服务和其他费用 |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
销售和市场营销 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
研发 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
一般和行政 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
股权薪酬总额 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
21
ONEUTE，Inc.
附注12-收入确认
该公司的收入主要来自销售订阅服务，其中包括软件即服务(SaaS)、云计算和合同后客户支持(PCS)的收入。SaaS和PCS的订阅收入在协议的合同期限内按比例确认，从向客户提供服务之日开始，云计算的收入在协议的合同期限内按消费确认。该公司还从销售软件许可证和专业服务中获得收入。许可收入在客户能够使用软件并从中受益时确认，来自专业服务和其他服务的收入在执行服务时确认。
收入的分类
根据客户的实际位置，按地理区域划分的收入如下(以千为单位)：
|
|
截至9月30日的三个月， |
|
|
截至9月30日的9个月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
美国 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
其他 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
总收入 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
在公布的任何时期内，没有任何外国占收入的10%或更多。
合约结余
应收账款按发票金额扣除坏账准备和信用损失后入账。应收账款在公司交付产品或提供服务期间记录，或在公司有无条件支付权的时候记录。在多年协议中，该公司通常在合同期内的每年年初向客户开出等额的年度分期付款。该公司记录多年许可软件的应收账款，无论是否收费，只要它有权在未来无条件地收到与这些许可相关的付款。
本公司估计每个报告期结束时的应收账款坏账金额，并根据对应收账款余额的账龄、历史经验和对前瞻性损失估计的预期等各种因素的评估，在需要时计提准备金。在制定前瞻性亏损估计的预期时，公司会考虑对未来经济状况的预测、过去事件的信息(如历史注销趋势)以及客户特定情况(如破产和纠纷)。应收账款在被认为无法收回时予以核销。截至2024年9月30日和2023年12月31日，坏账准备余额为$
递延收入包括确认收入之前的客户账单。该公司主要是在合同期内的每年年初以等额的年度分期付款方式向客户开具SaaS协议、PCS和基于期限的软件许可证的发票，尽管某些合同需要提前为整个协议开具发票。预计在资产负债表日起一年内确认的金额在合并资产负债表上记为递延收入，当期收入；其余部分记为递延收入，非流动收入。
递延收入余额将根据发票时间和收入确认而波动。截至2024年9月30日的三个月和九个月内确认的收入金额，并计入本期开始时的递延收入d是美元
剩余履约义务
截至2024年9月30日分配给剩余履行义务的交易价格总额是$
22
ONEUTE，Inc.
附注13-每股净亏损
下表列出了重组交易后一段时间的每股基本净亏损和稀释后每股净亏损的计算方法(单位为千，每股亏损除外)：
|
|
2024年7月24日至2024年9月30日 |
|
|
分子： |
|
|
|
|
净亏损 |
|
$ |
( |
) |
减：归属于非控股权益的净亏损 |
|
|
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A类和D类普通股的加权平均股表现出色-基本和稀释 |
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每股净亏损： |
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A类和D类普通股每股净亏损-基本和稀释 |
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B类普通股和C类普通股的股票不分享OneStream公司的收益或亏损，因此不是参与证券。因此，b类普通股和C类普通股在两类法下的每股基本净亏损和稀释后每股净亏损没有单独列报。
在2024年7月24日至2024年9月30日期间，本公司发生净亏损，因此，本公司潜在摊薄证券的影响不包括在每股摊薄亏损的计算中，因为该影响将是反摊薄的。
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注14 -关联方交易
数据感知
在收购DataSense之前，该公司是与DataSense签订的咨询和软件开发服务协议的一方。该公司的联合创始人兼首席执行官托马斯·谢伊（Thomas Shea）是安德鲁·谢伊（Andrew Shea）的父亲，安德鲁·谢伊（Andrew Shea）曾担任DataSense的首席执行官和股权持有者，直到该公司收购该公司。截至2023年12月31日，该公司对DataSense持有权益法投资，该投资并不重大。公司支付了美元
有关收购DataSense的更多详细信息，请参阅注释3“业务组合”。
注15 -后续事件
消费协议
2024年11月，公司修改了
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项目2.管理层对财务状况和经营成果的讨论和分析.
以下对我们财务状况和经营业绩的讨论和分析应与我们未经审计的中期简明财务报表和本报告其他部分的相关附注、我们截至2023年12月31日的年度的经审计综合财务报表和相关附注以及根据2024年7月24日规则第424(B)(4)条提交给美国证券交易委员会或美国证券交易委员会的招股说明书(日期为2024年7月23日)或新股招股说明书中“管理层对财务状况和经营成果的讨论和分析”项下的讨论一并阅读。本讨论和分析中包含的一些信息，包括与我们的业务计划和战略有关的信息，包括涉及风险和不确定因素的前瞻性陈述。您应该阅读标题为“前瞻性陈述”和“风险因素”的章节，讨论前瞻性陈述以及可能导致我们的实际结果与以下讨论和分析中包含的前瞻性陈述所描述或暗示的结果大不相同的重要因素。以下讨论和分析反映了OneStream Software LLC在重组交易和IPO之前的运营和财务状况的历史结果，以及OneStream，Inc.，包括OneStream Software LLC在重组交易和IPO完成后的运营和财务状况。
概述
OneStream正在通过数字财务云（我们支持人工智能的可扩展软件平台）对首席财务官办公室进行现代化和重新定义，数字财务云将核心财务职能和更广泛的运营数据和流程统一在一个平台中。数字金融云使首席财务官办公室能够形成整个企业的全面、动态和预测性视图，为企业领导者提供主动调整业务战略和日常执行所需的控制、可见性和敏捷性。
我们的大部分收入来自出售我们平台的访问权限，无论是根据我们计入订阅收入的SaaS合同，还是根据我们计入许可收入的永久或基于期限的软件许可证。订阅收入还包括云计算服务费以及基于期限和永久许可证的软件的客户支持和维护。我们将这些收入来源统称为软件收入，截至2024年9月30日和2023年9月30日的三个月分别占我们总收入的95%和92%，截至2024年9月30日和2023年9月30日的九个月分别占94%和91%。软件收入主要由我们的客户数量、每个客户的用户数量、订阅价格和用户许可证以及续订费率驱动。
自2023年以来，SaaS合同客户占我们总收入的大部分，超过90%的新客户都是SaaS合同客户。在2020年第三季度我们推出当前基于SaaS的模式之前，我们以永久或基于期限的许可证的方式出售了我们平台的访问权限。我们预计，随着时间的推移，SaaS合同的收入在总收入中所占的比例将越来越大，但我们可能会继续在有限情况下向某些客户提供许可证，例如政府机构或监管严格行业的大型企业。我们的大多数SaaS合同和基于期限的许可证都有三年期限，尽管目前的期限从不到一年到十年不等。我们的大部分合同都是不可撤销的。截至2023年9月30日和2023年12月31日，我们的剩余履行义务分别为99700万美元和89770万美元，包括已开票和未开票对价。
我们还从销售专业服务（包括咨询、实施和配置服务以及培训）中获得收入，但我们越来越多地利用合作伙伴来提供这些服务。截至2024年9月30日和2023年9月30日的三个月，专业服务分别占总收入的5%和8%，截至2024年9月30日和2023年9月30日的九个月，分别占总收入的6%和9%。
我们总收入的大部分来自美国的客户;然而，截至2024年9月30日和2023年9月30日的三个月，来自美国以外客户的收入分别占我们总收入的29%和27%，截至2024年9月30日和2023年9月30日的九个月均占30%，我们专注于发展我们的国际业务。
我们的目标客户是大中型企业，我们认为它们可以从我们的统一平台中受益最多，该平台可以验证和协调来自多个遗留产品、应用程序和模块的财务和运营数据。我们的销售和营销组织通过多个面对面和虚拟渠道与潜在客户互动，并为他们提供用户会议、平台演示、应用指南、白皮书、网络研讨会、演示和其他内容，以加速他们对我们平台的理解并推动更大程度的采用。我们高度专注于通过专门的客户成功经理支持客户部署、采用和使用我们的平台。
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此外，我们拥有一个强大的生态系统，由全球250多个进入市场、实施和开发的合作伙伴组成。我们的合作伙伴是潜在客户的重要来源，并为我们提供训练有素的OneStream认证实施专业人员网络。例如，我们与精品咨询公司和大型咨询公司中的专门团队合作，这些公司围绕为客户设计和实施OneStream平台建立了整个服务实践。我们还与埃森哲、IBM、毕马威和普华永道等全球战略咨询公司和全球系统集成商合作，将我们的平台介绍给他们的客户，作为大型数字转型项目以及金融和商业项目的一部分，在这些项目中，我们的平台可以帮助加快业务计划和改善用户体验。我们与全球系统集成商的伙伴关系在我们最近的增长中发挥了越来越重要的作用，我们预计这一趋势将继续下去。我们打算在培训和培养与合作伙伴的关系方面进行额外的投资。
除了我们的核心解决方案之外，我们还通过OneStream Solution Exchange提供越来越多的OneStream和第三方开发的应用程序。这些应用程序将我们平台的价值从首席财务官办公室的核心财务报告和规划扩展到运营边缘，为各种业务用户（包括财务、销售、营销、运营、人力资源和IT专业人员）提供工作流程。OneStream开发的应用程序可供我们客户的现有用户免费使用，尽管我们未来可能会对某些OneStream开发的应用程序收费。合作伙伴开发的应用程序最初于2023年在OneStream Solution Exchange上推出，由各自的合作伙伴定价，并通过未来的收入分成安排反映了长期收入机会。
我们的商业模式以最大化客户关系的终生价值为中心。我们在订阅期内按比例确认SaaS合同的收入。当我们的软件首次向客户提供时或在许可证期限开始时(如果较晚)，我们确认我们基于期限和永久许可证的大部分收入，其余收入可归因于在合同期限内按比例确认的维护和支持费用。一般来说，在合同的第一年，客户获取成本和与获得新客户相关的其他前期成本要高得多，尽管分配给客户维护和支持的销售佣金要在五年内摊销。在客户关系的整个生命周期中，我们还会产生与追加销售和扩大访问我们平台的用户数量相关的销售和营销成本。然而，这些成本占收入的百分比明显低于最初为获得客户而产生的成本。因此，客户在任何特定时期对我们业务的盈利能力在一定程度上取决于客户成为订户的时间长短以及它在多大程度上扩大了我们平台的用户数量。
我们专注于长期收入潜力。我们相信我们的市场机会很大，我们将继续大力投资扩大组织职能，以发展我们的国内和国际业务。我们的持续增长在一定程度上取决于我们在组织所有部门培养生产力的员工队伍以支持我们不断扩大的运营的能力，在一定程度上取决于我们在我们的平台上成功引入新的和增强的核心解决方案和应用程序的能力。因此，我们打算继续有效投资发展我们的业务，以利用我们广阔的市场机会，同时继续专注于正现金流。
自2012年首次推出平台以来，我们实现了快速增长。截至2024年9月30日和2023年9月30日的三个月，我们的软件收入分别为12250万美元和9890万美元，同比增长24%。截至2024年9月30日和2023年9月30日的九个月，我们的软件收入分别为33440万美元和24830万美元，同比增长35%。截至2024年9月30日和2023年9月30日的三个月内，我们分别出现净亏损24930万美元和净利润680万美元，截至2024年和2023年9月30日的九个月内，我们分别出现净亏损26220万美元和3170万美元。截至2024年9月30日和2023年9月30日，我们分别拥有1，534和1，305名客户，同比增长18%。我们将客户定义为截至计量日具有有效合同的实体;拥有多个部门、部门或子公司的组织可能会算作多个客户。
最新发展动态
重组交易
本报告中讨论的运营结果包括OneStream Software LLC在重组交易完成之前的运营结果以及OneStream，Inc.重组交易完成后，包括OneStream Software LLC。因此，未经审计的简明合并财务数据可能无法准确指示如果重组交易在所列期间开始时完成，我们的实际业绩将会是什么，或者我们未来的运营业绩可能是什么。有关更多信息，请参阅OneStream，Inc.的注释1“业务组织和描述”。本报告第一部分第1项包含的未经审计简明合并财务报表。
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影响我们业绩的因素
我们相信我们未来的表现将取决于许多因素，包括下文所述的因素。虽然这些领域带来了重大机遇，但也带来了我们必须设法取得成功成果的风险。请参阅标题为“风险因素”的部分。如果我们无法应对这些挑战，我们的业务和经营业绩可能会受到不利影响。
获取新客户
我们软件收入同比增长的最重要驱动力是前12个月新客户的签约。我们的运营和增长结果在一定程度上取决于我们吸引新客户的能力，我们相信有一个重要的机会来扩大我们的客户基础。我们主要依靠我们的营销努力、直销队伍和进入市场的合作伙伴来吸引新客户。我们未来实现显著收入增长的能力将取决于我们能否有效地吸引、留住和培训国内和国际销售人员，特别是具有向大型企业销售经验的销售人员。随着我们越来越依赖合作伙伴来支持我们平台的实施和应用程序的交付，发展、教育和培育我们的合作伙伴生态系统对我们获得客户也是至关重要的。我们相信，富有成效的合作伙伴生态系统会加速采用我们的平台，并实现更高效的实施。我们打算继续投资于扩大我们的伙伴关系生态系统，并加强对我们现有合作伙伴的教育和培训。
客户成功
我们推动增长和产生增量收入的能力在很大程度上取决于我们保留客户和增加平台用户数量的能力。我们的目标是100%的客户成功，这推动了我们所做的一切。此外，我们的许多客户可以作为潜在新客户的参考，推动未来的收入增长。我们分配客户成功和客户支持资源，以最大限度地保留和扩大订阅收入。我们还利用我们的实施合作伙伴网络，提供训练有素且经过OneStream认证的实施专业人员来推动客户成功。
在我们现有客户群中的扩张
我们的许多客户最初针对特定用例和用户部署我们的平台，通常是在财务组织内。我们的初始合同价值相对于行业中的许多合同价值往往较高，反映了我们平台的综合性，以及其部署允许客户更换多个遗留系统的事实。一旦客户意识到我们平台的好处和广泛适用性，他们通常会分阶段为新用例和其他用户（包括财务组织之外的用户）实施额外的核心解决方案和应用程序。随着我们的客户群不断扩大，我们平台的每一位成功采用者都是增加更多用户和产生增量收入的机会。因此，我们继续投资于客户成功的努力，帮助客户充分发挥我们平台的潜力，从而随着时间的推移扩大我们平台的用户数量。
特别是，与大型企业的客户关系导致我们业务模式的规模和运营杠杆。与小型客户相比，大型企业客户为我们扩大平台上的用户数量提供了更大的机会，因为这些客户的预算更大、潜在用例范围更广，并且随着时间的推移，将新工作负载迁移到我们平台的潜力更大。
国际扩张
截至2024年9月30日和2023年9月30日的三个月，来自美国以外客户的收入分别占我们总收入的29%和27%，截至2024年9月30日和2023年9月30日的九个月均占30%。除了在美国设有办事处和客户外，我们还在澳大利亚、欧洲和新加坡设有办事处，我们的客户分布在大约45个国家/地区。我们相信发展我们的国际业务存在重大机会，并计划继续投资于人员、办公空间、营销和数据中心能力，以支持我们的国际增长。
创新和推进我们的平台
我们打算继续投资于我们的研发，以扩展和增强我们平台的功能和能力，以推动CFO办公室内部和财务组织以外的用户进一步采用。我们打算通过扩展其核心解决方案、开发新应用程序和发展OneStream Solution Exchange来继续增强我们平台的性能、功能和用户体验，以保持和扩大我们的技术领先地位。我们还继续专注于投资人工智能支持的预测和自动化解决方案，以开发我们的首个机器学习驱动的应用程序为基础
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2017年，我们于2019年推出了预测金融信号核心解决方案和交易匹配应用程序，并于2022年商业发布了我们的首个支持人工智能的应用程序Sensible ML。
订阅收入和许可收入的混合
我们的总收入受到订阅收入和许可收入组合变化的影响。在截至2024年9月30日的三个月中，订阅收入和许可证收入分别占我们总收入的86%和9%，而截至2023年9月30日的三个月分别为74%和18%。在截至2024年9月30日的9个月中，订阅收入和许可证收入分别占我们总收入的87%和7%，而截至2023年9月30日的三个月分别为79%和12%。我们的大部分收入来自销售我们平台的访问权限，主要是根据我们作为订阅收入入账的SaaS合同。自2023年以来，SaaS合同已占我们新客户合同的90%以上。除了SaaS合同，订阅收入还包括云计算服务费以及我们基于期限和永久许可的软件的客户支持和维护。我们在合同期限内按比例确认SaaS合同、客户支持和软件维护的收入。在2020年推出我们的基于SaaS的模式之前，我们以基于期限或永久许可的方式出售对我们平台的访问权限，我们将这些许可作为许可收入进行核算。我们在我们的软件首次向客户提供时或在许可期限开始时确认许可收入(如果晚些时候)。有关我们的订阅收入和许可证收入组成部分的其他信息，请参阅标题为“-运营结果的组成部分-订阅收入”和“-许可证收入”的部分。
运营结果的组成部分
收入
我们的大部分收入来自出售我们平台的访问权限，无论是根据我们计入订阅收入的SaaS合同，还是根据我们计入许可收入的永久或基于期限的软件许可证。订阅收入还包括云计算服务费以及与软件许可证相关的维护和支持。我们还从销售专业服务（包括咨询、实施和配置服务以及培训）中获得收入，但我们越来越多地利用合作伙伴来提供这些服务。
订阅收入
订阅收入主要由客户数量、每个客户的用户数量、订阅价格和续订费率驱动。订阅收入包括SaaS合同、云计算服务费和合同后客户支持（PCS）的收入。
与客户的SaaS安排使客户能够在合同期内持续访问我们的托管平台。SaaS收入在自提供平台访问之日起的合同期内按比例确认，与SaaS订阅的控制权移交给客户一致。
云计算服务费由选择每月订阅我们提供的云托管服务来安装和访问其许可软件而不是自己管理的客户支付。我们的绩效义务是在合同期内以消费为基础提供云计算服务，收到的对价基于客户消费。我们在使用云计算服务时每月开具云计算服务发票。
PCS包括未指定的技术增强、客户支持和许可软件的维护。我们从向客户提供服务之日起，在安排的合同期限内按比例确认PCS的收入，与客户的受益模式一致。
许可证收入
许可证收入主要由客户数量、每个客户的用户数量、用户许可证价格和续订率驱动。许可证收入包括来自我们的期限和永久软件许可证（统称为许可软件）的许可证收入。我们履行我们的绩效义务并在客户能够使用并受益于软件的时间点确认许可软件的收入，这通常是在该软件首次向客户提供时或在许可期限开始时（如果较晚）。基于期限的许可软件的客户合同的典型期限为三年，通常在合同期内每年年初向客户开具等值的年度分期付款发票。
27
专业服务和其他收入
专业服务和其他收入包括与执行和咨询服务及培训有关的费用。专业服务不会导致软件的大量定制，因此被认为是独特的。大部分专业服务合同是按时间和材料提供的，我们在履行服务时间时确认相关收入。对于时间和材料项目，我们在工作发生时开具服务发票。根据参与范围的不同，客户实施的每个阶段通常需要一到六个月的时间才能完成，大多数客户都会完成几个实施阶段，以充分利用我们的平台并在其整个组织中扩大其使用范围。由于我们合同安排中的项目里程碑以及它们如何与客户的实施项目时间表相匹配，以及我们利用我们的合作伙伴提供这些服务的程度，专业服务收入可能会逐季波动。
收入成本
订阅收入成本
订阅收入成本包括与云计算服务和支持客户相关的成本。这些费用主要包括第三方直接服务器和云存储成本以及与提供产品支持相关的员工薪酬成本。
专业服务成本和其他收入
专业服务成本和其他收入主要包括与软件实施直接相关的费用以及培训客户和合作伙伴的费用。这些费用主要包括与实施和培训服务相关的员工补偿费用。随着我们继续投资于增长，我们预计专业服务和其他收入的成本将会波动，但由于我们的软件收入增长以及我们利用不断增长的合作伙伴网络提供实施服务的战略，我们预计其占收入的百分比将会下降。提供专业服务的成本历来高于我们产生的相关收入，因为我们使用专业服务来帮助推动客户成功并建立训练有素的合作伙伴和客户的生态系统。
毛利润和毛利率;软件毛利润和软件毛利率
毛利等于营收减去营收成本，毛利占总收入的百分比称为毛利。我们的软件毛利，即软件收入减去订阅成本，在截至2024年和2023年9月30日的三个月分别为9,010美元万和7,950美元万，在截至2024年和2023年9月30日的九个月分别为25240美元万和19500美元万。我们的毛利率从截至2023年9月30日的三个月的72%下降到截至2024年9月30日的三个月的50%，从截至2023年9月30日的九个月的69%下降到截至2024年9月30日的九个月的62%，而我们的软件毛利率(软件毛利率占软件收入的百分比)在截至2024年9月30日和2023年9月30日的三个月分别为74%和80%，在截至2024年9月30日和2023年9月30日的九个月分别为75%和79%。毛利率和软件毛利率一直并将继续受到各种因素的影响，包括SaaS合同和基于期限的许可证的收入组合、我们获得新客户的时机以及向现有客户续订和扩大销售、支持和维护、与运营我们平台相关的成本、我们扩大客户支持团队的程度，以及我们可以通过技术改进提高技术和基础设施的效率。此外，我们还受益于一种混合方法，在这种方法中，我们改进了我们的云计算合同和模式，使我们的成本结构具有更大的灵活性，并提高了我们产品的效率。我们预计，随着总收入和软件收入的增加，我们的毛利润和软件毛利润将以绝对值计算也会增加。
运营费用
运营费用包括销售和营销、研发以及一般和行政费用。人员成本是我们运营费用中最重要的组成部分，包括工资、销售佣金、福利、奖金和股权薪酬。运营费用还包括分配的管理费用。
销售和市场营销
销售和营销费用主要包括与我们的销售和营销人员相关的人员相关成本，包括工资、福利、递延佣金摊销、可变薪酬和股权薪酬。销售和营销
28
费用还包括广告成本、宣传材料和活动，包括我们每两年一度的OneStream Splash全球用户会议、旅行和娱乐、运营租赁成本和相关办公室费用、为销售和营销目的而签订的外部服务、软件和其他订阅费以及分配的管理费用。随着我们继续发展业务，我们计划在可预见的未来增加对销售和营销的投资，这主要是由于增加员工人数以及增加促销活动和产品营销工作的支出。然而，随着我们从业务规模中受益，我们预计销售和营销费用占总收入的百分比将随着时间的推移而下降，尽管它们占总收入的百分比可能会在不同时期波动。
研究与开发
研发费用主要包括与研发人员相关的人事支出，包括工资、福利、可变薪酬和基于股权的薪酬。研发费用还包括外部服务、专供我们研发职能使用的云托管和计算成本、运营租赁成本和相关办公费用、软件和其他订阅、会费和分配的管理费用。我们已经并打算继续投资于开发技术，以支持我们的增长。我们计划在可预见的未来增加我们在研究和开发方面的投资，因为我们将继续增长我们的业务，无论是绝对基础上还是占我们总收入的百分比。研发费用的预期增长主要是由于我们专注于进一步开发我们的平台，尽管我们的研发费用占我们总收入的百分比可能会在不同时期波动。
一般及行政
一般和行政费用主要包括与我们的行政、财务、法律、人力资源和其他支持人员相关的人员相关成本，包括工资、福利、股权薪酬和可变薪酬。一般和行政费用还包括专门用于我们一般行政职能的外部服务、软件和其他订阅和会费、经营租赁成本和相关办公室费用、差旅和娱乐、其他企业费用和分配的管理费用。
由于作为上市公司运营和Up-C结构，我们产生了额外费用，包括遵守适用于在国家证券交易所上市公司的规则和法规的成本、与合规和报告义务相关的成本，以及保险、投资者关系和专业服务的增加费用。我们预计，随着业务的增长，我们的一般和行政费用将增加，但随着我们从业务规模中受益，占总收入的百分比将随着时间的推移而下降，尽管它们占总收入的百分比可能会在不同时期波动。
29
经营成果
下表列出了我们所列期间的综合经营报表数据：
|
|
截至9月30日的三个月， |
|
|
截至9月30日的9个月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(单位：千) |
|
|||||||||||||
收入： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
订阅 |
|
$ |
110,722 |
|
|
$ |
79,419 |
|
|
$ |
309,542 |
|
|
$ |
215,340 |
|
许可证 |
|
|
11,734 |
|
|
|
19,495 |
|
|
|
24,818 |
|
|
|
32,939 |
|
专业服务和其他 |
|
|
6,684 |
|
|
|
8,090 |
|
|
|
22,572 |
|
|
|
24,048 |
|
总收入 |
|
|
129,140 |
|
|
|
107,004 |
|
|
|
356,932 |
|
|
|
272,327 |
|
收入成本： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
订阅(1) |
|
|
32,386 |
|
|
|
19,366 |
|
|
|
82,007 |
|
|
|
53,247 |
|
专业服务和其他(1) |
|
|
32,015 |
|
|
|
10,159 |
|
|
|
53,397 |
|
|
|
30,769 |
|
收入总成本 |
|
|
64,401 |
|
|
|
29,525 |
|
|
|
135,404 |
|
|
|
84,016 |
|
毛利 |
|
|
64,739 |
|
|
|
77,479 |
|
|
|
221,528 |
|
|
|
188,311 |
|
运营费用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
销售和市场营销(1) |
|
|
162,700 |
|
|
|
42,226 |
|
|
|
263,225 |
|
|
|
136,241 |
|
研发(1), (2) |
|
|
83,040 |
|
|
|
13,859 |
|
|
|
119,916 |
|
|
|
39,614 |
|
一般和行政(1) |
|
|
74,170 |
|
|
|
14,391 |
|
|
|
110,509 |
|
|
|
43,176 |
|
总运营支出 |
|
|
319,910 |
|
|
|
70,476 |
|
|
|
493,650 |
|
|
|
219,031 |
|
运营亏损 |
|
|
(255,171 |
) |
|
|
7,003 |
|
|
|
(272,122 |
) |
|
|
(30,720 |
) |
利息收入，净 |
|
|
5,022 |
|
|
|
1,133 |
|
|
|
8,319 |
|
|
|
2,702 |
|
其他收入（费用），净额 |
|
|
772 |
|
|
|
(1,072 |
) |
|
|
2,263 |
|
|
|
(2,894 |
) |
所得税前（损失）收入 |
|
|
(249,377 |
) |
|
|
7,064 |
|
|
|
(261,540 |
) |
|
|
(30,912 |
) |
所得税（福利）准备金 |
|
|
(32 |
) |
|
|
300 |
|
|
|
614 |
|
|
|
770 |
|
净（损失）收入 |
|
$ |
(249,345 |
) |
|
$ |
6,764 |
|
|
$ |
(262,154 |
) |
|
$ |
(31,682 |
) |
减去：非控股权益应占净亏损 |
|
|
(77,402 |
) |
|
|
— |
|
|
|
(77,402 |
) |
|
|
— |
|
应占OneStream，Inc.的净（亏损）收入 |
|
$ |
(171,943 |
) |
|
$ |
6,764 |
|
|
$ |
(184,752 |
) |
|
$ |
(31,682 |
) |
|
|
截至9月30日的三个月， |
|
|
截至9月30日的9个月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(单位：千) |
|
|||||||||||||
订阅费用 |
|
$ |
4,981 |
|
|
$ |
— |
|
|
$ |
4,981 |
|
|
$ |
— |
|
专业服务和其他费用 |
|
|
21,886 |
|
|
|
— |
|
|
|
21,886 |
|
|
|
15 |
|
销售和市场营销 |
|
|
114,713 |
|
|
|
459 |
|
|
|
115,987 |
|
|
|
3,582 |
|
研发 |
|
|
62,251 |
|
|
|
104 |
|
|
|
63,505 |
|
|
|
413 |
|
一般和行政 |
|
|
56,152 |
|
|
|
864 |
|
|
|
57,456 |
|
|
|
3,077 |
|
股权薪酬总额 |
|
$ |
259,983 |
|
|
$ |
1,427 |
|
|
$ |
263,815 |
|
|
$ |
7,087 |
|
30
下表列出了我们本期经营业绩占总收入百分比的组成部分：
|
|
截至9月30日的三个月， |
|
|
截至9月30日的9个月， |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
收入： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
订阅 |
|
|
86 |
% |
|
|
74 |
% |
|
|
87 |
% |
|
|
79 |
% |
许可证 |
|
|
9 |
|
|
|
18 |
|
|
|
7 |
|
|
|
12 |
|
专业服务和其他 |
|
|
5 |
|
|
|
8 |
|
|
|
6 |
|
|
|
9 |
|
总收入 |
|
|
100 |
|
|
|
100 |
|
|
|
100 |
|
|
|
100 |
|
收入成本： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
订阅 |
|
|
25 |
|
|
|
18 |
|
|
|
23 |
|
|
|
20 |
|
专业服务和其他 |
|
|
25 |
|
|
|
9 |
|
|
|
15 |
|
|
|
11 |
|
收入总成本 |
|
|
50 |
|
|
|
28 |
|
|
|
38 |
|
|
|
31 |
|
毛利率 |
|
|
50 |
|
|
|
72 |
|
|
|
62 |
|
|
|
69 |
|
运营费用： |
|
|
|
|
|
|
|
|
|
|
|
|
||||
销售和市场营销 |
|
|
126 |
|
|
|
39 |
|
|
|
74 |
|
|
|
50 |
|
研发 |
|
|
64 |
|
|
|
13 |
|
|
|
34 |
|
|
|
15 |
|
一般和行政 |
|
|
57 |
|
|
|
13 |
|
|
|
31 |
|
|
|
16 |
|
总运营支出 |
|
|
248 |
|
|
|
66 |
|
|
|
138 |
|
|
|
80 |
|
运营亏损 |
|
|
(198 |
) |
|
|
7 |
|
|
|
(76 |
) |
|
|
(11 |
) |
利息收入，净 |
|
|
4 |
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
其他收入（费用），净额 |
|
|
1 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
(1 |
) |
所得税前（损失）收入 |
|
|
(193 |
) |
|
|
7 |
|
|
|
(73 |
) |
|
|
(11 |
) |
所得税（福利）准备金 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
净（损失）收入 |
|
|
(193 |
) |
|
|
6 |
|
|
|
(73 |
) |
|
|
(12 |
) |
减去：非控股权益应占净亏损 |
|
|
(60 |
) |
|
|
— |
|
|
|
(22 |
) |
|
|
— |
|
应占OneStream，Inc.的净（亏损）收入 |
|
|
(133 |
)% |
|
|
6 |
% |
|
|
(52 |
)% |
|
|
(12 |
)% |
* 由于四舍五入，收入百分比总额可能不相加。
截至2024年9月30日与2023年9月30日的三个月比较
收入
|
|
截至9月30日的三个月， |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
|
|||
|
|
(单位：千) |
|
|
|
|
||||||
订阅 |
|
$ |
110,722 |
|
|
$ |
79,419 |
|
|
|
39 |
% |
许可证 |
|
|
11,734 |
|
|
|
19,495 |
|
|
|
(40 |
) |
专业服务和其他 |
|
|
6,684 |
|
|
|
8,090 |
|
|
|
(17 |
) |
总收入 |
|
$ |
129,140 |
|
|
$ |
107,004 |
|
|
|
21 |
|
截至2024年9月30日止三个月的总收入为12910万美元，而截至2023年9月30日止三个月的总收入为10700万美元，增加了2210万美元，即21%。
截至2024年9月30日的三个月，订阅收入为11070万美元，占总收入的86%，而截至2023年9月30日的三个月，订阅收入为7940万美元，占总收入的74%。订阅收入增加3130万美元（39%），主要是由于收购新客户和现有客户扩大对我们平台的使用。
31
截至2024年9月30日的三个月，许可证收入为1170万美元，占总收入的9%，而截至2023年9月30日的三个月，许可证收入为1950万美元，占总收入的18%。许可证收入减少780万美元（即40%），主要是由于我们持续从基于许可证的模式转向基于SaaS的模式。截至2024年9月30日的三个月内，我们的大部分收入来自SaaS合同的客户，我们预计随着时间的推移，SaaS合同的收入在我们总收入中所占的比例将越来越大。
截至2024年9月30日的三个月，专业服务和其他收入为670万美元，占总收入的5%，而截至2023年9月30日的三个月，专业服务和其他收入为810万美元，占总收入的8%。减少140万美元（即17%）主要是由于我们利用不断增长的合作伙伴网络为客户提供实施服务和时机的战略推动的’ 实施项目。
收入成本
|
|
截至9月30日的三个月， |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
|
|||
|
|
(单位：千) |
|
|
|
|
||||||
订阅 |
|
$ |
32,386 |
|
|
$ |
19,366 |
|
|
|
67 |
% |
专业服务和其他 |
|
|
32,015 |
|
|
|
10,159 |
|
|
NM |
|
|
收入总成本 |
|
$ |
64,401 |
|
|
$ |
29,525 |
|
|
NM |
|
|
num =没有意义。
截至2024年9月30日的三个月，收入总成本为6440万美元，而截至2023年9月30日的三个月为2950万美元，增加了3490万美元。
截至2024年9月30日的三个月，订阅收入成本为3,240美元万，而截至2023年9月30日的三个月为1,940美元万，增加了1,300美元万，或67%.订阅收入成本的增加主要是由于第三方直接服务器和云存储成本增加了600美元万以满足更高的客户需求，以及员工薪酬成本增加了600美元万，这是由于基于股权的薪酬支出增加了500美元万。2024年第三季度股权薪酬支出的增加主要是由于2024年7月修改了根据2019年计划授予的未偿还共同单位期权的条款，以取消没收条款，这取决于重组交易的完成，我们将其称为期权修改。在首次公开招股之前，我们没有确认这些未偿还期权的基于股权的补偿费用，因为它们受到此类没收条款的约束。于完成重组交易后，我们确认在该日期之前已归属的根据2019年计划授予的期权的基于股权的补偿支出，并在截至第三季度末，继续确认继续归属的期权的基于股权的补偿支出。
截至2024年9月30日的三个月，专业服务和其他收入成本为3200万美元，而截至2023年9月30日的三个月为1020万美元，增加了2190万美元。专业服务成本和其他收入的增加主要是由于员工薪酬成本增加2190万美元，这是由于主要与期权修改相关的股权薪酬费用推动的。
毛利和毛利率
|
|
截至9月30日的三个月， |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
|
|||
|
|
（美元单位：千） |
|
|
|
|
||||||
软件毛利润 |
|
$ |
90,070 |
|
|
$ |
79,548 |
|
|
|
13 |
% |
专业服务和其他毛利润 |
|
|
(25,331 |
) |
|
|
(2,069 |
) |
|
NM |
|
|
毛利总额 |
|
$ |
64,739 |
|
|
$ |
77,479 |
|
|
|
(16 |
) |
软件毛利率 |
|
|
74 |
% |
|
|
80 |
% |
|
|
|
|
专业服务及其他毛利 |
|
|
(379 |
) |
|
|
(26 |
) |
|
|
|
|
总毛利率 |
|
|
50 |
|
|
|
72 |
|
|
|
|
|
num =没有意义。
截至2024年9月30日的三个月毛利润为6470万美元，而截至2023年9月30日的三个月毛利润为7750万美元，减少了1270万美元，即16%。毛利润下降主要是由于
32
由于期权修改和许可证收入减少780万美元，基于股权的补偿费用为2690万美元，这部分被收购新客户和现有客户扩大对我们平台的使用所部分抵消。
截至2024年9月30日的三个月毛利率为50%，而截至2023年9月30日的三个月毛利率为72%。毛利率下降主要是由于期权修改和销售组合导致的股权薪酬费用增加。
运营费用
|
|
截至9月30日的三个月， |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
||
|
|
（美元单位：千） |
|
|
|
|||||
运营费用： |
|
|
|
|
|
|
|
|
||
销售和市场营销 |
|
$ |
162,700 |
|
|
$ |
42,226 |
|
|
NM |
研发 |
|
|
83,040 |
|
|
|
13,859 |
|
|
NM |
一般和行政 |
|
|
74,170 |
|
|
|
14,391 |
|
|
NM |
总运营支出 |
|
$ |
319,910 |
|
|
$ |
70,476 |
|
|
NM |
占总收入的百分比： |
|
|
|
|
|
|
|
|
||
销售和市场营销 |
|
|
126 |
% |
|
|
39 |
% |
|
|
研发 |
|
|
64 |
|
|
|
13 |
|
|
|
一般和行政费用 |
|
|
57 |
|
|
|
13 |
|
|
|
num =没有意义。
销售和市场营销
截至2024年9月30日止三个月的销售和营销费用为16270万美元，而截至2023年9月30日止三个月的销售和营销费用为4220万美元，增加了12050万美元。这一增长主要是由于员工成本增加11760万美元（主要与期权修改有关）、员工人数增加以及外部服务和软件订阅增加180万美元的股票薪酬费用增加有关。
研究与开发
截至2024年9月30日止三个月的研发费用为8300万美元，而截至2023年9月30日止三个月的研发费用为1390万美元，增加了6920万美元。这一增长主要是由于员工薪酬成本增加6800万美元，这与基于股权的薪酬费用增加6210万美元（主要与期权修改有关）以及员工人数增加有关。
一般及行政
截至2024年9月30日的三个月，一般和行政费用为7420万美元，而截至2023年9月30日的三个月为1440万美元，增加了5980万美元。这一增长主要是由于员工薪酬成本增加5780万美元（主要与期权修改有关）、员工人数增加以及2024年第三季度发生的IPO相关成本230万美元，导致员工薪酬成本增加5530万美元。
其他收入和支出
利息收入，净
|
|
截至9月30日的三个月， |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
||
|
|
(单位：千) |
|
|
|
|||||
利息收入，净 |
|
$ |
5,022 |
|
|
$ |
1,133 |
|
|
NM |
num =没有意义。
33
截至2024年9月30日止三个月的净利息收入为500万美元，而截至2023年9月30日止三个月的净利息收入为110万美元，增加了390万美元。净利息收入的增加是由于平均现金和现金等值物余额增加。
其他收入（NPS），净
|
|
截至9月30日的三个月， |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
||
|
|
(单位：千) |
|
|
|
|||||
其他收入（费用），净额 |
|
$ |
772 |
|
|
$ |
(1,072 |
) |
|
NM |
num =没有意义。
截至2024年9月30日的三个月，其他收入净为70万美元，主要包括外币收益。截至2023年9月30日的三个月，其他费用净额为110万美元，主要包括外币损失。
（福利）所得税拨备
|
|
截至9月30日的三个月， |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
||
|
|
(单位：千) |
|
|
|
|||||
所得税（福利）准备金 |
|
$ |
(32 |
) |
|
$ |
300 |
|
|
NM |
num =没有意义。
截至2024年9月30日止三个月的所得税拨备并不重大，截至2023年9月30日止三个月的所得税拨备为30万美元。所得税拨备主要包括我们开展业务的某些外国和州司法管辖区的所得税。截至2023年9月30日的三个月内，我们没有缴纳或准备联邦所得税，因为OneStream Software LLC被视为美国联邦所得税的合伙企业。截至2024年9月30日的三个月，我们的全额估值津贴抵消了美国联邦所得税。
截至2024年9月30日和2023年9月30日的九个月比较
收入
|
|
截至9月30日的9个月， |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
更改百分比 |
|
|||
|
|
(单位：千) |
|
|
|
|
||||||
订阅 |
|
$ |
309,542 |
|
|
$ |
215,340 |
|
|
|
44 |
% |
许可证 |
|
|
24,818 |
|
|
|
32,939 |
|
|
|
(25 |
) |
专业服务和其他 |
|
|
22,572 |
|
|
|
24,048 |
|
|
|
(6 |
) |
总收入 |
|
$ |
356,932 |
|
|
$ |
272,327 |
|
|
|
31 |
|
截至2024年9月30日止九个月的总收入为35690万美元，而截至2023年9月30日止九个月的总收入为27230万美元，增加了8460万美元，即31%。
截至2024年9月30日的九个月，订阅收入为30950万美元，占总收入的87%，而截至2023年9月30日的九个月，订阅收入为21530万美元，占总收入的79%。订阅收入增加9420万美元（44%），主要是由于收购新客户和现有客户扩大对我们平台的使用。
License revenue was $24.8 million, or 7% of total revenue, for the nine months ended September 30, 2024 compared to $32.9 million, or 12% of total revenue, for the nine months ended September 30, 2023. The decrease of $8.1 million, or 25%, in license revenue was primarily driven by our continued shift to a SaaS-based model from our license-based model. We generated the majority of our revenue for the nine months ended September 30, 2024 and 2023 from customers on SaaS contracts, and we expect revenue from our SaaS contracts to make up an increasing portion of our total revenue over time.
Professional services and other revenue was $22.6 million, or 6% of total revenue, for the nine months ended September 30, 2024 compared to $24.0 million, or 9% of total revenue, for the nine months ended September 30, 2023. The decrease of $1.5 million was
34
primarily driven by our strategy of leveraging our growing partner network to provide implementation services and timing of our customers’ implementation projects.
Cost of Revenues
|
|
Nine Months Ended September 30, |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|||
|
|
(in thousands) |
|
|
|
|
||||||
Subscription |
|
$ |
82,007 |
|
|
$ |
53,247 |
|
|
|
54 |
% |
Professional services and other |
|
|
53,397 |
|
|
|
30,769 |
|
|
|
74 |
|
Total cost of revenue |
|
$ |
135,404 |
|
|
$ |
84,016 |
|
|
|
61 |
|
Total cost of revenue was $135.4 million for the nine months ended September 30, 2024 compared to $84.0 million for the nine months ended September 30, 2023, an increase of $51.4 million, or 61%.
Cost of subscription revenue was $82.0 million for the nine months ended September 30, 2024 compared to $53.2 million for the nine months ended September 30, 2023, an increase of $28.8 million, or 54%. The increase in cost of subscription revenue was primarily due to an increase in third-party direct server and cloud storage costs of $19.2 million to accommodate higher customer demand and an increase in employee compensation costs of $7.5 million, driven by equity-based compensation expense of $5.0 million, primarily related to the Option Modification, higher headcount, and an increase in outside services and subscriptions of $1.8 million.
Cost of professional services and other revenue was $53.4 million for the nine months ended September 30, 2024 compared to $30.8 million for the nine months ended September 30, 2023, an increase of $22.6 million, or 74%. The increase in cost of professional services and other revenue was primarily due to an increase in employee compensation costs of $21.9 million, driven by equity-based compensation expense of $21.9 million, primarily related to the Option Modification.
Gross Profit and Gross Margin
|
|
Nine Months Ended September 30, |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|||
|
|
(dollars in thousands) |
|
|
|
|
||||||
Software gross profit |
|
$ |
252,353 |
|
|
$ |
195,032 |
|
|
|
29 |
% |
Professional services and other gross profit |
|
|
(30,825 |
) |
|
|
(6,721 |
) |
|
NM |
|
|
Total gross profit |
|
$ |
221,528 |
|
|
$ |
188,311 |
|
|
|
18 |
|
Software gross margin |
|
|
75 |
% |
|
|
79 |
% |
|
|
|
|
Professional services and other gross margin |
|
|
(137 |
) |
|
|
(28 |
) |
|
|
|
|
Total gross margin |
|
|
62 |
|
|
|
69 |
|
|
|
|
|
NM = Not Meaningful.
Gross profit was $221.5 million for the nine months ended September 30, 2024 compared to $188.3 million for the nine months ended September 30, 2023, an increase of $33.2 million, or 18%. The increase in gross profit was primarily the result of the acquisition of new customers and existing customers expanding their use of our platform, partially offset by the increase in equity-based compensation expense of $26.9 million.
Gross margin was 62% for the nine months ended September 30, 2024 compared to 69% for the nine months ended September 30, 2023. The decrease in gross margin was primarily driven by the increase in equity-based compensation expense and sales mix.
35
Operating Expenses
|
|
Nine Months Ended September 30, |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
||
|
|
(dollars in thousands) |
|
|
|
|||||
Operating expenses: |
|
|
|
|
|
|
|
|
||
Sales and marketing |
|
$ |
263,225 |
|
|
$ |
136,241 |
|
|
NM |
Research and development |
|
|
119,916 |
|
|
|
39,614 |
|
|
NM |
General and administrative |
|
|
110,509 |
|
|
|
43,176 |
|
|
NM |
Total operating expenses |
|
$ |
493,650 |
|
|
$ |
219,031 |
|
|
NM |
Percentage of total revenue: |
|
|
|
|
|
|
|
|
||
Sales and marketing |
|
|
74 |
% |
|
|
50 |
% |
|
|
Research and development |
|
|
34 |
|
|
|
15 |
|
|
|
General and administrative expenses |
|
|
31 |
|
|
|
16 |
|
|
|
NM = Not Meaningful.
Sales and Marketing
Sales and marketing expenses were $263.2 million for the nine months ended September 30, 2024 compared to $136.2 million for the nine months ended September 30, 2023, an increase of $127.0 million. The increase was primarily driven by an increase in employee compensation costs of $117.5 million, related to higher equity-based compensation expense of $112.4 million, primarily related to the Option Modification, and higher headcount, and increases in outside services and software subscriptions of $8.7 million.
Research and Development
Research and development expenses were $119.9 million for the nine months ended September 30, 2024 compared to $39.6 million for the nine months ended September 30, 2023, an increase of $80.3 million. The increase was primarily driven by an increase in employee compensation costs of $75.1 million, related to higher equity-based compensation expense of $63.1 million, primarily related to the Option Modification, and higher headcount, and increases in outside services and software subscriptions of $2.5 million.
General and Administrative
General and administrative expenses were $110.5 million for the nine months ended September 30, 2024 compared to $43.2 million for the nine months ended September 30, 2023, an increase of $67.3 million,. The increase was primarily driven by an increase in employee compensation costs of $61.0 million related to higher equity-based compensation expense of $54.4 million, primarily related to the Option Modification, and higher headcount, IPO-related costs incurred in 2024 of $4.3 million, and increases in outside services and software subscription costs of $1.4 million.
Other Income and Expenses
Interest Income, Net
|
|
Nine Months Ended September 30, |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
||
|
|
(in thousands) |
|
|
|
|||||
Interest income, net |
|
$ |
8,319 |
|
|
$ |
2,702 |
|
|
NM |
NM = Not Meaningful.
36
Interest income, net was $8.3 million for the nine months ended September 30, 2024 compared to $2.7 million for the nine months ended September 30, 2023, an increase of $5.6 million. The increase in interest income, net was due to higher average cash and cash equivalent balances.
Other Income (Expense), net
|
|
Nine Months Ended September 30, |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
||
|
|
(in thousands) |
|
|
|
|||||
Other income (expense), net |
|
$ |
2,263 |
|
|
$ |
(2,894 |
) |
|
NM |
NM = Not Meaningful.
Other income, net was $2.3 million for the nine months ended September 30, 2024 compared to other expense, net of $2.9 million for the nine months ended September 30, 2023. Other income, net of $2.3 million for the nine months ended September 30, 2024 consists primarily of the gain on remeasurement of the previously held equity interest in DataSense of $2.4 million, partially offset by losses from foreign currency translation. Other expense, net of $2.9 million for the nine months ended September 30, 2023 consists primarily of $3.0 million of previously capitalized deferred costs associated with our prior IPO process that were impaired in the first quarter of 2023 and gains from foreign currency translation, partially offset by gains on marketable equity securities of $1.2 million.
Provision for Income Taxes
|
|
Nine Months Ended September 30, |
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|||
|
|
(in thousands) |
|
|
|
|
||||||
Provision for income taxes |
|
$ |
614 |
|
|
$ |
770 |
|
|
|
(20 |
)% |
Provision for income taxes was $0.6 million for the nine months ended September 30, 2024 compared to $0.8 million for the nine months ended September 30, 2023, a decrease of $0.2 million, or 20%. Provision for income taxes consists primarily of income taxes in certain foreign and state jurisdictions in which we conduct business. We did not pay or provide for federal income taxes for the nine months ended September 30, 2023 because OneStream Software LLC is treated as a partnership for U.S. federal income tax purposes. For the nine months ended September 30, 2024, we did not provide for federal income taxes because we maintain a full valuation allowance.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe that non-GAAP operating loss and free cash flow, the non-GAAP financial measures presented in this report, provide users of our financial information with additional useful information in evaluating our performance and liquidity and allows them to more readily compare our results across periods without the effect of non-cash items and other items as detailed below. Additionally, our management and board of directors use our non-GAAP financial measures to evaluate our performance and liquidity, identify trends and make strategic decisions.
There are limitations to the use of the non-GAAP financial measures presented in this report. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. Our non-GAAP financial measures should not be considered in isolation or as alternatives to income (loss) from operations, net cash provided by (used in) operating activities or any other measure of financial performance calculated and presented in accordance with GAAP.
Non-GAAP Operating Income (Loss)
We define non-GAAP operating income (loss) as loss from operations adjusted for non-cash, non-operational and non-recurring items, including equity-based compensation expense, employer taxes on employee stock transactions, and amortization of acquired intangible assets.
The principal limitation of non-GAAP operating income (loss) is that it excludes significant expenses and income that are required by GAAP to be recorded in our consolidated financial statements, including non-cash expenditures under contractual commitments, equity-based compensation expense, employer taxes on employee stock transactions, and amortization of acquired intangible assets and the impact of non-recurring charges that we do not consider to be indicative of our ongoing core operations.
37
The following table provides a reconciliation of non-GAAP operating income (loss) to the most directly comparable GAAP financial measure for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
(Loss) income from operations |
|
$ |
(255,171 |
) |
|
$ |
7,003 |
|
|
$ |
(272,122 |
) |
|
$ |
(30,720 |
) |
Equity-based compensation expense |
|
|
259,983 |
|
|
|
1,427 |
|
|
|
263,815 |
|
|
|
7,087 |
|
Employer taxes on employee stock transactions |
|
|
393 |
|
|
|
— |
|
|
|
393 |
|
|
|
— |
|
Amortization of acquired intangible assets |
|
|
275 |
|
|
|
— |
|
|
|
458 |
|
|
|
— |
|
Non-GAAP operating income (loss) |
|
$ |
5,480 |
|
|
$ |
8,430 |
|
|
$ |
(7,456 |
) |
|
$ |
(23,633 |
) |
Free Cash Flow
We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment.
The principal limitations of free cash flow are that it does not reflect our future capital commitments and it does not represent the total increase or decrease in our cash balance for a given period.
The following table provides a reconciliation of free cash flow to the most directly comparable GAAP financial measure for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(in thousands) |
|
|||||||||||||
Net cash provided by (used in) operating activities |
|
$ |
2,360 |
|
|
$ |
(4,372 |
) |
|
$ |
36,014 |
|
|
$ |
(5,530 |
) |
Purchases of property and equipment |
|
|
(1,077 |
) |
|
|
(923 |
) |
|
|
(2,177 |
) |
|
|
(2,367 |
) |
Free cash flow |
|
|
1,283 |
|
|
|
(5,295 |
) |
|
|
33,837 |
|
|
|
(7,897 |
) |
Net cash (used in) provided by investing activities |
|
$ |
(1,077 |
) |
|
$ |
(831 |
) |
|
$ |
(9,771 |
) |
|
$ |
84,972 |
|
Net cash provided by (used in) financing activities |
|
$ |
352,978 |
|
|
$ |
— |
|
|
$ |
351,933 |
|
|
$ |
(3,299 |
) |
Liquidity and Capital Resources
Sources and Uses of Funds
Since inception we have financed operations primarily through the sale of equity securities and payments received from our customers. As of September 30, 2024, our principal sources of liquidity were cash and cash equivalents of $495.5 million, which were held primarily for working capital purposes, and the undrawn portion of our credit facility of $150.0 million. Our cash and cash equivalents consisted of money market funds and bank deposits. We believe our existing cash and cash equivalents and available borrowings under our credit facility will be sufficient to meet our projected operating requirements and known contractual obligations for at least the next 12 months.
A substantial source of our cash is from our deferred revenue, as we generally invoice customers in equal annual installments at the beginning of each year within the contractual period. Deferred revenue, which is included on our consolidated balance sheets as a liability, consists of the unearned portion of billed fees for our subscriptions, which we recognize as revenue as our performance obligations are satisfied in accordance with our revenue recognition policy. As of September 30, 2024, we had deferred revenue of $210.0 million, of which $205.8 million is recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.
38
Our future capital requirements will depend on many factors, including our pace of growth, subscription renewal rates, the timing and extent of spend to support research and development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced platform offerings and the continuing market acceptance of the platform. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, technologies or intellectual property rights. We may be required to seek additional equity or debt financing. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition would be adversely affected.
Credit Facility
In January 2020, we entered into a credit facility that allowed us to incur up to $50.0 million aggregate principal amount of revolver borrowings. In October 2023, we amended and restated our credit facility to, among other things, increase the borrowing capacity to $150.0 million and extend the revolving credit maturity date to October 27, 2028. As of September 30, 2024, we had no borrowings outstanding under our credit facility.
Under the terms of the credit facility, we have the option to borrow funds as either a secured overnight financing rate, or SOFR, loan or an alternate base rate, or ABR, loan. Any advances drawn on the credit facility incur interest at an annual rate equal to the SOFR plus 250 basis points for SOFR loans or the ABR plus 150 basis points for ABR loans. The ABR is based on a rate per year equal to the greatest of (1) the prime rate, (b) the Federal Reserve Bank of New York rate plus 0.5% and (c) an adjusted term SOFR rate determined on the basis of a one-month interest period plus 1%. Any undrawn portion of the credit facility is subject to a fee of 0.25% per year.
The credit facility is secured by substantially all our assets and contains certain negative and affirmative covenants, including financial covenants and covenants relating to the incurrence of other indebtedness, the occurrence of a material adverse change, the disposition of assets, mergers, acquisitions and investments, the granting of liens and the payment of dividends. We must also not permit the ratio of our indebtedness to total recurring revenue for the most recent trailing four quarters to exceed 0.50 to 1.00, and we are required to maintain $50.0 million in liquidity. We were in compliance with the covenants contained in the agreement as of September 30, 2024.
Tax Receivable Agreement
Under the TRA, we are generally required to pay cash to the TRA Members, which include KKR and other Continuing Members and certain Former Members, in the amount of 85% of the applicable savings, if any, in income tax that we realize, or that we are deemed to realize, as a result of (1) certain tax attributes that are created as a result of the exchanges or redemptions of their LLC Units (calculated under certain assumptions), (2) any net operating losses available to us as a result of the mergers completed as part of the Reorganization Transactions, or the Blocker Mergers, (3) tax benefits related to imputed interest and (4) payments under such TRA. We will continue to be required to make such payments to the TRA Members even after they have exchanged or redeemed all of their LLC Units.
The payment obligations under the TRA are obligations of OneStream, Inc. and not of OneStream Software LLC. We expect that the payments that we will be required to make to the TRA Members will be substantial.
Any payments made by us to the TRA Members will generally reduce the amount of overall cash flow that might have otherwise been available to us or to OneStream Software LLC and, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us.
Our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring, deterring or preventing certain mergers, asset sales, other forms of business combination or other changes of control. We might need to incur debt to finance payments under the TRA to the extent our cash resources are insufficient and there can be no assurance that we will be able to finance our obligations under the TRA.
39
Cash Flows
The following table summarizes our cash flow activities for the periods presented:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Net cash provided by (used in) by operating activities |
|
$ |
36,014 |
|
|
$ |
(5,530 |
) |
Net cash (used in) provided by investing activities |
|
|
(9,771 |
) |
|
|
84,972 |
|
Net cash provided by (used in) financing activities |
|
|
351,933 |
|
|
|
(3,299 |
) |
Operating Activities
Net cash provided by operating activities for the nine months ended September 30, 2024 of $36.0 million was the result of a net loss of $262.2 million and other noncash operating activities of $1.4 million, which were more than offset by noncash charges for equity-based compensation of $263.8 million, amortization of deferred commissions of $15.2 million, depreciation and amortization of $2.6 million, and noncash operating lease expense of $2.3 million. Changes in working capital were favorable to cash flows from operating activities by $15.7 million primarily due to an increase in deferred revenue of $27.3 million, an increase in accounts payable of $15.7 million due to timing of payments to vendors, and a decrease in accounts receivable, net of $1.0 million, partially offset by an increase in deferred commissions of $18.6 million related to an increase in software sales, an increase in prepaid expenses of $1.4 million and a decrease in accrued and other liabilities of $8.4 million.
Net cash used in operating activities for the nine months ended September 30, 2023 of $5.5 million was due to a net loss of $31.7 million, which was partially offset by noncash charges for amortization of deferred commissions of $12.7 million, equity-based compensation of $7.1 million, depreciation and amortization of $2.2 million, noncash operating lease expense of $1.7 million, and other noncash operating activities of $3.2 million. Changes in working capital were unfavorable to cash flows from operating activities by $0.7 million primarily due to a decrease in deferred commissions of $15.7 million, an increase in accounts receivable, net of $8.5 million, an increase in prepaid and other assets of $6.4 million, and a decrease in accounts payable of $6.4 million, partially offset by an increase in deferred revenue of $33.3 million and an increase of accrued and other liabilities of $3.0 million.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2024 of $9.8 million consisted of net cash used to acquire DataSense LLC of $7.6 million and purchases of property and equipment of $2.2 million, related primarily to leasehold improvements to support our expanding footprint.
Net cash provided by investing activities for the nine months ended September 30, 2023 of $85.0 million consisted of proceeds from the sale of marketable securities of $87.3 million, which was partially offset by purchases of property and equipment of $2.3 million, primarily related to leasehold improvements to support our expanding footprint.
Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 of $351.9 million consisted of $409.6 million in net proceeds from the IPO and proceeds from option exercises of $3.9 million, partially offset by $56.7 million of cash used for the repurchase of LLC units in the IPO Synthetic Secondary and $4.9 million of payments of deferred offering costs.
Net cash used in financing activities for the nine months ended September 30, 2023 of $3.3 million consisted primarily of $3.5 million of repayments of borrowings on our credit facility, which was partially offset by $0.2 million of proceeds from option exercises.
40
Contractual Obligations and Commitments
The following table summarizes our contractual obligations as of September 30, 2024:
|
|
|
|
|
Payments Due by Period |
|
||||||||||||||
|
|
Total |
|
|
Less Than |
|
|
1 – 3 Years |
|
|
3 – 5 Years |
|
|
More than |
|
|||||
|
|
|
|
|
(in thousands) |
|
||||||||||||||
Operating lease obligations |
|
$ |
23,373 |
|
|
$ |
1,121 |
|
|
$ |
8,044 |
|
|
$ |
7,605 |
|
|
$ |
6,603 |
|
Purchase obligations |
|
|
30,338 |
|
|
|
5,991 |
|
|
|
24,347 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
53,711 |
|
|
$ |
7,112 |
|
|
$ |
32,391 |
|
|
$ |
7,605 |
|
|
$ |
6,603 |
|
In addition to the contractual obligations included in the table above, in 2022 we entered into a five-year commercial agreement with a vendor pursuant to which we have committed to purchase $300.0 million of data center, cloud and IT services with no minimum annual spending requirement. As of September 30, 2024, our total remaining commitment under this agreement was $189.6 million.
Critical Accounting Policies and Estimates
In preparing our condensed consolidated financial statements and the related notes thereto included elsewhere in this report in conformity with GAAP, we must make decisions that impact the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. In reaching such decisions, we apply judgments based on our understanding and analysis of the relevant circumstances, historical experience and business valuations. Actual amounts could differ from those estimated at the time the condensed consolidated financial statements are prepared.
Our critical accounting policies are described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the IPO Prospectus. During the three months ended September 30, 2024, there were no material changes to our critical accounting policies from those described in the IPO Prospectus other than the addition of our equity-based compensation policy, as described in Note 2, “Significant Accounting Policies” to OneStream, Inc.’s unaudited condensed consolidated financial statements included in Part I, Item 1 in this report.
Recent Accounting Pronouncements
For information on recently issued accounting pronouncements, if any, refer to Note 2, “Significant Accounting Policies” to OneStream, Inc.’s unaudited condensed consolidated financial statements included in Part I, Item 1 in this report.
JOBS Act Accounting Election
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act, or the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act for the adoption of certain accounting standards until the earlier of the date we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
41
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency exchange rates and interest rates.
Foreign Currency Risk
While we primarily transact with customers in the U.S. Dollar, we also transact in foreign currencies, including the Euro, British Pound, Swiss Franc, Canadian Dollar, Swedish Krona, Australian Dollar, Mexican Peso, South African Rand, Danish Krone and Singapore Dollar, due to foreign operations and customer sales. We expect to continue to grow our foreign operations and customer sales. We benefit from the fact that the vast majority of the revenue we collect in each country in which we have operations is principally denominated in the same currency as the operating expenses we incur in that country, providing us with a natural hedge. Our international branches maintain certain asset and liability balances that are denominated in the functional currencies of these branches. Changes in the value of foreign currencies relative to the U.S. Dollar can result in fluctuations in our total assets, liabilities, revenue, operating expenses and cash flows.
As our international operations grow, our risks associated with fluctuation in currency rates will become greater, and we will continue to reassess our approach to managing this risk. In addition, currency fluctuations or a weakening U.S. Dollar can increase the costs of our international expansion. To date, we have not entered into any foreign currency hedging contracts because exchange rate fluctuations have not had a material impact on our operating results and cash flows.
Interest Rate Risk
As of September 30, 2024, we had $495.5 million of cash and cash equivalents, which consisted primarily of money market funds and bank deposits. Such interest-earning instruments carry a degree of interest rate risk; however, historical fluctuations of interest income have not been significant. Our investments are made for capital preservation purposes. We do not hold or issue financial instruments for trading or speculative purposes. Borrowings on our credit facility incur interest at the rates described in the section titled “—Liquidity and Capital Resources—Credit Facility.” We do not believe that a hypothetical 10% change in interest rates would have had a material impact on our operating results or cash flows for the periods presented in this report.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. Nonetheless, if our costs, including employee wages and benefits and other operating expenses, were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation and supervision of our chief executive officer and chief financial officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our chief executive officer and chief financial officer have concluded that, as of such date, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
42
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating and evaluating the controls and procedures and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
43
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time we are involved in various legal proceedings arising from the normal course of business. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors.
Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and OneStream, Inc.’s unaudited condensed consolidated financial statements and related notes, before making a decision to invest in our Class A common stock. Our business, operating results, financial condition or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, operating results, financial condition or prospects could be adversely affected. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.
Risks Related to Our Business and Industry
Our rapid growth may not be sustainable or indicative of our future growth.
Our rapid growth may not be sustainable or indicative of our future growth. Even though the number of customers that use our platform has grown rapidly in recent years, there can be no assurance that we will be able to attract new customers, retain existing customers or increase adoption of our platform. You should not rely on our historical revenue growth as an indication of our future performance.
Our ability to attract new customers, retain revenue from existing customers or increase adoption of our platform by both new and existing customers is impacted by a number of factors, including:
44
We might have difficulty attracting potential customers that have already invested substantial personnel and financial resources to integrate legacy products, applications and modules into their businesses, as such organizations might be reluctant or unwilling to invest in our platform. As we continue to invest in our sales and marketing initiatives, there can be no assurance that our investments and efforts will result in new customers, increased sales to existing customers or additional revenue. If we fail to attract new customers, or maintain and expand existing customer relationships, our revenue will grow more slowly than expected or may not grow at all and our business will be harmed.
In addition, our rapid growth may make it difficult to evaluate our future prospects. As we have a limited history of operations at our current scale, our ability to forecast our future operating results and plan for and model future growth is more limited than that of companies with longer operating histories and is subject to a number of uncertainties, including volatile macroeconomic conditions that may negatively impact our customers’ or potential customers’ willingness to purchase our platform. We have encountered in the past, and may encounter in the future, risks and uncertainties frequently experienced by growing companies in rapidly changing industries. If we fail to achieve the necessary level of efficiency in our organization as it grows, or if we are not able to accurately forecast future growth, our business would be harmed.
Our focus on long-term value over short-term results may also impact our future growth. We may make strategic decisions that may not maximize our short-term revenue or profitability if we believe that the decisions are consistent with our mission to deliver customer success and will improve our financial performance over the long-term.
Our business could be harmed if we fail to manage our operations to support our rapid growth and potential future growth.
Our rapid growth has placed, and might continue to place, a significant strain on our managerial, administrative, operational, financial and other resources. We intend to further expand our headcount and operations both domestically and internationally, with no assurance that our business or revenue will continue to grow, or grow at the same rates, as in prior periods. Continuing to create a centrally managed global organization with a geographically dispersed workforce will require substantial management effort, the allocation of valuable management resources and significant additional investment in our infrastructure. We will be required to continually improve our operational, financial and management controls and our reporting procedures and we might not be able to do so effectively, which could harm our business, operating results and financial condition. In addition, we might be unable to manage our expenses effectively in the future, which might negatively impact our gross margins or operating expenses in any particular quarter. Moreover, if we fail to manage our anticipated growth in operations and employee headcount in a manner that preserves the key aspects of our corporate culture, the quality of our platform might suffer, which could harm our brand and reputation, and our ability to retain and attract customers.
We have a history of operating losses and may not achieve or sustain profitability in the future.
We have a history of operating losses and we expect to continue to incur net losses for the foreseeable future as we continue to scale our business. While we have experienced revenue growth in recent periods, we do not know whether or when we will generate sufficient revenue to sustain or increase our growth or achieve or sustain profitability in the future.
We also expect our costs and expenses to increase in future periods, which could negatively affect our future operating results if our revenue does not increase. In particular, we intend to continue to expend significant funds to further develop our platform and applications and to grow our business, including:
We have incurred and will continue to incur increased compliance costs associated with growth and the expansion of our customer base, and we will also continue to incur new costs associated with being a public company. Our efforts to grow our business may be
45
costlier than we expect, our revenue growth may be slower than we expect and we may not be able to increase our revenue enough to offset our increased operating expenses. We may incur significant losses in the future for a number of reasons, including the other risks described in this report, and unforeseen expenses, difficulties, complications or delays, and other unknown events. If we are unable to achieve and sustain profitability, the value of our business and our Class A common stock may significantly decrease.
We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results and financial condition.
Our market is intensely competitive and characterized by rapid changes in customer requirements, industry standards, new discrete product introductions and incremental improvements of legacy systems. Our competitors vary in size and in the breadth and scope of the products and services they offer. We primarily compete with providers of financial consolidation, reporting, planning or analytics software, including legacy players such as Oracle, SAP and Infor and point product providers such as Anaplan, Blackline, Wolters Kluwer and Workday.
We anticipate continued competitive challenges from current competitors who address different aspects of our offerings, and in many cases, these competitors are more established and enjoy greater resources than we do. We also expect competitive challenges from new entrants into our industry. Many of our existing competitors have, and some of our potential competitors could have, substantial competitive advantages, such as:
Some of our competitors have made or could make acquisitions of businesses or could enter into strategic partnerships, including partnerships with cloud providers, that allow them to offer more competitive and comprehensive products or pricing terms. As a result, our current or potential competitors may be able to accelerate the adoption of new technologies that better address customer needs, devote greater resources to bring these platforms and applications to market, initiate or withstand substantial price competition or develop and expand their product and service offerings more quickly than we can. In addition, it is possible that industry consolidation may impact customers’ perceptions of the viability of smaller or even mid‑size software firms and consequently customers’ willingness to purchase from such firms.
If we are unable to compete successfully against our current or potential competitors, we may experience lower sales, price reductions, reduced margins and loss of market share or the failure of our platform to achieve or maintain more widespread market acceptance, any of which could harm our business. In addition, companies competing with us may have an entirely different pricing model. We may be required to revise our pricing or make substantial additional investments in research, development, marketing and sales in order to respond to such competitive threats. We cannot assure you that we will be able to compete successfully against our current or potential competitors. If we are unable to anticipate or effectively react to these competitive challenges, or if competing successfully requires us to take costly actions in response to the actions of our competitors, we could experience a decline in our growth rate and revenue that could adversely affect our business, operating results and financial condition.
46
If our industry does not continue to develop as we anticipate or if potential customers do not continue to adopt our platform and applications, our sales will not grow as quickly as expected, or at all, and our business, operating results and financial condition would be harmed.
We are focused on creating a modern, unified platform for the Office of the CFO in a rapidly evolving industry and market acceptance of our platform is critical to our continued success. Our platform and applications are relatively new, continue to evolve and have been developed to respond to an increasingly global and complex business environment with rigorous regulatory standards. If organizations do not increasingly allocate their budgets to solutions like ours or if we do not succeed in convincing potential customers that our platform should be an integral part of their approach to their enterprise performance management, or EPM, our sales might not grow as quickly as anticipated, or at all. Our business is substantially dependent on businesses recognizing that EPM inefficiencies are pervasive and are not effectively addressed by legacy approaches. Economic uncertainty or volatility, or future deterioration in general economic, market, political or social conditions, might also cause our customers to cut or delay their information technology or other business spending, and such cuts might disproportionately affect businesses like ours to the extent customers view our platform as too costly or as discretionary. If our revenue does not increase for any of these reasons, or any other reason, our business, operating results, financial condition and growth prospects will be materially and adversely affected.
If our platform or applications contain serious errors or defects, we might lose revenue and market acceptance and suffer harm to our reputation, and might incur costs to defend or settle product liability claims.
Complex solutions such as ours can contain errors or defects, particularly when first introduced or when new versions or enhancements are released. Despite internal and third-party testing and testing by our customers, our current and future platform, core solutions and applications might contain serious defects, which could result in lost revenue or a delay in market acceptance. Because our customers use our platform and applications for critical enterprise functions, such as assisting in the financial close or account reconciliation process, any errors, defects or other performance problems could result in damage to our customers. They could seek significant compensation from us for the losses they suffer. Although our customer agreements typically contain provisions designed to limit our exposure to such claims, existing or future laws or unfavorable judicial decisions could negate these limitations. Even if not successful, such a claim brought against us would likely be time-consuming and costly and could seriously damage our reputation in the marketplace, making it harder for us to sell our platform.
Our business depends substantially on our customers renewing their subscriptions and expanding their use of our platform. If our customers do not renew their subscriptions, if they renew on less favorable terms or if they do not add more users, our business, operating results and financial condition will be adversely affected.
In order for us to maintain or improve our business, operating results and financial condition, it is important that our customers renew their subscriptions when their contract term expires and add additional users to their subscriptions. Our initial subscription term is typically three years, but can range from less than one year up to ten years. Our customers have no obligation to renew their subscriptions after the expiration of their existing subscription period. Although our customer retention rate has been high historically, we cannot assure you that we will not experience lower customer retention rates in the future, or that we will be able to accurately predict renewal rates. Our customers may decide not to renew their subscriptions at all, or may decide not to renew with a similar contract period, at the same prices or terms, or with the same or a greater number of users. Our customer retention may decline or fluctuate as a result of a number of factors, many of which are beyond our control, including our customers’ satisfaction with our platform and applications, the quality of our professional services and customer support, our prices, the features and pricing of competing products, reductions in our customers’ spending levels, customer adoption and expanded use of our platform, mergers and acquisitions involving our customers and uncertain or deteriorating general economic conditions. Our ability to increase the number of users may also be negatively impacted by current and future AI capabilities that may reduce or replace our customers’ need for existing or future employees who are or would be potential users of our platform. If our customers do not renew their subscriptions, if they renew on less favorable terms or if they do not add more users, our business, operating results and financial condition will be adversely affected.
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Our sales cycles can be long and unpredictable, particularly with respect to large enterprises, and our sales efforts require considerable time and expense.
Our results of operations may fluctuate, in part, because of the complexity of customer problems that our platform and applications address, the resource‑intensive nature of our sales efforts, the length and variability of our sales cycles and the difficulty in making short‑term adjustments to our operating expenses. The timing of our sales is difficult to predict. The average length of our sales cycle, from initial evaluation to payment for our subscriptions and licenses, is four to eight months, but can vary substantially from customer to customer and can extend over a number of years for some customers. Our sales efforts involve educating our customers about the use, technical capabilities and benefits of our platform. Customers often undertake a prolonged evaluation process, which frequently involves not only our platform but also other companies’ products. In addition, the size of potential customers may lead to longer sales cycles. For instance, we invest resources into sales to large organizations, and large organizations typically undertake a significant evaluation and negotiation process due to their leverage, size, organizational structure and approval requirements, all of which can lengthen our sales cycle. Our ability to close sales during long sales cycles has in the past been, and may in the future be, negatively impacted by events outside of our control, such as labor union strikes and volatile macroeconomic conditions. We may also face unexpected deployment challenges with large organizations or more complicated deployment of our platform and core solutions. Large organizations may demand additional features, support services and pricing concessions or require additional security management or control features. We may spend substantial time, effort and money on sales efforts to large organizations without any assurance that our efforts will produce any sales. As a result, it is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers.
Individual sales tend to be large as a proportion of our overall sales, which impacts our ability to plan and manage cash flows and margins. These large individual sales have, in some cases, occurred in quarters subsequent to those we anticipated, or have not occurred at all. If our sales cycle lengthens or our substantial up-front investments do not result in sufficient revenue to justify our investments, our business, operating results and financial condition could be adversely affected. In addition, within each quarter, it is difficult to project the month in which a sale will close. Therefore, it is difficult to determine whether we are achieving our quarterly expectations or will achieve annual expectations until near the end of the quarter or year, as applicable. Most of our expenses are relatively fixed or require time to adjust. Therefore, if expectations for our business are not accurate, we may not be able to adjust our cost structure on a timely basis, and our margins and cash flows may differ from expectations.
Our revenue growth depends in part on the success of our strategic relationships with third parties, including go-to-market and implementation partners, and if we are unable to establish and maintain successful relationships with them, our business, operating results and financial condition could be adversely affected.
We seek to grow our partner ecosystem as a way to grow our business. We anticipate that we will continue to establish and maintain relationships with third parties, including go-to-market, implementation and development partners. We plan to continue to establish and maintain similar strategic relationships in certain industry verticals and otherwise, and we expect our go-to-market partners to become an increasingly important aspect of our business. However, these strategic relationships could limit our ability in the future to compete in certain industry verticals and, depending on the success of our partners and the industries that those partners operate in generally, may negatively impact our business because of the nature of strategic alliances, exclusivity provisions, or otherwise. As our agreements with strategic partners terminate or expire, we may be unable to renew or replace these agreements on comparable terms, or at all.
Our future revenue growth and ability to achieve and sustain profitability depends in part on our ability to identify, establish and retain successful strategic partner relationships in the United States and internationally, which will take significant time and resources and involve significant risk. To the extent we do identify such partners, we cannot be certain that we will be able to negotiate commercially attractive terms with any strategic partner, if at all. In addition, all implementation partners must be trained to implement our platform. In order to develop and expand our go-to-market channels, we must continue to develop and improve our processes for go-to-market partner introduction and implementation partner training. The success of our partner training programs is critical to our ability to provide adequate customer support and product implementation services. If we do not succeed in identifying suitable strategic partners, maintaining our relationships with such partners and upskilling them through our training programs, our business, operating results and financial condition may be adversely affected.
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Moreover, we cannot guarantee that the partners with whom we have strategic relationships will continue to devote the resources necessary to expand our reach and increase our distribution. In addition, customer satisfaction with services and other support from our strategic partners may be less than anticipated, negatively impacting anticipated revenue growth and operating results. We cannot be certain that these partners will prioritize or provide adequate resources to selling our platform. Further, some of our strategic partners offer competing products or also work with our competitors. As a result of these factors, many of the companies with whom we have strategic alliances may choose to pursue alternative technologies and develop alternative products in addition to or in lieu of our platform, either on their own or in collaboration with others, including our competitors. We cannot assure you that our strategic partners will continue to cooperate with us. In addition, actions taken or omitted to be taken by such parties may adversely affect us. Moreover, we rely on our partners to operate in accordance with the terms of their contractual agreements with us. For example, our agreements with our implementation partners limit the terms and conditions pursuant to which they are authorized to offer technical support and related services. If we are unsuccessful in establishing or maintaining our relationships with third parties, or if our strategic partners do not comply with their contractual obligations to us, our business, operating results and financial condition may be adversely affected. Even if we are successful in establishing and maintaining these relationships with third parties, we cannot assure you that these relationships will result in growing our customer or user base or increased revenue to us.
We recognize revenue from SaaS subscriptions to our platform over the terms of these subscriptions. Consequently, increases or decreases in new sales may not be immediately reflected in our operating results and may be difficult to discern.
We recognize revenue from our SaaS contracts ratably over the term of the subscription period, which is typically three years but can range from less than one year up to ten years. We recognize the majority of the revenue from our term-based and perpetual licenses when our software is first made available to the customer or upon commencement of the license term, if later, and the remainder is attributable to maintenance and support fees recognized ratably over the contract term. Following our transition to a SaaS-based model, the majority of our revenue in each quarter since the first quarter of 2023 has been derived from the recognition of revenue relating to SaaS contracts entered into during previous quarters, and we expect that trend to continue. Consequently, a decline in new or renewed SaaS contracts in any single quarter may only have a small impact on the revenue that we recognize for that quarter. However, such a decline will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in sales and potential changes in our pricing policies or rate of customer or user expansion or retention may not be fully reflected in our operating results until future periods. In addition, a significant portion of our costs are expensed as incurred. As a result, growth in the number of new customers or users could continue to result in our recognition of higher costs and lower revenue in the earlier periods of our subscriptions. As we continue to transition more existing customers to our SaaS-based pricing model it also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers or from existing customers that renew their subscriptions on a SaaS-basis must be recognized over the applicable subscription term.
Our continued transition to a SaaS-based model could cause our operating results to fluctuate.
We began offering subscriptions to our platform under SaaS contracts in the third quarter of 2020; since 2023, customers on SaaS contracts have accounted for the majority of our total revenue and more than 90% of our new customers have been on SaaS contracts. We expect revenue from SaaS contracts to contribute an increasing portion of total revenue over time, but we may continue to offer licenses to certain customers in limited circumstances, such as government agencies or large enterprises in heavily regulated industries. Under our SaaS-based model, we generally recognize revenue ratably over the term of the contract. Our continued transition of existing customers to SaaS contracts results in revenue we otherwise would have recognized in the initial period of a perpetual or term-based license agreement being recognized in a later period. Further, certain customers with term-based license agreements may not wish to renew on a SaaS-basis when their existing contracts expire, and there can be no assurance that we will be able to convert perpetual license customers to our SaaS-based model, each of which could cause our operating results to fluctuate from period to period.
Changes in our pricing model could harm our business, operating results and financial condition.
As the markets for our platform grow, as new competitors introduce new products that compete with ours or as we enter into new international markets, we may be unable to attract new customers at the same price or based on the same pricing model as we have historically used. Regardless of pricing model used, large customers may demand higher price discounts than in the past. As a result, we may be required to reduce our prices, offer shorter contract durations or offer alternative pricing models, which could adversely affect our revenue, gross margin, profitability, financial position and cash flow.
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We have limited experience with respect to determining the optimal prices for subscriptions to our platform and paid applications offered through the OneStream Solution Exchange. We may choose not to introduce or be unsuccessful in implementing future price increases. Our competitors may introduce new products that compete with ours or reduce their prices, or we may be unable to attract new customers or retain existing customers based on our current pricing model. Given our limited operating history and limited experience with our current subscription and pricing models, we may not be able to accurately predict customer renewal or retention rates. As a result, we may be required or choose to reduce our prices or change our pricing model, which could harm our business, operating results and financial condition.
Our quarterly results might fluctuate, and, if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.
Our quarterly financial results might fluctuate as a result of a variety of factors, many of which are outside of our control. If our quarterly financial results fall below the expectations of investors or any securities analysts who might follow our stock, the price of our Class A common stock could decline substantially. Some of the important factors that might cause our revenue, operating results and cash flows to fluctuate from quarter to quarter include:
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Many of these factors are outside of our control, and the occurrence of one or more of them might cause our revenue, operating results and cash flows to vary widely. As such, we believe that quarter-to-quarter comparisons of our revenue, operating results and cash flows might not be meaningful and should not be relied upon as an indication of future performance.
Seasonality causes our operating results and financial metrics to fluctuate from quarter to quarter and make them more difficult to predict.
Because many of our core solutions and applications focus on finance functions, including financial close and consolidation, financial and operational planning, account reconciliation, reporting and analytics, we have historically experienced pronounced seasonality in the third and fourth quarters. We typically acquire a relatively larger proportion of our customers in these quarters as a result of procurement cycles at our target customers and timing of our customers’ phased-in implementation of our core solutions. Because our customers also include U.S. government agencies, we have experienced an increase in revenue in the fourth quarter following the end of the federal government’s fiscal year. The rapid growth in our business has offset the impact of this seasonal trend to date and, because we recognize a portion of our revenue ratably, increases or decreases in new sales, customer expansion or renewals in a given period may not be immediately reflected in revenue for that period. We expect that seasonality will continue to affect our operating results and may make them more difficult to predict.
If we fail to develop, maintain and enhance our brand and reputation cost-effectively, our business, operating results and financial condition may be adversely affected.
We believe that developing, maintaining and enhancing awareness and integrity of our brand and reputation in a cost-effective manner are important to achieving widespread acceptance of our platform and are important elements in attracting new customers and maintaining existing customers. We believe that the importance of our brand and reputation will increase as competition in our market further intensifies. Successful promotion of our brand depends on the effectiveness of our marketing efforts, our ability to provide a reliable and useful platform at competitive prices, the perceived value of our platform, our ability to maintain our customers’ trust, our ability to continue to develop additional applications and use cases, and our ability to differentiate our platform and capabilities from competitive offerings. Brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building and maintaining our brand and reputation. We also rely on our customer and user base in a variety of ways, including to give us feedback on our platform. If we fail to promote and maintain our brand successfully or to maintain loyalty among our customers, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract new customers and partners or retain our existing customers and partners and our business, operating results and financial condition may be adversely affected. Any negative publicity relating to our employees, partners or others associated with these parties may also tarnish our own reputation simply by association and may reduce the value of our brand. Damage to our brand and reputation may result in reduced demand for our platform and increased risk of losing market share to our competitors. Any efforts to restore the value of our brand and rebuild our reputation may be costly and may not be successful.
Sales to government entities and highly regulated organizations are subject to a number of challenges and risks.
We sell our platform to U.S. federal, state, local and foreign governmental agency customers, as well as to customers in highly regulated industries such as financial services, telecommunications and healthcare. Sales to such entities are subject to a number of challenges and risks. Selling to such entities can be highly competitive, expensive and time-consuming, often requiring significant up-front time and expense without any assurance that our efforts will generate a sale.
We have achieved FedRAMP Moderate Authorization, meaning our platform has met certain government security standards and been approved for use by U.S. federal agencies. Any change in our FedRAMP certification could impede our ability to enter into contracts with government entities. If we do not successfully manage our FedRAMP certification, our sales to governments and governmental agencies could be delayed or limited, and as a result, our business, operating results and financial condition could be adversely affected. In addition, government certification requirements for products like ours may change, thereby restricting our ability to sell into the government sector until we have attained such revised certification or certifications. Government contracting requirements may also change and, in doing so, restrict our ability to sell into the government sector until we or our partners have met government-mandated requirements. If we do not achieve and maintain compliance with government requirements, it may harm our competitive position against competitors whose offerings are able to meet these requirements. There can also be no assurance that we will secure commitments or contracts with government entities even following efforts to meet government requirements, which could harm our margins, business, operating results and financial condition. Additionally, government entities and highly regulated organizations typically have longer implementation cycles, sometimes require acceptance provisions that can lead to a delay in revenue recognition, can have more complex IT and data environments and may expect greater payment flexibility from vendors.
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Further, governmental and highly regulated entities may demand contract terms that differ from our standard arrangements and may be less favorable than terms agreed upon with private sector customers. Such entities may have statutory, contractual or other legal rights to terminate contracts with us or our partners for convenience or for other reasons. Contracts with governmental entities may also include preferential pricing terms, including, but not limited to, “most favored customer” pricing. In the event that we are successful in being awarded a government contract, such award may be subject to appeals, disputes or litigation, including but not limited to bid protests by unsuccessful bidders.
As a government contractor or subcontractor, we must comply with laws, regulations and contractual provisions relating to the formation, administration and performance of government contracts, which affect how we and our partners do business with government agencies. Governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to renew our subscriptions, a reduction in revenue or fines or civil or criminal liability if the audit uncovers improper or illegal activities. As a result of actual or perceived noncompliance with government contracting laws, regulations or contractual provisions, we may also be subject to non-ordinary course audits and government or internal investigations which may prove costly to our business financially, divert management time or limit our ability to continue selling our platform to our government customers. These laws, regulations and contractual provisions could result in other added costs on our business, and failure to comply with these or other applicable regulations and requirements could lead to claims for damages from our partners, downward contract price adjustments or refund obligations, civil or criminal penalties, investigations, audits, termination of contracts, fines and other penalties, including, but not limited to, the federal False Claims Act. Violations of certain regulatory and contractual requirements, or failure to maintain required certifications, could also result in suspension or debarment from government contracting for a period of time with government agencies. Any such damages, penalties, disruption or limitation in our ability to do business with a government would adversely impact our business, operating results, financial condition, public perception and growth prospects.
Government demand and payment for our platform is affected by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our platform. If budget appropriations are not obtained, we may face contract terminations. More generally, if sales expected from a government entity or highly regulated organization for a particular quarter are not realized in that quarter or at all, our business, operating results, financial condition and growth prospects could be adversely affected.
If we are unable to introduce and successfully implement enhancements, new features or modifications to our platform and existing core solutions, or introduce and successfully implement new applications, our business could be harmed.
As part of our growth strategy we expect to expand the number of applications available on our platform with a combination of internally developed applications and applications developed by our partner community. If we or our partners are unable to introduce and successfully implement new applications, enhancements or features, or fail to develop new applications that achieve market acceptance or that keep pace with rapid technological developments, our business, operating results, financial condition and growth prospects could be adversely affected. The success of enhancements and new applications depend on several factors, including timely completion, introduction and market acceptance.
We must continue to meet changing expectations and requirements of our customers and, because our platform is designed to operate on a variety of systems and integrate a number of different technologies, we will need to continuously modify and enhance our platform to keep pace with changes in Internet-related hardware and other software, communication, browser and database technologies. Any failure of our platform to operate effectively with future software and technologies or to evolve and scale to address the changing needs of our customers could reduce the demand for our platform or result in customer dissatisfaction, which could adversely impact our business, operating results and financial condition. Further, uncertainties about the timing and nature of new software or technologies, or modifications to our platform or existing software or technologies, could increase our research and development expenses. If we are not successful in developing modifications and enhancements to our platform or if we fail to introduce new applications to market in a timely fashion, our platform might become less marketable, less competitive or obsolete, our revenue growth might be significantly impaired and our business, operating results and financial condition could be harmed.
If we are unable to successfully develop, implement and offer AI-enabled solutions on our platform or use AI technology in our business, our business, operating results, financial condition and growth prospects could be harmed.
We have developed and intend to continue to develop AI-enabled solutions offered through our platform and the OneStream Solution Exchange. We also expect AI technology to become more important to our operations and future growth. However, there can be no assurance that we will realize the desired or anticipated benefits from our investments in and use of AI technology. We may also fail to properly develop and implement AI technology or market our AI-enabled solutions. Our competitors or other third-parties may incorporate AI technology into their offerings more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our operating results and growth prospects.
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Additionally, our use of AI technology may expose us to claims, demands and proceedings by private parties and regulatory authorities and subject us to legal liability as well as brand and reputational harm. For example, if the output that our AI technology assists in producing is, or is alleged to be, deficient, inaccurate or biased, or if such output, including the collection, use or other processing of data used to train or create such output, is, or is alleged to be, infringing on or misappropriating third-party intellectual property rights or otherwise violating applicable laws, regulations or other actual or asserted legal obligations to which we are or may become subject, our business, operating results, financial condition and growth prospects could be adversely affected. Further, our employees, and other contractors or consultants, may input inappropriate or confidential information into an AI solution, thereby compromising our business operations, which may cause business operation disruptions, diversion of the attention of management and key information technology resources, and possibly lead to security breaches or incidents, or loss of, or unauthorized access to or other processing of, our confidential information or other business data.
The legal, regulatory and policy environments around AI technology are evolving rapidly, including the implementation of the White House executive order on the development and use of AI and the EU AI Act, and we may become subject to new and evolving legal and other obligations. These and other developments may require us to make significant changes to our use of AI technology, including by limiting or restricting our use of AI technology, which in turn may require us to spend significant time, money and other resources and make significant changes to our policies and practices. The use of AI technology also presents emerging ethical issues that could harm our reputation and business if our use of AI technology becomes controversial.
Interruptions or performance problems associated with our platform and technology might harm our business, operating results, financial condition and reputation.
Our continued growth depends in part on the ability of our existing and potential customers to access our platform at any time. Our platform is proprietary, and we rely on the expertise of members of our engineering, operations and development teams, as well as our relationship with Microsoft for its Azure hosting services, for their continued performance. We have experienced, and may in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of users accessing our platform simultaneously, denial-of-service attacks or other security-related incidents, natural disasters, pandemics or other catastrophic events. In some instances, we might not be able to identify the cause or causes of these performance problems within an acceptable period of time. Because of the seasonal nature of financial close activities, increasing complexity of our platform and expanding user population, it might become difficult to accurately predict and timely address performance and capacity needs during peak load times and incorrect predictions may result in capacity constraints that prevent users from being able to access our platform within a reasonable amount of time or at all. To the extent that we do not effectively address capacity constraints, upgrade our systems and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business, operating results and financial condition might be harmed. Further, interruptions or performance problems with our platform may cause our customers to experience serious damage, including the loss of data. This could cause customers to lose trust and confidence in us, and our reputation could be harmed.
We provide service level commitments under our customer contracts. If we fail to meet these contractual commitments, we could be obligated to provide refunds or credits for future service, or face contract termination with refunds of prepaid amounts related to unused subscriptions, which could harm our business, operating results and financial condition.
Our customer contracts contain service level commitments, which contain specifications regarding the availability and performance of our platform. Any failure of or disruption to our infrastructure could impact the performance of our platform and the availability of services to customers. We may in the future be unable to meet our stated service level commitments and, if we were to suffer one or more extended periods of poor performance or unavailability of our platform, we could become contractually obligated to provide affected customers with service credits and, in certain cases, face contract termination with refunds of prepaid amounts related to unused subscriptions. In such an event, we may also be required, or may choose, for customer relations or other reasons, to expend significant additional resources in order to help correct the problem. If we suffer performance issues, outages or downtime that exceeds the service level commitments under our contracts with our customers, our business, operating results and financial condition would be adversely affected.
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We rely on a limited number of third-party data centers to deliver our cloud-based platform, and any disruption of service at these centers could harm our business.
We manage our platform and serve most of our customers using cloud-based infrastructure that is owned and operated by Microsoft. We do not control the operation of these facilities. Any changes in third-party service levels at our data centers or any disruptions or delays from errors, defects, hacking, incidents, security breaches or incidents, computer viruses or other intentional bad acts or performance problems could harm our reputation, damage our customers’ businesses and harm our business, operating results and financial condition. The third-party data centers that we use are also vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. If the data centers that we use were compromised or unavailable or our customers were unable to access our platform for any reason, our business and operations would be materially harmed.
Our customers have experienced disruptions and outages in accessing our platform in the past, and might in the future experience, disruptions, outages and other performance problems. Although we expend considerable effort to ensure that our platform is capable of handling existing and increased traffic levels, the ability of our cloud-based platform to effectively manage any increased capacity requirements depends on our third-party providers. Our third-party data center providers might not be able meet such performance requirements, especially to cover peak levels or spikes in traffic, and as a result, our customers might experience delays in accessing our platform or encounter slower performance in our core solutions or applications, which could significantly impair the operations of our customers. Interruptions in our services might reduce our revenue, cause us to issue credits to customers, subject us to potential liability and cause customers to terminate their subscriptions or harm our renewal rates.
If we do not accurately predict our infrastructure capacity requirements, our customers could experience service shortfalls. The provisioning of additional cloud hosting capacity requires lead time. In addition, if these services and infrastructure become unavailable because they are no longer available on commercially reasonable terms, our expenses could increase. If we are unable to maintain our relationship with, or achieve required capacity under, our agreements with Microsoft, we might be required to transfer the operation of our platform to new data center facilities, and we might incur significant costs and possible service interruption in connection with doing so.
If we are unable to ensure that our platform interoperates with a variety of third-party software applications, we may become less competitive and our business, operating results and financial condition may be harmed.
Our platform must interoperate with a variety of third-party hardware and software systems and applications. Our business will be harmed if any provider of such software systems or applications:
Third-party services and products are constantly evolving, and we may not be able to modify our platform or core solutions to assure their compatibility with those of other third parties as they continue to develop or emerge in the future, or we may not be able to make such modifications in a timely and cost-effective manner. In addition, some of our competitors may be able to disrupt the operations or compatibility of our platform or core solutions with their products or services, or exert strong business influence on our ability to, and terms on which we, operate our platform. Should any of our competitors modify their products or standards in a manner that degrades the functionality of our platform or core solutions or gives preferential treatment to our competitors or competitive products, whether to enhance their competitive position or for any other reason, or if we are not permitted or able to integrate our platform or core solutions with these and other third-party applications in the future, our business, operating results and financial condition may be harmed.
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Incorrect or improper implementation or use of our platform, core solutions or applications could result in customer dissatisfaction and harm our business, operating results, financial condition and growth prospects.
Our platform is deployed in a wide variety of technology environments and into a broad range of complex workflows. Our platform has been integrated into large-scale, enterprise-wide technology environments and specialized use cases, and our success depends on our ability, and the ability of our partner community, to implement our platform successfully in these environments. We and our implementation partners often assist our customers in implementing our platform, but many customers use a third-party service firm. If we, our implementation partners, non-certified third-parties or our customers are unable to implement our platform and core solutions successfully, or are unable to do so in a timely manner, inadequate performance might result and customer perceptions of our platform, core solutions, applications and company might be impaired, our reputation and brand might suffer, we may face legal claims, customers might choose not to renew or expand the use of our platform and we might lose opportunities for additional sales.
If we or our implementation partners fail to provide sufficient high-quality training to enable our customers to realize significant business value from our platform, we may see a decrease in customer adoption of our platform.
Our customers sometimes request training to assist them in implementing our platform and core solutions into their business and rely on our customer support personnel to resolve issues and realize the full benefits that our platform and core solutions provide. As a result, an increase in our number of customers is likely to increase demand for training. Given that our customer base continues to grow, we expect that we will need to provide more customers with training to enable them to realize significant business value from our platform. We also rely on our ecosystem of implementation partners with trained and OneStream-certified professionals that help our customers implement our platform and core solutions and provide related training. We have been increasing our implementation partners and customer enablement through our training initiatives designed to create an ecosystem of people that are skilled in the use and implementation of our platform. However, if we or our implementation partners are unable to provide sufficient high-quality training resources, our customers may not effectively implement our platform or core solutions into their business or realize sufficient business value from our platform to justify follow-on sales, which could impact our future financial performance. Additionally, if our implementation partners fail to perform to our customers’ satisfaction or if the brand for any of our implementation partners is harmed, our customers may not choose to rely on our implementation partners for implementation and training.
Any failure to offer high-quality support for our platform might harm our relationships with our customers and our financial results.
In deploying and using our platform, our customers depend on our support services to resolve complex technical and operational issues. We might be unable to respond quickly enough to accommodate short-term increases in customer demand for product support. We also might be unable to modify the nature, scope and delivery of our product support to compete with changes in product support services provided by our competitors. Increased customer demand for product support, without corresponding revenue, could increase our costs and harm our operating results. Increased customer demand and expansion of our customer base, including in international markets, may also require us to outsource certain technical and operational support services to third-party providers. There is no guarantee that such third parties would be able to provide an adequate level of support or that we will be able to implement an effective support escalation plan to address issues these third-party providers are unable to address or resolve to our customers’ satisfaction.
Our sales are highly dependent on our business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality product support, or a market perception that we do not maintain high-quality product support, could harm our reputation, our ability to sell our platform to existing and prospective customers, our business, operating results and financial condition.
We depend on our executive officers and other key employees and the loss of one or more of these employees could adversely affect our business.
Our success depends largely upon the continued services of our executive officers and other key employees. We rely on our leadership team in the areas of research and development, operations, security, marketing, sales and general and administrative functions. In particular, Mr. Shea, our co-founder and chief executive officer, provides our strategic direction, is one of our core solution architects and has built and maintained what we believe is an attractive workplace culture. From time to time, there might be changes in our executive management team resulting from the hiring or departure of executives, which could disrupt our business. If we are not successful in integrating new key employees into our organization, such failure could disrupt our business. We do not have employment agreements with our executive officers or other key personnel that require them to continue to work for us for any specified period and, therefore, they could terminate their employment with us at any time. The loss of one or more of our executive officers or key employees, especially our chief executive officer, could harm our business.
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The failure to attract and retain additional qualified personnel or to maintain our company culture could harm our business and prevent us from executing our business strategy.
To execute our growth plan, we must attract and retain highly qualified personnel across our business, both in the United States and internationally. Competition for personnel is intense, especially for experienced sales personnel and engineers experienced in designing and developing cloud-based solutions and applications, including products with AI and machine learning capabilities. We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications. Many of the companies with which we compete for experienced personnel have greater resources than we have, and some of these companies may offer more attractive compensation packages. If we hire employees from competitors or other companies, their former employers might attempt to assert that we or these employees have breached their legal obligations, resulting in a diversion of our time and resources. Likewise, if competitors hire our employees, we might divert time and resources to deterring any breach by our former employees or their new employers of their legal obligations. In addition, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, it might harm our ability to recruit and retain highly-skilled employees. Further, laws and regulations, such as restrictive immigration laws or export control laws, may limit our ability to recruit internationally. We must also continue to retain and motivate existing employees through our compensation practices, company culture and career development opportunities. We may fail to identify, attract and retain talented and diverse employees who support our corporate culture that we believe fosters innovation, teamwork, diversity and inclusion, and which we believe is critical to our success. If we fail to identify, attract, develop and integrate new personnel, or fail to retain and motivate our current personnel, our growth prospects would be severely harmed. As we continue to grow and further develop our public company infrastructure, we may find it difficult to maintain our company culture.
In particular, increasing our customer and user base and sales will depend, to a significant extent, on our ability to effectively expand our sales and marketing operations and activities. We are substantially dependent on our direct sales force to obtain new customers. We plan to continue to expand our direct sales force and marketing team over time, both domestically and internationally. We believe that there is significant competition for experienced sales and marketing professionals with the skills and technical knowledge that we require. Our ability to achieve significant revenue growth in the future will depend, in part, on our success in recruiting, training and retaining a sufficient number of experienced professionals. New hires require significant training and time before they achieve full productivity, particularly in new sales segments and territories. Our recent hires and planned hires might not become as productive as quickly as we expect, and we might be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do business. Our business will be harmed if our sales expansion efforts do not generate a significant increase in revenue.
Unfavorable macroeconomic conditions that impact us or our customers or potential customers could adversely affect our business, operating results, financial condition and growth prospects.
Recent macroeconomic conditions, including fluctuations in inflation, higher interest rates, which can increase borrowing costs, global banking system instability, wars and conflicts in Ukraine/Russia, Israel/Gaza and throughout the Middle East, other geopolitical tensions, labor strikes and the remaining effects of the COVID-19 pandemic, have negatively impacted the global economy, disrupted global supply chains and created continued uncertainty, volatility and disruption of financial markets. They have also caused customers and potential customers to optimize consumption, rationalize budgets and prioritize cash flow management. As a result, we have experienced, and may in the future experience, the lengthening of sales cycles and a negative impact on customer acquisition and renewals, customer collections and our sales and marketing efforts. These and other direct and indirect impacts of unfavorable macroeconomic conditions on us and our customers and potential customers could adversely affect our business, operating results, financial condition and growth prospects.
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We may need additional capital, and we cannot be certain that additional financing will be available on favorable terms, or at all.
Historically, we have funded our operations and capital expenditures primarily through equity issuances and cash generated from our operations. Although we currently anticipate that our existing cash and cash equivalents, available borrowings under our credit facility and cash flow from operations will be sufficient to meet our cash needs for the foreseeable future, we may require additional financing. We evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans, operating performance and condition of the capital markets at the time we seek financing. Future sales and issuances of our capital stock or rights to purchase our capital stock could result in substantial dilution to our existing stockholders. We may sell Class A common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, investors may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our Class A common stock. Our credit facility includes, and any future debt financing could involve, restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. We cannot assure you that additional financing will be available to us on favorable terms when required, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth, development efforts and to respond to business challenges could be significantly impaired, and our business, operating results and financial condition may be adversely affected.
We may acquire or invest in other businesses, products or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results.
We may acquire or invest in other businesses, products or technologies that we believe could further complement or expand our platform, enhance our technical capabilities or otherwise offer growth opportunities. The pursuit of potential acquisitions or investments may divert the attention of our management and cause us to incur various expenses in identifying, investigating and pursuing suitable acquisitions or investments, whether or not they are completed. If we do complete acquisitions or investments, we may not ultimately strengthen our competitive position or achieve our goals, and any transactions we complete could be viewed negatively by customers, partners or investors. In addition, we may not be able to integrate acquired businesses successfully or effectively manage the combined company following an acquisition. Any integration process will require significant time and resources, require significant attention from management and disrupt the ordinary functioning of our business, and we may not be able to manage the process successfully, which could harm our business. If we fail to successfully integrate our acquisitions, or the people or technologies associated with those acquisitions, into our company, the operating results of the combined company could be adversely affected. In addition, we may not successfully evaluate or use the acquired technology and accurately forecast the financial impact of an acquisition transaction, including accounting charges. Further, we cannot guarantee that any company we may acquire has appropriately created, maintained or enforced intellectual property rights in their technology, potentially subjecting us to infringement claims if we were to adopt or use such technology. Indemnification and other rights under acquisition documents may be limited in term and scope and may therefore provide little or no protection from these risks.
We may pay cash, incur debt, or issue equity securities to pay for any such acquisition, each of which could affect our financial condition or the value of our capital stock. The sale of equity to finance any such acquisitions could result in dilution to our stockholders. If we incur more debt, it will result in increased fixed obligations and could also subject us to covenants or other restrictions that would impede our ability to flexibly operate our business.
From time to time, we may be subject to legal proceedings, regulatory disputes and government investigations that could cause us to incur significant expenses, divert our management’s attention and materially harm our business, operating results and financial condition.
From time to time, we may be subject to claims, lawsuits, government investigations and other proceedings involving products liability, competition and antitrust, intellectual property rights, privacy, data protection, data security, consumer protection, securities, tax, labor and employment, commercial disputes and other matters that could adversely affect our business, operating results and financial condition. As a newly public company our business and operating results are more visible, which may increase the risk of threatened or actual litigation, regulatory disputes and government investigations. Legal and regulatory proceedings and government investigations may be protracted and expensive and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation and other associated costs could be significant. Adverse outcomes with respect to litigation or any of these legal proceedings, disputes or investigations may result in significant settlement costs or judgments, penalties and fines or require us to modify our platform, all of which could negatively affect our revenue growth. The results of litigation, investigations, claims and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal and regulatory matters requires significant judgment. There can be no assurance that our expectations will prove correct, and even if these matters are resolved in our favor or
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without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our reputation, business, operating results and financial condition.
Our indemnification obligations and limitations of our director and officer liability insurance may have a material adverse effect on our operating results, financial condition and cash flows.
Under our bylaws and certain indemnification agreements to which we are a party, we have an obligation to indemnify, or we have otherwise agreed to indemnify, our current and former directors and certain of our officers with respect to past, current and future investigations and litigation. The scope of our indemnification obligations may be broader than the coverage available under our directors’ and officers’ liability insurance, or there may be insufficient coverage available. Further, in the event the directors and officers are ultimately determined not to be entitled to indemnification, we may not be able to recover any amounts we previously advanced to them. We cannot provide any assurances that future indemnification claims, including the cost of fees, penalties or other expenses, will not exceed the limits of our insurance policies, that such claims are covered by the terms of our insurance policies or that our insurance carrier will be able to cover such claims. Further, should a coverage dispute arise, we may also incur significant expenses in relation to litigating or attempting to resolve any such dispute. Accordingly, we may incur significant unreimbursed costs to satisfy our indemnification obligations, which may have a material adverse effect on our operating results, financial condition and cash flows.
Increased scrutiny and changing expectations from investors, customers, partners, employees and other stakeholders regarding our environmental, social and governance practices could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, customer acquisition and retention, access to capital and employee retention.
Companies across many industries are facing scrutiny related to their environmental, social and governance, or ESG, practices. Investors, customers, employees and other stakeholders have focused increasingly on ESG practices and placed increasing importance on the implications and social cost of their investments, purchases, work and other interactions with companies. For example, many investment funds focus on positive ESG business practices and sustainability scores when making investments and may consider a company’s ESG or sustainability scores as a reputational or other factor in making an investment decision. In addition, investors, particularly institutional investors, use these scores to benchmark companies against their peers, and if a company is perceived as lagging, these investors may engage with such company to improve ESG disclosure or performance and may also make voting decisions on this basis. Our customers and partners are also increasingly focused on our ESG practices. With this increased focus and demand, public reporting regarding ESG practices is becoming more broadly expected. If our ESG practices and future reporting do not meet investor, customer, partner or employee expectations, which continue to evolve, our brand, reputation and customer acquisition and retention may be negatively impacted. Any public disclosure we make may include our policies and practices on a variety of ESG matters, including corporate governance, environmental compliance, employee health and safety practices, human capital management and workforce inclusion and diversity. It is possible that stakeholders may not be satisfied with our ESG reporting, our ESG practices or our speed of adoption. We could also incur additional costs and devote additional resources to monitor, report and implement various ESG practices. If we fail, or are perceived to be failing, to meet the standards included in any sustainability disclosure or the expectations of our various stakeholders, it could negatively impact our reputation, customer acquisition and retention, access to capital and employee retention.
Risks Related to our International Operations
Our long-term success depends, in part, on our ability to expand the sales of our platform to customers located outside of the United States, and thus our business is susceptible to risks associated with international sales and operations.
We currently maintain offices in the United States and in Australia, Europe and Singapore, and we intend to continue to expand our international operations. Any international expansion efforts that we may undertake might not be successful. In addition, conducting international operations in new markets subjects us to new risks that we have not generally faced in the United States. These risks include:
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These factors might cause our costs of doing business internationally to exceed our comparable domestic costs. Operating in international markets also requires significant management attention and financial resources. Any negative impact from our international business efforts could harm our business, operating results and financial condition.
Further, entry into certain transactions with foreign entities now or in the future may be subject to government regulations, including review related to foreign direct investment by U.S. or foreign government entities. If a transaction with a foreign entity was subject to regulatory review, such regulatory review might limit our ability to enter into the desired strategic alliance and thus our ability to carry out our long-term business strategy.
We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in full compliance with applicable laws.
International sales of our platform are subject to export controls, including the Commerce Department’s Export Administration Regulations and various economic and trade sanctions regulations established by the Treasury Department’s Office of Foreign Assets Controls. Obtaining the necessary authorizations, including any required license, for a particular export or sale might be time-consuming, is not guaranteed and might result in the delay or loss of sales opportunities. The U.S. export control laws and economic sanctions laws prohibit the export, re-export or transfer of specific products and services to U.S. embargoed or sanctioned countries, governments and persons. Even though we take precautions to prevent our platform from being provided to U.S. sanctions targets, our platform could be sold by resellers or could be used by persons in sanctioned countries despite such precautions. Failure to comply with the U.S. export control, sanctions and import laws could have negative consequences, including government investigations, penalties and reputational harm. We and our employees could be subject to civil or criminal penalties, including the possible loss of export or import privileges, fines and, in extreme cases, the incarceration of responsible employees or managers. We might also suffer reputational harm and penalties if our resellers fail to obtain appropriate import, export or re-export licenses or authorizations.
In addition, various countries regulate the import of encryption technology, including through import permitting/licensing requirements, and have enacted laws that could limit our ability to distribute our platform or could limit our customers’ ability to implement or access our platform in those countries. Changes in export, sanctions and import regulations might create delays in the introduction and sale of our platform in international markets, prevent our customers with international operations from accessing our platform or, in some cases, prevent the export or import of our platform to some countries, governments or persons altogether. Any change in export or import regulations, economic sanctions or related laws, shifts in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in decreased use of our platform, or in our decreased ability to export or sell our platform to existing or potential customers with international operations. Any limitation on our ability to export or sell our platform would likely cause its overall use to decrease and harm our business, operating results and financial condition.
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We are subject to the U.S. Foreign Corruption Practices Act, or FCPA, and similar anti-corruption and anti-bribery laws, and anti-money laundering and similar laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, operating results and financial condition.
We are subject to the FCPA, U.S. domestic bribery laws, the UK Bribery Act and other anti-corruption and anti-bribery laws, and anti-money laundering and similar laws, in the countries in which we conduct activities. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, business partners, third-party intermediaries, representatives and agents from authorizing, offering, or providing, directly or indirectly, improper payments or other benefits, to government officials or others in the private sector in order to influence official action, direct business to any person, gain any improper advantage, or obtain or retain business. Anti-money laundering laws generally prohibit persons from engaging in transactions where the proceeds at issue derive from, or are intended to facilitate or conceal, illegal activity or where a party to the transaction is “willfully blind” to the illegal sources of the proceeds. As we increase our international sales and business, our risks under these laws may increase.
We sometimes engage with third-parties to market our platform or conduct our business in the United States and in foreign jurisdictions. In addition, we, our employees, business partners, third-party intermediaries, representatives and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We may be held liable for the corrupt or other illegal activities of our employees, business partners, third-party intermediaries, representatives and agents, even if we do not explicitly authorize such activities. These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. While we have policies and procedures to address compliance with such laws, we cannot assure you that none of our employees, business partners, third-party intermediaries, representatives and agents will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.
Detecting, investigating and resolving actual or alleged violations of anti-corruption laws can require a significant diversion of time, resources and attention from senior management, as well as significant defense costs and other professional fees. In addition, any allegations of a violation of the FCPA or other applicable anti-corruption or anti-bribery laws or anti-money laundering laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, enforcement actions, fines, damages, severe civil or criminal penalties or injunctions against us, our officers or our employees, disgorgement of profits, suspension or debarment from contracting with governments or other persons, reputational harm, adverse media coverage, and other collateral consequences, all of which may have an adverse effect on our reputation, business, operating results, financial condition, stock price and prospects.
We may face exposure to foreign currency exchange rate fluctuations.
We sell to customers globally and have significant international operations. As we continue to expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates. Although the significant majority of our cash generated from revenue is denominated in U.S. dollars, a material portion is denominated in foreign currencies, and our expenses are generally denominated in the currencies of the jurisdictions in which we conduct our operations. Because we conduct business in currencies other than U.S. dollars but report our results of operations in U.S. dollars, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could materially impact our operating results. Therefore, increases in the value of the U.S. dollar and decreases in the value of foreign currencies could result in the dollar equivalent of our revenue being lower. We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies.
Risks Related to our Technology and Intellectual Property
If our security controls or those of our vendors are breached or unauthorized, unlawful or inadvertent access to customer data or other data we maintain or process is otherwise obtained, our platform and applications might be perceived as insecure, we might lose existing customers or fail to attract new customers, and we might incur significant liabilities.
Use of our platform, core solutions and applications involve the storage, transmission and processing of our customers’ confidential data, including highly confidential financial information regarding their business and personal information regarding their customers or employees. Additionally, we maintain our own proprietary, confidential, personal and otherwise sensitive information. We rely on systems, websites and other services, including some that are managed by third parties, for the provision of our platform, core solutions and applications and such IT systems and services are at risk for security breaches and incidents as a result of third-party action, employee, vendor or contractor error, malfeasance, bugs, ransomware and other malicious software, or other factors. Cyberattacks and other malicious Internet-based activity continue to increase generally in number, intensity and sophistication, and cloud-based platform providers of software and services have been targeted. Techniques used to compromise or sabotage systems change frequently, may originate from less regulated and remote areas of the world and may be difficult to detect. These risks may be heightened in connection with wars and conflicts in Ukraine/Russia, Israel/Gaza and throughout the Middle East, and other geopolitical tensions and regional instability. As a result, we may be vulnerable to, and may be unable to anticipate or detect, security breaches and incidents.
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In addition, many of our employees (and those of our vendors) are working remotely, which may pose additional data security risks associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.
We have implemented various controls, systems and processes intended to secure our systems and the information on it. However, we cannot guarantee that these measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even if the vulnerabilities that may lead to an incident are identified, we may be unable to adequately investigate or remediate due to attackers using tools (including AI) and techniques that are designed to circumvent controls, avoid detection and remove or obfuscate forensic evidence. In the normal course of business, we, like many other companies, are and have been the target of malicious cyberattack attempts and have experienced other security incidents. To date, such identified security events have not been material to us, including to our reputation or business operations, or had a material financial impact, but there can be no assurance that future cyberattacks or other security breaches or incidents will not be material. Additionally, as our market presence grows, we, and service providers who store or otherwise process data on our behalf, may face increased risks of cyberattack attempts or security threats. We are reliant on third-party security measures to protect against unauthorized access, cyberattacks and other security breaches and incidents and the mishandling of customer, employee and other confidential or sensitive data and we may be required to expend significant time and resources to address any security breaches or incidents related to the failure of those third-party security measures. Our ability to monitor our third-party service providers’ data security is limited, and in any event, attackers may be able to circumvent our third-party service providers’ security measures. There have been and may continue to be significant attacks on certain third-party providers, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our platform, core solutions and applications.
If any unauthorized or inadvertent access to or a security breach or incident impacting our platform, core solutions or applications occurs, or is believed to occur, such an event could result in the loss or unavailability of data, loss of intellectual property rights or intellectual property protection, unauthorized access to, or use, alteration, disclosure or other processing of data, interruptions to or disruption of our platform, core solutions or applications, loss of business, difficulty attracting new customers, severe reputational damage harming customer or investor confidence, regulatory investigations, proceedings, orders, litigation (including class actions), indemnity obligations, and damages for contract breach or fines, penalties or other liabilities. Security breaches and incidents that we or our service providers suffer could also result in significant response and remediation costs, which might include liability for misappropriated, altered, converted or lost assets or information and repair of system damage that might have been caused, incentives offered to customers or other business partners in an effort to maintain business relationships after a breach or incident and other liabilities. Any actual or perceived security breach or incident could harm our ability to operate our business and may impact our reputation, harm customer confidence, hurt our sales and expansion into existing and new markets or cause us to lose existing customers. If a high-profile security breach or incident occurs with respect to us or another provider of cloud software, our customers and potential customers might lose trust in the security of our platform or in the cloud software industry generally, which could harm our ability to retain existing customers or attract new ones. Even in the absence of any security breach or incident, customer concerns about security, privacy or data protection might deter them from using our platform for activities that involve personal or other sensitive information, which may harm our business and operating results. Further, any actual, potential or anticipated cyberattacks or other sources of security breaches or incidents also may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.
Additionally, many jurisdictions have enacted or may enact laws and regulations requiring companies to provide notification of, or generally disclose, security breaches or incidents involving certain types of personal data and related matters. For example, the SEC has adopted cybersecurity risk management and disclosure rules that require the disclosure of information pertaining to cybersecurity incidents and cybersecurity risk management, strategy and governance. Such disclosures regarding a security breach or incident could result in negative publicity to us, which may cause our customers to lose confidence in the effectiveness of our data security measures which could impact our operating results. Further, because data security is a critical competitive factor in our industry, we make statements in public-facing materials and otherwise provide assurances about the security of our platform. Should any of these statements be untrue or become untrue, even as a result of circumstances beyond our reasonable control, we might face claims of misrepresentation or deceptiveness by the U.S. Federal Trade Commission, U.S. state and foreign regulators and private litigants.
We incur significant expenses to minimize the risk of security breaches and incidents, and may find it necessary or appropriate to increase expenditures with respect to data security, in response to a security breach or incident or otherwise. Although we maintain errors or omissions and cyber liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all.
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We could incur substantial costs in expanding, protecting or defending our intellectual property rights, and any failure to obtain, maintain, protect or enforce our intellectual property rights could impair our ability to protect our proprietary technology and our brand.
Our success and ability to compete depend in part upon our ability to protect our intellectual property rights and technology (such as code, information, data, processes and other forms of information, know-how and technology) and our ability to expand our existing intellectual property portfolio. We primarily rely on copyright, trade secret and trademark laws, invention assignment and confidentiality agreements, as well as our agreements with our employees, customers, partners and others, to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be inadequate and we may not be able to secure our intellectual property rights in the U.S. and the international markets in which we operate. In order to protect our intellectual property rights, we might be required to spend significant resources to monitor and protect these rights. Even if we do detect violations, we may need to engage in litigation to enforce our intellectual property rights. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, and could result in the impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property rights might be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights. Our failure to secure, protect and enforce our intellectual property rights could adversely affect our brand and adversely impact our business.
In addition, defending our intellectual property rights may entail significant expense. Any patent, trademark or other intellectual property rights that we have or may obtain may be challenged or circumvented by others or invalidated or held unenforceable through administrative processes, including re-examination, inter partes review, interference, and derivation proceedings and equivalent proceedings in foreign jurisdictions (such as opposition, invalidation and cancellation proceedings) or litigation. Even if we seek patent protection in the future, we may be unable to obtain or maintain patent protection for our proprietary technology. In addition, any patents issued from pending or future patent applications or licensed to us in the future may not be sufficiently broad to protect our proprietary technologies, may not provide us with competitive advantages or may be successfully challenged by third parties. The United States Patent and Trademark Office and various foreign governmental patent and trademark agencies also require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent and trademark application process and after a patent or trademark registration has issued. There are situations in which non-compliance can result in abandonment or lapse of the patent or trademark filing, resulting in partial or complete loss of patent or trademark rights in the relevant jurisdiction. If this occurs, our competitors might be able to enter the market.
We enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with our third-party providers and strategic partners. However, we cannot assure you that these agreements will be effective in controlling access to, and use and distribution of, our platform and proprietary information. Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our offerings. We may also enter into strategic partnerships, joint development and other similar agreements with third parties where intellectual property arising from such partnerships may be jointly-owned or may be transferred or licensed to the counterparty. Such arrangements may limit our ability to protect, maintain, enforce or commercialize such intellectual property rights, including requiring agreement with or payment to our joint development partners before protecting, maintaining, licensing or initiating enforcement of such intellectual property rights, and may allow such joint development partners to register, maintain, enforce or license such intellectual property rights in a manner that may affect the value of the jointly-owned intellectual property or our ability to compete in the market.
Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our brands, products and platform capabilities, and use information that we regard as proprietary to create brands and products that compete with ours. Effective patent, trademark, copyright and trade secret protection may not be available to us or commercially feasible in every country in which our platform is available. Further, intellectual property law, including statutory and case law, particularly in the United States, is constantly developing, and any changes in the law could make it harder for us to enforce our rights. The value of our intellectual property could diminish if others assert rights in or ownership of our trademarks, patents and other intellectual property rights, or adopt trademarks that are similar to our trademarks. We may be unable to successfully resolve these types of conflicts to our satisfaction. In some cases, as noted below, litigation or other actions may be necessary to protect or enforce our trademarks and other intellectual property rights against infringement or misappropriation. As we expand our international activities, our exposure to unauthorized copying and use of our products and platform capabilities and proprietary information will likely increase. Moreover, policing unauthorized use of our technologies, trade secrets and intellectual property may be difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak or inadequate. Additional uncertainty may result from changes to intellectual property legislation enacted in the United States and by other national governments and from interpretations of the intellectual property laws of the United States and other countries by applicable courts and agencies. Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our intellectual property rights. Any of the foregoing could adversely impact our business, operating results and financial condition.
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Assertions against us by third parties alleging infringement or misappropriation of their intellectual property rights or confidential know-how could result in significant costs and could materially and adversely affect our business, operating results and financial condition.
There is considerable activity in our industry to develop proprietary technology and enforce intellectual property rights. Our success depends in part upon our not infringing upon the intellectual property rights of others. From time to time, our competitors or other third parties may own or claim to own intellectual property relating to our platform and underlying technology, and we may be unaware of the intellectual property rights that others may claim cover aspects of our platform or the underlying technology. Accordingly, third parties may claim that our platform and underlying technology are infringing, misappropriating or otherwise violating third-party intellectual property rights and such third parties may bring claims alleging such infringement, misappropriation or violation. As one example, there may be issued patents of which we are not aware, held by third parties that, if found to be valid and enforceable, could be alleged to be infringed by our current or future technologies or solutions. There also may be pending patent applications of which we are not aware that may result in issued patents, which could be alleged to be infringed by our current or future technologies or products. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover our current or future technologies.
Claims of infringement, misappropriation or other violations of intellectual property rights might require us to stop using technology found to violate a third party’s rights, redesign our platform, which could require significant effort and expense and cause delays of releases, enter into costly settlement or license agreements, pay costly damage awards or ongoing royalties, or face a temporary or permanent injunction prohibiting us from marketing or selling our platform. With respect to claims that our technology or the conduct of our business infringe or otherwise violate intellectual property rights, or if we cannot or do not obtain licenses to such intellectual property rights on commercially reasonable terms or at all, or substitute similar non-infringing technology from another source, we could be forced to limit or stop selling our platform. In addition, we may be unable to meet our obligations to customers under our customer contracts or to compete effectively, and our revenue and operating results could be adversely impacted. We might also be obligated to indemnify our customers or other companies in connection with any such litigation and to obtain licenses, modify our platform or refund subscription fees, which could harm our financial results. In addition, we might incur substantial costs to resolve claims or litigation, whether or not successfully asserted against us, which could include payment of significant settlement, royalty or license fees, modification of our platform or refunds to customers of subscription fees. Even if we were to prevail in the event of claims or litigation against us, any claim or litigation regarding our intellectual property could be costly and time-consuming and divert the attention of our management and other employees from our business operations. Such disputes could also disrupt our sales and marketing efforts, making it more difficult to attract new customers, retain our existing customers and maintain customer satisfaction.
We use open source software in our platform, which could negatively affect our ability to offer our products and subject us to litigation or other adverse consequences.
Our platform, including certain aspects of our AI-enabled solutions and applications, uses software governed by open source licenses. The use of open source software involves a number of risks, many of which cannot be eliminated and could negatively affect our business. For example, the terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market our platform. By the terms of certain open source licenses, if we combine our proprietary software with open source software in a certain manner, we could be required to release the source code of our proprietary software and to make our proprietary software available under open source licenses. Additionally, the use and distribution of open source software may entail greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. From time to time, there have been claims challenging the use of open source software against companies that incorporate such software into their platforms. As a result, we could be subject to suits by parties claiming misuse of, or a right to compensation for, what we believe to be open source software. Litigation could be costly for us to defend, harm our business, operating results and financial condition or require us to devote additional research and development resources to change our platform. Although we have implemented policies to regulate the use and incorporation of open source software into our platform, we cannot be certain that we have not incorporated open source software in our platform in a manner that is inconsistent with such policies. If we inappropriately use open source software, we might be required to re-engineer our platform, discontinue the sale of our platform or take other remedial actions.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.
We rely heavily on trade secrets and confidentiality agreements to protect our unpatented know-how, technology and other proprietary information, and to maintain our competitive position. However, trade secrets and know-how can be difficult to protect. We seek to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants and other third parties, including suppliers and other partners. However, we cannot guarantee that we have entered into such agreements with each party that has or may have had
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access to our proprietary information, know-how and trade secrets. Moreover, no assurance can be given that these agreements will be effective in controlling access to, distribution, use, misuse, misappropriation, reverse engineering or disclosure of our proprietary information, know-how and trade secrets. Further, these agreements may not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our platform capabilities. These agreements may be breached, and we may not have adequate remedies for any such breach. While we have taken steps to enjoin misappropriation that we are aware of, such steps may not ultimately be successful, and we may not be aware of all such misappropriation. Any of the foregoing could adversely impact our business, operating results and financial condition.
Our customer agreements may include an obligation for us to enter into a source code escrow arrangement under which our source code may be released to customers in the event of a specified release event (for example, bankruptcy, insolvency or failure to provide agreed-upon maintenance or support for the services) for the sole purpose of maintaining use by the customer during the remainder of the term of the agreement. As a result of any such release, our customers will have access to our proprietary source code. While such access would be subject to duties of confidentiality, we cannot guarantee that our customers will comply with these obligations or otherwise not misuse our source code.
We may be subject to claims that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers or claims asserting ownership of what we regard as our own intellectual property.
Many of our employees and consultants are currently or were previously employed at other companies in our field, including our competitors or potential competitors. Although we try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these individuals have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such individual’s current or former employer. Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or key personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.
In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. Any of the foregoing could adversely impact our business, operating results and financial condition.
If we fail to comply with our obligations under license or technology agreements with third parties or are unable to license rights to use technologies on reasonable terms, we may be required to pay damages and could potentially lose license rights that are critical to our business.
We license certain intellectual property and software from third parties that are important to our business, and in the future we may enter into additional agreements that provide us with licenses to valuable intellectual property or technology. If we fail to comply with any of the obligations under our license agreements, we may be required to pay damages and the licensor may have the right to terminate the license. Our business would suffer if any current or future licenses terminate, if the licensors fail to abide by the terms of the license, if the licensed intellectual property rights are found to be invalid or unenforceable or if we are unable to enter into necessary licenses on acceptable terms. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.
In the future, we may identify additional third-party intellectual property that we may need to license, or would benefit from licensing, in order to engage in our business. However, such licenses may not be available on acceptable terms or at all. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more-established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. Even if such licenses are available, we may be required to pay the licensor substantial royalties based on sales of our platform. Such royalties are a component of the cost of our platform and may affect our margins. In addition, such licenses may be non-exclusive, which could give our competitors access to the same intellectual property licensed to us. Any of the foregoing could have a material adverse effect on our competitive position, business, operating results and financial condition.
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Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses.
Our agreements with customers and other third parties generally include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement, or other liabilities relating to or arising from our software, services or other contractual obligations. Large indemnity payments could harm our business, operating results and financial condition. Although we often contractually limit our liability with respect to such indemnity obligations, those limitations may not be fully enforceable in all situations, and we may still incur substantial liability under those agreements. Any dispute with a customer with respect to such obligations could have adverse effects on our relationship with that customer and other existing customers and new customers and harm our business, operating results and financial condition.
Risks Related to Regulation and Taxation
Privacy, data protection and data security concerns, and data collection and transfer restrictions and related domestic or foreign regulations may limit the use and adoption of our platform and adversely affect our business, operating results and financial condition.
Privacy, data security and data protection are significant issues in the United States, Europe and many other jurisdictions where we offer our platform. The regulatory frameworks governing the collection, storage, use and other processing of business information, particularly information that affects financial statements and personal data, are rapidly evolving, and any failure or perceived failure to comply with applicable privacy, data security or data protection laws or regulations may adversely affect our business. Further, these laws are not always interpreted uniformly and there is no guarantee that regulators or consumers will agree with our approach to compliance. Additionally, any violations of applicable laws, regulations or policies by third parties we work with, such as vendors or developers, may put our customers’ content at risk and have an adverse effect on our business. Any significant change to applicable laws, regulations or industry practices regarding the collection, use, retention, security, disclosure, or other processing of our customers’ content, or regarding the manner in which the express or implied consent of customers for the collection, use, retention, disclosure or other processing of such content is obtained, could increase our costs and require us to modify our platform, core solutions and applications, or modify our policies or practices, possibly in a material manner, which we may be unable to do on a commercially reasonable basis or at all and, which may limit our ability to store and process customer data or develop new applications and features.
For example, in the United States, several states have enacted new data privacy laws. The California Consumer Privacy Act, as amended by the California Privacy Rights Act, or the CCPA, among other things, requires covered companies to provide required disclosures to California consumers, and afford such consumers abilities to opt out of certain processing of personal information. Additionally, many other states have proposed or enacted data privacy laws, including, for example, Washington’s My Health, My Data Act, and numerous laws similar to the CCPA. The U.S. federal government also is contemplating federal privacy legislation, reflecting a trend toward more stringent data privacy legislation. In addition, the U.S. federal government and various U.S. state and foreign governments have adopted or proposed requirements regarding obligations on companies to notify individuals of security breaches and incidents involving particular personal information, which could result from breaches and incidents experienced by us or by organizations with which we have formed or may form strategic relationships. Even though we may have certain contractual protections with such organizations, notifications or other public disclosure or dissemination of information related to any actual or perceived security breach or incident could impact our reputation, harm customer confidence, hurt our expansion into new markets or cause us to lose existing customers.
Further, many foreign countries and governmental bodies, including the European Union, or the EU, where we conduct business and have offices or use vendors, have laws and regulations concerning the collection and use of personal data obtained from their residents or by businesses operating within their jurisdiction. For example, we are subject to the European General Data Protection Regulation and applicable national supplementing laws, collectively the EU GDPR. We may also be subject to the United Kingdom General Data Protection Regulations and Data Protection Act 2018, collectively the UK GDPR and together with the EU GDPR, the GDPR. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify an individual and include a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit. The GDPR also regulates cross-border transfers of personal data out of the European Economic Area, or EEA, and the United Kingdom, or UK. With regard to data transfers of personal data from our European employees and customers to the United States, we have historically relied upon EU-U.S. Privacy Shield and Swiss-U.S. Privacy Shield certifications for the transfer of personal data from the EU and Switzerland to the United States. On October 7, 2022, President Biden signed an Executive Order on ‘Enhancing Safeguards for United States Intelligence Activities’ which introduced new redress mechanisms and binding safeguards to address the concerns raised by the Court of Justice of the European Union, or the CJEU, in relation to data transfers from the EEA to the United States and which formed the basis of the new EU-US Data Privacy Framework, or DPF, which became effective as an EU GDPR (and later UK GDPR) transfer mechanism to U.S. entities self-certified under the DPF. We currently rely on the EU Standard Contractual Clauses to transfer personal data outside of the EEA. Case law from the CJEU states that reliance on the
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standard contractual clauses alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis. On June 28, 2021, the EU Commission adopted an “adequacy decision,” which allows for free flow of personal data between the EEA and the UK. This adequacy decision includes a “sunset clause,” which limits its duration to four years. During this period, the Commission could intervene at any time if the UK deviates from the level of protection currently in place. It is uncertain how data protection laws and related regulations will develop in the UK over time, and if and when the Commission might make use of this right to intervene. Any restrictions on cross-border transfers of personal data could adversely impact our customers’ use of our platform and our business, operating results and financial condition. We may, in addition to other impacts, experience additional costs associated with increased compliance burdens following such decisions and otherwise in connection with regulatory developments and evolving guidance regarding cross-border data transfers, and we and our customers face the potential for regulators in the EEA, Switzerland and the UK to apply different standards to the transfer of personal data from those regions to the United States, and to block, or require ad hoc verification of measures taken with respect to, certain data flows from the EEA, Switzerland, and the UK to the United States. We also may be required to engage in new contract negotiations with third parties that aid in processing data on our behalf. Our means for transferring personal data from the EEA, Switzerland and the UK may not be adopted by all of our customers and may be subject to legal challenge by data protection authorities. We may also experience reluctance or refusal by customers in Europe or other regions to use our platform due to potential risk exposure. We and our customers face a risk of enforcement actions taken by data protection authorities in various jurisdictions regarding cross-border data transfers, including from and to the United States. Any such enforcement actions could result in substantial costs and diversion of resources, distract management and technical personnel and negatively affect our business, operating results and financial condition.
We are also subject to evolving privacy laws on cookies, tracking technologies and e-marketing. Recent U.S. and European court and regulatory proceedings are driving increased attention to cookies and tracking technologies. If the trend of increasing proceedings by litigants and enforcement by regulators continues, this could lead to substantial costs, require significant system changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins and subject us to additional liabilities.
In addition, our customers also expect that we comply with certain standards that may place additional burdens on us. Our customers expect us to meet voluntary certifications or adhere to standards established by third parties, such as the SSAE 18, SOC1 and SOC2 audit processes, and may demand that they be provided with an auditor’s report to verify our compliance. If we are unable to maintain these certifications or meet these standards, it could adversely affect our customers’ demand for our service and could harm our business.
In recent years, use of AI and automated decision-making methods have come under increased regulatory scrutiny. New laws, guidance or decisions in this area could provide a new regulatory framework that could require us to adjust and may limit our ability to use our existing AI models and make changes to our operations that may decrease our operational efficiency, resulting in an increase to operating costs and/or hindering our ability to improve our services. For example, in the United States, Colorado has enacted legislation that, when effective, will restrict the use of certain AI systems, and the California Privacy Protection Agency is in the process of finalizing regulations under the CCPA regarding the use of automated decision-making and other matters.
Further, in Europe, in March 2024, the EU Parliament adopted a comprehensive, risk-based governance framework for AI in the EU market, the EU AI Act. It is intended to apply to companies that develop, use and/or provide AI in the EU and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security and accuracy, and introduces significant fines for noncompliance. There are also specific obligations regarding the use of automated decision-making under the GDPR.
We cannot yet determine the impact these laws and regulations or any future laws, regulations and standards may have on our business. Such laws, regulations and standards are often subject to differing interpretations and these or other laws or regulations relating to privacy, data protection and data security may be inconsistent among jurisdictions. These and other actual or asserted requirements could reduce demand for our service, increase our costs, impair our ability to grow our business, restrict our ability to store and process data or, in some cases, impact our ability to offer our platform, core solutions or applications in some locations and may subject us to liability. Further, in view of new or modified federal, state or foreign laws and regulations, industry standards, contractual obligations and other actual or asserted legal obligations, or any changes in their interpretation, we may find it necessary or desirable to fundamentally change our business activities and practices or to expend significant resources to modify our platform, core solutions or applications and otherwise adapt to these changes. We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new core solutions and applications could be limited.
The costs of compliance with and other burdens imposed by laws, regulations and standards may limit the use and adoption of our platform and reduce overall demand for it, or lead to regulatory investigations and other proceedings, private claims and litigation, and significant fines, penalties or liabilities in connection with any actual or asserted noncompliance. Privacy, data security and data protection concerns, whether valid or not valid, may inhibit market adoption of our platform, particularly in certain industries and foreign
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countries. Any failure or perceived failure by us to comply with our privacy policies, our obligations to customers relating to privacy, data security or data protection, any statements or commitments we make regarding privacy, data protection, data security or the processing of customer data or other data, or our other policies or obligations relating to privacy, data security or data protection, or any actual or perceived compromise of data security, including any such compromise that results in the loss or unavailability of data, unauthorized access to, or use, alteration, disclosure or other processing of data, may result in governmental investigations and enforcement actions, claims, demands and litigation, negative publicity, harm to our reputation, and could cause a loss of customers and harm our ability to attract new customers, any or all of which could have an adverse effect on our business, operating results and financial condition.
Changes in laws and regulations related to the Internet and cloud computing or changes to Internet infrastructure might diminish the demand for our platform and could have a negative impact on our business.
The future success of our business depends upon the continued use of the Internet as a primary medium for commerce, communication and business applications. Federal, state or foreign government bodies or agencies have in the past adopted, and might in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Regulators in some industries have also adopted, and might in the future adopt, regulations or interpretive positions regarding the use of cloud-computing software. For example, some financial services regulators have imposed guidelines for the use of cloud-computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to using such software. Changes in these laws or regulations could require us to modify our platform in order to comply with these changes. In addition, government agencies or private organizations have imposed and might impose additional taxes, fees or other charges for accessing the Internet or commerce conducted via the Internet. These laws or charges could limit the growth of Internet-related commerce or communications generally, or result in reductions in the demand for Internet-based products and services such as ours. In addition, the use of the Internet as a business tool could be harmed due to delays in the development or adoption of new standards and protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility and quality of service. The performance of the Internet and its acceptance as a business tool has been harmed by “bugs,” “viruses,” “worms” and similar malicious programs and the Internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure. If the use of the Internet is harmed by these issues, demand for our platform could decline.
The current legislative and regulatory landscape regarding the regulation of the Internet is subject to uncertainty. The laws and regulations governing the Internet are continuously evolving, and compliance is costly and can require changes to our business practices and significant management time and effort. For example, in April 2024, the Federal Communications Commission, or FCC, released a declaratory ruling and set of orders that reinstituted the “open Internet rules,” often known as “net neutrality,” which, among other things, were intended to prohibit Internet service providers from impeding access to most content or otherwise unfairly discriminating against content providers like us, and also to prohibit Internet service providers from entering into arrangements with specific content providers for faster or better access over their data networks. However, those rules have been stayed by a federal appeals court. At the state level, California and a number of other states have also implemented their own net neutrality rules which have mirrored or expanded parts of the federal regulations.
We cannot predict the further actions the FCC or states may take, whether the new FCC ruling and orders or state initiatives regulating providers will be modified, overturned or vacated by legal action, federal legislation or the FCC itself, or the degree to which further regulatory action or inaction may adversely affect our business. In addition, the results of the 2024 presidential election may influence whether the FCC maintains, modifies or, again, repeals these net neutrality rules. Should the courts or the FCC itself modify, overturn or vacate the FCC net neutrality rules or if state initiatives codifying similar protections are modified, overturned or vacated, Internet service providers may be able to limit our customers’ ability to access our platform or make our platform a less attractive alternative to our competitors’ offerings. While the EU requires equal access to Internet content, under its Digital Single Market initiative the EU may impose additional requirements that could increase our costs. If the FCC, EU or other authorities impose rules directly or inadvertently impose costs on online providers like us, our expenses may increase. Were any of these outcomes to occur, our ability to retain existing customers or attract new customers may be impaired, our costs may increase and our business may be significantly harmed.
The requirements of being a public company might strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of the Nasdaq Stock Market and other applicable securities rules and regulations. Compliance with these rules and regulations will continue to increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources, particularly after we cease to be an “emerging growth company.” The Exchange Act requires, among other things, that we file annual, quarterly and current reports with
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respect to our business and operating results. Further, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight might be required. We are required to disclose changes made in our internal control and procedures on a quarterly basis, and we will be required to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting beginning with the 2025 fiscal year. However, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an emerging growth company.
As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention might be diverted from other business concerns, which could adversely affect our business, operating results and financial condition. Although we have already hired additional employees to assist us in complying with these requirements, we might need to hire more employees in the future or engage outside consultants, which will increase our operating expenses.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice might evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations and standards, and this investment might result in increased general and administrative expenses and a diversion of management’s time and attention from business operations to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities might initiate legal proceedings against us and our business might be harmed.
We also expect that being a newly public company and complying with these new rules and regulations will make it more expensive for us to maintain director and officer liability insurance, and, in the future, we might be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and our compensation, nominating and governance committee, and qualified executive officers.
Our operating results may be harmed if we are required to collect taxes in jurisdictions where we have not historically done so.
We collect various taxes in a number of jurisdictions. One or more states or countries may seek to impose incremental or new sales, use, or other tax collection obligations on us. A successful assertion by a state, country or other jurisdiction that we should have been or should be collecting additional sales, use or other taxes could, among other things, result in substantial tax assessments, including potential penalties and interest, create significant administrative burdens for us, discourage potential customers from subscribing to our platform due to the incremental cost of any such sales, use or other related taxes, or otherwise harm our business.
The application of indirect taxes (such as sales and use tax, value added tax, goods and services tax, business tax and gross receipt tax) to businesses that transact online, such as ours, is a complex and evolving area. In 2018, the U.S. Supreme Court held in South Dakota v. Wayfair, Inc. that states could impose sales tax collection obligations on out-of-state sellers even if those sellers lack any physical presence within the states imposing the sales taxes. Under Wayfair, a person requires only a “substantial nexus” with the taxing state before the state may subject the person to sales tax collection obligations therein. An increasing number of states (both before and after the publication of Wayfair) have considered or adopted laws that attempt to impose sales tax collection obligations on out-of-state sellers. The Supreme Court’s Wayfair decision has removed a significant impediment to the enactment and enforcement of these laws, and it is possible that states may seek to tax out-of-state sellers on sales that occurred in prior tax years, which could create additional administrative burdens for us, put us at a competitive disadvantage if such states do not impose similar obligations on our competitors, and decrease our future sales, which would adversely impact our business, operating results and financial condition. Additionally, we may need to assess our potential tax collection and remittance liabilities based on existing economic nexus laws’ dollar and transaction thresholds. We continue to analyze our exposure for such taxes and liabilities. The application of existing, new, or future laws, whether in the United States or internationally, could harm our business. There have been, and will continue to be, substantial ongoing costs associated with complying with the various indirect tax requirements in the numerous markets in which we conduct or will conduct business.
Our international operations subject us to potentially adverse tax consequences.
We report our taxable income in various jurisdictions worldwide based upon our business operations in those jurisdictions. Our intercompany relationships are subject to transfer pricing regulations administered by taxing authorities in various jurisdictions. The
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relevant taxing authorities might disagree with our determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our operations. We believe that our financial statements reflect adequate reserves to cover such a contingency, but there can be no assurances in that regard.
The enactment of domestic or international legislation implementing tax law changes or the adoption of other domestic or international tax reform policies could materially impact our operating results and financial condition.
Recent changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and use foreign tax credits, as well as changes to U.S. tax laws that might be enacted in the future, could impact the tax treatment of our foreign earnings. Due to expansion of our international business activities, any changes in the U.S. taxation of such activities might increase our worldwide effective tax rate and adversely affect our operating results and financial condition. There is also a high level of uncertainty in today’s tax environment stemming from both global initiatives put forth by the Organisation for Economic Co-operation and Development, or the OECD, and unilateral measures being implemented by various countries due to a lack of consensus on these global initiatives. As an example, the OECD has announced that it has reached agreement among its member countries to implement Pillar Two rules, a global minimum tax at 15% for certain multinational enterprises. While some countries, including certain members of the EU, among other jurisdictions, have issued laws and regulations to conform to this regime that became effective as of January 1, 2024, we have determined that we are not yet subject to Pillar Two rules. We will continue to monitor legislative and regulatory developments to assess potential impacts that Pillar Two rules may have on our business, operating results and financial condition. Further, unilateral measures such as digital services tax and corresponding tariffs in response to such measures create additional uncertainty and may adversely impact our business. If these proposals or other unanticipated proposals are passed, it is likely that we will have to pay higher income taxes in countries where such rules are applicable.
Risks Related to our Organizational Structure
Our principal asset is our interest in OneStream Software LLC, and we depend on OneStream Software LLC and its consolidated subsidiaries for our operating results, cash flows and distributions.
We are a holding company and have no material assets other than our ownership of LLC Units in OneStream Software LLC. As such, we have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if any, depend on the operating results and cash flows of OneStream Software LLC and its consolidated subsidiaries and distributions we receive from OneStream Software LLC. There can be no assurance that OneStream Software LLC and its consolidated subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions will permit such distributions.
Our ability to pay taxes and expenses, including payments under the TRA, might be limited by our structure.
Our principal asset is a controlling equity interest in OneStream Software LLC. As such, we have no independent means of generating revenue. OneStream Software LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is generally not subject to U.S. federal income tax. Instead, taxable income is allocated to holders of its LLC Units, including us. Accordingly, we incur income taxes on our allocable share of any net taxable income of OneStream Software LLC and also incur expenses related to our operations. Pursuant to the Amended LLC Agreement, OneStream Software LLC will make cash distributions to the owners of LLC Units in an amount sufficient to fund their tax obligations in respect of the cumulative taxable income in excess of cumulative taxable losses of OneStream Software LLC that is allocated to them, to the extent previous tax distributions from OneStream Software LLC have been insufficient.
In addition to tax expenses, we also incur expenses related to our operations, plus payments under the TRA, which we expect to be substantial. We intend to cause OneStream Software LLC to make distributions or, in the case of certain expenses, payments, in amounts sufficient to allow us to pay our taxes and operating expenses, including distributions to fund any ordinary course payments due under the TRA. However, OneStream Software LLC’s ability to make such distributions might be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which OneStream Software LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering OneStream Software LLC insolvent. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations (as a result of OneStream Software LLC’s inability to make distributions due to various limitations and restrictions or as a result of the acceleration of our obligations under the TRA), we might have to borrow funds and thus our liquidity and financial condition could be materially harmed. To the extent that we do not make payments under the TRA when due, as a result of having insufficient funds or otherwise, interest will generally accrue at the rate provided for by the TRA. Nonpayment of our obligations for a specified period might constitute a material breach of a material obligation under the TRA, and therefore, might accelerate payments due under the TRA resulting in a lump-sum payment.
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We will be required to pay the TRA Members for certain tax benefits we might claim, and we expect that the payments we will be required to make will be substantial.
Future exchanges or redemptions of LLC Units for cash or shares of our Class A common stock or Class D common stock are expected to produce favorable tax attributes for us. When we acquire LLC Units from the Continuing Members through an exchange or redemption, anticipated tax basis adjustments are likely to increase (for tax purposes) our depreciation and amortization deductions and therefore reduce the amount of income tax we would be required to pay in the future in the absence of this increased basis. This increased tax basis might also decrease the gain (or increase the loss) on future dispositions of certain assets to the extent the tax basis is allocated to those assets. In addition, we expect that certain net operating losses will be available to us as a result of the Blocker Mergers. Under the TRA, we generally expect to retain the benefit of 15% of the applicable tax savings after our payment obligations below are taken into account.
In connection with the Reorganization Transactions we entered into the TRA with the TRA Members (including KKR). Under the TRA, we are generally required to pay cash to the TRA Members in the amount of 85% of the applicable savings, if any, in income tax that we realize, or that we are deemed to realize, as a result of (1) certain tax attributes that are created as a result of the exchanges or redemptions of their LLC Units (calculated under certain assumptions), (2) any net operating losses available to us as a result of the Blocker Mergers, (3) tax benefits related to imputed interest and (4) payments under such TRA. We will continue to be required to make such payments to the TRA Members even after they have exchanged or redeemed all of their LLC Units.
The increase in tax basis, as well as the amount and timing of any payments under these agreements, will vary depending upon a number of factors, including the timing of exchanges or redemptions, the price of our Class A common stock at the time of the exchange or redemption, whether such exchanges or redemptions are taxable, the amount and timing of the taxable income we generate in the future, the U.S. federal and state tax rates then applicable, and the portion of our payments under the TRA constituting imputed interest. Payments under the TRA are expected to give rise to certain additional tax benefits attributable to either further increases in basis or in the form of deductions for imputed interest, depending on the circumstances. Any such benefits are covered by the TRA and will increase the amounts due thereunder. In addition, the TRA provides for interest, at the rate provided for therein, accrued from the due date (without extensions) of the corresponding tax return to the date of payment specified by the TRA.
As a result of the exchanges made under our structure, we might incur a TRA liability. We do not expect to record a TRA liability until the tax benefits associated with the exchanges are more-likely-than-not to be realized.
The payment obligation under the TRA is our obligation and not the obligation of OneStream Software LLC. We expect that the cash payments that we will be required to make to the TRA Members will be substantial. For example, if all of the TRA Members had elected to redeem all of their LLC Units, including those held prior to the consummation of the Blocker Mergers, as of July 25, 2024, the closing date of the IPO, we would have recognized a deferred tax asset of approximately $519.7 million and a liability of approximately $441.7 million, assuming (1) all redemptions occurred on the same day, (2) a price of $20.00 per share of Class A common stock, which was the IPO price, (3) a constant corporate tax rate of 25%, (4) that we had sufficient taxable income to fully use the tax benefits and (5) no material changes in tax law. These amounts are estimates and have been prepared for informational purposes only. The actual amount of deferred tax assets and related liabilities that we will recognize will differ based on, among other things, the timing of the redemptions or exchanges, the price of shares of our Class A common stock at the time of the redemption or exchange and the tax rates then in effect. Any payments made by us to the TRA Members under the TRA will not be available for reinvestment in our business and will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid by us. Nonpayment for a specified period might constitute a material breach of a material obligation under the TRA and therefore might accelerate payments due under the TRA. Furthermore, our future obligation to make payments under the TRA could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that might be deemed realized under the TRA.
Payments under the TRA will be based on the tax reporting positions that we determine. Although we are not aware of any issue that would cause the U.S. Internal Revenue Service, or IRS, to challenge a tax basis increase or other tax attributes subject to the TRA, if any subsequent disallowance of tax basis or other benefits were so determined by the IRS, generally we would not be reimbursed for any payments previously made under the TRA (although we would reduce future amounts otherwise payable under the TRA). As a result, payments could be made under the TRA in excess of the tax savings that we realize in respect of the attributes to which the TRA relates.
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The amounts that we might be required to pay to the TRA Members under the TRA might be accelerated in certain circumstances and might also significantly exceed the actual tax benefits that we ultimately realize.
The TRA provides that if certain mergers, asset sales, other forms of business combination, or other changes of control were to occur, if we materially breach any of our material obligations under the TRA or if, at any time, we elect an early termination of the TRA, then the TRA will terminate and our obligations, or our successor’s obligations, under the TRA would accelerate and become immediately due and payable. The amount due and payable in those circumstances is determined based on certain assumptions, including an assumption that we would have sufficient taxable income in each relevant taxable year to fully use all potential future tax benefits that are subject to the TRA. In those circumstances, any remaining outstanding LLC Units of OneStream Software LLC would be treated as exchanged for Class A common stock and the applicable TRA Members would generally be entitled to payments under the TRA resulting from such deemed exchanges. We may elect to terminate the TRA early only with the approval of OneStream, Inc.’s independent directors (within the meaning of Rule 10A-3 under the Exchange Act and the Nasdaq Stock Market rules).
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As a result of the foregoing, we could be required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are the subject of the TRA, which payment may be made significantly in advance of the actual realization, if any, of such future tax benefits. We also could be required to make cash payments to the TRA Members that are greater than the specified percentage of the actual benefits we ultimately realize in respect of the tax benefits that are subject to the TRA.
Our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring, deterring or preventing certain mergers, asset sales, other forms of business combination or other changes of control. Accordingly, the TRA payment obligation could make us a less attractive target for an acquisition and result in holders of our Class A common stock receiving substantially less consideration in connection with a merger, asset sale, or other form of business combination or other change of control transaction than they would receive in the absence of such obligation. Thus, the TRA Members’ interests may conflict with those of the holders of our Class A common stock. In addition, we might need to incur debt to finance payments under the TRA to the extent our cash resources are insufficient and there can be no assurance that we will be able to finance our obligations under the TRA. If there had been an early termination or other acceleration event occurring immediately following the IPO, the maximum obligation due and payable by us under the TRA, assuming no material changes in the relevant tax laws or tax rates and assuming the present value of such tax benefit payments were discounted at a rate equal to SOFR plus 100 basis points, then at 6.34% per year, compounded annually, would have been approximately $272.3 million, based on the IPO price of $20.00 per share.
Our organizational structure, including the TRA, confers certain benefits upon the TRA Members, including KKR, which do not benefit Class A common stockholders to the same extent as it benefits the TRA Members, and imposes additional costs on us.
Our organizational structure, including the TRA, confers certain benefits upon the TRA Members, including KKR, which do not benefit the holders of our Class A common stock to the same extent as it benefits the TRA Members. The TRA provides for the payment by us to the TRA Members of 85% of the amount of tax benefits, if any, that we realize, or in some circumstances are deemed to realize, as a result of (1) the increases in the tax basis of assets of OneStream Software LLC resulting from any redemptions or exchanges of LLC Units from the Continuing Members, (2) any net operating losses available to us as a result of the Blocker Mergers and (3) certain other tax benefits related to our making payments under the TRA. Due to the uncertainty of various factors, we cannot precisely quantify the likely tax benefits we will realize as a result of LLC Unit exchanges and the resulting amounts we are likely to pay out to the Continuing Members pursuant to the TRA; however, we estimate that such payments may be substantial. Although we will retain 15% of the amount of such tax benefits, this and other aspects of our organizational structure might adversely impact the trading market for the Class A common stock. In addition, our organizational structure, including the TRA, imposes additional compliance costs and requires a significant commitment of resources that would not be required of a company with a simpler organizational structure.
Generally, we will not be reimbursed for any payments made to TRA Members under the TRA in the event that any tax benefits are disallowed.
If the IRS challenges the tax basis or other tax attributes that give rise to payments under the TRA and the tax basis or other tax attributes are subsequently required to be adjusted, generally the recipients of payments under the TRA will not reimburse us for any payments we previously made to them. Instead, any excess cash payments made by us to a TRA Member will be netted against any future cash payments that we might otherwise be required to make under the terms of the TRA. However, a challenge to any tax benefits initially claimed by us might not arise for a number of years following the initial time of such payment or, even if challenged early, such excess cash payment might be greater than the amount of future cash payments that we might otherwise be required to make under the terms of the TRA and, as a result, there might not be future cash payments to net against. If the outcome of any challenge by the IRS of the tax basis or other tax attributes that give rise to payments under the TRA would reasonably be expected to materially and adversely affect the rights and obligations of the TRA Members under the TRA, then we will not be permitted to settle such challenge without the consent (not to be unreasonably withheld or delayed) of KKR Dream Holdings LLC as the designated representative under the TRA. The interests of the TRA Members in any such challenge may differ from or conflict with our interests and your interests, and the TRA Members may exercise their consent rights relating to any such challenge in a manner adverse to our interests and your interests. The applicable U.S. federal income tax rules are complex and factual in nature, and there can be no assurance that the IRS or a court will not disagree with our tax reporting positions. As a result, it is possible that we could make cash payments under the TRA that are substantially greater than our actual cash tax savings.
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The disparity between the U.S. corporate tax rate and the U.S. tax rate applicable to non-corporate members of OneStream Software LLC might complicate our ability to maintain our capital structure, which could impose transaction costs on us and require management attention.
If and when we generate taxable income, OneStream Software LLC will generally make quarterly tax distributions pro rata to each of its members, including us, based on each member’s allocable share of net taxable income (calculated under certain assumptions) multiplied by an assumed tax rate. The assumed tax rate for this purpose will be the highest effective marginal combined federal, state, and local income tax rate that might potentially apply to any member for the applicable fiscal year. The legislation commonly known as the Tax Cuts and Jobs Act of 2017, or the Tax Act, significantly reduced the highest marginal federal income tax rate applicable to corporations such as OneStream, Inc., relative to non-corporate taxpayers. As a result of this disparity, we expect to receive tax distributions from OneStream Software LLC significantly in excess of our actual tax liability and our obligations under the TRA, which could result in our accumulating a significant amount of cash. This would complicate our ability to maintain certain aspects of our capital structure. Such cash, if retained, could cause the value of an LLC Unit to deviate from the value of a share of Class A common stock, contrary to the one-to-one relationship between the number of LLC Units owned by OneStream, Inc. and the number of shares of Class A common stock and Class D common stock outstanding. In addition, such cash, if used to purchase additional LLC Units, could result in deviation from the one-to-one relationship unless a corresponding number of additional shares are distributed as a stock dividend. We might choose to pay dividends with any excess cash. These considerations could have unintended impacts on the market price of our Class A common stock and might impose transaction costs and require management efforts to address on a recurring basis. To the extent that we do not distribute such excess cash as dividends and instead, for example, hold such cash balances or lend them to OneStream Software LLC, the Continuing Members in OneStream Software LLC during a period in which we hold such cash balances could benefit from the value attributable to such cash balances as a result of redeeming or exchanging their LLC Units and obtaining ownership of Class A common stock (or a cash payment based on the value of Class A common stock). In such case, these Continuing Members could receive disproportionate value for their LLC Units exchanged during this time frame.
Risks Related to Ownership of Our Class A Common Stock
Our Class C common stock and Class D common stock are entitled to ten votes per share, which has the effect of concentrating voting control with the holders of our Class C common stock and Class D common stock, including KKR and our co-founder and chief executive officer. This limits or precludes our other stockholders’ ability to influence corporate matters and may have a negative impact on the price of our Class A common stock.
Our Class C common stock has ten votes per share, our Class D common stock has ten votes per share and our Class A common stock, which is our publicly traded stock, has one vote per share. As of the date of this report, the holders of our Class C common stock and our Class D common stock, including KKR (which is one of the TRA Members entitled to the payments under the TRA) and our co-founder and chief executive officer, collectively hold more than 98% of the voting power of our outstanding capital stock. As a result, the holders of our Class C common stock and our Class D common stock have the ability to control or significantly influence any action requiring approval of our stockholders, including the election and removal of our directors, amendments to our certificate of incorporation and bylaws, the approval of any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction. Many of these actions may be taken even if they are opposed by other stockholders. This concentration of ownership and voting power may also delay, defer or even prevent an acquisition by a third party or other change in control of our company and may make some transactions more difficult or impossible without their support, even if such events are in the best interests of other stockholders. In addition, our stockholders’ agreement with KKR Dream Holdings LLC provides that so long as KKR and its affiliates own (1) at least 40% of our outstanding common stock, KKR will have the right to nominate a majority of our board of directors, and (2) at least 10% but less than 40% of our outstanding common stock, KKR will have the right to nominate a percentage of the authorized number of directors equal to KKR’s ownership of our outstanding common stock (rounded up to the nearest whole director). This concentration of voting power with the holders of our Class C common stock and our Class D common stock, and KKR’s director nomination rights, may have a negative impact on the price of our Class A common stock.
KKR controls us, and its interests may conflict with our or our Class A common stockholders’ interests.
As of the date of this report, KKR holds a majority of the voting power of our outstanding capital stock and, as a result, is able to control matters requiring stockholder approval. Accordingly, KKR, in its capacity as a stockholder, is able to exercise significant control over our operations, including the elections or appointments of directors, amendments to our governing documents, and entering into extraordinary transactions, including a sale of our company (which could trigger the acceleration of the TRA payments to the TRA Members, including KKR). The interests of KKR may not in all cases be aligned with our or our Class A common stockholders’ interests.
Further, our stockholders’ agreement with KKR Dream Holdings LLC provides that so long as KKR and its affiliates own (1) at least 40% of our outstanding common stock, KKR will have the right to nominate a majority of our board of directors, and (2) at least 10% but less than 40% of our outstanding common stock, KKR will have the right to nominate a percentage of the authorized number
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of directors equal to KKR’s ownership of our outstanding common stock (rounded up to the nearest whole director). In addition, the stockholders’ agreement provides that so long as KKR owns at least 25% of our outstanding common stock, KKR’s consent will be required for us to enter into any transaction or agreement that results in a change in control, and for the termination, hiring or appointment of our chief executive officer. As of the date of this report, five of eight members of our board of directors are nominated by KKR pursuant to the stockholders’ agreement. Accordingly, KKR controls decisions on all matters requiring board approval and our operations and policies, including the appointment of management, future issuances of Class A common stock or other securities (but not cash redemptions of KKR’s LLC Units, which must be approved by the Disinterested Majority), the payment of dividends, if any, on our Class A common stock, the incurrence of debt by us, amendments to our governing documents and entering into extraordinary transactions, including, generally, a sale of our company (which could trigger the acceleration of the TRA payments to the TRA Members, including KKR).
In addition, because KKR holds a portion of its ownership interest in our business through OneStream Software LLC, it might have conflicting interests with us or our Class A common stockholders. For example, KKR might have different tax positions from us which could influence its decisions regarding whether and when to dispose of assets, whether and when to incur new or refinance existing indebtedness, especially in light of the TRA, and whether and when we should terminate the TRA and accelerate our obligations thereunder. The structuring of future transactions might take into consideration KKR’s tax or other considerations even where no similar benefit would accrue to us or holders of our Class A common stock.
In addition, KKR’s significant ownership in us, nomination of a majority of the members of our board of directors and resulting ability to effectively control or significantly influence us may discourage someone from making a significant equity investment in us, or could discourage transactions involving a change in control, including transactions in which you as a holder of shares of our Class A common stock might otherwise receive a premium for your shares over the then-current market price.
Our certificate of incorporation contains provisions renouncing our interest and expectation to participate in certain corporate opportunities identified by, or presented to, KKR or its affiliates, other than those presented to representatives of KKR or its affiliates in their capacity as members of our board of directors, which could create conflicts of interest and have a material adverse effect on our business, operating results, financial condition and prospects if attractive corporate opportunities are allocated by KKR to itself, its affiliates or third parties instead of to us.
KKR is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us or that would be complementary to our business if we acquired them. Our certificate of incorporation provides that, to the fullest extent permitted by law, none of KKR or its affiliates, or any of their respective directors, partners, principals, officers, members, managers or employees, including any of the foregoing who serve as our officers or directors, all of whom we refer to as the exempted persons, will have any duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us or any of our affiliates. In addition, to the fullest extent permitted by law, in the event that any exempted person is presented with a business opportunity, even if the opportunity is one that we or our affiliates might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, such exempted person will have no duty to communicate or offer such business opportunity to us or any of our affiliates, provided that our certificate of incorporation does not renounce our interest in any business opportunity that is expressly offered to an exempted person solely in his or her capacity as a director or officer of our company. No exempted person will be liable to us, any of our affiliates or our stockholders for breach of any fiduciary or other duty, solely by reason of the fact that any such exempted person pursues or acquires such business opportunity, sells, assigns, transfers or directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to us or any of our affiliates. The Amended LLC Agreement contains similar provisions in favor of KKR and its affiliates, as well as provisions allowing KKR and its affiliates to freely conduct their business and investment activities. These provisions could create conflicts of interest and have a material adverse effect on our business, operating results, financial condition and prospects if attractive business opportunities are allocated by KKR or another exempted person to itself, its affiliates or third parties instead of to us.
Although we do not rely on the “controlled company” exemption under the rules and regulations of the Nasdaq Stock Market, we have the right to use such exemption and therefore could in the future avail ourselves of certain reduced corporate governance requirements.
As of the date of this report, KKR holds a majority of the voting power of our outstanding capital stock. Under the rules of the Nasdaq Stock Market, a company of which more than 50% of the voting power is held by a person or group of persons acting together is a “controlled company” and may elect not to comply with certain rules and regulations of the Nasdaq Stock Market regarding corporate governance, including:
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These requirements would not apply to us if, in the future, we choose to avail ourselves of the “controlled company” exemption. Although we qualify as a “controlled company,” we do not currently rely on these exemptions and intend to continue to fully comply with all corporate governance requirements under the rules and regulations of the Nasdaq Stock Market, subject to the phase-in periods for newly public companies. However, if we were to rely on some or all of the controlled company exemptions in the future, you would not have the same protections afforded to stockholders of other companies that are subject to all of the corporate governance requirements of the Nasdaq Stock Market.
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Our stock price might be volatile or might decline regardless of our operating performance, resulting in substantial losses for investors.
The trading price of our Class A common stock is likely to be volatile and could fluctuate widely regardless of our operating performance. If you purchase shares of our Class A common stock, you may not be able to resell those shares at or above the price you pay for such shares. The market price of our Class A common stock might fluctuate significantly in response to numerous factors, many of which are beyond our control, including:
In addition, the stock markets, and in particular the Nasdaq Global Select Market on which our Class A common stock is listed, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many technology companies. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility, or following an initial public offering. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from operating our business, and adversely affect our business, operating results, financial condition and cash flows.
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Substantial future sales of shares of our Class A common stock, or the perception that such sales may occur, could cause the market price of our Class A common stock to decline.
The market price of our Class A common stock could decline as a result of substantial sales of our Class A common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our Class A common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.
As of the date of this report, an aggregate of 74,135,230 shares of Class D common stock are issuable upon the redemption of LLC Units held by the Continuing Members (and the cancelation of an equal number of shares of Class C common stock held by them), subject to the conditions set forth in the Amended LLC Agreement, and such shares of Class D common stock are in turn convertible into shares of our Class A common stock on a one-for-one basis. In addition, as of the date of this report, an aggregate of 132,081,358 shares of outstanding Class D common stock are likewise convertible into shares of our Class A common stock on a one-for-one basis.
Under our registration rights agreement, the holders of an aggregate of 151,623,672 shares of our Class C common stock and Class D common stock, and their permitted transferees, have the right, subject to the conditions set forth in the registration rights agreement, to require us to file registration statements covering the resale of up to 151,623,672 shares of Class A common stock issuable upon exchange or conversion of such outstanding shares of our other series of common stock and redemption or exchange of accompanying LLC Units, as applicable, or to include their shares in registration statements that we might file for ourselves or our stockholders.
We cannot predict the timing, size or disclosure of any future issuances or sales of our Class A common stock resulting from the redemption or exchange of LLC Units or the conversion of Class D common stock, or the effect, if any, that future issuances, disclosure, if any, or sales of shares of our Class A common stock might have on the market price of our Class A common stock. New issuances of shares of Class A common stock may cause other holders of Class A common stock to experience significant dilution, and sales or distributions of substantial amounts of our Class A common stock, or the perception that such sales or distributions could occur, including upon the exercise of registration rights, might cause the market price of our Class A common stock to decline.
The holders of substantially all of our shares of Class A common stock not sold in the IPO (including shares of Class A common stock issuable upon exchange or conversion of outstanding shares of our other series of common stock and redemption of accompanying LLC Units, as applicable) are currently restricted from transferring or selling their securities pursuant to lock-up agreements entered into with the underwriters of the IPO or market standoff provisions that similarly restrict the transfer and sale of their shares, subject to certain exceptions. These lock-up agreements and market standoff restrictions will expire at the opening of trading on November 11, 2024.
Additionally, we have registered the offer and sale of all shares of Class A common stock subject to equity awards outstanding and reserved for issuance under our equity incentive plans. The sale of these shares, or the perception that these shares may be sold in the public market, in private transactions or otherwise, may adversely affect the market price of our Class A common stock.
If securities or industry analysts do not publish research or reports about our business or if they downgrade our stock or our sector, or if there is any fluctuation in our credit rating, our stock price and trading volume could decline.
The trading market for our Class A common stock relies in part on the research and reports that securities or industry analysts publish about us or our business. We do not control these analysts. If one or more of the analysts who cover us downgrade our Class A common stock or our industry, or the Class A common stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our Class A common stock could decline. If one or more of these analysts stops covering us or fails to publish reports on us regularly, we could lose visibility in the market, which, in turn, could cause our Class A common stock price or trading volume to decline.
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We do not intend to pay dividends to the holders of our Class A common stock for the foreseeable future.
We do not intend to pay dividends to the holders of our Class A common stock for the foreseeable future, except possibly in connection with maintaining certain aspects of our Up-C structure. See the section titled “—Risks Related to Our Organizational Structure—The disparity between the U.S. corporate tax rate and the U.S. tax rate applicable to non-corporate members of OneStream Software LLC might complicate our ability to maintain our capital structure, which could impose transaction costs on us and require management attention.” Our ability to pay dividends on our Class A common stock may be restricted by the terms of any future debt incurred or preferred securities issued by us or our subsidiaries or law. Payments of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion and any legal or contractual limitation on our ability to pay dividends. As a result, any capital appreciation in the price of our Class A common stock may be your only source of gain on your investment in our Class A common stock.
If, however, we decide to pay a dividend to the holders of our Class A common stock in the future, we would likely need to cause OneStream Software LLC to make distributions to OneStream, Inc. in an amount sufficient to cover cash dividends, if any, declared by us. Deterioration in the consolidated financial condition, earnings or cash flow of OneStream Software LLC for any reason could limit or impair its ability to pay cash distributions or other distributions to us. OneStream Software LLC and its subsidiaries may be restricted from distributing cash to OneStream, Inc. by, among other things, law or the documents governing our existing or future indebtedness.
We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Class A common stock less attractive to investors.
We are an emerging growth company as defined in the JOBS Act, and for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including:
In addition, the JOBS Act provides that an emerging growth company may take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies unless it otherwise irrevocably elects not to avail itself of this exemption. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our consolidated financial statements may not be comparable to the financial statements of companies that comply with new or revised accounting pronouncements as of public company effective dates.
We could be an emerging growth company until as late as December 31, 2029. Our status as an emerging growth company will end as soon as any of the following takes place:
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We cannot predict if investors will find our Class A common stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors find our Class A common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our Class A common stock and the market price of our Class A common stock may be more volatile.
Anti-takeover provisions in our governing documents could make an acquisition of us difficult, limit attempts by our stockholders to replace or remove our current management and depress the market price of our Class A common stock.
Our certificate of incorporation, bylaws and stockholders’ agreement contain provisions that could depress the market price of our Class A common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. Among other things, these provisions provide that:
KKR currently holds a majority of the voting power of our outstanding capital stock. Additional provisions in our governing documents will become effective on such date when KKR, Mr. Shea and their respective affiliates collectively cease to beneficially own, directly or indirectly, more than 50% of the voting power of our capital stock, which, among other things, provide that:
Moreover, our certificate of incorporation contains a provision that provides us with protections similar to Section 203 of the DGCL and prevents us from engaging in a business combination with a person (excluding KKR, its affiliates, associates and certain other related parties and any person who acquires ownership of at least 15% of our common stock directly or indirectly from KKR) who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless approval from our board of directors or stockholders is obtained prior to the acquisition.
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In addition, our stockholders’ agreement with KKR Dream Holdings LLC provides that so long as KKR owns at least 25% of our outstanding common stock, KKR’s consent will be required for us to enter into any transaction or agreement that results in a change in control and for the termination, hiring or appointment of our chief executive officer.
Any provision of our certificate of incorporation, bylaws or stockholders’ agreement that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our Class A common stock, and could also affect the price that some investors are willing to pay for our Class A common stock.
Our bylaws designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders or employees.
Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action, suit or proceeding brought on our behalf, (2) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, stockholders, officers or other employees to us or our stockholders, (3) any action, suit or proceeding asserting a claim against us or any current or former director, stockholder, officer or other employee of our company arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws, (4) any other action, suit or proceeding as to which the DGCL confers jurisdiction on the Court of Chancery or (5) any action, suit or proceeding asserting a claim against us or any current or former director, stockholder, officer or other employee of our company governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware, except for any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination). This provision does not apply to any action brought to enforce a duty or liability created by the Exchange Act and the rules and regulations thereunder.
Section 22 of the Securities Act establishes concurrent jurisdiction for federal and state courts over Securities Act claims. Accordingly, both state and federal courts have jurisdiction to hear such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring or holding or owning (or continuing to hold or own) any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions. Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our current or former directors, officers, stockholders or other employees, which may discourage such lawsuits against us and our current and former directors, officers, stockholders and other employees. Our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder as a result of our exclusive forum provisions.
Further, the enforceability of similar exclusive forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that a court of law could rule that these types of provisions are inapplicable or unenforceable if they are challenged in a proceeding or otherwise. If a court were to find either exclusive forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur significant additional costs associated with resolving such dispute, as well as resolving such action in other jurisdictions, all of which could harm our operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Reorganization Transactions
On July 23, 2024, as part of the Reorganization Transactions, we issued (1) 77,141,267 shares of our Class C common stock to the Continuing Members and (2) 138,067,795 shares of our Class D common stock to the Former Members in exchange for 138,067,795 LLC Units.
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The Continuing Members have the right, from time to time and subject to the terms of the Amended LLC Agreement, to have their LLC Units redeemed in exchange for, at our election, cash or (1) Class A common stock, if such Continuing Member is a holder of Class B common stock, or (2) Class D common stock, if such Continuing Member is a holder of Class C common stock (with the corresponding shares of Class B common stock or Class C common stock, as applicable, cancelled in connection with the redemption), in each case on a one-for-one basis. Each share of our Class C common stock is convertible at any time at the option of the holder into one share of our Class B common stock, and each share of our Class D common stock is convertible at any time at the option of the holder into one share of our Class A common stock.
These issuances that were part of the Reorganization Transactions were exempt from registration in reliance on Section 4(a)(2) of the Securities Act and Rule 506 promulgated thereunder.
Equity Plan-Related Issuances
On July 23, 2024, we granted stock options to purchase an aggregate of 2,413,968 shares of our Class A common stock to certain directors, executive officers and other employees under our 2024 Equity Incentive Plan, at an exercise price of $20.00 per share.
On July 23, 2024, we issued 459,230 shares of our Class A common stock upon exercise of options granted under our 2019 Common Unit Option Plan to certain of our executive officers and other employees, at a weighted-average exercise price of $7.08, for total gross proceeds to us of approximately $3.3 million. The holders then sold these shares in the IPO.
These equity plan-related issuances were exempt from registration in reliance on Section 4(a)(2) of the Securities Act or Rule 701 promulgated under Section 3(b) of the Securities Act.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the three months ended September 30, 2024, the following officers adopted and modified a Rule 10b5-1 trading arrangement as defined in Regulation S-K Item 408, as follows:
On
On
During the three months ended September 30, 2024,
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Item 6. Exhibits.
The exhibits listed below are filed or furnished as part of this Quarterly Report on Form 10-Q, or are incorporated herein by reference, in each case as indicated below:
Exhibit |
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Exhibit Description |
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Incorporated by Reference |
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Filed Herewith |
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Furnished Herewith |
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Form |
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File Number |
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Filing Date |
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Number |
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3.1 |
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Amended and Restated Certificate of Incorporation of OneStream, Inc. |
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8-K |
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001-42187 |
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7/26/24 |
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3.1 |
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3.2 |
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8-K |
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001-42187 |
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7/26/24 |
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3.2 |
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4.1 |
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S-1 |
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333-280573 |
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6/28/24 |
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4.1 |
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10.1 |
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8-K |
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001-42187 |
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7/26/24 |
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10.1 |
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10.2 |
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8-K |
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001-42187 |
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7/26/24 |
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10.2 |
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10.3 |
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8-K |
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001-42187 |
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7/26/24 |
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10.3 |
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10.4 |
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8-K |
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001-42187 |
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7/26/24 |
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10.4 |
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10.5 |
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Form of Director and Executive Officer Indemnification Agreement |
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8-K |
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001-42187 |
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7/26/24 |
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10.5 |
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10.6# |
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S-1 |
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333-280573 |
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6/28/24 |
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10.5 |
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10.7# |
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S-1/A |
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333-280573 |
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7/15/24 |
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10.6 |
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10.8# |
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2024 Employee Stock Purchase Plan and related form agreements |
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S-1/A |
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333-280573 |
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7/15/24 |
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10.7 |
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10.9# |
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S-1 |
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333-280573 |
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6/28/24 |
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10.8 |
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10.10# |
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S-1/A |
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333-280573 |
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7/15/24 |
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10.9 |
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10.11# |
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Confirmatory Employment Letter by and between the registrant and Thomas Shea |
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S-1 |
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333-280573 |
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6/28/24 |
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10.10 |
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10.12# |
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Confirmatory Employment Letter by and between the registrant and Craig Colby |
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S-1 |
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333-280573 |
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6/28/24 |
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10.11 |
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10.13# |
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Confirmatory Employment Letter by and between the registrant and William Koefoed |
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S-1 |
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333-280573 |
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6/28/24 |
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10.12 |
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10.14# |
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S-1 |
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333-280573 |
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6/28/24 |
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10.13 |
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10.15 |
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S-1/A |
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333-280573 |
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7/15/24 |
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10.15 |
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31.1 |
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X |
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31.2 |
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X |
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32.1 |
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X |
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32.2 |
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X |
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101.INS |
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Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document |
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X |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
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X |
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82
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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X |
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# Indicates management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ONESTREAM, INC. |
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Date: November 7, 2024 |
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By: |
/s/ Thomas Shea |
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Thomas Shea |
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Chief Executive Officer |
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(Principal Executive Officer) |
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Date: November 7, 2024 |
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By: |
/s/ William Koefoed |
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William Koefoed |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
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