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UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

or☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38034

Alteryx, Inc.(Exact name of registrant as specified in its charter)

Delaware 90-0673106

(State or other jurisdiction ofincorporation or organization)

(I.R.S. EmployerIdentification No.)

3345 Michelson Drive, Suite 400, Irvine, California 92612(Address of principal executive offices) (Zip Code)

(888) 836-4274(Registrant’s telephone number, including area code)

Not Applicable(Former name, former address and former fiscal year, if changed since last report)

Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☒No☐

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyandpostedonitscorporateWebsite,ifany,everyInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitandpostsuchfiles).Yes☒No☐

Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,smallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct.Largeacceleratedfiler ☐ Acceleratedfiler ☐

Non-acceleratedfiler ☒(Donotcheckifasmallerreportingcompany) Smallerreportingcompany ☐

Emerginggrowthcompany ☒

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐

Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).Yes☐No☒

Indicatethenumberofsharesoutstandingofeachoftheissuer’sclassesofcommonstock,asofthelatestpracticabledate.

OnNovember3,2017,therewere23,921,917sharesoftheregistrant’sClassAcommonstockoutstandingand35,244,315sharesoftheregistrant’sClassBcommonstockoutstanding.

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Alteryx,Inc.QuarterlyReportonForm10-Q

FortheQuarterlyPeriodEndedSeptember30,2017TABLEOFCONTENTS

Page NumberPartI: FinancialInformation 4

Item1.CondensedConsolidatedFinancialStatements(unaudited) 4

A.CondensedConsolidatedStatementsofOperationsandComprehensiveLossforthethreeandninemonthsended

September30,2017and2016 4

B.CondensedConsolidatedBalanceSheetsasofSeptember30,2017andDecember31,2016 5

C.CondensedConsolidatedStatementsofRedeemableConvertiblePreferredStockandStockholders’Equity(Deficit)forthe

ninemonthsendedSeptember30,2017 6

D.CondensedConsolidatedStatementsofCashFlowsfortheninemonthsendedSeptember30,2017and2016 7

E.NotestoCondensedConsolidatedFinancialStatements 9

Item2.Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations 23

Item3.QuantitativeandQualitativeDisclosuresAboutMarketRisk 33

Item4.ControlsandProcedures 33

PartII: OtherInformation 34

Item1.LegalProceedings 34

Item1A.RiskFactors 34

Item2.UnregisteredSalesofEquitySecuritiesandUseofProceeds 62

Item6.Exhibits 63

Signatures 64

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

ThisQuarterlyReportonForm10-Qincludes“forward-lookingstatements”withinthemeaningofthefederalsecuritieslaws.AllstatementscontainedinthisQuarterlyReportonForm10-Qotherthanstatementsofhistoricalfact,includingstatementsregardingourfutureresultsofoperationsandfinancialposition,ourbusinessstrategyandplans,andourobjectivesforfutureoperations,areforward-lookingstatements.Insomecases,forward-lookingstatementscanbeidentifiedbytheuseofterminologysuchas“believe,”“may,”“will,”“intend,”“expect,”“plan,”“anticipate,”“estimate,”“potential,”or“continue,”orothercomparableterminology.Forward-lookingstatementscontainedinthisQuarterlyReportonForm10-Qinclude,butarenotlimitedto,statementsaboutourexpectationsregarding:

• trendsinrevenue,costofrevenue,andgrossmargin;

• ourinvestmentsincloudinfrastructureandthecostofthird-partydatacenterhostingfees;

• trendsinoperatingexpenses,includingresearchanddevelopmentexpense,salesandmarketingexpense,andgeneralandadministrativeexpense,andexpectationsregardingtheseexpensesasapercentageofrevenue;

• maintainingafullvaluationallowancefordomesticnetdeferredtaxassets;

• cashandcashequivalentsandshort-terminvestmentsandanypositivecashflowsfromoperationsbeingsufficienttosupportourworkingcapitalandcapitalexpenditurerequirementsforatleastthenext12months;and

• otherstatementsregardingourfutureoperations,financialcondition,andprospectsandbusinessstrategies.

Althoughwebelievethattheexpectationsreflectedintheforward-lookingstatementscontainedhereinarereasonable,theseexpectationsoranyoftheforward-lookingstatementscouldprovetobeincorrect,andactualresultscoulddiffermateriallyfromthoseprojectedorassumedintheforward-lookingstatements.Ourfuturefinancialconditionandresultsofoperations,aswellasanyforward-lookingstatements,aresubjecttorisksanduncertainties,including,butnotlimitedto,thefactorssetforthinthisQuarterlyReportonForm10-QunderPartII,Item1A.RiskFactors.Moreover,weoperateinaverycompetitiveandrapidlychangingenvironment.Newrisksemergefromtimetotime.Itisnotpossibleforustopredictallrisks,norcanweassesstheimpactofallfactorsonourbusinessortheextenttowhichanyfactor,orcombinationoffactors,maycauseactualresultstodiffermateriallyfromthosecontainedinanyforward-lookingstatementswemaymake.Inlightoftheserisks,uncertainties,andassumptions,theforward-lookingstatementsmadeinthisQuarterlyReportonForm10-Qmaynotoccurandactualresultscoulddiffermateriallyandadverselyfromthoseanticipatedorimpliedintheforward-lookingstatements.

Allforward-lookingstatementsandreasonswhyresultsmaydifferincludedinthisQuarterlyReportonForm10-QaremadeasofthedateofthefilingofthisQuarterlyReportonForm10-Q,andweassumenoobligationtoupdateanysuchforward-lookingstatementsorreasonswhyactualresultsmaydiffer.ThefollowingdiscussionshouldbereadinconjunctionwithourcondensedconsolidatedfinancialstatementsandnotestheretoappearinginPartI,Item1ofthisQuarterlyReportonForm10-Q.

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PART I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (unaudited).

Alteryx, Inc.Condensed Consolidated Statements of Operations and Comprehensive Loss

(inthousands,exceptpersharedata)(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2017 2016 2017 2016 Revenue $34,155 $ 22,462 $ 93,019 $ 60,828Costofrevenue 5,425 4,062 15,545 11,727

Grossprofit 28,730 18,400 77,474 49,101Operatingexpenses:

Researchanddevelopment 7,774 4,496 20,943 12,419Salesandmarketing 15,514 13,456 48,731 42,530Generalandadministrative 8,005 4,298 24,115 11,623

Totaloperatingexpenses 31,293 22,250 93,789 66,572

Lossfromoperations (2,563) (3,850) (16,315) (17,471)Otherexpense,net (711) (284) (277) (562)

Lossbeforeprovisionfor(benefitof)incometaxes (3,274) (4,134) (16,592) (18,033)Provisionsfor(benefitof)incometaxes 25 58 (632) 148

Netloss $ (3,299) $ (4,192) $(15,960) $(18,181)

Less:AccretionofSeriesAredeemableconvertiblepreferredstock — (1,733) (1,983) (4,466)

Netlossattributabletocommonstockholders $ (3,299) $ (5,925) $(17,943) $(22,647)

Netlosspershareattributabletocommonstockholders,basicanddiluted $ (0.06) $ (0.18) $ (0.35) $ (0.70)

Weighted-averagesharesusedtocomputenetlosspershareattributabletocommonstockholders,basicanddiluted 58,942 32,538 50,864 32,390

Othercomprehensiveincome(loss),netoftax: Netunrealizedholdinggain(loss)oninvestments,netoftax (15) (9) (101) 75Foreigncurrencytranslationadjustments,netoftax (40) — (148) —

Othercomprehensiveincome(loss),netoftax (55) (9) (249) 75

Totalcomprehensiveloss $ (3,354) $ (4,201) $(16,209) $(18,106)

Theaccompanyingnotesareanintegralpartofthesecondensedconsolidatedfinancialstatements

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Alteryx, Inc.Condensed Consolidated Balance Sheets

(inthousands,exceptparvalue)(unaudited)

September 30,2017

December 31,2016

Assets Currentassets:

Cashandcashequivalents $ 95,776 $ 31,306Short-terminvestments 60,812 21,394Accountsreceivable,net 30,820 35,367Deferredcommissions 6,700 7,358Prepaidexpensesandothercurrentassets 6,211 5,013

Totalcurrentassets 200,319 100,438Propertyandequipment,net 6,913 6,212Long-terminvestments 25,989 —Goodwill 8,741 —Intangibleassets,net 8,456 —Otherassets 3,928 4,765

Totalassets $ 254,346 $ 111,415

Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity (Deficit) Currentliabilities:

Accountspayable $ 4,014 $ 1,780Accruedpayrollandpayrollrelatedliabilities 6,108 7,760Accruedexpensesandothercurrentliabilities 8,063 4,987Deferredrevenue 78,656 71,050

Totalcurrentliabilities 96,841 85,577Deferredrevenue 3,522 3,084Otherliabilities 2,531 1,182

Totalliabilities 102,894 89,843

Commitmentsandcontingencies(Note8) Redeemableconvertiblepreferredstock,$0.0001parvalue:nosharesand14,899sharesauthorizedasofSeptember30,2017andDecember31,2016,respectively;nosharesand14,647sharesissuedandoutstandingasofSeptember30,2017andDecember31,2016,respectively;aggregateliquidationpreferenceof$0and$87,448asofSeptember30,2017andDecember31,2016,respectively — 99,182

Stockholders’equity(deficit): Preferredstock,$0.0001parvalue:10,000andnosharesauthorizedasofSeptember30,2017andDecember31,2016,respectively;nosharesissuedandoutstandingasofSeptember30,2017andDecember31,2016 — —

Commonstock,$0.0001parvalue:1,000,000and56,025sharesauthorizedasofSeptember30,2017andDecember31,2016,respectively;59,142and32,674sharesissuedandoutstandingasofSeptember30,2017andDecember31,2016,respectively 5 3

Additionalpaid-incapital 253,712 8,443Accumulateddeficit (102,007) (86,047)Accumulatedothercomprehensiveloss (258) (9)

Totalstockholders’equity(deficit) 151,452 (77,610)

Totalliabilities,redeemableconvertiblepreferredstock,andstockholders’equity(deficit) $ 254,346 $ 111,415


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Alteryx, Inc.Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(inthousands)(unaudited)

Accumulated Redeemable Convertible Additional Other Preferred Stock Common Stock Paid-in Accumulated Comprehensive Shares Amount Shares Amount Capital Deficit Loss Total BalancesatDecember31,2016 14,647 $ 99,182 32,674 $ 3 $ 8,443 $ (86,047) $ (9) $ (77,610)

Issuanceofcommonstock,netofissuancecostsof$3,344 — — 10,350 1 131,412 — — 131,413

AccretionofSeriesAredeemableconvertiblepreferredstockissuancecostsandredemptionfeature — 1,983 — — (1,983) — — (1,983)

Conversionofredeemableconvertiblepreferredstocktocommonstock (14,647) (101,165) 14,647 1 101,164 — — 101,165

Equityissuedinbusinesscombination — — 265 — 5,285 5,285Sharesissuedpursuanttostockawards — — 1,194 — 2,562 — — 2,562Stock-basedcompensation — — — — 6,454 — — 6,454Equitysettledcontingentconsideration — — 12 — 375 — — 375Cumulativetranslationadjustment — — — — — — (148) (148)Unrealizedlossoninvestments — — — — — — (101) (101)Netloss — — — — — (15,960) — (15,960)

BalancesatSeptember30,2017 — $ — 59,142 $ 5 $ 253,712 $ (102,007) $ (258) $151,452


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Alteryx, Inc.Condensed Consolidated Statements of Cash Flows


Nine Months Ended September 30,

2017 2016 Cash flows from operating activities:

Netloss $ (15,960) $(18,181)Adjustmentstoreconcilenetlosstonetcashprovidedby(usedin)operatingactivities:

Depreciationandamortization 2,670 1,182Stock-basedcompensation 6,454 2,334Provisionfordoubtfulaccountsandsalesreserve,netofrecoveries 770 (36)Deferredincometaxes (1,138) —Impairmentoflong-livedassets 1,050 —Changeinfairvalueofcontingentconsideration 190 —Lossondisposalofassets 32 56Changesinoperatingassetsandliabilities,netofeffectofbusinessacquisitions:

Accountsreceivable 3,892 (3,342)Deferredcommissions 827 249Prepaidexpensesandothercurrentassetsandotherassets (2,229) (1,209)Accountspayable 1,720 2,646Accruedpayrollandpayrollrelatedliabilities (1,667) (2,357)Accruedexpensesandothercurrentliabilities 1,470 (241)Deferredrevenue 8,071 8,430Otherliabilities 288 1,343

Netcashprovidedby(usedin)operatingactivities 6,440 (9,126)

Cash flows from investing activities: Purchasesofpropertyandequipment (2,303) (3,454)Cashpaidinbusinessacquisitions,netofcashacquired (9,097) —Purchasesofinvestments (87,551) (5,706)Maturitiesofinvestments 21,768 11,382

Netcashprovidedby(usedin)investingactivities (77,183) 2,222

Cash flows from financing activities: Proceedsfrominitialpublicoffering,netofunderwritingcommissionsanddiscounts 134,757 —Paymentofinitialpublicofferingcosts (1,867) (68)PaymentofSeriesCconvertiblepreferredstockissuancecosts — (350)Repurchaseofcommonstock,netofcostspaid — (256)Principalpaymentsoncapitalleaseobligations (247) (165)Proceedsfromexerciseofstockoptions 2,562 270

Netcashprovidedby(usedin)financingactivities 135,205 (569)

Effectofexchangeratechangesoncash 8 —Netincrease(decrease)incashandcashequivalents 64,470 (7,473)Cashandcashequivalents—beginningofperiod 31,306 24,779

Cashandcashequivalents—endofperiod $ 95,776 $ 17,306


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Alteryx, Inc.Condensed Consolidated Statements of Cash Flows (continued)


Nine Months Ended

September 30, 2017 2016 Supplemental disclosure of noncash investing and financing activities:

Propertyandequipmentrecordedinaccountspayable $ 26 $ 108

Considerationforbusinessacquisitioninitiallyincludedinaccruedexpensesandothercurrentliabilitiesandotherliabilities $ 1,660 $ —

Considerationforbusinessacquisitionfromissuanceofcommonstock $ 5,285 $ —

Contingentconsiderationsettledthroughissuanceofcommonstock $ 375 $ —

AccretionofSeriesAredeemableconvertiblepreferredstock $ 1,983 $4,466

Deferredinitialpublicofferingcostsrecordedinaccountspayableandaccruedexpenses $ 529 $ 329

Propertyandequipmentfundedbycapitalleaseborrowing $ — $ 987

ConversionofSeriesAredeemableconvertiblepreferredstocktocommonshares $101,165 $ —


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Alteryx, Inc.Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Business

Our Company

Alteryx,Inc.anditssubsidiaries,orwe,our,orus,arealeadingproviderofself-servicedataanalyticssoftware.Oursoftwareplatformenablesorganizationstodramaticallyimprovebusinessoutcomesandtheproductivityoftheirbusinessanalysts.Oursubscription-basedplatformallowsorganizationstoeasilyprepare,blend,andanalyzedatafromamultitudeofsourcesandmorequicklybenefitfromdata-drivendecisions.Theease-of-use,speed,andsophisticationthatourplatformprovidesisenhancedthroughintuitiveandhighlyrepeatablevisualworkflows.Weaimtomakeourplatformasubiquitousintheworkplaceasspreadsheetsaretoday.

Initial Public Offering and Follow-on Public Offering

InMarch2017,wecompletedaninitialpublicoffering,orIPO,ofourClassAcommonstock.InconnectionwiththeIPO,wesold10.4millionsharesofClassAcommonstock,whichincludedtheexerciseinfulloftheunderwriters’optiontopurchaseanadditional1.4millionsharesinApril2017,at$14.00pershareforaggregatenetproceedsof$131.4millionafterunderwritingdiscountsandcommissionsandofferingexpenses.PriortotheclosingoftheIPO,allsharesofcommonstockthenoutstandingwerereclassifiedasClassBcommonstockandallsharesofourthenoutstandingconvertiblepreferredstockheldpriortotheIPOwereconvertedintoClassBcommonstock.SeeNote6forfurtherdiscussionofourClassAandClassBcommonstock.

InSeptember2017,wecompletedafollow-onpublicofferinginwhichatotalof8.0millionsharesofourClassAcommonstock(issueduponautomaticconversionofsharesofourClassBcommonstock)weresoldbycertainsellingstockholdersatapriceof$21.25pershare.WedidnotreceiveanyproceedsfromthesaleofsharesofourClassAcommonstockbythesellingstockholdersandweincurredofferingcostsof$0.7millioninthethreeandninemonthsendedSeptember30,2017inconnectionwiththisoffering.Thesecostsareincludedingeneralandadministrativeexpenseinourcondensedconsolidatedstatementofoperationsandcomprehensiveloss.

AsofSeptember30,2017,wehad21.1millionand38.0millionsharesofClassAcommonstockandClassBcommonstockissuedandoutstanding,respectively.

Basis of Presentation

OurinterimcondensedconsolidatedfinancialstatementsarepresentedinaccordancewithaccountingstandardsgenerallyacceptedintheUnitedStatesofAmerica,orU.S.GAAP,forinterimfinancialinformation.CertaininformationanddisclosuresnormallyincludedinconsolidatedfinancialstatementspresentedinaccordancewithU.S.GAAPhavebeencondensedoromitted.Accordingly,thesecondensedconsolidatedfinancialstatementsshouldbereadinconjunctionwiththeauditedconsolidatedfinancialstatementsandtherelatednotesfortheyearendedDecember31,2016includedinourfinalprospectusrelatedtoourIPOdatedMarch23,2017,ortheProspectus,filedwiththeSecuritiesandExchangeCommission,orSEC,pursuanttoRule424(b)undertheSecuritiesActof1933,asamended,ortheSecuritiesAct.Theunauditedinterimcondensedconsolidatedfinancialstatementshavebeenpreparedonabasisconsistentwiththatusedtopreparetheauditedannualconsolidatedfinancialstatementsandreflectalladjustmentswhichare,intheopinionofourmanagement,ofanormalrecurringnatureandnecessaryforafairstatementofthecondensedconsolidatedfinancialstatements.

TheoperatingresultsforthethreeandninemonthsendedSeptember30,2017arenotnecessarilyindicativeoftheresultsexpectedforthefullyearendingDecember31,2017.

2. Significant Accounting Policies

TherehavebeennochangestoouraccountingpoliciesdisclosedinourauditedconsolidatedfinancialstatementsandtherelatednotesfortheyearendedDecember31,2016includedinourProspectus.AsaresultofbusinesscombinationsmadeduringtheninemonthsendedSeptember30,2017(seeNote3),wehaveincludedouraccountingpoliciesrelatingtobusinesscombinations,intangibleassets,andgoodwillbelow.

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Correction of an Error

InthecourseofpreparingourconsolidatedfinancialstatementsasofandfortheyearendedDecember31,2016,weidentifiedanerrorrelatedtotheimpropercalculationofroyaltyexpenseduringtheyearendedDecember31,2016associatedwithlicensedthird-partysyndicateddata.WehavedeterminedthattheerrorwasnotmaterialtoourinterimunauditedconsolidatedfinancialstatementsasofSeptember30,2016,andforthethreeandninemonthsthenended.Thecorrectionofthiserrorresultedinarevisionwhichincreasedcostofrevenue,lossfromoperations,netloss,andcomprehensivelossby$0.3millionand$1.1millionforthethreeandninemonthsendedSeptember30,2016,respectively,anddecreasedprepaidexpensesandothercurrentassetsandtotalassets,andincreasedaccumulateddeficitby$1.1millionasofSeptember30,2016.

FortheninemonthsendedSeptember30,2016,therevisionincreasedcostofrevenuefrom$10.6millionto$11.7million,lossfromoperationsfrom$16.4millionto$17.5million,lossbeforeprovisionforincometaxesfrom$16.9millionto$18.0million,netlossfrom$17.1millionto$18.2million,andcomprehensivelossfrom$17.0millionto$18.1million.Netlosspershareattributabletocommonstockholders,basicanddiluted,increasedby$0.04from$0.66to$0.70fortheninemonthsendedSeptember30,2016.

Use of Estimates

ThepreparationofcondensedconsolidatedfinancialstatementsinconformitywithU.S.GAAPrequiresmanagementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,disclosureofcontingentliabilitiesatthedateofthecondensedconsolidatedfinancialstatements,andthereportedamountsofrevenueandexpensesduringthereportingperiod.Actualresultscoulddifferfromtheseestimatesandassumptions.

Onanongoingbasis,ourmanagementevaluatesestimatesandassumptionsbasedonhistoricaldataandexperience,aswellasvariousotherfactorsthatourmanagementbelievestobereasonableunderthecircumstances,theresultsofwhichformthebasisformakingjudgmentsaboutthecarryingvalueofassetsandliabilities.

Business Combinations

Theresultsofbusinessesacquiredinabusinesscombinationareincludedinourcondensedconsolidatedfinancialstatementsfromthedateoftheacquisition.Weallocatedthepurchaseprice,includingthefairvalueofanynon-cashandcontingentconsideration,totheidentifiableassetsandliabilitiesoftherelevantacquiredbusinessattheiracquisitiondatefairvalues.Anyexcessconsiderationoverthefairvalueofassetsacquiredandliabilitiesassumedisrecognizedasgoodwill.

Contingentconsiderationpayableincashorafixeddollaramountsettleableinavariablenumberofsharesisclassifiedasaliabilityandrecordedatfairvalue,withchangesinfairvaluerecordedingeneralandadministrativeexpenseseachperiod.Transactioncostsassociatedwithbusinesscombinationsareexpensedasincurred,andareincludedingeneralandadministrativeexpenseinthecondensedconsolidatedstatementsofoperationsandcomprehensiveloss.

Weperformvaluationsofassetsacquired,liabilitiesassumed,andcontingentconsiderationandallocatethepurchasepricetoitsrespectiveassetsandliabilities.Determiningthefairvalueofassetsacquired,liabilitiesassumed,andcontingentconsiderationrequiresustousesignificantjudgmentandestimatesincludingtheselectionofvaluationmethodologies,estimatesoffuturerevenue,costsandcashflows,discountrates,theprobabilityoftheachievementofspecifiedmilestones,andselectionofcomparablecompanies.Weengagetheassistanceofvaluationspecialistsinconcludingonfairvaluemeasurementsinconnectionwithdeterminingfairvaluesofassetsacquired,liabilitiesassumed,andcontingentconsiderationinabusinesscombination.

Intangible Assets

Intangibleassetsconsistofacquireddevelopedtechnology.Wedeterminetheappropriateusefullifeofourintangibleassetsbyperformingananalysisofexpectedcashflowsoftheacquiredassets.Intangibleassetsareamortizedovertheirestimatedusefullivesofthreetosevenyears,usingthestraight-linemethod,whichapproximatesthepatterninwhichtheeconomicbenefitsareconsumed.

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Goodwill

Goodwillrepresentstheexcessofthepurchasepriceoverthefairvalueofnetassetsacquiredinabusinesscombination.WetestgoodwillforimpairmentinaccordancewiththeprovisionsofAccountingStandardsCodification,orASC,350,Intangibles–GoodwillandOther.Goodwillistestedforimpairmentatleastannuallyatthereportingunitlevelorwhenevereventsorchangesincircumstancesindicatethatgoodwillmightbeimpaired.Eventsorchangesincircumstanceswhichcouldtriggeranimpairmentreviewincludeasignificantadversechangeinlegalfactorsorinthebusinessclimate,unanticipatedcompetition,lossofkeypersonnel,significantchangesintheuseoftheacquiredassetsorourstrategy,significantnegativeindustryoreconomictrends,orsignificantunderperformancerelativetoexpectedhistoricalorprojectedfutureresultsofoperations.

ASC350providesthatanentityhastheoptiontofirstassessqualitativefactorstodeterminewhethertheexistenceofeventsorcircumstancesleadstoadeterminationthatitismorelikelythannotthatthefairvalueofareportingunitislessthanitscarryingamount.If,afterassessingthetotalityofeventsorcircumstances,anentitydeterminesitisnotmorelikelythannotthatthefairvalueofareportingunitislessthanitscarryingamount,thenadditionalimpairmenttestingisnotrequired.However,ifanentityconcludesotherwise,thenitisrequiredtoperformthefirstofatwo-stepimpairmenttest.

Thefirststepinvolvescomparingtheestimatedfairvalueofareportingunitwithitsbookvalue,includinggoodwill.Iftheestimatedfairvalueexceedsbookvalue,goodwillisconsiderednottobeimpairedandnoadditionalstepsarenecessary.If,however,thefairvalueofthereportingunitislessthanbookvalue,thenthecarryingamountofthegoodwilliscomparedwithitsimpliedfairvalue.Theestimateofimpliedfairvalueofgoodwillmayrequirevaluationsofcertaininternallygeneratedandunrecognizedintangibleassets.Ifthecarryingamountofgoodwillexceedstheimpliedfairvalueofthatgoodwill,animpairmentlossisrecognizedinanamountequaltotheexcess.

Wehaveonereportingunitandwetestforgoodwillimpairmentannuallyduringthefourthquarterofeachcalendaryear.

Variable Interest Entities

InaccordancewithASC810,Consolidation,theapplicableaccountingguidancefortheconsolidationofvariableinterestentities,orVIEs,weanalyzeourintereststodetermineifsuchinterestsarevariableinterests.Ifvariableinterestsareidentified,thentherelatedentityisassessedtodetermineifitisaVIE.VIEsaregenerallyentitiesthathaveeitheratotalequityinvestmentthatisinsufficienttopermittheentitytofinanceitsactivitieswithoutadditionalsubordinatedfinancialsupport,orwhoseequityinvestorslackthecharacteristicsofacontrollingfinancialinterest(i.e.,abilitytomakesignificantdecisionsthroughvotingrightsandarighttoreceivetheexpectedresidualreturnsoftheentityoranobligationtoabsorbtheexpectedlossesoftheentity).IfwedeterminethattheentityisaVIE,wethenassessifwemustconsolidatetheVIE.Wedeemourselvestobetheprimarybeneficiaryifwehaveboth(i)thepowertodirecttheactivitiesoftheVIEthatmostsignificantlyimpacttheentity’seconomicperformance,and(ii)anobligationtoabsorblossesoftheentitythatcouldpotentiallybesignificanttotheVIE,orarighttoreceivebenefitsfromtheentitythatcouldbesignificanttotheVIE.

AsofSeptember30,2017andDecember31,2016,wedeterminedthattwoofourdistributorswereVIEsundertheguidanceofASC810,Consolidation,dueto(i)ourparticipationinthedesignofthedistributor’slegalentity,(ii)ourhavingavariableinterestinthedistributor,and(iii)ourhavingtherighttoresidualreturns.WedeterminedthatwewerenottheprimarybeneficiaryoftheseVIEsbecausewedidnothave(a)thepowertodirecttheactivitiesthatmostsignificantlyimpacttheVIE’seconomicperformance,and(b)theobligationtoabsorblossesoftheVIEortherighttoreceivebenefitsfromtheVIEthatcouldpotentiallybesignificant.Therefore,wedidnotconsolidateanyassetsorliabilitiesofthesedistributorsinourconsolidatedbalancesheetsorrecordtheresultsofthesedistributorsinourconsolidatedstatementsofoperationsandcomprehensiveloss.Transactionswiththedistributorswereaccountedforinthesamemannerasourotherdistributorsandresellers.AsofSeptember30,2017andDecember31,2016,wehadnoexposuretolossesfromthecontractualrelationshipswiththeseVIEsorcommitmentstofundtheseVIEs.

Recent Accounting Pronouncements

InJanuary2017,theFinancialAccountingStandardsBoard,orFASB,issuedAccountingStandardsUpdate,orASU,2017-04,SimplifyingtheTestforGoodwillImpairment,whichsimplifiesthesubsequentmeasurementofgoodwillbyremovingtherequirementtoperformahypotheticalpurchasepriceallocationtocomputetheimpliedfairvalueofgoodwilltomeasureimpairment.Instead,anygoodwillimpairmentwillequaltheamountbywhichareportingunit’scarryingvalue

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exceedsitsfairvalue,nottoexceedthecarryingamountofgoodwill.Further,theguidanceeliminatestherequirementsforanyreportingunitwithazeroornegativecarryingamounttoperformaqualitativeassessmentand,ifitfailsthatqualitativetest,toperformStep2ofthegoodwillimpairmenttest.ThisguidanceiseffectiveforannualoranyinterimgoodwillimpairmenttestinannualreportingperiodsbeginningafterDecember15,2021.Earlyadoptionispermitted.Whilewecontinuetoassessthepotentialimpactoftheadoptionofthisguidance,wedonotexpecttheadoptionofthisguidancetohaveamaterialimpactonourconsolidatedfinancialstatements.

InJanuary2017,theFASBissuedASU2017-01,ClarifyingtheDefinitionofaBusiness,whichnarrowstheapplicationofwhenanintegratedsetofassetsandactivitiesisconsideredabusinessandprovidesaframeworktoassistentitiesinevaluatingwhetherbothaninputandasubstantiveprocessarepresenttobeconsideredabusiness.Itisexpectedthatthenewguidancewillreducethenumberoftransactionsthatwouldneedtobefurtherevaluatedandaccountedforasabusiness.ThisguidanceiseffectiveforannualreportingperiodsbeginningafterDecember15,2018andinterimperiodswithinannualperiodsbeginningafterDecember15,2019.Earlyadoptionispermitted.Weareevaluatingthepotentialimpactofadoptingthisguidanceonourconsolidatedfinancialstatements.

InNovember2016,theFASBissuedASU2016-18,RestrictedCash,whichrequiresthatrestrictedcashbeincludedwithcashandcashequivalentswhenreconcilingthebeginningandendingtotalamountsshownonthestatementofcashflows.ThisguidanceiseffectiveforfiscalyearsbeginningafterDecember15,2018,andinterimperiodswithinfiscalyearsbeginningafterDecember15,2019,andshouldbeappliedusingaretrospectivetransitionmethodtoeachperiodpresented.Earlyadoptionispermitted,includingadoptioninaninterimperiod.Ifanentityearlyadoptstheamendmentsinaninterimperiod,anyadjustmentsshouldbereflectedasofthebeginningofthefiscalyearthatincludesthatinterimperiod.Wehavenotyetdeterminedthetimingofadoption.Wecurrentlypresentchangesinrestrictedcashwithininvestingactivitiesandsotheadoptionofthisguidancewillresultinchangesinnetcashflowsfrominvestingactivitiesandtocertainbeginningandendingcashandcashequivalenttotalsshownonourconsolidatedstatementofcashflows.

InOctober2016,theFASBissuedASU2016-16,Intra-EntityTransfersofAssetsOtherThanInventory.ThisguidanceremovestheprohibitioninASC740,IncomeTaxes,againsttheimmediaterecognitionofthecurrentanddeferredincometaxeffectsofintra-entitytransfersofassetsotherthaninventory.ThisguidanceisintendedtoreducethecomplexityofU.S.GAAPanddiversityinpracticerelatedtothetaxconsequencesofcertaintypesofintra-entityassettransfers,particularlythoseinvolvingintellectualproperty.ThisguidanceiseffectiveforannualreportingperiodsbeginningafterDecember15,2018,andinterimperiodswithinfiscalyearsbeginningafterDecember15,2019.Earlyadoptionispermitted.Wearecurrentlyevaluatingthepotentialimpactofthisguidanceonourconsolidatedfinancialstatements.

InAugust2016,theFASBissuedASU2016-15,ClassificationofCertainCashReceiptsandCashPayments,whichaddresseseightspecificcashflowissueswiththeobjectiveofreducingtheexistingdiversityinpractice,includingpresentationofcashflowsrelatingtocontingentconsiderationpayments,proceedsfromthesettlementofinsuranceclaims,anddebtprepaymentordebtextinguishmentcosts,amongothermatters.ThisguidanceiseffectiveforfiscalyearsbeginningafterDecember15,2018,andinterimperiodswithinfiscalyearsbeginningafterDecember15,2019.Earlyadoptionispermitted,includingadoptioninaninterimperiod.Ifadoptedinaninterimperiod,anyadjustmentsshouldbereflectedasofthebeginningofthefiscalyearthatincludesthatinterimperiod.Adoptionofthisguidanceisrequiredtobeappliedusingaretrospectivetransitionmethodtoeachperiodpresented,unlessimpracticabletodoso.Wearecurrentlyevaluatingthepotentialimpactofthisguidanceonourconsolidatedstatementofcashflows.

InMarch2016,theFASBissuedASU2016-09,Compensation—StockCompensation(Topic718):ImprovementstoEmployeeShare-BasedPaymentAccounting,whichsimplifiesseveralaspectsoftheaccountingforshare-basedpaymenttransactionsandrelatedtaximpacts,theclassificationofexcesstaxbenefitsonthestatementofcashflows,statutorytaxwithholdingrequirements,andotherstock-basedcompensationclassificationmatters.ThisguidanceiseffectiveforannualreportingperiodsbeginningafterDecember15,2017,andinterimperiodswithinannualperiodsbeginningafterDecember31,2018.Earlyadoptionispermittedinanyinterimorannualperiod.Alltheamendmentsinthenewguidancemustbeadoptedinthesameperiod.Weareevaluatingthepotentialimpactofthisguidanceonourconsolidatedfinancialstatements.

InFebruary2016,theFASBissuedASU2016-02,Leases,creatingTopic842,whichrequireslesseestorecordtheassetsandliabilitiesarisingfromallleasesinthestatementoffinancialposition.UnderASU2016-02,lesseeswillrecognizealiabilityforleasepaymentsandaright-of-useasset.Whenmeasuringassetsandliabilities,alesseeshouldincludeamountsrelatedtooptionterms,suchastheoptionofextendingorterminatingtheleaseorpurchasingtheunderlyingasset,thatarereasonablycertaintobeexercised.Forleaseswithatermof12monthsorless,lesseesarepermittedtomakeanaccountingpolicyelectiontonotrecognizeleaseassetsandliabilities.Thisguidanceretainsthedistinctionbetweenfinance

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leasesandoperatingleasesandtheclassificationcriteriaremainssimilar.Forfinancingleases,alesseewillrecognizetheinterestonaleaseliabilityseparatefromamortizationoftheright-of-useasset.Inaddition,repaymentsofprincipalwillbepresentedwithinfinancingactivities,andinterestpaymentswillbepresentedwithinoperatingactivitiesinthestatementofcashflows.Foroperatingleases,alesseewillrecognizeasingleleasecostonastraight-linebasisandclassifyallcashpaymentswithinoperatingactivitiesinthestatementofcashflows.ThisguidancewillbeeffectiveforfiscalyearsbeginningafterDecember15,2019,andinterimperiodswithinfiscalyearsbeginningafterDecember15,2020,andisrequiredtobeappliedusingamodifiedretrospectiveapproach.Earlyadoptionispermitted.Weareevaluatingthepotentialimpactofthisguidanceonourconsolidatedfinancialstatements.

InMay2014,theFASBissuedASU2014-09,RevenuefromContractswithCustomers.Thisguidancereplacesmostexistingrevenuerecognitionguidance.Itprovidesprinciplesforrecognizingrevenueforthetransferofpromisedgoodsorservicestocustomerswiththeconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.InAugust2015,theFASBissuedASU2015-14,whichdeferredtheeffectivedateofASU2014-09byoneyear.During2016,theFASBcontinuedtoissueadditionalamendmentstothisnewrevenueguidance.ThisnewrevenueguidancewillbeeffectiveforannualreportingperiodsbeginningafterDecember15,2018,andinterimreportingperiodswithinannualreportingperiodsbeginningafterDecember15,2019.EarlyadoptionispermittedforannualperiodsbeginningafterDecember15,2016.Weareevaluatingthepotentialimpactofthisguidanceonourconsolidatedfinancialstatements.

3. Business Combinations

InJanuary2017,weacquired100%oftheoutstandingequityofSemanta,s.r.o.,orSemanta,asoftwaredevelopmentfirmbasedinPrague,CzechRepublicthatdeliversacloud-baseddatagovernanceandmetadatamanagementplatform.InMay2017,weacquired100%oftheoutstandingequityofYhat,Inc.,orYhat,adatasciencesoftwarecompanybasedinBrooklyn,NewYorkthatprovidesdatascientistsandanalystswithself-servicedatasciencetoolsfordeveloping,managing,anddeployinganalyticalmodels.Theseacquisitionsweremadetoenhanceourplatformwithadditionaldatagovernancecapabilitiesandtheabilitytodeployandmanageadvancedanalyticmodels.

Thefollowingtablepresentsdetailsofthepurchaseconsiderationrelatedtoeachacquisition.CompanyAcquired

Month Acquired

Cash Consideration

Paid

Equity Consideration

Paid Cash Holdback

Contingent Consideration

Maximum

Contingent Consideration

Fair Value Semanta January2017 $ 3,944 $ — $ 500 $ 2,300 $ 1,160Yhat May2017 5,535 5,285 — — —

$ 9,479 $ 5,285 $ 500 $ 2,300 $ 1,160

TheacquisitionofSemantaincludedcashconsiderationheldbackforcustomaryindemnificationmattersforaperiodof24-monthsfollowingtheacquisitiondate.AportionofthecashconsiderationintheYhatacquisitioniscurrentlyheldinescrowpursuanttothetermsoftheacquisitionagreementandisreflectedingoodwill.

Thecondensedconsolidatedfinancialstatementsincludetheresultsofoperationsoftheacquiredcompaniescommencingasoftheirrespectiveacquisitiondates.RevenueandoperatingresultsoftheacquiredcompaniesfortheninemonthsendedSeptember30,2017werenotmaterialtothecondensedconsolidatedfinancialstatements.DuringtheninemonthsendedSeptember30,2017,werecognized$0.9millionofacquisitionrelatedcostsingeneralandadministrativeexpenseinthecondensedconsolidatedstatementofoperationsandcomprehensiveloss.

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Thefollowingtablesummarizestheestimatedfairvaluesoftheassetsacquiredandliabilitiesassumedasofthedatesofeachacquisition(inthousands):

Assetsacquiredandliabilitiesassumed: Cashandcashequivalents $ 382Accountsreceivable 247Prepaidexpensesandotherassets 68Propertyandequipment 54Intangibleassets 9,220Goodwill 8,724Accountspayable (479)Accruedexpenses,deferredrevenueandothercurrentliabilities (205)Deferredtaxliability,includedinotherliabilities (1,587)

Totalpurchaseconsideration $16,424

Goodwillrepresentstheexcessofthepurchaseconsiderationoverthefairvalueoftheunderlyingintangibleassetsandnetliabilitiesassumed.Webelievetheamountofgoodwillresultingfromtheacquisitionsisprimarilyattributabletoexpectedsynergiesfromanassembledworkforce,increaseddevelopmentcapabilities,increasedofferingstocustomers,andenhancedopportunitiesforgrowthandinnovation.Thegoodwillresultingfromtheacquisitionsisnottaxdeductible.

Wedeterminedthefairvalueofthecompletedtechnologyacquiredintheacquisitionsusingthemultipleperiodexcessearningsandthereplacementcostmodels.ThesemodelsutilizecertainunobservableinputsclassifiedasLevel3measurementsasdefinedbyASC820,FairValueMeasurementsandDisclosures.Keyinputsutilizedinthemodelsincludediscountratesrangingfrom35%to45%,amarketparticipanttaxrateof40%,anestimatedleveloffuturecashflowsbasedoncurrentproductandmarketdata,andestimatedcoststorecreatethetechnology.Basedonthevaluationmodels,wedeterminedthefairvalueofthecompletedtechnologytobe$9.2millionwithaweighted-averageamortizationperiodof5.7years.

AportionoftheconsiderationfortheSemantaacquisitionissubjecttoearn-outprovisions.Additionalcontingentearn-outconsiderationofupto$2.3millioninsharesofourClassAcommonstockmaybepaidouttotheformershareholdersofSemantaovertwoyearsupontheachievementofspecifiedmilestones.ThenumberofsharesthatwillbeissuedwillbedeterminedbasedonthetotaldollarvalueofconsiderationearnedupontheachievementofaparticularmilestonedividedbyanaveragetradingvalueofourClassAcommonstockcalculatedatthetimeoftheissuance.Weutilizedaprobabilityweightedscenariobasedmodeltodeterminethefairvalueofthecontingentconsideration.Basedonthisvaluationmodelwedeterminedthefairvalueofthecontingentconsiderationtobe$1.2millionasoftheacquisitiondate.

ProformainformationasiftheacquisitionsoccurredonJanuary1,2016hasnotbeenpresentedastheproformaimpactisnotmaterialtoourcondensedconsolidatedfinancialstatements.

4. Fair Value Measurements

Weutilizevaluationtechniquesthatmaximizetheuseofobservableinputsandminimizetheuseofunobservableinputstotheextentpossible.Wedeterminefairvaluebasedonassumptionsthatmarketparticipantswoulduseinpricinganassetorliabilityintheprincipalormostadvantageousmarket.Whenconsideringmarketparticipantassumptionsinfairvaluemeasurements,thefollowingfairvaluehierarchydistinguishesbetweenobservableandunobservableinputs,whicharecategorizedinoneofthefollowinglevels:

Level1 Unadjustedquotedpricesinactivemarketsforidenticalassetsorliabilitiesatthemeasurementdate.

Level2

InputsotherthanLevel1thatareobservable,eitherdirectlyorindirectly,suchasquotedpricesforsimilarassetsorliabilities;quotedpricesinmarketsthatarenotactivenearthemeasurementdate;orotherinputsthatareobservableorcanbecorroboratedbyobservablemarketdataforsubstantiallythefulltermoftheassetsorliabilities.

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Level3 Unobservableinputsthataresupportedbylittleornomarketactivityandthataresignificanttothefairvalueoftheassetsorliabilities.

Thefairvalueofourmoneymarketfundswasdeterminedbasedon“Level1”inputs.

Thefairvalueofcertificatesofdeposit,U.S.Treasuryandagencybonds,andcorporatebondsweredeterminedbasedon“Level2”inputs.Thevaluationtechniquesusedtomeasurethefairvalueofcertificatesofdepositincludedobservablemarket-basedinputsforsimilarassets,whichprimarilyincludeyieldcurvesandtime-to-maturityfactors.ThevaluationtechniquesusedtomeasurethefairvalueofU.S.Treasuryandagencybondsandcorporatebondsincludedstandardobservableinputs,includingreportedtrades,quotedmarketprices,matrixpricing,benchmarkyields,broker/dealerquotes,issuerspreads,two-sidedmarketsorbenchmarksecuritiesanddataprovidedbythirdpartiesasmanyofthebondsarenotactivelytraded.

Therewerenomarketablesecuritiesmeasuredonarecurringbasisinthe“Level3”category.

WehavenotelectedthefairvalueoptionasprescribedbyASC825,TheFairValueOptionforFinancialAssetsandFinancialLiabilities,forourfinancialassetsandliabilitiesthatarenototherwiserequiredtobecarriedatfairvalue.UnderASC820,materialfinancialassetsandliabilitiesnotcarriedatfairvalue,suchasouraccountsreceivableandpayables,arereportedattheircarryingvalues.

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InstrumentsMeasuredatFairValueonaRecurringBasis.Thefollowingtablespresentourcashandcashequivalentsandinvestments’costs,grossunrealizedgains(losses),andfairvaluebymajorsecuritytyperecordedascashandcashequivalentsorshort-termorlong-terminvestmentsasofSeptember30,2017andDecember31,2016(inthousands): As of September 30, 2017 Gross Cash and Unrealized Cash Short-term Long-term Cost Gains (Losses) Fair Value Equivalents Investments InvestmentsCash $ 89,377 $ — $ 89,377 $ 89,377 $ — $ —

Level1: Moneymarketfunds 6,399 — 6,399 6,399 — —

Subtotal 6,399 — 6,399 6,399 — —

Level2: Certificatesofdeposit 2,584 — 2,584 — 2,584 —U.S.Treasuryandagencybonds 52,537 (78) 52,459 — 27,569 24,890Corporatebonds 31,790 (32) 31,758 — 30,659 1,099

Subtotal 86,911 (110) 86,801 — 60,812 25,989

Level3 — — — — — —

Total $182,687 $ (110) $ 182,577 $ 95,776 $ 60,812 $ 25,989

As of December 31, 2016 Gross Cash and Unrealized Cash Short-term Long-term Cost Gains (Losses) Fair Value Equivalents Investments InvestmentsCash $ 10,499 $ — $ 10,499 $ 10,499 $ — $ —

Level1: Moneymarketfunds 20,807 — 20,807 20,807 — —

Subtotal 20,807 — 20,807 20,807 — —

Level2: — Certificatesofdeposit 10,552 — 10,552 — 10,552 —Corporatebonds 10,770 72 10,842 — 10,842 —

Subtotal 21,322 72 21,394 — 21,394 —

Level3 — — — — — —

Total $ 52,628 $ 72 $ 52,700 $ 31,306 $ 21,394 $ —

TherewerenotransfersbetweenLevel1,Level2,orLevel3securitiesduringtheninemonthsendedSeptember30,2017.AsofSeptember30,2017,therewere28securitieswithafairvalueof$77.9millioninanunrealizedlosspositionforlessthan12months.Thegrossunrealizedlossesof$0.1millionasofSeptember30,2017wereduetochangesinmarketrates,andwehavedeterminedthelossesaretemporaryinnature.

Allthelong-terminvestmentshadmaturitiesofbetweenoneandtwoyearsindurationasofSeptember30,2017.Cashandcashequivalents,restrictedcash,andinvestmentsasofSeptember30,2017andDecember31,2016helddomesticallywereapproximately$166.9millionand$52.9million,respectively.

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ContingentConsideration.Contingentconsiderationinconnectionwithacquisitionsismeasuredatfairvalueeachreportingperiodbasedonsignificantunobservableinputs,classifiedasLevel3measurement.SeeNote3foradditionalinformationonthevaluationofthecontingentconsiderationasoftheacquisitiondate.Thecontingentearn-outconsiderationhasbeenrecordedinotherliabilitiesinouraccompanyingcondensedconsolidatedbalancesheetwithanychangesinfairvalueeachreportingperiodrecordedingeneralandadministrativeexpensesinourcondensedconsolidatedstatementsofoperationsandcomprehensiveloss.Changesinfairvaluedependonseveralfactorsincludingestimatesofthetimingandabilitytoachievethemilestones.

Thefollowingtablepresentsareconciliationofthebeginningandendingbalancesofacquisition-relatedaccruedcontingentconsiderationusingsignificantunobservableinputs(Level3)forthethreeandninemonthsendedSeptember30,2017(inthousands):

Three Months Ended

September 30, Nine Months Ended

September 30, 2017 2016 2017 2016 Beginningbalance $ 1,318 $ — $ — $ —

Obligationsassumed — — 1,160 —Changeinfairvalue 32 — 190 —Settlement (375) — (375) —

Endingbalance $ 975 $ — $ 975 $ —

UpontheachievementofcertainmilestonesinconnectionwithouracquisitionofSemanta,wereleased12,492sharesofClassAcommonstocktotheformershareholdersofSemantaintheninemonthsendedSeptember30,2017.Inaddition,4,824shareswereearned,butheldbackforcustomaryindemnificationmattersinaccordancewiththeacquisitionagreement,andthevalueofthesharesispresentedwithinadditionalpaid-incapitalinthecondensedconsolidatedbalancesheetasofSeptember30,2017.Subjecttoanyindemnificationclaimsthatmayariseduringtheindemnificationperiod,theseshareswillbeissuedtotheformershareholdersuponthecompletionoftheindemnificationperiod.

InstrumentsNotRecordedatFairValueonaRecurringBasis.Thecarryingamountsofourfinancialinstruments,includingcash,accountsreceivable,prepaidexpensesandothercurrentassets,accountspayable,andaccruedliabilitiesapproximatetheircurrentfairvaluebecauseoftheirnatureandrelativelyshortmaturitydatesordurations.

AssetsandLiabilitiesRecordedatFairValueonaNon-RecurringBasis.Thefairvalueofourcostmethodinvestmentismeasuredwhenitisdeemedtobeother-than-temporarilyimpaired,assetsacquiredandliabilitiesassumedinabusinessacquisition,andgoodwillandotherlonglivedassetswhentheyareheldforsaleordeterminedtobeimpaired.SeeNote3andNote5forfairvaluemeasurementsofcertainassetsandliabilitiesrecordedatfairvalueonanon-recurringbasis.

5. Cost Method Investment

InNovember2014,weenteredintoadefinitiveagreementwithaprivatelyheldcompany,inwhichweagreedtoinvestapproximately$1.1millioninexchangeforsharesofconvertiblepreferredstockequaltoapproximately15%ownershipoftheprivatelyheldcompany.Weaccountforourinvestmentinthiscompanyusingthecostmethodofaccountingandtheinvestmentbalanceisincludedinothernon-currentassetsinourcondensedconsolidatedbalancesheets.Weevaluatetheinvestmentateachreportingdatetodetermineifanyindicatorsofother-than-temporaryimpairmentexist.Ifsuchindicatorsareidentified,wewillestimatethefairvalueoftheinvestmentanddetermineifanydeclineinthefairvalueoftheinvestmentbelowitscarryingvalueisother-than-temporary.Theestimatedfairvalueisdeterminedusingunobservableinputsincludingforecastedcashflowinformationfromtheinvestee’smanagement.TheseinputsareclassifiedasLevel3.DuringthethreemonthsendedSeptember30,2017,wedeterminedthatindicatorsofother-than-temporaryimpairmentexisted.Basedonourevaluation,weestimatedthefairvalueoftheinvestmentandrecordedanimpairmentforthefullvalueoftheinvestmentof$1.1million.TheimpairmentisincludedinotherexpensesinourcondensedconsolidatedstatementsofoperationsforthethreeandninemonthsendedSeptember30,2017.

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6. Stockholders’ Equity

Reverse Stock Split

InFebruary2017,weeffecteda2-to-1reversestocksplitofouroutstandingcommonandpreferredstockandacorrespondingreductioninthenumberofauthorizedsharesofpreferredstock.Allshareandpershareamountsforallperiodspresentedinthesecondensedconsolidatedfinancialstatementsandnotes,havebeenadjustedretrospectivelytoreflectthisreversestocksplit.

Dual Class Common Stock Structure

InFebruary2017,weimplementedadualclasscommonstockstructureinwhicheachthenexistingshareofcommonstockconvertedintoashareofClassBcommonstockandwealsoauthorizedanewclassofcommonstock,theClassAcommonstock.TheClassAcommonstockisentitledtoonevotepershareandtheClassBcommonstockisentitledtotenvotespershare.TheClassAcommonstockandClassBcommonstockhavethesamedividendandliquidationrights,andtheClassBcommonstockconvertstoClassAcommonstockatanytimeattheoptionoftheholder,orautomaticallyuponthedatethatistheearliestof(i)thedatespecifiedbyavoteoftheholdersofatleast662/3%oftheoutstandingsharesofClassBcommonstock,(ii)March29,2027,and(iii)thedatethatthetotalnumberofsharesofClassBcommonstockoutstandingceasetorepresentatleast10%oftheaggregatenumberofsharesofClassAcommonstockandClassBcommonstockthenoutstanding.Inaddition,eachshareofClassBcommonstockwillconvertautomaticallyintooneshareofClassAcommonstockuponanytransfer,exceptforcertainpermittedtransfersdescribedinourrestatedcertificateofincorporation,ortheRestatedCertificate.UponthecreationofthedualclasscommonstockstructurealloutstandingoptionstopurchasecommonstockbecameoptionstopurchaseanequivalentnumberofsharesofClassBcommonstock,andallrestrictedstockunits,orRSUs,becameRSUsforanequivalentnumberofsharesofClassBcommonstock.

UpontheeffectivenessoftheRestatedCertificateinMarch2017,thenumberofsharesofcapitalstockthatisauthorizedtobeissuedconsistedof500,000,000sharesofClassAcommonstock,$0.0001parvaluepershare,500,000,000sharesofClassBcommonstock,$0.0001parvaluepershare,and10,000,000sharesofundesignatedpreferredstock,$0.0001parvaluepershare.

7. Equity Awards

Amended and Restated 2013 Stock Plan

WegrantedoptionsandRSUsunderourAmendedandRestated2013StockPlan,or2013Plan,untilMarch22,2017,whentheplanwasterminatedinconnectionwithourIPO.Accordingly,nosharesareavailableforfutureissuanceunderthe2013PlanfollowingtheIPO.The2013Plancontinuestogovernoutstandingequityawardsgrantedthereunder.

2017 Equity Incentive Plan

InFebruary2017,ourboardofdirectorsadoptedandourstockholdersapprovedthe2017EquityIncentivePlan,or2017Plan.The2017PlanbecameeffectiveonMarch22,2017andisthesuccessorplantothe2013Plan.Underthe2017Plan,weinitiallyreserved(i)5.1millionsharesofClassAcommonstockforfutureissuanceand(ii)0.8millionsharesofClassAcommonstockequaltothenumberofClassBsharesreservedbutnotissuedunderthe2013Planasoftheeffectivedateofthe2017Plan.ThenumberofsharesofClassAcommonstockreservedforissuanceunderour2017PlanwillincreaseautomaticallyonthefirstdayofJanuaryofeachof2018through2027bythelesserof(a)5%ofthetotaloutstandingsharesofourClassAandClassBcommonstockasoftheimmediatelyprecedingDecember31and(b)thenumberofsharesdeterminedbyourboardofdirectors.Thesharereservemayalsoincreasetotheextentthatoutstandingawardsunderour2013Planexpireorterminate.AsofSeptember30,2017,anaggregateof5.4millionsharesofClassAcommonstockwerereservedforissuanceunderthe2017Plan.

2017 Employee Stock Purchase Plan

InFebruary2017,ourboardofdirectorsadoptedandourstockholdersapprovedthe2017EmployeeStockPurchasePlan,or2017ESPP.The2017ESPPbecameeffectiveonMarch23,2017.Underthe2017ESPP,wereserved1.1millionsharesofClassAcommonstockforfutureissuance.ThenumberofsharesofClassAcommonstockreservedforissuanceunderour2017ESPPwillincreaseautomaticallyonthefirstdayofJanuaryofeachof2018through2027bythelesserof(a)1%ofthetotaloutstandingsharesofourClassAandClassBcommonstockasoftheimmediatelyprecedingDecember31and(b)thenumberofsharesdeterminedbyourboardofdirectors.Theaggregatenumberofsharesissuedoverthetermofthe2017ESPPmaynotexceed11,000,000sharesofClassAcommonstock.

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Stock Options

StockoptionactivityduringtheninemonthsendedSeptember30,2017consistedofthefollowing(inthousands,exceptweighted-averageinformation):

Options

Outstanding

Weighted-Average Exercise

Price OptionsoutstandingatDecember31,2016 6,318 $ 5.65

Granted 938 16.72Exercised (1,099) 1.36Cancelled/forfeited (538) 8.30

OptionsoutstandingatSeptember30,2017 5,619 $ 8.08

AsofSeptember30,2017,therewas$11.9millionofunrecognizedcompensationcostrelatedtounvestedstockoptions,whichisexpectedtoberecognizedoveraweighted-averageperiodof2.9years.

Restricted Stock Units

RSUactivityduringtheninemonthsendedSeptember30,2017consistedofthefollowing(inthousands,exceptweighted-averageinformation):

Awards

Outstanding

Weighted- Average

Grant DateFair Value

RSUsoutstandingatDecember31,2016 373 $ 12.30Granted 178 18.10Cancelled/forfeited (96) 12.67

RSUsoutstandingatSeptember30,2017 455 $ 14.50

RSUsoutstandingasofDecember31,2016,orpre-2017RSUs,vestuponthesatisfactionofbothaserviceconditionandaliquiditycondition.Theserviceconditionfortheseawardswillbesatisfiedoverfouryears.TheliquidityconditionwassatisfiedonSeptember25,2017,whichwas180daysfollowingtheclosingoftheIPO.BeginningontheclosingoftheIPOinMarch2017,werecognizedacumulativestock-basedcompensationexpensefortheportionofthepre-2017RSUsthathadmettheservicecondition.IntheninemonthsendedSeptember30,2017,stock-basedcompensationexpenserelatedtoourpre-2017RSUswas$1.4million.

AsofSeptember30,2017,totalunrecognizedcompensationexpense,adjustedforestimatedforfeitures,relatedtounvestedRSUswasapproximately$3.7million,whichisexpectedtoberecognizedoveraweighted-averageperiodof2.0years.

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Weclassifiedstock-basedcompensationexpenseintheaccompanyingconsolidatedstatementsofoperationsandcomprehensivelossasfollows(inthousands):

Three Months Ended


September 30, 2017 2016 2017 2016 Costofrevenue $ 123 $ 24 $ 368 $ 72Researchanddevelopment 458 99 1,157 243Salesandmarketing 459 308 1,642 942Generalandadministrative 1,239 475 3,342 1,077

Total $ 2,279 $ 906 $6,509 $2,334

8. Commitments and Contingencies

Leases

Wehavevariousnon-cancelableoperatingleasesforouroffices.Theseleasesexpireatvarioustimesthrough2024.Certainleaseagreementscontainrenewaloptions,rentabatement,andescalationclauses.

Indemnification

Intheordinarycourseofbusiness,weenterintoagreementsinwhichwemayagreetoindemnifyotherpartieswithrespecttocertainmatters,includinglossesresultingfromclaimsofintellectualpropertyinfringement,damagestopropertyorpersons,businesslosses,orotherliabilities.Inaddition,wehaveenteredintoindemnificationagreementswithourdirectors,executiveofficers,andcertainotheremployeesthatwillrequireustoindemnifythemagainstliabilitiesthatmayarisebyreasonoftheirstatusorserviceasdirectors,officers,oremployees.Thetermoftheseindemnificationagreementswithourdirectors,executiveofficers,andotheremployees,aregenerallyperpetualafterexecutionoftheagreement.Themaximumpotentialamountoffuturepaymentswecouldberequiredtomakeundertheseindemnificationprovisionsisunlimited;however,wemaintaininsurancethatreducesourexposureandenablesustorecoveraportionofanyfutureamountspaid.AsofSeptember30,2017andDecember31,2016,wehavenotaccruedaliabilityfortheseindemnificationprovisionsbecausethelikelihoodofincurringapaymentobligation,ifany,inconnectionwiththesearrangementsisnotprobableorreasonablyestimable.

Litigation

Fromtimetotime,wemaybeinvolvedinlawsuits,claims,investigations,andproceedings,consistingofintellectualproperty,commercial,employment,andothermatters,whichariseintheordinarycourseofbusiness.

Wearenotcurrentlyapartytoanymateriallegalproceedingsorclaims,norareweawareofanypendingorthreatenedlitigationorclaimsthatcouldhaveamaterialadverseeffectonourbusiness,operatingresults,cashflows,orfinancialconditionshouldsuchlitigationorclaimberesolvedunfavorably.

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9. Income Taxes

Thefollowingtablepresentsdetailsoftheprovisionfor(benefitof)incometaxesandoureffectivetaxrates(inthousandsexceptpercentages):

Three Months Ended


September 30, 2017 2016 2017 2016 Provisionfor(benefitof)incometaxes $ 25 $ 58 $ (632) $ 148Effectivetaxrate 0.8% 1.4% (3.8%) 0.8%

WeaccountforincometaxesaccordingtoASC740,IncomeTaxes,which,amongotherthings,requiresthatweestimateourannualeffectiveincometaxrateforthefullyearandapplyittopre-taxincome(loss)toeachinterimperiod,takingintoaccountyear-to-dateamountsandprojectedresultsforthefullyear.Theprovisionfor(benefitof)incometaxesconsistsoffederal,foreign,state,andlocalincometaxes.OureffectivetaxratediffersfromthestatutoryU.S.incometaxrateduetotheeffectofstateandlocalincometaxes,generallylowertaxratesinforeignjurisdictionscomparedtotheUnitedStates,certainnondeductibleexpenses,andthechangesinvaluationallowancesagainstourdeferredtaxassets.Oureffectivetaxratecouldchangesignificantlyfromquartertoquarterbecauseofrecurringandnonrecurringfactors.

Weevaluatewhethertorecordavaluationallowanceagainstourdeferredtaxassetsbyconsideringallavailablepositiveandnegativeevidence,usinga“morelikelythannot”realizationstandard,includingourcumulativelosses,andtheamountandtimingoffuturetaxableincome.Basedonourreview,wewillcontinuetomaintainafullvaluationallowanceagainstourU.S.deferredtaxassets.

Theincometaxbenefitof$0.6millionfortheninemonthsendedSeptember30,2017primarilyrelatestoadiscretetaxbenefitof$1.0millionrelatedtoadecreaseinourvaluationallowanceagainstourdeferredtaxassetsrelatedtotheYhatacquisition,offsetinpartbyU.S.andCzechtaxexpensefromthesaleoftheintellectualpropertyrelatedtoourproductsfromtheU.S.parentcompanytowhollyownedsubsidiariesoutsidetheUnitedStatesandfromtheCzechsubsidiarytotheU.S.parentcompanyandotherwhollyownedsubsidiariesoutsidetheUnitedStates.

Neitherwenoranyofoursubsidiariesarecurrentlyunderexaminationfromtaxauthoritiesinthejurisdictionsinwhichwedobusiness.

10. Basic and Diluted Net Loss Per Share

Inperiodsinwhichwehavenetincome,weapplythetwo-classmethodforcalculatingnetlosspershare.Underthetwo-classmethod,netincomeisattributedtocommonstockholdersandparticipatingsecuritiesbasedontheirparticipationrights.Participatingsecuritiesincludeconvertiblepreferredstock.Inperiodsinwhichwehavenetlossesafteraccretionofconvertiblepreferredstock,wedonotattributelossestoparticipatingsecuritiesastheyarenotcontractuallyobligatedtoshareourlosses.

Underthetwo-classmethod,basicnetlosspershareattributabletocommonstockholdersiscomputedbydividingthenetlossattributabletocommonstockholdersbytheweighted-averagenumberofsharesofcommonstockoutstandingduringtheperiod.Netlossattributabletocommonstockholdersiscalculatedasnetlossincludingcurrentperiodconvertiblepreferredstockaccretion.

Dilutednetlosspershareattributabletocommonstockholdersadjustsbasicnetlosspershareforthepotentiallydilutiveimpactofstockoptionsandconvertiblepreferredstock.Aswehavereportedlossesattributabletocommonstockholdersforallperiodspresented,allpotentiallydilutivesecuritiesareantidilutiveandaccordingly,basicnetlosspershareequalsdilutednetlosspershare.BasicanddilutednetlosspershareattributabletocommonstockholdersforClassAandClassBcommonstockwerethesamebecausetheywereentitledtothesameliquidationanddividendrights.

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Thefollowingweighted-averageequivalentsharesofcommonstockwereexcludedfromthedilutednetlosspersharecalculationbecausetheirinclusionwouldhavebeenanti-dilutive(inthousands):

Three Months Ended


September 30, 2017 2016 2017 2016 Optionstopurchasecommonstock 5,890 5,590 6,029 5,363Unvestedrestrictedstockunits 418 — 411 —Conversionofconvertiblepreferredstock — 14,647 4,399 14,647Contingentlyissuableshares 12 — 4 —

Totalsharesexcludedfromnetlosspershare 6,320 20,237 10,843 20,010

11. Segment and Geographic Information

Operatingsegmentsaredefinedascomponentsofanenterpriseforwhichseparatefinancialinformationisevaluatedregularlybythechiefoperatingdecisionmaker,orCODM,whoisourchiefexecutiveofficer,indecidinghowtoallocateresourcesandassessourfinancialandoperationalperformance.OurCODMevaluatesourfinancialinformationandresourcesandassessestheperformanceoftheseresourcesonaconsolidatedandaggregatedbasis.Asaresult,wehavedeterminedthatourbusinessoperatesinasingleoperatingsegment.

OuroperationsoutsidetheUnitedStatesincludesalesofficesinCanada,CzechRepublic,Germany,Singapore,andtheUnitedKingdom,andaresearchanddevelopmentcenterinUkraine.Revenuebylocationisdeterminedbythebillingaddressofthecustomer.Thefollowingsetsforthourrevenuebygeographicregion(inthousands):

Three Months Ended


September 30, 2017 2016 2017 2016 UnitedStates $ 26,290 $ 18,158 $72,582 $49,632International 7,865 4,304 20,437 11,196

Total $ 34,155 $ 22,462 $93,019 $60,828

NocountriesoutsidetheUnitedStatescomprisedmorethan10%ofrevenueforanyoftheperiodspresented.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

YoushouldreadthefollowingdiscussionandanalysisofourfinancialconditionandresultsofoperationstogetherwiththecondensedconsolidatedfinancialstatementsandrelatednotesthatareincludedelsewhereinthisQuarterlyReportonForm10-QandourfinalprospectusrelatedtotheCompany’sinitialpublicoffering,orIPO,datedMarch23,2017,ortheProspectus,filedwiththeSecuritiesandExchangeCommission,ortheSEC,pursuanttoRule424(b)undertheSecuritiesActof1933,asamended,ortheSecuritiesAct.Thisdiscussioncontainsforward-lookingstatementsbaseduponcurrentexpectationsthatinvolverisksanduncertainties.Ouractualresultsmaydiffermateriallyfromthoseanticipatedintheseforward-lookingstatementsasaresultofvariousfactors,includingthosesetforthunder“RiskFactors,”setforthinPartII,Item1AofthisQuarterlyReportonForm10-Q.See“SpecialNoteRegardingForward-LookingStatements”above.

Overview

Wearealeadingproviderofself-servicedataanalyticssoftware.Oursoftwareplatformenablesorganizationstodramaticallyimprovebusinessoutcomesandtheproductivityoftheirbusinessanalysts.Oursubscription-basedplatformallowsorganizationstoeasilyprepare,blend,andanalyzedatafromamultitudeofsourcesandmorequicklybenefitfromdata-drivendecisions.Theease-of-use,speed,andsophisticationthatourplatformprovidesisenhancedthroughintuitiveandhighlyrepeatablevisualworkflows.Weaimtomakeourplatformasubiquitousintheworkplaceasspreadsheetsaretoday.

OurplatformincludesAlteryxDesigner,ourdatapreparation,blending,andanalyticsproductdeployableinthecloudandonpremise,andAlteryxServer,oursecureandscalableproductforsharingandrunninganalyticapplicationsinaweb-basedenvironment.Inaddition,AlteryxAnalyticsGallery,ourcloud-basedcollaborationoffering,isakeyfeatureofourplatformallowinguserstoshareworkflowsinacentralizedrepository.Ourplatformhasbeenadoptedbyorganizationsacrossawidevarietyofindustriesandsizes.AsofSeptember30,2017,wehad3,054customersinmorethan60countries,includingover400oftheGlobal2000companies.

Wederivesubstantiallyallourrevenuefromsubscriptionsforuseofourplatform.Oursoftwarecanbelicensedforuseonadesktoporserver,oritcanbedeliveredthroughahostedmodel.Subscriptionperiodsforourplatformgenerallyrangefromonetothreeyearsandthesubscriptionfeesaretypicallybilledannuallyinadvance.Werecognizerevenuefromsubscriptionfeesratablyoverthetermofthecontract.Revenuefromsubscriptionsrepresentedover95%ofrevenueforeachofthethreeandninemonthsendedSeptember30,2017and2016.Wealsogeneraterevenuefromprofessionalservices,includingtrainingandconsultingservices.

Weemploya“landandexpand”businessmodel.Ourgo-to-marketapproachoftenbeginswithafreetrialandisfollowedbyaninitialpurchaseofourplatform.Asorganizationsrealizethebenefitsderivedfromourplatform,usefrequentlyspreadsacrossdepartments,divisions,andgeographiesthroughword-of-mouth,collaboration,andstandardizationofbusinessprocesses.Overtime,manyofourcustomersfindthattheuseofourplatformismorestrategicinnatureandourplatformbecomesafundamentalelementoftheirregularanalyticalprocesses.

Wesellourplatformprimarilythroughdirectsalesandmarketingchannelsutilizingawiderangeofonlineandofflinesalesandmarketingactivities.Inaddition,wehavecultivatedstrongrelationshipswithchannelpartnerstohelpusextendthereachofoursalesandmarketingefforts,especiallyinternationally.Ourchannelpartnersincludetechnologyalliances,systemintegrators,managementconsultingfirms,andvalue-addedresellers.Thesechannelpartnersalsoprovidesolution-basedselling,services,andtraininginternationally.

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Key Business Metrics

Wereviewthefollowingkeybusinessmetricstoevaluateourbusiness,measureourperformance,identifytrendsaffectingourbusiness,formulatebusinessplans,andmakestrategicdecisions:

Number of Customers .Webelievethatourabilitytoexpandourcustomerbaseisakeyindicatorofourmarketpenetration,thegrowthofourbusiness,andourfuturepotentialbusinessopportunities.Wedefineacustomerattheendofanyparticularperiodasanentitywithasubscriptionagreementthatrunsthroughthecurrentorfutureperiodasofthemeasurementdate.Organizationswithfreetrialshavenotenteredintoasubscriptionagreementandarenotconsideredcustomers.Asingleorganizationwithseparatesubsidiaries,segments,ordivisionsthatuseourplatformmayrepresentmultiplecustomers,aswetreateachentitythatisinvoicedseparatelyasasinglecustomer.Incaseswherecustomerssubscribetoourplatformthroughourchannelpartners,eachendcustomeriscountedseparately.

Thefollowingtablesummarizesthenumberofourcustomersateachquarterendfortheperiodsindicated: As of

Mar. 31,

2016 Jun. 30,

2016 Sep. 30,

2016 Dec. 31,

2016 Mar. 31,

2017 Jun. 30,

2017 Sep. 30,

2017 Customers 1,578 1,834 2,047 2,328 2,565 2,823 3,054

Dollar-Based Net Revenue Retention Rate .Webelievethatourdollar-basednetrevenueretentionrateisakeymeasuretoprovideinsightintothelong-termvalueofourcustomersandourabilitytoretainandexpandrevenuefromourcustomerbaseovertime.Ourdollar-basednetrevenueretentionrateisatrailingfour-quarteraverageofthesubscriptionrevenuefromacohortofcustomersinaquarterascomparedtothesamequarterintheprioryear.Dollar-basednetrevenueretentionrateequalto100%wouldindicatethatwereceivedthesameamountofrevenuefromourcohortofcustomersinthecurrentquarteraswedidinthesamequarteroftheprioryear.Dollar-basednetrevenueretentionratelessthan100%wouldindicatethatwereceivedlessrevenuefromourcohortofcustomersinthecurrentquarterthanwedidinthesamequarteroftheprioryear.

Tocalculateourdollar-basednetrevenueretentionrate,wefirstidentifyacohortofcustomers,ortheBaseCustomers,inaparticularquarter,ortheBaseQuarter.AcustomerwillnotbeconsideredaBaseCustomerunlesssuchcustomerhasanactivesubscriptionfortheentiretyoftheBaseQuarter.WethendividetherevenueinthesamequarterofthesubsequentyearattributabletotheBaseCustomers,ortheComparisonQuarter,includingBaseCustomersfromwhichwenolongerderiverevenueintheComparisonQuarter,bytherevenueattributabletothoseBaseCustomersintheBaseQuarter.Ourdollar-basednetrevenueretentionrateinaparticularquarteristhenobtainedbyaveragingtheresultfromthatparticularquarterbythecorrespondingresultfromeachofthepriorthreequarters.Thedollar-basednetrevenueretentionrateexcludesrevenuefromprofessionalservicesfromthatcohort.

Thefollowingtablesummarizesourdollar-basednetrevenueretentionrateforeachquarterfortheperiodsindicated: Three Months Ended

Mar. 31,

2016 Jun. 30,

2016 Sep. 30,

2016 Dec. 31,

2016 Mar. 31,

2017 Jun. 30,

2017 Sep. 30,

2017 Dollar-basednetrevenueretentionrate 126% 127% 129% 135% 133% 134% 133%

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Components of Our Results of Operations

Revenue

Wederiveourrevenueprimarilyfromthesaleofsoftwaresubscriptions.Revenuefromsubscriptionsreflectstherevenuerecognizedfromsalesoflicensestoourplatformtonewcustomersandadditionallicensestoexistingcustomers.Subscriptionfeesarebasedprimarilyonthenumberofusersofourplatform.Werecognizesubscriptionrevenueratablyoverthetermofthecontract,commencingwiththedateonwhichtheplatformisfirstmadeavailabletothecustomer,andwhenallotherrevenuerecognitioncriteriaaremet.Oursubscriptionagreementsgenerallyhavetermsrangingfromonetothreeyearsandarebilledannuallyinadvance.Subscriptionsaregenerallynon-cancelableduringthesubscriptiontermandsubscriptionfeesarenon-refundable.Oursubscriptionagreementsprovideforunspecifiedfutureupdates,upgrades,andenhancements,andtechnicalproductsupport.Wealsogeneraterevenuefromlicensingthird-partysyndicateddatapackagedwithsubscriptions,whichwerecognizeratablyoverthesubscriptionperiod.Wealsoderiverevenuefromprofessionalservicesfeesearnedforconsultingengagementsrelatedtotrainingcustomersandchannelpartners,andconsultingservices.Revenuefromprofessionalservicesrelatingtotrainingresultsfromcontractstoprovideeducationalservicestocustomersandchannelpartnersregardingtheuseofourtechnologiesandisrecognizedastheservicesareprovided.Consultingrevenueisrecognizedonatimeandmaterialsbasisasservicesareprovided.Revenuefromprofessionalservicesrepresentedlessthan5%ofrevenueforeachofthethreeandninemonthsendedSeptember30,2017and2016.Overthelongterm,weexpectourrevenuefromprofessionalservicestodecreaseasapercentageofourrevenue.Inaddition,duetoour“landandexpand”businessmodel,asubstantialmajorityofourrevenueinanygivenperiodisattributabletoourexistingcustomerscomparedtonewcustomers.

Cost of Revenue

Costofrevenueconsistsprimarilyofemployee-relatedcosts,includingsalariesandbonuses,stock-basedcompensationexpense,andemployeebenefitcostsassociatedwithourcustomersupportandprofessionalservicesorganizations.Italsoincludesexpensesrelatedtohostingandoperatingourcloudinfrastructureinathird-partydatacenter,licensesofthird-partysyndicateddata,amortizationofintangibleassets,andrelatedoverheadexpenses.Themajorityofourcostofrevenuedoesnotfluctuatedirectlywithincreasesinrevenue.

Weallocatesharedoverheadcostssuchasinformationtechnologyinfrastructure,rent,andoccupancychargesineachexpensecategorybasedonheadcountinthatcategory.Assuch,generaloverheadexpensesarereflectedincostofrevenue.

Weintendtocontinuetoinvestadditionalresourcesinourcloudinfrastructure.Weexpectthatthecostofthird-partydatacenterhostingfeeswillincreaseovertimeaswecontinuetoexpandourcloud-basedoffering.

Gross Profit and Gross Margin

Grossprofitisrevenuelesscostofrevenue.Grossmarginisgrossprofitexpressedasapercentageofrevenue.Ourgrossmarginhasfluctuatedandmayfluctuatefromperiodtoperiodbasedonanumberoffactors,includingthemixofproductsandserviceswesell,thechannelthroughwhichwesellourproductsandservices,and,toalesserdegree,theutilizationofcustomersupportandprofessionalservicesresources,aswellasthird-partyhostingandsyndicateddatafeesinanygivenperiod.Weexpectourgrossmargintoincreasemodestlyoverthelongterm,althoughourgrossmarginmayfluctuatefromperiodtoperioddependingontheinterplayofthefactorsdiscussedabove.

Operating Expenses

Ouroperatingexpensesareclassifiedasresearchanddevelopment,salesandmarketing,andgeneralandadministrative.Foreachofthesecategories,thelargestcomponentisemployee-relatedcosts,whichincludesalariesandbonuses,stock-basedcompensationexpense,andemployeebenefitcosts.Weallocatesharedoverheadcostssuchasinformationtechnologyinfrastructure,rent,andoccupancychargesineachexpensecategorybasedonheadcountinthatcategory.

Researchanddevelopment.Researchanddevelopmentexpenseconsistsprimarilyofemployee-relatedcosts,includingsalariesandbonuses,stock-basedcompensationexpense,andemployeebenefitcosts,forourresearchanddevelopmentemployees,depreciationofequipmentusedinresearchanddevelopment,third-partycontractors,andrelatedallocatedoverheadcosts.Weexpectresearchanddevelopmentexpensestocontinuetoincreaseinabsolutedollarsforthe

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foreseeablefutureaswecontinuetoincreasethefunctionalityandotherwiseenhanceourplatformanddevelopnewproductsandservices.However,weexpectresearchanddevelopmentexpensetodecreaseasapercentageofrevenueoverthelongterm,althoughresearchanddevelopmentexpensemayfluctuateasapercentageofrevenuefromperiodtoperiodduetotheseasonalityofrevenueandthetimingandextentoftheseexpenses.

Salesandmarketing.Salesandmarketingexpenseconsistsprimarilyofemployee-relatedcosts,includingsalariesandbonuses,salescommissions,stock-basedcompensationexpense,andemployeebenefitcosts,foroursalesandmarketingemployees,marketingprograms,andrelatedallocatedoverheadcosts.Oursalesandmarketingemployeesincludequota-carryingheadcount,salesoperations,andadministration,marketing,andmanagement.Marketingprogramsconsistofadvertising,promotionaleventssuchasourU.S.andEuropeanInspireuserconferences,corporatecommunications,brandbuilding,andproductmarketingactivitiessuchasonlineleadgeneration.

Weplantocontinuetoinvestinsalesandmarketingbyexpandingourglobalpromotionalactivities,buildingbrandawareness,attractingnewcustomers,andsponsoringadditionalmarketingevents.Thetimingoftheseevents,suchasourannualsaleskickoffinthefirstquarterandourannualU.S.andEuropeanInspireuserconferencesinthesecondandthirdquarters,respectively,willaffectoursalesandmarketingexpenseinaparticularquarter.WeexpectsalesandmarketingexpensetocontinuetoincreaseinabsolutedollarsfortheforeseeablefutureaswecontinuetoexpandoursalesforcebothintheUnitedStatesandinternationally,andtocontinuetobeourlargestoperatingexpensecategory.However,weexpectsalesandmarketingexpensetodecreaseasapercentageofrevenueoverthelongterm,althoughsalesandmarketingexpensemayfluctuateasapercentageofrevenuefromperiodtoperiodduetotheseasonalityofrevenueandthetimingandextentoftheseexpenses.

Generalandadministrative.Generalandadministrativeexpenseconsistsprimarilyofemployee-relatedcosts,includingsalariesandbonuses,stock-basedcompensationexpense,andemployeebenefitcosts,forourexecutiveofficersandfinance,legal,humanresources,andadministrativepersonnel,professionalfeesforexternallegal,accounting,andotherconsultingservices,includingthoseincurredinconnectionwithourbusinesscombinationsandfollow-onpublicoffering,changesinthefairvalueofcontingentconsideration,andrelatedallocatedoverheadcosts.Weexpectgeneralandadministrativeexpensetocontinuetoincreaseinabsolutedollarsfortheforeseeablefutureaswecontinuetogrowandincurthecostsassociatedwithbeingapubliclytradedcompany,includingincreasedlegal,audit,andconsultingfees.However,weexpectgeneralandadministrativeexpensetodecreaseasapercentageofrevenueoverthelongtermasweimproveourprocesses,systems,andcontrolstoenableourinternalsupportfunctionstoscalewiththegrowthofourbusiness,althoughgeneralandadministrativeexpensemayfluctuateasapercentageofrevenuefromperiodtoperiodduetotheseasonalityofrevenueandthetimingandextentoftheseexpenses.

Other Expense, Net

Otherexpense,net,consistsprimarilyofforeignexchangegainsandlossesfromforeigncurrencytransactionsdenominatedincurrencyotherthanthefunctionalcurrency,interestincomefromouravailable-for-saleinvestments,andimpairmentofacostmethodinvestment.

Provision for (Benefit of) Income Taxes

Provisionfor(benefitof)incometaxesconsistsprimarilyofincometaxesincertainforeignjurisdictionsinwhichweconductbusiness,anddiscretetaxbenefitsrelatedtoourbusinessacquisitions.Aswehaveexpandedourinternationaloperations,wehaveincurredincreasedforeigntaxexpense,andweexpectthistrendtocontinue.Wehaveafullvaluationallowancefordomesticnetdeferredtaxassets,includingnetoperatinglosscarryforwards,andtaxcreditsrelatedprimarilytoresearchanddevelopment.Duetoourhistoryofdomesticlosses,weexpecttomaintainthisfullvaluationallowancefortheforeseeablefuture.

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Results of Operations

Thefollowingtablesetsforthourresultsofoperationsfortheperiodsindicated.Theperiod-to-periodcomparisonoffinancialresultsisnotnecessarilyindicativeoffinancialresultstobeachievedinfutureperiods.

Three Months Ended


September 30, 2017 2016 2017 2016 (in thousands) Revenue $34,155 $22,462 $ 93,019 $ 60,828Costofrevenue(1) 5,425 4,062 15,545 11,727

Grossprofit 28,730 18,400 77,474 49,101

Operatingexpenses: Researchanddevelopment(1) 7,774 4,496 20,943 12,419Salesandmarketing(1) 15,514 13,456 48,731 42,530Generalandadministrative(1) 8,005 4,298 24,115 11,623

Totaloperatingexpenses 31,293 22,250 93,789 66,572

Lossfromoperations (2,563) (3,850) (16,315) (17,471)Otherexpense,net (711) (284) (277) (562)

Lossbeforeprovisionfor(benefitof)incometaxes (3,274) (4,134) (16,592) (18,033)Provisionfor(benefitof)incometaxes 25 58 (632) 148

Netloss $ (3,299) $ (4,192) $ (15,960) $ (18,181)

(1) Amountsincludestock-basedcompensationexpenseasfollows:

Three Months Ended


September 30, 2017 2016 2017 2016 (in thousands) Costofrevenue $ 123 $ 24 $ 368 $ 72Researchanddevelopment 458 99 1,157 243Salesandmarketing 459 308 1,642 942Generalandadministrative 1,239 475 3,342 1,077

Total $ 2,279 $ 906 $ 6,509 $ 2,334

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Thefollowingtablesetsforthselectedhistoricalfinancialdatafortheperiodsindicated,expressedasapercentageofrevenue:

Three Months Ended


September 30, 2017 2016 2017 2016 Revenue 100.0% 100.0% 100.0% 100.0%Costofrevenue 15.9 18.1 16.7 19.3Grossprofit 84.1 81.9 83.3 80.7Operatingexpenses:

Researchanddevelopment 22.8 20.0 22.5 20.4Salesandmarketing 45.4 59.9 52.4 69.9Generalandadministrative 23.4 19.1 25.9 19.1

Totaloperatingexpenses 91.6 99.1 100.8 109.4Lossfromoperations (7.5) (17.1) (17.5) (28.7)Otherexpense,net (2.1) (1.3) (0.3) (0.9)Lossbeforeprovisionfor(benefitof)incometaxes (9.6) (18.4) (17.8) (29.6)Provisionfor(benefitof)incometaxes 0.1 0.3 (0.7) 0.2Netloss (9.7) (18.7) (17.2) (29.9)

Comparison of the Three and Nine Months Ended September 30, 2017 and 2016

Revenue

Three Months Ended September 30, Change

Nine Months Ended September 30, Change

2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Revenue $34,155 $22,462 $11,693 52.1% $93,019 $60,828 $32,191 52.9%

Theincreaseinourrevenuewasprimarilyfromadditionalsalestoexistingcustomersand,toalesserextent,theincreaseinourtotalnumberofcustomers.ForeachofthethreeandninemonthsendedSeptember30,2017and2016,revenueattributedtoexistingcustomerswasgreaterthan90%ofourrevenue.

Cost of Revenue and Gross Margin



2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Costofrevenue $ 5,425 $ 4,062 $ 1,363 33.6% $15,545 $11,727 $ 3,818 32.6%%ofrevenue 15.9% 18.1% 16.7% 19.3% Grossmargin 84.1% 81.9% 83.3% 80.7%

Theincreaseincostofrevenuewasprimarilyduetoroyaltiesassociatedwiththird-partysyndicateddatacosts.

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Theincreaseingrossmarginwastheresultofanincreaseintheproportionofrevenuefromsubscriptionsrelativetorevenuefromprofessionalservices,aswellasanincreaseintheuseofourcommunitysiteforself-servicesupport,whichreliesonengagementwithotherend-usersandourpartners,resultinginlowersupportcostsasapercentageofrevenue.

Research and Development



2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Researchanddevelopment $ 7,774 $ 4,496 $ 3,278 72.9% $20,943 $12,419 $ 8,524 68.6%%ofrevenue 22.8% 20.0% 22.5% 20.4%

TheincreaseinresearchanddevelopmentexpenseforthethreemonthsendedSeptember30,2017ascomparedtothethreemonthsendedSeptember30,2016wasprimarilyduetoanincreaseinemployee-relatedcostsexcludingstock-basedcompensationof$2.3millionduetohigherheadcount,anincreaseinstock-basedcompensationof$0.4millionduetohigherheadcountandstockawardsissuedinconnectionwiththeacquisitionofYhat,Inc.,orYhat,andanincreaseof$0.4millioninallocatedoverheadexpenses.AsofSeptember30,2017,wehad157researchanddevelopmentpersonnelascomparedto98asofSeptember30,2016.

TheincreaseinresearchanddevelopmentexpensefortheninemonthsendedSeptember30,2017ascomparedtotheninemonthsendedSeptember30,2016wasprimarilyduetoanincreaseinemployee-relatedcostsexcludingstock-basedcompensationof$6.1millionduetohigherheadcount,anincreaseinstock-basedcompensationof$0.9millionduetohigherheadcountandstockawardsissuedinconnectionwiththeYhatacquisitionandanincreaseof$1.0millioninallocatedoverheadexpenses.

Sales and Marketing



2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Salesandmarketing $15,514 $13,456 $ 2,058 15.3% $48,731 $42,530 $ 6,201 14.6%%ofrevenue 45.4% 59.9% 52.4% 69.9%

TheincreaseinsalesandmarketingexpenseforthethreemonthsendedSeptember30,2017ascomparedtothethreemonthsendedSeptember30,2016wasprimarilyduetoanincreaseinemployee-relatedcostsof$2.2millionduetohigherheadcountandanincreaseof$0.1millioninallocatedoverheadexpenses,offsetinpartbyadecreasein,andanoptimizationof,marketingprogramrelatedexpensesof$0.4million.AsofSeptember30,2017,wehad224salesandmarketingpersonnelascomparedto191asofSeptember30,2016.

TheincreaseinsalesandmarketingexpensefortheninemonthsendedSeptember30,2017ascomparedtotheninemonthsendedSeptember30,2016wasprimarilyduetoanincreaseinemployee-relatedcostsof$5.2millionduetohigherheadcountandanincreaseof$1.1millioninallocatedoverheadexpenses.

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General and Administrative



2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Generalandadministrative $ 8,005 $ 4,298 $ 3,707 86.2% $24,115 $11,623 $12,492 107.5%%ofrevenue 23.4% 19.1% 25.9% 19.1%

TheincreaseingeneralandadministrativeexpenseforthethreemonthsendedSeptember30,2017ascomparedtothethreemonthsendedSeptember30,2016wasprimarilyduetoanincreaseinemployee-relatedcostsexcludingstock-basedcompensationof$0.8millionduetohigherheadcountaswecontinuedtoexpandourinfrastructuretosupportourgrowth,anincreaseinstock-basedcompensationof$0.8millionduetohigherheadcountandtherecognitionofexpensesrelatedtorestrictedstockunitstriggeredbyourIPO,anincreaseof$1.1millioninconsulting,accounting,legalandprofessionalfeesrelatedtobecomingapubliccompanyandcostsrelatedtoourfollow-onpublicoffering,andanincreaseof$0.7millionofallocatedoverheadexpenses.AsofSeptember30,2017,wehad76generalandadministrativepersonnelascomparedto63asofSeptember30,2016.

TheincreaseingeneralandadministrativeexpensefortheninemonthsendedSeptember30,2017ascomparedtotheninemonthsendedSeptember30,2016wasprimarilyduetoanincreaseinemployee-relatedcostsexcludingstock-basedcompensationof$3.5millionduetohigherheadcountaswecontinuedtoexpandourinfrastructuretosupportourgrowth,anincreaseinstock-basedcompensationof$2.3millionduetohigherheadcountandtherecognitionofexpensesrelatedtorestrictedstockunitstriggeredbyourIPO,anincreaseof$3.2millioninconsulting,accounting,legalandprofessionalfeesrelatedtobecomingapubliccompany,ourrecentacquisitionsandourfollow-onpublicoffering,andanincreaseof$2.6millionofallocatedoverheadexpenses.

Other Expense, Net



2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Otherexpense,net $ (711) $ (284) $ (427) 150.4% $ (277) $ (562) $ 285 (50.7%)

Otherexpense,netconsistsprimarilyofgainsandlossesonforeigncurrencytransactions,interestincomefromouravailable-for-saleinvestments,andimpairmentofacostmethodinvestment.ThefluctuationinotherexpenseforthethreeandninemonthsendedSeptember30,2017ascomparedtothethreeandninemonthsendedSeptember30,2016wasprimarilyduetoa$1.1millionimpairmentofacostmethodinvestmentinthethreemonthsendedSeptember30,2017,increasesininterestincomeduetoanincreaseinbalancesofavailableforsalesecurities,andfluctuationsinforeigncurrencyagainsttheU.S.Dollar.

Provision for (Benefit of) Income Taxes



2017 2016 Amount % 2017 2016 Amount % (in thousands, except percentages) Provisionfor(benefitof)incometaxes $ 25 $ 58 $ (33) * $ (632) $ 148 $ (780) ** Notmeaningful

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ThechangeintheprovisionforincometaxesfortheninemonthsendedSeptember30,2017ascomparedtotheninemonthsendedSeptember30,2016wasprimarilyduetoadiscretetaxbenefitof$1.0millionrelatedtoadecreaseinourvaluationallowanceagainstourdeferredtaxassetsrelatedtotheYhatacquisition.

Liquidity and Capital Resources

AsofSeptember30,2017,wehad$182.6millionofcashandcashequivalentsandshort-termandlong-terminvestmentsinmarketablesecurities.InMarch2017,wecompletedourIPO,resultinginnetproceedsof$131.4million,whichincluded$17.6millionfromtheexerciseinfulloftheunderwriters’optiontopurchaseadditionalsharesinApril2017,afterunderwritingdiscountsandcommissionsandofferingexpenses.

Ourprincipalusesofcasharefundingouroperationsandotherworkingcapitalrequirements.

Webelievethatourexistingcashandcashequivalentsandshort-termandlong-terminvestmentsandanypositivecashflowsfromoperationswillbesufficienttosupportourworkingcapitalandcapitalexpenditurerequirementsforatleastthenext12months.Totheextentexistingcashandcashequivalentsandshort-terminvestmentsandcashfromoperationsarenotsufficienttofundfutureactivities,wemayneedtoraiseadditionalfunds.Wemayseektoraiseadditionalfundsthroughequity,equity-linked,ordebtfinancings.Ifweraiseadditionalfundsthroughtheincurrenceofindebtedness,suchindebtednessmayhaverightsthatareseniortoholdersofourequitysecuritiesandcouldcontaincovenantsthatrestrictoperations.Anyadditionalequityorconvertibledebtfinancingmaybedilutivetostockholders.Ifweareunabletoraiseadditionalcapitalwhendesired,ourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffected.

Cash Flows

Thefollowingtablesetsforthcashflowsfortheperiodsindicated:

Nine Months Ended

September 30, 2017 2016 (in thousands) Netcashprovidedby(usedin)operatingactivities $ 6,440 $(9,126)Netcashprovidedby(usedin)investingactivities (77,183) 2,222Netcashprovidedby(usedin)financingactivities 135,205 (569)

Operating Activities

FortheninemonthsendedSeptember30,2017,netcashprovidedbyoperatingactivitieswas$6.4million.Netcashprovidedbyoperatingactivitiesprimarilyreflectedachangeinoperatingassetsandliabilitiesof$12.4millionandnetnon-cashactivityof$10.0million,offsetinpartbyanetlossof$16.0million.Thechangesinoperatingassetsandliabilitiesprimarilyrelatedtoadecreaseinaccountsreceivableof$3.9millionfromcollectionsofannualbillingsinvoicedduringthethreemonthsendedDecember31,2016,andanincreaseindeferredrevenueof$8.1millionduetoincreasedbillings.Netnon-cashactivityprimarilyconsistedofstock-basedcompensationof$6.5millionanddepreciationandamortizationof$2.7million.

FortheninemonthsendedSeptember30,2016,netcashusedbyoperatingactivitieswas$9.1million.Netcashusedbyoperatingactivitiesprimarilyreflectedanetlossof$18.2million.Thenetlosswasoffsetinpartbyachangeinoperatingassetsandliabilitiesof$5.5millionandnetnon-cashoperatingactivitiesof$3.5million.ThechangeinoperatingassetsandliabilitiesprimarilyrelatedtoanincreaseinbillingsduringthethreemonthsendedSeptember30,2016resultinginanincreaseindeferredrevenueof$8.4millionoffsetinpartbyanincreaseinaccountsreceivableof$3.3million.Netnon-cashactivitiesprimarilyconsistedofstock-basedcompensationof$2.3millionanddepreciationandamortizationof$1.2million.

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Investing Activities

NetcashusedininvestingactivitiesfortheninemonthsendedSeptember30,2017was$77.2million,consistingprimarilyof$65.8millionofnetpurchasesofinvestments,$9.1millionofnetcashpaidinconnectionwithourbusinessacquisitions,and$2.3millionofpurchasesofpropertyandequipment.

NetcashprovidedbyinvestingactivitiesfortheninemonthsendedSeptember30,2016was$2.2million,consistingprimarilyof$5.7millionofnetmaturitiesofinvestments,offsetinpartby$3.5millionofpurchasesofpropertyandequipmentassociatedwithadditionalheadcountandofficelocations.

Financing Activities

NetcashprovidedbyfinancingactivitiesfortheninemonthsendedSeptember30,2017was$135.2million,consistingprimarilyofproceedsfromourIPOof$134.8millionand$2.6millionofproceedsfromstockoptionexercisesandpurchasesunderouremployeestockpurchaseplan,partiallyoffsetby$1.9millioninpaymentsofIPOcostsand$0.2millionofprincipalpaymentsonourcapitallease.

NetcashusedinfinancingactivitiesfortheninemonthsendedSeptember30,2016was$0.6million,consistingprimarilyofpaymentofissuancecostsrelatedtoourSeriesCconvertiblepreferredstockissuanceof$0.4millionand$0.3millionofrepurchasesofcommonstock.

Contractual Obligations and Commitments

TherewerenomaterialchangesinourcontractualobligationsandcommitmentsduringtheninemonthsendedSeptember30,2017fromthecontractualobligationsandcommitmentsdisclosedintheProspectus,exceptforthecontingentconsiderationacquiredaspartofourbusinesscombinationsasdiscussedinNote3ofthenotestoourcondensedconsolidatedfinancialstatementsincludedinPartI,Item1ofthisQuarterlyReportonForm10-Q.SeeNote8ofthenotestoourcondensedconsolidatedfinancialstatementsincludedinPartI,Item1ofthisQuarterlyReportonForm10-Qforadditionalinformationregardingcontractualobligationsandcommitments.

Off-Balance Sheet Arrangements

AsofSeptember30,2017,wedidnothaveanyrelationshipswithunconsolidatedentitiesorfinancialpartnerships,suchasstructuredfinanceorspecialpurposeentities,whichwouldhavebeenestablishedforthepurposeoffacilitatingoff-balancesheetarrangements.

Critical Accounting Policies and Estimates

OurcondensedconsolidatedfinancialstatementsandtherelatednoteshavebeenpreparedinaccordancewithU.S.GAAP.Thepreparationofourcondensedconsolidatedfinancialstatementsrequiresustomakeestimatesandassumptionsthataffectthereportedamountsofassets,liabilities,revenue,costsandoperatingexpenses,provisionforincometaxes,andrelateddisclosures.Generally,webaseourestimatesonhistoricalexperienceandonvariousotherassumptionsinaccordancewithU.S.GAAPthatwebelievetobereasonableunderthecircumstances.Actualresultsmaydifferfromtheseestimates.Totheextentthattherearematerialdifferencesbetweentheseestimatesandouractualresults,ourfuturefinancialstatementswillbeaffected.

TherehavebeennochangestoourcriticalaccountingpoliciesdisclosedinourProspectusrelatedtoourIPOdatedMarch23,2017filedwiththeSecuritiesandExchangeCommissionpursuanttoRule424(b)undertheSecuritiesActof1933,asamended.

Recent Accounting Pronouncements

SeeNote2ofthenotestoourcondensedconsolidatedfinancialstatementsinPartI,Item1ofthisQuarterlyReportonForm10-Qforadescriptionofrecentaccountingpronouncements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Foreign Currency Exchange Risk

Duetoourinternationaloperations,wehaveforeigncurrencyrisksrelatedtorevenueandoperatingexpensesdenominatedincurrenciesotherthantheU.S.dollar,primarilytheBritishPoundandEuro.Oursalescontractsareprimarilydenominatedinthelocalcurrencyofthecustomermakingthepurchase.Inaddition,aportionofouroperatingexpensesareincurredoutsidetheUnitedStatesandaredenominatedinforeigncurrencieswhereouroperationsarelocated.DecreasesintherelativevalueoftheU.S.dollartoothercurrenciesmaynegativelyaffectrevenueandotheroperatingresultsasexpressedinU.S.dollars.Wedonotbelievethatanimmediate10%increaseordecreaseintherelativevalueoftheU.S.dollartoothercurrencieswouldhaveamaterialeffectonouroperatingresults.

Wehaveexperiencedandwillcontinuetoexperiencefluctuationsinnetlossasaresultoftransactiongainsorlossesrelatedtoremeasuringcertaincurrentassetandcurrentliabilitybalancesthataredenominatedincurrenciesotherthanthefunctionalcurrencyoftheentitiesinwhichtheyarerecorded.Todate,wehavenotenteredintoderivativesorhedgingtransactions,asourexposuretoforeigncurrencyexchangerateshashistoricallybeenpartiallyhedgedasourU.S.dollardenominatedinflowshavecoveredourU.S.dollardenominatedexpensesandourforeigncurrencydenominatedinflowshavecoveredourforeigncurrencydenominatedexpenses.However,wemayenterintoderivativeorhedgingtransactionsinthefutureifourexposuretoforeigncurrencyshouldbecomemoresignificant.

Interest Rate Risk

Wehadcashandcashequivalentsandshort-termandlong-terminvestmentsof$182.6millionasofSeptember30,2017.Theprimaryobjectiveofourinvestmentactivitiesisthepreservationofcapital,andwedonotenterintoinvestmentsfortradingorspeculativepurposes.Ahypothetical10%increaseininterestratesduringtheninemonthsendedSeptember30,2017wouldnothavehadamaterialimpactonourcondensedconsolidatedfinancialstatements.Wedonothavematerialexposuretomarketriskwithrespecttoshort-termandlong-terminvestments,asanyinvestmentsweenterintoareprimarilyhighlyliquidinvestments.

Inflation Risk

Wedonotbelievethatinflationhashadamaterialeffectonourbusiness,financialcondition,oroperatingresults.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Ourmanagement,withtheparticipationofourChiefExecutiveOfficerandChiefFinancialOfficer,evaluatedtheeffectivenessofourdisclosurecontrolsandproceduresasdefinedinRules13a-15(e)and15d-15(e)undertheSecuritiesExchangeActof1934,asamended,ortheExchangeAct,asofSeptember30,2017.OurdisclosurecontrolsandproceduresaredesignedtoensurethatinformationwearerequiredtodiscloseinthereportswefileorsubmitundertheExchangeActisaccumulatedandcommunicatedtoourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,asappropriatetoallowtimelydecisionsregardingrequireddisclosures,andisrecorded,processed,summarized,andreportedwithinthetimeperiodsspecifiedintheSEC’srulesandforms.

BecauseofthematerialweaknessinourinternalcontroloverfinancialreportingpreviouslydisclosedinourProspectus,ourChiefExecutiveOfficerandChiefFinancialOfficerconcludedthat,asofSeptember30,2017,ourdisclosurecontrolsandprocedureswerenoteffective.Inlightofthisfact,ourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,hasperformedadditionalanalyses,reconciliations,andotherpost-closingproceduresandhasconcludedthat,notwithstandingthematerialweaknessinourinternalcontroloverfinancialreporting,thecondensedconsolidatedfinancialstatementsfortheperiodscoveredbyandincludedinthisQuarterlyReportonForm10-Qfairlypresent,inallmaterialrespects,ourfinancialposition,resultsofoperationsandcashflowsfortheperiodspresentedinconformitywithU.S.GAAP.

Previously Reported Material Weakness

Asdisclosedinthesectiontitled“RiskFactors”inPartII,Item1AofthisQuarterlyReportonForm10-Q,wepreviouslyidentifiedamaterialweaknessinourinternalcontroloverfinancialreportingrelatedtotheevaluationoftheaccountingimpactofcertaincontractualtermsincertainarrangementswithlicenseddataproviders,whichresultedinthemisstatementintherecordingofprepaidandotherassetsandroyaltycoststhatwererecordedincostofrevenueinthefirstthreefiscalquartersof2016.Thismaterialweaknessresultedinanimmaterialrevisionofthosequarterlybalancesheetandresultsofoperationsdata.

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Wecommencedmeasurestoremediatetheidentifiedmaterialweakness.Thoseremediationmeasuresareongoingandincludetheimplementationofadditionalcontrolactivitiesrelatedtotheidentificationandevaluationofthetermsofroyaltycontractsthatrequireconsiderationwhenassessingtheaccountingforthearrangement.

Whilewebelievethattheseeffortswillimproveourinternalcontroloverfinancialreporting,theimplementationofourremediationisongoingandwillrequirevalidationandtestingofthedesignandoperatingeffectivenessofinternalcontrolsoverasustainedperiodoffinancialreportingcycles.

Webelievewearemakingprogresstowardachievingtheeffectivenessofourinternalcontrolsanddisclosurecontrols.Theactionsthatwearetakingaresubjecttoongoingseniormanagementreview,aswellasauditcommitteeoversight.Wewillnotbeabletoconcludewhetherthestepswearetakingwillfullyremediatethematerialweaknessinourinternalcontroloverfinancialreportinguntilwehavecompletedourremediationeffortsandsubsequentevaluationoftheireffectiveness.Wemayalsoconcludethatadditionalmeasuresmayberequiredtoremediatethematerialweaknessinourinternalcontroloverfinancialreporting,whichmaynecessitateadditionalimplementationandevaluationtime.Wewillcontinuetoassesstheeffectivenessofourinternalcontroloverfinancialreportingandtakestepstoremediatetheknownmaterialweaknessexpeditiously.

Changes in Internal Control over Financial Reporting

Wearetakingactionstoremediatethematerialweaknessrelatingtoourinternalcontroloverfinancialreporting,asdescribedabove.Exceptasotherwisedescribedherein,therewasnochangeinourinternalcontroloverfinancialreportingthatoccurredduringtheperiodcoveredbythisQuarterlyReportonForm10-Qthathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,ourinternalcontroloverfinancialreporting.

Limitations on the Effectiveness of Disclosure Controls and Procedures

Ourmanagement,includingourChiefExecutiveOfficerandChiefFinancialOfficer,doesnotexpectthatourdisclosurecontrolsandproceduresorinternalcontroloverfinancialreportingwillpreventallerrorsandallfraud.Acontrolsystem,nomatterhowwelldesignedandimplemented,canprovideonlyreasonable,notabsolute,assurancethatthecontrolsystem’sobjectiveswillbemet.Further,thedesignofacontrolsystemmustreflectthefactthatthereareresourceconstraintsandthebenefitsofcontrolsmustbeconsideredrelativetotheircosts.Becauseoftheinherentlimitationsinallcontrolsystems,noevaluationofcontrolscanprovideabsoluteassurancethatallcontrolissueswithinacompanyaredetected.Theinherentlimitationsincludetherealitiesthatjudgmentsindecision-makingcanbefaultyandthatbreakdownscanoccurbecauseofsimpleerrorsormistakes.Controlscanalsobecircumventedbytheindividualactsofsomepersons,bycollusionoftwoormorepeople,orbymanagementoverrideofthecontrols.Becauseoftheinherentlimitationsinacost-effectivecontrolsystem,misstatementsduetoerrororfraudmayoccurandmaynotbedetected.Also,projectionsofanyevaluationofeffectivenesstofutureperiodsaresubjecttotheriskthatcontrolsmaybecomeinadequatebecauseofchangesinconditionsorthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

PART II: OTHER INFORMATION

Item 1. Legal Proceedings.

Fromtimetotime,weareinvolvedinlegalproceedingsarisingintheordinarycourseofourbusiness.Wearenotapartytoanylegalproceedingsthat,ifdeterminedadverselytous,wouldindividuallyortakentogetherhaveamaterialadverseeffectonourbusiness,operatingresults,financialcondition,orcashflows.Regardlessoftheoutcome,litigationcanhaveanadverseimpactonusbecauseofdefenseandsettlementcosts,diversionofmanagementresources,andotherfactors.

Item 1A. Risk Factors.

AninvestmentinourClassAcommonstockinvolvesahighdegreeofrisk.YoushouldcarefullyconsidertherisksdescribedbelowandtheotherinformationinthisQuarterlyReportonForm10-Qandinourotherpublicfilingsbeforemakinganinvestmentdecision.Ourbusiness,prospects,financialcondition,oroperatingresultscouldbeharmedbyanyoftheserisks,aswellasotherrisksnotcurrentlyknowntousorthatwecurrentlyconsiderimmaterial.Ifanyofsuchrisksanduncertaintiesactuallyoccurs,ourbusiness,prospects,financialcondition,oroperatingresultscoulddiffermateriallyfromtheplans,projections,andotherforward-lookingstatementsincludedinthesectiontitled“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”andelsewhereinthisreportandinourotherpublicfilings.ThetradingpriceofourClassAcommonstockcoulddeclineduetoanyoftheserisks,and,asaresult,youmayloseallorpartofyourinvestment.

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Risks Related to Our Business and Industry

We have a limited operating history under our current business model, which makes it difficult to evaluate our business and prospects and increases the risksassociated with your investment.

Althoughwehavebeenoperatingourbusinesssince1997,wechangedourbusinessmodelsignificantlyandfirstlaunchedoursoftwareplatformin2010.Further,since2013,wehavelicensedourplatformtocustomersunderasubscription-basedmodel.Asaresult,ourbusinessmodelhasnotbeenfullyproven,andwehaveonlyalimitedoperatinghistorywithournewbusinessmodeltoevaluateourbusinessandfutureprospects,whichsubjectsustoanumberofuncertainties,includingourabilitytoplanforandmodelfuturegrowth.Ourhistoricalrevenuegrowthshouldnotbeconsideredindicativeofourfutureperformance.Wehaveencounteredandwillcontinuetoencounterrisksanddifficultiesfrequentlyexperiencedbygrowingcompaniesinrapidlychangingindustries,includingachievingmarketacceptanceofourplatform,attractingandretainingcustomers,growingpartnershipsanddistributionofourplatform,increasingcompetition,andincreasingexpensesaswecontinuetogrowourbusiness.Wecannotassureyouthatwewillbesuccessfulinaddressingtheseandotherchallengeswemayfaceinthefutureandifwedonotmanagetheseriskssuccessfully,ourbusinessmaybeadverselyaffected.Inaddition,wemaynotachievesufficientrevenuetoachieveormaintainpositivecashflowfromoperationsorprofitabilityinanygivenperiod.

We have a history of losses, anticipate increasing our operating expenses in the future, and may not achieve or sustain profitability.

Wehaveincurrednetlossesineachfiscalyearsinceourinception,includingnetlossesof$20.3million,$21.5million,and$24.3millionintheyearsendedDecember31,2014,2015,and2016,respectively.Wealsoincurredanetlossof$3.3millionand$16.0millioninthethreeandninemonthsendedSeptember30,2017,respectively.AsofSeptember30,2017,wehadanaccumulateddeficitof$102.0million.Weexpectouroperatingexpensestoincreasesubstantiallyintheforeseeablefutureasweimplementinitiativesdesignedtogrowourbusiness,includingincreasingouroverallcustomerbaseandexpandingsaleswithinourcurrentcustomerbase,continuingtopenetrateinternationalmarkets,investinginresearchanddevelopmenttoimprovethecapabilitiesofourplatform,growingourdistributionchannelsandchannelpartnerecosystem,deepeningourusercommunity,hiringadditionalemployees,expandingouroperationsandinfrastructure,bothdomesticallyandinternationally,andinconnectionwithlegal,accounting,andotheradministrativeexpensesrelatedtooperatingasapubliccompany.Theseeffortsmayprovemoreexpensivethanwecurrentlyanticipate,andwemaynotsucceedinincreasingourrevenuesufficiently,oratall,tooffsetthesehigherexpensesandtoachieveandsustainprofitability.Growthofourrevenuemaysloworrevenuemaydeclineforanumberofpossiblereasons,includingadecreaseinourabilitytoattractandretaincustomers,afailuretoincreaseournumberofchannelpartners,increasingcompetition,decreasinggrowthofouroverallmarket,andaninabilitytotimelyandcost-effectivelyintroducenewproductsandservicesthatarefavorablyreceivedbycustomersandpartners.Ifweareunabletomeettheserisksandchallengesasweencounterthem,ourbusinessandoperatingresultsmaybeadverselyaffected,andevenifweareabletoachieveprofitability,wemaynotbeabletosustainorincreasesuchprofitability.

Our operating results may fluctuate from quarter to quarter, which makes our future results difficult to predict.

Ourquarterlyoperatingresultshavefluctuatedinthepastandmayfluctuateinthefuture.Additionally,wehavealimitedoperatinghistorywiththecurrentscaleofourbusiness,whichmakesitdifficulttoforecastourfutureresults.Asaresult,youshouldnotrelyuponourpastquarterlyoperatingresultsasindicatorsoffutureperformance.Youshouldtakeintoaccounttherisksanduncertaintiesfrequentlyencounteredbycompaniesinrapidlyevolvingmarkets.Ouroperatingresultsinanygivenquartercanbeinfluencedbynumerousfactors,manyofwhichareunpredictableorareoutsideofourcontrol,including:

• ourabilitytogeneratesignificantrevenuefromnewproductsandservices;

• ourabilitytomaintainandgrowourcustomerbase;

• ourabilitytoexpandournumberofpartnersanddistributionofourplatform;

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• thedevelopmentandintroductionofnewproductsandservicesbyusorourcompetitors;

• increasesinandtimingofoperatingexpensesthatwemayincurtogrowandexpandouroperationsandtoremaincompetitive;

• seasonalpurchasingpatternsofourcustomers;

• thetimingofourInspirecustomerconferences;

• costsrelatedtotheacquisitionofbusinesses,talent,technologies,orintellectualproperty,includingpotentiallysignificantamortizationcostsandpossiblewrite-downs;

• failuresorbreachesofsecurityorprivacy,andthecostsassociatedwithremediatinganysuchfailuresorbreaches;

• adverselitigation,judgments,settlements,orotherlitigation-relatedcosts;

• changesinthelegislativeorregulatoryenvironment,suchaswithrespecttoprivacy;

• fluctuationsincurrencyexchangeratesandchangesintheproportionofourrevenueandexpensesdenominatedinforeigncurrencies;and

• generaleconomicconditionsineitherdomesticorinternationalmarkets.

We have been growing rapidly and expect to continue to invest in our growth for the foreseeable future. If we are unable to manage our growth effectively, ourrevenue and profits could be adversely affected.

Wehaveexperiencedrapidgrowthinarelativelyshortperiodoftime.Ourrevenuegrewfrom$38.0millionintheyearendedDecember31,2014to$53.8millionintheyearendedDecember31,2015to$85.8millionintheyearendedDecember31,2016andfrom$60.8millionintheninemonthsendedSeptember30,2016to$93.0millionintheninemonthsendedSeptember30,2017.Ournumberoffull-timeemployeeshasincreasedsignificantlyoverthelastfewyears,from413employeesasofSeptember30,2016to515employeesasofSeptember30,2017.Duringthisperiod,wealsoestablishedoperationsinanumberofcountriesoutsidetheUnitedStates.

Weplantocontinuetoexpandouroperationsandheadcountsignificantly,andweanticipatethatfurthersignificantexpansionwillberequired.Inaddition,wesellourplatformtocustomersinmorethan60countriesandhaveemployeesintheUnitedStates,Canada,theCzechRepublic,Germany,Singapore,andtheUnitedKingdom.Weplantocontinuetoexpandouroperationsintoothercountriesinthefuture,whichwillplaceadditionaldemandsonourresourcesandoperations.Ourfutureoperatingresultsdependtoalargeextentonourabilitytomanagethisexpansionandgrowthsuccessfully.Sustainingourgrowthwillplacesignificantdemandsonourmanagementaswellasonouradministrative,operational,andfinancialresources.Tomanageourgrowth,wemustcontinuetoimproveouroperational,financial,andmanagementinformationsystemsandexpand,motivate,andmanageourworkforce.Ifweareunabletomanageourgrowthsuccessfullywithoutcompromisingourqualityofserviceorourprofitmargins,orifnewsystemsthatweimplementtoassistinmanagingourgrowthdonotproducetheexpectedbenefits,ourrevenueandprofitscouldbeharmed.Risksthatwefaceinundertakingfutureexpansioninclude:

• effectivelyrecruiting,integrating,training,andmotivatingalargenumberofnewemployees,includingourdirectsalesforce,whileretainingexistingemployees,maintainingthebeneficialaspectsofourcorporateculture,andeffectivelyexecutingourbusinessplan;

• satisfyingexistingcustomersandattractingnewcustomers;

• successfullyimprovingandexpandingthecapabilitiesofourplatformandintroducingnewproductsandservices;

• expandingourchannelpartnerecosystem;

• controllingexpensesandinvestmentsinanticipationofexpandedoperations;

• implementingandenhancingouradministrative,operational,andfinancialinfrastructure,systems,andprocesses;

• addressingnewmarkets;and

• expandingoperationsintheUnitedStatesandinternationalregions.

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Afailuretomanageourgrowtheffectivelycouldharmourbusiness,operatingresults,financialcondition,andabilitytomarketandsellourplatform.

Further,duetoourrecentrapidgrowth,wehavelimitedexperienceoperatingatourcurrentscaleandpotentiallyatalargerscale,andasaresult,itmaybedifficultforustofullyevaluatefutureprospectsandrisks.Ourrecentandhistoricalgrowthshouldnotbeconsideredindicativeofourfutureperformance.Wehaveencounteredinthepast,andwillencounterinthefuture,risksanduncertaintiesfrequentlyexperiencedbygrowingcompaniesinrapidlychangingindustries.Ifourassumptionsregardingtheserisksanduncertainties,whichweusetoplanandoperateourbusiness,areincorrectorchange,orifwedonotaddresstheseriskssuccessfully,ourfinancialconditionandoperatingresultscoulddiffermateriallyfromourexpectations,ourgrowthratesmayslowandourbusinesswouldbyadverselyimpacted.

If the market for analytics products and services fails to grow as we expect, or if businesses fail to adopt our platform, our business, operating results, andfinancial condition could be adversely affected.

Since2013,nearlyallourrevenuehascomefromsalesofoursubscription-basedsoftwareplatform.Weexpectthesesalestoaccountforalargeportionofourrevenuefortheforeseeablefuture.Althoughdemandforanalyticsproductsandserviceshasgrowninrecentyears,themarketforanalyticsproductsandservicescontinuestoevolveandthesecularshifttowardsself-serviceanalyticsmaynotbeassignificantasweexpect.Wecannotbesurethatthismarketwillcontinuetogrowor,evenifitdoesgrow,thatbusinesseswilladoptourplatform.Ourfuturesuccesswilldependinlargepartonourabilitytofurtherpenetratetheexistingmarketforbusinessanalyticssoftware,aswellasthecontinuedgrowthandexpansionofwhatwebelievetobeanemergingmarketforanalyticsproductsandservicesthatarefaster,easiertoadopt,easiertouse,andmorefocusedonself-servicecapabilities.Ourabilitytofurtherpenetratethebusinessanalyticsmarketdependsonanumberoffactors,includingthecost,performance,andperceivedvalueassociatedwithourplatform,aswellascustomers’willingnesstoadoptadifferentapproachtodataanalysis.Wehavespent,andintendtokeepspending,considerableresourcestoeducatepotentialcustomersaboutanalyticsproductsandservicesingeneralandourplatforminparticular.However,wecannotbesurethattheseexpenditureswillhelpourplatformachieveanyadditionalmarketacceptance.Furthermore,potentialcustomersmayhavemadesignificantinvestmentsinlegacyanalyticssoftwaresystemsandmaybeunwillingtoinvestinnewproductsandservices.Inaddition,resistancefromconsumerandprivacygroupstoincreasedcommercialcollectionanduseofdataonspendingpatternsandotherpersonalbehaviorandgovernmentalrestrictionsonthecollectionanduseofpersonaldatamayimpairthefurthergrowthofthismarketbyreducingthevalueofdatatoorganizations,asmayotherdevelopments.Ifthemarketfailstogroworgrowsmoreslowlythanwecurrentlyexpectorbusinessesfailtoadoptourplatform,ourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffected.

We derive substantially all of our revenue from our software platform, and our future growth is dependent on its success.

Since2013,nearlyallofourrevenuehascomefromsalesofoursubscription-basedsoftwareplatform.Weexpectthesesalestoaccountforsubstantiallyallofourrevenuefortheforeseeablefuture.Assuch,thecontinuedgrowthinmarketdemandforourplatformiscriticaltoourcontinuedsuccess.Werecentlyannouncedtwonewproductsforoursoftwareplatform,AlteryxConnectandAlteryxPromote,butcannotbecertainthateitherproductwillgeneratesignificantrevenue,ifany.Inaddition,theseproductsaredesignedtobeusedwithourAlteryxServerproductandwillnotbesoldindependently.Accordingly,ourbusinessandfinancialresultswillcontinuetobesubstantiallydependentonoursinglesoftwareplatform.

If we are unable to attract new customers and expand sales to existing customers, both domestically and internationally, our revenue growth could be slowerthan we expect and our business may be harmed.

Ourfuturerevenuegrowthdependsinpartuponincreasingourcustomerbase.Ourabilitytoachievesignificantgrowthinrevenueinthefuturewilldepend,inlargepart,upontheeffectivenessofourmarketingefforts,bothdomesticallyandinternationally,andourabilitytoattractnewcustomers.Thismaybeparticularlychallengingwhereanorganizationhasalreadyinvestedsubstantialpersonnelandfinancialresourcestointegratetraditionaldataanalyticstoolsintoitsbusiness,assuchorganizationmaybereluctantorunwillingtoinvestinnewproductsandservices.Ifwefailtoattractnewcustomersandmaintainandexpandthosecustomerrelationships,ourrevenuewillgrowmoreslowlythanexpectedandourbusinesswillbeharmed.

Ourfuturerevenuegrowthalsodependsuponexpandingsalesandrenewalsofsubscriptionstoourplatformwithexistingcustomers.Ifourcustomersdonotpurchaseadditionallicensesorcapabilities,ourrevenuemaygrowmoreslowlythanexpected,maynotgrowatallormaydecline.Additionally,increasingincrementalsalestoourcurrentcustomerbaserequiresincreasinglysophisticatedandcostlysaleseffortsthataretargetedatseniormanagement.Forexample,duringthe

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yearsendedDecember31,2015and2016,salesandmarketingexpensesrepresented80%and67%ofourrevenue,respectively.Weplantocontinueexpandingoursalesefforts,bothdomesticallyandinternationally,butwemaybeunabletohirequalifiedsalespersonnel,maybeunabletosuccessfullytrainthosesalespersonnelthatweareabletohire,andsalespersonnelmaynotbecomefullyproductiveonthetimelinesthatwehaveprojectedoratall.Additionally,althoughwededicatesignificantresourcestosalesandmarketingprograms,includingInternetandotheronlineadvertising,thesesalesandmarketingprogramsmaynothavethedesiredeffectandmaynotexpandsales.Wecannotassureyouthatoureffortswouldresultinincreasedsalestoexistingcustomers,andadditionalrevenue.Ifoureffortstoupselltoourcustomersarenotsuccessful,ourbusinessandoperatingresultswouldbeadverselyaffected.

Ourcustomersgenerallyenterintolicenseagreementswithonetothreeyearsubscriptiontermsandhavenoobligationorcontractualrighttorenewtheirsubscriptionsaftertheexpirationoftheirinitialsubscriptionperiod.Moreover,ourcustomersthatdorenewtheirsubscriptionsmayrenewforlowersubscriptionamountsorforshortersubscriptionperiods.Customerrenewalratesmaydeclineorfluctuateasaresultofanumberoffactors,includingthebreadthofearlydeployment,reductionsinourcustomers’spendinglevels,ourpricingorpricingstructure,thepricingorcapabilitiesofproductsorservicesofferedbyourcompetitors,ourcustomers’satisfactionordissatisfactionwithourplatform,ortheeffectsofeconomicconditions.Ifourcustomersdonotrenewtheiragreementswithus,orrenewontermslessfavorabletous,ourrevenuemaydecline.

If we are unable to develop and release product and service enhancements and new products and services to respond to rapid technological change in a timelyand cost-effective manner, our business, operating results, and financial condition could be adversely affected.

Themarketforourplatformischaracterizedbyrapidtechnologicalchange,frequentnewproductandserviceintroductionsandenhancements,changingcustomerdemands,andevolvingindustrystandards.Theintroductionofproductsandservicesembodyingnewtechnologiescanquicklymakeexistingproductsandservicesobsoleteandunmarketable.Analyticsproductsandservicesareinherentlycomplex,anditcantakealongtimeandrequiresignificantresearchanddevelopmentexpenditurestodevelopandtestneworenhancedproductsandservices.Thesuccessofanyenhancementsorimprovementstoourplatformoranynewproductsandservicesdependsonseveralfactors,includingtimelycompletion,competitivepricing,adequatequalitytesting,integrationwithexistingtechnologiesandourplatform,andoverallmarketacceptance.Wecannotbesurethatwewillsucceedindeveloping,marketing,anddeliveringonatimelyandcost-effectivebasisenhancementsorimprovementstoourplatformoranynewproductsandservicesthatrespondtotechnologicalchangeornewcustomerrequirements,norcanwebesurethatanyenhancementsorimprovementstoourplatformoranynewproductsandserviceswillachievemarketacceptance.Anynewproductsthatwedevelopmaynotbeintroducedinatimelyorcost-effectivemanner,maycontainerrorsordefects,ormaynotachievethebroadmarketacceptancenecessarytogeneratesufficientrevenue.Moreover,evenifweintroducenewproductsandservices,wemayexperienceadeclineinrevenueofourexistingproductsandservicesthatisnotoffsetbyrevenuefromthenewproductsorservices.Forexample,customersmaydelaymakingpurchasesofnewproductsandservicestopermitthemtomakeamorethoroughevaluationoftheseproductsandservicesoruntilindustryandmarketplacereviewsbecomewidelyavailable.Somecustomersmayhesitatemigratingtoanewproductorserviceduetoconcernsregardingthecomplexityofmigrationandproductorserviceinfancyissuesonperformance.Inaddition,wemayloseexistingcustomerswhochooseacompetitor’sproductsandservicesratherthanmigratetoournewproductsandservices.Thiscouldresultinatemporaryorpermanentrevenueshortfallandadverselyaffectourbusiness.

Further,theemergenceofnewindustrystandardsrelatedtoanalyticsproductsandservicesmayadverselyaffectthedemandforourplatform.ThiscouldhappenifnewInternetstandardsandtechnologiesornewstandardsinthefieldofoperatingsystemsupportemergedthatwereincompatiblewithcustomerdeploymentsofourplatform.Forexample,ifweareunabletoadaptourplatformonatimelybasistonewdatabasestandards,theabilityofourplatformtoaccesscustomerdatabasesandtoanalyzedatawithinsuchdatabasescouldbeimpaired.Inaddition,becausepartofourplatformiscloud-based,weneedtocontinuallyenhanceandimproveourplatformtokeeppacewithchangesinInternet-relatedhardware,software,communications,anddatabasetechnologiesandstandards.

Anyfailureofourplatformtooperateeffectivelywithfutureinfrastructureplatformsandtechnologiescouldreducethedemandforourplatform.Ifweareunabletorespondtothesechangesinatimelyandcost-effectivemanner,ourplatformmaybecomelessmarketable,lesscompetitive,orobsolete,andouroperatingresultsmaybeadverselyaffected.

Moreover,software-as-a-service,orSaaS,businessmodelshavebecomeincreasinglydemandedbycustomersandadoptedbyothersoftwareproviders,includingourcompetitors.Whilepartofourplatformiscloud-based,mostofourplatformiscurrentlydeployedonpremiseandtherefore,ifcustomersdemandthatourplatformbeprovidedthroughaSaaS

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businessmodel,wewouldberequiredtomakeadditionalinvestmentstoourinfrastructureinordertobeabletomorefullyprovideourplatformthroughaSaaSmodelsothatourplatformremainscompetitive.Suchinvestmentsmayinvolveexpandingourdatacenters,servers,andnetworksandincreasingourtechnicaloperationsandengineeringteams.

The competitive position of our software platform depends in part on its ability to operate with third-party products and services, and if we are not successful inmaintaining and expanding the compatibility of our platform with such third-party products and services, our business, financial position, and operatingresults could be adversely impacted.

Thecompetitivepositionofoursoftwareplatformdependsinpartonitsabilitytooperatewithproductsandservicesofthirdparties,softwareservicesandinfrastructure.Assuch,wemustcontinuouslymodifyandenhanceourplatformtoadapttochangesinhardware,software,networking,browser,anddatabasetechnologies.Inthefuture,oneormoretechnologycompaniesmaychoosenottosupporttheoperationoftheirhardware,software,orinfrastructure,orourplatformmaynotsupportthecapabilitiesneededtooperatewithsuchhardware,software,orinfrastructure.Inaddition,totheextentthatathirdpartyweretodevelopsoftwareorservicesthatcompetewithours,thatprovidermaychoosenottosupportourplatform.Weintendtofacilitatethecompatibilityofoursoftwareplatformwithvariousthird-partyhardware,software,andinfrastructurebymaintainingandexpandingourbusinessandtechnicalrelationships.Ifwearenotsuccessfulinachievingthisgoal,ourbusiness,financialcondition,andoperatingresultscouldbeadverselyimpacted.

We face intense and increasing competition, and we may not be able to compete effectively, which could reduce demand for our platform and adversely affectour business, revenue growth, and market share.

Themarketforself-servicedataanalyticssolutionsisnewandrapidlyevolving.Inmanycases,ourprimarycompetitionismanual,spreadsheetdrivenprocessesormoretraditionalcustombuiltapproachesinwhichpotentialcustomershavemadesignificantinvestments.Inaddition,wecompetewithlargesoftwarecompanies,includingprovidersoftraditionalbusinessintelligencetoolsthatofferoneormorecapabilitiesthatarecompetitivewithourplatform,suchasInternationalBusinessMachinesCorporation,MicrosoftCorporation,OracleCorporation,SAPSE,andSASInstituteInc.Moreover,businessanalyticssoftwarecompaniesoffercapabilitiesthatarecompetitivewithasubsetofthesolutionsweprovide,suchasMicroStrategyIncorporatedandTIBCOSoftwareInc.

Inaddition,otherlargesoftwarecompanies,suchassalesforce.com,inc.andAmazon.com,Inc.,anddatavisualizationcompanies,suchasTableauSoftware,IncandQlikTechnology,Inc,alreadyprovideproductsandservicesinadjacentmarketsandmaydecidetoenterintoourmarket.Wealsocompetewithopensourceinitiativesandcustomdevelopmentefforts.Wecouldalsofacecompetitionfromnewmarketentrants,someofwhommightbecurrenttechnologypartnersofours.Weexpectcompetitiontoincreaseasotherestablishedandemergingcompaniesenterthebusinessanalyticssoftwaremarket,ascustomerrequirementsevolveandasnewproductsandservicesandtechnologiesareintroduced.

Manyofourcurrentandpotentialcompetitors,particularlythelargesoftwarecompaniesnamedabove,havelongeroperatinghistories,significantlygreaterfinancial,technical,marketing,distribution,professionalservices,orotherresourcesandgreaternamerecognitionthanwedo.Inaddition,manyofourcurrentandpotentialcompetitorshavestrongrelationshipswithcurrentandpotentialcustomersandextensiveknowledgeofthebusinessanalyticsindustry.Asaresult,ourcurrentandpotentialcompetitorsmaybeabletorespondmorequicklyandeffectivelythanwecantoneworchangingopportunities,technologies,standards,orcustomerrequirementsordevotegreaterresourcesthanwecantothedevelopment,promotion,andsaleoftheirproductsandservices.Moreover,manyofthesecompaniesarebundlingtheiranalyticsproductsandservicesintolargerdealsorsubscriptionrenewals,oftenatsignificantdiscountsaspartofalargersale.Inaddition,somecurrentandpotentialcompetitorsmayofferproductsorservicesthataddressoneoralimitednumberoffunctionsatlowerpricesorwithgreaterdepththanourplatform.Ourcurrentandpotentialcompetitorsmaydevelopandmarketnewtechnologieswithcomparablefunctionalitytoourplatform.Wemayexperiencefewercustomerorders,reducedgrossmargins,longersalescycles,andlossofmarketshare.Thiscouldleadustodecreaseprices,implementalternativepricingstructures,orintroduceproductsandservicesavailableforfreeoranominalpriceinordertoremaincompetitive.Wemaynotbeabletocompetesuccessfullyagainstcurrentandfuturecompetitors,andourbusiness,operatingresults,andfinancialconditionwillbeharmedifwefailtomeetthesecompetitivepressures.

Ourabilitytocompetesuccessfullyinourmarketdependsonanumberoffactors,bothwithinandoutsideofourcontrol.Someofthesefactorsinclude:easeofuse;platformfeatures,quality,functionality,reliability,performance,andeffectiveness;abilitytoautomateanalyticaltasksorprocesses;abilitytointegratewithothertechnologyinfrastructures;visionforthemarketandproductinnovation;softwareanalyticsexpertise;totalcostofownership;adherencetoindustrystandardsandcertifications;strengthofsalesandmarketingefforts;brandawarenessandreputation;andcustomerexperience,includingsupport.Anyfailurebyustocompetesuccessfullyinanyoneoftheseorotherareasmayreducethedemandforourplatform,aswellasadverselyaffectourbusiness,operatingresults,andfinancialcondition.

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Moreover,currentandfuturecompetitorsmayalsomakestrategicacquisitionsorestablishcooperativerelationshipsamongthemselvesorwithothers,includingourcurrentorfuturetechnologypartners.Bydoingso,thesecompetitorsmayincreasetheirabilitytomeettheneedsofourcustomersorpotentialcustomers.Inaddition,ourcurrentorprospectiveindirectsaleschannelpartnersmayestablishcooperativerelationshipswithourcurrentorfuturecompetitors.Theserelationshipsmaylimitourabilitytosellorcertifyourplatformthroughspecificdistributors,technologyproviders,databasecompanies,anddistributionchannelsandallowourcompetitorstorapidlygainsignificantmarketshare.Thesedevelopmentscouldlimitourabilitytoobtainrevenuefromexistingandnewcustomers.Ifweareunabletocompetesuccessfullyagainstcurrentandfuturecompetitors,ourbusiness,operatingresults,andfinancialconditionwouldbeharmed.

If we fail to develop, maintain, and enhance our brand and reputation cost-effectively, our business and financial condition may be adversely affected.

Webelievethatdeveloping,maintaining,andenhancingawarenessandintegrityofourbrandandreputationinacost-effectivemannerareimportanttoachievingwidespreadacceptanceofourplatformandareimportantelementsinattractingnewcustomersandmaintainingexistingcustomers.Webelievethattheimportanceofourbrandandreputationwillincreaseascompetitioninourmarketfurtherintensifies.Successfulpromotionofourbrandwilldependontheeffectivenessofourmarketingefforts,ourabilitytoprovideareliableandusefulplatformatcompetitiveprices,theperceivedvalueofourplatform,andourabilitytoprovidequalitycustomersupport.Brandpromotionactivitiesmaynotyieldincreasedrevenue,andeveniftheydo,theincreasedrevenuemaynotoffsettheexpensesweincurinbuildingandmaintainingourbrandandreputation.Wealsorelyonourcustomerbaseandcommunityofend-usersinavarietyofways,includingtogiveusfeedbackonourplatformandtoprovideuser-basedsupporttoourothercustomers.Ifwefailtopromoteandmaintainourbrandsuccessfullyortomaintainloyaltyamongourcustomers,orifweincursubstantialexpensesinanunsuccessfulattempttopromoteandmaintainourbrand,wemayfailtoattractnewcustomersandpartnersorretainourexistingcustomersandpartnersandourbusinessandfinancialconditionmaybeadverselyaffected.Anynegativepublicityrelatingtoouremployees,partners,orothersassociatedwiththeseparties,mayalsotarnishourownreputationsimplybyassociationandmayreducethevalueofourbrand.Damagetoourbrandandreputationmayresultinreduceddemandforourplatformandincreasedriskoflosingmarketsharetoourcompetitors.Anyeffortstorestorethevalueofourbrandandrebuildourreputationmaybecostlyandmaynotbesuccessful.

Our revenue growth and ability to achieve and sustain profitability depends on being able to expand our direct sales force and increase the productivity of oursales force successfully.

Todate,mostofourrevenuehasbeenattributabletotheeffortsofourdirectsalesforceintheUnitedStates.Inordertoincreaseourrevenueandachieveandsustainprofitability,wemustincreasethesizeofourdirectsalesforce,bothintheUnitedStatesandinternationally,togenerateadditionalrevenuefromnewandexistingcustomers.Weintendtosubstantiallyfurtherincreaseournumberofdirectsalesprofessionals.

Webelievethatthereissignificantcompetitionforsalespersonnelwiththeskillsandtechnicalknowledgethatwerequire.Ourabilitytoachievesignificantrevenuegrowthwilldepend,inlargepart,onoursuccessinrecruiting,training,andretainingsufficientnumbersofdirectsalespersonneltosupportourgrowth.Newhiresrequiresignificanttrainingandtypicallytakesixmonthsormoretoachievefullproductivity.Ourrecenthiresandplannedhiresmaynotbecomeproductiveasquicklyasweexpectandifournewsalesemployeesdonotbecomefullyproductiveonthetimelinesthatwehaveprojectedoratall,ourrevenuewillnotincreaseatanticipatedlevelsandourabilitytoachievelongtermprojectionsmaybenegativelyimpacted.Wemayalsobeunabletohireorretainsufficientnumbersofqualifiedindividualsinthemarketswherewedobusinessorplantodobusiness.Furthermore,hiringsalespersonnelinnewcountriesrequiresadditionalsetupandupfrontcoststhatwemaynotrecoverifthesalespersonnelfailtoachievefullproductivity.Inaddition,aswecontinuetogrowrapidly,alargepercentageofoursalesforcewillbenewtoourcompanyandourplatform,whichmayadverselyaffectoursalesifwecannottrainoursalesforcequicklyoreffectively.Attritionratesmayincrease,andwemayfaceintegrationchallengesaswecontinuetoseektoaggressivelyexpandoursalesforce.Ifweareunabletohireandtrainsufficientnumbersofeffectivesalespersonnel,orthesalespersonnelarenotsuccessfulinobtainingnewcustomersorincreasingsalestoourexistingcustomerbase,ourbusinesswillbeadverselyaffected.

Weperiodicallychangeandmakeadjustmentstooursalesorganizationinresponsetomarketopportunities,competitivethreats,managementchanges,productintroductionsorenhancements,acquisitions,salesperformance,increasesinsalesheadcount,costlevelsandotherinternalandexternalconsiderations.Anyfuturesalesorganizationchangesmayresultinatemporaryreductionofproductivity,whichcouldnegativelyaffectourrateofgrowth.Inaddition,anysignificantchangetothewaywestructureourcompensationofoursalesorganizationmaybedisruptiveandmayaffectourrevenuegrowth.

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We use channel partners and if we are unable to establish and maintain successful relationships with them, our business, operating results, and financialcondition could be adversely affected.

Inadditiontoourdirectsalesforce,weusechannelpartnerssuchastechnologyalliances,systemintegrators,managementconsultingfirms,andvalue-addedresellerstosellandsupportourplatform.Channelpartnersarebecominganincreasinglyimportantaspectofourbusiness,particularlywithregardtoenterprise,governmental,andinternationalsales.Ourfuturegrowthinrevenueandabilitytoachieveandsustainprofitabilitydependsinpartonourabilitytoidentify,establish,andretainsuccessfulchannelpartnerrelationshipsintheUnitedStatesandinternationally,whichwilltakesignificanttimeandresourcesandinvolvesignificantrisk.Ifweareunabletomaintainourrelationshipswiththesechannelpartners,orotherwisedevelopandexpandourindirectdistributionchannel,ourbusiness,operatingresults,financialcondition,orcashflowscouldbeadverselyaffected.

Wecannotbecertainthatwewillbeabletoidentifysuitableindirectsaleschannelpartners.Totheextentwedoidentifysuchpartners,wewillneedtonegotiatethetermsofacommercialagreementwiththemunderwhichthepartnerwoulddistributeourplatform.Wecannotbecertainthatwewillbeabletonegotiatecommercially-attractivetermswithanychannelpartner,ifatall.Inaddition,allchannelpartnersmustbetrainedtodistributeourplatform.Inordertodevelopandexpandourdistributionchannel,wemustdevelopandimproveourprocessesforchannelpartnerintroductionandtraining.Ifwedonotsucceedinidentifyingsuitableindirectsaleschannelpartners,ourbusiness,operatingresults,andfinancialconditionmaybeadverselyaffected.

Wealsocannotbecertainthatwewillbeabletomaintainsuccessfulrelationshipswithanychannelpartnersand,totheextentthatourchannelpartnersareunsuccessfulinsellingourplatform,ourabilitytosellourplatformandourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffected.Ourchannelpartnersmayoffercustomerstheproductsandservicesofseveraldifferentcompanies,includingproductsandservicesthatcompetewithourplatform.Becauseourchannelpartnersgenerallydonothaveanexclusiverelationshipwithus,wecannotbecertainthattheywillprioritizeorprovideadequateresourcestosellingourplatform.Moreover,divergenceinstrategybyanyofthesechannelpartnersmaymateriallyadverselyaffectourabilitytodevelop,market,sell,orsupportourplatform.Wecannotassureyouthatourchannelpartnerswillcontinuetocooperatewithus.Inaddition,actionstakenoromittedtobetakenbysuchpartiesmayadverselyaffectus.Inaddition,werelyonourchannelpartnerstooperateinaccordancewiththetermsoftheircontractualagreementswithus.Forexample,ouragreementswithourchannelpartnerslimitthetermsandconditionspursuanttowhichtheyareauthorizedtoresellordistributeourplatformandoffertechnicalsupportandrelatedservices.Wealsotypicallyrequireourchannelpartnerstorepresenttousthedatesanddetailsoflicensessoldthroughtoourcustomers.Ifourchannelpartnersdonotcomplywiththeircontractualobligationstous,ourbusiness,operatingresults,andfinancialconditionmaybeadverselyaffected.

Inaddition,alloursalestogovernmententitieshavebeenmadeindirectlythroughourchannelpartners.Governmententitiesmayhavestatutory,contractual,orotherlegalrightstoterminatecontractswithourchannelpartnersforconvenienceorduetoadefault,and,inthefuture,iftheportionofgovernmentcontractsthataresubjecttorenegotiationorterminationattheelectionofthegovernmententityarematerial,anysuchterminationorrenegotiationmayadverselyimpactourfutureoperatingresults.Intheeventofsuchtermination,itmaybedifficultforustoarrangeforanotherchannelpartnertosellourplatformtothesegovernmententitiesinatimelymanner,andwecouldlosesalesopportunitiesduringthetransition.Governmententitiesroutinelyinvestigateandauditgovernmentcontractors’administrativeprocesses,andanyunfavorableauditcouldresultinthegovernmententityrefusingtorenewitssubscriptiontoourplatform,areductionofrevenue,orfinesorcivilorcriminalliabilityiftheaudituncoversimproperorillegalactivities.

We depend on technology and data licensed to us by third parties that may be difficult to replace or cause errors or failures that may impair or delayimplementation of our products and services or force us to pay higher license fees.

Welicensethird-partytechnologiesanddatathatweincorporateinto,usetooperate,andprovidewithourplatform.Wecannotassureyouthatthelicensesforsuchthird-partytechnologiesordatawillnotbeterminatedorthatwewillbeabletolicensethird-partysoftwareordataforfutureproductsandservices.Inaddition,wemaybeunabletorenegotiateacceptablethird-partyreplacementlicensetermsintheeventoftermination,orwemaybesubjecttoinfringementliabilityifthird-partysoftwareordatathatwelicenseisfoundtoinfringeintellectualpropertyorprivacyrightsofothers.Inaddition,thedatathatwelicensefromthirdpartiesforpotentialuseinourplatformmaycontainerrorsordefects,whichcouldnegativelyimpacttheanalyticsthatourcustomersperformonorwithsuchdata.Thismayhaveanegativeimpactonhowourplatformisperceivedbyourcurrentandpotentialcustomersandcouldmateriallydamageourreputationandbrand.

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Changesinorthelossofthird-partylicensescouldleadtoourplatformbecominginoperableortheperformanceofourplatformbeingmateriallyreducedresultinginourpotentiallyneedingtoincuradditionalresearchanddevelopmentcoststoensurecontinuedperformanceofourplatformoramaterialincreaseinthecostsoflicensing,andwemayexperiencedecreaseddemandforourplatform.

Our long-term success depends, in part, on our ability to expand the sales of our software platform to customers located outside of the United States and ourcurrent, and any further, expansion of our international operations exposes us to risks that could have a material adverse effect on our business, operatingresults, and financial condition.

Wearegeneratingagrowingportionofourrevenuefrominternationalsales,andconductourbusinessactivitiesinvariousforeigncountries,includingsomeemergingmarketswherewehavelimitedexperience,wherethechallengesofconductingourbusinesscanbesignificantlydifferentfromthosewehavefacedinmoredevelopedmarketsandwherebusinesspracticesmaycreateinternalcontrolrisks.Forexample,werecentlyacquiredSemanta,whichhasoperationsintheCzechRepublicandUkraine.Therearecertainrisksinherentinconductinginternationalbusiness,including:

• fluctuationsinforeigncurrencyexchangerates;

• new,orchangesin,regulatoryrequirements;

• tariffs,exportandimportrestrictions,restrictionsonforeigninvestments,sanctions,andothertradebarriersorprotectionmeasures;

• costsoflocalizingproductsandservices;

• lackofacceptanceoflocalizedproductsandservices;

• difficultiesinandcostsofstaffing,managing,andoperatingourinternationaloperations;

• taxissues,includingrestrictionsonrepatriatingearningsandwithrespecttoourcorporateoperatingstructureandintercompanyarrangements;

• weakerintellectualpropertyprotection;

• economicweaknessorcurrencyrelatedcrises;

• theburdenofcomplyingwithawidevarietyoflaws,includingthoserelatingtolabormatters,consumeranddataprotection,privacy,networksecurity,encryption,andtaxes;

• generallylongerpaymentcyclesandgreaterdifficultyincollectingaccountsreceivable;

• ourabilitytoadapttosalespracticesandcustomerrequirementsindifferentcultures;

• corporateespionage;and

• politicalinstabilityandsecurityrisksinthecountrieswherewearedoingbusiness.

Forexample,inJune2016,theUnitedKingdomheldareferendumandvotedinfavorofleavingtheEuropeanUnionandinMarch2017theUnitedKingdomprovidednotificationofitsintenttoleavetheEuropeanUnion.Thishascreatedpoliticalandeconomicuncertainty,particularlyintheUnitedKingdomandtheEuropeanUnion,andcouldcausedisruptionsto,andcreateuncertaintysurrounding,ourbusinessintheUnitedKingdomandEuropeanUnion,includingaffectingourrelationshipswithourexistingandprospectivecustomers,partners,andemployees,andcouldhaveamaterialimpactontheregulatoryregimeapplicabletoouroperationsintheUnitedKingdom.

Wehaveundertaken,andmightundertakeadditional,corporateoperatingrestructuringsthatinvolveourgroupofforeigncountrysubsidiariesthroughwhichwedobusinessabroad.Weconsidervariousfactorsinevaluatingtheserestructurings,includingthealignmentofourcorporatelegalentitystructurewithourorganizationalstructureanditsobjectives,theoperationalandtaxefficiencyofourgroupstructure,andthelong-termcashflowsandcashneedsofourbusiness.Ifineffectual,suchrestructuringscouldincreaseourincometaxliabilities,andinturn,increaseourglobaleffectivetaxrate.

VarioustaxreformbillsandotherproposalsarecurrentlyunderconsiderationintheUnitedStatesandabroad.

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TheU.S.proposalsinclude,amongotheritems,changingtheU.S.corporateincometaxrate,reducingoreliminatingcertaincorporatetaxincentives,andchangingtheexistingregimefortaxingoverseasearnings(includingtheintroductionofaminimumtaxonadjusted,unrepatriatedforeignearnings).

TheOrganizationforEconomicCo-operationandDevelopment,orOECD,issuedfinalactionitemsorproposalsrelatedtoitsinitiativetocombatbaseerosionandprofitshifting,orBEPS.TheOECDurgeditsmemberstoadoptsomeoralloftheproposalstocounteracttheeffectsoftheuseoftaxhavensandpreferentialtaxregimesglobally.OneBEPSproposalredefinesa“permanentestablishment,”andchangeshowprofitswouldbeattributedtothepermanentestablishment.Anotherproposalcallsforinsuringtransferpricingoutcomesarecommensuratewithvaluecreation,adoptingtheviewthecurrentrulesfacilitatethetransferofrisks,capital,andincomeawayfromcountrieswhereeconomicactivitytakesplace.WeexpectmanycountriestoincorporatetheBEPSproposalsintotheirlaws.Severalcountrieshavechangedorproposedchangesthatincorporatesomeoralloftheproposals.

Someoftheseproposals,ifenactedintolawintheUnitedStatesandintheforeigncountrieswherewedobusiness,couldincreasetheburdenandcostsofourtaxcompliance.Moreover,suchchangescouldincreasetheamountoftaxesweincurinthosejurisdictions,andinturn,increaseourglobaleffectivetaxrate.Itisunclearwhether,andtowhatextent,theUnitedStatesandothercountrieswillenactintolawtheaboveorsimilarproposals.

Inaddition,compliancewithforeignandU.S.lawsandregulationsthatareapplicabletoourinternationaloperationsiscomplexandmayincreaseourcostofdoingbusinessininternationaljurisdictions,andourinternationaloperationscouldexposeustofinesandpenaltiesifwefailtocomplywiththeseregulations.Theselawsandregulationsincludeimportandexportrequirementsandanti-briberylaws,suchastheUnitedStatesForeignCorruptPracticesActof1977,asamended,ortheFCPA,theUnitedKingdomBriberyAct2010,ortheBriberyAct,andlocallawsprohibitingcorruptpaymentstogovernmentalofficials.Althoughwehaveimplementedpoliciesandproceduresdesignedtohelpensurecompliancewiththeselaws,wecannotassureyouthatouremployees,partners,andotherpersonswithwhomwedobusinesswillnottakeactionsinviolationofourpoliciesortheselaws.Anyviolationsoftheselawscouldsubjectustocivilorcriminalpenalties,includingsubstantialfinesorprohibitionsonourabilitytoofferourplatforminoneormorecountries,andcouldalsomateriallydamageourreputationandourbrand.Thesefactorsmayhaveanadverseeffectonourfuturesalesand,consequently,onourbusiness,operatingresults,andfinancialcondition.

Because we recognize revenue from our subscriptions over the subscription term, downturns or upturns in new sales and renewals may not be immediatelyreflected in our operating results and may be difficult to discern.

Wegenerallyrecognizerevenuefromcustomersratablyoverthetermsoftheirsubscriptions.Asignificantportionoftherevenuewereportineachquarterisderivedfromtherecognitionofdeferredrevenuerelatingtosubscriptionsenteredintoduringpreviousquarters.Consequently,adeclineinneworrenewedsubscriptionsinanysinglequartermayhaveasmallimpactonourrevenueforthatquarter.However,suchadeclinewillnegativelyaffectourrevenueinfuturequarters.Accordingly,theeffectofsignificantdownturnsinsalesandmarketacceptanceofourplatform,andpotentialchangesinourrateofrenewals,maynotbefullyreflectedinouroperatingresultsuntilfutureperiods.Wemayalsobeunabletoreduceouroperatingexpensesintheeventofasignificantdeteriorationinsales.Inaddition,asignificantmajorityofourcostsareexpensedasincurred,whileasignificantportionofourrevenueisrecognizedoverthelifeoftheagreementwithourcustomer.Asaresult,increasedgrowthinthenumberofourcustomerscouldcontinuetoresultinourrecognitionofmorecoststhanrevenueintheearlierperiodsofthetermsofouragreements.Ourrevenuefromsubscriptionsalsomakesitmoredifficultforustorapidlyincreaseourrevenuethroughadditionalsalesinanyperiod,asrevenuefromcertainnewcustomersisrecognizedovertheapplicableterm.

As we continue to pursue sales to large enterprises, our sales cycle, forecasting processes, and deployment processes may become more unpredictable andrequire greater time and expense.

Salestolargeenterprisesinvolverisksthatmaynotbepresentorthatarepresenttoalesserextentwithsalestosmallerorganizationsandaccordingly,oursalescyclemaylengthenaswecontinuetopursuesalestolargeenterprises.Asweseektoincreaseoursalestolargeenterprisecustomers,wefacelongersalescycles,morecomplexcustomerrequirements,substantialupfrontsalescosts,andlesspredictabilityincompletingsomeofoursalesthanwedowithsmallercustomers.Withlargerorganizations,thedecisiontosubscribetoourplatformfrequentlyrequirestheapprovalsofmultiplemanagementpersonnelandmoretechnicalpersonnelthanwouldbetypicalofasmallerorganizationand,accordingly,salestolargerorganizationsmayrequireustoinvestmoretimeeducatingthesepotentialcustomers.Inaddition,largeenterprisesoftenrequireextensiveconfiguration,integrationservices,andpricingnegotiations,whichincreaseourupfrontinvestmentin

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thesaleseffortwithnoguaranteethatthesecustomerswilldeployourplatformwidelyenoughacrosstheirorganizationtojustifyoursubstantialupfrontinvestment.Purchasesbylargeenterprisesarealsofrequentlysubjecttobudgetconstraintsandunplannedadministrative,processing,andotherdelays,whichmeanswemaynotbeabletocometoagreementonthetermsofthesaletolargeenterprises.Inaddition,ourabilitytosuccessfullysellourplatformtolargeenterprisesisdependentonusattractingandretainingsalespersonnelwithexperienceinsellingtolargeorganizations.Ifweareunabletoincreasesalesofourplatformtolargeenterprisecustomerswhilemitigatingtherisksassociatedwithservingsuchcustomers,ourbusiness,financialposition,andoperatingresultsmaybeadverselyimpacted.Furthermore,ifwefailtorealizeanexpectedsalefromalargecustomerinaparticularquarteroratall,ourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffectedforaparticularperiodorinfutureperiods.

Our business is affected by seasonality.

Ourbusinessisaffectedbyseasonality.Duetothebudgetingcyclesofourcurrentandpotentialcustomers,historically,weenterintomoreagreementswithnewcustomersandmorerenewedagreementswithexistingcustomersinthefourthquarterofeachcalendaryearthaninanyotherquarter.Accordingly,ourcashflowfromoperationshashistoricallybeenhigherinthefirstquarterofeachcalendaryearthaninotherquarters.Thisseasonalityisreflectedtoamuchlesserextent,andsometimesisnotimmediatelyapparent,inourrevenueresults,duetothefactthat,inaccordancewithU.S.GAAP,werecognizerevenuefromthesaleofourplatformoverthetermofthecustomeragreement.Inaddition,wehaveexperiencedincreasedsalesandmarketingexpensesassociatedwithourannualsaleskickoffinthefirstquarterandourannualU.S.andEuropeanInspireuserconferencesinthesecondandthirdquarters,respectively.Ourrapidgrowthinrecentyearsmayobscuretheextenttowhichseasonalitytrendshaveaffectedourbusinessandmaycontinuetoaffectourbusiness.Accordingly,yearlyorquarterlycomparisonsofouroperatingresultsmaynotbeusefulandouroperatingresultsinanyparticularperiodwillnotnecessarilybeindicativeoftheresultstobeexpectedforanyfutureperiod.Seasonalityinourbusinesscanalsobeimpactedbyintroductionsofneworenhancedproductsandservices,includingthecostsassociatedwithsuchintroductions.

Any failure to offer high-quality technical support may harm our relationships with our customers and have a negative impact on our business and financialcondition.

Onceourplatformisdeployed,ourcustomersdependonourcustomersupportteamtoresolvetechnicalandoperationalissuesrelatingtoourplatform.Ourabilitytoprovideeffectivecustomersupportislargelydependentonourabilitytoattract,train,andretainqualifiedpersonnelwithexperienceinsupportingcustomersonplatformssuchasours.Thenumberofourcustomershasgrownsignificantlyandthathasandwillputadditionalpressureonourcustomersupportteam.Wemaybeunabletorespondquicklyenoughtoaccommodateshort-termincreasesincustomerdemandfortechnicalsupport.Wealsomaybeunabletomodifythefuture,scope,anddeliveryofourtechnicalsupporttocompetewithchangesinthetechnicalsupportprovidedbyourcompetitors.Increasedcustomerdemandforsupport,withoutcorrespondingrevenue,couldincreasecostsandnegativelyaffectouroperatingresults.Inaddition,aswecontinuetogrowouroperationsandexpandinternationally,weneedtobeabletoprovideefficientcustomersupportthatmeetsourcustomers’needsgloballyatscaleandourcustomersupportteamwillfaceadditionalchallenges,includingthoseassociatedwithdeliveringsupport,training,anddocumentationinlanguagesotherthanEnglish.Ifweareunabletoprovideefficientcustomersupportgloballyatscale,ourabilitytogrowouroperationsmaybeharmedandwemayneedtohireadditionalsupportpersonnel,whichcouldnegativelyimpactouroperatingresults.Inaddition,wehaverecentlybegun,andintendtocontinue,toprovideself-servicesupportresourcestoourcustomers.Someoftheseresources,suchasourcommunitypage,relyonengagementandcollaborationbyandwithothercustomers.Ifweareunabletodevelopself-servicesupportresourcesthatareeasytouseandthatourcustomersutilizetoresolvetheirtechnicalissuesorifourcustomerschoosenottocollaborateorengagewithothercustomersontechnicalsupportissues,customersmaycontinuetodirectsupportrequeststoourcustomersupportteaminsteadofrelyingonourself-servicesupportresourcesandourcustomers’experiencewithourplatformmaybenegativelyimpacted.Anyfailuretomaintainhigh-qualitysupport,oramarketperceptionthatwedonotmaintainhigh-qualitysupport,couldharmourreputation,ourabilitytosellourplatformtoexistingandprospectivecustomers,andourbusiness,operatingresults,andfinancialcondition.

Failure to protect our intellectual property could adversely affect our business.

Wecurrentlyrelyonacombinationofcopyrights,trademarks,tradesecrets,confidentialityprocedures,contractualcommitments,andotherlegalrightstoprotectourintellectualproperty.WealsohavefourpendingpatentapplicationsintheUnitedStates.Despiteourefforts,thestepswetaketoprotectourintellectualpropertymaybeinadequate.Unauthorizedthirdpartiesmaytrytocopyorreverseengineerportionsofourplatformorotherwiseobtainanduseourintellectualproperty.Inaddition,wemaynotbeabletoobtainsufficientintellectualpropertyprotectionforimportantfeaturesofourplatform,inwhichcaseourcompetitorsmaydiscoverwaystoprovidesimilarfeatureswithoutinfringingormisappropriatingourintellectualpropertyrights.

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Anypatentsthatwemayownandrelyoninthefuturemaybechallengedorcircumventedbyothersorinvalidatedthroughadministrativeprocessorlitigation.Ourcurrentandfuturepatentapplicationsmaynotbeissuedwiththescopeoftheclaimsweseek,ifatall.Inaddition,anypatentsissuedinthefuturemaynotprovideuswithcompetitiveadvantages,maynotbeenforceableinactionsagainstallegedinfringersormaybesuccessfullychallengedbythirdparties.

Moreover,recentamendmentstoU.S.patentlaw,developingjurisprudenceregardingU.S.patentlaw,andpossiblefuturechangestoU.S.orforeignpatentlawsandregulationsmayaffectourabilitytoprotectourintellectualpropertyanddefendagainstclaimsofpatentinfringement.Inaddition,thelawsofsomecountriesdonotprovidethesamelevelofprotectionofourintellectualpropertyasdothelawsoftheUnitedStates.Asweexpandourinternationalactivities,ourexposuretounauthorizedcopyinganduseofourplatformandproprietaryinformationwilllikelyincrease.Despiteourprecautions,itmaybepossibleforunauthorizedthirdpartiestoinfringeuponormisappropriateourintellectualproperty,tocopyourplatform,anduseinformationthatweregardasproprietarytocreateproductsandservicesthatcompetewithours.Effectiveintellectualpropertyprotectionmaynotbeavailabletousineverycountryinwhichourplatformisavailable.Forexample,someforeigncountrieshavecompulsorylicensinglawsunderwhichapatentownermustgrantlicensestothirdparties.Inaddition,manycountrieslimittheenforceabilityofpatentsagainstcertainthirdparties,includinggovernmentagenciesorgovernmentcontractors.Inthesecountries,patentsmayprovidelimitedornobenefit.Wemayneedtoexpendadditionalresourcestodefendourintellectualpropertyrightsdomesticallyorinternationally,whichcouldimpairourbusinessoradverselyaffectourdomesticorinternationalexpansion.Ifwecannotprotectourintellectualpropertyagainstunauthorizedcopyingoruse,wemaynotremaincompetitiveandourbusiness,operatingresults,andfinancialconditionmaybeadverselyaffected.

Weenterintoconfidentialityandinventionassignmentagreementswithouremployeesandconsultantsandenterintoconfidentialityagreementswithotherparties.Wecannotassureyouthattheseagreementswillbeeffectiveincontrollingaccessto,useof,anddistributionofourproprietaryinformationorineffectivelysecuringexclusiveownershipofintellectualpropertydevelopedbyouremployeesandconsultants.Further,theseagreementsmaynotpreventourcompetitorsfromindependentlydevelopingtechnologiesthataresubstantiallyequivalentorsuperiortoourplatform.

Inordertoprotectourintellectualpropertyrights,wemayberequiredtospendsignificantresourcestoacquire,maintain,monitor,andprotectourintellectualpropertyrights.Wecannotassureyouthatourmonitoringeffortswilldetecteveryinfringementofourintellectualpropertyrightsbyathirdparty.Litigationmaybenecessaryinthefuturetoenforceourintellectualpropertyrightsandtoprotectourtradesecrets.Litigationbroughttoprotectandenforceourintellectualpropertyrightscouldbecostly,time-consuming,anddistractingtomanagement,andcouldresultintheimpairmentorlossofportionsofourintellectualproperty.Further,oureffortstoenforceourintellectualpropertyrightsmaybemetwithdefenses,counterclaims,andcountersuitsattackingthevalidityandenforceabilityofourintellectualpropertyrights.Ourinabilitytoprotectourproprietarytechnologyagainstunauthorizedcopyingoruse,aswellasanycostlylitigationordiversionofourmanagement’sattentionandresources,coulddelayfurthersalesortheimplementationofourplatform,impairthefunctionalityofourplatform,delayintroductionsofnewproductsandservices,resultinoursubstitutinginferiorormorecostlytechnologiesintoourplatform,ordamageourbrandandreputation.

Additionally,theUnitedStatesPatentandTrademarkOfficeandvariousforeigngovernmentalpatentagenciesrequirecompliancewithanumberofprocedural,documentary,feepayment,andothersimilarprovisionsduringthepatentapplicationprocessandtomaintainissuedpatents.Therearesituationsinwhichnoncompliancecanresultinabandonmentorlapseofthepatentorpatentapplication,resultinginpartialorcompletelossofpatentrightsintherelevantjurisdiction.Ifthisoccurs,itcouldhaveamaterialadverseeffectonourbusinessoperationsandfinancialcondition.

Our platform may infringe the intellectual property rights of third parties and this may create liability for us or otherwise harm our business.

Thirdpartiesmayclaimthatourcurrentorfutureproductsandservicesinfringetheirintellectualpropertyrights,andsuchclaimsmayresultinlegalclaimsagainstourcustomersandus.Theseclaimsmaydamageourbrandandreputation,harmourcustomerrelationships,andcreateliabilityforus.Weexpectthenumberofsuchclaimswillincreaseasthenumberofproductsandservicesandthelevelofcompetitioninourmarketgrows,thefunctionalityofourplatformoverlapswiththatofotherproductsandservices,andthevolumeofissuedsoftwarepatentsandpatentapplicationscontinuestoincrease.Wegenerallyagreeinourcustomercontractstoindemnifycustomersforexpensesorliabilitiestheyincurasaresultofthirdpartyintellectualpropertyinfringementclaimsassociatedwithourplatform.Totheextentthatanyclaimarisesasaresultofthird-partytechnologywehavelicensedforuseinourplatform,wemaybeunabletorecoverfromtheappropriatethirdpartyanyexpensesorotherliabilitiesthatweincur.

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Companiesinthesoftwareandtechnologyindustries,includingsomeofourcurrentandpotentialcompetitors,ownlargenumbersofpatents,copyrights,trademarks,andtradesecretsandfrequentlyenterintolitigationbasedonallegationsofinfringementorotherviolationsofintellectualpropertyrights.Inaddition,manyofthesecompanieshavethecapabilitytodedicatesubstantiallygreaterresourcestoenforcetheirintellectualpropertyrightsandtodefendclaimsthatmaybebroughtagainstthem.Furthermore,patentholdingcompanies,non-practicingentities,andotheradversepatentownersthatarenotdeterredbyourexistingintellectualpropertyprotectionsmayseektoassertpatentclaimsagainstus.Fromtimetotime,thirdparties,includingcertainoftheseleadingcompanies,havecontactedusinvitingustolicensetheirpatentsandmay,inthefuture,assertpatent,copyright,trademark,orotherintellectualpropertyrightsagainstus,ourchannelpartners,ourtechnologypartners,orourcustomers.Wehavereceived,andmayinthefuturereceive,noticesthatclaimwehavemisappropriated,misused,orinfringedotherparties’intellectualpropertyrights,and,totheextentwegaingreatermarketvisibility,wefaceahigherriskofbeingthesubjectofintellectualpropertyinfringementclaims,whichisnotuncommonwithrespecttotheenterprisesoftwaremarket.

Theremaybethird-partyintellectualpropertyrights,includingissuedorpendingpatents,thatcoversignificantaspectsofourtechnologiesorbusinessmethods.Inaddition,ifweacquireorlicensetechnologiesfromthirdparties,wemaybeexposedtoincreasedriskofbeingthesubjectofintellectualpropertyinfringementdueto,amongotherthings,ourlowerlevelofvisibilityintothedevelopmentprocesswithrespecttosuchtechnologyandthecaretakentosafeguardagainstinfringementrisks.Anyintellectualpropertyclaims,withorwithoutmerit,couldbeverytime-consuming,couldbeexpensivetosettleorlitigate,andcoulddivertourmanagement’sattentionandotherresources.Theseclaimscouldalsosubjectustosignificantliabilityfordamages,potentiallyincludingtrebledamagesifwearefoundtohavewillfullyinfringedpatentsorcopyrights,andmayrequireustoindemnifyourcustomersforliabilitiestheyincurasaresultofsuchclaims.Theseclaimscouldalsoresultinourhavingtostopusingtechnologyfoundtobeinviolationofathirdparty’srights.Wemightberequiredtoseekalicensefortheintellectualproperty,whichmaynotbeavailableonreasonabletermsoratall.Evenifalicensewereavailable,wecouldberequiredtopaysignificantroyalties,whichwouldincreaseouroperatingexpenses.Alternatively,wecouldberequiredtodevelopalternativenon-infringingtechnology,whichcouldrequiresignificanttime,effort,andexpense,andmayaffecttheperformanceorfeaturesofourplatform.Ifwecannotlicenseordevelopalternativenon-infringingsubstitutesforanyinfringingtechnologyusedinanyaspectofourbusiness,wewouldbeforcedtolimitorstopsalesofourplatformandmaybeunabletocompeteeffectively.Anyoftheseresultswouldadverselyaffectourbusinessoperationsandfinancialcondition.

Our platform contains third-party open source software components, and failure to comply with the terms of the underlying open source software licensescould restrict our ability to sell our platform.

Ourplatformincorporatesopensourcesoftwarecode.Anopensourcelicenseallowstheuse,modification,anddistributionofsoftwareinsourcecodeform.Certainkindsofopensourcelicensesfurtherrequirethatanypersonwhocreatesaproductorservicethatcontains,linksto,orisderivedfromsoftwarethatwassubjecttoanopensourcelicensemustalsomaketheirownproductorservicesubjecttothesameopensourcelicense.Usingsoftwarethatissubjecttothiskindofopensourcelicensecanleadtoarequirementthatourplatformbeprovidedfreeofchargeorbemadeavailableordistributedinsourcecodeform.Althoughwedonotbelieveourplatformincludesanyopensourcesoftwareinamannerthatwouldresultintheimpositionofanysuchrequirement,theinterpretationofopensourcelicensesislegallycomplexand,despiteourefforts,itispossiblethatourplatformcouldbefoundtocontainthistypeofopensourcesoftware.

Moreover,wecannotassureyouthatourprocessesforcontrollingouruseofopensourcesoftwareinourplatformwillbeeffective.Ifwehavenotcompliedwiththetermsofanapplicableopensourcesoftwarelicense,wecouldberequiredtoseeklicensesfromthirdpartiestocontinueofferingourplatformontermsthatarenoteconomicallyfeasible,tore-engineerourplatformtoremoveorreplacetheopensourcesoftware,todiscontinuethesaleofourplatformifre-engineeringcouldnotbeaccomplishedonatimelybasis,topaymonetarydamages,ortomakegenerallyavailablethesourcecodeforourproprietarytechnology,anyofwhichcouldadverselyaffectourbusiness,operatingresults,andfinancialcondition.

Inadditiontorisksrelatedtolicenserequirements,useofopensourcesoftwarecaninvolvegreaterrisksthanthoseassociatedwithuseofthird-partycommercialsoftware,asopensourcelicensorsgenerallydonotprovidewarrantiesorassuranceoftitle,performance,non-infringement,orcontrolsonoriginofthesoftware.Thereistypicallynosupportavailableforopensourcesoftware,andwecannotassureyouthattheauthorsofsuchopensourcesoftwarewillnotabandonfurtherdevelopmentandmaintenance.Manyoftherisksassociatedwiththeuseofopensourcesoftware,suchasthelackof

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warrantiesorassurancesoftitleorperformance,cannotbeeliminated,andcould,ifnotproperlyaddressed,negativelyaffectourbusiness.Wehaveestablishedprocessestohelpalleviatetheserisks,includingareviewprocessforscreeningrequestsfromourdevelopmentorganizationsfortheuseofopensourcesoftware,butwecannotbesurethatallopensourcesoftwareisidentifiedorsubmittedforapprovalpriortouseinourplatform.

Respondingtoanyinfringementclaim,regardlessofitsvalidity,ordiscoveringopensourcesoftwarecodeinourplatformcouldharmourbusiness,operatingresults,andfinancialcondition,by,amongotherthings:

• resultingintime-consumingandcostlylitigation;

• divertingmanagement’stimeandattentionfromdevelopingourbusiness;

• requiringustopaymonetarydamagesorenterintoroyaltyandlicensingagreementsthatwewouldnotnormallyfindacceptable;

• causingdelaysinthedeploymentofourplatform;

• requiringustostopsellingsomeaspectsofourplatform;

• requiringustoredesigncertaincomponentsofourplatformusingalternativenon-infringingornon-opensourcetechnologyorpractices,whichcouldrequiresignificanteffortandexpense;

• requiringustodiscloseoursoftwaresourcecode,thedetailedprogramcommandsforoursoftware;and

• requiringustosatisfyindemnificationobligationstoourcustomers.

Future litigation could have a material adverse impact on our operating results and financial condition.

Fromtimetotime,wehavebeensubjecttolitigation.Theoutcomeofanylitigation,regardlessofitsmerits,isinherentlyuncertain.Regardlessofthemeritsofanyclaimsthatmaybebroughtagainstus,pendingorfuturelitigationcouldresultinadiversionofmanagement’sattentionandresourcesandwemayberequiredtoincursignificantexpensesdefendingagainsttheseclaims.Ifweareunabletoprevailinlitigation,wecouldincursubstantialliabilities.Wherewecanmakeareasonableestimateoftheliabilityrelatingtopendinglitigationanddeterminethatitisprobable,werecordarelatedliability.Asadditionalinformationbecomesavailable,weassessthepotentialliabilityandreviseestimatesasappropriate.However,becauseofuncertaintiesrelatingtolitigation,theamountofourestimatescouldbewrong.Anyadversedeterminationrelatedtolitigationcouldrequireustochangeourtechnologyorourbusinesspractices,paymonetarydamages,orenterintoroyaltyorlicensingarrangements,whichcouldadverselyaffectouroperatingresultsandcashflows,harmourreputation,orotherwisenegativelyimpactourbusiness.

The nature of our platform makes it particularly vulnerable to undetected errors or bugs, which could cause problems with how our platform performs andwhich could, in turn, reduce demand for our platform, reduce our revenue, and lead to product liability claims against us.

Becauseourplatformiscomplex,itmaycontainerrorsordefects,especiallywhennewupdatesorenhancementsarereleased.Oursoftwareisofteninstalledandusedinlarge-scalecomputingenvironmentswithdifferentoperatingsystems,systemmanagementsoftware,andequipmentandnetworkingconfigurations,whichmaycauseerrorsorfailuresofoursoftwareorotheraspectsofthecomputingenvironmentintowhichitisdeployed.Inaddition,deploymentofoursoftwareintothesecomputingenvironmentsmayexposepreviouslyundetectederrors,compatibilityissues,failures,orbugsinoursoftware.Althoughwetestourplatformextensively,wehaveinthepastdiscoveredsoftwareerrorsinourplatformafterintroducingnewupdatesorenhancements.Despitetestingbyusandbyourcurrentandpotentialcustomers,errorsmaybefoundinnewupdatesorenhancementsafterdeploymentbyourcustomers.Realorperceivederrors,failures,vulnerabilities,orbugsinourplatformcouldresultinnegativepublicity,lossofcustomerdata,lossofordelayinmarketacceptanceofourplatform,lossofcompetitiveposition,orclaimsbycustomersforlossessustainedbythem,allofwhichcouldnegativelyimpactourbusinessandoperatingresultsandmateriallydamageourreputationandbrand.Wemayalsohavetoexpendresourcesandcapitaltocorrectthesedefects.Alleviatinganyoftheseproblemscouldrequiresignificantexpendituresofourcapitalandotherresourcesandcouldcauseinterruptions,delays,orcessationinthesaleofourplatform,whichcouldcauseustoloseexistingorpotentialcustomersandcouldadverselyaffectouroperatingresultsandgrowthprospects.

Ouragreementswithcustomerstypicallycontainprovisionsdesignedtolimitourexposuretoproductliability,warranty,andotherclaims.However,theseprovisionsdonoteliminateourexposuretotheseclaims.Inaddition,itispossiblethattheseprovisionsmaynotbeeffectiveunderthelawsofcertaindomesticorinternationaljurisdictionsandwemaybeexposedtoproductliabilitywarranty,andotherclaims.Asuccessfulproductliability,warranty,orothersimilarclaimagainstuscouldhaveanadverseeffectonourbusiness,operatingresults,andfinancialcondition.

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Business disruptions or performance problems associated with our technology and infrastructure, including interruptions, delays, or failures in service fromour third-party data center hosting facility and other third-party services, could adversely affect our operating results or result in a material weakness in ourinternal controls that could adversely affect the market price of our Class A common stock.

Continuedadoptionofourplatformdependsinpartontheabilityofourexistingandpotentialcustomerstoaccessourplatformwithinareasonableamountoftime.Wehaveexperienced,andmayinthefutureexperience,disruptions,dataloss,outages,andotherperformanceproblemswithourinfrastructureandwebsiteduetoavarietyoffactors,includinginfrastructurechanges,introductionsofnewfunctionality,humanorsoftwareerrors,capacityconstraints,denialofserviceattacks,orothersecurity-relatedincidents.Ifourplatformisunavailableorifourusersandcustomersareunabletoaccessourplatformwithinareasonableamountoftime,oratall,wemayexperienceadeclineinrenewals,damagetoourbrand,orotherharmtoourbusiness.Totheextentthatwedonoteffectivelyaddresscapacityconstraints,upgradeoursystemsasneeded,andcontinuallydevelopourtechnologyandnetworkarchitecturetoaccommodateactualandanticipatedchangesintechnology,ourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffected.

AsignificantportionofourcriticalbusinessoperationsareconcentratedintheUnitedStates.Inaddition,weserveourcustomersandmanagecertaincriticalinternalprocessesusingathird-partydatacenterhostingfacilitylocatedinColoradoandotherthird-partyservices,includingcloudservices.Weareahighlyautomatedbusiness,andadisruptionorfailureofoursystems,orthethird-partyhostingfacilityorotherthird-partyservicesthatweuse,couldcausedelaysincompletingsalesandprovidingservices.Forexample,fromtimetotime,ourdatacenterhostingfacilityhasexperiencedoutages.Suchdisruptionsorfailurescouldalsoincludeamajorearthquake,blizzard,fire,cyber-attack,actofterrorism,orothercatastrophicevent,oradecisionbyoneofourthird-partyserviceproviderstoclosefacilitiesthatweusewithoutadequatenoticeorotherunanticipatedproblemswiththethird-partyservicesthatweuse,includingafailuretomeetservicestandards.

Interruptionsorperformanceproblemswitheitherourtechnologyandinfrastructureorourdatacenterhostingfacilitycould,amongotherthings:

• resultinthedestructionordisruptionofanyofourcriticalbusinessoperations,controls,orproceduresorinformationtechnologysystems;

• severelyaffectourabilitytoconductnormalbusinessoperations;

• resultinamaterialweaknessinourinternalcontroloverfinancialreporting;

• causeourcustomerstoterminatetheirsubscriptions;

• resultinourissuingcreditsorpayingpenaltiesorfines;

• harmourbrandandreputation;

• adverselyaffectourrenewalratesorourabilitytoattractnewcustomers;or

• causeourplatformtobeperceivedasnotbeingsecure.

Anyoftheabovecouldadverselyaffectourbusinessoperationsandfinancialcondition.

We have experienced, and may in the future experience, security breaches and if unauthorized parties obtain access to our customers’ data, our data, or ourplatform, networks, or other systems, our platform may be perceived as not being secure, our reputation may be harmed, demand for our platform may bereduced, our operations may be disrupted, we may incur significant legal liabilities, and our business could be materially adversely affected.

Aspartofourbusiness,weprocess,store,andtransmitourcustomers’informationanddataaswellasourown,includinginourplatform,networks,andothersystems,andwerelyonthirdpartiesthatarenotdirectlyunderourcontroltodosoaswell.We,andourthird-partypartners,havesecuritymeasuresanddisasterresponseplansinplacetohelpprotectourcustomers’data,ourdata,andourplatform,networks,andothersystemsagainstunauthorizedaccess.However,wecannotassureyouthatthesesecuritymeasuresanddisasterresponseplanswillbeeffectiveagainstallsecuritythreatsandnaturaldisasters.Ourorourthird-partypartners’securitymeasureshaveinthepastbeen,andmayinthefuturebe,breachedasaresultofthird-partyaction,includingintentionalmisconductbycomputerhackers,fraudulentinducementofemployeesorcustomerstodisclose

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sensitiveinformationsuchasusernamesorpasswords,andemployeeerrorormalfeasance.Suchabreachcouldresultinsomeoneobtainingunauthorizedaccesstoourcustomers’data,ourdata,orourplatform,networks,orothersystems.Becausetherearemanydifferentsecuritybreachtechniquesandsuchtechniquescontinuetoevolve,weandourthird-partypartnersmaybeunabletoanticipateattemptedsecuritybreachesandimplementadequatepreventativemeasures.Thirdpartiesmayalsoconductattacksdesignedtotemporarilydenycustomersaccesstoourservices.Anysecuritybreachorsuccessfuldenialofserviceattackcouldresultinalossofcustomerconfidenceinthesecurityofourplatformanddamagetoourbrand,reducingthedemandforourplatformandourrevenue,disruptournormalbusinessoperations,requireustospendmaterialresourcestocorrectthebreach,exposeustolegalliabilitiesincludinglitigationandindemnityobligations,andmateriallyadverselyaffectouroperatingresults.Theseriskswillincreaseaswecontinuetogrowthescaleandfunctionalityofourplatformandprocess,store,andtransmitincreasinglylargeamountsofourcustomers’informationanddata,whichmayincludeproprietaryorconfidentialdataorpersonaloridentifyinginformation.

We may be adversely affected by natural disasters and other catastrophic events, and by man-made problems such as terrorism, that could disrupt our businessoperations and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.

Naturaldisastersorothercatastrophiceventsmayalsocausedamageordisruptiontoouroperations,internationalcommerce,andtheglobaleconomy,andcouldhaveanadverseeffectonourbusiness,operatingresults,andfinancialcondition.Ourbusinessoperationsaresubjecttointerruptionbynaturaldisasters,fire,powershortages,pandemics,andothereventsbeyondourcontrol.Inaddition,actsofterrorismandothergeo-politicalunrestcouldcausedisruptionsinourbusinessorthebusinessesofourpartnersortheeconomyasawhole.Intheeventofanaturaldisaster,includingamajorearthquake,blizzard,orhurricane,oracatastrophiceventsuchasafire,powerloss,ortelecommunicationsfailure,wemaybeunabletocontinueouroperationsandmayenduresysteminterruptions,reputationalharm,delaysindevelopmentofourplatform,lengthyinterruptionsinservice,breachesofdatasecurity,andlossofcriticaldata,allofwhichcouldhaveanadverseeffectonourfutureoperatingresults.Forexample,ourcorporateofficesarelocatedinCalifornia,astatethatfrequentlyexperiencesearthquakes.Additionally,alltheaforementionedrisksmaybefurtherincreasedifwedonotimplementadisasterrecoveryplanorourpartners’disasterrecoveryplansprovetobeinadequate.

Failure to comply with governmental laws and regulations could harm our business.

Ourbusinessissubjecttoregulationbyvariousfederal,state,localandforeigngovernments.Incertainjurisdictions,theseregulatoryrequirementsmaybemorestringentthanthoseintheUnitedStates.Noncompliancewithapplicableregulationsorrequirementscouldsubjectustoinvestigations,sanctions,mandatoryproductrecalls,enforcementactions,disgorgementofprofits,fines,damages,civilandcriminalpenalties,injunctionsorothercollateralconsequences.Ifanygovernmentalsanctionsareimposed,orifwedonotprevailinanypossiblecivilorcriminallitigation,ourbusiness,operatingresults,andfinancialconditioncouldbemateriallyadverselyaffected.Inaddition,respondingtoanyactionwilllikelyresultinasignificantdiversionofmanagement’sattentionandresourcesandanincreaseinprofessionalfees.Enforcementactionsandsanctionscouldharmourbusiness,reputation,operatingresultsandfinancialcondition.

Changes in laws or regulations relating to privacy or the protection or transfer of personal data, or any actual or perceived failure by us to comply with suchlaws and regulations or our privacy policies, could adversely affect our business.

Componentsofourbusiness,includingourplatform,involveprocessing,storing,andtransmittingconfidentialdata,whichissubjecttoourprivacypoliciesandcertainfederal,state,andforeignlawsandregulationsrelatingtoprivacyanddataprotection.Theamountofcustomerandemployeedatathatwestorethroughourplatform,networks,andothersystems,includingpersonaldata,isincreasing.Inrecentyears,thecollectionanduseofpersonaldatabycompanieshavecomeunderincreasedregulatoryandpublicscrutiny.

Forexample,intheUnitedStates,protectedhealthinformationissubjecttotheHealthInsurancePortabilityandAccountabilityAct,orHIPAA.HIPAAhasbeensupplementedbytheHealthInformationTechnologyforEconomicandClinicalHealthActwiththeresultofincreasedcivilandcriminalpenaltiesfornoncompliance.UnderHIPAA,entitiesperformingcertainfunctionsandcreating,receiving,maintaining,ortransmittingprotectedhealthinformationprovidedbycoveredentitiesandotherbusinessassociatesaredirectlysubjecttoHIPAA.Ifwehaveaccesstoprotectedhealthinformationthroughourplatform,wemaybeobligatedtocomplywithcertainprivacyrulesanddatasecurityrequirementsunderHIPAA.Anysystemsfailureorsecuritybreachthatresultsinthereleaseof,orunauthorizedaccessto,personaldata,oranyfailureorperceivedfailurebyustocomplywithourprivacypoliciesoranyapplicablelawsorregulationsrelatingtoprivacyordataprotection,couldresultinproceedingsagainstusbygovernmentalentitiesorothers.Suchproceedingscouldresultintheimpositionofsanctions,fines,penalties,liabilities,orgovernmentalordersrequiringthatwechangeourdatapractices,anyofwhichcouldhaveamaterialadverseeffectonourbusiness,operatingresults,andfinancialcondition.

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Variouslocal,state,federal,andinternationallaws,directives,andregulationsapplytothecollection,use,retention,protection,disclosure,transfer,andprocessingofpersonaldata.Thesedataprotectionandprivacylawsandregulationscontinuetoevolve.Variousfederal,state,andforeignlegislativeorregulatorybodiesmayenactneworadditionallawsorregulationsconcerningprivacyanddataprotectionthatcouldadverselyimpactourbusiness.Complyingwiththesevaryingrequirementscouldcauseustoincursubstantialcostsorrequireustochangeourbusinesspractices,eitherofwhichcouldadverselyaffectourbusinessandoperatingresults.Forexample,inOctober2015,theEuropeanCourtofJusticeissuedarulinginvalidatingtheU.S.-EUSafeHarborFramework,whichfacilitatedpersonaldatatransferstotheUnitedStatesincompliancewithapplicableE.U.dataprotectionlaws.InJuly2016,theEuropeanUnionandtheUnitedStatespoliticalauthoritiesadoptedtheEU-U.S.PrivacyShield,orPrivacyShield,whichmayprovideanewmechanismforcompaniestotransferE.U.personaldatatotheUnitedStates.WewillneedtoassessthespecificrequirementsofthePrivacyShieldtodeterminewhetherwecancomplywiththenewframework.IfweareunabletocomplywiththePrivacyShieldwewillneedtoimplementalternativesolutionstoensurethatdatatransfersfromtheEuropeanUniontotheUnitedStatesprovideadequateprotectionstocomplywiththeE.U.DataProtectionDirective.Inanyevent,thereremainssignificantregulatoryuncertaintysurroundingthefutureofdatatransfersfromtheEuropeanUniontotheUnitedStates,andchanginglaws,directives,andregulationsmayhaveanadverseeffectupontheconductofourbusiness.Additionally,theEuropeanCommissionadoptedageneraldataprotectionregulation,tobecomeeffectiveinMay2018,thatwillsupersedecurrentE.U.dataprotectionlegislation,imposemorestringentE.U.dataprotectionrequirements,andprovideforgreaterpenaltiesfornoncompliance.Changingdefinitionsofpersonaldataandinformationmayalsolimitorinhibitourabilitytooperateorexpandourbusiness,includinglimitingstrategicpartnershipsthatmayinvolvethesharingofdata.Also,somejurisdictionsrequirethatcertaintypesofdataberetainedonserverswithinthesejurisdictions.Ourfailuretocomplywithapplicablelaws,directives,andregulationsmayresultinenforcementactionagainstus,includingfinesandimprisonment,anddamagetoourreputation,anyofwhichmayhaveanadverseeffectonourbusinessandoperatingresults.

Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of theUnited States, could subject us to penalties and other adverse consequences.

WearesubjecttotheFCPA,theU.S.domesticbriberystatutecontainedin18U.S.C.§201,theU.S.TravelAct,theUSAPATRIOTAct,theBriberyAct,andpossiblyotheranti-briberyandanti-moneylaunderinglawsincountriesinwhichweconductactivities.WefacesignificantrisksifwefailtocomplywiththeFCPAandotheranti-corruptionlawsthatprohibitcompaniesandtheiremployeesandthird-partyintermediariesfromauthorizing,offering,orproviding,directlyorindirectly,improperpaymentsorbenefitstoforeigngovernmentofficials,politicalparties,andprivate-sectorrecipientsforthepurposeofobtainingorretainingbusiness,directingbusinesstoanyperson,orsecuringanyadvantage.Inmanyforeigncountries,particularlyincountrieswithdevelopingeconomies,itmaybealocalcustomthatbusinessesengageinpracticesthatareprohibitedbytheFCPAorotherapplicablelawsandregulations.Inaddition,weusevariousthirdpartiestosellourplatformandconductourbusinessabroad.Weorourthird-partyintermediariesmayhavedirectorindirectinteractionswithofficialsandemployeesofgovernmentagenciesorstate-ownedoraffiliatedentitiesandwecanbeheldliableforthecorruptorotherillegalactivitiesofthesethird-partyintermediaries,ouremployees,representatives,contractors,partners,andagents,evenifwedonotexplicitlyauthorizesuchactivities.Wehaveimplementedananti-corruptioncomplianceprogrambutcannotassureyouthatallouremployeesandagents,aswellasthosecompaniestowhichweoutsourcecertainofourbusinessoperations,willnottakeactionsinviolationofourpoliciesandapplicablelaw,forwhichwemaybeultimatelyheldresponsible.

AnyviolationoftheFCPA,otherapplicableanti-corruptionlaws,andanti-moneylaunderinglawscouldresultinwhistleblowercomplaints,adversemediacoverage,investigations,lossofexportprivileges,severecriminalorcivilsanctionsand,inthecaseoftheFCPA,suspensionordebarmentfromU.S.governmentcontracts,whichcouldhaveanadverseeffectonourreputation,business,operatingresults,andprospects.Inaddition,respondingtoanyenforcementactionmayresultinasignificantdiversionofmanagement’sattentionandresourcesandsignificantdefensecostsandotherprofessionalfees.

We are required to comply with governmental export control laws and regulations. Our failure to comply with these laws and regulations could have an adverseeffect on our business and operating results.

Ourplatformissubjecttogovernmental,includingUnitedStatesandEuropeanUnion,exportcontrollawsandregulations.U.S.exportcontrollawsandregulationsandeconomicsanctionsprohibittheshipmentofcertainproductsandservicestoU.S.embargoedorsanctionedcountries,governments,andpersons,andcomplyingwithexportcontrolandsanctionsregulationsforaparticularsalemaybetime-consumingandmayresultinthedelayorlossofsalesopportunities.

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Whilewetakeprecautionstopreventourplatformfrombeingexportedinviolationoftheselaws,ifweweretofailtocomplywithU.S.exportlaws,U.S.Customsregulationsandimportregulations,U.S.economicsanctions,andothercountries’importandexportlaws,wecouldbesubjecttosubstantialcivilandcriminalpenalties,includingfinesforthecompanyandincarcerationforresponsibleemployeesandmanagers,andthepossiblelossofexportorimportprivileges.

Weincorporateencryptiontechnologyintocertainofourproducts.EncryptionproductsmaybeexportedoutsideoftheUnitedStatesonlywiththerequiredexportauthorizationincludingbylicense,alicenseexceptionorotherappropriategovernmentauthorization.Inaddition,variouscountriesregulatetheimportofcertainencryptiontechnology,includingimportpermittingandlicensingrequirements,andhaveenactedlawsthatcouldlimitourabilitytodistributeourproductsorcouldlimitourcustomers’abilitytoimplementourproductsinthosecountries.Althoughwetakeprecautionstopreventourproductsfrombeingprovidedinviolationofsuchlaws,wecannotassureyouthatinadvertentviolationsofsuchlawshavenotoccurredorwillnotoccurinconnectionwiththedistributionofourproductsdespitetheprecautionswetake.Governmentalregulationofencryptiontechnologyandregulationofimportsorexports,orourfailuretoobtainrequiredimportorexportapprovalforourproducts,couldharmourinternationalsalesandadverselyaffectouroperatingresults.

Further,ifourchannelorotherpartnersfailtoobtainappropriateimport,export,orre-exportlicensesorpermits,wemayalsobeharmed,becomethesubjectofgovernmentinvestigationsorpenalties,andincurreputationalharm.Changesinourplatformorchangesinexportandimportregulationsmaycreatedelaysintheintroductionofourplatformininternationalmarkets,preventourcustomerswithinternationaloperationsfromdeployingourplatformgloballyor,insomecases,preventtheexportorimportofourplatformtocertaincountries,governments,orpersonsaltogether.Anychangeinexportorimportlawsorregulations,economicsanctions,orrelatedlegislation,shiftintheenforcementorscopeofexistinglawsandregulations,orchangeinthecountries,governments,persons,ortechnologiestargetedbysuchlawsandregulations,couldresultindecreaseduseofourplatformby,orinourdecreasedabilitytoexportorsellourplatformto,existingorpotentialcustomerswithinternationaloperations.Anydecreaseduseofourplatformorlimitationonourabilitytoexportorsellourplatformwouldlikelyharmourbusiness,financialcondition,andoperatingresults.

If we are unable to recruit or retain skilled personnel, or if we lose the services of any of our senior management or other key personnel, our business,operating results, and financial condition could be adversely affected.

Ourfuturesuccessdependsonourcontinuingabilitytoattract,train,assimilate,andretainhighlyskilledpersonnel.Wefaceintensecompetitionforqualifiedindividualsfromnumeroussoftwareandothertechnologycompanies.Wemaynotbeabletoretainourcurrentkeyemployeesorattract,train,assimilate,orretainotherhighlyskilledpersonnelinthefuture.Wemayincursignificantcoststoattractandretainhighlyskilledpersonnel,andwemaylosenewemployeestoourcompetitorsorothertechnologycompaniesbeforewerealizethebenefitofourinvestmentinrecruitingandtrainingthem.Aswemoveintonewgeographies,wewillneedtoattractandrecruitskilledpersonnelinthoseareas.Ifweareunabletoattractandretainsuitablyqualifiedindividualswhoarecapableofmeetingourgrowingtechnical,operational,andmanagerialrequirements,onatimelybasisoratall,ourbusinessmaybeadverselyaffected.Volatilityorlackofperformanceinourstockpricemayalsoaffectourabilitytoattractandretainourkeyemployees.

Further,severalmembersofourmanagementteamhaveonlybeenwithourcompanyforashortperiodoftime.FourofoursixexecutiveofficersjoinedourcompanyafterApril2016,andourmanagementteamhaslimitedexperienceworkingtogether.Ifourmanagementteamcannotworktogethereffectivelyoranymemberofourmanagementteamleavesourcompany,ourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffected.

Ourfuturesuccessalsodependsinlargepartonthecontinuedserviceofseniormanagementandotherkeypersonnel.Inparticular,wearehighlydependentontheservicesofDeanA.Stoecker,theChairmanofourboardofdirectors,ChiefExecutiveOfficerandaco-founder,andEdwardP.HardingJr.,ourChiefTechnologyOfficerandaco-founder,bothofwhomarecriticaltothedevelopmentofourtechnology,platform,futurevision,andstrategicdirection.Werelyonourleadershipteamintheareasofoperations,security,marketing,sales,support,andgeneralandadministrativefunctions,andonindividualcontributorsonourresearchanddevelopmentteam.Ourseniormanagementandotherkeypersonnelareallemployedonanat-willbasis,whichmeansthattheycouldterminatetheiremploymentwithusatanytime,foranyreasonandwithoutnotice.Ifwelosetheservicesofseniormanagementorotherkeypersonnel,orifweareunabletoattract,train,assimilate,andretainthehighlyskilledpersonnelweneed,ourbusiness,operatingresults,andfinancialconditioncouldbeadverselyaffected.

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If currency exchange rates fluctuate substantially in the future, the results of our operations, which are reported in U.S. dollars, could be adversely affected.

Aswecontinuetoexpandourinternationaloperations,webecomemoreexposedtotheeffectsoffluctuationsincurrencyexchangerates.AlthoughweexpectanincreasingnumberofsalescontractstobedenominatedincurrenciesotherthantheU.S.dollarinthefuture,themajorityofoursalescontractshavehistoricallybeendenominatedinU.S.dollars,andtherefore,mostofourrevenuehasnotbeensubjecttoforeigncurrencyrisk.However,astrengtheningoftheU.S.dollarcouldincreasetherealcostofourplatformtoourcustomersoutsideoftheUnitedStates,whichcouldadverselyaffectourbusiness,operatingresults,financialcondition,andcashflows.Inaddition,weincurexpensesforemployeecompensationandotheroperatingexpensesatournon-U.S.locationsinthelocalcurrency.FluctuationsintheexchangeratesbetweentheU.S.dollarandothercurrenciescouldresultinthedollarequivalentofsuchexpensesbeinghigher.Thiscouldhaveanegativeimpactonouroperatingresults.Althoughwemayinthefuturedecidetoundertakeforeignexchangehedgingtransactionstocoveraportionofourforeigncurrencyexchangeexposure,wecurrentlydonothedgeourexposuretoforeigncurrencyexchangerisks.

We may have exposure to additional tax liabilities.

WearesubjecttocomplextaxlawsandregulationsintheUnitedStatesandavarietyofforeignjurisdictions.Allofthesejurisdictionshaveinthepastandmayinthefuturemakechangestotheircorporateincometaxratesandotherincometaxlawswhichcouldincreaseourfutureincometaxprovision.

Ourfutureincometaxobligationscouldbeaffectedbyearningsthatarelowerthananticipatedinjurisdictionswherewehavelowerstatutoryratesandbyearningsthatarehigherthananticipatedinjurisdictionswherewehavehigherstatutoryrates,bychangesinthevaluationofourdeferredtaxassetsandliabilities,changesintheamountofunrecognizedtaxbenefits,orbychangesintaxlaws,regulations,accountingprinciples,orinterpretationsthereof.

OurdeterminationofourtaxliabilityissubjecttoreviewbyapplicableU.S.andforeigntaxauthorities.Anyadverseoutcomeofsuchareviewcouldharmouroperatingresultsandfinancialcondition.Thedeterminationofourworldwideprovisionforincometaxesandothertaxliabilitiesrequiressignificantjudgmentand,intheordinarycourseofbusiness,therearemanytransactionsandcalculationswheretheultimatetaxdeterminationiscomplexanduncertain.Moreover,asamultinationalbusiness,wehavesubsidiariesthatengageinmanyintercompanytransactionsinavarietyoftaxjurisdictionswheretheultimatetaxdeterminationiscomplexanduncertain.Ourexistingcorporatestructureandintercompanyarrangementshavebeenimplementedinamannerwebelieveisincompliancewithcurrentprevailingtaxlaws.However,thetaxingauthoritiesofthejurisdictionsinwhichweoperatemaychallengeourmethodologiesforvaluingdevelopedtechnologyorintercompanyarrangements,whichcouldimpactourworldwideeffectivetaxrateandharmourfinancialpositionandoperatingresults.

Wearealsosubjecttonon-incometaxes,suchaspayroll,sales,use,value-added,networth,property,andgoodsandservicestaxesintheUnitedStatesandvariousforeignjurisdictions.Weareperiodicallyreviewedandauditedbytaxauthoritieswithrespecttoincomeandnon-incometaxes.Taxauthoritiesmaydisagreewithcertainpositionswehavetakenandwemayhaveexposuretoadditionalincomeandnon-incometaxliabilitieswhichcouldhaveanadverseeffectonouroperatingresultsandfinancialcondition.Inaddition,ourfutureeffectivetaxratescouldbefavorablyorunfavorablyaffectedbychangesintaxrates,changesinthevaluationofourdeferredtaxassetsorliabilities,theeffectivenessofourtaxplanningstrategies,orchangesintaxlawsortheirinterpretation.Suchchangescouldhaveanadverseimpactonourfinancialcondition.

Asaresultoftheseandotherfactors,theultimateamountoftaxobligationsowedmaydifferfromtheamountsrecordedinourfinancialstatementsandanysuchdifferencemayharmouroperatingresultsinfutureperiodsinwhichwechangeourestimatesofourtaxobligationsorinwhichtheultimatetaxoutcomeisdetermined.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations which could subject our business to higher taxliability.

Wemaybelimitedintheportionofnetoperatingloss,orNOL,carryforwardsthatwecanuseinthefuturetooffsettaxableincomeforU.S.federalandstateincometaxpurposes.AsofSeptember30,2017,wehadU.S.federalNOLcarryforwardsof$55.0million,whichifnotutilizedwillbegintoexpirein2035,andstateNOLsof$34.4million,whichifnotutilizedwillbegintoexpirein2024.

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Inaddition,underSection382oftheInternalRevenueCodeof1986,asamended,ortheCode,acorporationthatundergoesan“ownershipchange”issubjecttolimitationsonitsabilitytoutilizeitsNOLstooffsetfuturetaxableincome.Futurechangesinourstockownership,includingasaresultoffutureofferingsofourcapitalstock,aswellasotherchangesthatmaybeoutsideofourcontrol,couldresultinadditionalownershipchangesunderSection382oftheCode.ASection382“ownershipchange”generallyoccursifoneormorestockholdersorgroupsofstockholderswhoownatleast5%ofourstockincreasetheirownershipbymorethan50percentagepointsovertheirlowestownershippercentagewithinarollingthree-yearperiod.OurNOLsmayalsobeimpairedundersimilarprovisionsofstatelaw.WepreviouslyexperiencedanownershipchangethatresultedinlimitationsoftheannualutilizationofourNOLcarryforwards,butdidnotresultinpermanentdisallowanceofanyofourNOLcarryforwards.ItispossiblethatanyfutureownershipchangecouldhaveamaterialeffectontheuseofourNOLsorothertaxattributes.WehaverecordedafullvaluationallowancerelatedtoourNOLsandothernetdeferredtaxassetsduetotheuncertaintyoftheultimaterealizationofthefuturebenefitsofthoseassets.OurNOLsmayexpireunutilizedorunderutilized,whichcouldpreventusfromoffsettingfuturetaxableincome.

Economic uncertainty or downturns, particularly as it impacts particular industries, could adversely affect our business and operating results.

Inrecentyears,theUnitedStatesandothersignificantmarketshaveexperiencedcyclicaldownturnsandworldwideeconomicconditionsremainuncertain.Economicuncertaintyandassociatedmacroeconomicconditionsmakeitextremelydifficultforourcustomersandustoaccuratelyforecastandplanfuturebusinessactivities,andcouldcauseourcustomerstoslowspendingonourplatform,whichcoulddelayandlengthensalescycles.Furthermore,duringuncertaineconomictimesourcustomersmayfaceissuesgainingtimelyaccesstosufficientcredit,whichcouldresultinanimpairmentoftheirabilitytomaketimelypaymentstous.Ifthatweretooccur,wemayberequiredtoincreaseourallowancefordoubtfulaccountsandourresultswouldbenegativelyimpacted.

Furthermore,wehavecustomersinavarietyofdifferentindustries.Asignificantdownturnintheeconomicactivityattributabletoanyparticularindustry,including,butnotlimitedto,theretailandfinancialindustries,maycauseorganizationstoreactbyreducingtheircapitalandoperatingexpendituresingeneralorbyspecificallyreducingtheirspendingoninformationtechnology.Inaddition,ourcustomersmaydelayorcancelinformationtechnologyprojectsorseektolowertheircostsbyrenegotiatingvendorcontracts.Totheextentpurchasesofourplatformareperceivedbycustomersandpotentialcustomerstobediscretionary,ourrevenuemaybedisproportionatelyaffectedbydelaysorreductionsingeneralinformationtechnologyspending.Also,customersmaychoosetodevelopin-housesoftwareasanalternativetousingourplatform.Moreover,competitorsmayrespondtochallengingmarketconditionsbyloweringpricesandattemptingtolureawayourcustomers.

Wecannotpredictthetiming,strength,ordurationofanyeconomicslowdownoranysubsequentrecoverygenerally,oranyindustryinparticular.Iftheconditionsinthegeneraleconomyandthemarketsinwhichweoperateworsenfrompresentlevels,ourbusiness,financialcondition,andoperatingresultscouldbemateriallyadverselyaffected.

We may require additional capital to fund our business and support our growth, and any inability to generate or obtain such capital may adversely affect ouroperating results and financial condition.

Inordertosupportourgrowthandrespondtobusinesschallenges,suchasdevelopingnewfeaturesorenhancementstoourplatformtostaycompetitive,acquiringnewtechnologies,andimprovingourinfrastructure,wehavemadesignificantfinancialinvestmentsinourbusinessandweintendtocontinuetomakesuchinvestments.Asaresult,wemayneedtoengageinequityordebtfinancingstoprovidethefundsrequiredfortheseinvestmentsandotherbusinessendeavors.Ifweraiseadditionalfundsthroughequityorconvertibledebtissuances,ourexistingstockholdersmaysuffersignificantdilutionandthesesecuritiescouldhaverights,preferences,andprivilegesthataresuperiortothatofholdersofourcommonstock.Ifweobtainadditionalfundsthroughdebtfinancing,wemaynotbeabletoobtainsuchfinancingontermsfavorabletous.Suchtermsmayinvolverestrictivecovenantsmakingitdifficulttoengageincapitalraisingactivitiesandpursuebusinessopportunities,includingpotentialacquisitions.Ifweareunabletoobtainadequatefinancingorfinancingontermssatisfactorytouswhenwerequireit,ourabilitytocontinuetosupportourbusinessgrowthandtorespondtobusinesschallengescouldbesignificantlyimpairedandourbusinessmaybeadverselyaffected,requiringustodelay,reduce,oreliminatesomeorallofouroperations.

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The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain additionalexecutive management and qualified board members.

WearesubjecttothereportingrequirementsoftheExchangeAct,theSarbanes-OxleyActof2002,orSarbanes-OxleyAct,theDodd-FrankWallStreetReformandConsumerProtectionActof2010,thelistingrequirementsoftheNewYorkStockExchange,andotherapplicablesecuritiesrulesandregulations.Compliancewiththeserulesandregulationshaveincreasedourlegalandfinancialcompliancecosts,makesomeactivitiesmoredifficult,time-consuming,orcostlyandincreasedemandonoursystemsandresources,particularlyafterwearenolongeranemerginggrowthcompany.TheExchangeActrequires,amongotherthings,thatwefileannual,quarterly,andcurrentreportswithrespecttoourbusinessandoperatingresults.TheSarbanes-OxleyActrequires,amongotherthings,thatwemaintaineffectivedisclosurecontrolsandproceduresandinternalcontroloverfinancialreporting.Inordertomaintainand,ifrequired,improveourdisclosurecontrolsandproceduresandinternalcontroloverfinancialreportingtomeetthisstandard,significantresourcesandmanagementoversightmayberequired.Asaresult,management’sattentionmaybedivertedfromotherbusinessconcerns,whichcouldadverselyaffectourbusinessandoperatingresults.Althoughwehavealreadyhiredadditionalemployeestocomplywiththeserequirements,wemayneedtohiremoreemployeesinthefutureorengageoutsideconsultants,whichwillincreaseourcostsandexpenses.

Inaddition,changinglaws,regulations,andstandardsrelatingtocorporategovernanceandpublicdisclosurearecreatinguncertaintyforpubliccompanies,increasinglegalandfinancialcompliancecosts,andmakingsomeactivitiesmoretimeconsuming.Theselaws,regulations,andstandardsaresubjecttovaryinginterpretations,inmanycasesduetotheirlackofspecificity,and,asaresult,theirapplicationinpracticemayevolveovertimeasnewguidanceisprovidedbyregulatoryandgoverningbodies.Thiscouldresultincontinuinguncertaintyregardingcompliancemattersandhighercostsnecessitatedbyongoingrevisionstodisclosureandgovernancepractices.Weintendtoinvestresourcestocomplywithevolvinglaws,regulations,andstandards,andthisinvestmentmayresultinincreasedgeneralandadministrativeexpensesandadiversionofmanagement’stimeandattentionfromrevenue-generatingactivitiestocomplianceactivities.Ifoureffortstocomplywithnewlaws,regulations,andstandardsdifferfromtheactivitiesintendedbyregulatoryorgoverningbodiesduetoambiguitiesrelatedtotheirapplicationandpractice,regulatoryauthoritiesmayinitiatelegalproceedingsagainstusandourbusinessmaybeadverselyaffected.

Thenewrulesandregulationsapplicabletopubliccompaniesmakeitmoreexpensiveforustoobtainandmaintaindirectorandofficerliabilityinsurance,andwemayberequiredtoacceptreducedcoverageorincursubstantiallyhighercoststoobtaincoverage.Thesefactorscouldalsomakeitmoredifficultforustoattractandretainqualifiedmembersofourboardofdirectors,particularlytoserveonourauditcommitteeandcompensationcommittee,andqualifiedexecutiveofficers.

Asaresultofdisclosureofinformationinfilingsrequiredofapubliccompany,ourbusinessandfinancialconditionhasbecomemorevisible,whichwebelievemayresultinthreatenedoractuallitigation,includingbycompetitorsandotherthirdparties.Ifsuchclaimsaresuccessful,ourbusinessandoperatingresultscouldbeadverselyaffected,andeveniftheclaimsdonotresultinlitigationorareresolvedinourfavor,theseclaims,andthetimeandresourcesnecessarytoresolvethem,coulddiverttheresourcesofourmanagementandadverselyaffectourbusinessandoperatingresults.

We are obligated to develop and maintain proper and effective internal control over financial reporting. We have identified a material weakness in our internalcontrol over financial reporting and if our remediation of this material weakness is not effective, or if we fail to maintain an effective system of internal controlover financial reporting in the future, we may not be able to accurately or timely report our financial condition or operating results, which may adversely affectinvestor confidence in our company and, as a result, the value of our Class A common stock.

Asapubliccompany,wearerequired,pursuanttoSection404oftheSarbanes-OxleyAct,tofurnishareportbymanagementon,amongotherthings,theeffectivenessofourinternalcontroloverfinancialreportingcommencingwithoursecondannualreportonForm10-K.Effectiveinternalcontroloverfinancialreportingisnecessaryforustoprovidereliablefinancialreportsand,togetherwithadequatedisclosurecontrolsandprocedures,aredesignedtopreventfraud.Anyfailuretoimplementrequiredneworimprovedcontrols,ordifficultiesencounteredintheirimplementation,couldcauseustofailtomeetourreportingobligations.Ineffectiveinternalcontrolscouldalsocauseinvestorstoloseconfidenceinourreportedfinancialinformation,whichcouldhaveanegativeeffectonthetradingpriceofourClassAcommonstock.

Thisassessmentwillneedtoincludedisclosureofanymaterialweaknessesidentifiedbyourmanagementinourinternalcontroloverfinancialreporting,aswellasastatementthatourindependentregisteredpublicaccountingfirmhasissuedanopiniononourinternalcontroloverfinancialreporting,providedthatourindependentregisteredpublicaccounting

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firmwillnotberequiredtoattesttotheeffectivenessofourinternalcontroloverfinancialreportinguntilourfirstannualreportrequiredtobefiledwiththeSECfollowingthelaterofthedatewearedeemedtobean“acceleratedfiler”ora“largeacceleratedfiler,”eachasdefinedintheExchangeAct,orthedatewearenolongeranemerginggrowthcompany,asdefinedintheJumpstartOurBusinessStartupsActof2012,ortheJOBSAct.Wecouldbeanemerginggrowthcompanyforuptofiveyears.Anindependentassessmentoftheeffectivenessofourinternalcontrolscoulddetectproblemsthatourmanagement’sassessmentmightnot.Undetectedmaterialweaknessesinourinternalcontrolscouldleadtofinancialstatementrestatementsandrequireustoincurtheexpenseofremediation.Wearerequiredtodisclosechangesmadeinourinternalcontrolsandproceduresonaquarterlybasis.Tocomplywiththerequirementsofbeingapubliccompany,wemayneedtoundertakevariousactions,suchasimplementingnewinternalcontrolsandproceduresandhiringaccountingorinternalauditstaff.

InthecourseofpreparingourfinancialstatementsasofandfortheyearendedDecember31,2016,weidentifiedamaterialweaknessinourinternalcontroloverfinancialreporting.Amaterialweaknessisadeficiency,orcombinationofdeficiencies,ininternalcontroloverfinancialreporting,suchthatthereisareasonablepossibilitythatamaterialmisstatementoftheannualorinterimconsolidatedfinancialstatementswillnotbepreventedordetectedonatimelybasis.Thematerialweaknessidentifiedrelatedtotheevaluationoftheaccountingimpactofcertaincontractualtermsrelatedtoourarrangementswithlicenseddataproviders,whichresultedinthemisstatementintherecordingofprepaidandotherassetsandroyaltycoststhatarerecordedincostofrevenueinthefirstthreefiscalquartersof2016.Thismaterialweaknessresultedinanimmaterialrevisionofthosequarterlyresultsofoperationsdata.Thismaterialweaknesscouldresultinadditionalmisstatementstotheaccountsanddisclosuresthatwouldresultinamaterialmisstatementofourconsolidatedfinancialstatementsthatwouldnotbepreventedordetected.Becauseofthismaterialweaknessinourinternalcontroloverfinancialreporting,ourChiefExecutiveOfficerandChiefFinancialOfficerconcludedthat,asofSeptember30,2017,ourdisclosurecontrolsandprocedureswerenoteffective.

Inresponsetothismaterialweakness,wehavebeguntakingactionstoremediateourmaterialweaknessbyenhancingourexistingcontrolactivitiesrelatedtothereviewofroyaltycontracts,includingtheimplementationofadditionalcontrolactivitiesrelatedtotheidentificationandevaluationofthetermsofroyaltycontractsthatrequireconsiderationinassessingtheaccountingforthearrangement.Theseremediationmeasuresareongoing.Whilewebelievethattheseeffortswillimproveourinternalcontroloverfinancialreporting,theimplementationofourremediationisongoingandwillrequirevalidationandtestingofthedesignandoperatingeffectivenessofinternalcontrolsoverasustainedperiodoffinancialreportingcycles.Furthermore,whilewebelievewearemakingprogresstowardachievingtheeffectivenessofourinternalcontrolsanddisclosurecontrols,wecannotassureyouthatthesemeasureswillsignificantlyimproveorremediatethematerialweaknessdescribed.Wealsocannotassureyouthatwehaveidentifiedallourexistingmaterialweaknesses,orthatwewillnotinthefuturehaveadditionalmaterialweaknesses.

WeareintheearlystagesofthecostlyandchallengingprocessofcompilingthesystemandprocessingdocumentationnecessarytoperformtheevaluationneededtocomplywithSection404.Wemaynotbeabletocompleteourevaluation,testing,andanyrequiredremediationinatimelyfashion.Duringtheevaluationandtestingprocess,ifweidentifyadditionalmaterialweaknessesinourinternalcontroloverfinancialreporting,wewillbeunabletoassertthatourinternalcontroloverfinancialreportingiseffective.

Ifweareunabletoassertthatourinternalcontroloverfinancialreportingiseffective,orifourindependentregisteredpublicaccountingfirmisunabletoexpressanopinionontheeffectivenessofourinternalcontrol,includingasaresultofthematerialweaknessdescribedabove,wecouldloseinvestorconfidenceintheaccuracyandcompletenessofourfinancialreports,whichwouldcausethepriceofourClassAcommonstocktodecline,andwemaybesubjecttoinvestigationorsanctionsbytheSEC.Inaddition,ifweareunabletocontinuetomeettheserequirements,wemaynotbeabletoremainlistedontheNewYorkStockExchange.

Our management team has limited experience managing a public company.

Mostmembersofourmanagementteamhavelimitedexperiencemanagingapubliclytradedcompany,interactingwithpubliccompanyinvestors,andcomplyingwiththeincreasinglycomplexlawspertainingtopubliccompanies.Ourmanagementteammaynotsuccessfullyorefficientlymanageourtransitiontobeingapubliccompanysubjecttosignificantregulatoryoversightandreportingobligationsunderthefederalsecuritieslawsandthecontinuousscrutinyofsecuritiesanalystsandinvestors.Thesenewobligationsandconstituentswillrequiresignificantattentionfromourseniormanagementandcoulddiverttheirattentionawayfromtheday-to-daymanagementofourbusiness,whichcouldadverselyaffectourbusiness,financialcondition,andoperatingresults.

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If we cannot maintain our corporate culture as we grow, we could lose the innovation, teamwork, passion, and focus on execution that we believe contribute toour success, and our business may be harmed.

Webelievethatourcorporateculturehasbeenvitaltooursuccess,includinginattracting,developing,andretainingpersonnel,aswellasourcustomers.Aswecontinuetogrowandfaceindustrychallenges,itmaybecomemorechallengingtomaintainthatculture.Inaddition,weplantoexpandourinternationaloperationsintoothercountriesinthefuture,whichmayimpactourcultureasweseektofind,hire,andintegrateadditionalemployeeswhilemaintainingourcorporateculture.Ifweareunabletomaintainourcorporateculture,wecouldlosetheinnovation,passion,anddedicationofourteamandasaresult,ourbusinessandabilitytofocusonourcorporateobjectivesmaybeharmed.

Future acquisitions of, or investments in, other companies, products, or technologies could require significant management attention, disrupt our business,dilute stockholder value, and adversely affect our operating results.

Ourbusinessstrategyhasincluded,andmayinthefutureinclude,acquiringothercomplementaryproducts,technologies,orbusinesses.Forexample,werecentlyacquiredSemantatoenhanceourdatagovernancecapabilitiesandYhattoenhanceourcapabilitiesformanaginganddeployingadvancedanalyticmodels.Wealsomayenterintorelationshipswithotherbusinessesinordertoexpandourplatform,whichcouldinvolvepreferredorexclusivelicenses,additionalchannelsofdistribution,ordiscountpricingorinvestmentsinothercompanies.Negotiatingthesetransactionscanbetime-consuming,difficult,andexpensive,andourabilitytoclosethesetransactionsmaybesubjecttothird-partyapprovals,suchasgovernmentregulatoryapprovals,whicharebeyondourcontrol.Consequently,wecanmakenoassurancethatthesetransactionsonceundertakenandannounced,willclose.

Thesekindsofacquisitionsorinvestmentsmayresultinunforeseenoperatingdifficultiesandexpenditures.Ifweacquirebusinessesortechnologies,wemaynotbeabletointegratetheacquiredpersonnel,operations,andtechnologiessuccessfully,oreffectivelymanagethecombinedbusinessfollowingtheacquisition.Wealsomaynotachievetheanticipatedbenefitsfromtheacquiredbusinessduetoanumberoffactors,including:

• inabilitytointegrateorbenefitfromacquiredtechnologiesorservicesinaprofitablemanner;

• unanticipatedcostsorliabilitiesassociatedwiththeacquisition;

• incurrenceofacquisition-relatedcosts;

• difficultyintegratingtheaccountingsystems,operations,andpersonneloftheacquiredbusiness;

• difficultiesandadditionalexpensesassociatedwithsupportinglegacyproductsandhostinginfrastructureoftheacquiredbusiness;

• difficultyconvertingthecustomersoftheacquiredbusinessontoourplatformandcontractterms;

• diversionofmanagement’sattentionfromotherbusinessconcerns;

• adverseeffectstoourexistingbusinessrelationshipswithbusinesspartnersandcustomersasaresultoftheacquisition;

• thepotentiallossofkeyemployees;

• useofresourcesthatareneededinotherpartsofourbusiness;and

• useofsubstantialportionsofouravailablecashtoconsummatetheacquisition.

Moreover,wecannotassureyouthattheanticipatedbenefitsofanyacquisitionorinvestmentwouldberealizedorthatwewouldnotbeexposedtounknownliabilities.

Inconnectionwiththesetypesoftransactions,wemayissueadditionalequitysecuritiesthatwoulddiluteourstockholders,usecashthatwemayneedinthefuturetooperateourbusiness,incurdebtontermsunfavorabletousorthatweareunabletorepay,incurlargechargesorsubstantialliabilities,encounterdifficultiesintegratingdiversebusinesscultures,andbecomesubjecttoadversetaxconsequences,substantialdepreciation,ordeferredcompensationcharges.Thesechallengesrelatedtoacquisitionsorinvestmentscouldadverselyaffectourbusiness,operatingresults,financialcondition,andprospects.

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Changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported operatingresults.

U.S.GAAPissubjecttointerpretationbytheFASB,theSEC,andvariousbodiesformedtopromulgateandinterpretappropriateaccountingprinciples.Achangeinaccountingstandardsorpracticescanhaveasignificanteffectonourreportedresultsandmayevenaffectourreportingoftransactionscompletedbeforethechangeiseffective.Newaccountingpronouncementsandvaryinginterpretationsofaccountingpronouncementshaveoccurredandmayoccurinthefuture.Changestoexistingrulesorthequestioningofcurrentpracticesmayadverselyaffectourreportedfinancialresultsorthewayweconductourbusiness.Accountingforrevenuefromsalesofsubscriptionstosoftwareisparticularlycomplex,isoftenthesubjectofintensescrutinybytheSEC,andwillevolveasFASBcontinuestoconsiderapplicableaccountingstandardsinthisarea.

Forexample,theFASBandtheInternationalAccountingStandardsBoardareworkingtoconvergecertainaccountingprinciplesandfacilitatemorecomparablefinancialreportingbetweencompaniesthatarerequiredtofollowU.S.GAAPandthosethatarerequiredtofollowInternationalFinancialReportingStandards,orIFRS.Inconnectionwiththeseinitiatives,theFASBissuednewaccountingstandardsforrevenuerecognitionthatreplacemostexistingrevenuerecognitionguidance.Althoughwearecurrentlyintheprocessofevaluatingtheimpactofthesenewstandardsonourconsolidatedfinancialstatements,itcouldchangethewayweaccountforcertainofoursalestransactions,orthecoststoobtainorfulfillacontractwithacustomer.Adoptionofthestandardcouldhaveasignificantimpactonourfinancialstatementsandmayretroactivelyaffecttheaccountingtreatmentoftransactionscompletedbeforeadoptiondependingonthemethodofadoptionweselect.TheimpactoftheconvergenceofU.S.GAAPandIFRS,ifany,onourfinancialstatementsisuncertainandmaynotbeknownuntiladditionalrulesareproposedandadopted,whichmayormaynotoccur.

Our financial statements are subject to change and if our estimates or judgments relating to our critical accounting policies prove to be incorrect, our operatingresults could be adversely affected.

ThepreparationoffinancialstatementsinconformitywithU.S.GAAPrequiresmanagementtomakeestimatesandassumptionsthataffecttheamountsreportedinourconsolidatedfinancialstatementsandrelatednotes.Webaseourestimatesonhistoricalexperienceandonvariousotherassumptionsthatwebelievetobereasonableunderthecircumstances,asprovidedinthesectiontitled“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”inthisQuarterlyReportonForm10-Q.Theresultsoftheseestimatesformthebasisformakingjudgmentsaboutthecarryingvaluesofassets,liabilities,andequity,andtheamountofrevenueandexpensesthatarenotreadilyapparentfromothersources.Criticalaccountingpoliciesandestimatesusedinpreparingourconsolidatedfinancialstatementsincludethoserelatedtorevenuerecognition,deferredcommissions,accountingforincometaxes,stock-basedcompensationexpense,andvaluationofourcommonstock.Ouroperatingresultsmaybeadverselyaffectedifourassumptionschangeorifactualcircumstancesdifferfromthoseinourassumptions,whichcouldcauseouroperatingresultstofallbelowtheexpectationsofsecuritiesanalystsandinvestors,resultinginadeclineinthepriceofourClassAcommonstock.

If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.

Wereviewourgoodwillandintangibleassetsforimpairmentwheneventsorchangesincircumstancesindicatethecarryingvaluemaynotberecoverable,suchasdeclinesinstockprice,marketcapitalization,orcashflowsandslowergrowthratesinourindustry.Goodwillisrequiredtobetestedforimpairmentatleastannually.Ifwearerequiredtorecordasignificantchargeinourfinancialstatementsduringtheperiodinwhichanyimpairmentofourgoodwillorintangibleassetsisdetermined,thatwouldnegativelyaffectouroperatingresults.

We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make ourClass A common stock less attractive to investors.

Weareanemerginggrowthcompany,asdefinedintheJOBSAct,and,forsolongaswecontinuetobeanemerginggrowthcompany,wemaytakeadvantageofcertainexemptionsfromvariousreportingrequirementsthatareapplicabletootherpubliccompaniesthatarenotemerginggrowthcompaniesincluding,butnotlimitedto,notbeingrequiredtocomplywiththeauditorattestationrequirementsofSection404oftheSarbanes-OxleyAct,reduceddisclosureobligationsregardingexecutivecompensationinourperiodicreportsandproxystatements,andexemptionsfromtherequirementsofholdinganonbindingadvisoryvoteonexecutivecompensationandstockholderapprovalofanygoldenparachutepaymentsnotpreviouslyapproved.PursuanttoSection107oftheJOBSAct,asanemerginggrowthcompany,wehaveelectedtousetheextendedtransitionperiodforcomplyingwithneworrevisedaccountingstandardsuntilthosestandardswouldotherwiseapplytoprivatecompanies.Asaresult,ourconsolidatedfinancialstatementsmaynotbecomparabletothefinancial

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statementsofissuerswhoarerequiredtocomplywiththeeffectivedatesforneworrevisedaccountingstandardsthatareapplicabletopubliccompanies,whichmaymakeourClassAcommonstocklessattractivetoinvestors.Inaddition,ifweceasetobeanemerginggrowthcompany,wewillnolongerbeabletousetheextendedtransitionperiodforcomplyingwithneworrevisedaccountingstandards.

Wewillremainanemerginggrowthcompanyuntiltheearliestof(i)thelastdayofthefiscalyearfollowingthefifthanniversaryoftheeffectivenessoftheIPO,(ii)thelastdayofthefirstfiscalyearinwhichourannualgrossrevenueis$1.07billionormore,(iii)thedateonwhichwehave,duringthepreviousrollingthree-yearperiod,issuedmorethan$1.0billioninnon-convertibledebtsecurities,or(iv)thelastdayofthefiscalyearinwhichthemarketvalueofourcommonstockthatisheldbynon-affiliatesexceeds$700.0millionasofJune30.

WecannotpredictifinvestorswillfindourClassAcommonstocklessattractiveorourcompanylesscomparabletocertainotherpubliccompaniesbecausewewillrelyontheseexemptions.Forexample,ifwedonotadoptaneworrevisedaccountingstandard,ourfutureoperatingresultsmaynotbeascomparabletotheoperatingresultsofcertainothercompaniesinourindustrythatadoptedsuchstandards.IfsomeinvestorsfindourClassAcommonstocklessattractiveasaresult,theremaybealessactivetradingmarketforourClassAcommonstockandourstockpricemaybemorevolatile.

We are exposed to fluctuations in the market values of our investments.

Creditratingsandpricingofourinvestmentscanbenegativelyaffectedbyliquidity,creditdeterioration,financialresults,economicrisk,politicalrisk,sovereignrisk,changesininterestrates,orotherfactors.Asaresult,thevalueandliquidityofourcashandcashequivalentsandinvestmentsmayfluctuatesubstantially.Therefore,althoughwehavenotrealizedanysignificantlossesonourcashandcashequivalentsandinvestments,futurefluctuationsintheirvaluecouldresultinasignificantrealizedloss,whichcouldmateriallyadverselyaffectourfinancialconditionandoperatingresults.

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Risks Related to Ownership of Our Class A Common Stock

The market price of our Class A common stock has been, and will likely continue to be, volatile, and you could lose all or part of your investment.

ThemarketpriceofourClassAcommonstockhasbeen,andwilllikelycontinuetobe,volatile.SincesharesofourClassAcommonstockweresoldinourIPOinMarch2017atapriceof$14.00pershare,ourclosingstockpricehasrangedfrom$14.80to$23.59,throughSeptember30,2017.InadditiontofactorsdiscussedinthisQuarterlyReportonForm10-Q,themarketpriceofourClassAcommonstockmaycontinuetofluctuatesignificantlyinresponsetonumerousfactors,manyofwhicharebeyondourcontrol,including:

• overallperformanceoftheequitymarkets;

• actualoranticipatedfluctuationsinourrevenueandotheroperatingresults;

• changesinthefinancialprojectionswemayprovidetothepublicorourfailuretomeettheseprojections;

• failureofsecuritiesanalyststoinitiateormaintaincoverageofus,changesinfinancialestimatesbyanysecuritiesanalystswhofollowourcompany,orourfailuretomeettheseestimatesortheexpectationsofinvestors;

• recruitmentordepartureofkeypersonnel;

• theeconomyasawholeandmarketconditionsinourindustry;

• negativepublicityrelatedtotherealorperceivedqualityofourplatform,aswellasthefailuretotimelylaunchnewproductsandservicesthatgainmarketacceptance;

• rumorsandmarketspeculationinvolvingusorothercompaniesinourindustry;

• announcementsbyusorourcompetitorsofsignificanttechnicalinnovations,

• acquisitions,strategicpartnerships,jointventures,orcapitalcommitments;

• newlawsorregulationsornewinterpretationsofexistinglawsorregulationsapplicabletoourbusiness;

• lawsuitsthreatenedorfiledagainstus;

• developmentsordisputesconcerningourintellectualpropertyorourplatform,orthird-partyproprietaryrights;

• theinclusionofourClassAcommonstockonstockmarketindexes,includingtheimpactofnewrulesadoptedbycertainindexproviders,suchasS&PDowJonesIndicesandFTSERussell,thatlimitorprecludeinclusionofcompanieswithmulti-classcapitalstructures;

• changesinaccountingstandards,policies,guidelines,interpretations,orprinciples;

• othereventsorfactors,includingthoseresultingfromwar,incidentsofterrorism,orresponsestotheseevents;

• theexpirationofcontractuallock-upagreements;and

• salesofsharesofourClassAcommonstockbyusorourstockholders.

Inaddition,thestockmarketshaveexperiencedextremepriceandvolumefluctuationsthathaveaffectedandcontinuetoaffectthemarketpricesofequitysecuritiesofmanycompanies.Stockpricesofmanycompanies,andtechnologycompaniesinparticular,havefluctuatedinamannerunrelatedordisproportionatetotheoperatingperformanceofthosecompanies.Inthepast,stockholdershaveinstitutedsecuritiesclassactionlitigationfollowingperiodsofmarketvolatility.Ifweweretobecomeinvolvedinsecuritieslitigation,itcouldsubjectustosubstantialcosts,divertresourcesandtheattentionofmanagementfromourbusiness,andadverselyaffectourbusiness.

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Sales of substantial amounts of our Class A common stock in the public markets, or the perception that they might occur, including when the lock-up periodsend, could cause the market price of our Class A common stock to decline.

SalesofasubstantialnumberofsharesofourClassAcommonstockintothepublicmarket,particularlysalesbyourdirectors,executiveofficers,andprincipalstockholders,ortheperceptionthatthesesalesmightoccur,couldcausethemarketpriceofourClassAcommonstocktodecline.Wehadatotalof59,142,143sharesofourClassAandClassBcommonstockoutstandingasofSeptember30,2017.Oftheseshares,1,350,000sharesofClassAcommonstockand34,268,288sharesofClassBcommonstockaresubjecttothelock-uprestrictionsthatwereenteredintoinconnectionwithourfollow-onpublicoffering,ofwhich1,350,000sharesofClassAcommonstockand16,298,855sharesofClassBcommonstockwillbecomeavailableforsaleonNovember14,2017and17,969,433sharesofClassBcommonstockwillbecomeavailableforsaleonDecember6,2017.Theremainingsharesofourcommonstockarefreelytradable,withoutrestrictionsorfurtherregistrationundertheSecuritiesAct,exceptthatanysharesheldbyour“affiliates”asdefinedinRule144undertheSecuritiesActwouldonlybeabletobesoldincompliancewithRule144andanyapplicablelock-upagreementsdescribedbelow.

Whentheapplicablelock-upperiodsdescribedaboveexpire,weandoursecurityholderssubjecttoalock-upagreementwillbeabletoselloursharesinthepublicmarket.Inaddition,theunderwritersmay,intheirsolediscretion,releaseallorsomeportionofthesharessubjecttolock-upagreementspriortotheexpirationofthelock-upperiod.

Inaddition,certainholdersofourcommonstockare,subjecttocertainconditions,entitled,undercontractsprovidingforregistrationrights,torequireustofileregistrationstatementsforthepublicresaleoftheClassAcommonstockissuableuponconversionofsuchholders’sharesofClassBcommonstockortoincludesuchsharesinregistrationstatementsthatwemayfileforusorotherstockholders.

Salesofoursharesasrestrictionsendorpursuanttoregistrationrightsmaymakeitmoredifficultforustosellequitysecuritiesinthefutureatatimeandatapricethatwedeemappropriate.ThesesalesalsocouldcausethetradingpriceofourClassAcommonstocktofallandmakeitmoredifficultforyoutosellsharesofourClassAcommonstock.

Inaddition,wehavefiledaregistrationstatementtoregistersharesreservedforfutureissuanceunderourequitycompensationplans.Subjecttothesatisfactionofapplicableexerciseperiodsandexpirationofthemarketstandoffagreementsandlock-upagreementsreferredtoabove,thesharesissueduponexerciseofoutstandingstockoptionsorsettlementofoutstandingrestrictedstockunitswillbeavailableforimmediateresaleintheUnitedStatesintheopenmarket.

Wemayalsoissueoursharesofcommonstockorsecuritiesconvertibleintosharesofourcommonstockfromtimetotimeinconnectionwithafinancing,acquisition,investment,orotherwise.Forexample,weagreedtoissuesharesofourClassAcommonstockwithanaggregatevalueofupto$2.3millionupontheachievementofcertainmilestonesinconnectionwithouracquisitionofSemanta,ofwhich12,492sharesofClassAcommonstockwereissuedinAugust2017uponpartialsatisfactionofcertainmilestones.AnyfurthersuchissuancecouldresultinsubstantialdilutiontoourexistingstockholdersandcausethemarketpriceofourClassAcommonstocktodecline.

The dual class structure of our common stock has the effect of concentrating voting control with holders of our Class B common stock, including our directors,executive officers, and 5% stockholders and their affiliates, which limits or precludes your ability to influence corporate matters, including the election ofdirectors and the approval of any change of control transaction.

OurClassBcommonstockhastenvotespershareandourClassAcommonstockhasonevotepershare.AsofSeptember30,2017,ourdirectors,executiveofficers,andholdersofmorethan5%ofourcommonstock,andtheirrespectiveaffiliates,heldasubstantialmajorityofthevotingpowerofourcapitalstock.Becauseoftheten-to-onevotingratiobetweenourClassBcommonstockandClassAcommonstock,theholdersofourClassBcommonstockcollectivelycontrolamajorityofthecombinedvotingpowerofourcommonstockandthereforeareabletocontrolallmatterssubmittedtoourstockholdersforapprovaluntiltheearliestof(i)thedatespecifiedbyavoteoftheholdersofatleast662/3%oftheoutstandingsharesofClassBcommonstock,(ii)March29,2027,or(iii)thedatethesharesofClassBcommonstockceasetorepresentatleast10%oftheaggregatenumberofsharesofClassAcommonstockandClassBcommonstockthenoutstanding.Thisconcentratedcontrollimitsorprecludesyourabilitytoinfluencecorporatemattersfortheforeseeablefuture,includingtheelectionofdirectors,amendmentsofourorganizationaldocuments,andanymerger,consolidation,saleofallorsubstantiallyallofourassets,orothermajorcorporatetransactionrequiringstockholderapproval.Inaddition,thismaypreventordiscourageunsolicitedacquisitionproposalsoroffersforourcapitalstockthatyoumayfeelareinyourbestinterestasoneofourstockholders.

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FuturetransfersbyholdersofClassBcommonstockwillgenerallyresultinthosesharesconvertingtoClassAcommonstock,subjecttolimitedexceptions,suchascertainpermittedtransferseffectedforestateplanningpurposes.TheconversionofClassBcommonstocktoClassAcommonstockwillhavetheeffect,overtime,ofincreasingtherelativevotingpowerofthoseholdersofClassBcommonstockwhoretaintheirsharesinthelongterm.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our Class A commonstock and trading volume could decline.

ThetradingmarketforourClassAcommonstockdependsinpartontheresearchandreportsthatsecuritiesorindustryanalystspublishaboutusorourbusiness.Iffewsecuritiesanalystscommencecoverageofus,orifindustryanalystsceasecoverageofus,thetradingpriceforourcommonstockwouldbenegativelyaffected.IfoneormoreoftheanalystswhocoverusdowngradeourClassAcommonstockorpublishinaccurateorunfavorableresearchaboutourbusiness,thepriceofourClassAcommonstockwouldlikelydecline.Ifoneormoreoftheseanalystsceasecoverageofusorfailtopublishreportsonusregularly,demandforourClassAcommonstockcoulddecrease,whichmightcauseourClassAcommonstockpriceandtradingvolumetodecline.

We do not intend to pay dividends for the foreseeable future.

Wehaveneverdeclaredorpaidanycashdividendsonourcommonstockanddonotintendtopayanycashdividendsintheforeseeablefuture.Weanticipatethatfortheforeseeablefuturewewillretainallofourfutureearningsforuseinthedevelopmentofourbusinessandforgeneralcorporatepurposes.Anydeterminationtopaydividendsinthefuturewillbeatthediscretionofourboardofdirectors.Accordingly,investorsmustrelyonsalesoftheircommonstockafterpriceappreciation,whichmayneveroccur,astheonlywaytorealizeanyfuturegainsontheirinvestments.

Provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders toreplace or remove our current management, limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, oremployees, and limit the market price of our Class A common stock.

Provisionsinourrestatedcertificateofincorporationandrestatedbylawsmayhavetheeffectofdelayingorpreventingachangeofcontrolorchangesinourmanagement.Ourrestatedcertificateofincorporationandrestatedbylawsincludeprovisionsthat:

• providethatourboardofdirectorswillbeclassifiedintothreeclassesofdirectorswithstaggeredthree-yearterms;

• permittheboardofdirectorstoestablishthenumberofdirectorsandfillanyvacanciesandnewly-createddirectorships;

• requiresuper-majorityvotingtoamendsomeprovisionsinourrestatedcertificateofincorporationandrestatedbylaws;

• authorizetheissuanceof“blankcheck”preferredstockthatourboardofdirectorscouldusetoimplementastockholderrightsplan;

• providethatonlythechairmanofourboardofdirectors,ourchiefexecutiveofficer,president,leadindependentdirector,oramajorityofourboardofdirectorswillbeauthorizedtocallaspecialmeetingofstockholders;

• provideforadualclasscommonstockstructureinwhichholdersofourClassBcommonstockhavetheabilitytocontroltheoutcomeofmatters

requiringstockholderapproval,eveniftheyownsignificantlylessthanamajorityoftheoutstandingsharesofourcommonstock,includingtheelectionofdirectorsandsignificantcorporatetransactions,suchasamergerorothersaleofourcompanyoritsassets;

• prohibitstockholderactionbywrittenconsent,whichrequiresallstockholderactionstobetakenatameetingofourstockholders;

• providethattheboardofdirectorsisexpresslyauthorizedtomake,alter,orrepealourbylaws;and

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• establishadvancenoticerequirementsfornominationsforelectiontoourboardofdirectorsorforproposingmattersthatcanbeacteduponbystockholdersatannualstockholdermeetings.

Inaddition,ourrestatedcertificateofincorporationprovidesthattheCourtofChanceryoftheStateofDelawarewillbetheexclusiveforumfor:anyderivativeactionorproceedingbroughtonourbehalf;anyactionassertingabreachoffiduciaryduty;anyactionassertingaclaimagainstusarisingpursuanttotheDelawareGeneralCorporationLaw,orDGCL,ourrestatedcertificateofincorporation,orourrestatedbylaws;oranyactionassertingaclaimagainstusthatisgovernedbytheinternalaffairsdoctrine.Thischoiceofforumprovisionmaylimitastockholder’sabilitytobringaclaiminajudicialforumthatitfindsfavorablefordisputeswithusoranyofourdirectors,officers,orotheremployees,whichmaydiscouragelawsuitswithrespecttosuchclaims.Alternatively,ifacourtweretofindthechoiceofforumprovisioncontainedinourrestatedcertificateofincorporationtobeinapplicableorunenforceableinanaction,wemayincuradditionalcostsassociatedwithresolvingsuchactioninotherjurisdictions,whichcouldharmourbusiness,operatingresults,andfinancialcondition.

Moreover,Section203oftheDGCLmaydiscourage,delay,orpreventachangeofcontrolofourcompany.Section203imposescertainrestrictionsonmergers,businesscombinations,andothertransactionsbetweenusandholdersof15%ormoreofourcommonstock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sales of Equity Securities

OnAugust21,2017,weissued12,492sharesofourClassAcommonstocktofiveindividualsuponpartialsatisfactionofacontingentconsiderationearn-outprovisionenteredintoaspartoftheSemantaacquisitioninJanuary2017.

ThesalesoftheabovesecuritiesweredeemedtobeexemptfromregistrationundertheSecuritiesActinrelianceuponSection4(a)(2)oftheSecuritiesAct(orRegulationDorRegulationSpromulgatedthereunder)astransactionsbyanissuernotinvolvinganypublicoffering.Therecipientsofthesecuritiesineachofthesetransactionsrepresentedtheirintentionstoacquirethesecuritiesforinvestmentonlyandnotwithaviewtoorforsaleinconnectionwithanydistributionthereof,andappropriatelegendswereplaceduponthestockcertificatesissuedinthesetransactions.

(b) Use of Proceeds

OnMarch23,2017,theSECdeclaredourregistrationstatementonFormS-1(FileNo.333-216237)forourIPOeffective,andtheofferingcommencedthefollowingday.Theofferingdidnotterminatebeforeallofthesecuritiesregisteredintheregistrationstatementweresold.Goldman,Sachs&Co.andJ.P.MorganSecuritiesLLCactedasjointbook-runningmanagersfortheoffering.PacificCrestSecurities,adivisionofKeyBancCapitalMarketsInc.,WilliamBlair&Company,L.L.C.,JMPSecuritiesLLC,RaymondJames&Associates,Inc.,andCowenandCompany,LLCactedasco-managers.

Weregisteredanaggregateof10,350,000sharesofourClassAcommonstock,including1,350,000sharespursuanttotheunderwriters’optiontopurchaseadditionalshares.OnMarch29,2017,weclosedourIPO,inwhichwesold9,000,000sharesofourClassAcommonstock.OnApril18,2017,weclosedthesaleoftheadditional1,350,000sharesofourClassAcommonstock.Thesharesweresoldatapublicofferingpriceof$14.00pershareforanaggregategrossofferingpriceofapproximately$144.9million.Wereceivednetproceedsof$134.8millionafterdeductingunderwritingdiscountsandcommissionsof$10.1millionbutbeforedeductingofferingcosts.Weincurredofferingexpensesofapproximately$3.4million,ofwhich$1.0millionwerepaidintheyearendedDecember31,2016,$1.9millionwerepaidintheninemonthsendedSeptember30,2017,andtheremaining$0.5millionwillbepaidafterSeptember30,2017.Thus,thenetofferingproceeds,afterdeductingunderwritingdiscountsandofferingexpenses,wereapproximately$131.4million.Nopaymentsweremadetoourdirectorsorofficersortheirassociates,holdersof10%ormoreofanyclassofourequitysecurities,ortoouraffiliatesinconnectionwiththeissuanceandsaleofthesecuritiesregistered.

TherehasbeennomaterialchangeintheplanneduseofproceedsfromourIPOasdescribedinourfinalprospectusfiledwiththeSEConMarch24,2017pursuanttoRule424(b)(4).

(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

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Item 6. Exhibits.ExhibitNumber

Incorporated by Reference Filed

Herewith Exhibit Description FormFileNo. Exhibit

FilingDate

31.1

CertificationofDeanA.Stoecker,ChiefExecutiveOfficer,pursuanttoRule13a-14(a)/15d-14(a),asadoptedpursuanttoSection302oftheSarbanes-OxleyActof2002.

X

31.2

CertificationofKevinRubin,ChiefFinancialOfficer,pursuanttoRule13a-14(a)/15d-14(a),asadoptedpursuanttoSection302oftheSarbanes-OxleyActof2002.

X

32.1#

CertificationofDeanA.Stoecker,ChiefExecutiveOfficer,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002.

X

32.2#

CertificationofKevinRubin,ChiefFinancialOfficer,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002.

X

101.INS XBRLInstanceDocument. X

101.SCH XBRLTaxonomyExtensionSchemaDocument. X

101.CAL XBRLTaxonomyExtensionCalculationLinkbaseDocument. X

101.DEF XBRLTaxonomyExtensionDefinitionLinkbaseDocument. X

101.LAB XBRLTaxonomyExtensionLabelsLinkbaseDocument. X

101.PRE XBRLTaxonomyExtensionPresentationLinkbaseDocument. X# Thiscertificationisdeemednotfiledforpurposesofsection18oftheExchangeAct,orotherwisesubjecttotheliabilityofthatsection,norshallitbe

deemedincorporatedbyreferenceintoanyfilingundertheSecuritiesActortheExchangeAct.

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SIGNATURES

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,asamended,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersignedthereuntodulyauthorized.

Alteryx,Inc.(Registrant)

By: /s/DeanA.Stoecker

DeanA.StoeckerChairmanoftheBoardofDirectorsandChiefExecutiveOfficer(PrincipalExecutiveOfficer)

By: /s/KevinRubin

KevinRubinChiefFinancialOfficer(PrincipalFinancialandAccountingOfficer)

Date:November9,2017

64

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OFTHE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002

I,DeanA.Stoecker,certifythat:

1. IhavereviewedthisQuarterlyReportonForm10-QofAlteryx,Inc.;

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant’sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))fortheregistrantandhave:

a. designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensure

thatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b. evaluatedtheeffectivenessoftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

c. disclosedinthisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant’smostrecentfiscal

quarter(theregistrant’sfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting.

5. Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant’sauditorsandtheauditcommitteeoftheregistrant’sboardofdirectors(orpersonsperformingtheequivalentfunctions):

a. allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreporting,whicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreportfinancialinformation;and

b. anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant’sinternalcontroloverfinancialreporting.

Date:November9,2017/s/DeanA.StoeckerDeanA.StoeckerChiefExecutiveOfficer(PrincipalExecutiveOfficer)

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OR 15d-14(a) OFTHE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002

I,KevinRubin,certifythat:

1. IhavereviewedthisQuarterlyReportonForm10-QofAlteryx,Inc.;

2. Basedonmyknowledge,thisreportdoesnotcontainanyuntruestatementofamaterialfactoromittostateamaterialfactnecessarytomakethestatementsmade,inlightofthecircumstancesunderwhichsuchstatementsweremade,notmisleadingwithrespecttotheperiodcoveredbythisreport;

3. Basedonmyknowledge,thefinancialstatements,andotherfinancialinformationincludedinthisreport,fairlypresentinallmaterialrespectsthefinancialcondition,resultsofoperationsandcashflowsoftheregistrantasof,andfor,theperiodspresentedinthisreport;

4. Theregistrant’sothercertifyingofficerandIareresponsibleforestablishingandmaintainingdisclosurecontrolsandprocedures(asdefinedinExchangeActRules13a-15(e)and15d-15(e))fortheregistrantandhave:

a. designedsuchdisclosurecontrolsandprocedures,orcausedsuchdisclosurecontrolsandprocedurestobedesignedunderoursupervision,toensure

thatmaterialinformationrelatingtotheregistrant,includingitsconsolidatedsubsidiaries,ismadeknowntousbyotherswithinthoseentities,particularlyduringtheperiodinwhichthisreportisbeingprepared;

b. evaluatedtheeffectivenessoftheregistrant’sdisclosurecontrolsandproceduresandpresentedinthisreportourconclusionsabouttheeffectivenessofthedisclosurecontrolsandprocedures,asoftheendoftheperiodcoveredbythisreportbasedonsuchevaluation;and

c. disclosedinthisreportanychangeintheregistrant’sinternalcontroloverfinancialreportingthatoccurredduringtheregistrant’smostrecentfiscal

quarter(theregistrant’sfourthfiscalquarterinthecaseofanannualreport)thathasmateriallyaffected,orisreasonablylikelytomateriallyaffect,theregistrant’sinternalcontroloverfinancialreporting.

5. Theregistrant’sothercertifyingofficerandIhavedisclosed,basedonourmostrecentevaluationofinternalcontroloverfinancialreporting,totheregistrant’sauditorsandtheauditcommitteeoftheregistrant’sboardofdirectors(orpersonsperformingtheequivalentfunctions):

a. allsignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreporting,whicharereasonablylikelytoadverselyaffecttheregistrant’sabilitytorecord,process,summarizeandreportfinancialinformation;and

b. anyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheregistrant’sinternalcontroloverfinancialreporting.

Date:November9,2017/s/KevinRubinKevinRubinChiefFinancialOfficer(PrincipalFinancialandAccountingOfficer)

Exhibit 32.1

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I,DeanA.Stoecker,ChiefExecutiveOfficerofAlteryx,Inc.(the“Company”),doherebycertify,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002,thattothebestofmyknowledge:

• theQuarterlyReportonForm10-QoftheCompanyforthefiscalquarterendedSeptember30,2017(the“Report”)fullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934,asamended;and

• theinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsoftheCompany.

Date:November9,2017/s/DeanA.StoeckerDeanA.StoeckerChiefExecutiveOfficer(PrincipalExecutiveOfficer)

Exhibit 32.2

CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I,KevinRubin,ChiefFinancialOfficerofAlteryx,Inc.(the“Company”),doherebycertify,pursuantto18U.S.C.Section1350,asadoptedpursuanttoSection906oftheSarbanes-OxleyActof2002,thattothebestofmyknowledge:

• theQuarterlyReportonForm10-QoftheCompanyforthefiscalquarterendedSeptember30,2017(the“Report”)fullycomplieswiththerequirementsofSection13(a)or15(d)oftheSecuritiesExchangeActof1934,asamended;and

• theinformationcontainedintheReportfairlypresents,inallmaterialrespects,thefinancialconditionandresultsofoperationsoftheCompany.

Date:November9,2017/s/KevinRubinKevinRubinChiefFinancialOfficer(PrincipalFinancialandAccountingOfficer)

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