BASIS of PRESENTATION
Certain Definitions
As used in this report, unless expressly indicated or the context otherwise requires, references to:
“OneStream,” “we,” “us,” “our,” the “Company” and similar references refer to (1) OneStream Software LLC and its consolidated subsidiaries prior to the consummation of the Reorganization Transactions and the IPO and (2) OneStream, Inc. and its consolidated subsidiaries, including OneStream Software LLC, after the consummation of the Reorganization Transactions and the IPO.
“Amended LLC Agreement” refers to OneStream Software LLC’s sixth amended and restated operating agreement, which became effective as part of the Reorganization Transactions.
“Blocker Mergers” refers to the acquisition by OneStream, Inc. of LLC Units held by the Former Members and in exchange for which OneStream, Inc. issued shares of Class D common stock.
“Continuing Members” refers to certain KKR entities, all other pre-IPO members of OneStream Software LLC that were not party to the Blocker Mergers and all pre-IPO members that held incentive compensation units of OneStream Software LLC immediately prior to the Reorganization Transactions.
“Disinterested Majority” refers, with respect to a potential redemption of LLC Units, to the majority of OneStream, Inc.’s board of directors who are disinterested, as determined by OneStream, Inc.’s board of directors in accordance with the General Corporation Law of the State of Delaware, or the DGCL, which must exclude any director who is (1) the beneficial owner of the LLC Units to be redeemed, (2) affiliated with the beneficial owner of such LLC Units or (3) serving on OneStream, Inc.’s board of directors as a nominee of the beneficial owner of such LLC Units or its affiliates.
“Former Members” refers to certain pre-IPO members of OneStream Software LLC that were corporations that merged with and into OneStream, Inc. as part of the Reorganization Transactions and that contributed their LLC Units to OneStream, Inc. in exchange for shares of Class D common stock. The Former Members include all pre-IPO members of OneStream Software LLC that are not Continuing Members following the Reorganization Transactions, including certain affiliates of KKR.
“IPO” refers to the initial public offering of OneStream, Inc., completed on July 25, 2024.
“IPO Synthetic Secondary” refers to the use of the net proceeds from the sale of 3,006,037 shares of Class A common stock by OneStream, Inc. in the IPO to purchase an equal number of issued and outstanding LLC Units (and purchase and cancel an equal number of shares of Class C common stock) from KKR Dream Holdings LLC and certain other Continuing Members at a purchase price per LLC Unit equal to the IPO price per share of Class A common stock, net of underwriting discounts and commissions.
“KKR” refers to KKR Dream Holdings LLC and affiliated entities. KKR is both a Former Member and a Continuing Member.
“LLC Units” refers to the single class of non-voting common units of OneStream Software LLC.
“Reorganization Transactions” refers to the internal reorganization completed in connection with the IPO, following which OneStream, Inc. manages and operates the business and controls the strategic decisions and day-to-day operations of OneStream Software LLC as sole manager and includes the operations of OneStream Software LLC in its consolidated financial statements.
“Secondary Offering” refers to the sale by the Company and certain selling stockholders of Class A common stock that was initially completed on November 18, 2024 and the underwriters’ subsequent
exercise in full of their option to purchase additional shares of Class A common stock that was completed on November 27, 2024.
“Secondary Offering Synthetic Secondary” refers to the use of the net proceeds from the sale of 6,892,009 shares of Class A common stock by OneStream, Inc. in the Secondary Offering to purchase an equal number of issued and outstanding LLC Units (and purchase and cancel an equal number of shares of Class C common stock) from KKR Dream Holdings LLC at a purchase price per LLC Unit equal to the public offering price per share of Class A common stock, net of underwriting discounts and commissions.
“TRA Members” refers to the parties to the Tax Receivable Agreement, which include KKR and other Continuing Members and certain Former Members.
Risk Factors Summary
Investing in our Class A common stock involves numerous risks, including those set forth below. This summary does not contain all of the information that may be important to you, and you should read this risk factor summary together with the more detailed discussion of risks and uncertainties set forth in Part I, Item 1A. Risk Factors of this report. Below are summaries of some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. Our Risk Factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.
Our rapid growth may not be sustainable or indicative of our future growth.
Our business could be harmed if we fail to manage our operations to support our rapid growth and potential future growth.
We have a history of operating losses and may not achieve or sustain profitability in the future.
We face intense competition and could lose market share to our competitors, which could adversely affect our business, operating results and financial condition.
If our industry does not continue to develop as we anticipate or if potential customers do not continue to adopt our platform and applications, our sales will not grow as quickly as expected, or at all, and our business, operating results and financial condition would be harmed.
If our platform or applications contain serious errors or defects, we might lose revenue and market acceptance and suffer harm to our reputation, and might incur costs to defend or settle product liability claims.
Our business depends substantially on our customers renewing their subscriptions and expanding their use of our platform. If our customers do not renew their subscriptions, if they renew on less favorable terms or if they do not add more products, solutions or users, our business, operating results and financial condition will be adversely affected.
Our sales cycles can be long and unpredictable, particularly with respect to large enterprises, and our sales efforts require considerable time and expense.
Our revenue growth depends in part on the success of our strategic relationships with third parties, including go-to-market and implementation partners, and if we are unable to establish and maintain successful relationships with them, our business, operating results and financial condition could be adversely affected.
We recognize revenue from SaaS subscriptions to our platform over the terms of these subscriptions. Consequently, increases or decreases in new sales may not be immediately reflected in our operating results and may be difficult to discern.
Our continued transition to a SaaS-based model could cause our operating results to fluctuate.
Changes in our pricing model could harm our business, operating results and financial condition.
Our quarterly results might fluctuate, and, if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially.
Our long-term success depends, in part, on our ability to expand the sales of our platform to customers located outside of the United States, and thus our business is susceptible to risks associated with international sales and operations.
If our security controls or those of our vendors are breached or unauthorized, unlawful or inadvertent access to customer data or other data we maintain or process is otherwise obtained, or if the information systems on which we rely experience any other type of cybersecurity incident, or any technical failure that compromises our information or operations, our platform and applications might be perceived as insecure, we might lose existing customers or fail to attract new customers, and we might incur significant liabilities.