Mandiant (MNDT) 28 Oct 202020 Q3 Earnings call transcript

Good day, everyone. And welcome to the FireEye Third Quarter 2020 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] Also, this call is being recorded. would turn I to call time, Patterson. Kate this like the to over At ahead. go Please

Officer; for today’s Josh. and of Executive you, of Frank Executive investors.fireeye.com. are the today financial live XXXX. Relations of Key, XXXX. joining on And for Kevin section the being is Chief accessed call call today, us issued quarter and Products me Officer FireEye’s Chief broadcast market President, Accounting FireEye’s results With from of FireEye results This Officer FireEye’s Investor call the discuss the Thank at After a FireEye; to afternoon. Verdecanna, be third Financial for Mandiant President FireEye’s Mandia, Good Vice Christopher Internet website thanks Solutions. press quarter over for closed the third on Executive of release can Chief the Vice to everyone the and announcing

uncertainties, future after representing some update not from results are these strategies. forward-looking actual of those number our FireEye’s forward-looking management which you let Before FireEye’s to me These the risks begin, expectations, no make obligation certain statements and including this FireEye’s statements of subscriptions we the financial statements that as market go-to-market guidance to and priorities, by relating rely and metrics, of and drivers for expectations them and statements our call. and remind forward-looking and FireEye’s a course as undertake anticipated and apply and initiatives, business availability expansion opportunities materially the services, investments, growth and could of control, involve and benefits, and should These beyond transformation, call, and for differ offerings, we to of capabilities statements. views will statements in results cause which expectations of new the you during these on plans products, enhanced today,

hour of risks Investor be as from and to documents earnings Copies ago. the our Relations of description detailed an the uncertainties, website. the SEC by of refer our section filings, may our these visiting as posted well a For or please SEC obtained release

financial certain discussed on call. will this non-GAAP Additionally, be measures

on We comparable the measures section these of for most the reconciliations website, as earnings financial directly Investor provided in GAAP in release. non-GAAP measures the financial as well have the Relations

of to like posted point I’d the I’ll supplemental on that statements turn that, With Kevin. also have over financial call Finally, section slides we the out the Investor and website. Relations to

like you to joining to of I proud us loved hope FireEye I for remain new we have how us. the for healthy that ones challenges have all and adapted and Thank of you, emerged all thank And safe. you of I’d and today that Kate. and team your are

FireEye transform while to each results continue We quarter. strong delivering

range last turn the quarters then our of call we continued third the on recent SaaS metrics. exceeded over provide outlook and bottomline said for for results of on the roadmap Advantage, platform. cloud on for dive ago. our Products our remarks our quarter the Mandiant Frank we Vice of will we the I'll do topline quarter over the the solutions and highlights stabilization third both year. updated emerging then businesses operating financial few discuss reflect third both the demand more full Today, of Verdecanna results the our the with product Advantage, some wrap and up details native offerings Our and a quarter the strong guidance services. and Executive weeks Mandiant call fourth force the and which and we products. we of approximately We driving deeper Solutions to the President launched prepared both platform did innovations provide discussion will Mandiant Solutions our And Chris quarter what deployed FireEye Chris Mandiant in Control three to the our will additional in and the behind I including and Key, for

net at non-GAAP per In all and share operating levels. fact, were all record income income, time earnings our revenue

share the of highlights. Let some me

Third That's by quarter above ago. offerings, platform our as Platform, Validation of Intelligence revenue was our which growth and and Security grew range. products. subscription security million. XX% as Managed Defense includes compared category, well cloud $XX cloud-based was services guidance million again category year $XXX a the control midpoint Revenue led our our This Threat managed to

Validation revenue continue Combined $XX tempo. a cloud accounted the XXXX than equipped of XX% stronger in of at and in Threat the very for to XX% recurring more million. high Consulting and third row This operate Endpoint, to increased category. our Demand revenue annual services quarter grew the quarter, of the a professional category our growth expertise record in mature compares total and quarter and in XXth services of services drive third exceeded a third for compared that revenue. XX% for professional Security continued we appliance-based for XXXX. the to Cloud Mandiant of Revenue ever a year-over-year. This Intelligence this Our platform and this again of and the category our is category and third business X% for marks sequentially fourth of quarter quarter row revenue the XX% XX% quarter in to services XXXX. revenue our our

products control to Solutions, the of products continues shift Mandiant cloud-based appliance-based in products and our appliance-based as many our traditional organizations. composite Even deeply embedded revenue our from remain to

and the $X million. new of the customers first transactions In fact, since in added logo the in And we income than greater product close sequential these And we both growth non-GAAP XXX per bottom ARR a quarter XX had quarter XXXX. operating margin achieved income, our We operating increased and continuing while related We and earnings non-GAAP net sequentially. metrics improve XX% and year-over-year record fourth these to share. for results and generated line. time record

emerged that time, two Since last related of mentioned we Now, we were focus our structured FireEye. brands, FireEye have separate Mandiant Solutions. we around two seeing year areas business within and different, Products but

and our each the to go-to-market We innovation, have of leverage been able improve equity accelerate brand.

the a knowledge innovations FireEye Products highlight best are product led believe Products layer that in are leverage to security what leverage, to recent Bill I offerings our to position. cyber customers maintaining we detection best enable frontline and attacks and our are security empower from product focused of few and Robbins. technologies our can are businesses that to security is our and of intelligence this frontline by agnostic best technologies provide on I all like our Our protect Mandiant and control Solutions would expertise. our

agent detection we features asset-based the AI-based and from to our from we to alert remediation and single our endpoint between interface. have to learn Helix, a improve made frontline Helix federated progress response continued creating to our data with products correlation, security accept through correlation directly several a We endpoint products machine email and new capabilities have increased including the streaming and our email from We flush user new queue integrations and management interface our significant have data from view learning Helix Other to view and added of that And intelligence. actions. Helix. perform in include capabilities emails

Cloud our Advisory for Advisory Helix cloud the capabilities in empower and a Security management added better We Cloud to up, also security Product and customers. to more checks is Cloud To by for security pivot streamline Assessment Mandiant designed sum robust, and equipped XX more operations customers added to team. stronger compliance FireEye than

and of innovation innovation improve detection, Our releases and the architecture to prevention endpoint highlight speed investigation power security quarter our during improve endpoint the third improve workflows.

and With Intelligence remediate. email to applying this event streamer action and to windows stops to guard, to Specifically, modules, logs the a enricher. important adoption We remediation and in private analysts growing more Microsoft X.X and increase unauthorized an our with analysts force we from event automate have integration VIPs. effective with AWS streamer data, on streaming stealing metal detects Mandiant to Grid to workflow investments In we SIMs. ways our recipients providing are we IDs meets released announcement number announced large in residency released event The our instances. features, to OXXX guard this Security user new capability understand accelerated passwords. scanning our module Helix The endpoint strict area. retroactive we many to in labeled remains and directory quarter data module the email, We product building led on that our cloud automates scanning completing for centers for ability and product demand obtaining alert Microsoft enricher focused protect And module XX% easier process growth Smart are outbound Network process made our of and data enhancements, X.X outbound three allowing And improvements AWS. third-party our to have which and that across of requirements and from our Azure and family. driver a run in the processes by use and for customers. And by take active release bare the of customers the our started we integration

our us to and growth is and strategy foundation this and in to Intelligence, the which the in any using of that native Intel our of Solutions our the to security-as-a-service consists any Managed with and believe of Security make you Intel platform Consulting, use expertise allow Mandiant milestone cloud Mandiant Now, expertise I'd all of security ease our Solutions, Threat accessible that significant Therefore, launch a scale software delivery customers achieved Advantage infrastructure. security update sizes, October, in elegance platform. Building on Defense products simplicity, of we Advantage, any We of to Mandiant Validation. like strategy. solutions our the and by actionable environment Mandiant of

believe in our increasing the technology. Threat We and Validation be adoption of also our Intelligence it will instrumental

it will and customer Now, I'd platform to Advantage our details the turn be you. Mandiant over like call to our who our intelligence to and how experts. frontline discussing Key, to access revolutionizes Chris over of Chris, the

Thanks, Kevin.

improving addressing with many bundled solutions Advantage they earlier questions time? we experts. security efficiently? Managed launched and they managed, compromised? budget formerly offer SaaS enabling services. customers be with mentioned, focused effectively customer Security As are Are expertise an Advantage MDR posture by frontline compromised? for we our and of to Mandiant our be backed deliver and are technology plan our Advantage our easy-to-deploy, will Can from a and Defense, all Consulting our our to intelligence customers frontline this offerings our delivery, there fully Advantage provides us platform With Verodin, powered integrated the driven goal meet things using over flexible security Is backed And to Threat including are ranging offerings expert Intelligence, being from These XXX% the on their top month, by customers wherever to intelligence. technology Validation, they in maturity Mandiant Mandiant they asking. will business. to opportunities new for up easy-to-use resourcing our perspective. and opens a interface our Mandiant,

expect eyes Customer improving their highlighting leveraging day-to-day Experts workflows, and world embed Mandiant most Mandiant their We we customer that teams skill breach team, Consultant guiding by and intelligence their up and able and the other will security the will through virtual of on their focus. important leveling our what to where of extension feel see frontline to Advantage, is like as are them overlay effectiveness. be analysts into

response a us Solutions by incident of Mandiant intelligence this to could Consultant customers improve For leveraged through to powerful allows time their Advantage scale across Imagine Advantage for unlimited tomorrow of while battling users. provides defenses. a if an real single thousands expertise. number be immediately technology learns what an scale our Mandiant

vision products customers, enables intelligence, potential expanding original empower Helix, that in base enables unique. exponential. have, consultant customer in expands For Advantage also regardless of the us is deployed. addressable of the to with and the effect expertise extend SIM of team ripple Advantage our for our or reach us our they've by every number we building believe security makes market the us I control and world impact total the Mandiant across every what to Advantage on our

Given go-to-organization to continue vendor Advantage may for of controls. is have for security FireEye position knowledge to we the position but relevant enables hold as the we their that believe teams that also we incident the and unique and another Products, incredibly be us response, unparalleled this the uplevel have chosen to leverage to scale attackers valuable. unique

enable will market advantage try, to an Going us to solution easy expanded new to easy as opportunity. SAS of take to buy this

finished a know represented moving first to and reporting we customers intelligence from on customers Threat was The to Mandiant enabling traditional know direct launched how Intelligence. to know customers, when our raw in we our we module Advantage what Intelligence giving we Threat to access a on This and focus provide our data shift our it.

customers XXXX a differentiator, this cost provide sign no for we've up indicators source new a source included this to level disruptive. and few in seen our our new easily and sign of of weeks, providing machine and of version. that offering. trialing In many this requested has is those the the users. looking part approach, many of free our is paid The freemium to offerings. our are to impact also we intelligence think see unique to millions forward tier their beyond. decided enabling As approach on hundreds a and learning experience have paid equal to freemium already information be vendors have tier, just Confident major we first providing a new business We driven up and the what approach and score organizations of We're at open getting we confidence will data pricing, open on demo free for proprietary

look their our able clicks. actor through in on on believe technique threat demand, sort five to retailer to the By able to remarked a of a and actual deploy intelligence completely to a and their the rapidly quantifiable see being our recent changes By of be Advantage. In not Mandiant but this this XXXX, end ‘XX, next plans resources prioritize we UI address from for of shortcomings. any to just capability, breaches well add environment, testing enable as demo using seeing to his data global his a Validation years, frontline just upcoming we We're we their continuing few to in validation add its additional QX resilience Advantage environment powerful we against modules validate customers to out actors’ year, build their a the and as I'm will changer. that investigating Mandiant forward validating in As plan incredibly started. response is that will next Mandiant Advantage is managed we Mandiant quarters. by both and getting go QX customers initial against the to this excited validation. demand what environments game the over capabilities just to will move several

that remind all report. you four Chris, In closing, want I much we XXXX. thank of very that you the for of to priorities had for

then teaming intend three we enrolled and Intelligence. the year. investigations incident First, best at perform last be Threat the more response, the We red to during during timeframe first quarters of XXXX same

to Services expanding security areas, IoT, continued capacity Mandiant We in to red add consulting and transformation teaming. organization services including cloud our security, our all

workloads migration the of to support a Service. Security we address to and lot again including our Network threat enhancements our cloud. cloud-based with this to to Second, of multiple Cloud Advisory of infrastructures. defend our with detection X.X extend secure and Assessment expertise And Security we our acquisition intend launch release priority Cloud of dynamic And

Expertise Third, the in intend through world seamlessly technology. at best our we we to intend security Demand On validation. be to And deliver finally, the our

and the from attackers our you point validation working platform I platform. platform and with validation be I stop that when to also combining Chris, available at are them or slow intelligence, our against new will managed offerings validation most detect on to Advantage demand, the security commonplace. instrumental most. that of security between will as often measuring need also validation believe emerging Mandiant well adoption. experts attacks, the heard the the in customers into and security to continuous our gap believe process our we're attacks. safeguards Advantage The As a too at effectiveness make as security close make adapt expertise the techniques We're current these simple, our will and Mandiant

more use experts over with to proof quarter, the our services. non increase now, point, delivery our of third the utilization I'd to the to increased in XX% experts Revenue Frank. like call of Expertise Expertise from Demand And turn response a As again than On of to of the by generated diversify. incident continues XXX% adoption approximately the Demand of On and continues use for these

Kevin, the Thanks, everyone call. to on hello and

updated of remind that move results and and operating I'll details to me and we let on to cash QX except referring our you our Before revenue the guidance QX -- XXXX, for for flow. non-GAAP QX be metrics

Our key our our quarters. second in believe QX our for extended non-GAAP takeaways set growth measures expense XXXX. of other are emerging There remains across saw compensation, QX on to non-cash stock-based three close have trend increased of convertible a XXXX. QX our exclude and products and results. stage in strength stabilization amortization debt, the year-to-date with enter and the on restructuring outlook solid and interest foundation the and great products, the XXXX items. we've of solutions, first intangibles, profit non-recurring the And and mature and Demand results, we our building solutions I from strong we for and revenue strong more the to a charges

we the our ‘XX. guidance to Turning all we midpoint QX performance specifics metrics. delivered of We to above had our by of expenses across the financial results. revenue compared $XX million, was million another of our In and that $XX QX reduced strong operating range revenue -- key QX, record

result, another a quarter operating record As delivered we for profit.

of flow and $XX cash $XX cash flow of operating positive delivered also We million free million.

length, turn of performance. indicators as renewals summary and level the regard quarter, remain our to refresh now changes of to without timing of details. subscriptions financial high our base the installed contract the revenue recurring insight of on cycles. or expansion recurring most focused large the revenue in hardware into the important let's provides We of the As average annualized ARR short-term

rates of volatility or for growth all billings. can we've the in these factors any As year-over-year cause seen,

better revenue believe our followed transformation But billings progress of ARR know we widely are indicators continue journey, and the reasons these current environment. be especially metric. in to on a our we For

are So no some QX billings billings, performance. longer provide we to guiding will while we our on color

QX, point the improve reasons was each of rates outlined the QX X% is year-over-year million I For from delivered growth we we points This percentage continue year-over-year few decline QX, $X of down million low ‘XX. believe which will will or X% than $XXX growth. few the to for billings, billings the much better in believe a in by quarter. a billings in year-over-year I the

First, compare to XXXX activity due the the refresh the first grow ARR. and the sequential the the difficult in for and our of of in related product half over half This related in generation us, has validated by With normalized. billings growth behind and product of first increase were billings that related third appliances have XXXX. product trends

seeing growth solutions are for subs category, we strategies. their Second, a map security cloud the strong in emerging organizations and as platform our out long-term pipeline

than greater non-financial are and our of Finally, customers trending new metrics dollar transactions up. million operating ARR logo all

seeing per four as $X XX% only million transactions, trend well. the of or than the transactions In at upward the transaction Looking included large of products number but is more and increasing, number QX, or greater not the solutions we services. are products

we of trend, our to strong quarter-to-date XXXX. of very to in quarter, year-over-year was on and endpoint, in the the visibility decline is on had services year-over-year slightly subs rate a in deals The similar than platform, to the this achieved billings some consistent some in timing category Cloud take a level back Helix, prior for managed a very the expect than cloud deals moment a we first growth but growth pipeline category. revenue additional first a I in aberration ARR, believe rather XXXX. in the context year-over-year and and or better the and a billings the occurred growth Before renewals I year a some provide negative the performed and let in and due to would large growth rate -- quarter. of fourth turned me reported of large quarter, Intel half validation The make well QX. sizable rate of Defense year-over-year, QX what turn rate half to ‘XX the an to with QX result billings the this very bounce Managed renewals. our Based close the into decline

recognized sequentially the our outperformance Revenue increased $X by over the sales forensic X% to for due increased XX% are The with compared of Looking services sequentially, ARR at the and platform, accounted revenue year-over-year. appliances with versus our of for revenue, solutions ARR, approximately category Every largely of and product ARR has this quarter, of cloud-delivered category with strong in QX. revenue revenue category in of cloud $XX X% ‘XX. cloud approximately compared this flat our related X% decreases expectation Services prior for business stabilized. was portion this was also This category managed showed versus increase strength three with QX, with total flat subscriptions the up Professional QX. Revenue to revenue with quarters. indicator year-over-year, continued by of XX% and year-over-year. category and subscription endpoint, million total expectation year-over-year, cloud-based record and important category XX% decreased sequentially having for up related an QX product our Intel associated million increased about business this a of sequentially validation. in and PX led XX% front. which up to on-premise growth in the and product

XX%. We gross $X.XX our high The continued the the QX Operating at events down the share million related flat reductions resulted ’XX, range. continue levels the about and end expenses of as structure, our half guidance. QX our or facilities high profit gross transformation and pandemic cost first $XX and than reduced to quarter. in of operating travel, from with chargeability, reflecting lower and activities, operating XX%, following and were expected estimate average about which ‘XX end associated of facilities the million services costs were our $XX resulted per sequentially and and costs. rates XX% of reduced Total as flat guidance historical high maintain relatively margin travel We of of in this $X.XX utilization on above margin well was of of record earnings savings million of expense combination or $X revenue higher above margin with

flow. sheet Turning balance cash and to the

Our our increase by QX, deferred million. closed worldwide, million the as QX. from The in quarter expenditures than most we healthy. DSOs of balance fewer revenue. $XX appliances The to our reflects well driven cloud-based the of million quarter ended record purchase $XX was as sequential our receivables, appliance as towards quarter million cash short-term were With continued very from years. $X amortization of ended remains from year was continue the days sheet with We XX in with free flow demo with facilities quarter. $XXX an $XXX in solutions, cash decrease shift low. more a prior million ended at $XXX less the capital of end of sales prior in the million We of and million. We the $XXX investments increase of the based on billings

Before to reach our levels incoming the we've we business. past seen QX, our get in federal bookings federal outlook, the record with two have years. our had In about strongest several growth questions we

and to outlook turn for current XXXX. let's our QX Now

earnings per our the With early year. continued revenue and and we in QX guidance revenue QX, momentum are posted strong we for raising see the share results the in

QX to For revenue million the in of range equal revenue expect the QX, midpoint. approximately at we million, to currently $XXX $XXX

in the resulting repeated appliance a revenue. PX be in taking QX, not and assuming large sales will conservative more are We less approach that upfront

services our be approximately X%, the flat that We QX the be point. revenue also days holidays billable I to growth a which due revenue guidance implies will of relatively expect low with believe On of in because year-over-year will QX. basis, less

specifically are growth not I quarterly guiding Although, here. XXXX, to revenue year-over-year will see we reaccelerate we from believe rates

and We between expect XX% gross margin XX%. of

expect services about with holidays. long-term working chargeability and the in margin XX% to we days to return the quarter, to on the average to return fewer as average utilization gross due our We of

expense $X million sequential XX%, This margin implying higher and between XX% in expenses. operating billings. to primarily growth expect to in due of by million $X commission a increase sequential We is the operating driven

share We earnings $X.XX. per and between $X.XX expect fully diluted of

$XXX million are raising an For to midpoint XXXX, million at the increase $XXX narrower range range. a we to million, guidance of on our $XX revenue

between We XX.X% expect gross XX.X%. margin of and

operating assumptions ongoing outlook. COVID-XX which guidance -- our are operating margin reflects guidance consider to on including your you assumptions impact to Embedded that some our this range year-to-date as the and of QX metrics our the results We raising models. you pandemic build about X.X% within are X%, our should

have it increase First, some expect we T&E restrictions as compared globally. QX reduced relaxed with levels. operating effectively as facilities That are become on restrictions costs operate said, and that to can at slightly travel continued, is clear we

-- we levels. to to do post-pandemic return cat So not expect pre-pandemic these categories expense

anticipating the surge services somewhat on the remain we cautious not Second, year, we same based million. the specifically, More our current in in of services when prepaid impact billings outlook, services potential about of are QX we $XX pandemic last on our saw billings growth exceeded rates.

by are strong. qX. year-over-year the outlined anticipating expect demand to Although, no category, will of indication strong deliver ability in performance or services we our extremely billings softening likely remained is means both decline This an services revenue as we continued in in revenue section, that services

expect grow. also Expertise sales We Demand to On to continue

a However, for revenue services billings indicator are better why time services more versus which performance. or prepaid services the on contracts, for mix and is material fixed bid dependent is of

outlook the from Finally, material our solution. assumes QX launched newly impact Advantage Mandiant no

lessen. to I'm we will emerging now headwinds demonstrates Let to strength open show Operator, call of as me saying the we to that adoption all business. year-to-date solutions confident and remain, growth the for increase have questions. continue our on uncertainties progress that of our performance although by we our believe fronts, impacted w close the will expect the

with you. Instructions] question Sterling [Operator first comes from Thank JPMorgan. Our Auty

You question. may your proceed with

the is This for question. guys. on Thanks Hi, Matt for taking Sterling.

you your about Thanks. caught if break quarter? product I talked ARR really in the driving was wondering product think is in remarks, the -- I prepared I could growing. this What down. performance in you that

across strong product had quarter We really Yeah. the Board. a

had specifically, good products network, the on think towards and the better quarter And fed quarters. fed and email quarters. I larger do in a see mix is QX and products Helix, we endpoint

last quarter now solutions Got you. or Solutions. for And the with Mandiant you about working accepting talked third-party

been seen what's so the terms uptake far in you've reaction Now from of customers? additional

Chris, please? you that this is Kevin to take like Would speaking. question,

kind a prospects I very the definitely mean, be into our FireEye we're have. level two access of it. customers and our the to decisions well the to of existing passive to the about of we as control excited had product They're data leverage Yeah. and having a One, that made, able they've reactions. expertise Control our regardless Absolutely. talking as uniqueness deeper intelligence looking customers that about excited we've are

Additionally, analysts, it's resonated something well. that with industry has definitely

So, it's good been a positive far reaction around. so very all

guys. Great. Thanks,

Thank you.

question next Stifel. Gur from Talpaz Our with comes

you’re You question. may your proceed

This actually Chris Speros is Gur. for Hi. on

For incremental related both XXX relationship you some Office for to particularly and provide adding Microsoft, with the you've surrounding defender details demand within to FireEye’s Azure, that enhance Kevin, opportunity as seen as Intelligence technology? well Mandiant Assessment the can Security the Mandiant

out able Defense that overlay everywhere the we capabilities. our Yeah. be endpoints Microsoft's It's think intelligence, do but or that our Managed differentiates of can support. the with to on service, prospects But want is make to endpoint. we sure customers our endpoint and We other there just with to forensics with that ubiquity, besides what endpoints something lot want a our there's recognize we specifically

you endpoint, you, and our an We we your ability our and intelligence we've working manage overlay our sell can hard team. do of Microsoft's been the hey, advanced experts, prospects, security to and or customers in extension can to being an use So incorporate for put if that that.

over the So this course we're quarter. rolling out that of

was beta a Managed our have dependent that prior that, customer us that. wholly the Service on really on working Defense to with using endpoint. But We we're

is to going other we're of our several And over able parties to to so, that want the third time Microsoft to too. Intel we skills first be in expect apply

our and Products biggest product So as being as impact. differentiators which in right the expertise, But house want but and it's roof still same too that that under the want Controls leverage, the so. be same think other to let by We will the Obviously, seen advantaged in products that Mandiant a soon be Mandiant, Intel the take I agnostic. to to that direction. brand and FireEye being we and say said, move

than one being talk about makes And you ton of Can and products more degree validation technology in is greater to transactions? sense. included large being noticed of that million transaction XX% what and which included products. these in That a the the are Frank, driving $X you for included four

of benefits real the of how one mean, comprehensive our is. I FireEye is offering Yeah.

transactions, you if those is multiple lot you products at so what greater and multiple million look of And solutions. dollar see a

point a Helix product, And or lot or and so, couple you'll cases with a network, on a you'll and a On like Demand. that endpoint Defense Managed have we'll email subscription then in of Expertise add then

the we driving of a at one at for of this product ago, nice, years, But one a important when the a I there immediate than of just the spear and more on of broad the dependent time, of majority see we're needs set think business today way kind think have look point offering of and tip their isn't you I we that lot is So selling feel kind depending customer versus year is large when of really a they multiple we'd are. the lot that, the every being, services deal. platform the the -- products and comprehensive more vast or it two previous leads what really it in looked

So I within think way because customer to at level. operate expansion a much a we it's are bases healthier those getting higher

on and congrats the guys quarter. Thanks, great. That's

you. Thank

you, Thank Chris.

you. Thank

comes question next from Fatima Our with UBS. Boolani

You proceed question. in your may

a the Thank Good team. questions couple taking afternoon, Frank, questions. for you. you for

next you As I in and through know out about X have you how through performance shining. we X talk lifecycle us over well. quarters? those considerations some I appliances appliances And the we the those as the Gen base But a rolling Gen think quarter. of if up should the maybe of couple appliances that product as about highlighted this and in PX on the then the have your follow think you think Can about we base.

Yeah.

right it around, thing But I go going that we as think saw. when think be don't to think that went last only acute acute the third for typically This we generation. a And as to that a would couple be think the time. primarily would in the going it's can of to generation now, of the longer you happening XXXX. refresh to appliances again, see be much refreshed a the our and within fourth I concentrated going in -- it's saw -- be quarters XXXX time time period think, was over activity, going I I it's you're we of refresh pretty through

Fatima, is And Kevin. this

was a and the a going little XX% were Gen is we change when down things a of market XX% growth, were that's of We appliances. we Product was FireEye the lot it And X, two when at exceptional. One selling time selling one bit growth, XX%s. growth to had

So products refresh, flushed XXXX. medium is to saw we're where seeing when of back the committed. some Gen we the stay that's in the but seeing FireEye, large and XXXX, businesses bought some What enterprises XA small did the we're less we commitment out to that the X smalls, the renew that big,

look we more FireEye better. and is I'm better fit confident when that now, cycle so it's has will the where handle better one. plays than base, at going better prior The refresh So between next and the enterprises, us the more and strengths and handle customer it XA more to we're than we our

while And our…

I appreciate. Thanks.

…client is appliances. our forensic

Yeah.

better of a little product than a business. piece planned. very overall We're It's small bit we still the had

curious expand or or to move spend. cloud campaign in other factors have be your they're question, to you. breadth active rolled is aren't and support form you broader I with especially Mandiant the how customers, revenue think programs expanded some enablement that just sort some program on the an much the customers to as guess, of am of you who I certain umbrella. portfolio, more Thank sort have a streams necessarily me. maintenance think it the I maintenance for Fair and I'm streams if the as some being enough. how may software revenue of their any tail targeted of I conversion the wanting initiatives specific and any about wondering And much looking have to towards about out, of of, you long under the portfolio? your if that's If And

our Yeah. they customers is, to be. Fatima, One to really two I'd are want with say, that be I’d ways. where answer we working

our if that the cases, So and XXX% good are along have cloud go we product customers the migration In moving a we before to strategy, lot they hybrid news of to move is have with they cloud. have set environment a we them cloud. both hybrid cloud. to fully And a entire across the on-premise on-premise

So, where vast want want -- eventually to that move cloud. customers the be they majority we're we want but the of our to be, realized to we to ultimately, we

work do them. with we So

XXXX cloud force, we a on We little of through bit also then in and sales, in process. have do bit having XXXX incent migration to sales for them kind don't little more so the go a push any initial

Managed the Yeah. remark Then integrate to customer and we're we things security, Mandiant On portfolio, security, we're Managed that This that. taking the taking have a Services, endpoint Advantage. interface network portfolio, Helix When actually motioning the that eight Validation, is into about Mandiant eight as With into can we doing broadness of avenues and we Intel is email Kevin. the Demand have it's Defense. Validation, different and Mandiant Intel all -- them Defense Expertise what Advantage, talk in security,

customer. So there's five avenues into a

it our several we're the dollars business into million hundred trying take So put of to Mandiant actually Advantage. and

portfolio. and easier an it's simpler So

so I appreciate you gentlemen. Thank color. much, the

you. Thank

Thank you.

Owens next with Rob Our from question Piper Sandler. comes

with your proceed may question. You

lot Good and Kevin with talking puts move for about parts question. taking the forward guys, to takes thanks and of a been moving and afternoon, now we Frank revenue Hey. my acceleration and as model. there's

Right.

infrastructure, we guidance, more I and around what execution not from success, still points asking be? how to is out, acceleration there am ‘XX proof focus with the see but Is here obviously go-to-markets for or playing on be done those around

very Mandiant went, we're your away. our Rob today, are on I customers keen finished Advantage three getting Intel Well, operational and modernize your want not Intel everywhere days the like adopted Intel, we

we folks for Mandiant went different it. marrying with and graph and maintained delivered the Advantage. marriage a So to -- have Intel already. we the taking one now source the the you're of whole we the actually got that truth, input to logical sources By news is one up company, have that was key we Validation. reading It day such database bunch we've in internally, interface, at a making where Intel is the sure the where from our smartest that the And we by of have

being seeing targeted. You're the industry This is banners.

to get based got be responding vulnerabilities to thousands into able want common see we’re test exploited most to a I the being on the away. click this I've hey, of and all Here's customers to intrusions to, if insights problem

easy-to-try driver we year. making consolidating engineering. think easy-to-buy is to our a is why going make That's platform, the into because call I it the making it top portfolio put on Mandiant Chris enabled consumable, this next cloud, Key be it from had going and into the we

Control biggest ways, did engineering with is and bringing to that and it relevant our took simpler Products split of platform of kind differentiators is we we in Chris have we scale ways One year Solutions ways, that things driving more FireEye last the the engineering engineering better. and and that market Mandiant in

getting have make to widely that to going it it. do adopted. reading headline XXXX. I And driver I question. going test Well out. everywhere I'm that's I simple think So it's to the guess And this go worry more this and about average They the get attack? next than to for And do saying, the over might security the be Try I question the we're so big Rob, and few think are hey, safe I that person. just months

have looked and as any probably much grow was there? for then Thanks. thought. revenue well there perspective, Great. an takes Were would a at but if perspective, quarter-over-quarter Cloud the MSP didn't as I second up Frank, puts I ARR performance particular category, from both Platform And as the and as

Yeah.

going the to Cloud of we're the and look quarter there pipeline category really to-date in by the Platform lot driven QX, deals deals just the a QX. of large But kind QX was close QX at in deals, we it's deals product. look skewed a what think the quarter. have for of towards large kind If if at great we I

to QX there. nicely at see look so on you'll bounce see pretty you it a pretty And range. category grow And you'll a nice I in trended very think basis, I if that in a continues think back tight

get in QX quarter, get backed saw XX% by three as so up to year-over-year. growing ‘XX, one then but then every you of You XX% now are we and it's that and negative quarters

some product Part that skew just So, be did a the deals I which really now. towards to that really that more tends an of products. we anomaly of versus strong have it's do right cloud towards to is just the you skewed quarter, fed think by happen larger driven fact

All right. you. Thank

Thank you, Rob.

you. Thank

from Ruykhaver comes Baird. Our next with question Jonathan

You may your question. proceed with

guys. Hey, Yeah.

once for thinking Could ‘XX, growth Mandiant, relative Services But Validation, to that how of should on do compelling fiscal and Security you obviously the just impact so Mandiant So into obviously of helping And look business this relative growing outperformance performed very again. expect portfolio from there. at Mandiant a pattern now continued well as be capabilities, portfolio. look FireEye to of growing due Services? to Mandiant billings you we we the Advantage, Products

right sure I'm incident billings not do and is a because trailing billings response, services firms we the you, a is metric, which of material metric tell can and lot if usually is I Well, time contract.

the do after for you it work. you So build

So best to for Threat And world of experts – rate It Defense scope products Managed in be. us. at But business. best to business, the has running We're growth breaches. world world look be period. at We're in Mandiant responding our have look in at indicator the the the Intelligence. when We're that incredible we at we're than be validation. the can definitely at faster a I trailing to Solutions you that best

accessible were FireEye well that are more using things at that products. and that and in at folks look the and the say, using as into a FireEye top right I take and make all So it to it the not Control Controls, put exceptional as let's platform

So it's area absolutely we're the emphasizing. growth

growth expect drivers Mandiant I look quarters continue going in XXXX pretty -- the really and it's significant consistent XXXX, a to across look forward. we're going Cloud and to to to had year in you what of to XXXX some going products. have going Solutions, also And great growth Yeah. expect our good forward endpoint similar think we are if but

Okay. in pricing And just that I stabilization helping wonder and add-on talked ARR? then if that rate. improvement might for be then renewal the dynamic sounds on you've great. service stabilize And just Good. about about the talk how adoption in and the to can you That ACV and specifically product, opportunity impacting renewal

Yeah.

lot But bringing is, really able and to different thing think products products, as with definitely we're do happening validated and products expect it think things greater as kind and that, solutions, the I to QX, grow a that so year we helps of had the the have brings first of stabilized we're kind selling of rate, of and rates the think by the I side, over QX. a solutions transaction million product with is remain half we the look of because lot on solutions But that driven that, sell a at and a are the the renewal product growth in we better stabilization in part important ARR of a proved stabilized had of couple ARR. COVID. in the along the in are bit it of of is and the along we cases. go-forward, don't challenges has have we with we that in jointly One lot lot little which a we be individual comprehensive could each I dollar

Frank. Very helpful. Thanks,

Jon. Thanks,

Thank you.

question with Kalia Saket Barclays. comes next from Our

your You question. may with proceed

for but maybe from And here. the you you if Frank, nice do in guidance, first in the some Hey, activity? guys. for you're about giving not could just cadence it? restructuring backfilling that taking see maybe pivot profitability my you, remaining to about can profitability, how questions talk, quarters, Thanks here talk that little of bit quarter, a anecdotally, to the maybe that of just the double-digit coming that maybe you a backfill understanding some you cost savings maybe think XXXX

Yeah.

expectation that activities benefit the in is first I lot in think at look OpEx, get full a of quarter. second We'll the a look when we will like the and did transformation of XXXX. year our XXXX we XXXX quarter

at we've what same significantly able we've overall mean, of I we great growth you invest but business. been is, do reduce -- So to areas in effects, look to model, able the the if been the about thing the time, at the

growth invest XXXX spend but will forward, areas standpoint the I of in of in relatively versus business, look overall OpEx So, an bucket we'll be flat as think ‘XX. we the the continue from to

drive will in obviously will add hosting add some cloud because cloud will growth. continue also Consultants, we We Mandiant increases to see we we costs COGS, additional as

Advantage. my Got for maybe clearly follow it. excited it. Mandiant Got I up about Kevin, mean, you, very

So a the to just that maybe think the business, second. side there's several put I about the part Services products for there. of If just Cloud I'll Managed in

Yeah.

about… think you as And

Right.

what a those sense? about in products sustainable … your years, products sort having make it coming competitive most mind? Does excited are in you maybe of advantage about

inside going Meaning Managed over which support years. coming products a to are the Defense we

Just the high growth product…

Mandiant.

the …in cloud.

how was and agent, we value. Solutions, minutes on some the want we so that Oh! to of it. it can it of be an kind the hey, threats the time we something see ran just We product. the Validation time decided, we the made when Yeah. that it's works. That's of did Even dry well based recent the cloud of and Mandiant do. XX It we On ransomware From download a Well, inside moment run run value. actors a Demand

very Validation On I'm Demand. excited So about

see want they to try was at know know really want People it and talked are time Intel. that. always systems even how we what For all to and smalls, out good know Chris It we our about to, the might there out. we hey, let's when that operationalize

I'm upgraded front we be may Meaning our intelligence the cleansed, offering. from Intel, our that coming So in put lines we not it's it just operational just now. excited it right

right, data the Advantage are into to we're that of doing this we're stuff submitting speaking as the customers it. doing call, by right we're on mean, our Mandiant lines. advantage way, sure take folks make now. over hot All can I As there XXX is investigations we're feeding, front

I'm that. pretty I excited our sure question, endpoint. about I'm excited add So the that. I'll right. But actually not understood if I'm about

we the our people forensic to there's value up it unique using everybody back that endpoint I We fails isn't and threats endpoint our miss. of find TAM, else's this and have but endpoint a forensics experts our when folks endpoint in I lot to really protect enormous think capabilities know in

simply we're our at service, endpoint. Defense Managed want do. our because looking upcoming us are a excited third-party customers our going products about differentiator. We So go that's we think in it's the to to quarters, to what other But

Thanks bunch, Makes a sense. of Kevin. a lot

you. Thank

question next Stanley. Fodderwala Our from comes Morgan Hamza with

with You may your question. proceed

you Hi, my for Thank guys. question. taking

in their a you a and of talk increase as about deemphasized? sort maybe to when start -- portfolio, think the focused to will they to perhaps done to to the security what product relates distributed think priorities work environment. Can you where as about be about Just about up previous XXXX, your and maybe think architectures as there follow parts which of remain are portfolio enable they're customers But more you perhaps, in question. you rapid your spending Kevin, spending your lot their the it talk of work-from-home. the was and obviously, more a

going Well, on-prem Yeah. deemphasized. be are to appliances

on hey, emphasis happened it. let's us of is I for easier One accelerate think cloud the to the users remote It's absolutely manage the Then cloud. just with majority of defending the things companies get that recognize, to visibility.

cloud important. CAS-B see And so you'll get security and

that do People is endpoint can choices. ransomware, buy based detection think right a recognized of backed now. endpoint I to the that you run is that great that eliminates with going an that think, can through lot experts, can that endpoint by a learn, signature need adapts, list are

question So portfolio, I a growth from absolutely our think, driver. endpoint No about is it.

people products driver. and is and cloud If your believe there Helix our Azure, all controls can resources, think humans whether with it. that's Google the red a assessment place one On get FireEye look to I Demand in the visibility manage at I Validation teaming now Cloud and cloud-based doing provides growth or in take with them. you're defend Advisory, all absolutely it in a Cloud, AWS, in you

you If into security thinking portfolio, firewall. thinking with, management, if how But you program think your about where I’d it, becomes I security got got today, organization, validation need you have some you teaming do and as is prioritize program your innings about configuration start start and you're a say, about to that's you the you of starting have. want hey, just to to integrate start security to six controls credential red validating you it have the level, maturity your is start and things and At stage fact, in a all your you critical. you have what

matter, portfolio, So cloud that's I when to at look endpoints Advisory matter. is going visibility Cloud because the our and needed. going to Helix

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of on portfolio our would things that are and appliance the portion the on-prem at be the less bases it. just applicable look I So go-forward

Got you. it. Thank

you. Thank

Our next Essex Brian question Sachs. with Goldman comes from

You may your question. proceed with

Thank efforts making marketing of about if where mature sales you sales we sales and elect bit, marketing dollars the Thank spend you and the particularly on force efforts of if is travel, growth? you are talk kind this maybe question. changes on side? drive to I'd I of to like can kind you're the guess, hit reaccelerate and kind better for to make the maybe again post-restructuring incremental opens might earlier Frank, economy what might any taking that pipeline and a growth little sales you up How back Great. can you. year, to

Yeah.

I seen improvements sales of a lot think, we've productivity. in

that of have three than to geos majority comprehensive a multiple number the in lot least ramped the that are products multiple have leaders two a with years of our seeing a and past. lot one for sales sold may sales solutions. we've platform or they of up vast been now with at all of think good selling just brought got have I now of years We're is, years, four a and like, set -- lot across company more they've in leadership that a folks products, of and the for

not the take So to there really I been will continue and a hit from sales a productivity cost look we think expect there. reduce as We've forward, able we perspective.

think a go I we've productive done been than the are T&E job of more things in -- managing a as we've expect we expense open really up, So do good past. to of we when definitely kind down point that things do up to as I bit up, to And the levels, some mix next even it really post-COVID rather and where expect than events. get likely pre-pandemic events to don't back all think, because a little but of open year we in-person we virtual will in-person

home and and I of savings from just really to used been there'll we've I this And think meetings think and got also meetings team's the I Zoom teams So be effective. kind working some think, there.

think have kind I news the paradigm kind continue been to able is, cross-sell customers so to good And post-COVID. to able acquire be been will a upsell. we shift of But it and new and of

So we've sales very been happy performance. with the

see forward? going of the maybe this item. driven that a and to insight improvement and is reversion that that housekeeping kind And new you Great. maybe product just contract in Okay. quick we a bit expect up kind quarter, like Looks last a primarily maybe we of duration, follow saw any levels back around of to level kind or was intact had of might the

Yeah.

we to over time to will an services. I as think, average average length continue shortening of contract length cloud perspective, move from think I see of more we kind to continue the contract a

Yeah.

I would probably at months. yeah, we year-over-year, two declines look we expect, like as month, of year-over-year see one

I going see quarter to I the And reverses did in think large of but over and flows in little drive product product, there. period, QX. and time, that little down to managed I very like the I we see it have bit think a last not been bit is a fall a of that significant we But because multiyear growth good off think not because year we're we're really capital QX, kind think seeing cliff. more I do one news we to cash over think have any kind able we've continued nice nice a

again, Thanks Great. Okay. guys. Appreciate it.

Thank you.

Thanks, Brian.

Take one please. more question,

Thanks.

you. Thank

comes Our Yi Lee with Fu last question from Oppenheimer.

proceed question. with your You may

Thank you on for results. strong and question set my congrats of gents a taking

it on Frank be question end, or whether one my Chris. Kevin, Just for

But obviously during and Just the the the colors cloud we be a Chris, in you on macro hear regions EMEA general can and cyber maybe the or that, the total and for business seen Frank certain maybe environment. comment will Mandiant wave, well. pandemic please? We've as then elevated in second business threat will and in helpful in Kevin, lockdown environment this Advantage some

Sure. Yeah.

That’s it for me.

Yeah. Kevin. This is

in at the doubt, an geopolitics, whether mostly unrest, it's wrapped there no there's conditions, looking cyberspace, macro environment, ransomware. Just COVID economic is around challenges, escalation geopolitical

is healthcare getting think targeted. I

an to line that it's just their back are get like reached level. on to likely seems industries more think it and targeted being business are pay tolerable I

a So of driving right now. that's activity lot the

is that's -- negative increase So the impact of there of in an saying factor tax either in right that's in harbors. activity cyberspace or factors probably that's folks an risk increase increase my busy and now. an us many too. it's many is There the their or this juncture. of the conducting way these escalation an There But no attacks is safe number probably attacks are from contributing these that at keeping is of one repercussions

think will out. organizations while already that I may gets period. So before We're happen that lockdowns all future. remotely to working sorted it in the a be are almost and regards any In

to to be remote feel We then. it's be, happened but it, what not going as didn't locations. going lockdowns, to we any as So I it's the used are we impactful from in our think still impact for sending and March brace expertise

to our used in future now, by customers and or so or ways customers. are prospects We remote collaborating

ever additional that an we're back I have about There organizations much of in not worried that's too see have choosing if a employees not back physical are again a to not the location. are difference I'm don't come lockdown. So there's of hey, coming organizations said, to especially lockdown, lot their offices. considering to

normal and new the FireEye that. prepared able be in a you do to got So way is distributed to to work is

Thanks the answering… and Kevin, for you thank color,

Thank you.

connects anyone you. if …

Thank you.

to And you. any call at now turn remarks. I'd not showing questions over further I'm Mandia back like any to the Thank for time, Kevin further this

our thank solutions. that around on continue outlook it's to products and the and our the all times interest to wrap of about some their up. you. all and I a like quarter our to be for structuring QX. most the in made stay please for employees customers. again business security But and of for want Thank I'd for FireEye and our Yeah. prior strong and for your progress to this I you to continued focus our have And Thanks in towards care. wanted and Take our your result of excited transformation, through I commitment focused to safe share for quarters these we us healthy. efforts joining challenging FireEye, today performance

you. today's Ladies Thank and gentlemen, this call. conference concludes

Thanks.

for participating. Thanks

now may You disconnect.