Datadog (DDOG) 14 Feb 202019 Q4 Earnings call transcript

Good afternoon. My name is Jerome, and I will be your conference operator today. At this time, I would like to welcome everyone to the Datadog Q4 2019 Earnings Call. [Operator Instructions]

Thank you. Mr. begin may you Ljubich, your conference. AJ

issued Jerome. us today you, results, we press Good today. of quarter afternoon, joining for which release our in you thank announced the to financial close market and XXXX Thank after review fourth Datadog's

Joining are Pomel, and call Datadog's CFO. today Obstler, and David Datadog's the me Co-Founder on Olivier CEO;

of or including and XXXX, our this the R&D expected investments, statements safe forward-looking under quarter are call, business expenditures our that our the our Reform Litigation and and we potential market During and Securities performance, first of capital of related to the securities benefits $XXX,XXX year products, Private our will are laws full Act to with greater, harbor outlook strategy, customers including pursuant make provisions future statements the related XXXX, made contribution opportunity. go-to-market for of federal of for our financial size of the of ARR to

anticipate, to believe, forward-looking statements results The as subsequent from identify risks to statements will These future and indications of of only expressions similar uncertainties statements cause of subject today date. to continue, expectations. similar could any as intend, words are actual not our intended or a views are estimate, variety expectations. of expect, reflect and These and that materially differ

our is and the factors September our [XXXX] could Relations with that ended available which risks important SEC filed affect results, other quarterly of of on report Investor November quarterly to the material XX-Q please XXXX, in XX section actual For refer a for (Ph), website. discussion XX, on period our the

be call will available limited for replay time. there A this a also of

filings for the available to report reports in with and time time XXXX, will the that SEC. other our and information XX-K annual Additional may ended from we December quarter file XX, Form be on made

release, our these reconciliation the find which portion refer our most Additionally, a measures their this conference Please Investor to call. financial GAAP Relations in on financial comparable tables of on non-GAAP the measures discussed earnings to of you for directly measures. will be website can

turn With to the call like that, I would Olivier. to over

and Thank review you driven finish customer XXXX and year been were joining was segments a full-year across QX QX results. to the traction to continued our us our for great and us. today geographies a what AJ, strength integrated you, for by thank has all platform. and supported by milestone of broad-based Results

year or our of our was an our of or year. QX, XX% more, is products using of increase We ended to $XXX customers majority the customers XX% To of with now annual year-over-year. the two which rate $XXX,XXX are the as about and run The guidance. close or summarize of with XX% of increase high-end year-over-year the end million, ARR XXX more of revenue above or

retention As in over adopted was usage customers past quarters, our as our dollar-based newer XXX% rate their net products. and increased

a with still We the year or cash [indiscernible]. around also of and less a that to be million $XX is capital-efficient continue flow [indiscernible] free

guidance million, of year. the $XXX,XXX cash $XXX which increase an revenue high-end XX% was full-year, the For of above around for and approximately we was the our or breakeven generated year-over-year, at flow free

market more into platform becoming more wants step difficult is lever, that which world little for is results that a cloud indicate observability architectures. and internal also a To our in back to clearly platform teams, accomplish bit, the unified DevOps important a but

Datadog a Our in world. performance winner converging in XXXX shows is this

And as efficient with from used our monitoring integration silos, origins as by by collects infrastructure lending by get and deployed our adoption disparate of the And an is platform our sources everyone. product. that by many and data seeing our across driven success teams ubiquity we everywhere

analytics greater platform and deliver innovation ops in customers an actionable user and and today and infrastructure and And more the and age. exceptional result provide users real-time. in business As applications a for do ever, our IT into cloud consistently we clarity to enable experience. the provide dev, monitoring insights to than all is We Datadog so

in mind, let's our background performance. that With review QX

of number in very was customers QX, results. additions, robust record customers. approximately for net we year and both pleased twice quarter growth well new driven broad-based Company a First by all, our ago. We the logo added a the same are is which we X,XXX with in added continued almost existing the as as Strength new of

new of approximately our growth, And For XX% is demonstrating strong customers logo platform strong growth net the our newer year, products. just our very of our of including performed well. strategy retention clearly customers, existing while ARR uptake with new resonating, from came as

or actual From of user pace of the an RUM, the earlier an extended the application. User launch innovation in our multiple exciting After accelerated Monitoring, of perspective, monitoring with journey suite of monitor experience users we QX. Synthetics of with year, developments the to Real R&D our in within products launch we

continuing flows and network Network on-premise public And to environment. private our full stack traffic across or monitor vision as observability, clouds, on launched NPM, Monitoring, we for as Performance well

with a with We beta network meaningful on-premise the implemented monitoring physical of to our devices and visibility more connects extends which to networks. offering, SNMP recently integration, customers

and uptake create business. drive our customers revenue which We additional of our are initial future to and RUM, for demonstrates drivers pleased our value with for the opportunity NPM

we step beyond down to future beyond continue also security security We QX, platform of silos a and cases. In to envision dev power observability as ops extended our used break where monitoring, apply announced first and the teams. a

involve cloud world applications securing As all becomes it that needs to the clear three. in

traces, massive We customers across IT operationalize also collected logs, better data already of and we security. can the by metrics, harnessing our help amounts that believe

to ourselves we the believe comprehensive logs became platform, evidenced the In observability with our customer is and XXXX, of XXXX, our observability most of first have the be three Datadog unify product. a proven to by we adoption. this In pillars launch

which the from products, than increase a year, which vendors is over today about customers our about that of today. or using or point XX% majority is of more an are end XX% This customers the means more year are have the multiple solution of of using our As products, some X,XXX ago. two

that even segments. We penetration also is and relatively mid-market SMB across know enterprise,

the observability using X% the three year, XX% as infrastructure, systems. it the less year clear logs boundaries Additionally, full ago. adopting two our APM that can and are market has for been is from workflows customers a and benefit combining and finding from impressive in of years. end that value cross pillar this coalitions are pillars of which all between And up third in makes customers our of platform especially by than our and approximately of logs, This considering that teams is

platform and the Finally, one XXXX. value about our approximately initial very our surprises demonstrates in us relationship. year demand of greatest integrated a new to more land products, deals add had logo only of pent-up success up deals. XX% this the the our two from the XXXX, In This to from for and of newer been ability XX% or start of products has customer

expand we summarize, increase To share wallet believe significant product further very customers. a with our opportunity our we and portfolio have to

investing of our in are product-driven part innovation strategy. core a business We company is a and

with a Now, the look at go-to-market, onto starting let's our approach. move

channels capture commercial and coverage opportunity both sizes. enterprise company across have the We been to in expanding

in growth and new While continuing rapid also existing North territories are in expanding America, internationally. we

finally, are announced markets, as in channel, partner January Datadog have such expanding a we building Partner team. in launch been government-focused new investing we with the of in Network. Additionally, the the And as

investment. We for plan are about channel continued opportunity excited with the partners and

as logo QX as Turning additions, saw well We sales. new existing from to strong our customers. expansion

up customers, As the approximately X,XXX ago. of year fourth the end we XX,XXX of from had a quarter,

As the mentioned is approximately in we record a customers Company. earlier, QX, added X,XXX which for

of with QX more more, and XX% year than an increase ended in with $XXX,XXX up a ago an from We XXX XXX QX. or customers, ARR of

cohort over that than expect growth. is Given driver of generated we customers large future from a our customers of of be our ARR more $XXX,XXX, to this XX%

We also with two from which or up year customers year with ended ago, ago. the is a million only of and years XX more, XX ARR $X XX

key quarter. Now, review wins the in some of let's our

by upsell Datadog, has dollar information with view teams in by [indiscernible] and a disparate global all with tools single three reduced customer company. This customer a adapting spend pillars. First, financial unified and factor XX, caused a XXXX, we increased on a services With had Datadog point since this has multi-million started of solutions.

Second, customer Performance of have XX right Monitoring. alerts, came infrastructure, a This we Datadog retailer. XXXX, adopted in spend first a and large [indiscernible] they after experiencing seven-figure more by e-commerce to had Friday. Synthetics and another APM, Network upsell to recently factor increased their Today, amounts of before large Black

Third, airline. land we had an global US-based from quarter a large this exciting

time was lack [indiscernible]. a time. to causing on cloud-first initiative, As move realized deal, the a ample enabled cloud-scale an and has for initial improved room the risk. embarked And of we significant over Datadog growth monitoring a that Company see market as six-figure toward its it

the national largest public logs and seven-figure demonstrates Europe's sector. monitoring also metrics, in was in won cloud a of across of public one different railways Datadog over our single truth using organization its as This a on turned tools, which traces has Fourth, a eyes potential environment. this XX deal through upsell. procurement had source After process,

a we such XXX deal old over exciting XXX insurance Fortune of beverage public and professional go the or company, an the a employees. bank, range, six transportation but deals organization, XX,XXX manufacturer Asia-based many traditional in years with can't made, We services equipment, US were there industrial over global every company, other as and sector a firm seven-figure

span massive strategic examples of happening traditional a demonstrate organization both that cloud globally and IT native today replatforming across migration enterprises. all and to a We cloud by the industries. Datadog diverse to believe set is is that customers partner these driven

which we are tremendous stages to we capture. we we are in early market opportunity, what think is a conclusion, of a positioned believe the well As

us We is been and performing a today. our at down level focus high made has on successful on very have what doubling

innovation to plan hiring great customers. we and to new existing XXXX, in our So and engineers to delivering invest continue in

in We such public as a go-to-market, also in our committed investing new to expanding across in all capacity our partner globally opportunities as well remain channel investing as sector. geographies, sales

Financial would call With our to like David? the to Chief that, Obstler. I David turn Officer, over

Thanks, Olivier.

detail. we up an will very capped quarter XX% year for year-over-year. million, results exceptional our $XXX.X in are which pleased As mentioned, I was Revenue off with fourth review now QX results, Datadog.

geos, platform as across and by and as quarter's Olivier As by well driven customers, mentioned, strong strength was success adoption. broad-based, the new segments driven existing

provide new regions. channels year-over-year. more we new for This record To across contributions strong very demonstrating a ARR, context, quarter logo logo was saw with additions growth some in strong sales and QX,

Additionally, we of customers. saw strong existing continued expansion

above In the for dollar-based XXth fourth quarter. retention net the our XXX% was quarter, consecutive

retention products, by as to cross-selling usage Our is increased products. rate well the primarily of as existing driven robust newer

retention rate. The as robust expansion continue is of cloud see their products frictionless driver customers net and a newer to continue recent We of migrations. our more cross-selling

note Next, deploy the across organizations would growth simple and and demonstrates the simplistic segments. easy also of which to platform, SMB enterprise, largest with and robust of we mid-market enough This not strength power for is segments smallest. use the our across for but powerful

ARR increase from customers the believe an We XXXX. an mid-market ample I'm XXXX $XXX,XXX average happy of that increase enterprise about at ARR continued of $XXX,XXX to And of for from $XXX,XXX, at of was customers at report end of these of segments. was room the XXXX. there end average of the each XXXX $XXX,XXX, of our remains end penetration the at end about our the

with very teams QX of momentum QX these region in international saw business. note both that and I strong these in that of the regions EMEA had a still international aggregate ARR adds we many performing and are - well. the internationally ramping. outpacing growth in record APAC strong with Lastly, quarter

been QX, revenue in million, timing sequential billings, up discussed last year-over-year. we calculated billings revenue a in with change of as line Adjusting plus invoice $XXX.X deferred revenue, to in quarter, was would a changed growth have its Turning large for calculated which the XX% that growth. timing that defined XX%

billing better terms our as As ARR. the of as growth relationship monthly tight Revenue and discussed discourage indicator revenue the our of a it given the billings the customers growth not gauge strongly and between among we is a and business. portray of of mix does use previously, of annual momentum accurately

Now, statement let's more detail. income review the in

noted, As a non-GAAP. reminder, are all unless metrics otherwise

release. and our earnings was million, We of have compares the the year a XX%. gross in period. profit was of a quarter hosting reconciliation efficient $XX.X provided in to margin of quarter margin to in last in by gross XX% This of margin our a GAAP Improvement XX% ago cloud spend. non-GAAP financials representing gross driven Gross use

margins centers As in prioritize build-out resource have ranges may primarily we we our fluctuate focused data optimization. as and previously, well development on innovation newer discussed innovation, Therefore, are within product gross we cloud geographies. as of as product over the certain

of revenue or R&D $XX.X period. the year ago million, was consistent with expense XX%

and of benefit RUM the have product-led to adoption platform. of extensive QX, investments is from in continue This Network well launch by as We and Security in Monitoring. made as the announcement evidenced our products

and continue investments to our meaningful to platform a to in R&D. therefore, see make We plan and expand continue opportunity to innovate

Sales the expenses, greatest expenses, to the ago leverage outperformance which to aggressively pronounced which expense to came closer or period. continue down QX go-to-market $XX.X rate of year-over-year revenue partly year to from due a sales the on marketing the revenue. was to invest in XX% globally. of lower from We expand marketing at grew grew XX% note versus rate plan our we Furthermore, was in and million, the The change line. revenue,

public higher than X% operating a an $X.X and expenses. ago operating income Operating to a of margin, loss year some was compared expense negative million, $X the slightly in given or X% G&A $XX.X ago million, revenues, of margin or X% company-related year X% million was period.

in on weighted was income by XXX outperformance. driven revenue quarter million million, Profitability or share, per diluted outstanding. primarily was average shares outperformance Net $X.XX the the $XX.X

efficient high a and highly and on our return experienced business marketing have a and investments in have We model in sales R&D.

have opportunity breakeven operated and we slightly ahead large invest opportunities see we continue QX, of market ample on outperformed to profitability While profitable in to in to around the us.

operations securities. a balance positive $XX.X the cash, and million flow, flow restricted from the million ended quarter marketable positive cash and sheet $XXX equivalents, to with year. million quarter for in was Cash $XX.X the in and cash Turning full the a cash we

capital was and consideration free for into quarter taking cash positive software, approximately or around After expenditures full-year. capitalized the and flow $XXX,XXX million $XX.X breakeven the in

be which Beginning represents we outlook I the XXXX. quarter, would expect at a the first million the year-over-year to full-year of first growth $XXX now turn to range quarter to midpoint. the like and million, in of to the for our XX.X% with revenue $XXX

Non-GAAP average negative net expected million million. $X $X.XX from shares is to to the of loss based be is XXX operations $X.XX to negative weighted loss approximately per be outstanding. negative on negative to range share in million $X per share expected Non-GAAP

expected be loss net For the midpoint. is $XXX of outstanding. the approximately to year-over-year full-year per range million in from operations to range XXXX, negative the to revenue in expected XXX of is be to $XXX XX% growth million $X.XX expected per which the loss negative million, Non-GAAP to share in represents $XX million share negative its shares at average be is $XX negative Non-GAAP of per million. to $X.XX on share weighted range based

to into things consideration guidance. few this A in take

in hosting within saw while prioritize on gross in of fourth resource focus we to as product strong quarter, continue Therefore, the optimization. regions. our First, and gross cloud innovation certain and our range margin we efficiencies vendors diversification fluctuate may over development we margins our a

our events have sales kick-off. corporate including in we some QX, Second, important

of Then line. much invest the recent below in hiring to targets and sales remains some our loss aggressive operating notes R&D and marketing. intention our Next, outperformance, including

We of $XX $XX the marketable interest to expect security million on investments. approximately for income our based cash full-year million and

expect Second, but we do provision our entities. to be a federal to have a not tax international related taxpayer

we the million. expect forecast reflects our Note share are to For tax that loss in count, QX full-year, since count a for $X share basic of our period. we $X provision each XXXX and a million forecasting

with quarter, in the full-year. as are we pleased performance very To summarize, well the the as fourth business

our at model. We few match have in demonstrated and growth that can efficiency have scale

our growth to and dollar for very and a We time. We successful opportunity market stages very we a we over future. multi-billion early believe Company feel ability are making the build large good continued of the for at about foreseeable investments are

will the now that, call let's With Operator, the we for open questions. begin Q&A.

Stanley. Sure. [Operator Sanjit comes first Morgan question of the Instructions] line from Your Singh of

is line Your open. now

point, of made market you follow-up about of Hi, momentum going And your Olivier, in customer three XX% different the Could that Datadog? pretty also platforms are taking customers aggressively, unified on of adopting of congrats standardize exceptional platform? toward mid-markets, and the are the you for which XXXX. it Where of sense to and is moving are these terms sort give strong pillars. I the in of journey a who seems a the like question customers a sort you you sort Really it in script across better the wanted thank but board. all really performance that like whether you in terms they segments, on as of displacing on enterprise? more consolidate Datadog and

Yes.

about same and enterprise, new all net same enter talk So the through or the by is are one we mid-market the of segments, the cases, environment. And every we you SMB, in going cloudy each in large, momentum and whether actually deployments momentum. in to see

we one. don't day from So anything displace typically

going open What of lend is going some time, these That and to the more had vendor, we will to deployments are multiple have. of will is be homegrown customers time majority displace for majotarily we is that source the we systems. the with pillars that customers. not in displace, but of a we spent when Over cloud environment that, one we the has already separate displace

related my some follow-up, seeing is Understood. you the to across And product. sort momentum are of as of it

Thank to expected get sustaining? cohort RUM, and the and of Synthetics. that would the portfolio is products sort look vary, sort sense faster up buckets, let's are going infrastructure a is a if momentum you. that talking across picking three Network than still and Monitoring, about obviously what Performance say, They where buckets? the at monitoring, sense three but of the want us So XXXX, give are and Monitoring about released core be of where in XXXX of you product sort you and customer those then we two I attraction User have to logging of just Real APM XXXX, the Could

Yes.

So data monitoring, a and hyper The products what are faster that growth in its that own. building keep own our tell can exact in tell was I initial are at can are a could both which single product, the would the its and I logs products if scale, it grows and scale, significant have high infrastructure you than scale, growth super we you they be growing is, APM but company initially. SaaS infrastructure right, we not similar disclosing that

other for been products, And the some is then only for is Synthetics. time the really market that on the one

we started or charging for just started either even others, them, The haven't for charging them. we yet

haven't we started started example, in December. for For RUM charging charging but we for yet, NPM

these So are very new.

very have We that script that. we that and scale products, from newer mean, less the have mentioned they stories customer like customer large them. some more adopted we one the recent, so we exciting stories see see - about in NPM adopted good but more obviously, are adoption. far, one I we because But

the has base Synthetics summer Now, will been the market, - for has in start and a growing. during charging keeps they user large

them. We And are they in have going products. which these the be all products thanks grow going see can't that end, very footprint, these long-term we the faster to believe and there is But or adoption of to is still biggest general, lot so, of a the in hopeful. are we of tell of with we satisfied very for to are very many early we growth,

Thank Olivier. you. color, the Appreciate

of comes Chris the Merwin line question Goldman of next Your Sachs. from

open. now is line Your

very the much question. Great. for Thanks taking

some seeing, to the products about what with why are particular you are reasons you Thanks. are enterprise Can which with So, you are non-infrastructure competition? you And customers I segment? those of hearing that about winning that your ask particular resonating are of accounts. to the the of relative from some just in talk in traction about wanted

in not there is APM with - or logs the are cases a scale. infrastructure products, attach There going that more land and more typically friction breakdown in be had look, in two enterprise the same very infrastructure will rates it see notable at to and in to going a majority the difference So, and in APM. of there. we as the the is Though, we categories is The other right? we of bit or is adopting

So multiple that to logs that over they from higher to day adopt for than be - are are the they both dollars for dollar typically going are adopt customers even grow are customers going APM, though use products, but time. to one going

the So on growth there longer APM, might be example. for a fuse on

And pricing. Great. on just a follow-up quick then

You, a lot that with now, logs mechanism in competitors pricing market be obviously, that put together. trying you new replicate a to came are the seems broader the up resonating for products and to guess, the have I of

lot sensitivity to talk for are when less is there and have around on the are you therefore, So functionality you much they just to price how a very sensitivity customers, of more you focused products? or the charging

so real two you have it. the much over on two Well, one the the customers the sensitive of itself, know, are value they is but price is as things: is there not and control

what So give we get all can that, it. with controls to - the way want the make of all our the we is of align work to for customers, they pay so pricing to value all our they product the

what So want with where agreement like controls that you for customers being scale. have end mentioned and pricing have on log and that don't we prisoners is make the we up have have that at side to what products, don't APM infrastructure they it of sure we a where and monitoring versions of have also done

Great. Thank you.

Your of of Lenschow next the comes question Barclays. line Raimo from

now line Your open. is

because need, terms that? how is or talking needed talk investment specialist one Hey, think there. etc., you before Is like in the security, thanks to vendors out force whole a sales field into obviously Olivier, of for there CECL, quick that have taking you are of you there decent my sales haven't start a support you to in - well. question, on that as What and from brings just and some there? you kind me, that congrats about a played

Yes.

R&D and bulk in the now, product right So is side. the investment the of making we are

So are that starting. is we where

security. in still are very We early

there. are charging We for yet not anything

a our to some see time ramifications on take organization. before going go-to-market So we full is it

and the when secured. great would in customers open is short-term, or we deal of need cloud it the from there to - environments have we from that, to I the get new space comes environments a products that But early one, signals amount be cloud say great

a to bottom a is also have which realty and adopted the customers amenable which new of done. - need, there of being what So we they is we have done up, what is the it is the gap net rest exactly rest have and have

have past being aligned So need the initially, very more more the is fit. we the and changes a go-to-market and with customization sales done in what might well In we term, see that there signs of longer to required the team.

we in anyway, sizes customization general, different different to need in team channels to are get more geographies, more customers out to and in But that sales ways might we address to we have go-to-market them. different the that making changes and as are

Okay, the perfect. networking one then on And side.

of to So be the open Because be - guys is now? etc. historically, switches, bit you game. with different had it some the little networking were source it because used Is projects, you on or possible where to that had a kind how it to monitoring like do different a separate always changing etc.,

and use of network with on-prem monitoring already and ripping are the Well, we to going that and everything so, replacing not first all, people objective today.

clouds, and in is network on-prem public significant point want a footprint and extend customers to that starting Our visibility private then devices. to have that

starting we are selecting of these devices So, would this the - of just already by with, limits customers. subset the types I say,

them, of right? is of a this with it real competency lot to testing monitoring lot core what sort when of do devices, then, a Company. in with integrating already world customers [indiscernible] different mean, all is with comes with of integration I and of testing, it small a the we our infrastructure integrating here, the product, that And

happen investing not to So definitely is that we that in. going is keep overnight, obviously, something

perfect. Very Thanks. well helpful, done. Okay,

from Your Brad of the comes line next Credit Suisse. of Zelnick question

Your line open. now is

wanted success what on the and mainly congratulations market? logging Olivier, My could you, competitive you public competing you you for who especially the very compete against. Perhaps and for enterprise impressive That both on-premise very results, that around dynamic touch business Excellent. specifically multi-products to are shared have touch I so Thanks first the And in seeing much environment and on the you if for you metrics of on would specifically helpful. question how be sort spans in logging? are adoption.

higher So, APM being say, equal footing see the logging today, large product product I in on we second take give adopted the as is environment the with this from amount enterprises. there in it great day again or friction fast very less also is growing a it a because are those fast environments submit of is to of because one, growing product adoption dollar from data very lot is typically would and themselves.

enterprises In everybody competitive that. to though, customers cases, in to Even don't environments have most large knows those a have in dynamics, terms Splunk, of cloud going the with. some they most vendor are all anything start have other logging on-prem, the so

a fact Splunk in adopting a a looks altogether in have platform - them some like lot is it they environments. the of on-prem not And different

our environment So that strategy. before and to go in is is typically are we try and clouds. well-established public next-generation see, we on-prem don't what That replace the private we

pricing And the in in you Olivier. to had market months? reference follow-up Thanks, Does rates that to that, the you seeing? a win now number changes that dynamic pricing any changes the are have mentioned, just seen a any competitor that that competitive and in change they of for in you have the way effect maybe for you

was the last is the The commented same changes feel end. we it we in is quarter as our situation on. on There that could no exactly

right. Very Thank you helpful. much. All so

question comes next from Markets. Your the line Capital of of Hedberg RBC Matt

open. Your line is now

Could of ago Matt. couple kind for of specifically? a weeks for really makes talk do can Matt Datadog a actually little is you in Olivier, This out you bit things Thanks. for a positioned put interesting about Swanson the case And impacts the less, report growth strong how server then the it this be to really invest you to a trend technology. maybe more of on it? state

Yes.

bit, To then continuum like less. and step package moved investing we your last answer To infrastructure way next when the stage stable to a had little this we were what are server a was static in definitely run. back go of is hardware the very we supporting us question they on for XX evolution look So and years first, infrastructure type heavily at VMware being anywhere. and VMs of part ago, is you to the in

were sorry. go cloud that smaller that containers were basically Then that containers then are could VMs, - every every second. up that go you are less functions And instances millisecond, up had cloud you instances microsecond. had done and that up VMs had and that this smaller you that server could go down, and basically Then every select smaller down smaller

that all that are components up from lots and lots statically lots stat big one basically being So, things combined of - moving that and down and tiny is lots very and and of to lots that and coming few different ways. in a goes keep continuum being

there that that run of see to we the the is time really run the the the observability So is that toward way it, a happening time. terms understanding provide shift from in of value goes of actually

are the our doing is of more us, what think and for machines value can experience us. customers, solve to more complexity, are the better the the in what it of understand is our make changing manage it the the the and and problem machines keep doing the it that manage we and people complexity So creates the for sure job end for end this in

So it that a favor. in the we market our definitely think development tilts is

have another about kind then, Thanks. that continue some helpful. can feels year is but of accidentally this those it is during you investments investments if are XXXX, the levers And see we during when you you really the up thinking of just ramp as talk we quarters David, line? profitable, or into on to describe quarter That about outperformance top like to

Yes.

I think that been last line, has a is bottom of outperformance hiring to the with to the what has we going do which time, plans. is it said lot

case extent the those the are hiring outperforming. in R&D conservative would most We we we hire in quarter. the second to pull of some can of can do a and more quickly, is levers change sales. on marketing be more or the to then to levers been based more in And then, and marketing a are planning dollars to trade a are The the essentially shows, have pull little we

Thanks time. right. the All for

Yes.

Your J.P. question Sterling comes of from next of Auty Morgan. the line

open. now is line Your

Thanks. Yes. guys. Hi,

X,XXX to the is, customers So is a are in big and customers or an that rate metric? seeing what improvement the wondering in both uptick that terms in driving net the of new dig overall an that in, in renewal quarter, gross I'm of wanted on the adds you coming are inflection

both. It bit is a of

would say, the they are already generally So up softly I renewal are high. trending stable, overtime, pretty rates

So more them not And there of grow. go to a for lot the door. room is customers through just seeing

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This Brent. for guys. is Thanks. on Parthiv Hey,

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in XXXX repeat for results to we and So QX I whole. would a closing, very are that like for pleased as with

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Thank you.

concludes conference call. today's This

you. now may Thank You disconnect.