CyberArk Software (CYBR) 5 May 212021 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Q1 2021 CyberArk Software Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to your speaker today, Erica Smith, Vice President of Investor Relations. ahead. go Please

and Good will to [Amy]. With you joining a After Mokady, for on Siegel, session. and Thank Financial question-and-answer up Chief CyberArk's morning. the first today Officer. Chairman Udi are review call remarks, results. Executive quarter us Officer; the Josh we you, prepared today Thank Chief open XXXX me to financial call

statements, may to which I certain begin, management's statements you made results be for second let considered and call the refer of of we based forward-looking Before judgment the projected expectations that quarter today reflect information. best regarding XXXX. on the me on available the our and beliefs operations our remind currently discussion specifically full-year

those COVID-XX adjust disclaims duration any response from transition to updates posted economies, ability the that any subscription projected statements. and to model, and report the as risks materially to differ on COVID-XX those in regarding your forward-looking forward-looking scope on with ability publicly in related of to any the our application I the to a or actively might the pandemic, the global release website, results risk expressly Form business today's actual the are to its company's statements. as attention to SEC pandemic. our well to referenced contained release and CyberArk impact CyberArk's in direct undertaking or revisions factors in annual filed these XX-F Our press

also in discussion outlines investor today's release, financial Additionally, that of call. measures directly this GAAP Reconciliations in conference non-GAAP the today's to press discussed are most measures as comparable presentation an call. on well financial the financial as updated be will available

visibility the breakdown The focus investor can and our increase P&L and of in that our revenue our quarter our presentation at cost which can the changed we March, business. webcast subscription call historic beginning of outlined our be the new P&L the With held in revenue to call investor of Executive Officer, turn over long-term on our in into of transition results quarterly found the Chairman first of appendix presentation section to we to we this As A website. of in like available also I'd found Mokady. be website. QX our is also deck Udi that, the Udi? update and of Chief today's the relations day

your completed of Thanks, and and and to for joining call our hope quarter Erica, healthy. is the a everyone the transition families first today. active to safe successfully We thanks start. We XXXX off subscription. are you great

with thrilled SaaS are with We our $XXX last in well few fast financial execution of recurring company over growing solutions. year. comprehensive new transforming our ahead quarter, guidance with first the on our of revenue into a revenue our towards portfolio million A revenue are XXX% highlights. subscription Total and growing way was CyberArk a line

In see recurring total addition, of $XX XX% it reached was to million or our revenue revenue. great

We in ahead million our expectations. income cash free also than of operating more flow non-GAAP both million and generated of $X $XX

that this given exceeded XX%, our booking again of rewarding much quarter our expectations was Our success solutions. revenue strength subscription the particularly outperformance SaaS our from mix of was at

used from revenue we annual can of believe in ARR underlying or the subscription, revenue increase the that business. be strength Given ratable recurring evaluate the to

and subscription results. profitability is the up customers, demand value $XXX faster that our reached partners, demonstrate that recurring the subscription SaaS of ARR CyberArk, the our million, which to incredible momentum is business for the same grew mix and will our Our for than XXX%. will I and innovation, impressive create PAM. we QX XX% centered security shareholders. framework together and transition, platform, year-over-year March, revenue outlined in pillars identity ARR on and in Day use growth, and walk ARR Investor from At even subscription our long-term more through our four

compliance. secular tailwinds digital innovation, center zero execution Digital technologies line not and automation and our industry and of but with a the transformation in every trajectory. user growth. tailwind, applications Let's the and a are of between start and human hacker users, blurring excellence workforce transformation, applications Identity user, only bots. explosion Positive, are major tools privileged trust, between is Security including driving and strong also at the growth

for flight urgency the signed the and customers, For XXXX initiatives is as emergency continued we beyond build-out a In quarter, the programs. strategic sense and creating And moved domain are and in into They partners embracing a security security an assumed execution of enterprises experience. to solutions, comprehensive, this and cybersecurity. comprehensive trust have security to result, deep of Enterprises breaches looking mindset. Microsoft the QX. breach have trust SolarWinds fourth the and are of of who measurable wake zero

relevant contributed the more DevSecOps our our drive As for before. across momentum land year, business, generation the against executing making at To fuel privilege will across opportunity This accelerated industry another this strategic Access. has are move we with further an business year. growth, we than portfolio, our expand look this management, record seen performance. immediate throughout quarter with increased growth are focus as dynamics our The which our and aligned security two QX our we and our access to well Early in pipeline ever identity our strategy. these and also impact speedboats,

world to hearing of in on and Officers the increasingly entitlements contributing is that customers SaaS fastest of continue key need effects strong I'm as ripple our record be secure, that a risk past. of more Security often in these subscription is package the pipeline PAM cloud our offering, Enterprises SolarWinds perpetual the premise embrace not customers endpoint portfolio. DevOps, offerings growth We growing that manager see cloud purchase from solutions versus the in Chief where and privilege areas. criticality hybrid Access, for than to in to our a the recognize which in points Information among our privileged one from resulting with to demand continue run

all SaaS efficiency. part reasons. to win two workforce also the access highly and user access, of Our making operational investments dividends modernize a for identity first of in as the engagement all-time is customer privileged at of that A the deliver paying as equally are remains competitive the with with number our seamless customer high. quarter strategy the strategy. In as from as deal, a success extending pace demonstrate a customers year explosion examples an applications love security important distributor existing power last customer of to recognizes security this over employees, main a employees, This I wholesale expanded experience. of

access an as win. a large attack a PAM is Telco modernization. its First, SolarWinds expand This for a the of against the it ease strategy; customer realized from following catalyst the great velocity embraces manager, paving fourth SaaS methodology Identity and part A store it significantly portfolio. with just a and key road DevOps security quarter use, its demonstrates the expansion of unparalleled our customer time-to-value, existing in after quarter fast Orion chain win Blueprint in deployment The for management a secrets just our competitive wholesaler to sales was platform. Workforce its reducing attack buying XXXX, scalability cloud identity grocery identity of second, surface was privileged our and increased later,

robotic or expanding strategy rollout also with cloud. will secrets We its are protection protecting RPA of automation PAM this with customer’s the manager process privileged significantly

just about of new industries, over Our improve retail, quarter. logos last continue XX% XXX in customers significantly new close XX% rates including all quarter. these We and business and financial subscription progression up were landed global and to government, deals, won the services. across about We first from wins

its all couldn't to hybrid based PAM environment. customer meet the its its vendor software first looking with manager other on machine committed CyberArk premise solution. of cloud to retailer in delivering Cloud homegrown environment, an innovation and for servers company in environment. and consulting that databases helping secure that like Azure, long-term As the across a as applications, Identity evolve and vulnerability We're the In scale its identities. as to and program, Tenable’s secure Azure organization strategy privileged step out an rolling Security to would its management requirements DevOps replacing examples, and multi-cloud well A U.S. as step was secure Google well is this pipeline partner the incumbent AWS its is of secrets as

demand look environment. we team the ahead, added accelerating to XXXX pace growing are has ramped As sales in we capacity productivity the with to keep we the and

ecosystem of us help will scale extending market. and of CQ in go to our reach is Technology our partner ours advisory further firms Partners and drive Our

creating sales towards the new company. subscription a positive. impacted employees CyberArk recurring both which and is which strongest accelerated heavily towards The weighted push transition, market. And geared Moving revenue, from feedback towards mix the a on our SaaS. the our scoring of becoming Customers had mid-January helping introduced in bookings, offerings recognized our our as store discuss. been year we motion. are and XXXX. this in the The already This goal to incentives, Josh working, is our Americas introduced that as customers, pulling in which deal are subscription has in pull we subscription earlier maturity packages were overwhelmingly levers recurring well bookings deal incredibly SaaS with the own Geographically, have desk subscription of of pipeline reflected generation, combined partners push the the new and will

process, as of value. more traction the is where reducing more and lifetime of with the couldn't We both The sales terms coming saw transformative relationships, deeper, generate and activity APJ, in ahead higher customer be transition you out and examples. are value are The which in the delivering our first already the shifting pleased in trending with quarter our some I of enduring transition. team customer increasing pleased cross-sell the we will friction towards of EMEA building is earlier in subscription subscription expectations.

to enterprise multi-factor to our are and with customers our privilege portfolio integrated centered privilege. to continuing security made security trust Now, are portfolio into to we frameworks, on authentication today, innovation moving while enhance solving We've continue engine. step we gas innovation identity evolving a significantly quarter, first progress controls. our just our our the where unified, enhanced around the embracing cases we used considerable provide are zero In on pillar, platform on with time comprehensive offering. in Customers capabilities our our

Our investments momentum. is cloud that the entitlements Large in environments help secure off. are innovation paying manager building customers

strengthening integration cloud, and is privileged as to our manager and more Conjur the more development. posture solution cloud between adopt approaches to and tighter Our cloud native offering our customers application applications security secrets move they

named demonstrated Red are by CQ Our Hat. our Partner partnerships recently extending of being reach, Year by the

and customer offerings June. partner impact out wait through many and we as rolling these exciting our be preview move XXXX, can't to will upcoming in of event We at I

building Finally, to have emphasize we innovation, Josh of changed this are and to scale, wanted profitability the discuss making to that period. a year principle operating committed model part durable our and investments to pillar business transition growth not Investment delivering returning and detail. our are we once will approach in of DNA, drive CyberArk. more growth, profitable through to remain We a strategic the and is guiding of rule we our I XX

As recent XXXX, are into DevSecOps. business. heightened our cybersecurity And of PAM, have we solutions hacker wake the attacks remainder seeing of a innovation, industry and of of are sense urgency we Access, I the and driving In across the accelerating a major pace imperative. tailwinds look the business our

well. Our go machine is executing to market

are We our at leadership delivering pace. a position extending and innovation record

the business in on a our cloud well and first value tremendous way execution a With are our call for now solutions and leading I outlook fast unlock growing customers, full-year. in the subscription for our our the and over are us, to who quarter towards shareholders, strong and the company, results way. will Josh? to into the position turn partners. great Josh, quarter, we our transforming our We will our discuss are second

Udi. Thanks,

appendix contains Before we website cost as March. at that be the of we presentation revenue through the quarter, Investor The the Day that in our we of lines our of walk breakdown the posted discussed helpful and discuss the details new revenue we will slides you decks to wanted we remind and to our P&L the of of the historic results. that

of the We our transition our business. P&L making to change visibility increase the subscription into direction the success this are of and to

$XXX booking beat X% million mix, our was into reached million in moving XX% business approximately $XXX Total in last were first quarter. exceeded subscription the income, momentum XX% and given strong from results, percentage million that mix and with quarter continued first subscription from in revenue of So, total and increasing the revenue, We we total the first a with to quarter, operating in also expectations up guidance, XXX% of of revenue and year. $XX particularly only mix our pleased XX% our of revenues, a the in bookings. revenue represented year. first last million quarter booking subscription subscription the $X revenue Subscription EPS

the a was model, anticipated, our license million As given $XX and sales perpetual for in towards shift decline recurring did business subscription the motion revenue quarter.

and services services combined million, revenue. professional maintenance million $X.X million in Our was maintenance from with revenue $XX recurring professional XX.X and

of from growing important reached $XX During increasing that last XX% include health the of subscription the provide the or business. XX% into and revenue $XX from the it subscription percentage of recurring total of revenue. metrics to revenue revenue evaluate first the They bookings recurring quarter recurring increased is momentum annual total In year. additional transition total period, and and million from revenue total mix XX% the visibility million first in and quarter,

we revenue driven mix mix first is through recurring success is rates Please the mission our Our The which all compares bookings in will for the software. mix That's quarter, first the calculated first annual revenue a based by year-on-year subscription the bookings bookings new the total This as have of was million including is is only into perpetual as XX% maintenance move contribution of year. growth prem as from from year. growing quarter was set quarter subscriptions, well bookings note, an the the strong percentage and of our It still XX, as about SaaS continued At mind the pace renewal subscription licensed our assumed XX%. on transition, in our XX% of subscription of of In the about to new annual last headwind critical headwind the and was indicator compared an transition. the mix March the first Idaptive, license to XX% consideration, critical quarter to about keep to first level about bookings. excluding guidance, On organic from quarter. on million the deals basis, in revenue year-on-year. headwind our $XX created that the Taking mix bookings. $XXX of than the The year-on-year. of grew grown annualized in in mix XXXX. bookings recurring ARR the our by $XXX million first strength our in value, last XX% quarter would the XX% faster by

pleased highlights XX, subscription of $XX Another year-on-year XX% total important last This to up that's success about representing March we our at $XX ARR watch March ARR, our of grew includes We which clearly our from year. is at million, or closely prem million XX% were recurring growing than business. and our just over subscription in XX kept the tremendous faster on portion growth of XXX% portion metric SaaS that subscription contracts. subscription that the

non-GAAP to our year-on-year XX%, $XX.X about All by quarter Geographically, representing total a see compared full ARR the tables The as by $XX.X $XX.X driven to the million. business Americas new well discussed will both press grew $X recognized Americas existing, million the of which XXXX. in this again, release. reconciliation the revenue. the please generated million. well XX% the of lowered first line the be quarter logos. revenue GAAP year-over-year be period of during of that's as XX% bookings our to in had comparison, basis, continues diversified. the revenue SaaS by strongest was items P&L increasing of generated in And the in percentage the million Our quarter, EMEA revenue, for APJ growth non-GAAP on to

the first was year. XX% Our margin, quarter gross quarter gross or that's profit $XX.X in compared an million XX% last to first

Our gross two impacted factors. by margin is being

our from to mix; the the delivering our related increased headwinds SaaS First, second, bookings services. expenses subscription cloud and

the marketing increase scale in million. increased $XX.X expenses R&D Sales go million we about continue to increased we by as to invest XX% across year-on-year P&L, the to $XX.X investments innovation. expenses. XX% down for to make million deliver in contributed the we Idaptive engine to million Moving geographies. year-on-year quarter and all to disciplined XX% $X.X $XX.X to expenses the grew increased business. In the first as expand XX% market to to operating total, our G&A million year-on-year business. $XX.X

million Our Operating operating about foreign by income $X.X $X.X was exchange net lowered rates. million was quarter. in the Income from

approximate $X.X expenses XXXX. business $XX into operating to ending quarter cash sales In revenue total a in XX% headwind This in margin $X.X had executed Over with our well our first employees in are XX% free sheet flow quarter approximately of Taking invest XXX a and free flow first or marketing. our cash headcount. quarter in operating would count, the corresponding a income. driven collections for quarter. ended was As headwind from are the XX% investments. flow the first against quarter, We income bookings. by contributed aggressive our our employee cash our to plan $XX.X reminder, impact have million on account, the strong Net million quarter fourth been cash first strong billion and employees $X.XX margin, Of per hiring worldwide. with the we share and related our the diluted to the of X,XXX or the operating was million balance

XX% We million. year-on-year to also revenue by increased $XXX deferred

$XX XXX% SaaS by last to XX million Our $XX year. to grew over compared million, deferred March revenue at

we guidance, total quarter of $XXX million to second XXXX, the Turning million. for revenue to $XXX our expect

of income X.X expect to operating [$X.X second about for non-GAAP quarter. a million operating We loss the million] non-GAAP of

basic $X.XX diluted net loss non-GAAP range diluted and expect income EPS to per shares We of share. net to per our $X.XX from of

and average XX.X and average XX.X shares million assumes basic diluted diluted weighted also guidance shares. million weighted Our

about We of $X.X in are a million guidance quarter of This $X profitability bookings the second million taxes approximately second for headwind of the assuming and revenue and XX% XXXX. quarter. assumes subscription for

Our our the mix of of guidance and overall of for our for strength pipeline, the reflects the opportunity, our an assumption XXXX bookings. full-year

expect million $XXX the We in to million. $XXX total revenue range of

our well increasing While we growth bookings bookings This total a our headwind million than mix pipeline subscription and XX% revenue quarter, million. our assumption our anticipated subscription to about increasing range first in robust of $XX subscription as are and our which stronger because to are approximately revenue. we as to mix the $XX maintaining mix assumed guidance, our our a of revenue and XX%, to headwind prior compares higher

upward strong Our the outlook percentage the robust strategy. and mix the the and adjustments to increase bookings confidence first as environment represent well for headwind in of our quarter performance, an demand our illustrating as execution full-year in our

We million to to operating between expect be $XX $XX non-GAAP million. income

to We $X.XX. expect our of range be share income non-GAAP in per $X.XX net diluted to the

For XX.X we average taxes. $XX full-year, expect in about weighted the shares about million million diluted and

are and Investor in mentioned, transition, to expect exiting discussed XXXX by fourth at between so levels which changing and quarter to the profitability Udi of are continue our to quickly or As to for snap we we X quarters planning quarters, we exit investment after Day, philosophy back mid-XXXX. not we XX be in the

with strong we maintenance. cash first and our which of free terms reflected outperformance In thrilled bookings in strength our collections in cash for were fourth perpetual quarter quarter, the the of the flow, the

margin in-line with business, XXXX, our full-year will our net in our income cash be the For non-GAAP considering the margin. that to continue flow we seasonality anticipate

to operator we Our turn over and XXXX I of first the Q&A. investment the now quarter level growth right the beyond. and Operator? will for in conviction the making our performance that in strengthens to innovation call drive are

question first you. Saket, Saket with of Thank Kalia Barclays. your open. the line Your comes line from is [Operator Instructions]

my morning, Okay, great. Thanks questions here. taking Hey, good for guys.

Hey, morning. Saket, good

market, a about maybe, maybe know, the for for out talk that? Hey any are Udi. the Udi, call Hey, you like you PAM morning. to thoughts thoughts on and Maybe takes puts broader And you what can your Okta your on entrants specifically on good thoughts first, new Okta, identity you this just know, and entering platform market? into just

pioneer the and leader space hot Sure, the growing sure. Look, we in that's in very importance. a are

breaches] I really importance. [recent the think highlight

accelerate So, coming a we’ve took and across keys We paranoid the think major to entry. We've privilege journey compromise security infrastructure the I customers been call expected is in on gives at think to both hence a breakaway when our they we put security identity looking and productively I position competition to security the kingdom it us about expand it, like problem. advantage. further us innovation I invested our leadership. PAM all continued comes to and Cloud non-human more for following IT in from the into it leadership proliferation talked where that as as specifically, major we But always like, the the and security identity giving and kingdom. advantages of won't time, security keys and we first, enterprise to human to

center And broad to so, expansion continue and with break the and a it. security, of we're identity into PAM at lead major the to going but away advantage, as with

Got makes bit. component ARR they if zoom Josh, the will, for keep of bigger for could of follow-up the of you components expectations? ARR that maintenance rest pie, your quarter. mind of wondering for in of just sort through And you, into on piece is pieces maybe it. you maybe those believe the year. a if two ARR how did I piece sense. thanks the the was need that some modeling just a in my I to versus compare maintenance the little detail for That

thanks Yeah, hi, for the question.

think XX% about maintenance regardless where the of we [ARR]. about total anticipated came in with in I came know, You

that's XX% really component, [ARR] that look in from subscription if that quarter he first and in better I XX% XX% we the think we the last back SaaS anticipated ARR growth coming and which the compared was we of flip bit to on the now side, saw come than year. a with of

that. we're you pleased So, with know,

SaaS really on get, doing that the coming we from maintenance, on we're the right you to think I side. but bonus the renewal better so, expected rate know, And is getting

Thanks, guys. helpful. Very

Saket. Thanks

JPMorgan. Next line Sterling with Sterling, is of your from question comes Auty open. the line

Yeah, thanks. Hi, guys.

pushback curious, So, I'm you of have gotten. just may kind what

think mix happen But you which the why where it you Where of lot comes terms of did subscription wanting many have watched that expected, pushed choose happen? a in back? to don't subscription, customers got as surprise or in So the I of transitions. was us not And did better to it than a SaaS?

hey with all, first start expectations. transition, we're it the beat Sterling, I excited So, the of to strong our subscription think

is pipeline, the old as with And chewing first looking pleased so, in sell that can quarter, pipeline has you a current on outperformed some and as know perpetual, that mix old how full-year, pleased we but full-year pipeline. see you continue very how some we and to have to expected it’s with QX the very

I say, the expected start pushback, no to but year. transition wanted way and So, we better actually really would this than

or weigh And in maybe going Josh, mix, outlook, anything to just I Has follow-up bit changed want it's the for Alright, make expense one potentially more great. the your understand would on a you. subscription EPS EPS? sure guide. really little I that full-year more

around Sterling. taxes. hi, even really actually It's the below It's Yeah, operating line. income the really

then in we of the of we As and income we rate levels, you and you're tax higher lower actually forecasting kind at end a finished year. we operating up – We, taxes with know, mark hovering rest the were for what net the at QX saw the globally. happened around when QX

our for tax So, projected provision. we just the – for tax adjusted

you. Thank Perfect.

Sterling. Thanks

UBS. the is Your from comes open. next line Fatima your line Boolani of Fatima, with question

the questions. Josh, wanted with for Americas to I my you Thank taking morning. you performance. Good start on

that sort headwind, in but So, still it looking for performance other performance it's as the better we appreciate for [geographic relative seems that much Americas, concentrated model transition adjust in the that even flattish quantifying if you like us we're the relates more a Americas, to at theater]. headwind of to in your

go So, can dynamics any for the adjusted wondering that talk explain that headwind? flattish dynamics, motion you or marketplace to would growth year-on-year to market other if

Fatima, I’ll Yeah, here. Udi start.

that we the actually you in and elements mover done see faster region. the it, mean, transition in this coming actually, So with weight would looked some are a of on is growth excited heaviest at specific to the it, the XX% quarter. touched QX, say off is the I was SaaS. record we Americas when I fastest it of it and

rest in And see the pleased of of QX, we great of the so the are great pipe, with the know, optimistic especially we're the we're, the are and year. where when Americans, rest you we start for

And I add in – on of specific add would there I would I terms just markets. guess

You know, we a first repeat federal strong this quarter, was last know, you in year, that quarter. in didn’t the spend that of And, very cycle. out had

So…

for or for category? any Very on could have And us that's it level you, expectations, and changing helpful. subscription me. it subscription specifically high since SaaS the extent Josh, the Thank that ARR to you. I to the prem, you modeling performance expectations points revenue this point as to relates between and mix and is quarter mix your

thanks. Yeah,

still [ARR]. on really heavy we're know, seeing You a the SaaS

that would of we're prem way. point, looking X:X kind know, using this on you ratio you So, subscription. of continue a And, still SaaS I know, it versus at at

your line Your is Rob open. next question comes Sandler. Piper Owens with Rob, of line from a

question. my taking for thanks and Great,

As them are a think update to the guardrail? how of Idaptive should any look Idaptive quarter, you I’ll ask about doing? bought on Thanks. up since acquisition, ARR, then in year both And number front? that And noting that sticking maybe an it's from Given was you growth? organic two, kind you this said, how been we a and puts QX around we year ago, were I perspective you know over towards XX% takes

with the And of connected integrating and there. we've one into sales create also one invested start part invested Idaptive, it on latter I'll overlay portfolio. I Sure, security PAM plus equals to identity we've putting an the XX the think on with really question last quarters in effort several part being of

in it I’ve tip examples as we're standalone, really given called front us as So, also but in cross-sell, landing as a still the of the Day. we Investor it well the with played of motion the the seeing early spear Idaptive and for and are – for innings some customers new it's existing upsell Matt

but it's [ARR] [ARR] for at And so you on see on young XX% plus know, really and the with growth the on off year. Rob, very organically speedboat that we're growth taking CyberArk, an well. the year XX% first the within you question, we know, much looking started quarter you early XX%, we for nicely off continuing and, And is still know,

All right, thanks.

Hamza next comes line your from Morgan Your of question open. line is Stanley. Hamza, the with Fodderwala

in had really thank fast, started to Salesforce for I announcements. know, on, product question of the back question you growth introduce selling and do you guys, Salesforce productivity some incentives Hey, my particularly a in around want you that? how And, to had sort and good you ramp should in think with you of progressing, the ARR morning. sort just that, sort ramp. know about, relation see that you we I'm taking know, how know, the QX just wondering, I of new half?

going, quarters, Hamza. half teams, three capacity of months know, will know, and they you the we do going quarters front pipeline You you the our sales, second year, of through to the, have two know, nine globally. record continuing And, into, first to to growth our you continued on you you that hi, know, about And ramp. take sales sales have, the know, expand the we know, still our each be the into in to really the you record of you And, cycles. you're know, six ramp we continue quarter. know, we're to Yeah, right, sales the kind excited

HX that are say hirings by board bringing the future in earlier. always that, ones And that at year, last half we big them year, the in their actually the pipe with and year. mentioned [subscription]. only their a point. when So, almost would productive I do anticipate we QX, we're have them the on really nice of teams. mean, our and we all And on that's increase productivity SaaS did QX, of I first with off of I pipe, and last reps add into with would I already in last subscription at to of from kicked really that, saw we this I seeing noted they're the from the we And did look fully we sales first in And on certainly growth think how this the teams. up it why quarter it from have that sales has in in board my subscription I the we very ramp beginning some like year, the notes, pleased deals deals

that And quarter, if was was you it. in wondering could XX% inorganic growth Got quarter follow think well? Idaptive, that just I contribution a was maybe fairly more up range, maybe sort consistent Josh, somewhere of for concrete, the last give I as this was the high from organic brief

from The question? Idaptive? inorganic What’s your impact organic, the revenue on

On ARR.

Oh, on [ARR].

just I was, I XX% think from it XX% the impact if for it again, about it growth, was perspective. organic XX, was over about growth, and said an –

you. Thank

Gregg, of line from question Moskowitz Your next comes with open. your Gregg the Mizuho. is line

of among course adoption Okay. how evolving enterprises? broadly, taking Thank both and quarter how much Udi, you I interesting is privileged you do with but this of that example, that the And more XXXX? over for was, questions. you know start very how customer see the this cloud call one mid-market to Maybe

large quarter large Thanks. can and see some accounts. blurring privileged beginning strong cloud. I how for lines Yeah, would to verticals, be it. that enterprises a and very adopting And in into super big even absolutely how – financial even we're say the very

larger in deals PAM new the new force cloud. privileged landing becoming PAM, it's so within is within And

licensed roughly All of kind of or Josh, just then to percentage right, what hear. revenue how expectations? tell bookings, that's great your compared as to that can a was AAM And you and us either

there's against a mix happening you that now much know, bookings a a so forth, and growth larger little less higher. it absolutely bit levels bit looking now anticipated change absolutely subscription at relevant levels rate revenue, subscription whether percentage SaaS when the the AAM with expectations. our perspective, a because a we for at even actually, from our will say absolutely had basis. But nice coming perpetually look year-on-year at becomes on And it's contributed that when I and It product the at even revenue and we from hit or a

you. Thank great. Okay,

Your line Brian the line next question open. with your comes Goldman is Brian, Sachs. from of Essex

for good Thank the and Great, thank you taking morning. you question.

couple you. had I Udi, a for know, You

and this as number the at abbreviated SaaS terms attach remarks prevalent rates in in to Are or trued now? a higher trust have tenor on you're up XXXX? You that know, could of the their just on end-to-end pipeline? if that you last maybe platform? customers of didn't of and in us noted And you pattern a quarter more I flight customer What do end-to-end know, what rates solutions update year? enter prepared you maybe you getting attach buying evolved your came mentioned more kind you is think you how seeing deals. But buying patterns may in the of is

platform, Yeah, the it's the progression prevalent move in we cross-sell SaaS the see definitely faster. on where more

already to commentary or the seeing of back talked much QX cycles, earlier deal we’re I to and similar I Identity seeing in kind average going size perpetual areas is the size deal the and SaaS about basics on commentary we which related like transition and would other that our also a is in whether in – them back add-on, that deep to the looking home. in about multiple their customer up much it strategic - track last now PAM looking Security. they’re the to year, being be following seeing when both and perpetual is commentary work in do We products programs, and from historic more related we’re and deeper in QX saw the strategic that think deal programs. And it to say and Blueprint but great. in do they them be solutions, as to more to – to continued things year deal looking in SolarWinds we’re customers, the size, and comes also are new at really

next Your Andrew, is from the your Nowinski line D.A. with line comes Davidson. question open. Andrew of

and you morning, everyone. Thank Great. good

high-level just SolarWinds Microsoft could, you Exchange wanted impacted may had how wondering to they touched forward? I’m you may on have pipeline results? if a put QX and going on the all just they at if have start up question your maybe the an So, how and attacks, with impact And a finer on point

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your just it how it. way was over then this and like XXX to logo added adds break of customers you how the your added performed wondering new expectations? looks excluding you I out purchases came at look I Idaptive relative Idaptive you. you customers And Thank by quarter. when Got your new many if could

large in and in customers well. them of our we business subscription majority of core were the at when our looked actually our off were on PAS as and the coming new I’ll and from overwhelming jump SaaS think I percentage – actually, a

last from XX% whole back and think the XX%-plus XX% look even of the over that coming of has we’ve incremental come added still probably – are ARR from organically. I new if year, we customers

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you. Thank Great.

Liani Tal, is open. of America. comes your of the Your Bank next from line Tal question with line

guys. Hey, the migration of give of accounting are you under to us on next of and quarter well, seems question ARR like us impact expectations Street context slightly Maybe guidance. as make to have quarter Thanks. – I like-for-like? the under context give would for SaaS? just next a just the revenues about a It mind the the EPS to comparison

Tal. Hi, the Thanks for question.

accounting, the the talking really, our about subscription as you’re think if SaaS and I know about talked relates rate. you we it from, headwind to

and subscription the packages, the it going term-based and XX% to up XX% For it’s business, side on-prem, XX% we’re time. XX%, for looking of upfront between the pro upfront rata closer licenses, new at over

to, guidance. it’s fully a for still we on in to subscription pleased QX. able SaaS, so come with headwind obviously, on we’re and into one, really anticipated and the our obviously, the ratable perspective goes – the what for increase And that at So anticipated in, mix bookings calculation be revenue guidance

actually So the think that for an actually really our mix nine and business it basis, really next for and annual supports expectations about think from you it fact really the – months. subscription full-year, about our and that perspective, the where nicely, when the pipeline for we’re supports we it increased is from for also headwind the growing it’s our quarter raising the

to. able about we’re we’re So, guide to excited what

there of there for a impact a the of quarter? gave is accounting? Josh, next And, number like Is number this quarter number what’s you the

headwind? the For

Yes.

QX. is headwind The – XX $X for Yeah. million

Got it. Thanks.

from line comes open. your Ruykhaver the with question next is Jonathan line of Your Baird. Jonathan,

hi. morning. Yeah, guys. Good Hey,

challenges particularly pipeline about the pretty rates, year you strong deal conversion certain last to you verticals. within talked growth, So, and noted sizes also consistently but

you XXXX, So, I’m do if curious to those where just potentially comment challenges business? could in continue you on see entering dynamics the

showed rates this that – rate Yeah. could we also I and say, to close – close – the return strong Hey, to that on I I probably And perspective, think from and, in this would that pipe we seeing pipe. say, would Jonathan. a and was the about quarter. for that talk quarter to we’re execution on record us building ability normalcy front great

opportunity a the more SaaS in cross-sell. number so, and through return of we the of in more SaaS course, growing And growing portfolio because customers them journey take acceleration more And can that normal. signs a for of then, to we have

than do Udi, good Is for need more what I past? hear. DevSecOps see how the and what of That’s seen buyer growing the I’m to is security a really to you’ve have you of on center influence wondering, you follow-up as impacting that it in starting highlight privileged? The the

Yeah.

have both I created of one There movement the and no think made and strategic things that organically expanded doesn’t moves enterprise – DevSecOps most probably we is we happening. – we’ve that this the inorganically is customer when speedboat.

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to It a a developer creates was side it’s DevOps I bridge would for in deals, very And, the have – our great solutions. customers largest an to it strategic in-road included DevSecOps element. So, it’s of the our say, many our and side.

transparent value secrets. are [CSO – audience keep again so, and And it can this bring to they build very developer that while secure very them manage them making the for pleased customers] they to can our

to great Thank That’s hear. you.

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line Your next question Tilton. state your comes Josh from of name, the Josh. Please company

line open. Your is

from Capital is Markets. Josh Berenberg This Tilton Yeah.

able at as quick the two pricing to ones a that believe last Idaptive on pricing Management hoping Have over environment I I Just me. in I differentiator. comment year. could you pricing the correctly, the all was since Access using remember you from was improve been If acquisition?

I thanks, think – Josh.

very different the that Idaptive. I a them was for differentiator a think now can a we’re we – that we journey if into and Access differentiator much on The customer, the fact Identity stand-alone And, full take approach. is Security land PAM. of as course, and taking

included we’ve value. And on some it And new general, to because so, also in in we’re going change differentiate cases, pricing the packages. in

a follow-up on just And that.

a any today believe for You guys that the seeing as using ASP of completed to you MSA suite? what customer product customers of MSA MSA? PAM you PAM have PAM Do indication Privilege guys also, with portfolio. of implement the percentage integration without uplift And if you Thanks. the are mentioned, I what looks are

landing most many were taking PAM there that the of a them to a and to for spot yes, to all big were think of probably are opportunity secure or front when it’s great in the they And users. in in it’s for part here. MFA customers expand organization, too handy put customers fully an to opportunity us have MFA don’t the – we with I have important access But then projects the – that I come long.

big – it’s big it’s a base. a in opportunity So, within the customer

you. Thank

Ho comes the line of Your line Jonathan, is open. Blair. from Jonathan next with question your William

just your talk opportunity And maybe of the little I be? used opportunity. could with of guess, out you commentary more an Can on there? traditional that I bit about how morning. relative wanted big big to a maybe, Good to non-human cases, see start market Hi. you how the some

Yeah. Thanks, Jonathan.

the being about shift and as industry goes for I every world think another matter in the the it opportunity and left day that past non-human human exponentially, talked what side growing is the as big we’ve technology. think by is. I Applications no day are

becoming the professionals. the more developer software them win-win, But most bridge one see of the security securing of and for elements DevSecOps. And and we cross-industry So important great more companies. in that we a control transparent to have good point

it more put whole that’s behind speedboat speedboat course, a only in more And this of So, we, why critical of becoming that the – and see opportunity. we because it critical.

it. shift as there seeing an as of this or coming from And to lot then existing relative the a solutions you this Got to greenfield that’s is well? to opportunity are subscription, replace mainly just opportunity

up – we there just of new continuously So, surprised logos, are in enterprise. that of And, types I are a about to in moving subscription there if like type up multiple elements and earlier, terms more of but transition, mentioned the were in pleasantly it’s of terms delivery. the – organizations more we talk SaaS the happy are land that in

to bring a way greater portfolio us them from us So, – faster. bring it across to time a perspective, and for to time new the those gives value then gives customers faster logo it –

of there though of a conversions, are of the there and want bigger terms a do them small bring that, we when again are subscription. conversions value of customers get we conversions to And them piece, of into In to even it’s – course, piece to portfolio.

getting And better kick and place. where in, where products getting more actually because they the the right get in so, packages security they’re that’s value

Thank you.

open. Company. Alex, from comes is Henderson Needham the of question Alex next & line Your your with line

team. Hi,

push record provide in or see additional did order I guys Mike at this on up you follow guess, to SaaS, customers you Alex the least with bigger us have the the to line sales subscription color. for adoption Cikos final higher top this are I quicker have magnitude underway in and Henderson. and on of the You if maybe some on of rates model want and could here pipeline transition guess, you down the from velocity deal? moving cycles the of I give funnel to that increased seeing,

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are We’re very that not of transitions. changing is to nine-month our this the but of upsides we kind this one six- optimistic general of our approach,

I And year. much add would into better quarter this rates that, going close seeing the we’re first of

supporting I’d meaning we’re and before existing of all, it increases as it’s packages. of the going pipeline packages, and lines our including to across is it of our DevSecOps. goals, each transition especially or And, mentioned very pipelines, well really customers record whether other of Udi product we’re and think say the geographies that, what course, subscription tracking and Access that in our pleased the is, record subscription mention the our is pipeline, seeing it’s across we’re this across transition things new that, again, Privilege, one first of supporting as see So the I’ll customers, we’re all new that we about closely SaaS it like goals about, also talking aspects that each and the when of we about – pipeline, the

line line is question Erik, final open. JMP Suppiger of Securities. comes from the with your Your Erik

squeezing for Thanks Yeah. in. me

contribution First I the was be to and that suggested out. take for you quarters XX% very quarter to year-ago off, for your What X think accelerate reaching quickly. to expanded will seems timeline I you in that’s XX% moving from like XX%. your it It it think to subscription bookings, XX XX%? it would

indicated fiscal June headwind think, the projected think that had for So, it from I then the quarter million was it March quarter? secondly, happening quarter And the I your coming will in what of that QX XXXX? you the $X before in here. do Why about $XX of is the be you million, down likelihood think end March

moved Basically, year increases as Thanks, Yeah. year-on-year think year one. I’ll we questions. started if you basis, to those for between subscription. the a to some started we already Erik, and QX we QX about percent the second with on it last see on last – start

We that’s know math. when the impacting – you at the look it at headwind we So, look look at year-on-year. we

So, we’re from not perspective. doing cumulative it a

the versus it a basis. We’re already and year’s started this a a ago, as, QX scenario we okay, looking have to business from more taking subscription at year natural on we’re year ago QX QX

it’s on So growth. slight supporting in still we question in where strong the started a to that’s first real see regard the headwind, your goalposts, decline why revenue pleased but With within we’re that we’re moving the happening certainly we original it up quarters. happening, goalpost definitely to able establish the for that really first us quarter XX being to the because is set our transition of well firmly X

percentage a We’re able points move to in QX. up couple

able for percentage were couple the also and We to a for QX up move already year. points

we’ll based see to how bring I we quarter of But more want I be want the to think, transition. the than of see it work, year, the how half again still able the full and we for so one see. reevaluate we’ll one think behaves far – But like I you goes, quarter to on we QX in know order in, period. really to what QX but is first think we’ll transition see – just off

Mokady I the back remarks. our turn will closing over for This question-and-answer concludes to Udi session. now call

will our I we transition our much. and deeper today. as our relationship partners, for I everyone and to Again, for with supporting strategy, partners. am confident to even customers, execute first very thanks we contributing subscription Great. employees customers joining thank you a company. our who Thank today. I want build joined everybody to that to want our us and strong thank quarter

participating. for you Thank call. conference today’s concludes This

disconnect. may You now