Sumo Logic (SUMO) 11 Mar 212021 Q4 Earnings call transcript

Greetings, and welcome to Sumo Logic's Fourth Quarter fiscal 2021 earnings conference call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Mr. of President Vice Thomas, Investor Relations. Paul sir. proceed, Please

Investor Sumo Thank and quarter I'm Thomas, President to earnings you. afternoon, and Paul of Vice Logic's Good Logic's Sumo full call. fourth conference welcome Relations. year 'XX fiscal

Joining and Chief and President Ramin CEO; the me Sydney call on Officer. are Sayar, today Financial Carey,

include remarks Ramin and format followed by Our prepared today Sydney, will session. by a question-and-answer

pandemic, risks call. uncertainties business most risk recently Commission, will on obligation update be related XX-K factors by Logic Form in that our call the including to the future uncertainties. it's forward-looking this differ including to may with except statements from timing financial expectations of comment platform included and of discussions Exchange the XX-Q our and no overall filed Actual and market will questions of our Form to of business, your anticipated our the required statements and be in risks is of guidance, efforts, materially and impact A discussion performance our quarterly forward-looking and responses law. proposed with Securities our filed COVID-XX to to our strategy on and factors benefits our regarding statements relating subsequent acquisition and assumes does this and Labs, results and risk These or forward-looking regarding Some the future the not solutions, results of expected DF that prospects. to statements. will statements, Sumo intend filings our made the contain contained our expectations our on subject report go-to are

considered today GAAP measures historical furnished non-GAAP to with be our financial Form GAAP reconciliation results, non-GAAP Information financial which in not filed our regarding a was found X-K website including and from non-GAAP or Investor in at include on measures. with earnings Our as our our results. to release, discussion results, should will our Relations for non-GAAP may the substitute addition our financial today isolation and a These SEC be of in investor.sumologic.com.

guidance, in posted non-GAAP financial GAAP discussed With our of forward-looking guidance earnings detail as measure certain turn to our corresponding Ramin. in not that, is a Investor Relations available the release For over the me on let call website. to the reconciliation

see to sizes you, Paul, quarter continuous our today demand and to Logic's us and We everyone all year driven Sumo We cloud by call. thanks, joining choose earnings finish digital of for fourth our their maturities Thank our and for full customers had a on transformations. platform year platform. intelligence strong and enable

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international to growth we across markets. strong as both environment adoption successfully navigate segments solve multiple and as difficult continuing a are driven revenue domestic and First customer well by

Gross are of levels. in signs customer our we quarter Second, the and seeing above pre-pandemic year base. customer early in ago recovery the stability were ads

achieve half for route to early our a to and ecosystem of drive enabling market second authorization significant ramp in in our our launched helping investments the year. fed routes solutions new the Third, expanded partner traction security we moderate we observability market. Fourth,

type one and few a are authorization. with companies observability of select analytics of We SaaS this

new capabilities expand platform to our and for both launching continue Finally integrations solutions. we security observability and

base. saw $XX.X by momentum revenue total was our strong XX% Now revenue in supported of I'd like improving on details to with to increasing growth year-over-year. more each some up customer We million provide Revenue performance these.

in additions landed XXXk in quarter year pre-COVID or than customers we quarter more ago gross increased levels. generate Momentum annualized to These the exceeding the revenue our continued putting new who also This XX% over with back a recurring dollars with XXX quarter above us we the macroeconomic AR. customers the XX. AR and of with over cases. customers the customers multiple sizes environment Despite and million up added all to finish to with two in year-over-year XXX challenging used year we win across continue customers

more expand or saw IT with land This our Devops, and teams. daily expansion platform and more in therefore as land and adoption Often the in analysis. quarter volume wins increases. cases increase we see data of then action we ingestion and security cases across one again and scans than our users, more leverage as multi-use process used analysis initially We organizations their teams ingestion XX%

most more ingest grew to To In me we daily daily. XXX over in average fact perspective driving growth a in start scan one and expand the hospitality that XX% continue the let the just I and this put wins than year-over-year with impacted land and travel of our segments few in the of of the share examples petabytes industry. a win market quarter. will

scale. global with or replace quarter legacy solution and The manage six-figure SIEM too a we CSE. way a signed their hotel our legacy cumbersome Enterprise to This to Cloud SIEM operator too expensive large land solution had with to become

industries processes This mean cloud hunting even Our win security reduced because economics scalability. migrate the threat CSE their that need of cloud. and modernize as won as solution well to as they and rapid time analytics to automate still tools impacted demonstrates to and our remediation automatic

their as of digital We pandemic. seen accelerate the result have a customers transformation also efforts

channel shifted they analytics Sumo business a significantly When customer for omni to used more impacted initially business needed give This quarter comprehensive with a case. in intelligence They expansion for digital data better COVID them analyze their customers with capabilities a we six-figure they a retailer. observability. user their to full experience had into platform year ago large a to expanded experience. their visibility Logic's of which amount customers The started

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decided This quarter detection SIEM our us here chose meantime of to practitioners. with security up our only SIEM differentiated upgrade events bubbling and for their matter. What was time to comprehensive Cloud ease legacy resolution threat investigation use their and Enterprise. that reducing they analytics automated and the Therefore, significantly out-of-the-box

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started service substantial in standardizing on After we platform dollar group to services who technology an as internationally opportunity This ARR. are win and of a market digital provide expansion had for thousand their a quarter with The continues their transformation industries now for usage XXXk in AR. and our financial service growing both the they over digital us. financial provider U.S. demand

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in see QX. We continue to we adopt capabilities customers launched new observability

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strategy. ecosystem our to shifting Now

solutions. to continue adoption our and security expand We ecosystem and reach to partnerships drive with awareness our observability of

the firewall Cloud integrations In addition security. third-party we and integrations SIEM solution to the for AWS and broadened with our and observability updated our both network

previously with applications testing include insights software Sauce their improve DevsOps. that from Alaskan Labs and also development Sumo optimization cloud release to data This reliability expanded derive others enables Labs. and also announced of security customers automatically Sauce velocity, quarter help test continuous across to solution we the our Logic quality, also actionable leverage to

expanding market. invest to routes continue We to our in

up which it to platform the significant new and our achieve opens FedRAMP us of of public This important proud quarter this We're authorization we the our achieved government moderate milestone. sector differentiates for agencies. team hard milestone work further at took of opportunities significant security and

like year a was massive new open-source for to our our including additions I'd observability on monitoring at included the new and past to innovation broadened We innovation. Sumo AWS move suite capabilities. which with Sumo. solution This year Now observability tracing distributed Logic

and root of view engineers. their interdependencies, site Following maps on faster for DevOps we cause that microservices of announced and the this allowing a quarter providing launch service reliability troubleshooting holistic

the XX% acquire competencies Building adding automation customers to accelerate our identify quickly Cloud to tracing security will logs capabilities. look to their security of certifications SIEM a our To the our us for will have users service Total SIEM. improving and array quarter. of CloudWatch free skills program; certifications capabilities security and by our our training the cause us. with announce multi-level degradations. orchestration take momentum addition and of SIEM further our the the threats to integrated Labs intelligence opportunity create this advantage are cloud digital identified features the or remediation great increasing excited while XX,XXX further into we adoption the as closing and wide to to environments most including of center we capabilities also larger a SOC. our We our of Cloud a secure great that new root believe importantly response for and year-over-year security more explorer the new a root now operations enhanced success definitive a platform. government Logic leading year in viral SOAR win add transaction we in Cloud ‘XX. of entered with exceeded in to re-invent automation anticipate the Amazon cause AWS us such Cloud added and approvals of The we of metrics business FY the as program ecosystem these was knowledge, enhance of engineers that provide we in for and applications opportunity helping JASK or quarter observability acquisition including allow second also Sumo the These also certain close is launched by Logic's This quarter partners. will solution to in provides and and our at native subject in our transaction Cloud recent have certification new customary Labs SIEM. two service by DF Kubernetes to we the were conditions for Sumo SIEM automating SOAR significant provider on observability maximize investments into to a In further agreement transformational maps SIEM platform DF We to of

market digital our we believe our to remain the half dynamics overall this distributors, plan we ISVs, for international to the demonstrated invest enter this the strategic in intend AWS are expect In markets our we growing increased resellers the and MSPs target registration, analytics into second deal year of which we context distribution market transformation in are to tailwinds we and and partners partnership MSSPs. federal continue investments and go-to-market option addition of presence similar reach programs demand other This we through the secular with making across for expand platform. to grow sales go-to pleased ecosystem quarter and our marketplace, differentiated and expectations drive We to In and and to with The continue enhanced geographies. demand our performance leverage summary, generally we last collaboration and partners DevSecOps our year direct in with year. expanded year. to includes of our including and like expand platform functions. Putting clouded our verticals new strong

While environment encouraging COVID to we overall headwinds in and base create sale see the cycles. customer spending continue elongated signs our impact

Carey we and to to However, migration, to Logic our part well-positioned their anticipate year enhance application to and over Customers more continue in improved the last and ‘XX. industries opportunity second Financial ability of increase benefit. strong this I our the financial in year growth provide the would for QX Chief investment of fiscal as our growing digital modernization investments transformation the year ‘XX. ‘XX to across like we increase half now opportunity are in half of our that Officer to core fiscal a in drive from outlook fiscal choose With Sydney platform. and year security will We Sumo more capture cloud our are have made of we results details second plan

start fiscal with and thanks year highlights discuss financial year. I'd everyone to ‘XX. brief provide the Thanks the for today. overview financial the for like a and I joining Ramin our of fourth a call outlook results of our will brief and quarter summary quarter for

improve and this and customer geographies. channel segments wins across market to continue quarter with metrics First,

delivered Next, with continued and growth strong our our efficiency margins. demonstrated execution improvements operational lastly revenue top-line we in

in are the where up customers with we base continued over momentum ARR. total We make our enterprise our of our XX% pleased are seeing customer

As were customer QX adds up year-over-year. Ramin growth in highlighted earlier our

In we levels. the and strongest fact We are the in saw quarters and have the both gross customer seen addition past mid-market were enterprise in four back to pre-COVID we segments. this

quarter This to in ARR with XX ended up year-over-year customers. year We over over in million XXXX ARR XXXk year-over-year. our increased and XXX the customers customers to up increased XX% XX% X

more Logic that have Those a doubled who total slightly XXX are only the customer than total MSPs service deliver tool. not or Sumo While customers year managed from end providers ago MSP does over count customers include is year-over-year. up also

overall In ‘XX. excellent our addition channel up in more year fiscal MSPs year growing an XXX% wrapped to than

to with performance four as ecosystem last well a of finish eight market and globally. year partners the and lastly internationally performance with the the the having quarters mid-market of posting over the the EMEA we to the strong both expand best mid continue in and saw best our last XXX And exited partner We year quarters.

as operate in continue we we are customer seeing to our are While by we encouraged momentum we base uncertain an in year. the exit environment the

the impacts expected did below last few and dollar time it was the net believe the than in dropped term This This the related will headwinds seeing decrease combination in expansion primarily At our it pandemic retention our expect to in XXX%. are the in quarters we encouraging impacted slower than net mentioned to performance. same of earlier as historical Moving higher quarters. downgrades as it churn quarter based XX We points in of a we and decline by customers. below drive install large in persist do continue longer retention XXX%. discussed drive is causing we percentage we two quarter to driven and by our the driven signs coming volatility time see first to base that improvement

our on performance provide revenue performance. up strong in year-over-year. year Total to Fourth from Recall and seasonality excluding revenue customer largest break will I We because we more $XX.X fourth full quarter largest business. the up our customer delivered year-over-year. million our that fourth was of and our of million financial $XX.X rest variability XX% out increased differs the Now XX% details the that dollars a quarter quarter.

year-over-year. year XX-month For total business. best Therefore, duration from can the the customers. metric to our up the ‘XX billings Calculated trailing XX% look due revenue full billings timing $XXX.X XX% was year over we our trailing of fiscal measurement for large that calculated Recall totaled this at the as and million fluctuate year-over-year. a period XX-month to up of quarter billings period of renewals the for $XXX.X million we fundamentals quarter believe period XX-month reflects

obligations contracts. by size remaining expansion driven RPO or Our the of duration new and year-over-year and performance increased XX%

commitments to pleased longer-term are customers larger making our to see We platform. and

also addition RPO current increased year-over-year. In XX%

review more detail. Now income the statement I'll in

metrics As and a included financials unless of in posted reminder our is on non-GAAP. reconciliation all our earnings release to website. otherwise GAAP are and noted A non-GAAP

to In hiring First, quarter. in quarter. we focus go-to ramping pausing but our our that after significant a that up saw in improvement this discretionary from the drivers QX margins continued Recall XX% in achieve key our lower hiring saw hire expected market back QX ago improved didn't period. of margins. operating we of strong were which spend our a margin In head year expenses the gross in to we again we led with on QX forecast our XX% were year-over-year count profile lower in prior the quarter; we with combined overall than the

our percentage reduced to primarily revenue Sales fiscal of benefit or XX% spend the shift as year our online. year of our In $XX year in addition the headcount cost marketing addition a driven and in marketing continue year-over-year. revenue improve Headcount efficiency compared AWS efforts declined were million revenue over gross we in with in travel compared programs year carrying and expenses full expense objectives by year more digital from as of saw the ago continue XX% The QX year ago hire ‘XX. and XX% expenses in-person from drive last improved and the to In margins and favorable we period. year-over-year to was XX% events quarter growth to in lower we we period. reach did to quota to also to platform improvements and

XX% pre-COVID on of the count XX% was and decline million and head In administration our ago fact, a of saw development primarily as In public to expense XX% or of X million revenue in XX% track gross or discretionary operating the company. a QX reduced and revenue costs as in operating the sales with compared marketing percentage to G&A performance revenue are of associated at and The to we improvements improvements the in of compared period. in significant Research was in costs year period. was by across revenue company. and increased General performance. in $XX.X includes ago a the year and R&D total revenue drove back percentage hire expense revenue we margin, pace revenue expense strong as of driven lower spend.

year loss loss XX% Our $X.X operating of of in was operating an improving loss XX% the ago from million operating an or period.

or million $X.XX share loss our outstanding. was year. XX XX% million was approximately fiscal the loss For the on prior year a diluted percentage shares $XXX.X per weighted operating over improvement Net average point $X.X based year of the full quarter ‘XX in diluted

the decrease a We to compared was of equivalents; revenue million Free period. X% the the period sheet negative the negative in $XXX.X million and quarter Turning or from to cash of year flow prior ago balance and in cash with our $X.X million ended period. in cash flow. negative $X.X XX%

Now to I will move guidance. on

enter seen timing with is environment compared we change the a As recovery macro year not have last pace we to predict. difficult the half significant ‘XX The in and of the fiscal of second year.

anticipate as by the to COVID believe recovery the investing are when transformation year in digital transformation second of in will accelerate. marketing productive. and opportunity presented innovation we investments last Regardless we of sales the new revenue and believe as to half opportunity continues will improved the of the second we However, and in year of picks we drive half digital up that the capacity exit more grow. made capture this becomes pace We our sales and of cloud product the growth

fiscal we market routes lower These our operating and long-term drive innovation more increasing quarter in and to will growth. that first our build addition also this will our move but to in year market are year guidance. broaden on and In margins go-to in observability to to security ‘XX platform. result With investments investment I'll

revenue rate total of million an million excluding representing $XXX XX%. For million Revenue year-over-year. representing Revenue customer to $XX.X represents growth $XXX to of $XXX the QX to expect or on XX% million XXX loss a million million our excluding Non-GAAP XX%. XX% our largest rate growth per a of XX XX% XX% share XX% a average XX% of of year-over-year. $XX.X XX% $XX.X year-over-year. to total year outstanding.\ revenue loss $XXX weighted million fiscal of $XX.X to XX% a $XX.X loss of to operating full rate of rate shares growth we to to or million of operating largest approximately For $X.XX million $XX.X million Non-GAAP to growth this to customer million of of

uncertain million success. revenue positive that growth, share the loss year We an operating to In $X.XX expand in XX% outstanding. Non-GAAP per we to reach. the base well-positioned to are half capabilities delivered reminder expect plan with are loss We million shares to to strong in of of or your loss the in this $XX.X environment happy any improving to revenue of margins. of a summary, As accelerate and results our XX%. the we weighted million invest more momentum pleased $XX.X Ramin average our second executed we year. take on for $X.XX and quarter customer questions. operating market the and and Operator? in growth approximately With an we're of XXX Non-GAAP year. go-to and We platform believe I of

Company. you. Instructions] [Operator Derrick comes question from & Our Thank Please first Wood proceed. Cowen with

deferred a talk a and on quarter-to-quarter congrats about thanks a guys know doesn't growth, was and like the stripping kind Ramin that but I much maybe but side look strong into for quarter was from guidance but for billing ‘XX. like volatility Sydney long-term Maybe quarter. on of part you the XX% it of Great starting Sydney had that and revenue really that through billings at with even fiscal strong that's it it carried out looks you two-parter XX%

and could So on to quarter for then in or that maybe that the click wait that of follow-up. kind that a the skewed just I'll call anything for you out billings double

Sure. Thanks Derrick.

quarter in seen what consistent pretty billing we've fiscal to the we year. last pattern So had

so billings have our the back contracts didn't unusual. Our being upfront bulk we annual to anything have of normalized

the we tracking So look it's be. at thought as it would to we where growth billings

customers about bit you understand and key hit acceleration. navigating out the you the to know if large growth but still the of need top move ex I initiatives guidance could acceleration second Thank kind three in on that will know the think investor little you. really needle Ramin or and growth then a half. you I just the on to two call ‘XX that the things of for I maybe that XX% some not growth, from and growth that Okay see fiscal slowdown drive

part got of the let I it. that I broken question Sure it's Derrick got but me, gist up of hey think

the pick a of started important half? invest continue the down So back it I think back and last growth half first to in in direct and in are what did capacity we'll remember that for this that. slow half still the drivers mean predominantly up year to and it's and we hiring selling year the of are the I to we model

portfolio for announcements driver expansion around as well Cloud to respect and second to organic innovation the the our has leading lot our as that a The that the of do observability tends with SIEM be Enterprise. to with

third well markets The our of international as to install as as the some impacted in growth in base piece those stability is look of customers particularly those. and we reapproach that industries

Okay. of where Anything you the capacity on you growth you'd share stand to kind could of in terms where to get sales like or of year? today by the end

Yes. of there on The good news is actually hiring. plan capacity we're ahead

me we As we're in ‘XX. the correct I'm of entered quarter Sydney XX% entering terms up if capacity wrong fiscal

also Yes. ‘XX. ramped for but XX% enterprise. fully We're capacity as entered ramped a of in year good up enterprise in reps capacity up more capacity the improvement saw fully was we Overall our we than fiscal entering

Right.

great That's to hear. Right.

Okay thanks guys.

Good hear Derrick. to you

question next Matt the question. Hedberg comes Capital. from Our with Please RBC proceed with

just curious from as increased are the fiscal I'm Hey months broadly of fiscal guys spot that calendar, removed taking enter several with we're question. but a Sunburst for have you more to situation front around sort ‘XX. is your good Solarwinds, folks Ramin, year that your I navigate hack. imagine this guys now my help how customers because to thanks we or threat in conversation landscape

security for blunt. terms of to circumstance much to I be unfortunate different the in nothing's that think opportunity Matt due

across as it's of we're more there. awareness conversations and there's as the the our risen level e-staff think a say having lot I and I so would customers well at board

capabilities. for need enhanced seeing we're auditing Secondly

spec do Third, the but look of and related of policies in at tool SIEM look Enterprise so Cloud a and offering think is practices to ops of how large of help and and own speak to the assess spend. SIEM need are terms lot to some for components Cloud of and staff their environments our augmentation what and our by to with services conversations I around the they incremental then around

on of half, we're you're about helpful to it the some bit That's you starts That's and now the growth second had kind think side of just SMB second your then on customers think and towards was little the Sydney, I about how the out first vaccines the towards in really have guess more on half know where side? of looking kind business. the thinking that of on that churn half acceleration to you of and guys the of great. versus your the of see we're do good thought I churn? the the sort Do there curious pick end SMB churn we're up in economy kind we've at from got you a SMB that in

but look and as well still the getting we with last was adds were fiscal volatility the with market base the net, it XX% ‘XX of So in and as year so with in particular below both were really over enterprise as I and some levels. I are strong year churn those in at customers SMB of pleased our the sorry we'll I'm mid mid-market pre-COVID back that and the bulk growth customer to in QX see and think

coming size XX%. we overall those pre-COVID and back was about segment that enterprise deal to levels saw also also our deal We new also saw up the logo was levels and size in our pre-COVID average back average coming to

and some momentum very into had actually go of we that's the good metrics customer So we year. feel so in the next as quarter a we like bit

momentum That's were with of like coming strong. seems there's in QX of this bit year great, exiting trends I lot but of like seems a out first it quite half conservatism little it the mean a

you. guys. me Thank for it that's So

you. Thank

Stanley. from with next Our proceed. Morgan Singh Sanjit comes question Please

sort SIEM apps endpoint? to elements taking offering brings question what would performance sort the the Thank cloud-based I then ultimately talking morning the the this to of the of ability of to plus on and a guess to the of SOAR to the do on of table point questions unified across this we you get if need diagnose is you mean on and SOAR acquisition question congrats space and help good observability for about and and think modern security QX. have I instrument acquisition the all apps a end first plus about guess I be the to

good voice Hey see to hear you, your again. Sanjit

use across and if at the stores interesting analytics only automation but more of applicable the as well we out is and to same at tools look much and the I think looked security trends dozens the as we've aspect us remain the need some particular for both it's of for there security not acquisition that this broadly. automation observability about case

rationale So one. that's

than go to think a the way have honest where I do to one service, than than new customers time in be continue fact. continuing XYZ endpoint a tool, and the doing there's one terms need point of with been and endpoint second that to and that old need over one the some be the enterprise provide of from we quite the a so for the reality to we've to where more bridge they more invest decade all network need to more you, don't to to firewall of in lot in we we

So remains same. our strategy the

an market. a the we integrated frankly a an SIEM SOAR market that now category. not the only extension on market now and In of terms why with Cloud SOAR native we're separate believe to native bring It's to strongly of why that's capability SIEM Cloud

really differentiated So is I think important offering here. competitively in

some SOAR, like Now the support that of quickly with choice very but said integrate definitely we'll and be still integrating close we partners that own their we'll the acquisition. that with after and our still have tools

you questions to progresses that's year change the range. rates over took and hit XX%. around an quarters to quarters you at Sydney the you customer just business guy calls growth COVID guidance the in growth I we'll my XXs the When was growth so pace next completed of my couple revenue if the step large prior X third at XX% leg more basis kind XX% look the high for of and the interesting the for grew on terms customer to X then how see that for the understand in I business about down and Very I question and rate the past of a incremental of another down sustained guess sort three

to to quick talk much was see around these be your the overall you the to that reflected growth that going green in in question rate.? that why business guess So then some so simply of financials is in weakness for I and is reflected get longer when about the why shoots take the we

Yes.

reminder a so capacity really rate. freezing year driven in impacting first fiscal growth half the our a we and as hiring again of and So the market model is of go-to are the XX

to normalization back year. a begin next slower the was some in downgraded. consolidation. saw QX. churn customers hospitality fiscal to two We're large those look bit impacting That's we two rates into we other one an was seeing bit see had start we we churn to that in and M&A and bounce in as larger bit space in downgrades out base rates that COVID as and that past. more installed will also also expansions travel large we've the that larger the nut a believe growth our definitely One of better coming We had the We seen

of Best luck Understood. [indiscernible].

William Our Suri with next comes Blair. question Please from proceed. Bhavan

[indiscernible] question have began Several change to this everyone competition. environment? next I quick you on the on seen is Have over the year. for Bhavan. Hi a solid competitive companies ramp in new end Congrats have solutions security the to a on year.

No, of there. the market or seen any don't the we've observability we Hey serve. change in either think security the I segments that

deal the apart. with success a is of Cloud to coupled obviously us our long set driving blunt of continues the still cloud SIEM native with but and vendors given of history for acquisition the lot to some That issues the and all there's our SOAR with the a bit our quite ability believe think noise of other we of happened to what's Enterprise. be that hack data that security and types architecture, I super

I just great your years to the and than That's a over Logic Sumo changed have you pricing X customer did hear using past since they ago? did year products X.X differently Are follow-up how, customers model? changed conversations to

They about so as and usage if consumption happen. you value so different understand packaging they enterprise the new well conversations install Yes. spend. up for for it's and We Great allocate that strongest in as as gist of or lower come the understand conversations, as usage. from end the the by mid credits what the quarter hence at they terms transparency or base question. licensing In they credit naturally still Point need of two of those those portion and can in segments good really used and QX as of teams to we to a well renewal and look and the at the that have the and that's either really case licensing. can saw departments or can they based transition out plan contribution

vendors getting are reactive build of with lot helping more and them surprise a proactive So like the other become a do they conversations those shock and versus in space.

for Thanks great. Ramin. That's

Our proceed. Murphy JPMorgan. next comes Please question with from Mark

over and us taking behalf based seen is of quarter. Hi, any have in customer portion could Ramin, they today? base pricing? sitting as in congrats on Mark. topic pricing you update that pricing the kind uptick is average if to of on questions this your for of of the an ARR On Thanks our moved of credit Have you [indiscernible] what as the new

We're install of that's based new can I disclosing credit model were all [XX%] north percentage quarter the licensing. of say of Yes. last the but base on deals not

renewals. indication as for net upgrades both is there adoption as well So new strong and of

Understood.

competition and on you and the their Okay you seen observability if Splunk's versus material Splunk of acquisitions. through or others win change maybe have in have Sumo's observability up cloud we differentiates all rates? kind of the suite obviously any kind Could shore what suite front cloud seen highlight

the of with extended more basic Kubernetes just on then have multiple logs well period. XXXX CDN application into lineup foremost I as back and building observability, that been of monitoring AWS integrating but to We Then September we that market added much started tracing years. Yes. mean in environments the as and and more. and the not in extending for distributive fall with our in the the with last observability platform analytics we core organically and it metric first backend unified solution first out

XYZ. us focus not think seeing you're different ends, different and continued as you're a So left I different there of usage a and innovation back to models, so have from licensing different different UI, and kind result delivery organically

So of to where deal today. with across customers market have lot a generally the that's unfortunately

to very that doing decide trying much how QX not earlier They see they we that good in where out to majority our or of new best and terms build attach evaluate there install still technologies. and monitoring smarter a forward. environment breed and more go that well of only all to said of claiming are and vendors the continue claiming security new about we still with buy Now suite have and to XYZ getting logo practitioners what than to lands a they're they're of entire practitioners talked irrespective the expanding a as it's opportunity out their net know modules they base as we

Understood. Thank you.

Owens Our proceed. next question comes Piper with Please from Sandler. Rob

‘XX? that guys we you it taking curious and should could question. as transition fell and how rails throughout look you the as about fact there be fiscal guide Thank of Great. for rate XXX we or my the net any at thinking retention below I'm continue kind

Yes.

slower percentage that to would and It pandemic. to we did fall few budgets did was really below some in expansion due guide install that by drop our contraction driven points. did As due net it that's base by last the see happen we than quarter retention XXX% a in

about We and year in a have impact hospitality ‘XX. that bit it of also downgrades I a the also had some in churn then large us general was that happened two did and period headwind spoke fiscal travel in the for on

in above So impacted we're expect bit we COVID quarter-by-quarter it enter mid-market see going and time but around segments industries a that and the improvements see our to for XXX%. we I bounce ‘XX as into think little fiscal to over back year we should come

fiscal look billings x models? annual parameters some as our an for can on around then pace second you we growth basis with should about that or we ‘XX that as revenue put customer And large think at

revenue Yes, the an is billings XX-month a that annual should should metric best basis for that more we yes [indiscernible] I we and mean again track we see trailing our and looking closely growth. think see basis to on on at

you Thank very much. right. All

Powell Our with next proceed. BTIG. Gray question comes Please from

thanks numbers. Great, QX and on the good a lot congratulations

to know billings high level to follow-ups to some growth terms ago do it you is you couple a of talked but fiscal how of customer sort maybe see, three return much prior I long you possible questions. just just about levels? just how then ‘XX Thanks. relative talk about a of and COVID takes this in like pre-pandemic and kind at do how impacted think then your today of estimate you or number ballpark it So in patterns a roughly about just feel can months spinning to six visibility to fully how to you

sure the impact can Yes, we billings. really I'm talk not exact about of

than Those what would get impacted Sydney to? normal cycles highlighting don't those about. I I as some you talked impact as was earlier obviously upgrades expect that think expansion that well some sales had to and cross-sells. we've historical if you an customers want around elongated industries lower and naturally know more of

to through quarterly this the customers for allow to help trying big to we align customers our payment a upfront ‘XX saw some wanting add like in shift Yes. as And just working do terms, of were customers I of that. were and and had annual they not customers time in year wanting we prior quarters fiscal difficult wanting and we

number should As billing look in-period we've annual that's and our so them calculated a to can more that look billing. gotten at really the have from our if where are where pre-COVID quarter-to-quarter that again into and return also we've our patterns bulk so annual back I fluctuations really in QX at growth trailing period slip upfront we from billing, QX annual actually a billings we months will look at XX get encourage big just seen issues of to billing renewal cause you because if you standpoint we the with

thank from could headline you duration side then comparative a follow-up, growth contract about? perspective on the or we macro the it helpful anything and or that like should impact that's Got factors a just be that billings in XXXX thinking just anything

and did average our there. did up enterprise we term had good of so we of strength kind a XX% months of see we larger our some business in see did commitments and for segment see approach contract the duration Well, XX we strong and that year RPO longer and

,all you right thank Understood very much.

question Berenberg. with comes Crane proceed. next Kingsley Our from Please

a just to self-service I want the talk on the little bit Hey about congrats quarter. model.

that you If you what customer of buff the types and timeframe? to style grows Xk sort cadence adopting in a ARR with terms about of think they're that the quickly noticed to grow have XXXk in products starts that that of

Hi Kingsley.

of think moved activities last has back changed. were in to that campaign something done the Everything of because were suddenly year that type investing I fiscal the So this to over in marketing changed. and half digital going the of been prior lot been year we've a the fundamentally

you'll experience they a up little this to a bit more direct focus that account. the account for a and we've or us it's And self-service a to to but is create opportunity, end-to-end set whether lead there. from get an on an go initiated it in As been we require result data conversion in and from Sumo in and the putting and in customer they grow and what see particular emphasis continue a to experience case trial investment

product it that motion going in end capabilities we're marketing frictionless We're think end as as a forward. automate we can we're the on the make trying one. as initiative and trying to to reduce so to growth times, possible, more I as cycle help sales So investing well two

Yes. It's great.

an I addition market. go-to to the excellent think it's

MSP one -- was just I the another the would on mentioning thought be So customers important.

be the So from then spend average? these net of would new type some I these customers profile have customer converted clarify maybe to and sort of with just would Sumo new compared being to customers an existing guess the how of with most entirely of these

base so have Well, install year-over-year We our out. why typically in never counted call they that and we are those that's those new. we as grew significant

service type they're in new solutions of lot offering. think detection offering I manage the important transition existing from here these the is providers, managed Sumo response a cases to other thing a for of the

So they the in that's coupled that transition. together cobbled or third already of organically and they're have built party midst and something

commercial what trying adding So to you're that. to agreements their to that's quickly lot more a and the shift more as base for them platform to well seeing capabilities by Sumo opportunity we're product install the support them as enable

contribution like Yes. channel been to and add those talked year-over-year. pay in off the a MSPs about a we're year we've And year. then just the in a partners we We cases giving investments adding lot focus definitely and of we've doubling seen as our investments with making new route channel ‘XX market. be really In channel us having would I'd not touching to those customers last fiscal

over XXX have internationally broaden We channel and partners were reach we and really out as the focused well. we how

Yes.

traction the impressive. really I that's clear. is think It's And Thanks. from me.

comes Please Our Abernethy Rosenblatt. from proceed. next with Blair question

and terms much can that the you're your of of in you on more in at to very stage dig a Thanks wanted of quarter sense market? building and little fed what how guys. us to give now when pipeline you're bit authorization, in the good sort there just attraction nice start just I a attacking moderate see Can some FedRAMP the authorization.

Hey question. Blair, good

different I of achieve that of there's out that really in been ways can terms point few sponsorship. of SaaS down to lot to investment moderate to able go authorization. a think it's the one has this companies There we're you FedRAMP and be agency important

target and the of but as go importantly more question result working really opens years You also end. couple still state product we as have a of that well by the and as either just terms opportunity to not actually higher up on federal, to do to is capabilities path local your a government the been a this but going for followed partners to RAR alternative more than in channel

the able a and It's to so different. opportunity. to capacity ramping we've little note budget now attack are that ramping to important be bit that sales cycles the And been direct channel go federal

capacity fiscal our will sales across So our continue year to and there. this timing spread ramp the of that throughout as our partners we direct

very you much. Thank Great.

management At time over the turn call to back comments. I like closing for would this to

in attendance. that thank everyone With to want we

to and able ‘XX soon. the to look and guys partners with work customers results fiscal opportunity will, in their More their and be importantly our dedication ‘XX about connecting forward fiscal we QX Sumo that and for employees, hard to strong again excited and we're in the our great achieve you the

today's Thank does you. This conference. conclude

this may have time disconnect a your You at lines and day. great