Mimecast (MIME) 10 Feb 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Mimecast Third Quarter 2020 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to your speaker today, Mr. Robert Sanders.

to XXXX call ended welcome third the and of quarter December evening Mimecast's for earnings fiscal Good XX, XXXX. Sanders, Robert am Director Relations. Investor I of With our Peter and me tonight Brown, Chairman Rafe and CEO; on Bauer, CFO. our call the Co-Founder, are

statements being live future company. conference the regarding replay could of available has future subject forward-looking financial statements ended. the Tonight are events live. this Tonight's those broadcast forward-looking to and A the will in performance risks call of uncertainties These statements. actual is forward-looking cause be make differ and call call from after to materially we the will that results

contained conference in Mimecast's to the Commission. you factors cause differ in caution Securities defined in results call. We are release Exchange further to statements those today's on and filed These the that press important XX-Q with and risk this risk factors from most could forward-looking consider Form recent the

financial which is GAAP reconciliation superior to in During this in our or a for, representation call, results. non-GAAP be substitute to not information isolation we non-GAAP both reasons from, of today's considered measures our for Relations to will and the are intended in non-GAAP press our GAAP the of the found website. non-GAAP and can release, measures Investor measures. A of present be GAAP These included section

as make statements We a to statements date information are February be of forward-looking date. to of XXXX. on we as future this events. new obligation of undertake update today The assumptions this is or we reasonable call based result Any no that these believe XX,

month we Investor of on Day the a Analyst us. California, you I'd Financial this to Francisco, having Finally are San invite join remind and that to XXth like you in and

call the turn to Bauer, like Peter? to over would I Peter Now,

and the quarter you fiscal joining for our call third evening, earnings XXXX. Good for thank of

Email discuss and Security how our this framework. an Analyzer On recent of our X.X with DMARC I'll that acquisitions tonight's call, and overview next support achievements of our quarter, I'll begin Segasec strategy, and

our ongoing solutions API And talk the and of are discuss why our over our some share our XXX. third examples has I'll with in our I'll partnerships how delivered of benefiting the offerings finally, these Mimecast success customers. Office integrations integrated Microsoft were And competitors. quarter, I'll about and then growth preferred

once and Turning net new in to reported, sharing with of result to to customer the the retention, addition constant our results our XX% was world-class of as delighted Revenue quarter, of that grew and you again third additional base of XX% of $XXX.X performance platform. currency. are we to sales guidance. million the XXX services exceed be year-over-year This subscribers, customers our

notable several enterprise to named in by Mimecast's are The the in market Quadrant and validated further Mimecast leading high amongst larger confidence advisory in Enterprise these for research up and a as be fifth Magic Gartner a continues leader for comp Archiving building year the for segment brand against row. Information profile providers, was And organization. elevating wins competitors. technology our and leading was success wins customers, This

opportunities them Partners also us. to and in recognize position with our the improving market available partnership

For XXXX. silver for the example, named of CDW their partner year Mimecast

think X.X beyond Mimecast's Cyber Security the at to what Email email have X.X quarter, Summit. best the over Resilience attackers’ Email Today, introduced third of the cyber strategy, we time. Security gateway. strategies moves as use During we our how evolved outline resilience

consider. call X well the users focused on of customers or both safe need defenses blocking it, that that zones of keeping ever Our or as deliver a perimeter as that an solution for to email additional attempt attack organizations to we as to threats evolving scams organization's are sophisticated Zone directly malware set gateway two and is

leverages or the X, the attacking domains to where attacker Zone Now brands systems to attacks, perimeter fake then the in or company, inside X report impersonation, at email and public employees, fraud. and properties look commit simply wild, web proliferate Zone the organizations, credentials attackers an when threats using and the partners, inside customers,

three deliver Now services Mimecast an Email integrated X.X solution Security across zones. all

Our defense both training acquisitions with and Zone and to Analyzer in X Segasec. made deliver DMARC that then into TDP Zone offering IEP our at Zone platform X, X enhancements recently we've and the awareness significant of

We Now offer analysis service easier and when stopping Mimecast solution domain-based domain services, attacks. effective message gateway management and and more acronym the authentication that DMARC offers a and set combined Analyzer customers is cost Analyzer with reporting conformance, for spoofing an up DMARC provides DMARC.

service extending chains digital against by company's supply brands, Segasec beyond attacks that protect and defenses and perimeter assets. footprint is a a detection customers protects the spoofing organizations to digital

Here your proactively malicious digital damage. we finding domains are and properties or legitimate impersonating and they removing before assets replicating do

we the offering or As call Exploit part of Segasec BEP. will now, Mimecast Mimecast Brand Protection

these already adopting framework. The customers technologies, a the for on as customers witnessed proving comprehensive availability existing X.X popular of to we Security new being new Email attracted is these Mimecast and advanced platform us services our

open adoption base we've been has a and on our to prior key differentiator across API discussed engagements. continues strategy, new customer Our deep and in calls which see sales rapid

organizations. customers XXX services to Over API's of we've the doubled over XXXX, of through the more than course accessing number our

IBM technology IBM Our integration complimenting vendors third to quarter grew ecosystem resilient, integrations include leading of in fast expanding QRadar. with Mimecast with the

Demisto This email cyber to resilience realize Mimecast Additionally, capabilities value upgraded recently can adding directly the from enabling strategy. customers users further from enhances their by Demisto. remediation within of mailboxes removal

is Office Today, quarter and secure to in XXX, our cyber our over Mimecast to Now enhance Office Microsoft XX,XXX with half be XXX base meaning be on use total the customer of with now their more strong. new Office Microsoft XXX. continues help to customers us with time, resilience confident over success for XXX. that them Office of to third first to came the than our organizations half More

XXX XXX and total dependency. Office users on today, are there and can world near over a Now imagine active we deployment office business easily XXX of million

course homogeneity range wide on of This can concentration exploit attacker of scale of used a risk organizations, business infrastructure. targets. means a tremendous scam a represents as this can across be critical huge single to multiple the successful advantage this Now security

Now different Mimecast that new risks interdependencies mitigate can and new this require new by risks pose they face dependencies and in and reality digital the help customers characterized plans mitigations.

vendors Our connected systems Email of security organization X.X as more email through a pervasive linking the security are ecosystem. products customers a beyond part emphasizes and expanding inside to API's view that Security as strategy broader perimeter of used well generally by more the as our and other and

archiving, suite see a ubiquitous we our extensions, and web as an with When security, XXX Office combined significant our continuity, resilience and of security cyber to continued grow opportunity and in world. such subscribers

are reasons the solutions Now I'd with share types we're to the market. to of choosing some the and you Mimecast like delivering of customers

of to So protect resilience a enhanced Office the recognize XXX XXX offered addition firstly, users their a in cyber moved brand. customers company technology and need to U.S. staff about with to and based healthcare for Microsoft what

commenced Mimecast superior the RFP after live and XX was with vendors, breadth days for efficacy and vendor, selected to of at their Zone in threats to another to insider perimeter Mimecast employee leading or and But both empower our and evaluating capabilities in ability organization was Zone scan deployed An protect to running addition of for were X X, for solutions defenses. this our Zone traffic X.

understood value evaluation DMARC a product security used web to unique separate to and our cover sort this during be platform and they our too. Mimecast both brand needs, categories, and across in the exploit of purchased offerings. service continuity they their protect X, of Zone delighted our what ultimately subscription and ability integrated In included They and multiple archiving their customer customer. differentiated

Secondly, attempt between in Splunk proof-of-concept selected Demisto. efficacy. proving Mimecast vendors to They other block network emails. had vendor and a Palo to integrate they several and the including our be was as for not open another a using was our It engineering and solution as better they technologies employees in leading and Alto with U.S. for API's did intended, so XX,XXX was Mimecast firm with ability an and a looked dangerous with successful our efficacy to legacy through Networks side-by-side

future employees efficacy organization consideration involving U.S. Security Email was a suite the Mimecast they comprehensive given roadmap a that lower comparison of from and a to and consolidation. rising proof-of-concept existing costs selected. XX,XXX a then healthcare provider, provided better solution. was versus after for workload a sought their Additional completing with experienced integrated side-by-side services Mimecast And Then incumbent

more valued with Email X,XXX and and also our children's Security efficacy Zone archiving. and using acquired customer for legacy eDiscovery offering. was for bolster multiple projects solution looking technology employees The Security They Analyzer vendors X organization to archive simultaneously a from Then service defenses. had better an their streamlined Email healthcare recently with a DMARC

effective in was Mimecast selected of vendors, involving deploy platform, easy and POC to platform. to needs our thorough other cost both their delivering After leading for integrated a

to the with of the and efficacy advantage email vendors recover. to sustainable of IT communication looked employees added improve transportation this some company a infrastructure And and other global platform internal customer protect, data A XX,XXX take with network. sink and integrate and Mimecast chose modern benefits and security include in

as While the not services. efficacy, flexibility align API other incumbent live for as support our administrative off After integration. was able Mimecast their selected with customer customer's versus vendors, to our leading vendor offered platform Mimecast this a vendors, and of threat was bake vision not sharing robust across improved and

students and approximately using A email XXX Australia to standalone in of was student staff for while protect over faculty ATP Mimecast on XX,XXX XX,XXX higher education relying their Microsoft Office institution with accounts.

compromised. course incident accounts. of Over XXXX, compromises were of experienced accounts one In repeated this organization student over student X,XXX the

able Mimecast’s more of implement contain TTP for for IEP remediate faculty staff X improving user of bundle that the was and the experience threats safeguarding and sheer for and And perimeter costly, to and XX,XXX and effective organization to was a both network. or guard while was cyber attack, both they cost selected the spread inside to end all reducing number to sought Zone Zone hunt and combines this hours the with institution solution. unmanageable resilience. enhanced IT, complexity SX X further the and this

XXX over in zones Office an A nine a policy complex required XXX,XXX beverage on company configuration global multi-zone that with covered vendor operating geographic support that scale. deployment could a employees

evaluation that complex alongside vendor and look insiders. defenses After and efficacy to Additionally, from protection their to stronger compliance their Mimecast incumbent the malicious attacks their incumbent have global was eluded and an careless requirements. ability Zone impersonation add found organization against guard vendor to to fulfill this had better X sought

partnerships summary, So and technologies, innovation continue against so, of service our focus and to we staying customers doing and while adversaries our In balanced operating best of topline threats defending with we we look services today's their XXXX we mindful innovation solutions. people simultaneously available This our that in are as and threats remain enhance as abreast driving growth risks growth Mimecast’s ensures our to to develop perpetual model profits. customer provide the delivering alter our on and Constant underpins tactics. new and beyond.

the turn detail to like to call over I'd further. Brown, to financial Now, Rafe? the our Rafe cover CFO

Thank you, Peter.

that As balanced report had fiscal quarter third leverage end quarter. Peter expanding we the for productive business. adjusted our a we continuing in growth to both the a both I'm exceeded and high third mentioned, revenue of deliver guidance scorecard pleased of very and XXXX, EBITDA, the for to of

is Security in into the We organizations. further product the X.X Zone acquisitions quarter of offerings acquisition as appealing acquisition in which announced X Analyzer two DMARC aware Email our you the closed the These shortly strategy, and third to are Segasec. large expand of of quarter particularly our fourth

which XX% of adjusting currency headwind In year over growth and generated the for the absolute we we million, of represents quarter, faced. prior terms, the $XXX.X revenue dollar third $XXX,XXX of

year impacted quarter at Our constant currency growth quarter. guidance fluctuations Note providing our last prior third results the currency by that for the positively stood quarter XX% since rate over $XXX,XXX. foreign

an the XX.X% for a DMARC we added DMARC time year. please at adjusted XX.X% work customer same $XX.X of XXX Analyzer to million On customers we or compared acquired XX,XXX quarter this third this in the note the business. totaled But customers to EBITDA figure services excludes XX customers as worldwide. quarter representing basis, prior net quarter. Mimecast the integrate million, in the margin Adjusted EBITDA now

last at average Average X.X per services $XX,XXX the in prior this Our the time. up to from across constant our customer improvement to services average the rose approximately currency values customer year. order year order value XX% in Currently, terms. continued quarter at over per base for customers customers stands services show up prior over X.X all year

Mimecast organizations. New acquisitions in customers expand conjunction to the The mentioned Mimecast continued for Office helpful greater Office within earlier, XXX products We our customer of XXX business using time. service customers proportion two opportunity with deployments such larger us an appetite quarter number rose past XX% our afford as appeal to to for and to the with footprint increase is existing demonstrate in our XXX continue Office as first offerings. the expansion of see the a

XXX the customers those X.X services of quarter services customers not compared Office customer third per As XXX. for purchased Office average three to on using

XX month revenue at of rates XXX% in prior year. the compared trailing Our to stood XXX% retention QX

to existing subscriptions continue numbers and results customers be services. retention underpinned renew solid as continue revenue up-sell their our gross purchase Our to additional by

year. From a growth North revenue up with geographic quarter over strong North perspective, the last in American remained American XX%

North grow our the below expectations. America remained in but third Our continued performance to outside outside business America quarter North

gross margin basis quarter, margin up gross from XXX of year. for the QX to Turning the third prior recognize points XX.X% the we non-GAAP

of million prior points XX.X% by of efficiencies was improvement quarter third XX the driven revenue of our year for basis grid. profit operating non-GAAP scale the and $XX.X from Our or within

terms quarter was basis $XXX,XXX on weighted share third fully breakeven net GAAP shares a bottom income average on per In our XX line diluted million diluted based or outstanding.

Our full quarter is in tax our tax regarding expense. line communication tax totaled expense million year $X in Fourth quarter. to approximately with approximately expected be million GAAP the charges prior $X

net share, shares average fully income quarter million the for weighted was million again XX diluted or on per $X.X non-GAAP Our $X.XX diluted outstanding. based

the rate XX%. continue and quarter, XX.X% non-GAAP for year a rate Our non-GAAP of to was tax project tax full approximately we

Turning our operating XX.X% totaled cash third of or revenue. $XX.X to cash quarter flows, flows million

Free With U.K. cash to for to the a $XX we settlement litigation cash call, was $X.X approximately on which flow the and the our million. noted million million, and the a a pursuant Africa now patent third in CapEx. flow we full-year As $X.X quarter both totaled capital quarter. split earnings of prior for impact complete, of total offices between new made payment operating South be expect in our expenditures

or expenditures am continue with say approximately to the their expected to incurred, $XX flow Mimecast pleased cash of the even of 'XX million the cash I sheet. approximately year. million be in DMARC be cash that our $XX $XX FY performance December will we million anticipate for the approximately free on as for XX, paying for had full-year with of million balance $XXX Analyzer one-off to After line

You cash QX the by acquisition approximately should item is we last thus $XX a that note will reduce announced our that Segasec month balance and million.

guidance fiscal turn to for Let of me now the remainder 'XX.

be fourth or constant of in to revenues XXXX, currency $XXX.X terms. million the $XXX quarter expected range the to For to are of XX% million in XX% growth

Our estimated January to guidance the dollar is of exchange as of the includes prior the from based on of XX, year. U.S. XXXX, impact and negative resulting strengthening rates an compared $XXX,XXX

be to revenue of XX% quarter range range Adjusted to constant to to expected XX% million. EBITDA is $XXX.X the currency expected is $XX.X fourth to growth million million terms. in or for the Full-year XXXX be in in $XX.X million the of $XXX.X

$X.X million, was XXXX by negatively in year. prior fluctuations in estimated at fiscal $XXX.X Prior an the midpoint. exchange guidance compared the provided rates guidance in effect Foreign to November for are this rate million impacting the

QX bleeding with by the overachievement to we're seeing $X.X coupled Our our million in our enough full-year in is constant terms. the guidance raise strength currency midpoint of in business

the In of addition, risen in our foreign call, midpoint dollar million by terms of million $X.X exchange full-year $XXX.X guidance resulting to the this in by is million. absolute our since $XXX.X $XXX,XXX that November being tailwind up raise positively from is moving used million rates $X.X in impacted of

November, in be Please to the Analyzer $XXX,XXX acquired from acquisitions is January and total year. announced note DMARC announced for approximately two Segasec revenue in that our expected

$XX.X EBITDA of million. $XX.X raised range are adjusted a to XXXX being Full-year to million expectations

our midpoint, we increasing guidance. at deliver adjusted the increasing pointing of $X.X which EBITDA is adjusted the worth are improvement guidance operating impact absorbing a XXX EBITDA at the basis by acquisitions the that point would It full-year year. million over midpoint prior We are costs while our out two the

our this finalizing also to year expectations March set initial we to XX, planning, While like XXXX. still ending the I are for would time take

is but XXXX. close this this exchange our And on foreign good planning believe rates again, based fiscal refine please note 'XX starting guidance January expectations, these process, As we will of is XX, a we that and conclude as point.

a of 'XX guidance. basis is Full-year 'XX. at $XXX the in or to is range guide currency in 'XX terms approximately when Full-year of midpoint approximately fiscal million XX% XX% $XXX would our fiscal 'XX margin revenue be expected expected constant midpoint fiscal adjusted $XXX the to be over to EBITDA improvement against which to million, the current growth million point our be measured XXX revenue fiscal of

expected be full-year reported million as free charges XXX margin the one 'XX that we items at midpoint mentioned is X% CapEx Free modeling flow. is for improvement flow cash our cash the that an current cash and on year-over-year flow point 'XX to On the CapEx point over free fiscal 'XX fiscal are basis of earlier, based margin basis a $XX our after still revenue. now expected Setting aside improvement is approximately guide. XXX approximate this time basis, of fiscal

a while final flow commitment guidance margins. 'XX would both to free our that growth fiscal I to reflects comment, As highlight like cash for expanding delivering disciplined the

first And Operator, line the question. please time to and questions. to for with open can you like your pull that, thank your you for I'd our

Instructions] [Operator from Kalia line comes question first Capital. Our comment from Barclays or Saket the of

open. is line Your

you. Peter, Hi to with start just maybe

you're do going item? after more how MessageLabs do it's a go a has and of probably guess that viewing bit a customers those as of think long-term Just zooming maybe Security that MessageLabs little now opportunity, future their talk to understanding of you are how Email a Broadcom, part little about the I bit little can that Mimecast competitive specifically, out bit, hearing think Symantec what customers? you you on just environment the from

I MessageLabs customer maybe Yes, uncertainty to of Symantec with and right. ambiguity base. start-off and just that's the acquisition that Symantec been years it Broadcom we've even many now, introduces migrating customers And level very or think for a to prior And obviously MessageLabs. for successfully coming servicing in, of

lines the So as interested uncertain something they've segment focused which we're or product there either as their particularly Mimecast. has growth good the they Broadcom that customers really very be is for the and that mid-market been Email on to that several of feeling those well-trodden plans, it's area successfully or them of to that understand commitment one Security with migrated would really a future jumpy in home category, that path in about a about thousand spoken as a Broadcom's in helping pretty a it's hasn't following they're customers them that of if shown other have companies not that a Mimecast, case

you with opportunity had reciprocated. largely community, a the of who ownership Symantec user think end perhaps I not the is but with just was level to that Symantec structure, loyalty also the under partners, are previous

long-term focus to Broadcom's not appear organization. certainly you're type think, typical with I reseller does mid-market, - be if relationships building

what partners And that over not previously have think have. that loyalty showing are comes channel is willingness and to to certainly between those and interest Mimecast open I previously introduce and may they those so may that Symantec, in been a greater

of to and from to help from of we're partners make a educational migrate to Mimecast. So both over things view and commercially customers doing for view promotional it easier a point point

Peter. bit sort the little a helpful, you and that is, the lot does Rafe, of bit? you for ebb-and-flow about a makes quarter-to-quarter. a revenue little Maybe it, retention maybe guess how net metric I just of talk really question sense, that's Got can

the happening base, you they're how it and about sort some it this out changes that maybe are going qualitatively that more of the think customers. with forward in like enterprise quarter, came at sounds metric I of XXX% do think

customer. trending attached of product more about those revenue future a do that in retention net of the they're like as How of you some Sounds think per changes? sort result

are stepping the there number Yes, variance from is Well, numbers well over you. it, good. really there time, back - revenue really thank some our in retention net quite are

additional customers of products ability been When a you for quarter calculate metric. is the we've as quite to a sell how is well of things time. we into just to our base, trailing into as long four dig keep the it, consistently math One able it demonstrate

time. So over it's looking back

attractive strong that And and of coming well, back time, XX% driving of a and got thing think course, so, it's off along base, year if now to us, it's coming in way our you take now products for to uptake, penetrated the a was really to on that's place. and over TTP but come natural we've going that new its went some of lot a was very up

talking product the But X board, announced And that's about on got great opportunity. went is our Peter things we're about strategy it. two I that of to length, penetrate excited up new through Email into the training, and we've brand think that top behind Security kind make sure new one then X.X the into thinking base making awareness have some our really to archive in at further, what those and as just solution really we coming it across Zone other which of the base, base to acquisitions offerings us just web we're about we're that, really further, our seems sure working we

Capital comment line from or question comes of Markets. RBC the Matt Hedberg next Our from

Your line is open.

Hedberg. taking Dan for Thanks questions. for Matt my It's Bergstrom

but So sounds early old any then here as more too change signs or continuation. Brexit this any in following last it probably is or quarter, a you like of And pointed January? at in to EMEA this just quarter underperformed the few point, some stability, well, that weeks softening certainty early vote

row couple that that a called out right in quarters yes, a has our - on So something been calls. we've

North I growing. just able keep the important couple in the the back step still And to think you always just the American revenue our first of when growth at fact that look international it's the business quarters. company now started of we've up to over get things of one remember are It's total. last North that American Mimecast, not seen and an XX% with U.S. in is The and the right thing our to outside it's EMEA we not is discussion, lost

do broad So world Brexit see the South issues we had or impacts obvious Africa our have local footprint has reflects enterprise like when across we of some a and we some touched a of base up, local challenges the as on because you small customer on their a GDP coming some economy we mid which very - very economy, are customers also that the by in and and but those have well. numbers certainly lot customers,

right You know, we're really our looking and that's position when hand, at it as what we're we can into we market do the done in we've at where something to the take make sure resources, best that we're account planning, deploying for moved We're to the have people make sure sure headwind if right make there the around there's we bit cylinders, that all a from out of the economy. our best even we're in to on we've some doing firing people roles.

beyond customers how quarter with within sounds to guess, perimeter, I with so like it that, been now. curious Security, inside then a a branded and And three just after resonating Email or is zone the particularly the approach it's

You little skews SX on thoughts about bit here talked any or Should a the any additional we examples here. to customer bundling bundle new call the and the there? changes go-to-market expect

into understand face channel well X.X problems customers, contextualize of the understand that Security we making to the the Email And to as it providing I we partners. is offerings fitting so sense certainly help and that for looked that framework. context offerings, think a they prospects them is that as our to intuitively Yes, that lot talked

and So, the X and strong offerings. brand this awareness we've obviously last protect quarter, brand of seen place adoption new Zone the during DMARC IEP exploit the both training, our

evidence with have that's anecdotal to we be customers popular the too. to going good suggest some So,

comment from Oppenheimer. Eyal or comes Our next of line the question Shaul from

Your line open. is

Quick how well has question, year, past for like update you course Peter, on talk progressing about over that the can had to the been invested that us in of the quarters Germany your and now? you operation few the prior

Shaul. Thanks, Sure.

growth out local And in centers ago. So to support and market and market opportunity. language implemented obviously, months sort built Thanks others. Germany, we our the and American tremendous we of service team about a size of the the the North local sort local in business our but with just our European not XX that nature German of of ratable country data broader our Central to of scale

and opportunity take as a meaningfully continue in among things well. the growth into into region. framework customers on partners other into think revenue we us distribution that any that market security It'll Symantec while drive as before that And - will to pie up Europe shows our help over we email to extends but that And sign new opportunity continue chart, well. X.X that

Peter, And if has I may course about extremely the years. as XXX the out well it think without past a played few we doubt, the Office opportunity, of and over

you more the see in to about asking not it XXX? be two, upside be Europe the as probably main the America. but about do think we out - XXX, break it it North between base Office Office America? As EMEA and it a I'm years or three probably next Where so relates and we more in way will entire try will to

sourcing interesting that out to The still a of business that's premise on-premise has our the three categories but to on prospect. arrangements. and they're have technology. classically cloud of no mean, pertaining to of I offload one Yes, I and because the is ditch and provider, one email maybe we looking contingent think those to There's an things plans immediate security archiving they a some corporate

equipment migration they bucket talking us the about to is, us And that planning add competitive looking the on a And are or had underwrite avoid that. Office some with own that got either on-premise we they can so layering that backhauling help a nothing to place, of they their the and success busy of third cohort security you've in XXX, that to they or Then migration. data and then on and to already can networks. or to either their they're now that those with talk disband solution better are

coming penetration business advanced What's and in what is particular, so is those first of markets most and different the Germany like U.K. markets if across out you quite of we're the third go in think sort of bucket. is more the I Office that we're in bucket. have Europe deriving that and in of many have that XXX you and U.S. that seeing interesting to actually Central second we

represents for to that be cycle us sort as of so, as excited that an well. opportunity well. early And migration there interesting in of And we're

from Thill from question of next comes the comment Our or line Jefferies. Brent

is Your line open.

Appreciate is the Brent, Hey for thanks guys, color that fourth and Joe on mostly assuming XXX,XXX this for in the the on quarter. question. acquisitions from fiscal is revenue

So analyze X.X million. it, meaningfully Email contribute should to if I we expect to $X about it's When revenue? more Security

I mind is think that, a keep Email to X. Zone Security very in acquisitions contribution just the big Well, - are two revenue in X.X

So, us primary to product good product sure some like products X is for Zone just very Zone are and a make our in X.

on make around same what that we're Zone X acquisitions? question is Is your So the to sure really page, is where the just thinking? that you're

Yes, Zone X I’m sorry?

that with great lose Segasec. and - we I solution. them want already and with products, we're products, within that into to sight of, though, so and Yes, they're is The obviously nice think technologists, small partnerships both don't DMARC in integrating place companies our those great have thing we

you So opportunity had for start us to We to helpful. if it's going quite a I and be are And working running that's really. a great together. will, think

- a off That organization. this into base much bigger said, they small are and just working

are year. of terms product, bit to you some really last what it that in to in of for up, kind nice began awareness going training strategy to with very fiscal in of products acquisition like the take mid-term, we're time a that look which would ramp it's an the So, growth seeing the

into platform. integrated along impact. much those and a of are to We're will customer see more adoption, our the seeing revenue coming start products things We've that now quickly more driving fully good

the And a then just your high a implies you prudent long-term there's But model in guys on currency the some sustained have sell] little regards point XXXX street there. out in XXX in your I'm laid fiscal but steepish [the constant XXs, basis high adjusted and while assuming growth below It guidance, what a you now. a to conservatism guys the for the also in in presentation. above EBITDA, investor have improvement, it's bit it’s it's then

think how Thanks. just about forward? So growth profitability versus going we should

up topic into that this significant a here we'll in lot - so coming on couple Day at Yes a Analyst that's just will a more. weeks dive our be

in make to execute building and seeing, it, balancing think, at terms let on on And bottom guidance. sure of focused and can growth both our in the well, I focused are both we're we growth, one how that million levers is as profitability. we as adjusted focus we guidance exercise value of of Our consistently we're line $XXX things hitting but EBITDA is we're least on where deliver

one an Of the that, course, the call metric is in us. improvement. us likewise, nice for a we stopped shows cash again noticed just things free And for which emphasis and execute that's around as of but milestone you that's big on a that a flow, probably

feel is demonstrate value to we we're bottom delivering. very important Something ambiguous the an line in fashion

SunTrust. from of line the from comes Tillman comment or question Terry next Our

open. is line Your

my is Nick for taking for This questions. actually Terry. on Thanks

result So I are had in enterprise resonating what both guys Segasec Thanks. customers how anything the your a far the Analyzer of receiving are within guess particular you terms and I was, market sales of so of acquisitions? first in these seeing it's teams DMARC as from acquisitions? guess I one benefits

Yes great question.

of makes think well both offerings of that market lot cater up X.X lot these sets protect around story talking been process early there's megaphone brand problem received. while particularly new So to interest, Email acquisitions the And into - two are a to extremely out this a we've for. it's is I sense the DMARC it's framework market. the Security fairly and through the it's it, is evidence that The days, about a our get exploit obviously that It customers. early and

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comes or Our from comment next the line Keith question Bachman of from BMO.

Your line is open.

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to larger If you be market you're going up are seeing Proofpoint clear, deals? just more these in

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Auty question next or from line the comes Our of from comment JPMorgan. Sterling

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taking is you what I to? the international wondering just the point Thanks This areas Sterling. the that this are lagging? can Matt on for guys reasons point for was at of And main still markets question. are in what some

do by are market Matt, the mean international So of you areas what that lagging?

specific any of product in well terms as geographies? adoption, So as the

Okay, yes great question.

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just very quick one Great. then And helpful. follow-up. That's

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Our or from of next Steve comment comes Koenig the line question Wedbush from Securities.

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that's the conference for for you Unfortunately, you. close all would like this period time Thank time, we time. today's to Thank have At the participating. I call. Q&A this at

disconnect. now Everyone, have a day. wonderful may You