Mimecast (MIME) 3 Feb 212021 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Mimecast Q3 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today Robert Sanders, Director of Investor Relations. Please go ahead sir.

morning. Good Mimecast XX, the XXXX. the XXXX third call December ended earnings to fiscal for quarter Welcome I'm Sanders, Robert Director of Investor Relations. the and Brown, on our me call are morning With Peter Co-Founder, Chairman CFO. CEO our Rafe and this Bauer, Today's call is live. broadcast being call A after the be live replay will available has call of ended. this

could to results forward-looking regarding These consider and Securities events cause are today's including important that Commission. in are disclosed recently a additional providing could regarding the make actual differ contained statements forward-looking statements on subject forward-looking financial factors the risks future to cause this These to the are will and that on differ call. Exchange risk when filed uncertainties statements. XX-Q faith with We good SEC those future performance you guidance to risk actual forward-looking uncertainties those aligned our release with the security and and in statements Mimecast's statements we making in Form factors basis creates in and The from materially press of most company results incident. the recent defined recommendations. caution further the pandemic COVID-XX from forward-looking We

to measures our During to non-GAAP which GAAP this financial for today's results. isolation the press in can included believe be of we non-GAAP these new in today present reconciliation intended for and and to information considered reasons this statements of superior measures. the release, future call a GAAP A that measures of GAAP non-GAAP call, we'll both These information assumptions be not our substitute our non-GAAP of is Any to are are from, obligation or or representation of a be of based as this update undertake is date forward-looking Relations on found events. XXXX. in section Investor We no as to The the February result reasonable date. make X, statements website. we

to Now, Peter over like the turn call to Bauer. I'd

and a you morning busy today. lot is everyone thank got Good and safe and quarter you It's a and for us. well. for we’ve Mimecast to cover I your family hope joining been

Before are I future. the level about want high at to frame I a we thinking discuss how our results

We ongoing pandemic as yet in we impacts continue the to is the navigate not the for which of hope stabilized spring. back

ahead. We disclosed cyber and capitalizing we are confident address about early recently still plan. of remain opportunities excited we working are strategic in and hopefully quickly long our and our to innings term the And the on incident

to as we not had come know fast Of capable that right we is growth pre-pandemic course may will expected the we areas as achieve Mimecast initially continue invest to of. in the

inherent of to retention XX% We rate. also leading have These leverage revenue our model billion crossed contributed fundamentals to cash business $X.X high and flows. model free that that in expanding demonstrate industry achieving through The milestone we the run as financial the fundamentals an margins exciting revenue, recurring gross continue is intact. our remain

update on Before achievements in we've cyber start let January. an the quarter briefly our dive the we me results with incident the in disclosed during into

this incident our in them. with priority has to transparent top protecting Our being and responding customers been

experts launched aware as investigation enforcement. coordinating we by became As law the and with an third-party leading situation activities internal we supported soon all forensics of began

on to targeted base actions precautionary the take certain our have working began with to immediately handful their customers protections. advised remediation we measures also customer and of We who were fortify other

effective. the close of an believe have remediate isolate threat and particular has We operating taking unfortunate identified Our contact We understand are that that they with us today reality and been them. this the customers been larger process. is collaborative and we in to this highly enterprises throughout in steps with remain

continue We environment. to and examine our closely monitor

confirmed is has by factor. solar investigation related the our sophisticated Orion to perpetrated compromise incident threat this winds and same As the previously was software that disclosed

will communicate ongoing to blog. Our our publicly quarter. continue customers And our to in and the updates now investigation where if directly onto on Mimecast is appropriate warranted disclose and

in to let high-end briefly of FY XX results we the the by and had delivered year $XXX.X our across of customers third an and of re-acceleration revenue including ‘XX at do that on the be over about in increase to and thinking end currency this we expect the our providing improve of came a gradual Rafe growth million We how net guidance a last rate next. supported constant fiscal time, ads. identifying XX% the logo security incident. the QX the That but U-shaped fiscal We fiscal are revenues a guidance revenue said, metrics. pleased in recovery up new throughout expect QX the exceeded new year-over-year to in currently later have was quarter XXX for stabilizing quarterly all coming will me deals next six-figure This touch growth we year line pre-pandemic. year in with with call anticipated year. over retention terms prior

thus We cash business into efficiencies delivering are and to flow build and strong continuing meaningful increasingly our operating margin expansion.

the that FY between profitability strategic and remains we invest of as to even into initiatives continue and our to XX market growth. our balance declare longer-term to in To goal. We ‘XX drive rule team growth achieving go expect

growth in offerings time at on landscape a additional challenging been with we environments take is a the track executing threat targets that team. in have of the investment our our context line and results. the delivering and strategy In will both long-term are three-pronged topline growing We and bottom our delivering

the in First, expanding our footprint market. enterprise

use to platform the stronger automating SMB and our to and thirdly, scale. to selling on and engagements Secondly, on channel efficiency market at easier even with create more multiproduct customers and innovating

continued by in investments underpinned is this of All R&D.

organization customer changing legacy healthcare with U.S. and had of we wins to from And we used As elements we continue included and various competed momentum that of our seats. technology example quarter. Symantec when competitive against successes factor six-figure to XXX,XXX our customers trust. around This demonstrate this whenever security API and this more the strategy X.X In XXX deception. this vendors. our the framework other ecosystem anticipate provided meet Ultimately, building by pharmaceutical threat build leading largest XX platform, this confidence platform solution Mimecast advantage to landscape our quarter countering a their win important in integrated this selected underscores further for email a deployment another cyber an the security and sophisticated company Office were EU our security and as deciding having broad previously

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as protection, a protect, professional also Analyzer net services customers and XXX,XXX targeted internal services across bundled DMARC our services, acquire We including seats for new email security our continuity email framework U.S. services. with threat such company X.X saw solution

further results this upmarket. that focus Our with our advancing multiproduct quarter demonstrated strategy well overlaps our

displacement addition with including already on one and at and those healthcare won provider awareness we In firm services security, U.S. XX,XXX their selecting organizations two solutions I've archiving legacy XX,XXX to replacing seat each new touched multiple firm the email other training. seat

security solution services. firm and engineering with email training, a XX,XXX Analyzer, security, awareness the brand exploit adding employees services framework continuity We also large DMARC won X.X, which across selected Australian protect

international central more continued again agency government to markets for also business and than in this a continue Europe growing central our XX,XXX large with we Canada in with key XXX%. such quarter a public-sector markets central of growth grow as strides one Our seats made and Europe

our CrowdStrike threat build X.X shares to intelligence our continue reviewer, out product security enhancing and our Zone with we email in quarter differentiates architectures. to introduced safe which awareness the which innovations further During from capabilities, of platform the any fish X the robust more our build archive, discovery help even new integration customers security solution without case training solutions

conference native virtual We out-of-the-box our leverage their this our and OS Splunk, sessions resources estates scale. strategy also we recently engagements across to revenue below I Networks, easy advancing achieve and delivered to helping Mime goals. learn the where to help strategy underscores upmarket, three-pronged Alto continues customers how security wins to CrowdStrike, the Palo cloud Netskope APIs more SMB accelerate RapidX hosted our pre-pandemic about stronger and cosponsored integrations to create Notwithstanding of use platform prioritizing Mimecast power moving with and educational by with growth trade in our to their alternating multiproduct market all numerous line we customers growth to SecOps earlier; at these are and efficiency in mentioned the expectations channel and even our

this one. implementing depart, this easy an force reduction the includes we roughly eight-year-olds, decision not to all in did workforce stock approximately Now are colleagues of we tough which restructuring of as environment as which lightly. especially is and it's never a X% have make And in

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in teams multiproduct customers. both and existing our investments and product expect strategy with We to fuel our new sales

leveraging improving our access service to investing talent growing pool to Africa. be in We and data, capabilities investing will also customer automation enhance South in by our

realize experience market about industry We In enable Directors opportunity. our January, these operating are Helene brings Board to and initiatives joined board. and of Auriol Helene they will and us international significant the excited expertise our confident to Potier

wanted position on market right departing remains and thank folks, engineers, large and that I to work weeks last our Now over others a incident success the relentless want for technical more customers. on few needs There a who Mimecast rest the the of that us and favorable team in of I and team strong your than in summary, thank security staying our focus also opportunity us drivers market we tirelessly and leaders the very to diligently growth. for the have on of for world profitable ingredients ever.

to your to dedication this problem-solving, teamwork With to Rafe especially review Your that details resilience, past it and turn over year. our of I'll results. the your

fiscal flow to report Peter. XXXX. of that high-end you pleased of EBITDA the revenue, our exceeded third adjusted I for Thank the cash we guidance quarter and free for am

growth demonstrate deliver topline operating challenging amidst Our environment. both a ability results our margin expansion and bottom-line even to

implications I like to Before a force to into the financial our for jump would financial in mentioned. I moment review results quarter. reduction the of the take Peter

First we for and margins expanding and initial remain and you fiscal few I will ‘XX guidance committed ‘XX FY that and would topline flow reiterate get cash like our in growth minutes to we to a see driving as when to beyond. in

today roles will and of and some of initiatives XX well Second, approximately as believe we million that to continue reductions be efficiencies from customers fiscal quarter business. as please approximately to to And we outlined to the we enable Peter improve in restructuring while more perspective, growth us are eliminating will will both the our a result charge market systems processes in savings ‘XX. note in drive reinvesting reach to our as product that headcount fourth of these finally, $X.X in further go

Let's third now results. quarter to the turn

First, impact COVID-XX. were a the on note continuing seen

geographies. As pandemic has we our significant said core the earnings our impact on had calls prior have on a

tight Our our protect despite and and helped an facing navigate budgets. our derisk customers us our have team to operating period this to uncertain challenging customers, environment efforts support our business

the from in larger last the in in with American quarter, call. late While we pipeline headwinds the did macro team increases consistent our earnings marginal our noted process customers bookings pickup a third see had North

be will January that recovery. continue slowdown a of and UK in the we economies to market slower likely showing generation be recover. in American albeit activity believe is the and South to was pipeline signs still appear of there early African to the While gradual North Unfortunately, month struggling

This order $XXX,XXX since XX% Now an third-quarter dollar our which by to impacted of for for constant success last third to this per November in values at larger year the with the quarter. tailwind year topline stands as time AOV our fluctuations customers calculated million absolute XXX were or In approximately per AOV we terms. in providing results. FX the customer positively number X.X improvement Note currency over stood at currency shift customers the across year-over-year is of increases the the base services XX well in our as year foreign growth XX% currently prior currency third at $XXX.X continued terms. results our X% quarter. prior generated Bolstering over prior Adjusting the customer million. increasing of currency up year at guidance $XX,XXX customer January average that in added in revenue average services our organizations. to in favorable the services compared rate for of our $X.X rates, results improvement represents constant X.X trend attributable We quarter, the over

the As metric markets begin on stood with impact our count new we've of few in last see retention quarter been for at thus to ended expect major COVID-XX Net and smaller we the economies our the XX discussing the period pandemic customers broader net is quarters an over outsized fourth until the XXX% line December on having recover. the pressure our expectations. revenue to customer

X% awareness the X totaled sell as at of likely the economic fourth and its last our Zone at in by the We protection are churn which totaled quarter added added of reach added which X earlier XXX% Again XXX this interest customers quarter, end solution customers XXX year. DMARC expectations which our third anticipate to the in quarter. in retention reflects Zone customers end quarter line internal facing. in upsell we our shared quarter. solutions by revenue challenges the of the Down email helped which Looking customers with components XXX% rate in our is with training strong of consistent XXX net continued

margin for in We quarter approximately non-GAAP third primarily our driven travel up improvements operating Adjusted points continue the the basis expansion improvements resource third margins. gross to the recognized cost totaled Thus of been EBITDA cost prioritization basis drive real the XXX year-on-year improvements, these quarter from estate the points prior $XX.X XX.X% expansion year. XXX EBITDA We in our of margin margin of to operational throughout XX.X% gross achieved year. the XX.X% expenses the would compared computation basis quarter consisting have We’ve of a prior year. prior compared margins derived the efficiencies adjusted EBITDA representing of as XX.X% of even million EBITDA savings a result approximately driven COVID-XX in representing net savings. adjusted $X.X reductions quarter this excluding our to benefits margin an same gross million through bottom-line by from footprint. On the discrete and

Now line. turning to the bottom

non-GAAP of the the quarter profit revenue, XXX basis year. $XX.X or points from an Our improvement was operating million for third prior XX.X% of

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

Our was non-GAAP the tax XX% for rate quarter.

non-GAAP of implemented shares on are profit As a XX structure $X.XX diluted we we have a operating of number fully third approximately full-year GAAP changes to our modeling share the million or for per XX%. of reported quarter million global outstanding. rate $XX.X income diluted of average a tax We now weighted based again net

expense totaled approximately third $XXX,XXX. to the tax million quarter is Fourth charges GAAP be approximately Our $X.X in tax quarter. expected

currently is expense tax to GAAP million. year full estimated approximately be Our $X.X

Turning flow. to cash

cash flow than profitability of $XX quarter XX.X% of operating by revenue. revenue late higher quarter. expected Free or cash the jumped driven in XX% and million for million the totaled by better to quarter or flows collections Third $XX.X

balance of year. million As December $XXX of XX from had $XXX of of cash the Mimecast beginning debt Net our cash million the sheet current of $XX balance the million. at spans on

Let guidance. to me turn now

growth XX% XXXX XX% For be $XXX.X the and expected fourth of to revenue in between to million $XXX.X million terms. currency fiscal or is quarter constant

Adjusted based estimated XX, this prior is of positive XXXX as quarter. assume the U.S. guidance fourth million resulting and cash travel from compared Free are in on $XX January the to to approximately $XX.X weakening continuing quarter fourth $X.X Our to flow impact dollar the rates of an EBITDA be exchange million. the the million expected is very quarter for of year. is $XX.X fourth million. expected we between and the for point little At to be includes

this Turning the November $XXX,XXX currency million $XXX terms. early in XXXX million Fiscal for in be year. by estimated year guidance effect constant in full or between an expected Adding $XXX fiscal compared exchange year. to provided was fluctuations and The the revenue positively to the growth rate guidance the fiscal in million foreign midpoint. the at are is XX% to prior approximately XXXX impacting details prior $XXX rates

in $X.X of foreign exchange million. in the million in to the guidance This our $XXX.X QX year our guidance currency of tailwind by midpoint full by raise that November $X.X moving million achievement $X.X constant midpoint our is us over of has impacted dollar a up rates arisen increase million in from since terms Our resulting used leading call absolute to positively being million in the terms. $X.X is by million full-year $XXX

EBITDA We or represents and adjusted $XXX.X are XXX At a $XXX.X guidance $XX.X XXXX million. raising million the this full improvement prior point basis guidance. over midpoint to between year our million

bookings XXXX reflecting and over provided time We of is XX important of to flow XX% flow QX I Thus, note impact in ‘XX. revenue recognized the and are in quarter FY is constant our for at XX, margin ‘XX Please exchange again year to would initial a X% basis free $XXX backorders revenue would this a approximately currency point cash XXXX. midpoint million of in for November. set the on most of take minimal fiscal to rates of measured the XX year to raising million cash have remind that guidance point basis be revenue when to prior our based bookings XXX any expectations typically is against arguably on million the the quarter foreign as January terms improvement is given year $XX radically. XX% the like our of also improvement or $XXX everyone range ending guidance. year approximately is prior guidance XXXX. to XX, fiscal guidance. to Full This our in this range expected of expectations million midpoint growth also I March full that $XX over of XX.X% that revenue free

adjusted guide modeling recognition of will ‘XX. approximately of move year our FY acceleration as assuming whole expected improvement FY our Returning of approximately to leads be year margin to purposes anticipate fiscal the nature fiscal revenue our ‘XX revenue a midpoint relatively would would then Which of we We XXX into revenue represent across EBITDA higher economy yields for margin For will even guidance, be an flat point expect growth bookings strengthening the us to is XX% full the and revenue be ‘XX. basis ‘XX $XXX over million. fiscal of adjusted of EBITDA ‘XX. growth

the modeling For point would we towards to despite ‘XX FY of business preliminary $X a reaching impact the ‘XX full of XX% its margin FY is our a significant over approximately the for the discussed year FY free basis, to progress would approximately cash February. rate expect a targets represent total represent last be that purposes free ‘XX XX% guide fiscal would GAAP XX%. we global improvement year $XXX cash flow would of which XX% I ‘XX. of tax pandemic, Free at at flow which taxes note cash Mimecast full the analyst and XXX This long-term and conclude, demonstrating resilience. million revenue midpoint margin the million, day approximately basis is To our be of flow to on non-GAAP expected approximately

difficult to expand it some and closing show team make to on With remarks. to some the hard commitments decisions quarter the will third exceed that for flow working to Peter margins. back business we meet and results while cash turn opportunity our are investing growth we've I to free meet expectations delivering our is had As

change XX able for It's and we for Mimecast grow how vision thrive future. achieve Rafe. and it and been will always been to last years our we’ve how the to it's the Thanks DNA

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you please the if operator questions. would for open line Now

question first comes Matt Markets. Capital Thank from you. [Operator Instructions] Hedberg RBC with Our

with You may proceed your question.

about at number guys. Great. potential turning actually maybe question of that for call a there could additional you top the to kind thinking Maybe wanted you protection, taking by provide of email terms you benefit I of Thanks term, my could impacted the the to for more of solarwind from and I compromise. this screech customers versus Peter, nature. then customers of bit the ask be the number the guys details little missed were in things Mimecast of third-party that longer about actually but to

That's good Matt. question. Thanks

Okay.

did and So said precautionary our to go anything customers I know to in We the to successful. and I customer think another our material five had don't what was go out you out a as look subsequent to we a you continue have with so the targeted actions by discussed beyond this for or ongoing blog that. ship statement statements. publicly. base we was them additional and been be to we and broadly But things some more take, put would initial we encourage at

a broadly I requires continue and security be to elevated amongst email elevated and really very I to it has factor. and we this threat very transparency sector look there What as threat factor particularly speaking that at for think what that level significantly result threat the shown teamwork represents organizations. clearly vendors world in of cyber committed a is remains public is and significant think around this government level threat we a when us

it think that environments to the I in really and underscores particular doing in the XXX. we're customers help very like protect their collaboration importance significant underlines Office of investments So work

of bit me your could called which largest to come little large as the ever talk seeing just replacement the tailwind great update Symantec mean up but you're to that there. maybe win deal about it of a large out stood win that significant curious and is out I thought a business I'm that hear, be think to momentum? thing obviously other beyond I an the deals then broader and for great bit That's you is you that deal? within about trends which really opportunity a we've the long-term this that very could the all renewal pretty Symantec

this on at off start is least. Thanks this Rafe. Yes. I one will

way the We you are by seeing for Symantec on business and a year-to-date or encouraged from look has encouraged when pipeline. our quarter even the by we're continue year-over-year uptick formerly heading we're basis customers to seeing what we nice the in it a shown be

think some about I starting things opportunity been when up renewal an long-term talked helpful. we of Symantec contracts So up those renewal that's contracts setting is and that or come those that a come they with and us had to for to pass for

Thanks Rafe.

Thank you.

from comes Catharine question with next Trebnick Our Colliers.

question. with may You your proceed

my X.X you Thank the an and email evolving as and into dive email for out landscape? to bit more little far are how a taking you in they lay Could X.X as what question. opportunities that's Thanks.

Yes.

Catherine. sure For

X It's a market. that that significant three email that to the So to working of investment messaging really being communicate out continues about there and around environment how which the security we've landscape. really in modern our we've been to think and Zone framework in the about of strategy perimeter innovation threat down our email context is additional X.X that customers had opportunity and breaking security tons security to the classic and be zones; in generally into

this quarter. last I and that deals added in TDP Zone X, product XXX think with TDP in the we new

look we've that's phishing lateral in inside those the make like them when threat important looking phish human the I an to the Zone of the of the with anchor important our email new really inside awareness threats of really that things are enhance capabilities that the sort we actual more story. X the much of think identifying at around product at layer safe Then today. of perimeter innovations So terms training movement vulnerabilities delivered representative network, on simulation some capabilities landscape

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to capabilities this email we of capability emerging part solution. beyond really in is quarter. Zone really that's then the We a security So DMARC X.X XXX think perimeter I really become talk our of added security customers a email what about X all important course and strong some DMARC to is play must-have in and new paying organizations customers starting our for in

email multi-zone a to great really a framework perimeter about pervasive to service. security It's gateway much strategy clearly more of an It's framework. as it's So kind as a opposed for historically. important it's relevant organizations think and filtering

So for thanks Catherine. question the

Yes. No, that category you. more need have to I it getting wins clarify your the you these three in talk and you're always two about when thank like announce seems to bigger win you when deals.

So it's you. see. nice Thank to

Thank you.

Thank you.

next Our SMBC. Koenig with Steve from comes question

proceed with may You your question.

this or kind terms Thanks very versus go indications you able aside year. year for your tactics customers color market Hey on I wondered to be us taking initial how emphasis tweak Any breach in on sales about generally gentlemen incident and and responding products, from give rates thank then of if are to last you're its impact might you the might questions. in just go-to-market any you win certain approach to of more cycles? my some etc. greater on what or how thinking much. the changes about or

I'll this with from Yes morning early Steve. here This for is Rafe. thanks coast. this being the us west start off and up

you pipeline worth that short-term a generating would jobs and impact did team a available on so just day in their that. credential serving customers, and that's the out the through them is we've impact pipeline will January. we're for the sure and noting our have I we With changes generation making really That security is working activities making we're all if that to on helping back sure company to devoted weeks entire think direct couple

aside So that least that expectations initial seeing nothing far. changes specific is at point that really we're our from thus there

that our a things of of all we've our transparency broader in customers enterprise them extra we gotten just that sophisticated the really Pete solarwinds going is attack a need focus on customer mile transparency and term how with we them. at when has that the we to and success and the appreciate feedback noted this much are that or Now ourselves much reminded of the look top and great frankly to the they one on defend I little frankly very because factors lot from us how think longer threat calls these is what call times like that work together against collaborate of

take to as aligning and So part first I changes in next our function what profound to the on certainly the resources hiring be and that I how a that like into help resources smaller called right guys was continued efforts there we'll from we for this and resources more your more laid deep shifts out anything to now we're that but whether or general engineers the evolving are through digging out. changes get initiatives and some the the and is serve support accounts handling it that within focused can weeks and place the the sure investment our that taking going some more want one and building with fiscal those make the of rest focusing certainly of of towards appreciate taken with enterprise is would on last it's and rep an focus of the out systems to and and on that's he been most to technical enterprise organization customers the from That's the market continued level, few strategic has they're we've as whether perspective. we and year going about that change larger systems feedback what is To we're out of to away question are small the eventful call more service don't those as these and of Pete go more towards it's look customers. those the those the forward customers on those probably say be we the they them efficiently them. sales as the we one customer seems transparent the senior place to business

Thanks Rafe. Yes.

this many like of truly think when is add that has importance would stages integrated underscores security successful and I been architectures. of for architecture it so the is building security I of a to industry-wide other factor that things on integrated the think in what an sophisticated in organizations we're scale, the I an really so early one

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you. Thank Great.

you. Thank

question Sterling Our JPMorgan. with from next comes Auty

may You with your question. proceed

Thanks guys. This for is Pat on Sterling. Hi my taking for question.

In appreciate terms you of the that explained. guidance of some there pieces we the

the how growth understand that trying you that from next year, how from is lower is XX% well in from fiscal impact bookings just the of coming mentioned how that possibly much XXX tailwinds Just as migrations? to coming as from Thanks. of much that much [DMARC] Office of

Thank Yes. you.

that the has those all anyways the of XX% aligned we're impact into is guidance of focus those just terms midpoint that year noted, make year's been really for looking in of from of areas most but talking get for that year the are as recover. long to business had revenue and call translate market particular bookings COVID the our December next how in U.S. that's saying which is bookings, North So think half on our or goes some to seen be COVID XX% American It we've without and slower about a I appearing at we're to reinforcing business force that worth outside all ‘XX. sure we'd those this we much in our the FY that in I a in very out little strength bit remember to environment. X% I encouraging think place is you on and still but did the of almost

it in know really amortize and us months well time for guidance SaaS how quarter for bookings the this come them five-six of rest will year's revenue just recovery cause with as you you we probably as just still to revenue if ‘XX on does the the this line at weight next recognition have revenue the we've that to undue and model described. the up next and full raging into it recover gives terms extremely next on markets of So year's impact and to little and us COVID being important on lag because will the look puts slow that the the next a so will that still in being FY to when bookings thus guidance consider sets

to growth. wanted And guys do this of and some just follow-up growth achievable for that XX% time to of of kind sure to within frame some headwinds you ‘XX range the Thanks. At you analyst of then terms think year? still Great. ‘XX you are long-term XX% in talked That's one bookings the you day make the helpful. gave targets that those mentioned given fiscal that next about that mentioned you given the in very

Sure.

market range think think about I the right way think of is our us. products and to upper terms opportunity before that like mid that's business to we teens the still in that's the available, our

is strong true think quite I us. that that So remains and for

think came before guidance COVID that the gave we crisis I along. shortly

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guys. very helpful. Thanks That's Great.

you. Thank

with question from Tillman comes Terry Our next Truist Securities.

You may preced with your question.

even guess that Yes. question Thanks a and recently forward follow just about six first picture what's grinds compared and the sunburst this on. question opportunity thinking the about opportunity with up. just ago for to XXX months will ago months taking different incident bigger the three Peter the is How opportunity as my then going changing pandemic Office well questions. I and now I is as O-XXX then

Yes. A great question.

protect So I additional mean than are Office significant XXX us XXX. of using adding security capability for continues More half terms layers customers top a us of to of business XXX. source of in on our and Office to of be

So that's organizations. of XX,XXX north

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opportunity. that about bullish remain we So

how I'll and terms out exposure how my of step at looking FY mixes into And into pick even ultimate enterprise just Thank I'm not or of will we over of to business stair of gradual at sure and really to question then and follow-up ‘XX it but there all about understand for of how a look opposed still is this and the kind the throw more the we of it how mid the proportion in much increase up business trying I'm quickly mean you terms just I a to the though guidance this do Yes. [fight] if can are is just about of, think in I total? my going small enterprise? market to you. in as uptick be ‘XX that ‘XX think in

Yes. very helpful. That's

I We've end market been way talking be it at about about XX% having to that think of it'll our right highest of be the think revenue. gradual. somewhat

about that time gradually it well over somewhat calls but and the these is some we how business. and the to of mid lower even as the does as customers size large a but that We lot continue on enterprise to really mid watch grows with have we talked end business strong some on grow

a somewhat but the is we're growing a with getting at investment the and you'll that slow on and good enterprise basis. scale our lot whole recognize business So size of attention growth

question. Operator next

you. Thank

with from Our next question comes Brent Thill Jefferies.

You may question. your with proceed

strong for issues for Great perhaps quarter. just Thanks business? on in any on aspirations Joe and compromise been recent to the Brent. in with the is further that in Has public hear regards being this the about sector sense size the future of the and then guys the Hey that question. growth the elaborating here

Yes.

Okay.

for I be we We our important announced and but a in quarters markets status have government business full sector it'll recently to and FedRAMP before our focus So operate us. us. clearly authority sector remain mean several ready on education for that's that well grid as target FedRAMP

I the sector remarks us out international think a had And prepared last and had interestingly, that quarter in the agency the signed the I of our grew in internationally business government market in U.S. in X%. quarter. education X% called to it's key from government with large but also a revenue our

we're clearly attack sector how feel those there. level really to making So results cyber and that threat elevated good sunburst generally progress this we with public the we've very have solarwinds to thing like is the presented significantly take through more governments One security seriously. seen threat

likely A, but for on and think it's think serve in for the administration global us of to to out and signs I resource coming threat important this skill a encouraging we Mimecast of new going counteract market also such a an lucrative most commitment of basis market terms forward.

Microsoft's that the and truly Microsoft comfort logical versus decision macro all in and appreciate added is no good then on issue competitive detail. a maybe call Awesome and everything said you gives go enough issue in this security? email people a the the Peter with What and was a you issue

a history. it's duration our question. in mean have competitive of for Well, a we operated the I great environment

with the really adversaries keep and higher not in their We efficacy environments. I our enough clearly for recent vendors may have more focused we innovating security on on underlying with dependency, keep additional we that layer secure proven events I not their has to security to feel important It's So to help more the dependency rely environments important target that that successfully merely they business. have being think being additional think specialist confident serving that juiciest indicated more that the organizations that can resilient that quite and know do organizations application secure current we significantly. for be demonstrate and tooling know but and landscape be but and mitigated threat to customers it's have specialist earn

we So that yes to and good have very message and well to we in go about continue serve opportunity feel grow conscious that innovate order but really this again to and really in environment.

Thanks sense. guys. Make

Thank you.

with next comes Bank Bachman Montreal. Keith Our from of question

You may question. with proceed your

thank the taking very you two want much to ask. Hi question. for I had I

that context or comments is on was one I first you retention rate The you could the if any give see. net wondering

it for of then move year. something you any one ask quickly how get back QX it, fiscal that And does follow-up as kind the fiscal just next you the new given three as year? my color after. I'll to of You've on Directionally may throughout unfold at look how can

Yes.

a year. We trailing So most and they see is four-quarter it I perform. being contracts to how our first think approximately in revenue that a the of metric contracts look back keep net number mind those with retention with

is So it going is to nature its slowly. by move somewhat

I going all some metric little a probably that but here key that there. we'll the speak key while customer indications experiencing through net COVID run count think a number we're watching is noted that as customer suppressed to I to ads that's working still important out going to those because of how it's metric speak the to to an and watch continue challenges for to we're bit be we'll the is the

between some this and stabilized we've stability seeing quarter it. that it's does and last it note worked through quarter in and shock You'll like some we're of feel so initial

it coming as needs that that's and would to I piece. be quarters be caution we'll watching the to tandem. key on continue this everyone a So I in though think in at looked

retail hopeful see dependent it's move that through but as the of a COVID a these customers stake Again so even people give look crisis they the lot how like quite performing think come the that's hospitality smaller if net that's view number take but better for I number a going as the to the organization a AOV progresses. they customer of businesses recovery is in of companies somewhat ads at that the focus and you out we'd out So saw year of on sector as whole the a indication. places We lot would some function and the in keep an we much to certainly hope on really these as as as and uptick would we crisis COVID numbers good we're in remember sell those them come a down respective of markets. of let's COVID need and that the

the reductions of to years? set as those do this Okay. Peter a that but if I on to make you you you could some head basis but company for growth talk sure call very you the you count you're and the discussion initial importantly at on I'll two over how up a are more balance balance just taking where durable the reduction future conference three and missed organization direct about this how trying and next to again look the

Great Yes. question Keith.

at less thoughtful to going set what is be we're SMB able up automation do market how initiatives be investing extremely to invest able to enterprise, and the to our so rebalancing execute double say on our for on mid implication want of we term and and make how then long long that we So certain down to down that looked we well that to we key that changes do on looked areas are we've plan. about be and efficiency and that our double tail to to at and and need ourselves we those are customers in there what strategic more slightly in this by plans been

them organizational shifts able both I the be difficult and the that think invest of of generation some us demonstrate our some I the to they So areas line the some easy in the to cash these it's changes efficiencies to make of model. right on but that we've help inherent mean not also made are strength in company that's yield of the bottom and but

good set we've there that So out got right FY up and execute. now just for about to I balance XX feel how get and we

luck. Many All Good thanks. Okay. right.

you. Thank

you. Thank

Capital. Chokshi Nehal Our question with Northland next comes from

You may with question. proceed your

do course Thank U-shaped rate constant growth recovery? you to give fiscal the color of throughout you currency year bottom What some Yes. ‘XX? up expect Could on the you.

Thanks. Yes.

with be go across As this of obviously the that might on I we we of roughly the one SaaS ultimate late to it activities in that range on revenue of the have growth well in impact but the guidance recognition uptake how depending things rate will bookings revenue again in XX noted front revenue bookings think FY an have in range quarter rates needs growth.

the think is that think about be I it yes range to roughly So right FY within for way we'll ‘XX.

rates? revenue a And rate throughout retention the expect relatively at also how to profile you that current would net even

that of approximately this based the how the to think I course it out think range. speaking over I in that's think right roughly the roughly play about on year, way things and again

most long-term the the important? that taken? Which really the have biggest up you or experiencing Okay. be the rule from restructuring returning of will of back guys rate what's accelerating And then three prongs my described follow-up for to of question the in terms XX the to growth benefit prong

important across it's I the additional of successful clearly with is strategy sort one think sales investment on investment and out multi-product that to of difficult the I will ability the our but R&D enterprise generally focus that be in but from feel to to our of parts platform. our specifically single do continue that Well, benefit them importantly very

from of really strategy customer and business seen Being invest the plan. you've levels penetration set think that our new move per base average this to two year-over-year. to higher able products X.X drive X.X in customer both into from are into investment to those driving So multi-product up benefit that and I

you. Great. Thank

you. Thank

with Eyal Shaul Our from Oppenheimer. comes next question

question. may your You with proceed

of the Good What lessons the maybe or derivative to from question. have the gentlemen. was the I can think that the I outage maybe you I XXXX sunburst just you've Thank recent aftermath some differ compare XXXX back but of it morning you. one materially applied long I'm experienced or in the that you this know back average out course the you think you over because for five-six time learned time five-six be did looking covered everybody such actually for ago? that stronger past who from years came if of much learn could years. a I

greatly So a maybe for just compare will us appreciated. contrast be

Yes. That's Shaul. a question great

teams a have their to I stronger to one our take that's view, and of terms development think I setback in crucial historically through things but on security engaging every R&D posture, whether can whether some that learn come is key setbacks. we've from to of our whether and it's company transparent them think our part we're I of back wired the product a as own with and it's really is think we a we time as and customers very that operations of getting learned things of being open with these point

the lead we and can use And Mimecast that impact regardless in this we've that. worry difficult doing complicated of or particularly incident much how open so seen with how is as information you've been from customers how or that risk. to soon about of have what as mitigate we might We

with kind we're forthcoming So that. very of

opportunities absolutely sophisticated Mimecast at lot a on this robustness improve side I organization. develop and that with both of things extract from has of products are encounter one going of as as sort our when of of adversary the well learnings all the and can all one we certainly an think as there look that that an indulge is to like in we a to learns those

question. Operator we'll take final one

you. Thank

Our next question from Brian comes Essex Goldman Sachs. with

You question. with proceed may your

it. I thank you Good morning question. for and the taking appreciate really

this heard I saw you if given? question your where perspective was on previously guess XQ given a perspective segments Europe flatter other a then strength geo from full that weakness on we've from was full and just weak but what outlook UK in or and that and but flatter covered the pretty year had geo maybe about thoughts is I just UK guidance guess you've the a softer and a Sorry

Yes. Thanks.

crisis say optimistic the both and is the much South we we're UK is think very of economy. experience is I and in in think some on everyone forward still is and feeling team, UK impact I Africa the our behind now our the COVID forward. the moving look as line of will I the are UK BREXIT impact though this

starting there getting in a positive crisis should positive beyond was we sure companies certainly momentum some note and our at least optimism is North in through quarter more some given our COVID a was to until in some getting frankly or economies as sales on but quarter going look to be out having there have so in to bit COVID when to least people and I the a bit is are COVID certainly sense at with to Where us. general indications look late be confidence really is bit of to we there Africa QX and but that UK is this shown the those a giving I degree with the they some here South important the back very some the a the across of did U.S. check, customers third think it positive certainly team yet is vaccinated So like hasn't moderate and crisis and December to was is struggle Tim a is started are the there of see up little as the it I certainty we in whole. again work. it year went think Likewise America

already segment I seen Got you're up quarter, you the a I pipeline but That's large it. and what interested what or it the in How wins past it the are seen customers. again significantly dynamics particularly in seeing apologize larger and be those if is you've penetrating than market? in ability guess the the customer just discussed larger competitive to might and you've you substantial of helpful market land enterprise in larger

great. really opportunity. that feel We market about enterprise That's good Yes.

of large I thousand north prepared I plus tens seats account think examples deals really of a thousands out had anecdotal XXXXK the then with we also called hundred that some in wins of and of remarks nice some seats.

to these Mimecast the each large and quarter very as have needs enterprises large enterprises add sophisticated capable of think more we platform. very So that proven of our is we extremely being that's out addressing

terms feel we particular hunt yes. as in So our yes, significant and limit engagement where we've as we we a our No company and technology opportunity. teams of can built evolve now as

Great. helpful. Very Okay. Thank you.

I'm call Peter would not this now you. any Thank showing time. remarks. questions like further Bauer to back to over further I at for the And any turn

early ‘XX to three Folks announcement the so for on morning. we or join us. in this the week time. those Have a Thanks QX updating look earnings the great west FY thanks rest got for coast joining our you of and who up forward months to

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

disconnect. not may You