Cognyte Software (CGNT) 9 Apr 242024 Q4 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Cognyte Fourth Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions please note that today's conference may be recorded. I would now like to hand the conference over to speaker host Dean Ridlon, Head of Investor Relations. ahead. go Please

Cognyte's Hello, Investor operator. I'm Dean Cognyte's David Ridlon, with Thank Thank everyone. you of Abadi, and CEO; Relations. Sharon, today. for Head Elad you, Cognyte's I'm CFO. joining here us

Before our presentation. today accompanying mention call I getting is would started, to that like a

select during webcast Investors of made conference If at our today's you'd real-time cognyte.com like Cognyte link statements tab, and current forward-looking statements. visit please these Click and as them. performance. cautioned on these of view call, securities to the the click website the undue on the and The in on I slides the Investors call. required section would certain to those and materially future the not XXXX or forward-looking to Litigation draw of forward-looking call fact by statements laws. are no reliance guarantees results Investors in are to also assumes Securities your are like expectations of within attention by could matters Actual may revise are other statements. differ the provisions forward-looking to meaning statements place forward-looking expressed from call, update These this Private as management's Act that of based implied except not these of obligation the discussed the on on date or Reform of contain this federal law,

focus and on XXXX, make SEC. release publish management our our a and or indicated and non-GAAP our periods non-GAAP uses see companies Investors measures to because discussed we investors as from on financial to measures. and these between for similar Form report information Non-GAAP provides other believes discussion cognyte.com XX, fiscal of these information to financial isolation today cause investors among of those presentation business measures financial it purposes. financial have other included measures. other non-GAAP detailed and filings see file materially in measures actual For of from, which for We in XX, the ended comparative may how and measures non-GAAP The Please results reconciliation meaningful GAAP January the and for performance considered of financial with our limitations differ measures. companies. to believe useful the for financial used GAAP Please to forward-looking differ in about be uncertainties more and those XXXX, comparing substitute year today's should company section risks, the non-GAAP financial informational that results January information we a but today our include peer is slides, The expect that not XX-F Cognyte's statements. at from the annual by superior earnings website a could is

Now I'd Elad. like to turn the call over to

the Welcome, was utilize year Thank to as Dean. to fourth technology and to continued need in fiscal improving their an executed conduct conference short Cognyte. year finish new fourth our for by long-term strong quarter momentum the The that Market confidence line intelligence supported 'XX, XX% stabilized outlook. grow. for and everyone, improve growth which our ways we a productive entered . approximately well a We RPOs, in continues and of advanced and new you, remains with us to strong business give delivering is to call. and top and quarter

revenue, more 'XX be an reached to are expect the we pace operating expected our slower accelerate improved growth, American to but expansion North have ramp, a and expense clear, than growth to future To leading be revenue of be gross to fiscal our we we and R&D growing our we in year investing our rapidly where than Importantly, operating profitability. point is will inflection profit of be efforts leverage.

of more million For non-GAAP we million increased our non-GAAP increased SIS profit gross revenue. and $XX adjusted revenue on than $XXX.X $XX fiscal generated by 'XX, million in

Our our consecutive adjusted $X.X positive of expense enabled operating third gross and at EBITDA leverage growing quarter profit, improving million. management

delivered for million we in $X $XX positive from fact, cash cash of $XX the In million with year, operations full EBITDA adjusted and of free million positive along flow.

execute Cognyte we income, just the year meaningfully coming our and it of and we to be now expect platform sustainable next believe one deliver is have to operating build further foundation strong maintain again operational generating on growth. this profitable We a not year. to aim as but expand and to the in stable profitability, to improvements we expect

During QX, we innovative the and continue to strength technology and recognize who volume. ability customers existing to Cognyte's our new win deals deliver with both of

exchange profitability at growth, new contracts customers incremental we strategy These a flow growth. we over land believe XX up signed customers, which year-over-year. full time. and that year, start and revenue most cases, drive customers and Looking XX% present with new to is opportunity will our the In meaningful cash small, new drive

we addressable represents across America market, As North meaningful expansion. opportunity net look for our a

to in we results started As North several wins important fiscal with allocating These year. investments presence drive are resources increase to the over previously our already America. shared, past have

have are and start solutions the new potential with our has Our providing strategy and as deliver region. to to customers our the been with successful been pleased throughout references local customers new value

penetrate more customers, share over market, wallet win. technology we'll leverage superior time. to working confidence that sound, have customers momentum. to increase in new our with an to our allow to we established efforts has this North approach we partner we strategy we with increased federal to win our and Regarding and Initial progress reinforced right the is believe and able be us simultaneously our sales have believe are existing America sales and customers We further this that

technological and that customers. our value generate solutions and continue deliver to our believe we innovate unique for We demonstrate leadership

the We around have a powerful hundreds track investigative delivering globe. lengthy record to of of solutions customers analytic

and domain decades many experts, as us view with we relationships long customers have Our customers.

value by find otherwise. the allows investigations creating to security, This for in to existing new believe twins AI faster We Our more be makers, references innovative and other us field decision-making customers incremental detecting scale, digital to investigators helps to technology, are impossible law enabling with national prioritize hidden would analytics using very relationships and customers. and to deals that are our advanced solutions national ways and effective and both intelligence organizations Our and productivity decision effective risk maximize and enforcement, insights nearly more investigations. creating analytics patterns, data important and investigation win including faster of them for perform and and enable customer trials

is brought would an with advanced more security existing differentiated challenges to recently than $XX These its highlight value recognizes We combat on emerging capabilities evolving we our superior solutions mission our new for with and new for We of technology. by that customer believe and our I a The want version first needs. technologies advanced demonstrated the continue select to one solution to customers. The you million of create serve released performance needs national of like deliver for capabilities. customer our to support the terrorism. because

customer address use are is from $XX an for intelligence additional from that satisfied is other they this an is to using solutions customer approximately national win our security This highly with broader for existing cases. million threats. second win The

of case, solution our this use For the through were field demonstrate we effectiveness able trials. to

forces. deal deal. strong generate. and both ability it solution, we value the performance national for This customer for million. for $X solutions customer solutions The deployed us, country, the win and intelligence with reference help this already The to of and safeguard a value agency is role them new is third new to their as our approximately in is sold this reference agency in sign generating The another served the has affirming a significant their Previously, a played them. new to

threats would help partner speed, Customers of what's now make relatively decisions. like from I and trusted timely success the investigations on are them to the In rate combating on improve front all that strategic and responsible geographies solutions a for driving national providing agencies, a that accuracy as range discuss intelligence like to up that the agencies way customers security small and are innovative to level. general, recognize focused demand. organizations

bad level better. of has increase wide to technology activities It connect are challenges. leverage Our customers to to sophistication as entities dealing difficult the of increasingly The variety with become a continues actors footprint. through of digital their

data are with In customers addition, working of diversity our grown dramatically. and volume the has

and Our our analyze Cognyte of customers AI-enabled is create more more analytics challenging to it much challenge a digital situation, a data more picture of in solutions actors unstructured, streams bad footprint. advanced holistic digital using this to data multiple addresses places, investigating difficult.

ahead our These evolving technology increased customers threat. the challenges, unrest investing in with to geopolitical to new requires them coupled of this emerging keep continue

important our demand. to to our so technologies investigative enable that believe continue technology, customers, with customers and customers of innovations increase to we expertise continue provide and will the to utilizes differentiation. various leverage strength patients. R&D bring utilizing can to The analyze execute We to our in together ad analytics make to advanced our and our data the domain the capabilities growing our We maintain assets enhance our decisions to evolve value differentiation good drive continue rapidly we desperate are to Cognyte rapidly.

and transact actions. physical and asset safely generate Customers our our it GenAI regulations no with For illegal barriers, risk for to using source actors content with open borders to bad without easier potential other high controls, create Similarly, currency require provided the across investigate identity has added or the anonymously. for solutions it cryptocurrency bad and has example, it the ideal transactions. and cryptocurrency ability have reveal of channel. an making its GenAI the of to better actors and and can bad intent in identities be made actor complexities advancements is the for of can significant transferred space, customers. understand use fake confidence, on

the construct of evolving address. platform to and Intelligence a enables Ultimately, picture ability Decision to involved. fund this suspects, continually operations. to examples allows authorities groups financial limit companies our landscape organized illustrate authorities organizations, their the accounts Our criminals customers to These of picture need

solutions to demand our for We growth. continue expect these trends long-term generate drive and to

outlook FY Turning a for 'XX. entered solutions to the for year short-term with [indiscernible] Demand our is strong RPO. our very

and We profitable time, in investing of and creating drive at our fiscal long-term the growth. aim this expect we the sustainable with are and leverage same infrastructure go-to-market our to advancing year, capabilities operating

We X%, midpoint. to revenue for fiscal minus growth at 'XX representing be $XXX plus million year-over-year approximately are X.X% expecting the or

grow profit We also faster expect than to revenue. gross

As grow expansion continued margin, gross expect result in to profit of than XX% gross a more our year-over-year. we by

Given expect efforts detailed drive to for model, margin in adjusted the million, in to be fiscal more provide we financial more our David what about expansion. than we EBITDA ongoing during $XX generated the double our reflecting leverage year his 'XX, guidance remarks. will

is market the believe we summarize, healthy. To

continue variety domain customers face Cognyte us look is them Our challenges to make threats. established well decisions faster as cases and many of expert involving for growing use a to investigations, that significant and solutions help partner. across trusted accelerate a and wide mitigate

solutions the world them make Our perform our customers us the safer. frequently significantly results, tell the to effectively that and enabling missions improved

long-term customer asset Our significant established to be for us. relationships continue a

We full with financial year, pleased positioned and the believe and we in results for improvement and and execution quarter our are continuing well fourth for sustainable is profitability. growth Cognyte

Ron and like to Before was executive, provide who over the moment did and Sarita and our would Research from experience Sarita strong Defense significant accomplish a want Director David, division, Cognyte executives communications, contributions of including a their industry of and specializing members, to to to Head Nagan knowledge, to to to mission our the software a Forces, Israeli the in publicly I experience for an And leadership extensive Sika traded each Ron and elite confident to unit. Rossville fields important Board I'm turn Board. strength seasoned over is I the that AI brings industry call take I financial he Board. additional years. our relevant welcome commitment to and advanced of Head cyber technology connect of where in companies. thank will

our about turn me David to outlook. details provide let call 'XX Now and to David? fiscal results over the more

fourth that results expectations, financial Thank everyone. and stabilized market you, We our solid and delivered execution. reflecting demand quarter Elad, hello, exceeded

lower the and for our With of we were a strong fiscal 'XX, 'XX large sheet base, to positive each able the overachieve healthy a entered foundation highly ended in the we We with growth. solid momentum. and fiscal with combination differentiated solutions, and year balance and demand expectation quarter profitable customer

year, due increased million million cash generated Our the $XX.X from to free operations cash FY cash balance 'XX. significantly of during primarily during and flow flow the we of $XX.X

no cash outstanding and our we $XX.X year, the of had debt. balance end million, the At was

QX, revenue During of $XX the extended vast software an million, XX% XXXX. end Revenue we increase until $XXX.X million full year the of of driven increase we approximately was borrow available our January growth credit now have was for revenue. $XX and The in the facility, majority million year-over-year. by to

revenue year grew software revenue, up the full gross for was as million, Our gross revenue revenue Recurring Gross in technology, differentiation our and cost profit points increase basis see innovative year-over-year. our value XX.X%, million, main driver year-over-year, total structure. was total our the for about profit to long-term close the $XXX XX%. competitive improved and for representing XX% fast XX% of as XXX of of $XXX and customers twice XX% was improvement our an was full of are The our target revenue. year year margin

for both existing solutions. new the of value customers, demand our continue mentioned, cutting-edge from the Elad and As to reflecting investigative deals significant analytics and win we

we XX customers, of year. 'XX, new new an compared increase customers to won fiscal During last XX

you now our performed each share major me Let KPIs. with against we how of

RPO a RPO short-term continues a of Our Total end demand short-term million. QX for the won. million. year at healthy and to of deals our have the was $XXX.X RPO we be ended with result We of solution $XXX.X strong,

obligations As grew QX and a remaining $XX.X represent revenue as revenue revenue reminder, by was year-over-year be performance million. RPO, recognized XX.X% is future in that expected periods. to or contracted

more QX margin basis an was We than year-over-year also gross software Our of points million. $XX.X was able grew QX XXX in revenue XX.X% year-over-year. XX%, by improve and our improvement margin to gross significantly. were

was on drive The drove Our gross of and profit focused combination faster to and XX% QX, grow structure growth, We've to than revenue been profit margin goals revenue. gross continued up profitability. our improve our effective meaningfully cost year-over-year. expansion. better model improved In executing further margins financial

million. of million adjusted $X.X EBITDA, delivered we full QX, $X bringing EBITDA year During adjusted to

going positive the metrics delivering positive so the continue far adjusted for I've SIS discussed X adjusted non-GAAP each forward. EBITDA have We quarters, adjusted and of EBITDA delivered to expect basis. last we an are All

expect the strong we million our the We year-over-year short-term year this that approximately For outlook. full represents plus midpoint of minus 'XX, growth revenue or X.X% $XXX.X environment RPO the This and fiscal range. support at revenue $XXX believe X%. approximately positive million, demand of of

similar to also will previous We that the believe seasonality years. revenue of our be

each year-over-year slightly margin be to our and We drive are that QX year. than of expect line QX quarter We the profit in today the continuing growth. throughout level growth to top will outlook believe we revenue below XX% reporting improvement increase gross sequentially and gross our more

quarters non-GAAP We be an improvement XXX on XX.X%, mix. year-over-year between expect the margin the year-over-year. about may margin points revenue Gross basis of to improve based fluctuate our gross and to

X%. slower full the and expenses an our meaningfully we revenue $XXX approximately be For year, operating expect of to million, non-GAAP about increase grow than

than $XX we last Our the in year. quarterly OpEx million, to leverage adjusted about may EBITDA more be have of year. model, fluctuate slightly compared doubled Because our we expect throughout to the

minority to our be $X be expect cash about noncontrolling taxes about million. and interest to million $XX We

expect the we the range. midpoint annual in at to revenue of at result, EPS a come As loss $X.XX

fully share weighted XX For count, about FY million 'XX. diluted shares assume we in average

Turning than In from adjusted EBITDA. generate typical operation year, million similar higher to to the to flow. operations, a from cash cash cash adjusted we is significantly of plan expected EBITDA. about year, $XX This

our decided an we future Israel is CapEx in more $X result drive will headquarter investment it to and of and agreement amount an in lease The expected for our extended environment million a space occupy. recently to change XX open additional to OpEx of savings. the years. renovation have reduce about work We We facility and in renovate incremental

about related of $X proceeds of SIS additional to divestiture adjustment. expect from price the million also We

we total For expect the CapEx expected SIS full of year, net a $XX million. of proceeds approximately

The summarize, them. advanced we market FY and and during and stabilized customers executed generate well new recognized value 'XX results. our for and To strong existing has the solutions produced they

value and including latest of add by capabilities our technologies, solution to to the AI. the delivered leveraging We continue increase customers. our

operations. we profitability to and can are be in As positioned leverage we flow improvement believe improvement a model additional in sustainable growth We growth, from our strong of years. cash future flow and for 'XX and continued have profitability cash so we expect in a result, year well FY significant generate

hand would Operator? over the questions. I for like line the that, to operator to With call open the to

[Operator Our Instructions] first comes Mike with question Cikos from Needham.

landed I a I think past to ask you know said statistic. the that with respect customers, XX first question XX% wanted new about year-over-year, the which year I is company you actually. which this was is great up or quarter to the

Or they to land see, remained are Just actually land, new the when customers unchanged. larger? landing are they has initial relatively trying these

at landed year. Cognyte this year with to you Cognyte who coming If customers customers versus probably the last

of different it's national give more for a geographic-wise, security, color. It's yes, intelligence. enforcement, so number it's I'll variety national of areas, It's Maybe year. globally. good customer new some Mike, a types. spread you customers the Also, from law coming

expand it's following, over and relatively wallet across upgrade, world case are expansions, us this customers are a is growing also last value, is with We small the customer with acquiring see a and they of limited most And healthy. starting deal years. the the when that grow land this also than here. time. they we good million. So large the and over strategy new functionality, now. of start with customers, the with But deals, small few indication. this share either the capacity. actually use more go and the And usually and cases is other small, is And is the new new one Usually, more The a demand case them actually year $XX had

those on the guys hear. are to or and let's existing in decided with a of That's guys land additional rate million that color that great they're who is have you to deck, we're citing as their what Cognyte. Or I million comment I $XX deal, but expand. intelligence it customers just could you? know that customer are security signed who customers just sense they you some the around a be how And your it could quickly say, you're helpful, slide these to any provide for is at a renew what to with of increase X to Just over think if $XX that, spend way build size year? that I usage X% there come national it trying that might far expanding X% like over national of the a renew their a deal time so you year? seeing deal for expanding as get of before customers when is Cognyte was signed,

Yes.

X So more which in new difficult maybe you then over is it's quantification actually before. customer their to happened other they to I'll solution, side more they customer. to customer some lot this one have the with us us came with have they and faced their created given with and didn't the upgraded varying solution. this address, And they each years, because this capabilities years this with them we need and is lot actually give And a the that other. than actually capabilities more the side that the territory decades, the that for about data because the customer X and first many X new answer do of technology quite quantification But color I'll between a came

million the border border different they It's use of we border Actually, because another expanded country. the borders the quantification, a reference but in for starts capacity years us not we few that very case. The earlier, worked result and before the reference different could is with challenges mentioned and About that they ones this quantify that have is already actually the had customer functionality And that sold $XX customer organization a existing control they customer come and actually have be same related be for into solution it the that different also, quickly. the it I second and existing large one a us, a actually, grow control for a of one to customers very for can was new to different plus difficult it's was very that areas deals large and and with last like, before. capability customer or upgrading, and happy very actually to to might strong an challenge. other small fit a of for can concerns in border, didn't that

between it other. one between one the So customer varies really deal the other, to to

the would and believe we something customers that statistics in countries understand new helps upgrade I need happened be we of us So And address customers and of challenges, their hundreds with examples current that to I is many be also, prepared earlier. technology which with lot actually a future are to in have gave and able helpful that to here. the it needs, they given not in that their one engage order frequently and

So land and very us. important expand for is

in a dollar gave Great. CRPO And one driving I I trying guys this around like driving revenue some to to the decent to get in that growth. and I'm to that balance could. confidence Cognyte today? But at CRPO I we beyond guys revenue if this wanted there's 'XX the color a incremental that comparison looking it the we a final 'XX. And amount CRPO outlook, better guidance of better I fiscal just are above you incremental understanding. that of what's then great to just If look coming you fiscal add have year in have, understanding looks the exiting just get know question,

Actually, the to the last RPO, the short-term is of RPO year. coverage similar

on deliver we to before the RPO the that profitability. far deals improved given we gives outlook. not going it mix are that confidence terms we have in coverage. was what And the high we have from it's of also, the And the see the us that confidence in this can So of

our in level confidence the is So high. outlook

$XXX balance if Cognyte If year I back guided $XXX million and million full could the just to we you ago, CRPO in go push of X revenue. But back for year had guys then on a second. that

look you're of still $XXX then and at increase. I So today, are we And million CRPO $XX are where million. about we million $XXX in talking have the guide

dollars beyond at guidance today? the that incremental we balance gone that million to $XX if almost the So above I'm the million just CRPO I up $XX look the and dollars trying Does of And have has from incremental CRPO clear that make above the again, want to get balance. make a -- doubling better I'm understanding I sense that. just sure on of, to

Yes.

if previous versus RPO you our the So perspective. look guidance that of the in XXX initial like the of current from the period, at different XXX environment were we a in

million this with RPO, which perspective, the year. that demand, a guided. we $XXX that RPO The we us short-term difference Is us RPO that and to pleased last we first that During allow where and percentage our question? in RPO guidance growing to we have, you this your that we you coverage with next and it's overachieve short-term will predict is guiding quarters second, increase is that compare know also able million in same the very the year, to And the allow we versus our and last the saw strong million at actually are year, a the significant saw which are the actually, quarter-over-quarter. over you XXX, look from few the confidence of land. year, When other good starting to we're last very a $XXX.X increased few percentage the quarters, $XXX over we -- way very the going versus were year from see that work year customers, that is similar and is if we main our we closely quarter-over-quarter, and last

appreciate No, and you It do Elad. the does. I from it does. color both incremental really

So very much. other to thank you on it over analysts turn I'll the line.

Our question TD comes Securities. from Shaul next with Eyal

double-click which ongoing the mention topic around prepared term? remarks, maybe And and we us about your My AI du outperformance. Can on in recent provide you maybe did should quarters. AI, the on for near and GenAI, driver Cognyte point, question latest is with jour company. as in the insights? you Elad, GenAI market a some this development has impacting been be consistent the long how thinking Congrats

AI between hide customers for time. our make better. to it's to safer And it's over the more customers, becoming -- bad race our important the that So we it's understand that guys race. world And a are is important a we're and maybe trying trying actually,

they're actually, if they that are. the identities. hide guys, difficult GenAI to -- you and look address. using technology GenAI complicated I So they in their makes an fake advanced entities the who earlier order and to more using anonymize bad currency on call get and use gave our challenge example actually this to about and in And customers' much

time. to If bad you who want them, to first need growing know put or And one your they hands investigate over the on guys you are. this is challenge is that

actually and in in to structured capabilities actually customers, something to need probability areas different to On able is have and behind And unstructured more happens. identify hidden who uncover in identity order unhide, that them the order for from data analytics more AI high them in in sources. they the be other they our coming to able hand, be for the insights,

those quite And we AI So solution, been that workflow has everyone of implement part our implement note customers. race and it's And of present when important two. AI part and it's the into a the it's that products. into it our our process remind our actually, important future we to integral between We a solutions of as to view long an it for time.

also are not important. of but customers environment. of our And the process. So of some our it's the is stand-alone customers and It's investigation unique which it's customers overall is solution, part part a have of highly a they workflow or most using, our customer government

feed we into the AI So environment. the

this in value of research more incremental give technology. focus give on. have insights long all We we time. for have And them ago. quicker is to data AI AI out our holistic manner. continually their the sets long much that purpose, actually of our drivers we and one accurate something we the value customers And AI over short it the dedicated for demand evolving And be the in It's a view that's So you leverage for for that unhide generate order To that using to to benefit of a able as customers. team and established term.

next from Evercore. question [Operator Instructions] comes with Peter Levine Our

to AI just one follow-up the question. Maybe

in given your the government Just you that Given there pools you restrictions maybe your guys are navigate customers. work the the data the that pull you of that, with, of secrecy can privacy how customers, data from? of curious some the any of terms

Yes.

you provide want to It's not managed own we do is services to the So deliver we data. to remind them. And have data that data our that customers their customers. I not

So they and responsibility investigation are interference. they the their on data it's government that countries, that customers the in are process to the they allowed that hands do put and to our regulated given customers their themselves are without

exposed are customer So we data. not to

And what it, fiscal going need it to baked sorry, if are XX fiscal think about upsell fiscal 'XX to assumptions of for Do 'XX, what customers are saw what's still north 'XX think new in more I'm be the an the Okay. assuming What then net there. call -- net versus your you -- customer fiscal are you in you assumptions, hitting, growth for 'XX. that you then XX with meaning maybe you're of is guidance, motion? 'XX. in help XX us about and Obviously, new you

the behind assumptions and an idea that the guide kind entails? just So of what give of us

Yes.

So in the of direction this guidance. you asked about the I understand

existing the guidance at view. is look you on the guidance, if built the So primarily

look order market will So new including they the acquire, relying at earlier guidance. do acquiring started most on. Federal. of for time, that recently U.S. customers. new growth on that accelerate is have local Actually, are over I new the we in we we'll state we One customers example mentioned customers call the But focusing are the be and if we customers, in first with much on the you investments to customers. not that focus and new

long you time to with and and already put Actually, customers. that with expect already for in also, tell and strategy, second a quite meeting do can and for that land follow-on the mentioned year, new customers from was customer you about again us to stay And expand So deal us. I tell we one continue after order from a as expect again. customer buy us land the we earlier, customers those can the U.S. have that January and this I I the actually meeting And I in we us.

it's new U.S. we on and customers, for continue win us that, So . primarily the important focused and in to are

to into further that partners? And in understand if is Help think Is new making that today the us the you're the U.S.? about you expansion investments the expand that direct? U.S.

Sure.

them penetration started capabilities investment So and the including actually, with that sales and direct. needs, sales POC started with given marketing efforts everything the a investment, we the current team a the state it's in relevant We And on and And business participating efforts mode, U.S. local a for in disproportional in the it conferences. have -- the local. level. we team, sales is to

established using market clearance are partner access who with we customers. federal and and of know-how has the As Federal, relevant and relationships relevant

So state partner an and have. is is local that established primarily direct, primarily by we federal and

is follow-up question Mike Company. from & next Cikos Our Needham a with

least on Peter more because Not new clear, was to everyone said a know he Elad side here, make sure comment follow-up XX checked had I you I based David on my And numbers just management heard. referenced customers. have guys, and incremental the if question what at just I of a

XX 'XX, I in digesting for from I have, XX stated which 'XX. know Just up fiscal this new in we're time, fiscal perspective, numbers the all real and customers in is

year-on-year increase to from so there's XX XX% fiscal 'XX. 'XX Is to that XX fiscal from correct? a And

XX is It to from XX.

new XX. to XX XX from So ---

XX%. up is which small, XX

that. it. appreciate I Got .

this for further time. at back no call like I'd closing the are turn over Ridlon Dean to to any questions There remarks.

Thank Michelle, thank and joining you, call. us for you, on everyone, today's

speaking We you free meantime, will speak hope May any and and to again next Should questions me, attending in the reach feel with you be of with then. forward you in have conferences to quarter. several some you. to we to out Thank look please

disconnect. you day. may Thank great This Everyone, participation. you have does a your program, conclude for now and the