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spk_0: welcome to the cockney third quarter earnings conference call my name is john up your operator for today's call at this time but since arnold than only mode they are we will conduct a question and answer that and during the question unanswered that than a pt have a question what better than one on your touchstone phone please note the conference is being recorded and i'm not trying to call over to dean red line
spk_1: thank you operator hello everyone i'm dean red lion cognates new head of investor relations thank you for joining us today i'm here with a large her own cognates ceo and david a body cognates the up before getting started i would like to mention that accompanying are called today is a web acts with fly if you'd like to view the slide in real time during the call please visit the investor section of our website at cog make dot com click on the that there's tab click on webcast the link and like a conference call i would also like to draw your attention to the fact that certain matters discussed on this call may contain forward looking statements within the meaning of the private securities litigation reform act making ninety five and other provisions of the federal securities laws these forward looking statements are based on management's current expectations and are not guarantee the future performance actual results could differ materially from those expressed in or implied by these forward looking statements the forward looking statements are made as of the date of this call and except as required by law called night assumes no obligation to update or revise investors a caution not the place undue reliance on these forward looking statements for more detailed discussion of how these and other risks and uncertainties could cause cognates actual results to differ materially from those indicated in these forward looking statements please see our annual report on form twenty ap for the fiscal year ended january thirty first two thousand and twenty one filed with the fcc on april twenty ninth two thousand and twenty one and other filings we make with the fcc the financial measures discuss today include non gap measures we believe investors focus on non gap financial measures in comparing results between periods and among appear companies to publish similar non gap measures please see today's presentation slides our earnings release and the investor section of our website at cog night dot com for reconciliation of non gap financial measures to gap measures non gap financial information should not be considered in isolation from as a substitute for or superior to gap financial information but is included because management believe it provide meaningful information about the financial performance of our business and as useful to investors for informational and comparative purposes the non get financial measures the company uses have limitations and may differ from those used by other companies now i would like to go in call over to the lot
spk_2: think again we're excited to either join the club night in well gonna be on to a quota conference call and people report that quarter revenue and you know the dps one again about the other end of our guidance none the revenue was one hundred and ninety million dollars and under ppl for thunder one sense a doctor the be that also getting stronger a twenty two million dollars june for their we assume when many loves gave including multiple seven and i did it is driven by our security analytics platform as he approached completing our first the reasoning then company and play with execution of us stop the strategy experience the glass of revenue growth and you to do three than expected when you do it was aggressive go think you full within weeks left in the air very fine you go on all outlook when alex that four hundred and eighty billion dollars of revenue or around seven point five percent your they glowed it does this and lot of growth and their descent the pps at the midpoint the before revenue expectations they they do that avoid one other guy that slithering the goal i'll go saw the do a film follows to do the organization with the not on ethics blood for blood them less many defensive you use cases i would like to start my discussion today with reveal felt village deal with isn't your three that he fled the be the future and of the flooded the first event books and please fifty million dollar deal from a national security agency that their the new functionality this is a good example of follow platform can help love address they're going live blog celebrate complex investigation with our latest innovations insecurity analytics the second that example the to the each of approximately dungannon dollar in connection with the opposite expansion of our platform to be a good example of how we had customers kinda solutions wanna live increasing amount of data they capture and less evolving security threats we believe these loves it is he fled the laser focus of innovation and artificial intelligence and data analytics and i'll gotham his ability to leverage a platform to address many different use cases for example i used for platform is accelerating organized crime investigation security agency people that the by members of criminal organizations or the study of envisions echo coffee them including the leadership funding sources any dancers and i'll be like little when prime before they happen into the digital world really not have lived the as many digital footprints that can be very useful an accelerating investigations the amount of digital information that is available to security agencies is growing rapidly but he's also very diverse and difficult wanna live in order to find action value insects oh platform is deeply significant amount of studies and a major security agencies to leverage digital footprints to connect the dots and rich quick conclusion by few they give analyzing data from a wide variety of thousand i believe organized communication is a good example of only for both men uk says of along on the slut slothful to help all customers are blessed evolving security challenges as will cause we believe the security ah if it's market is in it's early stages and your well positioned for logged on globe many customers recognize that on want solutions can no longer keep both it's growth in the the volume and the recipe they seek open on a good platform for the block a partner that can support multiple cases solution that can feel better gay from different sources and generate high quality insights foster the way they get a wide range of security threat before the forty on phone we have an officer of innovation that has enabled us to establish called night as a meeting went off the beauty only acceptable with nearly one thousand people our there for melody both the news world jaco me that the continuing to the a market for developing highly sophisticated thought flow customers obama good leadership is not just about though technology customers also have confidence in our ability to deliver value both knowledge or cricket of innovation and visit the plugins when does the my then while good leadership they continued to collaborate with our customers to stay on the cutting edge of what official intelligence and security or lyrics bloodlust be one the needs of the was locked the fish together security agencies in summary will play though a third quarter results and on thread for thoroughly first year as an independent public company and with the funded the fusion of i felt the prodigy the extent to deliver them percent growth of both for the looking for the we are in the large and growing market is positively the future and the localization for lot of love now that he turned the corner little david to discuss looking for use as an outlook more the day
spk_3: david
spk_4: thank you allowed and the lowered the one is gonna do they will include none the financial measures are considered him between our dog and non gaap financial measure is available as dimension know or any really and in the with a section of our website with the solid the fourth quarter with revenue adjusted to be done and pps coming to a public education the behind our thoughts with the ongoing the man both solution for both existing and new customers during the quarter we won many large order to them by our cutting edge official intelligence and security analytics thoughtful exactly none the bourbon turning that one hundred and eighty point seven million dollar gift of the be done to mean it when two point one million dollar and building guess i mean when he once said you to date none the the new with three hundred and fifty point three million dollar adjusted to be done with sixty one point eight million dollars and look at the
spk_5: thirteen at the a sense
spk_4: with three quarters the i know i would like to provide an update on our sophisticated you and how it is objectively impacting our financial results our soccer mix continue to improve this year at i'm still left hard work and professional services uplift report that our focus but the he job a double digit including good of it through the first three quarters and weeks that then percent go for the full year on the london faces we've been steadily increasing the percentage of our revenue generated from their over the last year i would believe that was puppet even an aunt that matching the year as we continue to drive or your support mix the execution a poet political strategy and benefit about our customer and good night for customer by deploying know one of the platform that benefit from foster innovation easier installation and think like the moto g optics for good night should be i have felt the need is improving our financial model growth opportunities and competitive differentiation let me know scott our although guidance our outlook for like twenty two is four hundred and eighty million dollars of nuns present you with the land of life of minus two percent if like think approximately seven allow our perfect meal been you go the for vice outlook if legs that and recent event affect the the timing of deployments including miserable fiction in certain countries little boy worsening of epidemic recent showed a different party compliments required to deliver that them out of a solution
spk_6: another factor
spk_4: with good thing it third of it to go faster than where the new and in addition to double digit growth open golf we expect adjusted to be done the go victims the thing you'll be your normal life for the spinoff defend the geez i'm on a related to sub machine public company infrastructure which than the likely i know legal and other public company and compliance functions he also expect our none got the believe the dps to come in at eighty cents at the midpoint of the revenue inch since the fiddle with build our other company function to operate independently including expanding our finest legal and i could see
spk_2: along those lines and place to welcome been a though and regulations executive
spk_4: are on track to deliver folded resolve you know what first year in a standalone public company and expect finish the year with ten percent growth of the globe i will open platform is being with a customer as the others a wide range of the just isn't and the for fucking elation keep face with the boldly security challenges for guide is a leader in a large and growing market and yeah well completion for sustained lump them go with that i would like to have the call over to go through a dirt to open the lights for questions
spk_7: operator
spk_0: thank you and i'll begin the question answer that and if you do have a question press or than one on your on phone if you wish my mchugh please press the pound sign or the ascii once again if you give question press barn and one on your own phone our first like and from like he goes from need of and company
spk_8: hey guys thanks for taking the questions here i did one a circle up on be revenue guidance today understand that we are seeing was ten million dollar reduction at the midpoint based on the worsening travel restrictions around the pandemic and the third party component shortages you guys you talking about can you help us dick about how much of that ten million dollars is from pandemic versus the component shortage this is it a fifty fifty split or sixty four have how should we think about that
spk_2: i like there for the perchance so learn and like to give local about a guide and so will the number of or fuck goes that we get into account the one we get about guidance
spk_9: at this go there those a recent developments or we had to consider the including mention local be good at a job description of these other countries that are related to the emergence of the only go on and their the substance of the year that around and just as a reminder are global a software company and for most countries we can deploy without rather
spk_2: however there are a sudden customers that clouds rather than some of those are being a popular the bike by be like now a another factor as mentioned the the recent shortage of or that body components that is required to deliver said unopposed not a solution also here like my you a that the majority of for revenue a constant softer a hello there instead of the most and that a global by hardware and to enable us to the leader of sculptor
spk_9: a year in the first year as a public company fair although he lowered eleven loud look at we expected to other achieve a gross margin girl and neither initial outlook for red wine get ghost bobby than the be done and that was hope it is expected to grow by ten percent and nominee did he die by fifty percent the elaine
spk_2: and i would also like a to point out that bloody used revenue because her moved towards the high margin softer and there is a very little impact a on their a b s as of the quantification air would we're a factory in there are many different the as fuck those into the guidance
spk_9: we have you know on certain days and upside and it's quite difficult to work to quantify each of the individual elements of by itself that because of him that day there we're too down to guide as both a million dollars though there is any bugs go for a few mean of the but but but generally speaking it's like difficult to the color each one of the elements beta of i help stances mike
spk_8: yes yet it helps eight thousand and four the travel restrictions around the pandemic i just want to make sure i'm being clear on it sounds like it's primarily government mandates right it the it's not like for or maybe you can actually provides and color on this is it customers not letting you on sight to perform the insulation and out of out of caution on their porters it's almost entirely related to government mandates
spk_2: yeah so were you i'd see so many related to government for government the sometimes you're not allowed to walk in mostly because of from certain regulations they have a so a the leo's old job a presence we have many employees around the world and there are many officers wonder what have you know so when you have you
spk_9: other forces you to easier but when it comes to other customers that the a their head will not let us say getting the side because of the their own chance or we cannot fly because of honestly restrictions and this creates a little bit of air the lane their deployment diamond
spk_8: okay okay and then that the final thing that i wanted to touch on before i turned it over for the and pony shortages that we're seeing i'm curious how long has this has been an issue for you guys and and can you explain which components here you're experiencing though shortages and
spk_10: yet so where in some used he says early the little softer embedded the network appliances their that our air quotes from that body
spk_9: and there is the global shortage of them have their components and appliances a small parts of the value of the day
spk_2: a however we can't recognize revenue over from our softer until the the prices of becoming available at this is the a recent development we didn't feed before we were able to wear to have everything we need so far and the currently we see some there and i you know delays and shortages and in this respect and we hoping we
spk_9: the vandals in order to learn to make sure that he has going venturi and for future mean
spk_8: and have that was gonna be my my last question for you on the topic so if if we work beating the shortages now i understand that you're working with your vendors that can you help us understand and heavily times gotten worse recently are they getting better since you are working with that suit up with him better start with your vendors and then follow would be do anticipate this been a one quarter phenomenon or or is his potential to have to extend for a couple of quarters of this time
spk_2: yes oh well as it is a recent development the we're lucky we down the study recently to to to make sure that they doesn't the effect of business the for the longer term it's hard to tell whether it's you know weeks or months but the but generally speaking it's a recent development
spk_9: i am having said that again i want to remind you that third the the portion of the of the appliance with you know regular overall a business is not the he is not huge so so this is something that a i believe would be able to overcome over time as attacking the necessary steps in the show
spk_2: them again looking dude vandals or thanks to help them there without purchasing department said to find the anything components
spk_8: great thank you i'll turn it over to any my colleagues thank you guessed
spk_0: thank you
spk_11: our next question mark
spk_12: not only from africa or great take my question is that peter levine and for kirk to the piggyback off the last question though considering the nature of the data that you deal with when he talked about travel restrictions yeah i get the implementation can you see a slowdown what are you also seeing a slowdown perhaps
spk_9: the pipeline build your wraps can go on site can you may be kind of just decipher what what that looks like in terms of wraps getting on site vs implementation delays
spk_2: yes so were obviously as all say security eh nail gun or security challenges it's only growing and we do see that on wifi it's arguments are solution as they surely more related to a damning of deployments air of course logistics our though so make it the harder for us to talk what's customers of la mancha the activities but there for those areas there that will not wanting to i think about that two years eleven and during get all their efforts are remotely and quite successfully so far as though it's many related now to the deployment timing
spk_12: and obvious answer your question truck
spk_4: fair enough and then for i'd have given guided circle twenty three yeah i'm sure we'll get that next quarter of but can you give us maybe just a a brief guy inciting the kind of what you're thinking based on what you see today and how that's gonna impact pipeline deal flow for next year thank you
spk_2: oh and you mention it's it's legit
spk_4: ah as you mention the with cheryl and guidance there for next year it you know where you for calm and that if you remember that in the beginning of the year and i kinda back in january which shown and day for you to plan that of for that the beach or when you go
spk_12: at this point we expect to be a year under air and present day revenue go ah but with that and percent there was of they'd and and and their guidance you queue for call
spk_0: great thank you very much take my questions
spk_13: thank you
spk_1: next question is from brian remember from imperial capital
spk_9: yes like very much so i'm looking at difficult twenty three i it sounds like it's more app pandemic related or anything region all that ah that you're selling into that africa is it all travel into the us i can you gag yeah
spk_10: talk about where it is regionally on is your issue or is it everywhere and cause it seems like it's more of a pandemic rather than at i travel pandemic rather than a shortages of equipment that correct
spk_9: yet again it's serve one you did the guy that guy dance it's quite difficult to to separate the the different elements but the generally speaking of other pandemic at again we do have a global presence we have little piece of landed law we have their global their engineers and says forth the a in setting up not though those
spk_14: actually most of the territory's so so it's not the a white the issue for us it's law and a temporary and to changing and because the day the dynamics of changing it's also changing from for want want them to the other two different country so it's it's country a related it's not the a full territory
spk_13: related and it's also related to the to where we are you know we are at present there physically without people at all we have the we welcome and by traveling too good to the side though it's something that i would say the country specific and judging from time to time according to the epidemic care and changes
spk_4: okay and then just as a follow up on as i'm looking at twenty three and twenty four eyed as we have to ah you're growing your seminary percent this year i is that reasonable to continue even in this current state of my covert and everything else to see that kind of growth and twenty
spk_15: tree or should we be been higher are are lower i i know that i'm asking for guidance but i just want some general directional guy
spk_4: and a lot of it's that he again now i will land and as an hour and a movie theater for with them you know at we would share our athletes when to tweak i did you know where to put but there again you generally when the out the you need to his plan we could for another digit the and and the
spk_0: currently at as we mentioned like and we are some have to sit there were the negro or with the strong day was what we'd go
spk_16: and the we will learn but that is no next move for athletic our next question i'm brand reebok from evil great maybe just one more on fiscal twenty three as you look at the first quarter april it's up against a pretty difficult comp i think the hardest at a year
spk_17: how should we just sort of think about that were there one time items that positively impacted one key with this current fiscal year which which might lead to
spk_4: the situation where gross could be below trend line for one keep thanks that you bring eleven been mentioned the before like to have been we looked on that fateful the but the way to mean the colored guidance on a date by think that he the position and the short billion compliments it's well about for you know as fifteen they're limiting their business which
spk_16: and may have input for the you know a few millions and they're on the other side of the story live like that our ability to deliver the player software of the remotely to end of the looting the last year the actually local couldn't committed without for a long time at and very successfully and
spk_9: a it in the live the good enough to continue to do the same
spk_18: as there for the nails the next year so early prefer to put together but there are too picky for sure if i'm calling out he did you are very allen to see you can see the involving will reply
spk_2: that's great man just one click follow up as you think about emanate with potential for you guys to execute on you that and twenty three thanks
spk_9: yet solar ever feminized the first the four hour and a flash the and least by the way through that were mainly relying on their organic growth we have one thousand and the and the paper really no way things we are not relying on and the names in order to to exit
spk_2: you tell a plan
spk_19: having said that we have a history of talking them and knives in order for us to be able to create more value to our customers and accelerate the air and the offerings
spk_0: he won their area and the other area is the most of his you come a a look at it as land a in a case by case basis and when you find something relevant with cotton consider it the had big the seasons as thought to to like the long story short to summarize add up in the we always that have pipeline fulfilled
spk_8: those and their one real foggy to relevant we do it almost looked into given a be something that look the longer than not for the show that them right thank you very much
spk_4: thank you and we'll push from mexico company hey guys i forget me back on i i did have just a couple more questions the first coming back to those components shortages or any these components sole source ah of out the keep them my town so actually it's not fair
spk_9: so fast that thou we do have like care i would city like very common that a component that we are looking into in the that yeah like can we will look a bit challenge with him but there's something that we can now walk on it i could be like you know that difficult birth or something that that and that you need to things have happened he said the time you did it the time madly may change a rich looking us could do that you know and you have to a month to month a few weeks ago now that is becoming like that few months or a mac know the prices guns out
spk_8: so although all again and in because you know was the and the he working on them nip at the public eye for an hour ago but that in the seventies and but it's it's only sophistication that they are required that so we're from the magnitude lower from a challenge to provided as he that it's something that will have to me their magical yet just the two to elaborate on these my and most of us after his longing going off the shelf and know caught the other as some of it is running on southern appliances and for those doesn't apply the rear your components that the air we face the shortages so it's something that is link that it's not something that you the and major and they will reflect
spk_4: play the portion of our business i hope this helps it does it does and if i'm looking at the
spk_8: the gross profit guidance for the year of up ten percent year to year the it actually implies the queue for gross margins declined from que three and i'm wondering that that sequential decline that's embedded in your guidance is that based on increasing costs or the these components are or why would we be of it can you help his think about why we would be seeing the gross margins the clock and que three to four for my garage they they imagine imaginary the the slight decline you know i'll buy the now you have a good perfect there and now and gift and that it was shared macau be looking at the percent go for it was perfect and it's made depends on there and of those needs and the a bit of that them their our mission where we going to men and obviously you could see that the over day over there first nine months of the year
spk_4: we were like a deliberate gov greg was magical quarter dakota quarter of flood or will be aftermath of that expected
spk_2: great adventures just one other question i know
spk_4: i'm i know we're all thinking about fiscal twenty three and physical twenty four maybe not
spk_20: specific guidance but but given that you guys have nearly a year under your belt now as an independent company and we we reference those three year targeted you guys did put out of excuse me at the time of the at the time of the spin on it is card bag willing to to reiterate or back
spk_21: the fact that it's still expects to retain those those targets that were initially laid out of at the time of the spent
spk_0: oh
spk_22: again now in general you lay out the way to me see our that he didn't go to both of it's me as part of our and output put says we looked at once again from scratch and the adjust the plan required
spk_23: ah we inserted into glenn que for and the and the the hell did manage to consider the teams have changed over the year and are we were at to go sledging which he put their our their ability of
spk_24: continue to success and the business to allow the all the guns with the cliff you can for
spk_25: okay thank you thank you mike
spk_4: and we have a question from louis the palm of i'm william blur good afternoon i know that of the month the morning banks and what percentage of of revenue during the quarter was recurring and separately what percentage of rabbit and in general overall it through does hardware appliance that you record the come on it shortages but acela loot they be dumb that for the question of over the time revenue leave the love fifty percent of the top of the revenue
spk_25: ah and the if you look at the all on revenue death element that there may be delivered on their appliances is when percent of the total a new but if you want to look at the shortage of the of their they do exist much smaller air force and yeah not they're splitting the revenue you know where their am
spk_4: and put up so it's are so it's not something that have been quantified it oughta do have the good kind of like a limitation of will be our the been disrupted so the majority of the revenue in suffer as the the globe and caught and it is like something that the at about four and lock our solutions instead of cases we are have software that it's deployed on that album fit in atlanta and it ended a good or that be as like a certain things that are air we would be their shortage it's not all over it's very air s specific care for the and on that we are monitoring it than the and including getting the three level to ensure that we would not have to be with their i level of but again you in the big picture you can see little thing the believe that we are working on it's relatively low
spk_2: of their level of course with our solution is a very small indicated that we are you appliances which week between shortage it also limited
spk_25: grant amp of related to that recurring revenue i believe as been a goal for the company to increase the percentage of repairing lab revenue but i think over the past nine month in the level has flatlined at that fifty percent it is that is that trail or has there been any increase over the first nine months of the year in the real recurring revenue percentage so we're in learning and of but generally when we sure that were outlook for the and of can get here we sure that we believe that the fifty percent of their regard gripping you represent the
spk_9: correctly where we are in there with the way well for him
spk_2: yeah you know as sure there's some plan to work more overtime man as such a manner where the new she will never have positive impact but did not something that will be back on the short them it's more locked him and
spk_9: okay
spk_2: thanks am my last question for the the ten million dollar than and guidance reduction do you have specific visibility
spk_9: in terms of
spk_2: when he will recognize those feel that have been pushed back or is the year expectation that that ten million dollars is is gone forever and in the fields were are cancelled
spk_25: yeah so i think these one am her notebook of those it's only a matter of thirty plumbing timing and no one is related again to the been there make so it's hard to say to turn one exactly can land in specific country that he has employed and but the the deal though hey how there and the customer and need third of solutions will provide a lot of money to customize over and security challenges are only becoming more complex so the needed very not that than he does the user either has disappeared and for that reason it's only a matter of timing and dems of their how the shortage of of are they big mention
spk_26: and add this is something that the with specific to certain areas within the appliances there that we need in order to to deploy are softer and deliver it and this is something that they're we believe there are you know i can say it's a few weeks old
spk_4: oh couple of months but that this is something that we believe there will be able to overcome what we do blocked it leave again her trying to an airport or than those in order for them to to an end to help us to increase the inventory to on and second by the way we you about to same get people to her them as that put our hands on on the missing the about though so we do what they wanted to be done you know that to were to or a result of the service sir mother but the again customers away think they need solutions and or be something that there will deploy as soon as the you know the eco system and a good decent will allow us i hope i hope this new of the answer
spk_2: okay so did you say that you don't have a disability in terms of when he will receive that the proper component that and deliver
spk_25: is that ten million in revenue so again
spk_9: the
spk_27: we we have like how we are monitoring the relevant companies that when the single now and like a man i almost a daily basis to see like the the timeline of sentencing between that and the next few weeks and but a with you know with a lower level of the with during the look at he smirks and to do
spk_28: dillard mention it i eat now that it's a two weeks issue or four weeks issue but the we believe it's a very short than one oh wow so think that it's going to stay with us for among their beard and reducing the did something that
spk_29: a currently under control endeavors
spk_0: specific genes that on fish pacific test pollution that we are selling
spk_30: and by the way out and child them sitting on their so sorry and by the way just to make sure we are going on think that it's not a thirteenth out and million related to the shortage i also related to to flight restrictions etc so did just to make sure that the we understand the than this before
spk_0: but but often ali is he said that it all timing related right like there haven't been any cancellation
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