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spk_0: the day and thank you for standing by welcome to the key one twenty twenty one cyber art software earning conference call at this time of pistons are in a listen only mode please be advised that day conference is being recorded after the speakers presentation there will be a question and answer session to ask the question during the session you will need to press star one on your telephone if we require any further assistance please press dark euro i would now like china call overture eager to date erica smith vice president of investor relations please go ahead
spk_1: thank you any good morning thank you for joining us today the reviews that odd first quarter two thousand twenty one financial results with me and the call today or liberal party chairman and chief executive officer and just legal chief financial officer after prepared remarks you open up the call to a question and answer session avoid again but the remind you that certain statements made on the hall today may be considered forward looking statements which reflect management best judgment based i currently available information i refer specifically to the discussion of our expectations and beliefs regarding are projected result of operation for the second quarter in a four year twenty twenty one or as sold in both might differ materially from those projected any forward looking statements i direct your attention for the risk factors can feed in the company's anymore page on form twenty f filed with the fcc and those reference to introduce federally that are comfy to buy books let fate and low lowered myths regarding our ability to actively transition the business with the description model the duration is scope of the killed nineteenth and and it it's or rated impact on global economy and our ability to adjusted response to the pulpit navy pandemic black orchid friendly disclaims any application or undertaking to a nice publicly any of these own vision for any forward looking statements additionally nine gap financial measures will be discussed on this topic for reconciliation for the most directly comparable job financial measures are also available introduce personally involved in an updated investor presentation that outlines the financial discussion of today's fall i can be outlined at our investor day that we held in march beginning in the first quarter we changed the revenue and cost of that revenue presentation of p a now to increase visibility into our conscription transition and the long term focus of our business the historic breakdown of the new piano presentation can be found in mid appendix of the queue to update that which can also be found in the kit quarterly results section of our investorrelations website or what de paul is also available on our website
spk_2: with that i'd like to join the call of into our chairman and chief executive officer legal nobody in the first or ago and thanks everyone for during the goal love you and your families are safe and healthy twenty twenty one who's off to a great start we successfully completed the first quarter of are active transition to subscription we are real with our execution and are well on our way towards transforming cyborg too fast growing recurring revenue company with a comprehensive search before your solutions a few financial violence don't run was a hundred and thirty million dollars and for school and had of our years with our new subscription revenue mind going a hundred and eighty percent over last year in addition it was great to see a recurring revenue reach seventy six million dollars or sixty eight percent of the already be also generate more than five million dollars of non gaap operating income and thirty million dollars in free cash flow both ahead of our expectations oh revenue a performance was particularly rewarding given that are subscription booking mixed exceeded expectations and fifty one percent much of our success is for was again from strength or says solutions given the increase in revenue are you from subscription we believe that annual recurring revenue or a or are can be used to evaluate the strength of the underlying business or a are reached two hundred and eighty eight million dollars of forty one percent year over year and even more impressive is that are a are from sources have shifted together move faster than two hundred and fifty percent a are are subscription next and recurring revenue demonstrate the momentum in the business and incredible demand for identity security platform which is centered on fan and aren't as they marched we outline four pillars that will go a long term value for cyborg our customers partners and shareholders are you use the same framework of growth subscription transition innovation and profitability to walk through our key on results let's start with both positive secular talents and excellence and executioner driving a strong growth trajectory ideally security that the center of every major industry deal including digital transformation zero drugs hacker innovation and compliance is your transformation and explosion of technologies applications and our nation to or not only blurring the line between a privilege user and a work for soon user but also between you and users applications and box for customers this is creating a sense of urgency percent of security enterprises have moved beyond the emergency initiatives and do that was twenty twenty and into should checked execution of comprehensive security programs and as a result the flight to trust we signed the fourth quarter continued and que one in the wake of solar winds and them microsoft beaches enterprises i'm basing zero trust and and assume breach mindset they're looking to security partners who have comprehensive measurable security solutions and deep the main experience as you look at our business these industry dynamics are making a day security more relevant than ever before the dried our growth we're executing well as this opportunity with our land and expand strategy early this year we aligned our business across privilege access nashville and hour to speed those deaths that us and access the strategic me as for accelerated argument him with an immediate impact the scene in our q one performance the increase focused also contribute to another record quarter for pipeline generation across the bridge for you which will fuel our grow throughout the year we can do to see customers embrace or sessa wishes with privilege cloud and inkling village manager among the fastest growing offerings in awkward for you and the continue to run in a hybrid world resulting in strong demand for our on can span pan offering or more often than not it's subscription package versus the perpetual purchase of the best i'm here from customers that one of the ripple effects from settlements is that chief information security officers increasingly recognize the critically and access devolves and lot and talents as key keywords voice that need to be secure which is contributing to a record by and growth in these areas are lessons in customer success over the last year are also paying dividends as the base of engagement with existing customers remain at an all time high a number of customer examples from the first quarter of demonstrate the power of our strategy in a highly competitive of a wholesale distributors expanded with workforce identity as part of that strategy to modernize access security bleed and deliver operational efficiency this customer recognizes that the explosion of sas applications is extending village access to all employees nikki security equally as important as a scene as user experience i love is when for two main reasons first the customer embraces are any security strategy and second it demonstrates the increased sales velocity from ourselves before you this whole of sailor realized fat kind of value ease of use and unparalleled scale ability of to buy for the club and just the fourth quarter of twenty one paving the road for workforce eight and expansion just a quarter later it was a great when the solomons arrival was accounts for an existing felt a of the significantly expand expand appointed and reducing it's attack service with secrets manage a key win against a combative devolves black rock a large grocery store chain is following our blueprint of the dodgers part of it's identity nexus management modernization are predicting that customers robotic on the nation or rp a strategy would seekers manager will also significantly expanding it's path addiction with the rollout of privilege cloud i knew that his progression and closer to continue to improve in the first quarter we landed over a hundred and seventy new customers in about seventy percent of these winds were subscription deals up significantly from about fifty seven percent just less water we won logos across all industries including rico local government and financial services as examples a us base weekend is replacing any come in and then vendor that queen scales meet the requirements of it's hybrid new by were helping his customer secure across google cloud and as as well as all servers and databases and it's on venice and violent a consulting organization was looking for an a day security partner committed to delivering innovations that would involve instead with his long term strategy to secure it's eight of us and azure multicolored environment the devil sideline and into she had and in the first step of his cybarco ran the company's rolling up privilege clout antique it's manager to secure homegrown applications as well as other stopper like cannibals on the building management solution as we look ahead the sale capacity we added and twenty twenty as rapid productivity and we're running a team to keep pace with the accelerating demanded violent or bargain ecosystem of advisory firm survive and seeking technology partners is further expanding i reach and will help us drive scale in our got a market moving up with a subscription transition feedback from customers partners and our own employees has been incredibly positive the levers we introduced earlier this year are working rainbow push and pull in the margin we're already pulling a store subscription wine twenty and the new packages we introduced in mid january combined with the maturity of ourselves says offerings and accelerated that motion the sailors and this as well as the deal desk and deal scoring are helping for cyborg towards our goal of becoming a subscription company this is reflected in our new package and which is overwhelmingly geared towards recurring subscription bookings heavily weighted towards sex geographically the americans had the strongest makes a bickering books which impacted i recognize revenue was just will discuss we are pleased with such different tracks in any me and a bj both trending ahead of our expectations the subscription transition is reducing friction in the cells process and increasing our crossrail activity as he sign some of the earlier customer examples the teams already shifting towers delivering transformative value and building deeper more enduring relationships which will generate sire lifetime for some value i couldn't be more pleased with where we are coming out of the first floor in terms of the transition now will be on to our innovation them where we continue to step on the gas runner innovation engine in the first quarter we make considerable progress evolving are folio into a unified comprehensive identity gary platform centered on privilege we've been together multifactor authentication work for brothers portfolio to provide our customers was significantly enhanced security controls customers i'm bracing your interest payments and why just and tacky to the these are solving enterprise use cases today we are continuing to enhance are offering our investments in innovation that helped us more secure the club environments are paying off lot of talents manager is building momentum are tighter integration between our secrets fans are solution and feathered flat offering a strengthening our customer security posture and they moved more and more efficacious to the club and a dark cloud native approaches to application development i seek in partnerships are expanding our reach demonstrated by recently been named partner of the year by red hat we will be rolling out exciting offerings as we move from twenty twenty one and i can't wait to preview many of these at our upcoming customer partner effective than engine finally we are making strategic investments this year to drive growth innovation and scare and josh will discuss our possibility villard in more detail i wanted to emphasize then we have not changed outpost investment and building a durable business model is part of our dna a guiding operating principle of cyber we remain committed to delivering profitable go and returning to the role of forty once we on through the transition team it as a look into the remainder of twenty twenty one we have major industry calix driving our bins in the wake of the recent cyber security attacks and accelerating pace of hacker innovation are solutions are a business imperative and we're seeing a heightened sense of urgency across pam access and bear set ups or go to market machine is executing the we're extending our leadership position and delivery innovation and a record pace we are well on our way those transforming the business into a fast growing subscription company and are cloud solutions are leading the way that are strong situation in the first quarter we are in a great position to unlock tremendous value for us our shareholders our customers and our partners i will not turn the call over to josh will discuss our results and out different second floor and full you josh they exude he came before we discuss the details of the quarter we wanted to remind you that we post and slides to the website it will be helpful as we walked through our results the appendix of the decks contains they're stored breakdown of the revenue and cost of revenue lines and the new presentation of my bnl and we discussed at our in the in and i'm better day in much we are making it's check the p to increase visibility into and success of our subscription transition and the direction of our business so moving into our results are strong business momentum continued in the first quarter we are pleased to be a revenues operating income an fps guidance particularly given that the also exceeded expectations with the percentage midst of subscription buildings total revenue was one hundred and thirty million dollars and fifty one percent subscription booking mixed up from a hundred and seven million dollars and approximately twenty percent subscription booking that in the first quarter last year since gets in revenue which twenty five million dollars and represent twenty percent of total revenue in the first quarter increasing our hundred and eighty percent from nine million dollars and subscription revenue and a person only a total revenue in the first quarter last year as anticipated given the shifted our sales merchandise or recurring gibson business model perpetual license revenue did decline and was twenty seven million dollars for the quarter are combined maintenance and professional services revenue was sixty one million dollars with fifty one point six million from repairing maintenance and nine point eight million dollars in professional service his revenue during as gifts and transition period it is important to evaluate additional metrics that provide increased visibility into the momentum and health and the business they include total recurring revenue percentage makes a bookings from subscription and annual recurring revenue in the first quarter photo recurring revenue reach seventy six million dollars or sixty percent of total revenue going forty one percent from fifty four million dollars and increasing from the fifty one percent of total revenue in the first quarter last year a recurring revenue growth is driven by strengthen my subscription bookings from sas and on ramp subscriptions as well as i continued strong mandatory no arranged for our mission critical software the mix of subscription bookings as a percentage of new license bookings is an indicator of pace and the success of the transition in the first quarter the mix was about fifty one percent of new license balkans as compared to the next are guidance which assumed only forty seven percent this compares to about twenty percent in the first quarter last year please note as we move through the transition the subscription next will level set all deals to an annual value including the perpetual bookings the head when created by the mix of bookings was about eleven million dollars in the first quarter taking the head when into consideration of first quarter total revenue would have blown by about sixteen percent good idea it is critical to keep in mind that the headline is calculated based on the annualized bookings next year on year and march thirty one at a are i was two hundred eighty eight nine dollars grown forty one percent year on year from jewelry and five million dollars in the first quarter last year and an eye on an organic basis excluding the contribution from adaptive our and kind where avenue still grew faster than thirty percent in the first quarter twenty twenty one another important metric that we can watch closely is the growth of just the subscription portion of a are our which includes our sas and outram subscription projects were employees that are subscription portion grew faster than two hundred fifty percent year on year to about eighty eight million dollars representing over thirty percent of total a are at march thirty one that's up from twenty five million dollars or twelve percent and march thirty one last year this clearly highlights are tremendous success in growing are recurring subscription business or a our growth this quarter was driven by both existing as well as new logos geographically the business continues to be well diversified the americas generated sixty one point three million dollars in revenue representing fifty four percent of total revenue and for the year over year comparison the americans again as strong as percentage of sas bookings during the quarter which lower i recognize revenue in the period by that eight million dollars email grew by forty percent year on year to thirty eight point three million dollars a pj generated thirteen point one million dollars revenue that's increasing thirty nine percent compared to the first quarter twenty twenty allied items of the piano will be discussed at a non get basis please see the full gap to not gap reconciliation and the tables of oppressors our first quarter gross profit was ninety five point five million dollars on eighty five percent gross margin that's compared to eighty seven percent in the first quarter last year a gross margin is being impacted by two factors first the head when for our suspension bookings mix and second increase plowed expenses related to delivering are our services moving down the pan out we continue to make disciplined investments in the in the distance id grew by thirty nine percent year on year twenty five point four million dollars as we invest to deliver innovation adaptive expensive contributed about two point one million dollars a year on year increase in expenses sales and marketing a cruise twenty percent to fifty three point eight billion dollars as we expand i go to market engine abreast of geography is je ne increased thirty seven percent year on year to ten point yeah nine million dollars to scare the business and total operate that just the first water increase twenty seven percent to ninety point one million dollars our operating income was five point four million dollars in the quarter operating income was lowered by about one point two million dollars net from foreign exchange rates as a reminder the approximately eleven million dollar revenue headwind at a corresponding impact on our operating income taking the head went into account or operating margin would have been approximately thirteen percent in the first quarter or twenty twenty one over seventy percent of our operating expenses are they to headcount we executed well against are aggressive hired by and invest in the business and in at first quarter with one thousand eight hundred and eight employees worldwide of our total employee count eight hundred and thirty two employees are in sales and marketing
spk_3: net income was three point eight million dollars or nine cents per diluted share for the first one and the first quarter free cash flow was thirty one point three million dollars or twenty eight percent free casual margin driven by strong collections for my fourth quarter bookings this casper contributed to our strong balance sheet and we ended up water with one point
spk_2: two billion dollars in cash and investments we also increase deferred revenue by twenty three percent your idea to two hundred sixty million dollars or stats to revenue grew my over three hundred percent to forty eight nine dollars compared to eleven million dollars and march thirty one last year turning to our guidance for the second quarter twenty twenty one which that total revenue of one hundred eleven two hundred and ninety million dollars we expected not get operating loss of about three to have to non gap operating income of drain a million dollars for a second quarter we expect our if he s to range from non gap that law loss of eleven cents per basic and either the chairs to net income of six cents per diluted share or guidance also assumes thirty nine point six million weighted average basic and diluted shares and forty eight point seven million weighted average diluted ships we are suing two point five million dollars in taxes for the second quarter this guidance assumes about fifty five percent of description games and a revenue and profit though the when of approximately nine million dollars and second quarter of twenty twenty one our guidance but a full year or twenty twenty one reflects the strike the my pipeline and overall opportunity and an assumption for the mix of my bookings we expect total revenue in the range of four hundred eighty four to four hundred and ninety six million dollars while we are maintaining our revenue ranch because of are stronger than anticipated total of these and are higher subscription bookings me to the first water as well as our but subscription pipeline note we are increasing our subscription next assumption to about fifty seven percent and our revenue headwind increasing to approximately forty five million dollars this compares to a prior guidance which soon to make some fifty five percent and a thirty nine million dollar headwind to revenue and awkward adjustments to the mix percentage and head when represented a prisoner bookings outlook than four year illustrating a strong first quarter performance as well as our confidence in the robust a man and environment and executioner my strategy we expect not gap operating income to be between twenty to thirty million dollars we expect are not get that income for diluted share to be the range of thirty nine to sixty four cents that a full year we expect love forty point nine million weighted average and shares about ten million dollars in taxes as would imagine and we discussed an investor day we are not changing our investment philosophy and are planning for profitability levels the snap that quickly after we exit the transition which we continue to expect to be in between eight to ten quarters so like sitting in the fourth quarter of twenty twenty do or by mid twenty twenty three in terms of free cash flow we were thrilled with yeah performance in the first quarter which reflected the strength of our perpetual bookings in the fourth quarter and are strong cast elections for maintenance for the full year twenty twenty one considering seasonality in our business we continue into speed and are casual margin would be in line with are not get the inca margin i prefer it to the first quarter strengthens i conviction that we are making the right level of investment to drive growth and innovation and twenty twenty one and beyond
spk_0: oh now turn the car over to the afternoon fuck unit operator thank you at this time on the for conducting a question and answer session to allow for many questions of tough talk the asked she three limit your question to like question but in a follow up north africa has since he's passed start than another one on your telephone keypad first question comes to light of sakic high elvis
spk_4: pack ice you're lining up and okay great hate morning i think protect my questions here they said it on hoodie hey you the hague the morning cabinet maybe maybe for you first the their him can you just talk about your thoughts on on new entrance into this market and a movie just specifically to call out octa and and what your thoughts are on and on maybe a of the put from takes for compound potter identity platform like octa and you it
spk_2: entering the pam market and the any thoughts on that church or look we are our the pioneer and the leader in a very hot space that's glowing importance i think recent beaches really highlight the boards that we've we've expected more competition and entry we've always been like i like to call him productively paranoid about our leadership position and the and hands invested in continued break away late or innovation to further accelerate our leadership but i think specifically the the journey we can play there is security gives us a major advantage we think that coming from pan where are where we put security for hours on ended and follow the proliferation of privilege across both human and nonhuman in a infrastructures giving us in of a major advantages as we expand into i did security and looking at it as a security problem
spk_3: i talk to our enterprise customers are all the time and and they won't compromise on security when it comes to the keys to the i keep them in the keys to the at the the cloud that kingdom and so well who were going to continue to to break away and leave with that of the broad expansion into identity security but i'm pam as
spk_4: that as a major advantage and epicenter of it got that that makes sense now i'm josh maybe from i follow up for you thanks for some the detail on the a air are components in the quarter i was one or figured as human to the meat and speech at the little bed i believe maintenance into the bigger piece of that a or are pi if you well how did how did that component of a or are me to compare vs your expectations and married to keep in mind for sure
spk_2: modeling those two pieces through the rest the or anne hi thanks to the question yeah i think maintenance came in about were about where we anticipated with regards came in about seventy percent of the total a are i think on the flipside or we saw a i come in a bit better than we anticipated with that forty one percent growth really coming from the from the from the sat in the subscription core component which was now thirty percent of that a are that's compared to twelve said if we look back in the first quarter of last year
spk_4: so yeah we're we're pleased with that and so add bigger maintenance you know we're getting the right renewal radar that we expected to get by really the bonuses coming from doing better on the south side
spk_5: very helpful thanks guys
spk_0: like it
spk_6: next question comes to the line as telling audible taking martin darling you're lining up and
spk_4: yeah thanks i got so i'm just curious what kind of push fact you may have gotten so the next in subscription were better than you expected which had an adult becomes a little surprise that many of us that watch of the transitions by where you got pushed back out where did happen
spk_2: why did happen in terms the customers not wanting kids to choose subscription or soft so as a history because like we're very excited with the strong start to that of ships and transition i think our ah into a beta our our our our expectations and so laugh at the first quarter of that is chewing on some old pipeline you can say we we have some old pipeline that he expected that to continue to have to sell as as perpetual them very pleased with how the mixer ah as as out the fallen very pleased with outside looking in the in the current thou a full year aka young kids do and full year of high blood i'm so i would say no pushback
spk_4: but actually better than now better than expected that transition and and really the way we wanted to start this year i great men just bail on poppy i want to make sure i understand the full year yes guide as anything really changed in your expense outlook or it's just the next going more subscription that would ah
spk_2: i'm potentially way a little bit more yet yes darling it's really actually even below the operating income line of it's really around the taxes as we kind of finished you want and we saw what happened she won and we read forecasting taxes for the rest of the year we you know when you're hovering around when you have bring at the at the lower operating but at the net income levels
spk_4: and now we actually and up with a higher tax rate around globally so we just adjusted a adjusted for the text for our project attacks your vision
spk_2: provision are or thank you
spk_0: thanks to him don't have to question comes from the line and started mike dewine the qbs that and i'm hoping the morning thank you for taking my questions and josh i wanted to start with you and the americans performance so appreciate he quantifying that headwind for as like it relates to the model trend the transition that seems like it's more concentrated in the americas pretty good actually i just for that
spk_7: how to end or someone he had a kid flash performance in the americas ah relative too much better at performance and your other are geographic theaters that wondering if you can talk to any other marketplace dynamic or at go to market notion ah dang next that would explain that to flat as shot
spk_2: the or adjusted for the headwind the how nobody here are all star dinosaur also actually when we looked at it down and you you just as we actually exciting excited to see that is the faster movers in the in the transition with the the heaviest weighed down now on ancestors i would say some are have some lots on specific elements of this a quarter i mean i'm
spk_8: marcus is coming off a record duff or thirty two percent growth that queue for and it was the fastest so far of of the region and so are we on what would later where we are new market especially when we see the great by it makes dark you do and i are optimistic for rob off of the rest love the rest of the year
spk_2: anna and i get that would add there
spk_3: i would just add on a specific in terms of markets your last year and and in the first for we had a very strong federal span that was out of cycle
spk_1: and you know that that didn't repeat the in in in this corner
spk_0: so er how for them but country biggest upon i had you ah on high level and model points on our expectation the bitcoin testing as it relates to the subscription revenue and conscription a are get between fast and on cranmer an and each cat the performing this quarter is changing your next expectations
spk_2: ethically for that i'm category and at the funny thank you
spk_0: yeah thanks yeah we're still seeing a really assess heavy on the a are so you know we're still using kind of a two to one ratio of us as a versus the i'm from subscription and at the at this point out i would continue looking at it that way
spk_4: your next question comes from a line for robbed or once a high percentage drop your line it's open
spk_2: great educational make soon as new towards due to an air are noting that you wanted to hundred a year ago when switching case and how we should think about growth in a you said you are the three percent more good perspective
spk_4: good school know you are you like kind of gardening and then the bit too
spk_2: get him to than a year since the acquisition and you know game on how to get to this to banks as are all started out there would be with the with the lot of question on now on a that and i can we we've invested duff out under the village does several borders on and really integrating it does out integrate one plus one equals eleven with that would would being part of our bug connected into ban and part of the have any security or up and folio and down a lot invested in in putting our overlay yard sales on sales and freaked out there so we we we or a it's still it's still early i innings for afraid that this was banned alone but we're seeing a tough oh and and some of the examples of given our really play well in in the process lot have some motion with existing customers and also as a new law landing from for us as a as a different experience as math call it enough india in investor day and and so it's that it's and it's an early young speedboat within a within sidewalk
spk_3: in baghdad that is is is really a are taking a firewall
spk_2: and and rather have you know on yeah yeah good question and you know we're still very much looking at thirty percent growth for the year on a are and that you know we we started up nicely and for slowed forty one percent thirty plus percent and organically in and and we see that the continued
spk_0: our a thanks
spk_4: linux next question comes from mine at santa ana wanna with morgan stanley hunting none of them
spk_9: a i think you take my question and good morning
spk_2: i'm a question on the third that with the outward up for activity ram that you had just started to really introduce and centered around back fat milk
spk_10: with about sports and que one and at the new park announcement i'm wondering how do you either ramp sort of program thing particularly in the back half and not actually think about for the air en route
spk_11: in relation to that
spk_2: you know i answered and yeah you're right we are we really dead continue to ramp i capacity and and under sales front the it into the first quarter
spk_12: and yet we had a you're still six to nine months outside close and were were excited about the get they got it a record continued recognize that we had a pipeline it will be continuing to do i expand our sales in our sales teams are globally
spk_2: and you know going you know going into you know each other colors yet through the second half and a year they do take god two to three quarters to wrap that we always anticipate a future growth by bringing him on board earlier and i would say that when we look at the the be hirings that we did and h to of last year in two three a keyboard certainly ah it and certainly the ones for the first half of that year we are you're seeing them really fully productive at this point and our we actually saw a nicer increase productivity of into this first water from our as deeds and as big as to do with the ramp up that we that we saw that we did last year on the sixties and and i would add that down i like images my nose the really on board with the satisfaction and in all or almost all of the refs advice a subscription deals in their in their by far
spk_4: some have only subscription deal done that in their fight than death and and as that that's why know the we're very pleased with how we kicked off from lot of the beginning of the and may be a brief all of birth or for jobs as wondering if you could maybe give
spk_9: more concrete sort of that inorganic contribution from a gap in i think last quarter or the organic that was someone the i've thirty percent range with that will that fairly consistent
spk_2: the corner law the organic and inorganic impact on revenue from adaptive monograph on arrow on a on a air i'd i'd think i'm be the impact for it was again i said it is about forty one percent growth and i was about thirty just over thirty percent road
spk_0: if it from an organic perspective
spk_13: your next question comes from the line of great must collect making and breaking up and
spk_2: okay thank you very much after going to questions are able to have a duty how i them i recall that one guy interesting after example that are broadly howard adoption of privilege crowded quarter among both mid market enterprises and and had a fetus about a quarter twenty three one that of the banks are yeah absolutely i'm on a super strong quarter of bar on offer of glad i will i would say that that were beginning to see the lines learn in into how big and how large enterprises can be in not in in adopting it and of and and even not even some very on the even financial love
spk_4: articles and and now and and very large job accounts and so it's our it's it is becoming a of the the the larger force within the within new am ah within new pam deal is that is landing in the in privilege for them
spk_2: i that's great to here and and gosh i can tell us roughly what a and was at the percentage of either revenue i like and fucking had just how that compared to your expectations it absolutely hate against our expectations and actually now on we look at revenue you know with are much larger percentage are coming from sas and subscription and so forth and a becomes a little bit less relevant one looking at the product mix and a revenue because there's is now a change for whether it's happening potentially were or or or or subscription basis but i will say that from a bookings perspective
spk_14: i am absolutely i had a nicer and nicer rate a year on year and and some contributed of at the levels or even at the levels and when dissipated even a bit higher
spk_0: okay great thank you
spk_4: your next question comes from the line of bryant assets like goldman sachs bryant your line at them great thank you and anger morning thank you for taking a question yet duty at a couple for you and the are you mention you're prepared remarks your flight the trust and maybe if you could be updated in terms of how customer buying patterns metal bar that you enter this year and a glass forty and are you know the number of
spk_2: you know customers the came on and abbreviated a tax rates or me to didn't do and and solutions kind of true up their details but what what is what is the tenor of buying pattern in a twenty twenty one what you're seeing and a pipeline are you getting more and and and higher tax rates now and and a that more prevalent on the soft spot for yeah it's definitely an a lot more prevalent on the on us as platform where we see the but for breast and i'm i'm a in in the crosshairs move on move faster and i think that the commentary last year earlier in the air we talked about that cause we're kind of that are looking to do love the basics of the transition to load the work from and now we're seeing them much be much more back to their strategic the programs we already saw that in in now and queue for and had competed and nuts and que wanna know and and commentary and and and things were saying and vilsack cycles are both are related to solo and and also related to the being back on on track is better than looking to do at a deeper and deeper programs weather like and like in the commentary really following our blueprint wouldn't with comes to us to add on and and looking at the and multiple love products and death and solutions but also in the in in new customers and we're seeing them be more more strategic about that about going deep and power i'm and and and other years and in a deli security i would say that the the the up the average deal sized
spk_0: that is up and and down and says feels as are similar do a to laugh to perpetual on a stark perpetual deal size which is which is great
spk_15: your next question comes from the line of entered the keep the a date it's an answer iran is up
spk_2: great thank you add more iran so i one to apply little question on you be touched on the for when the microsoft exchange attack i'm just wondering if you get a put a fighter point on and how they may have impacted of at all the que on results and then and how they've ah man had an impact on your pipeline going forward a bigger than the really important news is that they played a long deal for our for cyber it's it's one of those events that that that has up multiple layers of the a return worries anybody neither reminder that done that that village no matter how you decide the and attack and no matter how they they they first enter and a network or club environment where are they looking for lateral movement escalation in all out for themselves and and and movement so we've received celebrating that the long tail over of awareness some and and the that the field as is feeling that both and pam and also as we've expanded down in july their security because there are other eggs samples there in those attacks of of deck of attacking other elements of of of identity
spk_16: and then are specifically there were some examples and in into one and and i i gave the example of of the of the telco word helped that reinforce our the or accelerate a deal or at least the expand the bill size into a more strategic job by but that i think the important thing is is is a long
spk_4: hell are we get
spk_2: god thank you and then are why look at your new customers yeah out like over a hundred and seventy this quarter of wanting to get a break out how many came by way of our adaptive purchases at and hi are you new logo ads performed ah it you know excluding the i doubt that customers you added are relative expectations i'm i'll jump in and you know and we look at actually i think and the new customers the know the the overwhelming majority were were from are you know from our core past ah and actually a large percentage of them were coming in the of of a large subscription and are sas business as well as a good thirty percent of the if you look even back over the the whole last year thirty percent of the incremental a are our that we've added a has has come from new customers and and you don't probably still ninety parts per cent are coming from the are coming from though organically and it's a burnt out of many of the that the new packages be introduced in in the
spk_17: in the year actually clue i dabbed of our components are in them that might multifactor authentication and and and signal and single sign up so it's a it's a it's a it's attached to too many of the of of the new on the logos
spk_0: great thank you
spk_4: your next question comes from line of tagliani west bank of america talk and line it up and a guy's arm have a question about that at square guidance it seems like the revenues are are up there as despite down the street expectations and dps is well would you mind to give us the context that of get counting impact on the migration to laugh sas
spk_2: maybe give us the context of a are for next quarter just to to make a comparison of like the like thanks
spk_3: i doubt that that thanks to the question i get i take from the you know really i if you talking about the accounting i you know we talked about the ya the head when an edgy relates in i do ourselves to subscription rate for the for the subscription
spk_2: if it's description started a business on pram turn based licenses were looking at it going out between know fifty percent of fraud and definitely packages it's it's closer to seventy percent it thirty percent up front and seventy percent pro rata overtime so access obviously it is a fully roundabouts so that goes in obvious into that edwin calculation for the guidance and where we're pleased with the guidance he noted to be able to one increase our it's are anticipated or subscription bookings next and still really come in at what we anticipated on on a revenue perspective for for to so from that perspective were really supports and we think about it as from an annual basis it really supports the fact that our pipeline and is growing is growing nicely it's actually when you think about our sisters in there to increased edwin
spk_4: or from the quarter and for the full year were actually really raising expectations for the business
spk_2: you know for the net for the next nine months or so we're excited about about wilmer able to get to
spk_0: and adjusted that number is or upper like this quarter you get the number of what's the back of accounting is their number for next quarter
spk_18: for the headwind yes yeah that had windows at ten nine million dollars for you to that your next question comes to mind a top and my cover with bear jonathan your line it up and
spk_2: yeah good morning take eyes i can't eat and last year you you talk can fit only about strat pipeline grout but knew you'd noted challenges to build lively and and as a conversion rates particularly with inserted article suggests a curious you can comment on those dynamics entering twenty twenty one where do you continue to potentially the challenges in the death yeah he's other night i would say i would say i will what was worse are saying out our a return to return to normalcy on on on that front and and the ability to of for us to ah of of the bike was building right i think this is for a week we also showed that strong execution on that down on on that
spk_19: on that five and that dumb and and the i would say that some us from flaws or perspective that we could probably talk about the record the ah record lows region in his so in in this is border and and so a lot more and more signs of have returned to while region to know
spk_18: will and then of course the the that the more opportunity for acceleration because because off a growing us south folio in a growing than number of customers that death that we can take them through to the sastre journey and in not in process
spk_2: that good it good here ah
spk_20: eight the fall by at his is on dad sat got and and wanting to lead you i usually a growing influence of of that center apart and the buyer of security impact the privilege is a really dirty to highlight the need for know for what you do the what you think the path
spk_2: yeah i think this is probably one of the most strategic things we've no we we made when in media log organic and inorganic leah expand the degraded the divorce or a speedboat there's no there's no enterprise customers that doesn't have that that that that and that new good happening where where are aware on top of of securing their there's human not and putting human control their their see now other the expansion of privilege and that in in their application that environment and us and then it's secure our secret so it's a it's it's a it's a very basic element a was in in in not enough and many of our of our largest building
spk_19: looted are are are out there got sell out of a solutions and down and the of alligator it equates a great bridge for for our customers to a half hour and interrupting the developer sides in the their upside and so are are see so's these are customers are very pleased that they can be
spk_0: and they can bring this value out into the yard the developer audience and and can keep him secure a law making it they're transplants for them to to manage seekers
spk_4: that's great the are thank you
spk_21: they could
spk_4: your next question comes from line of josh tell them to fit your company named josh line is open yeah it's just helping from bamber capital market
spk_2: ah just too quick lunch for me i was hoping that you could comment on the pricing environment and active management over the last year
spk_4: if i remember correctly i believe i doubt there with you know python the differentiator have you been able to improvise would often be at little i think guys that fast as i think we were were taking a different down a different approach and of course on the stand alone without those of differentiator for us aren't right after the the differentiator now is very much the fact that that it if we land and access our customer we can take them on the full like then a journey and into
spk_2: and in into our and into path and so in some cases the the pricing change also because we've included in in them and nu lab and new up packages and and and and in general were out we're going to differentiate on on value and and to follow up on that you mentioned an ugly be completed the integration of an day with the privilege portfolio you guys have any indication of what percentage of customers are using pam today without an effect and also what do you that being at the uplift a t a pan customer looks the and land on that day that pampered sweet
spk_0: i think i have vowed that that that that that with that fully that fully handy i'm here but it's a it's a big part of ah yes the are to our customers that that
spk_22: are many customers were were ah the the and the fate projects we're we're we're taking to lot too long and when we come in with the the day to put embassy in front of them it's a great the landing spot ah fought for them to do
spk_2: at the sick to secure probably the most important access the have any organization and then an opportunity for us to expand to all our to all users so it's in a big it's it's it's it's it it is a big opportunity within the the the customer murtha of the customer base thank you your next question comes from the line of jonathan johnson how that billion black jonathan you're right it's open i a good morning i just wanted it may be start out with us on your commentary on the non nonhuman opportunity you can talk of our bit about how big that market could be an image you are yeah gets relative to didn't watch additional use cases know how how big of an opportunity to their if that their job and i think in the in the back
spk_3: we talked about the non human opportunity being as big as the of the as the human now as the human side and that i think every every day that goes by as is another shift left a for hour for the world and and now and technology i'm in in obligations are are growing exponentially and no matter what what into
spk_4: sweden so cross industry we see them becoming more and more of a software companies and and we have that that that great bridge of that and securing one the most important elements in net in in that endeavor that sec ops ah but but dad but with a win win
spk_2: transparent do lead developer the end up and any good control points or of for the security professionals so when we see we see that down on only become more and more critical and and and that's why we are good wheatley of course put it in in the speedboat the assholes people behind it because it is critical lot of victory got it and then it is relative to the shift to subscription and you're normally be seen this ah and an opportunity to replace existing solutions or is there a lot of green job opportunity or that's coming from this is off
spk_0: so there's a bath that that there done multiple other elements and or subscription now transition but if we talk about done new logos out of their more and more types of organizations they're just happy to land in assess assess delivery and and like i mentioned earlier we we were pleasantly surprised that it that it is it's continues singing
spk_4: moving up the up in terms of that type of the have ended by said gives us and for from under lot of spiked it gives us a way to bring greater time to fetch a guide to value for those of others customers and then i'll bring them across the board folio lot faster in terms of death of conversions as far south of the are convergence of of of vibe and even even though
spk_2: some it's a small it's a small base there are been versions of that of customers to larger subscription and and when we do that we'd meet we meet me again wanted to bring them value in to get him into a bigger pieces of it volume and down and to that where the packages sakic again whether they're actually getting more more value the and getting better security because they get so there with the right products and in place thank you she smashed and comes from the line at alex hunterston with of and and company alex your lining up and i can the of mike goes on align your crowd henderson ah i didn't want to follow up on this record pipeline that you guys have this it's ridiculous begin at one of magnitude or at least provide some additional colored i guess with is mild transition underway and the big push on subscription and and a higher adoption rates and sad it's ah are you saying i guess increase velocity in itself cycles are and and customers movie quickly and quicker from the top and fall down to the up the front the up yeah thanks i hope i would say we still we still love talk about six to nine months after ah tao cell cycle but the beginning to see the the the advantages and value and and i like it like a talk about of of of of of customers have a higher velocity on when when it comes to our does that as sad as as customers and that their ability to to get tough are faster tend to value and then and then faster adoption and are billy do lots of divorce process love ah faster would i would not changing our kind of our our our our six to nine months out of a general law approach but that that you don't we were very optimistic that it this is one
spk_0: the upsides of the stuff of this of this that trainer at transitions that and an hour and i would add that dumb yeah we're seeing much better close rates go into the first quarter and out of this year
spk_3: so that would imagine a devoid of and i'll mention it again and when we think about directed by by are else to say well we like about his it it's first of all going across all aspects of the pipeline new customers existing customers across each of the geography is and across each of the product lines that
spk_4: we're talking about whether it's a privilege access or or dead set ups and of course one of the other things that were actually very closely is is is supporting our transition goals and our really pleased to see the pipeline
spk_7: supporting
spk_3: the transitional it's meaning that we're seeing a record increases in our sas up i glide as well as our subscription packages including and especially or a new subscription averages your final question comes from line of eric up a garbage can key security eric your life up and adventures with me and
spk_2: first off for your contribution from the subscription bookings one on people's twenty percent knew that calling and expanded the fifty one percent seems like that the that's moving very quickly what will it take for you to one exonerate your timeline for love for reaching that seventy to eighty percent suggested it would be think tankers out or one when you think the likelihood of that happening them before the end of fiscal to him to and secondly em i think you've indicated that you're wrap your head when bad projected for que teams about nine young and it was eleven million and media and much cooler here why will it be coming down i'm in the gene pool for more for me the most cool
spk_3: yeah thanks to that question the he also the with the second one
spk_2: you know basically as as we moved last year if you think about it on a year on year basis we already started to get me started to see some increases last year between you wanted you to on the percent subscription so yeah that's impacting the math you know we look at have a look at the head when we look at it year on year so we're not doing it for much emotive perspective were looking at it as okay we're taking this year's urge due to burst is the eggs versus the scenario from two to a year dot already due to a year ago we he started to add more subscription business on a on a on a natural base itself that's why i eat in a world where switches i declined and add when but it you know it you know where it was still supporting the stronger than middle with regard to your first question on moving in the moving in the goalposts yeah were real i'm pleased where we started or the first quarter because it really set us up well for being able to establish firmly at that the transition is happening that it's certainly happening definitely with an original goal bozo of eight to ten quarters
spk_0: were able to move up a couple percentage points and you want
spk_2: we also were able to move up a couple of percentage points are ready for to do and for the year i think got ya que en is still one quarter of work
spk_0: but died young whoa what the hell out due to goes in and will be able to at a base ah for the first half the you really have reevaluated again
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