Varonis Systems, Inc.

Greetings and welcome to the Verona Systems Incorporated Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host. James Arrestia, Director of Investor Relations. Thank you, James. You may begin.

James Arrestia Thank you, operator. Good afternoon. Thank you for joining us today to review Varonis' third quarter 2021 financial results. With me on the call today are Yaki Feidelson, Chief Executive Officer, and Guy Melamed, Chief Financial Officer and Chief Operating Officer of Varonis. After preliminary remarks, we will open the call to a question and answer session. During this call, we may make statements related to our business that would be considered forward-looking statements under federal securities laws, including projections of future operating results for our fourth quarter and full year ending December 31, 2021. Due to a number of factors, actual results may differ materially from those set forth in such statements. These factors are set forth in the earnings press release that we issued today under the section captioned Forward-Looking Statements, and these and other important risk factors are described more fully in our reports filed with the Securities and Exchange Commission. We encourage all investors to read our SEC filings. These statements reflect our views only as of today and should not be relied upon as representing our views as of any subsequent date. Varonis expressly disclaims any application or undertaking to release publicly any updates or revisions to any forward-looking statements made herein. Additionally, non-GAAP financial measures will be discussed on this conference call. A reconciliation for the most directly comparable GAAP financial measures is also available in our third quarter 2021 earnings press release, which can be found at www.feronis.com in the investor relations section. Also, please note that all common stock and per share data have been retroactively adjusted for the impact of the three-for-one stock split affected March 15, 2021. Lastly, please note that an updated investor presentation, as well as a webcast of today's call, are available on our website in the Investor Relations section. With that, I'd like to turn the call over to our Chief Executive Officer, Yaki Fajolson. Yaki?

Thanks, Jamie, and good afternoon, everyone. Thank you for joining us to discuss our strong Q3, which was a major milestone for Voronis. Our first quarter to surpass 100 million in revenues. As companies around the world became more aware of the need to protect sensitive data, we see this achievement as just scratching the surface of the enormous opportunity ahead of us. I want to thank the entire Voronis team for their efforts, which led to this success. With that, let's jump in as I provide an update on our business. I want to focus on the security problem facing all organizations and why our data-first approach continues to resonate with new and existing customers. I will then turn the call to Guy to discuss our Q3 results and updated financial guidance. Let's start with the current operating environment, where our world is more reliant on data than ever before, and the ultimate objective of security efforts is to protect it. The global digital transformation has led to many collaboration benefits, but it has also fundamentally changed how companies must approach security, as we have said. Sensitive data is now stored and accessed for more places. The perimeter is hard to define and even harder to monitor and protect, and endpoints now serve mostly as access points to large data stores on-prem and in the cloud. Organizations using these sanctioned data stores and critical business applications so that their employees can more easily collaborate and extract more value from data. However, The ease and speed of collaboration has made securing data far more challenging, and we continue to see that without the right protection, it is getting harder and harder for enterprises to manage security without impacting productivity. As the sprawl of data continues, the attack surface grows, and behind it, critical digital assets are woefully unprotected. The potential for damage from just a single compromised user, which we defined as the blast radius, is tremendous. And this doesn't need to be the case. We see this with our customers on a daily basis, especially with ransomware. With Varonis, CISOs have better visibility into risks that are growing by the day. In addition to these fundamental data protection concerns, we see misconfigurations exposing sensitive data to many people, and the interconnectivity of SaaS applications increasing the risk that attackers can utilize these connections to move laterally in the cloud. The sophistication of today's hackers cannot be overstated, as state actors lead the efforts and their techniques spill over into the commercial world. At the same time, we see how cryptocurrency makes it easy to monetize crime without any trace. Nearly every organization faces these problems, and the need to solve these align perfectly with the primary use cases we are addressing, data protection, threat detection, and privacy and compliance. We have discussed the data protection and threat detection in companies can no longer ignore regulations like GDPR and CCPA when we are beginning to see enormous fines for non-compliance. In short, we are unleashing the potential of our platform as companies think more strategically about data-centric security, and we do not expect this momentum to slow down. Let me provide a few examples of some key customer wins for this quarter. One of Europe's most recognized international organizations with nearly 20,000 employees became a Voronis customer in the third quarter. In addition to other threat detection needs, they sought to secure active directory, prepare the data for migration to the cloud, and ensure compliance with GDPR. After we revealed where they were at risk, and showed our ability to remediate overexposure to sensitive data, they purchased multiple licenses, and we are currently discussing additional licenses that will broaden the coverage we provide. As we have said, we believe all Varonis customers should be a double-digit number of licenses based on the current and growing threat landscape. The higher upfront value we provide through our subscription offering consistently leads to healthy expansion and absence. A strong example is a utility company serving a major U.S. city, which first became a Voronis customer several years ago under our perpetual model, purchasing three licenses. In 2020, they took advantage of our subscription offering to secure data in the cloud, as well as monitor the perimeter and remediate open access issues. In Q3 of this year, they further expanded their deployment to cover additional data stores and easily migrate data across platforms. In less than three years, this company went from three Voronis licenses to 20, and this does not include a recently introduced cloud licenses, which leave room for additional expansion in the future. These examples illustrate the continuation of strong adoption and engagement trends we are seeing, coupled with healthy pipeline. We are well positioned to close the year strong. As we have said, we believe our position in the market is unmatched, and the team is relentlessly focused on continued execution and capitalizing on the enormous opportunity before us. With that, let me turn the call over to Guy. Guy.