This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk_0: about the not for the any the guidance suggest slightly slower growth in the second half of the year in a are off than we thought this quarter is that like conservatism on that because of it outside deal with quarter and then the benefit from secure touch
spk_1: yeah patrick i'll take that as a raj on in our our overall not philosophy on guidance is always been a guide to what we see in front of us and on and that's have begun to and been our guidance now for aid and we we have seen that improving environment with on with some ten up demand returning but i saw think it's too early to have to call normal just given you know what's happening with the or the delta variant and such that we are confident we are confident in were solutions are in the market the adoption rate that the customer environment that just you know what we're looking at the pipeline were looking in on top down and and bottom got and then that's where i been i think that returned to the into and and my prepared remarks my talk about we saw a a behavioral change too the pre cold buying behavior right where we had a lot of run rate deals but also supplemented by by a couple of large the old each quarter we did see that again and to now could that be a trend potentially yes and and we also do have some nice momentum and upside drivers that you know that could play out but for right now we're we're guiding to what we see in front of us
spk_2: that helpful and then i mean
spk_0: peter the time the tornadoes some the commentaries rounds small a deal sizes lest you seek closing deals be phased in italy those current three three now behind us you said that he was time to pick a larger back to normal disembarking she around deals and had that you're getting close a week he had the is the is of ahead would be sword canada twenty now in the rearview mirror after the ping know it free it it certainly feels that way but as raj said in a one corner is not get a trend by large deals are back there is a sense of urgency for these projects i think possibly built upon the fact that they had several months now to laid plans for identity to zero trust for password list the we are kind of living in a new world and respect issue that identity is essential to scary as it does to the funny part of the surface nipple on fire so it does feel like there is a return you know i would return of confidence and an urgency to these projects that feel similar to what we had experienced prior to comment
spk_3: the get that you so much
spk_4: your next question comes from the line of adam board from stiefel you're lying you something
spk_0: hey i think so much for taking the question that means it arrives at it in a like a lie i excitedly this not disclosed it on sat and and like year that gross margin night and have an impact as we look forward and he go for twenty percent the obviously something like that in comic water as we think about the potential costs market and pack or as and cause by as that becomes a lock on it
spk_1: next has her adam audits surprise here so you know typical with a fast business and week there's a there's infrastructure there's people on their sport that you need to put in place also and and in our case prior to a critical mass and of fast rather new right and and we are growing into that nicely both god that certainly yeah we think that i'm in the future there will be at least over the next several quarters there will be you know some pressure on gross margin is we continue to invest in the areas to make us and our customers really successful know deployments and then older time we would expect is the scrolling to that so so i think your instinct is right but you know we didn't feed and que to buy our there's potential for for some slight movement downward there before we before we come back up and will will
spk_4: will continue to collect the data points here and provide a better outlook in i'm in our industry day
spk_5: cause greater that's really helpful and maybe just a quick follow up and worth asking lot of just aren't secure touch acquisition edie edie commentary on the that that contribution you're in organically ah
spk_1: for that for the whole yeah yeah there won't be much this year we're really focused on making sure we're we're getting integrated and getting the team rampant and getting the team integrated into paying and and and really building the pipeline amongst our base customers that that's probably be the first order of business and weakness quarter
spk_0: and maybe some fly contribution team for but nothing meaningful i think are you really start to see the impact and secured touch and twenty twenty two it's been such a critical technology and just so top of mind in the classroom i use case
spk_6: and yeah we just feel like god like this really gives us a much stronger and and deeper and wider know around that customer use case we're we're we're we'd been historically very strong
spk_1: axelrod thanks so much
spk_7: sure
spk_8: next question comes from the line of brian calling from seeping your like itself open
spk_0: thanks for taking my question so i'm wondering when you get the
spk_1: fifty one percent growth and sas can how that breaks down between in a your existing customers just shifting over
spk_0: you're poor software to sas versus from new customers
spk_1: yeah we have odd and with our staff platform is a great land prior great land solution for us and we're seeing that and increase adoption bought from our base customers as well as new i'd say for our ping ping one a turner affairs we did see take up in a new logos from the introduction of that that platform and the other now we're seeing in the pipeline that those
spk_0: a lot of beef customers that are looking at migration so so i think going forward you're going to see more more migrations onto our platform words you know that that in the beginning we've seen more from new customers there god helpful i'm also curious it's provide an update on a competitive environment whether you're you've seen improved win rates as a result of some of these enhancements to the fast platform particularly with customers global three thousand expanded that target market for
spk_1: over one thousand three thousand i'm curious if you're saying
spk_0: our when rates camera lower pound
spk_1: i'm working
spk_9: we are absolutely increasingly competitive for the customers who have a cloud first posture so i was a balcony and just say he intended the identity market obviously the competitive market but it's extremely large and growing market as well and we didn't
spk_1: that global three thousand where we focus you know we've we've built a platform now that's pretty competitively differentiated trusted by north of sixty of the fortune one hundred you can see some of those expansions are pretty significant by long time customers who in some cases
spk_0: as in the case and wells fargo
spk_10: we replaced by sas competitor with are offered so i think what you should expect is increased competitiveness and increased when wage and in some cases i'll suggest feels that were unwinnable by pain as little as six months ago
spk_4: our i'd ugly yelping has as a distinct advantage in some of the capabilities that we can provide so that is been an investment a long lived theme an investment for ourselves that will continue into the future and i were expected are win rates have improved and will continue to improve their
spk_0: oliver that thanks for the tires they frank
spk_1: your next question comes from the line of great talent from bp i g you're like is open next you have to make want to follow up on that one can you just can't hope to see how much of the success that that you saw each you to how much of that was pink specific vs macro like specifically like woods the improving rates in the bake off that you're saying who was that a bigger part of the performance
spk_0: or would you say uses more related to register a better old better better overall market conditions
spk_1: i think the macro trend is and we have an improving set of market conditions but
spk_0: want to give credit to improving competitive
spk_1: the posture that thing has with our solution said so the boeing deal in particular was a cloud transformation deal
spk_0: based upon our penguin advance services for their said was introduced last in a late part of last year
spk_1: and that's a pretty significant milestone when company of the size and scale or and security posture of bowling so lax pain as a strategic partner for their future identity and cyber security initiatives
spk_0: so i can't say that the macro environment a we would not be giving ourselves full credit to how we served boeing and we've been a great partner end to the evolution of our cloud platform double service that deal so i think both have played in impact guy can they improve performance is too
spk_1: if i would say both probably played an equal impact got it that than a license and it's my the question and and i think everyone understands how i do is becoming a more important part of the security fact that i'd i'd be curious how much or how often is that purchased this isn't being driven by something like a marketing department or digital experience or or something that direct elite influences your customers revenue vs just the security department for the customer use case that's more the norm than the exception so
spk_0: yeah added the line of business the chief digital officer someone responsible for user experience a consolidated user experience from a fragmented user experience i'm is more common the not that that that the buying title is different than the security or identity weeds what we have seen however is it there is a growing influence
spk_1: by the identity teams and certainly by the security group as a whole as things like identity fraud and the customer consumer use case require that company have additional skillset to combat that with all their digital properties so as i reported before me be an extreme case of this is that i was talking to one of our champions and a large you know top five bank and he was describing how he was originally responsible for operations for the workforce identity security use case then responsible for engineering and in the last four months they've consolidate consolidated well over a thousand people
spk_0: the between the workforce in the customer use case for all cyber fraud and identity
spk_4: now that's an extreme scenario where company has we organize themselves to gain better leverage and understanding of their identity security posture across both use cases but i do believe that that is a sign of what's to come
spk_1: i do not see an environment where identity sitting underneath the customer use case and and the first line of defense against fraud and the foundation of an exceptional customer experiences does not benefit the companies don't look to have some sort of leverage between the two groups
spk_0: understood that that's really helpful on banks and not congratulations on the great numbers thank you
spk_1: your next question on some the line of ben smith from pfeiffer sandler your lungs open hi guys banishment on for rabo and states were taken my question andrea you you talk a bit about how takes time to educate both the market and your sales force on the sas offering and i'm wondering if you can talk a little bit about the progress with gs eyes on that front and on just how those partnerships are playing out with the sas product most of our connection or in the channel with our south product and our products in general we have a very strong the set of partners who exclusively focus on identity and are very deep and make a says exclusively focus on paying maybe one step up from those are kind of the national the national integrator to be we're we're not quite to the gs i scale and there we have a growing set of partnerships as well
spk_4: what we have many customers who have worked with g a size and we worked with all of bgs eyes and obviously in the fortune one hundred do you guys are present in all of those accounts and and seeping i would say that most of the interaction historically has been with our software on the geo size
spk_1: we're very focused on developing strong partnerships with a global gs eyes on we are building upon successful deployments there is good recognition of the importance of pain to the growing cyber practice those yes i do see us and many of their strategic accounts and they are looking for stronger relationships with paying that i would imagine that it will take some additional time for them to become familiar with are growing cloud in south offering
spk_0: gotta think that's that's all for me get
spk_1: your next question comes from the line of greg moskovitz for me though you're line is open thank you and congrats on our target quarter and i apologize if my questions have been asked that multiple a call today andrea know it's still early days but it there anything new or different that case is putting in place for make a mark of respect that that's a good question the there is a that there are several focuses that we had as a company prior to
spk_11: jason's arrival course we were looking for strengthened some of the skillset
spk_1: global three thousand solutions selling is very important and as our portfolio has grown or kind of moving beyond individual products into use cases and into solutions and jason a very strong background there as well as channel international and federal all kind of growth investment areas for us
spk_0: i'm we have not made any major changes or he is not instigated any major changes to the organization
spk_1: i will say i'm impressed with really what i call
spk_0: the mindset the jason brings with him he's
spk_1: he's he just got a great outlook on embracing the new in in looking at the portfolio capabilities and appreciating all of the ways in which we can land and a new customer or expand and and customer and so it's always good he can kind of a new perspective i'm i'm sure he's built on the success in his career on that mindset night and i do see maybe some of the early things as bring it that mindset to think that no major changes to the the design of our go to market it very of andre and rise i realize you don't care disclosure customer accounted for in that a year but since we're at the halfway mark are able to say directional he how this has been cracking visa the what you'd i and twenty nineteen and twenty twenty
spk_12: fast i will provide some more detail on that in on the you know in december we talk by the
spk_4: but just to rationally yeah we're continuing to attracting logos especially with our our staff platform that creates a you know a nice land for us and of course that's offset by that's what we've typically considered to be non regrettable churned logos those were we're not a
spk_0: good fit for them and they're not a good fit for us and as we continue to focus in on the global two thousand and ideal customer cohort your new you can continue to see that kind of push and pull that the nice part is that the customers we are attracting our our traditional growth account
spk_13: and and and great land and expand capability and and potential there and you're saying that in the a are are going to that's more of the focus for us
spk_1: great thank you very much your next question comes from the line of socket tell from barclays your line is open okay great hey guys thanks for taking my questions here and similarly i pod as if any my questions have been have been asked roger medial stark start with you great to see the the the beat on a or are this quarter of a i believe the error outlook for the year is going up but i just ordered lesson to be some just wondering is there anything that we should keep in mind visa v sort of timing of deals or anything else to to sort of think about when you compare to the queue to beat versus kind of what a or is projected to do for the rest beer can suck it shows again as you know we are we always guide to what we see in front of us and we did see you have very strong activity and que to and more triangulating all data point so cut down bottoms up and as well as the macro we're we're all fucking being a keen eye on the delta variant and making sure that we don't have any kind of get likely dead
spk_13: last year but that's hard to calibrate at this point so so he and a part of it is our enthusiasm and excitement about what we're seeing in a market than what we saw certainly key to
spk_1: hello too early to call normal and and claim that we're back to this three code red pattern if you will have a bunch of or on radios coupled with which i'm really large the as like we saw in queue to could that continue to happen sure both were not
spk_0: you know we're just not calling medic and yet got it got to topple maybe maybe five fall of for for you andre great to see the increasing south next also really appreciate the increased disclosure there you know i was wondering how you sort of see the sas it is long term in terms of you know whether it's next whether it's
spk_1: yeah i mean it it maybe also to leave leave leave it there kind of high level to just talk about what the sas business here at thing looks like long term
spk_0: second as you know what of our thesis is that what i'm going to live in a singular cloud world or even a singular spouse world and large enterprise hybrid it's year's day certainly hybrid i t environments hard here is and
spk_1: and now i think everyone realizes that they're going to live in a multi cloud reality as well so the combination of a multigenerational hybrid i cheated doesn't shift and become singular and anyone cloud in the reality that they're going to have assets in multiple clouds the whole cloud your way we approach that pain has the ability for us to deploy in one or more clouds and i've reported in the past what some of our larger customers are doing is being coupled with now what i've seen in the last ninety days as a a real awareness and focus on i guess what i call resiliency and in particular cloud resiliency calm a number of surveys have come out showing that most companies believe ninety two percent now just believe that are drawing up a more high cloud strategy and didn't just resiliency driving that mandate we're extremely well positioned on that front so i do believe that a lot of new run rate business down market activity is going to optimize on speed of deployment of their identity control plane and that and that speaks to a cloud first requirement but serving a global three thousand and regulated industries and with is growing multi cloud awareness and there's growing awareness of multicolored resiliency more specifically wanting to run the identity control plane in two or more clouds for resiliency and to combat block in any vendor locking or cloud larkin
spk_4: i'm i anticipate that i did what today is the software part of our business been deployed in the cloud using or develops program is a
spk_1: long lived reality for us and a desired outcome for are large enterprises soap a way that was a long way to win a way of saying do expect our staff to grow and do expect that the growth rate they were experiencing in fact to continue we are projecting that i'm but do not expect that in the pink
spk_4: world or in the global three thousand it it becomes all sas certainly not all thousand overnight we're going to see a healthy balance overtime i do believe sounds will be the larger part of our a are are if you if you play this out for five years on but the other part of our business is going to be very healthy
Disclaimer