VRNS - Earnings call transcript Q2 2018

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Operator

Greetings and welcome to the Varonis' second quarter 2018 conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder, this conference is being recorded. pleasure Varonis. your my Investor Staci now for Relations is to host, introduce Mortenson, It ahead.. go Please

Staci Mortenson

Thank session. you financial we preliminary afternoon. Faitelson, Financial review call on operator. Officer Good the call will Chief Varonis' today joining the a Operating Guy to second open to Executive us and Officer up quarter Melamed, are Chief remarks, XXXX today results. and me Thank With question-and-answer Yaki you Chief for After Officer.

are risks cybersecurity and large including transactions associated addressable related sales environment, increased direct time, ability subsequent engineers, differ with risk international high general and the those solutions, statements statements. statements Securities issued to that release materially in and the including transactions XX, are captioned business this of ability products, attract ability we and call, actual to those ending offerings quality with filed materially make industry During large Important statements statements third in Federal pricing quarterly described Securities closing consistently cycle and read may We risks to of including our our be all more close not set associated encourage and factors section could would investors Actual market, These and factors or to views in filings. the the these basis, our increased other personnel future changes a and to in including our only today today Commission. Exchange our ability These expenditure distribution anticipated reseller and sales any conditions important expand sales changes under contained undertaking forth our associated upon and retain able relied risk as forward-looking publicly reflect year statements. the competition, be fully Laws, develop reports that risk earnings addressed economic our may the be with provide and to in introductions our deliver in to disclaims growth competitive on views as our forward-looking any of any product competitive application updates our should may considered of employees press our forward-looking statements expressly or from SEC services and data not build for results or representing any December to for cause support to we trends as date. efforts Varonis' the forward-looking to and and release we channels, that the XXXX. projections factors, innovative our made differ and operations fiscal quarter herein. with operating under results as revisions from such such results factors including new

release, Additionally, our non-GAAP webcast Relations a Chief in financial for A earnings reconciliation found our over XXXX the Investor conference be press most our quarter the Officer, of in financial available that, second in be GAAP today's website measures section. will Faitelson. Executive be that available Relations note Yaki? Yaki the Investor call to comparable call is call. also like discussed section. would measures which www.varonis.com on at directly can Also, please the turn I will to With on this

Yaki Faitelson

an for XX% revenues the Total increase $XX.X year-over-year. quarter everyone. afternoon good and million, of second were Staci Thanks

revenues increased North EMEA increased XX% America quarter, the During revenues and XX%.

North the West growth America Coast was region. underperformance Our by impacted in in

goals for will business. improvements track the half that to we we into the our leadership help we sales and of these second confident We doing in more are on in the top as XXXX. effectively region moved changes remain have help the in capture the year demand We ensure region to across the deliver feel

more a are of percentage two again and clients three of number purchased who customers or quarter. meaningful more most increasing We our and ones to at the with products sold new this existing

lifetime We increasing are X,XXX companies also track having need success directly greater breaches employees risk, value. and data preventing meeting or and compliance for it the and to stored, speaks This who customers with to wherever have protect more their reducing requirements. is

platform driven strategy. driving partner Varonis on ongoing Our and choice approach focus expand making by innovation in land of a is a

worldwide, awareness that attended During demand. for the make to Varonis Connect demand These number is customers. investments continued of challenges. Management our XX such prospects and an to met we RSA, and Summit hosted addresses Gartner Risk that solution as and strong critical reinforced events the and increasing Security and key increase second quarter, conferences we with We platform Events our

worldwide. and most customers, of to new to be assessment and corporate files many For they take executive show control networks existing emails overexposed unprotected continued organizations the level have senior to way and effective Too their on risk that have both and data. ownership

needs three more risk using the quarter. about our help we two customers period. [indiscernible] using they get year have to regular year to can we ago We purchased a business increased will customers to And products, powerful we When existing in or all from security innovations have have new them very made chance upsell. assessments helping a XX% upsell XX% of solutions, for how to further. discuss risk been products remaining or addition take working with the XX% cross-sell. is more XX% in progress tool from the their assessment ago drive opportunities, compliance up customers In on which how address we and to purchase be talk who review proven that or a this

the DatAlert. data. a lock Engine the years and a overexposed was meaningfully of one amount solutions, in were external the they of time find inconsistencies shared they years week. could issues, malware invulnerable approach, damage. sensitive it but global our real identification customer added example fix to largest for fixing Engine breach made credit help assessment attackers, In deriving the were This amassed to and their group speaks files that Automation and secure how did Engine Automation engine significantly the The data. decreased smarter believe measurable QX, them For [indiscernible] of why two access it show and us. and accelerate insider. unified to With security value the relied With automation outside also strong engine, Varonis union huge Varonis, need we takes from example, likelihood over and automatically, risk scope work a to security access help data working and U.S. concern them on a to threats Cryptolocker one the DatAdvantage Automation big differentiator and potential build the to we to down of exposures of reducing with are to reduced customers to they key and is protect amount to cleanup

across XXX company broad customers industries sizes. During the added of quarter, set a we and new

on grow and and to can cloud, companies continues manage realize a data serve protect implement partner As evolving their premises looking the needs. that data they must to to in and strategy

and product still that customers started the we seeing and to data While one our one have security. in approach customers value are came a in thoughtful taking platform us with increasingly division, to just

more XX% many will issues companies, manage as data all raising Classification them concern. file and better a that native to Engine external files, Varonis suspicious and not delete could QX, monitor risk fix that open the approach assessments Data indicate will everyone as on firm At give automatically files them were Automation with revealed archives files, within exposed permissions find notify the sensitive tools the keep with well security law behavior of those files the of ethical up. could the decided Varonis example, user Transport the in second to activity Engine For data internal than will security largely will but tried threats. firms or migrate behavior, using regional quarter, platform. Engine visibility into firm DatAlert DatAdvantage In Microsoft they or and will

Additionally, and management vulnerable took the firm the burdening sensitive were discovered risk will law to without handle they staff. reduce DataPrivilege secure how Varonis, their permissions, action for and critical data. With IT folders

estate more based company The XXX,XXX open folders these large contains is of to a for data. in stale that example and the of who in revealed everyone customer advance risk in assessment than Germany new GDPR. great XX% folders risk Varonis contacted real Another data assessment data firm

for Patterns helped DatAdvantage GDPR Engine helping Varonis, are the is leadership into search With locate to kept Exchange them for and be and Windows team can demonstrate regulated DatAlert gained visibility and cleanup Now and them data. make safe. and sensitive Data the to how its Classification of and notify it the data web activity. DatAnswers the fulfill permissions. them and company's them sensitive company maintain to information forgotten CIO unusual requests right related for easy data

more We the with because compliance we helped of I data our have GDPR well value. customer a we think Guy. before, rigorous compliance help and getting SharePoint lean don't With adopting investment once and a are that, over opportunity invoicing migrated to existing profile alone, growing Engine confident remain and With on that DatAlert. OfficeXXX remain growing positioned looked Varonis land data Online, more protect acceleration Varonis opportunity. emails sensitive the for We documents with They again revenue and Data broader a to turn to that for cloud. solution of are the security to Classification in our call Exchange investment DatAdvantage, with cloud, is and value recently build Varonis years is mentioned business Varonis, what realize allows more to positioned and their organization. on-premises to context and have strategy business. This executives I strategy the and on focus which needs. their platform. is transportation that underpinned including to data in the billion to in secure that are by valuable that Online from governance the comes they critical we comprehensive As expand capture. our innovation Classification our relying and they data, Engine company [Indiscernible] in and stored environment let awareness believed we driving company risk value all and top Data and OneDrive team live of their to present well on U.S. More reducing capture of this we for serves within had meeting again OfficeXXX greater $X everyone two SharePoint data OneDrive which solve for security Varonis is and risk adoption assessment been that security demands. QX, revealed OneDrive and our Online. large purchased In lifetime platform DatAdvantage the customer vulnerabilities extended Exchange customer the from SharePoint, us their the me and mailbox believe to we and opening

Guy Melamed

Yaki. you Thank

QX License our an we full with that are of you remind quarter was XXX adopt accounting to the to according in new like a revenues standard accordance for XX% revenues increase would Total XX% million, the results year-over-year. method. of $XX.X which $XX.X I begin, quarter This were million. represents from second I Before the second XXXX. the increase retrospective

$XX.X XXXX. to increasing revenues million, XX% and were maintenance compared quarter second Our of the

For June over renewal our XXXX, the once XX, months maintenance was again XX%. three ended rates

increase, several the quarter, great we our rate renewal our a which is of last validation seen Over have support teams. and maintenance products, renewal

million, revenues revenues World Looking revenue of million, to $XX.X of of X% at revenue. increase Rest an increase the XX% $X.X business total XX% EMEA total $XX.X XX% in revenues revenues of North of at or represent came geographically, of million increased XX%. America the XX%. an total or or

contribution quarter, XX%, from quarter second customer the second XX% the maintenance revenue and was license For first year in up new XXXX.

larger customer XXXX. our new we our customers the QX in customers larger XXX to as customers, from on we the employees to with initial revenues to new approximately compared focus second X,XXX We same at with quarter to companies or on existing During ended time strategy focus us continuing see X,XXX the base. we make to Validating continue while XXX customers. added increasing more quarter, commitments attracting our

wherever XXXX. QX our of investments three or driving our our data families, with more expand trends their XX% of two These stored, platform compared customers June up had and XXXX. its XX% and or from of XXXX, of product approach which XX% strategy. XX, June had customers R&D purchased land helps in customers of XX, families in as and more validate product purchased our our XX% our track protect As

million accordance to discussing to non-GAAP on not I would that forward of XXXX items, the in to unless calculated a website. our for for tables and available and XX.X%, quarter $X.X representing $X.X substitute which the Please total to release, with GAAP. be of I our out second gross reconciliation million, expense detailed on non-GAAP second non-GAAP moving of loss related quarter a quarter excludes be is the financial results point GAAP in profit note to stock-based report of the going expense margin tax of Before found the a in which stated, million was will can like in margin profit $XX.X measures in compensation press for a that in addition compensation. our and payroll results stock-based Gross of with otherwise We XXXX. gross line as

our expenses. line we to to growth go-to-market cases and we products Turning increased in continually as number operating initiative improve use deliver strategy, as our of global well our to to in expand In our drive customers. our with investments R&D the

grow we our while XXXX excluding XXX the yearly our to remember, desire to our margin improving you headwind operating FX. non-GAAP As related continue provided we basis revenues when guidance, to initially emphasized points

to the Operating plan. expenses second of totaled to in compared million second million in XXXX. quarter execute continue the against quarter $XX.X $XX.X our We

loss a $XXX,XXX same negative our X.X% or an As compared result, million second last for year. operating of or to of the quarter margin negative of was period an in operating the operating operating an X.X% loss margin $X

of During quarter the due financial quarter, foreign $XXX,XXX income financial due second the of gain. to primarily compared expense exchange we to XXXX, foreign $XXX,XXX of to exchange in losses, had primarily

foreign fluctuate. losses exchange know, you and As gains can

do with not and guidance exchange in losses to any foreign or impact we not additional expense consider movement potential as Our associated rate. and estimate financial other gains does currency income foreign

XXXX, $X.XX we This and and diluted net million or per second XXXX. of XX.X approximately $XXX.X was QX outstanding at and sheet, on a and basic for for million the diluted XXXX, loss in to or quarter look of per $X.X compared share QX Our second cash quarter with a cash, the XXXX is XX.X and net the share, shares $X.XX If of of million million loss based the and we basic diluted short-term investments. ended balance equivalents basic $XXX,XXX for loss respectively. quarter

six of cash the million, in XXXX, operations improvement of million operating This months in first we provided with keeping $XX.X to year-over-year of cash first by our flow months generated is During compared flow of $X.X XXXX. positive to strategy of quarter quarter the the at X,XXX with flow employees, scale from operation. our quarter, previous ended is business, the increase of levels a of second We From of an this delivering XX% cash increasing X,XXX from the XX XXXX. the end addition people. six

realize We our headcount scale. the business we productivity as increase continue and improvements to to grow

guidance. Moving to

expect For the to $XXmillion, to year-over-year million XXXX, XX%. third approximately $XX quarter growth of XX% representing of of we total revenues

outstanding. diluted non-GAAP tax diluted of expect and $X.XX. per loss per basic basic We $XXX,XXX to and diluted non-GAAP $X million and net and income and breakeven of profit operating of XX.X non-GAAP XX.X shares range to $XXX,XXX our to $X.XX share a assumes million share million This of provision

good demand share progress profits and goal we we approximately of now In to million $XXX to XXXX, million, flow range expect $X.X the from to diluted the This $X.X $X.X $XXX.X total our XX% operating diluted tax XXXX assumes $X.XX. representing and be million per of million to of $X.X closing, WE range year-over-year towards shares is a full provision non-GAAP made of to million expect the delivering income solutions now outstanding. For strong growth in year our $X.XX cash million and operation. income the XX.X and for XX%. non-GAAP revenues in solid the million of of improving to

as lifetime customer With our value. attach customer Operator? questions have. we our be investment continue would you that, R&D take rate the happy to increase driving We and of to base the we journey across in benefits see

Operator

Instructions]. [Operator

coming Our first from question Matt today Capital RBC is Markets. that Hedberg from

is line now live. Your

Matt Hedberg

on may there? perhaps help the Hi for any And thanks you bit little feels? can happened you Coast. the the Did how guys. though, on And Coast? Thanks the be West quarter What little a quantify for specifics a then Or be the Coast? high-level, West for you on us on us could questions. maybe may wondering guess, the from lose West the bit the there? I Yaki, I am more impact the deals? more give color pipeline changes a

Yaki Faitelson

Yes.

course. Of

quarter, meet the this really overall the Varonis Coast West So didn't standards.

know, just As region. overall methodical fix sales a and we we And way very very to we you have going that well market injected to us very a proven. help Varonis leader are the just successful

is business. view in multi-quarter you that not in the we America that take to demand very is is second of basis. believe, on execute a company positioned North This demand are In North America And Matt, in to well we quarter-by-quarter strong. The why very half assess we well the can that on a of year. you terms need demand, it a is strong. very stressed always overall the

Matt Hedberg

a That's maybe help and can am your impact quarter us can both I also help would Since one curious, with outlook? revenue then FX us That you be guide, if OpEx? on the quick last the for great. And the helpful. on Guy. your but both you

Guy Melamed

Sure. Hi Matt.

wasn't of this and FX terms material the So portion. material in for isn't quarter HX

but portion, It on headwind guidance in was of X% know, of have for material the approximately we for us. material impact. didn't a you As exclude not FX but the a maybe the it revenue terms too side, HX

Matt Hedberg

OpEx on And the then line? anything

Guy Melamed

of remember, that. the the basically basis U.S. year headwind of when for each quarter the line, the provided the in because points full you the we shekel beginning we and On hedging that dollar XXX Israeli we versus the guidance, the year OpEx of have we as will closed at said

Matt Hedberg

Got Thanks. it.

Guy Melamed

you. Thank

Operator

DiFucci And from our Jefferies. from John next question is coming

now is line live. Your

John DiFucci

I But get look day on this guys, the like I one and Coast guys you know with to of otherwise, I just the all is pretty Yaki, I region fine. good guess little going a you. ask am math tomorrow. I bit question. weakness West and can of a out to just am ask Thank numbers going

to on mean do Coast, have a know all Sorry if and because that any be very West new the go-to-market you us detail people give are can not they the strategy, but just more we know they on the strategy. you I methodical repetitive but

appreciate something would can little there Sorry that? else, the but you us little a know, more. is more a question really what you to ask So same give I

Yaki Faitelson

okay. It's

overall the just you regarding So disciplined. West very to need be Coast,

it's how know You sold.

POC in C-level to need enough are You we know people you and we just it and to a It present business fixing. do just something leadership to something how very present need that the and is and right then have this in pull and rates. way we structural. do scale And high is conversion POCs are doing at the case and

We doing need We discipline teams. company, is tell than closed quarter. we you we have mid-sized the We having more good And that, and time. this to This not at several grow this make missed growth. multi-quarter people very on a as a be In a a where a Had will delivering, license trailing this transactions. take business. Coast we everything to never we the business. XXX know, did of why view allocation deals resource we we we that quarter, it's quarter and history hundreds XX% just had the public high on always America in and basis, North XX-month you are our Having West said is more conversation. right customers sure have including

because competition. POCs, good way very quarters the barely into have play know we working, have these the any how will out it's several have things that ahead we We We pipeline. visibility

the is working. are So security time so we process. from is stopping is the us analytics working budget, The we very everything well. are will many that time. things to The in sales that cloud right Really, doing big. Engine dong is happen like are nothing Things there Automation once in and

visibility addressing lot a of with are it and lot of We are control. addressing it we and

John DiFucci

sort assessment wonder on a That's could, it great. helpful. lot dovetails does. could we a a while more I of your and And I a give able conversion on that about are if remarks to your for ahead a even ton of more eyes. Maybe engaging a customers sale this prepared risk do have, the bit their and That's and us once I for what's can a have just I give maybe if imagine don't you then it. do then and risk team the you about that? that know it goes once of what, becomes you high Thank this go a the started little yes, makes into perhaps companies you. in started you little into like something at get very And that in little that follow-up level talked do assessment? Because especially approach little What's to been you of sense, open trend saying, when And information? earnest? sure, per hearing in sort

Yaki Faitelson

POC This of he Ken a for that's is engineering, field to what the Yaki, have, head they valuable it's exposed. said, came see Spinner, how you going to not know came so me that what's on, data critical customer from and this our

becoming same convincing against are and that assessment we risk them. And of a its we format methodology a data the the the It's assessment converting a and just and show And campaign. very customer. the are With are doing the days, at then is these present across do we can processes, something sales it's a for the delivering it's you and are following And can to the what risk understand that doing are C-level and analytics, just a you And risk high you we something the valuable really customer testing penetration to are can if in assessment bring easily, value, APTs. of can just business. you the real once these remediate to catching how reporting we the very the priority risk security we how things Board. business what the them. team, that It's are doing people, the bring lot

John DiFucci

to Okay. become norm, going market with the that has And then just every customer? that way

Yaki Faitelson

It's the only way.

John DiFucci

you. Thank Great. Okay.

Operator

Thank you.

Saket Our next Kalia is Barclays. from question from

is line now live. Your

Saket Kalia

Guy. here. the the Thanks versus guys. Hi from of new mix your I I of just new. you And categories, for you, guess Guy, you, for anything first in business a your existing existing? XX% for from you, overall taking follow-up then question talk One Yaki. about for Maybe customers my versus questions can there license versus But result year the is, either have existing? new know those expectation that question in was we versus of significant

Guy Melamed

Thanks Saket, for the question.

all, the to you us about have of of are customers quarters initial First heard larger new in how last talk couple making us. commitments

a quarter customers long-term, initial and the aligned this licenses. those buying more it's think we definitely on we that. strategy time I more existing very and were happy with was on customers over With said, of that great our and see those indication with new and making our commitments

licenses. We have our and we of more more than existing XX licenses want to see customer sell and and more more more

But this from first those new the time, customers coming quarter made over license quarter can commitments saw from and in go maintenance larger fluctuate initial year up. to another, customers. we one and should So specific to existing continue by the it

Saket Kalia

it. Got

mouth, is out the it? bit? it want little bit a in don't seems put to maybe clarify. like So I new say a just to perhaps existing you was your but that than Is maybe were fees, fair pushed words I to to on about you did think right the way that better it existing want

Guy Melamed

with quarter, trend the the this So time will bottom to by existing happy customers specific made that's the see those are percentage bring commitments customers. our to long over line. were down and I increasing initial where of continue In levels you to out grow profitability term, we ability the think total revenues of their new part the over

Yaki Faitelson

case, hard, Varonis' And in very it's XX-day a in trend window. to draw a

Saket Kalia

hinted fair. totally Yaki, I that's this actually my follow-up for think earlier, That's you maybe just, is you. at this And No.

anything in evaluating sure is you competitive asked, the but it you anything changed or can about a know question before touched terms relatively on bit? of internally limited Just just win you when has I else landscape the talk competition? that to make track your rates

Yaki Faitelson

was this against The At ourselves. are point, ever. No. than stronger we competitive competing situation

hitting are We scale.

we we meeting We are our and every measuring every know if in any force and the point, dominant are competition. And at everything, POC we market. this see

Saket Kalia

helpful. guys. Very Thanks

Guy Melamed

you. Thank

Operator

you. Thank

question & is Company. from Alex from next Our coming Henderson Needham

Your now live. line is

Alex Henderson

But you indicating win volume that the meetings? the this are take within back it it are What a Is specifically volume it the excluding I West competition? that the excluding of very that rate POCs? it going get realize Is at Great. on deal of you Coast of right the into West to up C-level were versus bit. quarters closures? it a beat multiple North going have to it? if that to of operations the you look would year? matter of comfort the Or the little volume region, in period short to how is you been here American West half are Coast much going something from higher Is is a region rates the to growth it within a change it and the as do could get is you And Coast, of XXs, the is change fit?

Yaki Faitelson

everything we And the customers the Varonis right when the First business, We in are ground leadership. senior these leader, deal. get enough coverage these sure proven this relatively company, that what are and to the right and upsells leadership at we just into with so are people in have the know looking to is know are the POCs. leaders, close are have what we aiming make their do rates remember, to we veterans on

XX the was expanding time, you can didn't quarter the also that in it's market. of hard. to other business. we this are but America. in in everybody EMEA to definitely Varonis. correctly, We that then also the pipeline terms about looks had maturity but good and hard growth we penetration The our something I pipeline, are that. me need Remember about asked around like a we is the overall year and business American something have we pipeline XX%and business we can coverage. And a we and the in one But this see in It's We very see questions we it understand see same it this if the that business. hiccup last talking from is visibility, surface overall like very North business predict, just we is and times talking for the remember that move in and the predict some We scratch North days, atypical when to see and said, good the contracting. we West is our it Within

You upsell are use you this within know who how that know know and we into what by and going are Varonis translate individuals holding it the and individual, to are the we are cases revenues. the pipeline

So have very control. visibility and good just good very a we

Alex Henderson

was deal of which volume West That's volume in it the caused meetings, was the answer region way, that all the Varonis it closures, of doesn't number the C-level didn't information, the Varonis great of was something Coast do the that you off what but to it within POCs, question of asked is, be mix specifically the whether path.

it? was So what

Yaki Faitelson

the way follow-ups, individual, but dependent It's presentation. it Well, was running the the the people were it's the the just on C-level meetings, everything.

saw very teams. market that methodology part didn't fix it. We doing on are of We is But with good they strong just playbook, we have saw. that big but sales why execute. depends now what and can these That's this we playbook team, we the they demand have the are a

Alex Henderson

right. All

"missed close of question get of that that all confidence you this sales that time region"? amount could period how on in So answer of you a you the this above can you got is if of short within last

Yaki Faitelson

with not of we all the are know individual. the It exactly what sales We above the have. team problems was

this very is a for the pipeline right direction are right play And profile. this the involved The the pipeline have people, the indicators customer deals time. the out people of time. a of the right we how have we the abuse the profile, believe We are are right will and way the terms the out this all decade use base, than all that profile of and it very mix, history customer, good in more playing we doing cases, and long in same the a in

Alex Henderson

floor. I Thanks. will cede the

Operator

Thank you.

Our with from your question. Franchi next is Morgan from question proceed Melissa Please coming Stanley.

Melissa Franchi

guess Okay. for Thanks I one start. question. Guy my to question for taking

the improve? So when of QX are throughout you you assuming seeing for sustain the the are in year? assuming revenue the that second thinking in West Coast you can half you the saw what your guidance challenges that about are year, Or

Guy Melamed

QX is that and the reason Part large We of with we the to year. definitely West and our the a deal takes federal half see the investments and have guidance how history the has Coast federal for don't fact the made of the place. in federal for QX enough lot a of for predict with do improving that closing to we market for have second still team. But see

So the that's part the of will feel the pipeline the and for half do guidance, reason for but the of be QX we improving. second good very about West year that

Melissa Franchi

Okay.

that assumption in embedded guidance so West improves? the clarify, an to Coast is just So

Guy Melamed

Correct.

Yaki Faitelson

a good very But have North region. pipeline the American all we across overall,

As strong this for strong invested we have lot. said, is still very is a a careful. But a a very pipeline. bit And of team, big quarter just we new and the federal. We us Guy business

Melissa Franchi

Or the this then larger And point color and the on Yaki, new some and do going sense. year-over-year, concentration to customer start deal expect stabilize are on makes does sizes you adds? see That at adds continue? in helpful up, metric will that start trend growth new but had on to to you we customers down maybe Okay. customer initial

Yaki Faitelson

We we customers in. play growth that the new in in want X,XXX-plus, have market in to

very are penetrating the we and customer with sizes. market way the we the comfortable So feel

also we for customer customer with right volume we our the both provide business lifetime value that can good account and force is want that are to for the strong business sellers upsell. and doing but do the with very this that sales also We customer focus productivity

way overall, terms customers, that penetrate happy. our of in So new are in very the we we

Melissa Franchi

you Thank very sense. Makes much.

Yaki Faitelson

you. Thank

Operator

Talpaz from Stifel. Gur your coming And is next from question

is now live. Your line

Gur Talpaz

for question. taking my Thanks Great.

about history, ago. able EMEA So years important this, had and you just whether bounce if or pretty Yaki, it talked quickly, Russia have look it's some you an you think you in but geospecific point, have QX XXXX I the back to at when weakness was been

you geospecific ran get I saying, multi-quarter, sort are you focus know the but quarter, respond when react saw? when confident regions? I keep And you one on on point question is, because of to don't to you same those quickly you run able focus an going pretty So playbook important adversity? think in I to do you it's have the saw guys face guess, same back been and just feel do the you that weakness bounce And you

Yaki Faitelson

you we a change a is very thing America. region, America, when Yes, within in is remember, lot North U.K. not North doubt the one that underlying at a have structural just had but important strength the and without we to of like that this the overall look

So close. of to that for EMEA. than significantly much the This scale problem, we in is easier what something had This not is of less even this terms attack. in us is is

Gur Talpaz

being fed then it's you Can as but perhaps QX? gives quarter. sense. just to here that Are opportunity? feel the play opportunity interesting optimistic around opportunity, CDM deals And confidence there of feel can this you there you push into sort American else fed optimistic We against, talk you programs you that's about you about saw cautiously or have Make that perhaps North you into opportunity? cautiously why things optimistic. some over whether U.S. the talked something specific maybe you being of put the What about some place drive some also

Yaki Faitelson

lot. We is for have we We approvers. And budget this just just in discussions see invested going see a with tremendous We customers. the also market. what need the

be for we a we that And for problem that teams. and can did We team very a solving right programs We it right the about everything in have just invested are massive the We us. good and certification. the them right. just believe think and in business invested

from now time get and the to it's it done. investment Varonis big Just

Gur Talpaz

Okay. Thank you.

Operator

you. Thank

from question Our McDowell from coming next JMP is Securities. Greg

now is line Your live.

Greg McDowell

so go the XX, Obviously, of bit. Europe other things a much. one was you. in it's on much about you growth a little going world GDPR the effect row. in May a Europe? quarters into growth, very coming GDPR is of could Europe? With why little Thank Europe and how to two I Thanks want talk around I halfway to best And the versus performing in just hoping well in XX% bit highlight due going regions,

Yaki Faitelson

as easy before, data on It's compliance It's you about you not everything. purchase, think justify really definitely, just Varonis. go framework I problem. to solve always how about And about through just said land think exercise, but to how GDPR, protection, Varonis and GDPR cybersecurity to to in presented very a the with once this reporting. very clear be to

So it's something that is helping us.

good the we so And across demand board. see just

Greg McDowell

for you. then I talking about one And you renewal the were noticed rate. Guy,

wondering to increasing. that the could quarters, just are how several or increase changes on start maintenance if Thanks. renewal I renewal was what it? For rate touch been maintenance you tweaks been you to have and rates have doing made

Guy Melamed

Thanks for the question.

quarters. renewals seen it's I renewals working a value. our product in indication the those product, our last increase of customers. also team great we and the a that rate over And using the and great couple the are are think our and with support indication of renewal that directly of the have seeing on customers And team

Varonis. a We are And with at that. different very our great of departments indication happy it's

Greg McDowell

Okay. Thanks.

Operator

you. Thank

is question from Bennett coming Chad Craig-Hallum. next Our from

Your live. line is now

Chad Bennett

taking my for questions. Thanks Great.

license a period we ago three or just I wondering a license to business guys teens investment teens multi-quarter short-term the are if high the outlook. level, standpoint a should not So or high from be we in your growth about take kind talk an based growth looking revenue at the guide investing guess quarter, a high look in high on business? high-XXs now license growth, you it's could current I going business like view, time what, I guess I business, you the of am in mid XX% from XX-day since quarters XX% at Varonis on to XX%, guess

Yaki Faitelson

clear We a want want that see in business, be a We execute and just way invented set guide them, to to can revenues. sure we But goal forth is go we that market. always that company. business This in $X know, we We market. that in the We responsible something when this a this well enable make we billion hiring way. a against. them. investing we a to you are can to support definitely different in We is we people can we are opportunity created

to hire. look history at in So see guidance, the always can terms investing in of responsible in we a investing profitability, business, And very way. and guide are the back the balancing the to growth, we everything the between we that in that ability people trying you are overall

Chad Bennett

real then for And me. quick follow-up

belabor businesses? whether North those in the force Just or or adds disruptive, go-to-market the in not the on guess, West entering year, quarter? around to higher-end of X,XXX-plus the new changes America to or focused it's any there Coast cross-sell, new but employee was sales any opinion stuff, Were your change upsell fiscal I

Yaki Faitelson

No.

a in what just we terms did any of gradual always changes product, that the that X,XXX-plus, gradual. It's a are think we everything I with it's new process. doing

before, We have we If close are transactions. XXX conversation. not several We doing hundred did brought mid-size any wouldn't And said we revolutions we here this I in that deals, customers. as several sense.

and some things to So stressing a why to can this is came America like are us and to that always asset, happened it multi-quarter to consistent a it a try And On goal. we in just view make us this to are Europe the back have quarter-by-quarter doable happened public that analyze we it times in North time and sense. we basis, in any doesn't always happen. because

Chad Bennett

my Understood. for question. Thanks taking

Yaki Faitelson

you. Thank

Operator

Thank you.

Our D. Davidson. next Jaluria from A. question is Rishi coming from

is now line live. Your

Rishi Jaluria

for guys. questions. taking my Hi Thanks

Or to for about fix. you terms start me West kind leadership? personnel the Guy. other is or Are purely talking me of of it issue? Coast are being any then the investments issues. it to changes as follow-up there And a again that let like have I in this happen either on mean leadership need changes Yaki, I sounds to fix First,

Yaki Faitelson

mainly It's leadership.

Rishi Jaluria

driving understand Guy, land Got Can by what's that? help it. the us you talked strategy. customers? by as part expand seat you greater purchased of initial and products initial the And getting in Thanks. adoption lands larger Is phase about or more initially by that driven Okay.

Guy Melamed

I a little bit it's think both. of

wanting on buy as two-and-a-half And licenses. focusing we seeing about remember, customers. definitely larger more to ago, are years We customers you two, started

more So they time, that the think risk are in generate buy licenses customer they XX of we over customers targeting seeing lifetime we vulnerable through those much those over want customers and they assessment, when and those to and it's how to but combination and how where to where licenses customers value more. we a company have can eyes going their help I how seeing extract are everyone enterprises the exposed open that, is are see just in sensitive data also and

Rishi Jaluria

Thanks it. guys. Got Okay.

Guy Melamed

Thank you.

Operator

you. Thank

Our The Mark Schappel from Company. next from Benchmark is coming question

line is now live. Your

Mark Schappel

those for how you. just Thank questions question. some one of your been decisions but you the enterprise to or my noted conversations and that, have the taking actually you In you are I if with but customers was you license any answered, around talked Most or are about still granted agreements beginning are thought haven't understand you and here, wondering wondering if I was yet, Hi. past, ELAs. signed my ongoing? I Yaki, have for customers processes have

Yaki Faitelson

Varonis the we ELAs. in not closing it's still are a ongoing common but and not just They are practice

Mark Schappel

you. Great. Thank

Yaki Faitelson

Thank you.

Operator

Thank you.

We our question-and-answer end to like would the management over I to floor turn of back any further have or comments. session. for reached the closing

Yaki Faitelson

all to in Before success this the of their employees work to thank past we to end hard and contribution like quarter. our call, would I for our

Thank thank also soon. customers are today and for like you looking and support. their you forward for continued would partners all talk us to our We to to joining to we

Operator

Thank today's you. That does conclude teleconference.

you your wonderful thank for time participation day. this disconnect We and at may have lines your You today. a

Varonis Systems (VRNS) 31 Jul 182018 Q2 Earnings call transcript