VRNS - Earnings call transcript Q3 2021

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Operator

Greetings, and welcome to the Varonis Systems, Inc.

Third Quarter 2021 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, James Arestia, Director of Investor Relations. James. you, Thank

begin. You may

James Arestia

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

considered fourth risk our Due should to updates Varonis relied set our in we be that and During today statements this as as future earnings actual factors, to make any may securities that forth including SEC are as more under all December statements Commission. or press And forward-looking call, these under full the upon be revisions laws, Securities from date. to herein. or today issued any with statements factors of Exchange captioned release forward-looking made subsequent expressly related the federal ending representing application in our not views described any to reflect such our factors any These and business operating number will our those disclaims fully read forth statements. reports views We investors and encourage of the filed materially to statements. XXXX. undertaking results filings. quarter important only other in of we publicly statements forward-looking projections set results year release may a XX, of for and section These differ are our

call. section. XXXX. split been the note data March also Relations XX, press most the comparable will our quarter available please found measures all adjusted GAAP and can stock share be retroactively financial effective earnings Investor conference A of X-for-X Also, for reconciliation the that stock is have financial directly which per XXXX common in for non-GAAP in third be measures release, discussed the on Additionally, at www.varonis.com impact this

updated today's on presentation section. well Yaki Yaki? the the an please like of Investor investor as our are Executive a available that to I'd that, Officer, over Chief webcast turn as Faitelson. Lastly, to With note call our website Relations in call

Yakov Faitelson

everyone. Jamie, us for and QX, Thanks, revenues. good Varonis, strong first major you quarter discuss was our million to milestone $XXX joining afternoon, a surpass Thank our to which for in

in data-first update existing to on on protect just As want and the of ahead call Guy as focus achievement us. continue the to surface to to opportunity organizations discuss I their became the entire I thank security customers. sensitive let's and an all that, efforts, more enormous approach team to this the the around business. companies facing new We QX to With problem updated why jump I we scratching success. guidance. the aware financial Varonis as our our led world results then and see of with resonate need will the provide want the data, our of to which for turn

data to that as collaborate applications stores business extract where perimeter easily the it access environment said. approach places. has transformation must now define global points more data serve and to critical before harder is the The reliant large of And mostly changed from on-prem stored is and ever employees and monitor than security, accessed value operating are from more collaboration more ultimate and led in our data current even the using can stores cloud. now world have many The digital and companies also is as with efforts start Let's benefits, and it. so protect data data. security but protect. how and the their to to Sensitive Organizations endpoints hard sanctioned more fundamentally is to objective on has we

However, and and we has harder continue impacting to challenging, manage made for collaboration enterprises the to far harder and securing see it more security data speed right of protection, without getting the is productivity. ease that without

Varonis, part data continues, attack of behind just critical blast visibility for and user, potential unprotected. are need grows, it, woefully is assets on by the this define CISO risks damage tremendous. as As case, the the surface radius from the single compromised that especially a into a The with are we ransomware. digital customers And see this this be which day. our to with daily see better but basis, we growing doesn't With

In every data easy efforts we Nearly data over and aligned trace. these compliance. the spill faces and applications crime exposing we utilize and that overstated, lead increasing can time, connections cryptocurrency attacker and cloud. to primary to interconnectivity their data SaaS of addressing: need solve state people, in world. it actors protection to techniques laterally of are addition hackers risks problems into concerns, this see any the sensitive misconfigurations the the move the how threat this without commercial the sophistication to today's privacy with cases the use and The makes be as cannot fundamental to At protection, many we these organization monetize perfectly see same detection the

ignore platform and are are for do And regulations not noncompliance. our sign when to threat think data slow strategically the can of short, detection, momentum about the GDPR beginning no as security. expect we unleashing protection like companies enormous see to and we more potential CCPA discussed have data-centric longer In We this companies and we down.

quarter. wins of examples provide some me customer Let a this key for few

third of employees Varonis a with most the became XX,XXX quarter. international in customer One nearly Europe's organizations recognized

licenses at to ability sensitive additional discussing In licenses, to will directory, threat are multiple the GDPR. that secure for active and were the compliance and data addition they where coverage we overexposure risk broaden migration showed detection provide. data, with remediate they we prepare they other to our needs, to sought cloud to revealed and ensure currently purchased After we

the number consistently this lead Varonis double-digit to on access company current as get cover all through based expanded X than higher utility and growing major years platforms. the became additional perimeter and data the we offering took licenses. subscription upfront said, provide of QX XX, is Varonis company under perpetual strong in should migrate open include issues. we this for of they In landscape. as with continuation of customers several subscription and healthy recently deployment and ago from purchasing threat stores less not coupled offering X cloud the city, trends further example year, expansion our In a and our XXXX, are across our to value monitor our options. their seeing, have easily well U.S. A a The cloud introduced secure X licenses in advantage which we As In they customer the examples remediate Varonis model, first which data to believe strong adoption went leave to years, does These and room healthy pipeline. this of we engagement data the licenses future. illustrate licenses, additional expansion serving

to We are positioned close year strong. the well

enormous team Guy. the continued in our execution said, unmatched, and on opportunity With As to turn the the before the call me and believe is we let relentlessly on us. that, is over market Guy? position focused we capitalizing have

Guy Melamed

afternoon, Yaki. Good Thanks, us Thank joining everyone. today. you for

their by and results, demonstrates driven $XXX history. need time growth our continued for highlights was in data. secure XX% quarter This surpass include third the total revenue the to our platform with XX% of customers our pleased year-over-year of in to which revenue $XXX.X power to of our in Financial ARR sensitive QX are million million. first growth We

revenues resulted in to total targets in since QX have The is which strong execution XXXX. confidence year, Our is delivered we another this is for of alone. highest which growth the growth. in our That our guided continued our we million, $XXX business quarter against were the have approximately we year our revenues quarter reflected guidance, the

results, continue the our platform. making see after demonstrate of to their a Varonis we healthy new substantial at deployment and customers we customers value balance commitments of expanding existing upfront our Looking

over We a as licenses that val. has are meaningful the of lifetime in reflects this increase increased time new purchased customer by number pleased customers

As ongoing XX% in a from total up more employees a XXXX, of ago. in XX% more X year to XX% or XX% or XX, years time, X up ago customers metrics these have customer of of Varonis XXX the X employees XXX or customers our a we get more than engagement licenses, XX% number to growth and strong customers opportunity same licenses, double total with of our September the ago and rapid illustrate or the with double-digit XX% licenses. year and XXXX. purchased also At the The from we more purchased see more all demonstrates QX

maintenance $XX renewal remained revenues Total detail. grew Turning our $XXX.X and now were in Subscription to million to more rates $XX at third And million. services XX% our as revenues results quarter XX%. revenues over XX% to grew strong million.

Looking North revenues. or the of XX% $X.X Revenues million revenues. business grew of of XX% X% EMEA, at to of total World revenues geographically. total $XX.X million In or grew XX% to America were XX% total or $XX.X in revenues revenues. Rest million

forward. margin of the third totaled third profit quarter be expenses a million. quarter of for to non-GAAP million, the income quarter gross results third XX.X% in going the XX% XXXX. to back was discussing Gross statement. Operating $XX.X Turning I'll representing in compared the $XX.X

X.X%. of income compares operating year in was a operating same This drive $X.X $X.X or last period income million As we or the million to margin quarter margin continue to an operating operating margin leverage. result, of an of X% operating third as

is with to for to income we of per XXX.X for of million XXX.X outstanding of diluted the $X.X income ended share cash, quarter, million compared in had million shares During was securities our This $X.XX million cash net diluted interest per XXXX deposits. short-term of XXXX. third convertible the marketable QX expense the respectively. on We of Net due or $XXX,XXX, million QX income $XXX.X $X.XX diluted approximately share XXXX $X.X expense XXXX, on primarily financial based equivalents, notes. quarter and QX income third quarter and of or for and

million we an September to $X.X net For the operations $XX.X last of same negative XX, increase X We generated second year. the period new this XX used quarter from X,XXX months from of million ended compared with the the cash employees employees, quarter third of year. in ended XXXX,

believe we will departments capacity invest these as us opportunities we geographies investments continue market. We across and the in the allow to innovation to see in capture and

our especially ability in the our growing against performance demand our our capitalizing guidance, of strength QX for the guidance. platform. outstanding our Moving financial believe on QX reflects continue XXXX, to We to

XX% the quarter fourth $XXX growth $XXX total revenues to of of to XX%. representing million, For expect XXXX, million of we

shares diluted We expect $X.XX share million net to range income per outstanding. to $XX.X This non-GAAP non-GAAP operating and of million million the income of assumes $X.XX. diluted $XX.X in XXX.X

meaningfully $XX.X revenues For again full pleased and In in $XX.X of now expect expansion and while million to cash share drive non-GAAP $X.XX. outstanding. shares assumes our XX% third XXX of with $XXX.X XX%. now year, ongoing summary, income continues of $XXX diluted our of the revenues. resulting the in strategy $XXX.X diluted top we line results the million expect of flow we million first growth This growth, generation are to million total quarter execution our to raising also to operating as in We income million range to net are our margin per quarter go-to-market $X.XX with operating representing non-GAAP and guidance million,

for in questions. come. milestone, would happy the joining And with we continued proud year investment Thanks strong Operator? and today. are close for next a and take to milestones the be to of We us to know this business the us we positions that and that, outperformance

Operator

[Operator Instructions].

Our first comes Auty with JPMorgan. question from Sterling

Sterling Auty

of maybe much as and how qualitative look do a driving explanation you have as give I look alluded like? from idea trend you think the a the think from what is to interpret commitments at maybe customers. larger had initial sizes. you I bigger quantitative us what they I Can think do Guy, it stronger that So deal and to will initial or guess you grown here

Guy Melamed

buy the customers. licenses. our number It's in of higher a is we what the acquire, more double perpetual of come back the that they and had also likelihood seen value sold answer much licenses we've very way great is are they they approximately see will platform the licenses. And that buying They product that They're the when buying and we the more. question. The more licenses consumption

the at initially double we And was the thought transition. just When than ASP price So what year on lift, technology the we growth that the about perpetual you when the initiated we what's subscription first would think lifetime it licenses, price much the and the that of you value. how be fact is customer XX% is they're when this of higher consumption number see can maintenance. acquiring of driving

Sterling Auty

look capacity, And That moving would terms that current your what one in at sense. what hiring mentioned capture hiring makes of you demand you as you are set you to sales follow-up be, doing and forward? up sales as durable to

Yakov Faitelson

we going market in We huge, the the how can is really concentrated And benefiting to of sure protect customers just that opportunity, market that know There's support the them, on-prem right captured need to and repositories, just in to there we just them in way from tremendous to -- we make understanding data of that which sales keep set opportunity sanctioned in growing available they we and from data, is we total force. and and going strong front we're need base But can and can terms enable we cloud, are and the what it grow us. data a The the tremendously. we is hiring. in our we we do give we're need the market But said, as make to it to the them. Guy of right just sure very counsel.

We have place. enough management in

have We success. we come support people enablement need and to when make programs, their sure diligent in here, them we that very

Operator

Our comes next with Matt RBC. question from Hedberg

Matthew Hedberg

And want now there as return actually help year, results. that I guess more with in return curious. the I travel? the do up to work What you. on guess of bit Congrats next pipeline generation? your if Yaki, world start or Varonis' into I travel stance to by to a opens is right think you sort here I'm team, could is

Yakov Faitelson

First of partners. and foremost, just it's employees, safety customers and

But diligently team and and we and are from rules definitely our with following markets yes, we everything offices the are HR we of the XXX operate. of remote work Cloud. DatAdvantage the health So local just in terms benefited doing authorities we in

So us. digital helped transformation the

As you makes of with that and contact a the full customers our team. sense know, the is sense very well, with sales enterprise in sport to be also it

can meet are we to hybrid are in places So environment. that gradually meet a And can just... and we working we moving doing. partners, customers just We we

Matthew Hedberg

Got it. a this for And follow-up maybe Guy. then is

ARR difficult As more decelerates, you're off of comparisons.

revenue more guiding but model we to the about year, year, the next you're about might to yet, of right I next mean we a is where think and think between convergence to converging? year start obviously, that not should the growth we X? As see how next are of rates way sort the point we

Guy Melamed

quarterly expectation an as metric is and the that we're And is I think happy at of ARR growing of start one analyze of growing part the the kind when out we saying one. and revenue ARR that the at there's and kind on XX%. a a And convergence lot I'll and have ARR, revenue, annual we obviously, and the of of there metric, the very ARR XX% by revenue. revenue with confusion

sort very be strong business. for metric, on more you we trailing a subscription in mentioned, at a that of look quarterly and how -- are think results next revenue, They're call, at XXXX. the of of actually matter ARR those -- the you it And could on have growth. indication enter look metric earnings provide the annual you growth, doesn't or the XX-month and I how the next discrepancy. strength But it an when it at color and we'll quarter as some an as maintenance there revenue the see you converged. and basis So both recurring really XX% And analyze

Operator

with Thill Our next is Jefferies. Brent question from

Brent Thill

nicely, grew but sequentially. Just only ARR X% XX%,

questions. there So I are many think

understand Just quarter? trying federal perspective, maybe you trajectory on kind federal a driving to little what's comment this add going the just bit a also forward? and And saw this to of versus you from color vertical to any if could the what commercial about

Guy Melamed

enterprise We at XX% was good the look when the XX%, I like said, growth, being strong at most very think ARR very by numbers, feel growth I being of the the pipeline. the So business. about we driven revenue and, the overall at

kind when and the it's the indication think strong about look to a against at XX% an it's XX% QX being of an outstanding we great how QX business the at of I indication you providing is kind guidance guidance feel because of XXXX. of

So we the good definitely closing year very feel about business the strong. and

Brent Thill

And in sorry, seeing? you're Guy, there of what any was federal color on terms

Yakov Faitelson

federal, was saw growth of a the in driver We Guy lot in XXX. Office enterprise was business. focus and As remote mentioned, overall on work there collaboration the

the do a manage lot how and data a just opportunities, XXX the allocate is budget. that the just us. but bit it for we the is of of But saw we opportunity to So what exploring see was to

see next we of the there front many And are initiative So year, projects related of customers lot X trust a and to for federal are trust. and the for many just prospects. the X opportunities to center we and

but that the we next primarily enterprise. do the growth So by can in they very year, well was believe driven the

Operator

Our next question with comes from Barclays. Saket Kalia

Saket Kalia

agreements first, that? mean you and some of larger products, mean, focus your as more to point with adoption I about in them many multiple of I future? base have where customers the sort think the about as ever was speak a of you as what grow. thought for here gets continues customers. of I have curious, the Maybe And so enterprise takes sort as the the to you puts adoption I license are think for on Yaki, themselves well numbers multiproduct

Yakov Faitelson

do. We

explosion is repositories like in with Most customers points. see and We in So the what need The endpoint. call we that to very sanctioned on-prem cloud. data are data. the They protect of understand this is perimeters that access we more they are to definitely saw what define. hard

in already the have customers time. capability the the return the that you if of many to in us, see other it. protect there efforts top, more more. times thing not will digital have do much higher to Varonis investing is one assets, is you are investment have customers more you efficient that that way tremendous. most to have. more And that licenses, When is is order of if much you So Definitely, want platform And when is security your over consume we [indiscernible] licenses

and what and for from it think customers easy be about benefit will So but we it's something that consume we think make the we they more definitely world, early it the will think our it, and sure to from will right stages, benefit is is and that that we will products constantly still about definitely out, play to But way it. this how we'll see about it. in but is it

Saket Kalia

ask it. Guy, about I ARR about here really nice there on transition sort pretty the a high forward? revenue to few was path to the question I that of and sort helpful. for anything quarters. been differently. for done. mid- mean about it's XX% ARR quarters, mean I Got going had the growth maybe is Maybe That's convergence think mean Is slightly you. ARR growth I'll the breaches. last growth. the of high-profile several ARR of glide asked several We've of

year. modeling Understanding for ARR, of what about when to don't course, COVID are Of we had years? takes last the of let's that next puts couple say, that should and guide think we ARR, the some have you

Guy Melamed

that the there more of some enter Saket, model at have to and out of ARR, in XXXX. ARR earning some talking confusion about the of feel providing have of we towards on numbers. call we things that next is one kind ARR when how the we the color there's think we And thought those points numbers I as that of heard we look

will well. of the leading we metric us out we sell provide Cloud become the feel this think right should a year that licenses that as will kind I right indicator more leading recognize way, because color to ARR So on metric revenue. we therefore, us. for DA now Cloud a for DA is -- we more And ratable for as But and

Yakov Faitelson

start best the way that us for is thing then is that doing Saket, But high-level usually are spending, these breaches, builds what scarcity protect thoughtful my end, there are what process, where stuff. from. benefiting my assets, we one I'm my organizations And they I'm demand stuff. what of -- how breaches, alerts, in are from high-level drowning enterprise very to emergency but a there reactionary is the to is I the are this going with need do, just

when where around that for standardizing So us I and settling, is just customers and benefiting more a and just are more think looking we this and becoming the really what's more the mainstream are happened is dust solution... is

Operator

Our Owens next Rob question Sandler. comes Piper from with

Robbie Owens

types actually customer realizing rates a it's nice can terms Cloud, lead of give But any being early. in selling That or tip into it's still providing of was relatively spear the attached? DA you the of your feedback where if Any it's motion?

Yakov Faitelson

but massive material see started to business running really a are is contribution believe that this conversations the going We where are not We'll We resideThis are contemporary business. to these that pipeline. the it's customer build risks positive. -- where your opportunity year, are applications very and

XXX strong So and be it's Cloud -- good what we can us. the believe can is from that with offering a do it DA indications very of indicator initial we the

Robbie Owens

you've it this getting to customers base or if And have how an given have, you double-digit but second, or apologize know actually you give can if And gotten us reached of license share don't of of before, what I there? metric talked Yes. the idea about adoption. I you've much

Guy Melamed

consuming The than year numbers of metric licenses. more customers about and And there actually have platform. or the what about, more licenses customers X was providing supporting that or we are last exactly the we're with more talking employees started X number XXX

seen ago. And we're X this on years actually year. We X XX% XX% licenses, last from go more what doubling ago than the XX% more or XX% licenses years to at and or year, X the had year more X have this we

average in licenses fact to customer. consuming can very get very of much that strong indication So the are per believing platform on the double-digit and we customers we that the

Yakov Faitelson

automation. of understand the much is Once more that they value. need you All more basis customers, automated they to get have

what in see more when just they [indiscernible] X XX to... or the have between automation this you So in licenses [indiscernible] and XX is sheer progress

Robbie Owens

All given like right. success license another it's category, seeing time the seems in X the the almost And for and it X. you're

Operator

[Operator Instructions].

comes UBS. Boyd with Roger from question next Our

Roger Boyd

the Congrats results. on

one Just in and Office drivers, you're these could thinking if about past and over strength about tailwind this more what 'XX? you're calendar quarters tailwind the of a XXX, wondering thinking about little you couple terms of seeing of how provide of color the it into XQ

Yakov Faitelson

it is not which far create just collaboration. designed XXX, is data And the we very is is is see -- whole risk with is lot to capacity a of and the that protect lot capacity it. What lot collaborate adoption customer share ability of using And to the -- effective. adoption you towards the to geared this -- of just suite there organization data just see exposes that and seen, risk a COVID, and and show and to protect. a it's to our we've protect. And exceeded it's

and services positioned they need once that this order feature just challenges. these... same set also between SaaS in other very just productivity efficient these we and Framework growth customer area tension collaboration to are presenting a the And mass hard uniquely critical is we and a always remediation Metadata us. for our to solve token, solve is just the have very are a But to protection, always see lot to see of towards XXX, this of almost do a visibility in a It's data designed opportunity hard. tremendous Varonis. doing, more believe and for and security also We very So -- constantly lot we classification in and gets tremendous and it's we value what in a

Operator

question from Nowinski Andrew Our Wells next Fargo. with comes

Andrew Nowinski

ask So about to maintenance I revenue. want

look subscription you the in isolation, revenue growth. had you If at amazing

to over continues on when isn't your to existing expect growth convert overall guess revenue And weigh more should to we declining subscription? However, rate. customers faster? maintenance why I the maintenance

Guy Melamed

that over So we maintenance of a has rates renewal The been perpetual decline had is the percentage an you consistently in see the that indication have renewal rates strong have. that of XX%.

have the back rather don't our additional to but said go existing them and subscription. under to sell try and just convert that all subscription, we along them licenses We customers

So they they buy licenses. additional of keep their maintenance and perpetual

with it's line have more our so them, We we recurring one that component. value provide customers as sell that item. to line OpEx item for many more And can an licenses to

So if to convert, but see seen haven't customers we far, wanting address pushing. to so happy we'll not it we we're be and it,

Andrew Nowinski

So your license they just those subscription buying a they are -- or are customers that more buying licenses, on basis does perpetual are [indiscernible]?

Guy Melamed

selling No. licenses We're not minimis We're subscription. selling additional licenses. -- as that's de number, perpetual the

Operator

question next & comes Our from Needham with Mike Cikos Company.

Michael Cikos

just in the that, with being that fact, their be could the cycles, maybe impact some But those that for a all we're me seeing I'm in threat environment in, you imagine the of the overall I curious approach currently more -- Would sense cycles. And two about trying just your in are think about on are sales on more get putting I'd do familiar licenses the taking I'm current and has urgency elongate sales had when you to heightened sales thinking cycle. hand, other help what as into trying to is if upfront? compressing environment, thoughtful customers one more bucket I'm in sales differences if cycles.

Yakov Faitelson

the process. It deals, motion bridge. look sales somewhat mainly what case-by-case can basis, you see there is a these more is is at that accelerate our Obviously, overall closing sales if stay cycles strategic. But we on the a same. the much Overall, becoming

the larger strategic. sometimes and go in to see. base is are more buying is our the is on rates predictable. that than the overall deal to CISO process more This that these sales time better conversion and the simpler licenses So really that buying additional customers licenses. and just more We customer the see have see the more -- have relationship and We with with a much pipeline. We CISO larger can a we becoming what on over we accounts, see access are relation --

Operator

Fodderwala Our next Stanley. with question from Morgan is Hamza

Hamza Fodderwala

products some have you Yaki I next are wanted solutions into this you at pipeline, pipeline on on of seeing they're know your year. look cloud follow material out of the to more QX, going year? question the But rolled just the newer a interest sales for materiality today. in earlier to as as up one. that not that cloud into forward Maybe I you

Yakov Faitelson

of definitely we lot interest. a So see

world have and Just where is there and thinking GitHub, going. order exactly the in using data, Okta compromise repository, this are contemporary is Salesforce, is customers FSAs what endpoint. When what risk, [indiscernible] to about their -- data, customers to this of central many the an how is Google, they see. like endpoint They Box, you stuff information XXX, on of application, don't a part get the a fill data are how business lot huge this you

other The applications thing SaaS -- are the all that interconnected. these

really movement. to easy do So lateral

So once damage the ability -- organization you in massive to the strike are in, just is huge. it's

doing we positioned world, -- business protection we So today, are applications, are and we to program, in do. that the data solving uniquely what are

this point this. We that do are the only can one at

contribution. we be part lot is can But we foundation the just saw said, protects for XXX that of value, see your data that that, and the the of transformation. believe material in year, add really DatAdvantage this that and we we our this we can won't digital as So definitely, with a company with be Cloud. believe that is business, But we a big what we can

Hamza Fodderwala

net quite is think new in strongly Got as we we and the relative a horse about how for ARR, Not And of to Guy. QX. ARR question, people it. to flattish. the one ARR a was a in I'm QX at think QX quarterly look into new In the the first the should curious, on beat somewhat that additions. on basis just at QX, just ARR just it grew follow-up that dead metric generally about looking net ways ARR just QX? in seasonality additions And but half I maybe think

Guy Melamed

for under seasonality seasonality see to subscription the at and much see look you don't compare what perpetual the the used the change. to When model, we we you

the of model. the that year was is and so QX it's for expectation under quarter the that dollar So expectation always the largest subscription

it, same. So the seasonality, see as we stays

Operator

Craig-Hallum. next comes Bennett from with question Our Chad

Chad Bennett

data So introduction I and any indication the coverage -- X and Polyrize you data rebranded, it's you with or is in stores? base just it's cloud whether products guess, Kind of that data have these stores of penetration data kind your products asked cloud the the in now of coverage differently, what cloud or out your ways, split and base store penetration it's whether where different that's do terms of or, new maybe now applications new Microsoft-based non-Microsoft that, is your there opportunity -- your cloud products? have within cloud rolled with you've kind in been of or

Yakov Faitelson

we platforms with these the to the SaaS is This We is this Most activity us. a to standard think and [indiscernible], Microsoft coexist mass, connectivity, of that huge just response detection SaaS protect critical with privacy to you for a need much We moving I always as applications Polyrize of of for Everything a be critical cloud of we and security, protection, opportunity XXX beauty one with lot strengths Cloud acquisition the others the believe massive coexist lot is the compliance [indiscernible] all is standard opportunity them. in with that that data the get them. massive. And and the becoming DA with once which them said forward. base on cloud. SaaS applications. before, this protect And are in see and then reach more and API and we threat there collaboration, of and

Operator

is FBN next Shebly from with Seyrafi Securities. Our question

Shebly Seyrafi

you Did expectations? beat Can the how it you that And it currently? October month can behind us, talk went? just pipeline now the about is strength of your of about your talk

Guy Melamed

when look for good since QX we think guidance is against guidance I QX. think before, XXXX, we it at to a the as Well, outstanding pipeline, indication we is of highest we provided see the the guidance and said that XXXX. QX, an I provided it's how about QX

guidance at the look indication the we're where the guiding of and you So way. of the kind I of we're in still same kind when end out into going we of think putting responsible there are year,

throughout have. customers our new to existing acquire year, sell the I about feel as feel the about QX to and we ability continue well. intend We opportunity So that we customers. our that done to in and think do we've we And good that good to

Operator

Shaul and question next with Cowen Eyal is from Our Company.

Shaul Eyal

has constraints, if minds right any investors' quarterly seeing on guide. commentary, color chain supply results greatly? at end as appear your on Congrats or the none you're this Yaki, your on on when looking and But been Guy it topic, would now also any which gross margins.

Yakov Faitelson

us. to not it. about have it's point, anything for At this We don't say relevant

Operator

with comes Our Ruykhaver Jonathan from question next Baird.

Jonathan Ruykhaver

looking to to it's just use if into malware, effective companies for and driven security a you we you at so that understand trying how business? not I about behavior, And going see how focused So because But case. material automation. only I'm just area file see companies response a is about mostly detection, remediation. by could great just but on strategically, threat it's that And the systems. number you're of user more moving activity overall then forward, the around wondering talk detection get sense faster

So just look you what a from and you're over time? to development at capabilities area maybe product standpoint how more that doing curious kind add of

Yakov Faitelson

have that the looking the capabilities -- we are looking data are at we the really is that way we strong from And very world outside. adding. constantly Yes,

the and of data. at and protect they're and then order trying -- looking are everybody are So to efforts network, in endpoint to all the these

the data We are from itself. coming

data, user and from the And the accurate is organization if -- accounts, really there, in -- -- to data, well. to specification reliable this not to are which the that generate VIP detection extremely generate is response, data the only we data damaging where [indiscernible] [indiscernible] profiles is you we users, [indiscernible]. in you data building the from and really have the itself. we most of is any stream data itself, accessing and deviation and that of problem. that, which threat we can are of almost is it organization the understand are attack store service We alerts, And regular can the and very works you the where where and to there, with analyze, the infrastructure have very, users, closest access and are classifying able well profiles sitting And part in very this there

Operator

with Smith Berenberg Andrew from Markets. comes question Capital next Our

Andrew Smith

from a competition Just question on me.

more that securing XXX% I cloud in data not stores expect Cloud, potentially into you move cloud. to you do understand from are DatAdvantage CASB organizations with As run the products? into competition likely

and the the an having cloud important is data ability for on-prem you? cover So both advantage holistically to in

Yakov Faitelson

just definitely other advantage, focus is big data. hybrid the The Yes. is the advantage but on a

access critical CASB not there a you the when visualize and with and can just offer. sense So different completely the competition abnormal behavior are and mentally and here generates just because They be large not to confusion. of who set these is really data take just want [indiscernible]

you just customer product we visual install the just once So it's the risk, scale risk, we remediate the at completely and just different a classify that understands immediately the it's the very sell, show visually, data offering. a

is same our just -- we of we that or Cloud offering we so DatAdvantage with So confusion see competition with enterprise see [indiscernible]. that the amount the DatAdvantage far

Operator

is Joshua question from next Wolfe with Our Tilton Research.

Joshua Tilton

QX to seasonality provide about call unusual from from business, quarter, impact anything COVID us last us think maybe year's biggest subscription can last Given out? are there any guardrails revenue the normal QX to year's to help aside the you

Guy Melamed

about side, pre-pandemic slightly itself when feel as but into revenue the higher below built travel, going higher we -- into think kind slightly quarter. indication consideration guidance, and perspective, levels. we travel, for I guidance the expense how we and Well, a took the indicating of the From I'm talking speaks still

was If And you because hit guidance providing we And think an then was QX outstanding quarter. that. against QX, better about a the numbers. in quarter. and just outstanding had we're was strong obviously of than that -- a COVID even better hiccup when XXXX, QX kind we had then QX

So of on the and year, end we entering the execute can that how we kind we good feel cylinders. of feel about we're all

Operator

further any There at floor Arestia questions turn back would for time. over this are comments. to James to the no I like closing

James Arestia

you, for we to don't joining thank quarter. forward good and to everyone, And your can a out So speaking night. be hesitate tonight. we for helpful. Have you Please reach if with look interest this

Operator

conference. today's concludes This

at for lines your you your Have wonderful time. Thank may disconnect a You participation. evening. this

Varonis Systems (VRNS) 2 Nov 212021 Q3 Earnings call transcript