SUMO - Earnings call transcript Q3 2022

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Operator

Greetings. Welcome to the Sumo Logic Third Quarter Fiscal 2022 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the to turn team. Sumo now will conference the over Logic I

Unidentified Company Representative

you. to conference XXXX welcome afternoon. call. Logic’s Thank And fiscal Sumo Good third quarter earnings

Joining and Chief Sayar, Officer. are Jennifer me Vice Accounting call CEO; McCord, Finance and and Ramin of President on the President today

by today format followed prepared session. Ramin and remarks Our question-and-answer by include Jennifer, will a

results of expected in included go-to-market statements. guidance, of and our be are regarding factors Logic the in forward-looking and risks this is XX-Q efforts and no business and except A with contained on XX-Q will discussion including results statements report may risk statements, investments, our future our our overall contain will forward-looking our Actual and pandemic, our regarding These uncertainties. risk filings related including strategy not discussions Form the Securities Some factors financial expectations filed and our COVID-XX to market comment to does business, uncertainties assumes filed or to of as recent and quarterly intend Commission, statements that the update obligation by impact the platform future statements this differ call. made will law. subsequent and on prospects. be questions to Form our and opportunity materially expected on forward-looking the most required expectations the with Sumo our Exchange call, that responses and our risks performance to your solutions, to of related subject our from and

in results found investor.sumologic.com. Investor and Form with including not with be isolation a a non-GAAP measures. financial substitute will our GAAP for website filed today which GAAP release, at measures furnished results, X-K addition Relations Information from our SEC on should our results. may in our our financial discussion in our regarding earnings was to Our non-GAAP considered as be or non-GAAP non-GAAP and to today financial These of historical reconciliation the include

a corresponding of non-GAAP our guidance, Relations in Ramin. over turn is forward-looking on the detail the let certain not guidance to posted that, financial call With release me measure Investor For our earnings reconciliation to the website. available as in discussed GAAP

Ramin Sayar

everyone, today our quarter Thanks, earnings third for us joining on call.

in pleased laid are our quarter, of guided we strong earlier with and the of revenue exceeded high and improving the were saw that the out We end this theaters. results our as underpinned results well We These as which our all that in saw year-over-year. we enterprise by mid-market growth North XX% metrics. performance the segments delivered of year contribution America, across this strength good international

across was continue continued improving In addition, the leverage portfolio, performance global by this many which of MSSPs. channel of adoption Overall, partners, and driven and our resellers to and new namely our enhancements earlier see released strong year. performance features observability and growth customer our we contribution security our and

of fact, seen our strong our continue to use cases. platform the multiple in this we new and usage quarter both quarters, business new as we’ve increase best In and customers for existing saw expansion

ended a to $XX XXXK our coming than XX%. in year-over-year million more financial with customers, Turning saw this performance with above the This strong high range. highlights, end quarter, total revenue increase in guidance we topline of We ARR. XXX of represents quarter of with the

by XX% more grew count year-over-year. than customer total our Additionally,

both and business, traces of of see for logs, of we mix new suite metrics the opportunities. strong full at Looking adoption cross-sell and observability stack to our consisting continue

which which Cloud the In of to analytics target which our contributed an well in SIEM IoT to to given increasingly customers driven offerings harder driven as and package, in new addition, it’s and vertical. momentum rise and we creating transform and of was new security of the the architectures, our in amounts them security devices, transformation logo security cross-sell giving geography rise This in This XX% exponential The being is by also more being security, various and previous Due data unprecedent target also enterprise year. of simplicity who larger machine business serve and the new application value smaller across the modernization, was cloud digital who is and by as and every quarters, operations. mountains by both identify, with to new the threats, modernize each sophisticated connected growing, offerings, from data rapidly more need creates quarter. and use. infrastructure SOAR leading Whereas increase have opportunities, and over cloud speed market of customers migration ease types in to noise application created. as become strong

are Continuous three As such, solve these practices. all of to improve these trying their does and mature architectures our customers. many This to challenges to DevSecOps platform applicable cloud application we the believe answer posture help Platform who organizations of that cloud-native our Intelligence things to and/or the in and security is our evolve is Therefore, sizes, challenges. for

application ensure First, reliability.

exciting cloud optimize infrastructure. protect where customers third, to transformation. I’d wins able from leverage digital to address And and and secure now multi-cloud migration that, platform against like to of some and opportunities With share threats. of were this the manage modern Second, security our our quarter,

homegrown open facing North the new and of both and had well a metric log amount and solution troubleshooting. and us their as which cross-sell years for are real a largest collections. now This observability stack thereby and customer initially and required we with DevOps their modernized several large gain of application with based existing They seven in application. customer visibility This various massive started of instrumentation, the leading figure a architecture full time, full customer for and reliability ensuring scale application, using the to newly stack analytics customer strategic new source performance, services on scale time required a collection new tool, legacy leverage Sumo. ago is This better micro expanded quarter, as America. usage replaced monitoring deal enterprise This facing our over observability

team sales landed infrastructure six IPO. applications. were critical capabilities company figure and a preparing fast deal mid-market selected strategy secure growing with order Sumo’s in software their Our mission DevSecOps for and high to a

Now our because we out and box events well monitoring the their of are security platform. controls. for use, actionable AWS our XX,XXX providing differentiated they our over Sumo within ease as security of insights functionality, as platforms, and chose accounts Ultimately, of

operational also continued scale. to as a lowering replace well because However, as grow to source simplify Sumo, solution, homegrown were complicated costs able open they they and replace as model, thereby selected their complex we a and licensing

logo new quarter who’s to figure six company Another focused. was taking this steps digitally win a a land more become with

customer they’re also facing micro their As they continued leveraging building services. apps, more out

of their well the infrastructure saw Because as and such, security. we application clear reliability, engineering DevSecOps As became of and importance security CISOs both the choice. as ensure capabilities, working teams to Sumo’s together

cloud-native We’re customer cross-sell also financial seeing XX,XXX as address engineering, observability more benefits customers six firm single we this security new of full increasingly single APAC, is operations initially last and solution why see quarter observability now platform and our a observability, industry of recognize do with using they’re for had than in our we but the recognition challenges case, In modern for a and DevSecOps expand services with our the for employees. only a We and landed platform. capabilities. to for mobile different which a required Sumo use continue they of the banking international both selected they security analytics application Not figure our security. using They differentiation beyond security and customers stack a receive the teams geography. Sumo, to

this quarter SOARs. the in leader fact, Radar our named Report was In for Cloud SOAR GigaOm

was Amazon helping Web embark a at recognized digital on performance Services commitment Partner In addition, Reinvent of customers modern drive Logic’s XXXX cloud ISV as Year week. AWS migration as Global This innovation and application Sumo their Sumo to recent the by transformation, Logic last and initiatives. they award selected

our this of both some that product Moving the for our Conference and and of User to made XXXX extend capabilities Annual Illuminate talking about I observability on, platform event at the Global security. announcements were like

features, a Operators enhancements open through OpenShift well For integrations, observability, monitoring to announced alert for capabilities support and OpenTelemetry sources it improvements source. real making their easier These Hat run to Hat enhancements distro, additional data as well with response new new we as Red to our open troubleshooting customers include for Red workloads AWS new on the even as source Marketplace. AWS, time as

Plus, In Sensu all announced we which further platform introduced to of allows for Go of monitoring-as-code and insights for security. Go and Sensu the Sensu reliability enhances troubleshooting, improved data capabilities our addition, types real-time and Go integration

with challenge Moving our to enterprise. security This continues a to complexity clear on that today’s modern suite. be

our box expanded detection proud and as further and our alert on vision team detection new These that such, the XDR as I’m security product that Therefore, EDR out tools everything customer’s their we response, need Monitoring of threat a solution workload solutions the they XDR. our and Sumo cloud-native improve Analytics protection, accomplished, security has with technologies openness integrates that which and ability leverage to dress goes of especially that Logic like Sumo open As solution. to that XDR, help updated front. well is Cloud modern enhancements and expanding innovation Security with and insights response announced for existing applications.

Soar, our we share This log capture market. confidence a our as meaningful of have well suite. observability been analytics, that my believe technology strategy right growing underscores the adoption stack differentiated and leading as with SIEM I fact, fast In never product Cloud and has portfolio this the stronger cloud to growing full

we rigor clear growth real in additional business. drive need of that to it’s focus operational levels a acceleration to However, the me of and

efforts focus experience, that enhancing a sure business. to to and the result, appropriate besides resources coverage in a our go-to-market As investments, we’re innovation place product also make on scale we have our continued

of we of and invest her fact, leadership Operations. Lynne capture in In as Under large with a with large record we extensive are Doherty us. to to front multiple experience, at Worldwide market continuing President, delighted growing brings our in her tech announced sales Lynn opportunity recently and scaling that operations leadership, go-to-market companies. the track go-to-market I’m Field strategy

Given additional helping go-to-market and global that partner Sumo I’m and share by her ecosystem, market scale experience, gain its help will our us leg confident next expansion strengthen for growth. motion, she of our focusing

executive company’s implement our our Officer In Financial the improvements allow continue happy will has addition rigor partnering Delphix, in Lynn more and the leader. primary investments finance Chief Chief ArcSight, for strategy XX platform, making is evolution and come The as in joining two high provide experience will my the XX, VP plans. our leadership to excited to our to operations years. and QX on the and because opportunity. leading with have results. to an details Stewart. that on delighted observability improve competes look joining Logic Accounting large was for on results growth companies Jennifer team Grierson In CFO. financial addition, private first more it with in as go-to-market our QX. quarter. leader and I’m speed pleasure with Stewart be Monday, it we a summary, is that, that excellent in operational Finance This Officer forward operational new of Previously, public to security He in particularly McCord, where the and XXXX. to I’m been yielding I’m outlook our CFO December operational we’ve now to SIEM DevOps as Stewart Stewart spent I With announce order as are Stewart in our eight Sumo scale and been market security more Logic software, observability from of capture and years he Sumo of them quickly of and and up served generation markets than

Jennifer McCord

voice Ramin, it everyone us back. hasn’t thanks lost over it and the my Thanks, on joining weekend Please and call. the quite I’ve come excuse for today.

I’d detail then into each Turning more highlights on and brief for summary quarter, go the the start a results of topic. to of like quarter the into financial with the

for of mid-market, growth mentioned, First, we’ve the we revenue capabilities strength platform. of and seen channel. across best strong expansion This with in quarters, as differentiated adoption saw in robust performance multiple XX%. the adoption seen cases quarter new We by new over continued international and business use driven Ramin saw year-over-year and was enterprise, a in multiple

in counts. we Next, logo saw strong and and margin And RPO acquisitions billings, made customer improving including investments we finally, saw performance, across quarter. activity planned the

to our customer continue fastest was customer have total We growth seen last seven quarters. over count in grew strong year-over-year, growth the we’ve XX% the as which

and customers XXX It’s customer or XX% a increase and in we’ve year-over-year quarter We fastest industries various revenue growth annualized We with growth. continue to ended six the revenue This this more than last of across recurring seen with see in quarters. sizes. outpaced opportunities ARR. the was XXXK

retention points remained few As quarter. expected, net our this percentage a dollar based below XXX%

As a reminder, a is four quarter based average. dollar retention our net

in However, retention base. we customer with total in-quarter saw an noticeable our the improvement across strength

do medium expect the increase retention. we over to modest While this long-term, in dollar net expected variability we in metric, based

the fluctuate fundamentals trailing of XX-month customers. due our billings Turning the base of our XX% capabilities calculated quarter-to-quarter, from customer Therefore, XX-month totaled reflects business. period timing platform. a trailing we period period, to to billings year-over-year billings renewals XX-month billings, million, as leverage over calculated for look of Recall believe duration that a our we can for the as at up this metric continues best the measurement our and $XXX.X larger

obligation customers case performance flexible or due our differentiated long-term platform and remaining larger commitments continuing we’re our RPO, licensing to and make see multi-use new to to model. Moving

year-over-year, quarters transformation. and increased XX% continued contracts, to duration size migration, opportunities cloud of and This the driven RPO and expansion security modernization the by application due around new

average be years approximately continues to Our in land length. two

as renewal. drive XX% upgrades continue year-over-year, investments our expansion early to addition, RPO in the current In and increase portfolio

the review in statement income more detail. I’ll Now

are As and in on million, included website. non-GAAP third of to all earnings increase reminder to revenue is our XX% unless and delivered release quarter, the metrics a otherwise $XX noted, up posted A compelling non-GAAP. reconciliation measures in performance year-over-year. total We GAAP our

break year-over-year. out customer largest business. customer the seasonality revenue from quarter that is of million, we our Recall XX% was Third that rest largest in our because historically different variability of $XX.X up our excluding

their business activity with However, more our making aligned recently has more relevant. become overall segmentation the less

have by gross saw the we year new margins, fully to margin, driven in quarter, in ramp to our features ago a optimized decline gross was year-over-year on faster been the XX% cloud-based not The that third period. XX% compared on Moving platform. in

of quarters improves gross the However, quarters benefits that optimization the current compared we in the prior XX%. of can see to margin, which margin

capabilities can releases evolve As gross by and new products, our be to continue on we our of timing based the provide margin these in and customers. and platform some adoption variation there

marketing compared was $XX.X year to revenue, sales or on operating in expense expenses, of Moving period. XX% and ago the million to XX% revenue of

the invest outperformance existing period. above and Sensu and and expense of enhancements we’re in R&D their Given $XX.X margin quarter. associated expansion by platform both costs company. was customers, market range, greenfield the going to our points market are million XX% significant public expense continuing coverage, large XX% and go-to-market with total, in and was employees Research development our opportunity for million functions. as capacity year high to was new increased compared $XX.X product revenue compared to the of revenue, in focus driven XX% or of in by of period. includes of in XX% as of as revenue X% guidance or our and our a the year on of our ago operating XX% increase or revenue a operating investments, The administrative percent driven In as end innovation acquisition negative including majority of the continued revenue expense was General ago G&A DFLabs revenue, forward.

on was We approximately average share continue in go-to-market continued quarter capabilities. with platform outperformance weighted the pleased diluted diluted the XXX.X Net $X.XX margin after based be enhancements, shares or loss per million to and acquisitions $XX.X outstanding. million investments our in

million ago and negative with negative balance XX% of period. in in or the securities. and our revenue, was flow sheet cash compared to ended the Turning to quarter the Free XX% year we in negative marketable cash million cash $XXX.X period flow, $XX.X

full evolve as guidance, remain our to reported improve leadership. year QX for under guidance new the capabilities go-to-market XXXX, we’re about to turning optimistic fiscal continue year increasing We future reflect we results. Now our full to our and

of Non-GAAP XX%, a outstanding. loss share approximately operating to million average loss our million million growth $XXX.X growth of weighted $X.XX year-over-year. representing We Revenue expect to of total million, and excluding rate $XX XX% per rate of representing non-GAAP revenue of customer loss XX% $XXX.X to a million million shares XXX.X million, $XXX.X year-over-year. an $X.XX of $XX.X to largest or operating on $XXX.X of

XXX a QX, we our outperformance, margin questions. and give expand total in us to the of $XX.X excited about results XX% opportunity saw XX% and XX%, investments growth We while activity $X.XX efforts platform us. the multi-cloud With year-over-year. we’ve to the and to is durable average improve make of as of rate by continue growth, we continuing $XX.X to outstanding. million or an XX% $XX.X to that, to and operating market delivering and has share quarter represents threats. to These manage of of differentiated opportunity revenue are of our confidence loss will and $XX.X results Operator? largest security customer continued delivered protect against investments shares we million any of year-over-year, on evidenced of in RPO. our and as growth helped capture remain operating making growth been non-GAAP happy weighted Ramin revenue I ensure a secure to counts, that billings go-to-market XX% application and modern continuous $XX.X logo expect loss excluding front In for customers growing customer or year-over-year, capabilities. platform, take our continuing a revenue our rate For are intelligence optimize infrastructure and reliability, of which with it $XX.X million. revenue million million XX% XX% approximately loss compelling summary, to was growth to We This million Non-GAAP in million to strong per your

Operator

Markets. with is question RBC Matt proceed from Please your Capital first question. Our Instructions] [Operator with Hedberg

Matt Roswell

for This is Roswell you. Matt. Matt Thank Great. actually

and congratulations the for sales elongated cleaned the with well up. the if Doherty, maybe quarter another of to the got to North cycles they First hire, we issues Sumo, see from could Stewart questions as was the Lynne close hire to as some since switching on focus just that on then really rates great it off, last American and

kind of is experience or quarter? to her First, that from then any that outlook? go-to-market on early maybe And any the strategic change on you make you from past saw what changes the might feel she

Ramin Sayar

Matt. Thanks, is Ramin. Great. This

a have quarter. with delayed. in few that those performance time last of technically all, of to America bit saw were little deals to a in not few In contributed and delighted cross-sells around making from -- and North by to, also had and portfolio QX quarter, we’re driven speak, want us. won We importantly, particular, transactions Lynn strong talked contribution the QX saw did quite join commercials overall so about. because refer rebound we the if First we that mid-market the respect to business, had the trend Stewart that question we period. We to we’ve strong strong and upsells investments the more some But our with to and we you see been

of changes, to refine we will in and of the Stewart discipline quarters we’ve growth. for future continue in been terms to and that experience addition and part the now rigor, durable help has operational simplify enhance second an bring for continuing your this and of scale can invest been question and evolution of that as us so Lynn go-to-market The our focus

Matt Roswell

question, driver a for security it see needs strong through helpful. Are for you. like security. as I make Ramin, as then but transformations? of that, of become stage strength base? people to digital which transformation it egg, these the that’s I second like the it it also you’re kind seeing chicken for seeing people transformation, obviously, comes starting overall DevSecOps seems been maybe always of an kind quarter my transformation, unified on faster they’re the more from sides But to There’s you’re these the collaborative. changes mean, going in you customer one, conversations another platform is the to And understand sets more really traction great and of as to philosophy digital your know first. was super about growth That’s both security, trying

Ramin Sayar

Yeah. Good question.

digital markets. whether enterprise, different practitioners selling those, for transformation the They will This are in security of these Sometimes to or motions. is that These that and it’s markets. something distinct different these right? hard to more has is of include selling say threat doing years than modernization driving distinct risk Sumo some the large But are and been particularly XX buyers. separate delineate I

DevOps collaborate think what better today. able choice pointing platform a need is for you’re with that be logical and a is Sumo I cloud-native that single and to have desire ability teams each provides out and the other to with operations Logic security to

Matt Roswell

Thank Perfect. you.

Operator

next with Cowen Our question with from Please proceed is question. Derrick your Co. Wood and

Unidentified Analyst

few to below there quarter. this? Andrew leverage It’s on on should you that Thanks. Jennifer points back net strong feeling about do How are Great. for Congrats it getting the get XXX? over rev the you Derrick. you Oh! and to timeframe think XXX. retention, on What have what we about mentioned, is over

Jennifer McCord

Andrew. which my below apologize Again, quarter, I this net XXX for Hi, voice. Yeah. come retention expected. did based we Dollar in

As can reminder, which that the quarter seeing. is a we it average, improvement a are obscure four

I metrics with mentioned prepared to retention noted momentum we renewals we’re it in expansion in customers. improve our that. will we’re which incurred upgrades see as remarks, quarters the seeing base, a we’re of take to the our Gross average, normalize that This that is the due the the seeing time to for gave. with the and encouraged because my of we’ve in across you lot early four that total did quarter and portfolio, customer continues retention our increase As we one of best to product some of But had. investments

Unidentified Analyst

enough. talked growth fully ramped last And Fair reps. you Ramin, about XX% in quarter, enterprise

and going currently new the trending reps? that’s ramp how to how for is productivity check to wanted Just

Ramin Sayar

I we the labor all mean, market are I global facing think, Yeah. challenges.

of North we’ve also the North in domestically to and as in We’re America the been theaters. well internationally. enterprise, In and mid-market, adding America, invest capacity better and outside continuing getting as coverage

Unidentified Analyst

guys. Thanks, Great.

Operator

question. with with your next Morgan question from is Singh Stanley. Please proceed Sanjit Our

Sanjit Singh

a a taking bit quarter. little trajectory for growth on and I to growth. you then of want question overall just talk about the congrats that Thank solid and

XX-month came in XX%. RPO mentioned So, by Jen, your my I number trailing think year-over-year at RPO, was I think, calculations. your the you current at that, billings XX% Look

growth so a sort rates get be XX%. imply we into progress that is that converge the with or more quarter that this those growth of billings with kind as you more pandemic Does that of XXXX RPO that of is And to still of which needs coming and should seeing acceleration in revenue of the you are that that revenue square straddling that growth? out growth, sort to rates do seeing execution think kind to of to levels back be higher done the

Jennifer McCord

So with it. -- I I can can do start Ramin,

XX%. mean, So, up you commit extending as platform. they’re is their is What than seeing was current co-terming customers us with are earlier to rather yeah, and mentioned, continuing duration to we’re upgrading the contract cloud I RPO

So on that mentioned, shouldn’t to than we’ve have to reason and faster over happy some revenue. we’re see still revenue with as believe with isn’t time. that total that coming There work do the to current there’s Board. converge is both executives we a growing But that RPO

Sanjit Singh

voice start hope and Understood. you rest to I to And start better. hope to get help to feel your some

Ramin, team, the puppet Ramin, take your look possibility if at much, cross-sell analytics that that sort penetrated there’s was I’ll observability, I next are time? other like customers is frame IT you log question percentage of guess how customers the core get that you out, analytics with has like, to ops which sort product on with because strategy. obviously, the I the the my of log beyond wondering side what sort if think what you on we like you moving forward observability to security could over So, of and observability do of core how can for those penetrations adopted

Ramin Sayar

Yeah.

good Sanjit, joining to us. hear voice. So, for Thanks

we the past first think This base are both we strong not right? as only business, new to it’s and make cross-sells. foremost, the product as the best net install portfolio realize we I saw that important -- question for that in but itself new manifests also quarter, penetration, investments logos, that well contribution and So

for modernize of and the wasn’t traditional examples they scaling. their platform they Sumo customer, new cross-sells, to production, and using they rolled a as the scaling existing and it and tools one do On out DevOps their realized Kubernetes large enterprise I and highlighted where logs it to yourself

or a that’s when full and they the that’s Why stack deploy new want Kubernetes tools up bring pretty new out. scale micro the logical can’t it one services highlight to point some of a they observability. that logically I architecture they replacing handle when customers repeatable see is, that. It’s or and of just process and So expanded that extension up we we into homegrown moved scale

to So for the let now security. install do alone have to think, the of we -- that be penetrate observability of the question, early other the cross-sell have a respect and I lot we able part innings in with cross-sell to we’re to in the base to

Sanjit Singh

Appreciate it. you, Thank Understood. Ramin.

Operator

Murphy with is JPMorgan. with Our from your question proceed next question. Please Mark

Mark Murphy

very congrats. Thank Yeah. my you much. I’ll add

Ramin, that cases commented QX, to in security use related correctly. think, I you that XX% bookings heard So, of I if

operations. So experience you trending past? field in more I see had in observability in that has and especially taking I’m Lynne, believe over forward, going than with monitoring just she the security how wondering

Ramin Sayar

from experienced I mean, logos, not a see But this I by both we I security business Yeah. in leadership saw has well think, terms security. and necessarily is the market both larger And Stewart of that is about observability in opportunity front domain. in Lynn’s us. about This cross-sell. in of contribution of for new observability we new was strong in as think as contribution equally balanced QX in what the

a gates, of is, our the highlighted case new think business brand proximately, in whether third out right or the of a from I came renewal past business. and what upgrade new also we that multi-use was

well we’ve highlighted think see we of and So shown to that in will as going be a QX. as forward, that I as QX, mix kind continue will

Mark Murphy

Okay.

somewhere remaining around So good forward. XX%

would the you the fiscal next that you that increase quota what course, commented -- of sales to look you year? for for in targeting then carrying upcoming year, that go-to-market, headcount fiscal be the Can good that’s could For see. approximate well as are investing like

Ramin Sayar

and remember, first you a to into to days job, the good she’s so, very in right, coming the Mark, got business XX days, up speed. far understanding XX and the doing so job

So that prepared us coupled year. for to ahead with work of for We Stewart starting got week. next some next that get

So importantly, to plans approximate, Board, strategy them this a is of a new bring accelerate I together, our feel on. forward. on we at We really leaders more to get say, that place point, commitment and huge in there’s stuff can’t need and going market to our put for us. continuation I growth, this what will and in, develop these already delivered and we’ve

Mark Murphy

Ramin, Okay. look if you the credits one, One move pricing made on the that to cloud you flex model. back final

it I months about was think ago. XX

Ramin Sayar

Yeah.

Mark Murphy

DPM, you’ve base? of could the to you’ve an is like, is completely how based just driven per you there users resonated that helping well it’s So users. got with comments there, think be on active now the customer? has a Is increase any allowing that customer delayed unlimited to it got number reaction Any has in on that that -- you or

Ramin Sayar

complements cloud. with continued licensing economic that do model the features, of the for appropriate a is commented a Yeah. Great that we’re of data that day, because the volume analytics, on mean, every on model lot which question. And we’ve to but analytics new terms before of also the exabyte. an mirrors Well, tiered I desire innovation exceeding has that think I growth analyzing of and in more

Now ARR duration on And when second from months actually than part XX they a the an of you’ll is new ARR is model. -- our greater of more XX% that credits contract to lot of the see upgrade. approximately perspective, question, or your

the features. different us new supersize flex and right with They credits like strong time that allows and cloud expand them they that to new licensing size, the model So like occasion gives and features. on

we product the we expect the for in So lights have right know right capabilities, and right benefit DevSecOps -- customers this area. the the strategy

Mark Murphy

much. very you Thank

Operator

proceed Mielczarek William question. Our next question is from Blair. Kamil with Please your from

Kamil Mielczarek

today the good look you quarter. see more partner MSP can making started at progress Thanks to channel? on congrats how partner the make longer on pre-COVID, to ecosystem, these can investments contributions term, you to investments? some this detail and good making when as think the -- of It’s further do especially how you you provide compare leverage made you And contributions the you about when you’re

Ramin Sayar

voice. Sure. Kamil, you’re well. to your hear good Hope

That’s which about think, customers data done talk when XDR, with I the example, strong and important from traction delineate and to an as effort open access The we So, of they around and is space ISV put make others. flexibility we’ve continue in why the integrations and an to observability or provide with monitoring a to we sources. we Atlassian security ecosystem ecosystem, to efforts to partners. perspective efforts the the DevOps lot get need choice

we their not continue themselves, security, observability as it where to that even can Now, that cases, look invest address on a of tools retention the themselves with, globally. opportunity, they be Sumo -- to the go-to-market that and easily lot to together need cobbling business, continues and massive they’ve tried MSPs So stickiness side, as they to cases grow been how on right? sell their transform through build in flip at with drive you we continue to but we’ll and or only use a to

we and Third, and as area and tier markets, new model, it with think international. to fed, where new pertains we to markets distributors That’s an coverage, two particularly better international standard distribution VARs. being can the get and LatAm respect

out focus to we will us forward and going Lynn’s helpful be continue experience be a will year. those for there next as continue to us for So scale

Now for QX…

Kamil Mielczarek

great. Yeah. That’s

Ramin Sayar

approximately our For to question, thing leave QX I came than business then of our with… will since business, the more your to you Last channel. XX%

Kamil Mielczarek

And… Okay.

Ramin Sayar

Yeah. Go ahead.

Kamil Mielczarek

Yeah.

Ramin Sayar

I’ll thing we recognition because Year Award the them of ecosystem VARs help last the been of and is, you last transform of of ISV the also Kamil, awarded and the giving Global that, that by in we’ve Sorry. week, were AWS, business. Partner leave their to with ISVs

So we’re proud pretty that. of

Kamil Mielczarek

that trending? the help If last seeing. their the you year loaded -- for great can of Yeah. changes costs in Ramin, that’s see past maybe features thanks the one better around so just to really been the follow competition, It’s actually that And it’s have really you Are over two in your most quickly, and enterprise’s being or data I could that had color, amount the pricing the seeing their generally and in win two of conversations quickly competition changed us seen rates on the limit how update platforms or onto some competitors all up help and thorough. customers introduced award the any quarters? control are on we’ve

Ramin Sayar

Well, when tiered we with I’ll our ingest That’s usage move around to model. respect game. and and the provided the or has credit say, Sumo existence. We’ve utilization based more welcome to been when flexibility we licensing this changes. that’s to the doing an since for introduce average always

focus been usage real for ability us to the -- shocked. billed core that’s their to In time. ability and versus it and credit model, long new customers I the in can a time their and see be time So optimize their strategy real base think rears for a

putting they too So, things are unfortunately, oftentimes is throttle are bill -- a ingest get that surprised that who the in are customers lot too of some afterwards. because and to the vendors shock still

the have So choice. And in They want They transparency. want provided. want what customers has Sumo what is we always seen that’s marketplace flexibility.

our we that’s that we’ll think to and been benefit customers underscore I forward. going see So something for continue

As versus quarters. in of speaking broadly marketplace, last competitive it previous the more change terms in dynamics quarter have to nothing pertains

Kamil Mielczarek

and the That’s good to the get to see hear pricing of new attraction I model.

taking Thanks congrats for again. question. So my

Operator

your with Our Blair next Rosenblatt from question is Please proceed question. Abernethy Securities. with

Blair Abernethy

you particular, customer two an feedback? wonder in but really had could if and Sensu early, Plus, Thanks very guys. give Go you it’s know just quarter just nice any us Go on things. I update Ramin, early wondering just quick if much I

Ramin Sayar

the as conference the backend, troubleshooting the for had was really that think and ability last of some a addition -- alerting we data to building. Go Sensu analysis, and for of context that’s ability that, source that customers the lot to data and of to The leverage that open the some to I connect what been been collection able provides the source quite Plus result pipeline for our time during to -- has that quarter, There quite around they’ve collection put open Sensu it’s so time. dashboarding important ingestion, a and announced efforts pipeline some be source Sumo been community committed open doing so Sure. their with speak, to

the second that’s point. So

to their terms still existing been customers in in with and closed to two being and and Sensu it’s short of vision the part come point Third product their opportunities, since the of Go feedback, terms secondly, net ecosystem together the Plus. new the we’ve it’s those early reinforce time very the positive strategy integration. of in acquisition release and very of But how Sumo, commitment

Blair Abernethy

in mean, did Okay. and the terms a side, Great. Thank quick new customer the these customer see -- go-to-market -- lands, the you. deal what characterize sizes just as? what what greenfield And new in customers? terms the on of customers are average new can And follow some coming quarter in of you of, as up or sort I mostly of for your still in you most what

Ramin Sayar

cross-sells, enterprise going However, ASP observability. from a versus to and you’re Well, as new business come highlighted security you I to our a Naturally, with as multi-use lands some I the segment customers see of we an when from of quarter. in right? very in the mentioned stack from before, strong moving we security, our full on performance the XX% in strong saw upsells case one customers saw transaction about higher observability, have

still But that, year. with opportunities of So prevail that market greenfield up much breed this also ASP capture to we’ve very this improvements drove that have I market business still we think quarter. released go opportunity a have and and great last is brought a to market, best the observability

Blair Abernethy

Great. Thank you.

Operator

question. Powell proceed with last Our with is BTIG. Gray Please question your from

Gray Powell

answered. one All my and Great. Yeah. working asked in. Thanks have have A But left. for right. of been lot questions I did

often like, of an security headcount particularly themes and don’t response, am that company, bigger we managed the it’s curious, market the need our one they on detection actually the that end side. work have security about typical in on because hear just mainly on they and just is I space your So in the

have can MDR you maybe exposure kind that So theme providers? how about play and talk into you kind what just to of you of

Ramin Sayar

Great.

their anything, MSPs providers So, the the to been us. I are of lot a becoming strong that’s and MDR EDR/MDR if offering, A mean, MSSPs I a they go-to-market for are providers partner and us. for think, need evolve

portfolio. that and/or response SOAR opportunities compliance. in is, a to from and stepping security SIEM why endpoint, of as manager second get to we holistic infrastructure that move element have stone to to offering That’s want to integration that a broader an of their view the customers offerings did right, and we as The the that to cloud Cloud analytics,

directly for for it’s also expansion So customers. the opportunity an not but partners, only

more and So been firewall, endpoints, I what that’s time a to great we’ve the do it’s and and help think the is ecosystem trying how network standardize collected evolve. on to

Gray Powell

much. Thank Great. Okay. very you

Operator

you reached time. have the Thank session. question-and-answer today’s participation. may of This at disconnect We and end this lines the your for concludes conference you

Sumo Logic (SUMO) 7 Dec 212022 Q3 Earnings call transcript