SUMO - Earnings call transcript Q1 2023

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ConferenceCall Participants

Kamil Mielczarek - William Blair Matt Swanson - RBC Capital Markets Derrick Wood - Cowen & Company Sterling Auty - JPMorgan Sanjit Singh Morgan Stanley Janet Zhang - BTIG

Operator

Greetings and welcome to the Sumo Logic First Quarter Fiscal 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to host pleasure of Liberator, my Relations. Investor now introduce Bryan your Director It's Bryan. you, Thank

begin. may You

Bryan Liberator

Thank you. And XXXX Good afternoon. earnings quarter Logic's conference Fiscal first call. welcome to Sumo

President Financial Officer. the are call Joining and me Chief Ramin on Sayar, Grierson, Stewart and today CEO;

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

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

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

the of on financial Ramin. available corresponding earnings turn as measure For With GAAP certain in Relations detail to release is posted to call Investor the the non-GAAP let me guidance over our that, a forward-looking reconciliation now on our website. guidance, discussed

Ramin Sayar

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

with growth. guided again We are metrics. XX% pleased year start all growth our a of revenue to strong we our QX, we the fiscal XX% In year-over-year ARR as and high-end exceeded once delivered

expansion customers XXXk. serve, new also we feel We the delivered and teams growth the In priority. cycles. settled earliest initiatives given traction with the a being into remain billings pursuit modernization across roles and We greater migration cloud markets than and high shorter security teams the with have strong sales transformation, sales the digital expansion

quarter. SaaS platform contribution and this our helps broader their As customer of journey, customers analytics we needs address native initiatives embark desk challenges reliable on for our base the the requirements leading and observability key drivers These across for were and which secured their both SecOps security. ultimately cloud strength saw cloud and helps applications,

of highlights, of range. came million financial high-end revenue total guidance above to the Turning XX.X our in

We customers our continue with year-over-year of customer platform. usage We a customers of the to representing adoption their base in see and wins quarter continue to XXXk with ARR, increase XXX our more increase across ended largest than our with XX%.

both our stated, secure. digital world experiences and to previously vision reliable As make we the is

helps platform things. customers Our uniquely cloud native three do

application First, ensure reliability.

cloud against protect third and insights secure gain and infrastructure. threats, Second, security modern into

suite. scale platform, for leading a both Sumo, observability customers our utilizing addition of are cloud to selecting log the through increasingly security Sumo In analytics breadth and

infrastructure, customers and helps software issues cycle times. specifically, quality monitor our troubleshoot application diagnose cloud more release improve and and rapidly So suite observability and

and infrastructure compliance, regulatory and security and In helps threat our and lastly, protection, security detection with cloud and industry audit automation suite monitoring, orchestration. and workload customers addition, security investigation application

part platform centric often like our companies Now, disrupting key examples traditional are industries technology who new to of are customers the complex of the tech provide to with how using using of some I'd wins pushing limits our thinking, wins are architectures Many and for do these so. and as highlight quarter. new

are We digitally Logic proud Sumo these is organizations. being four by selected of disruptive that leading types

Their transaction I'll open hypergrowth deal logo Previously, they lost dollar region failed, online cases, to highlight they the The ensure media new and to XX upwards their the day. use of first do-it-yourself modern of let are one alone require, company handling reliability used with million to users by being which which was were the to over just volumes understand is cloud. data were APAC when multimillion a digital in services capable moving XXX solution, is the applications which of using revenue. source they the leading a terabytes the wasn't able struggling or

but is running, app reliable, is used retention. only to not revenue solution customer being and full keep our observability leading Now, to suite also experience improve which stack their

teams continuing effectively platform, helped cloud teams given our of that infrastructure platform our workloads valuation six-figure retail Next, was also recognize as physical digital to observability they And Greenfield with logo was see migrate technical applications deal And company because we're to strive security a digital. land the both their new more and and the was in many using shift both locations the grow our application of and as This adoption mandated across costs, security and had model. for team. their they modernize the protect by cloud ecommerce reliable, Sumo more to able their enable cloud. manage as ensure order their Their We're customers flexible to selected cases. a to additional decision led for benefits and for expand the them we CIO they they that them space U.S. to lastly, strategically to a their development use credit licensing well-known online become

subsidiary financial SIM and services XXX struggling expanded many case talent. our retain fortune attract For example, customer of top to firm. security. a we to are companies, and started Like a for use [indiscernible] security now This log a with years have Cloud have ago with a large they several for U.S. six-figure analytics observability

result, required fatigue, the SIM security efforts, organizations response in their such such process This a next technology team current a beginning great threats. struggle people, some because but alert are a As and correlation automating from could they their the transformation generation suffering by security of alleviate that representation that was many of pressure to is challenges.

million some customers of a they use importantly, with our business strategic their that Additionally, commitment, expand our upgrades as cases, increase and platform. and couple of adoption dollar increase continue with largest us. of customers existing our their the partnership We to more technology had

wins security they dollar company way travel analyze of analytics a disrupting in One as came from per incident people XXs of and that They solution terabytes recently APAC. selected J the for those is needed log our day. had million additional a data to of

identified quickly unable threats team gaining ensuring they the remediate, solution immediately that remain of confidential security the were to and data secure. trust Our potential ultimately, their customers CIO,

be partners, MSSP to we've partners. mention with MSSP continued an of to to see important channel our that traction like strategy. in our part our and strong continued particular, I'd has Lastly,

on them vendor focused partner the becoming with. for to easiest We are

count. all not as at service a are third fast actionable Suma our MSSP of them frequency included customers to Looking scalable, a whole, total and while outsource are continuing security flexible create also of customer our the as of class sophisticated attacks to service parties, experts. economics. with insights, they increasingly is which because over security in coupled and type any Customers providing are to platform, helps in our of cloud security provider of as best data, now the Logic shortage to sizes XXX provide ingest level intelligently

many is our platform that for stack during cloud important exciting customer While it's quarter, and the integrated other deliver had by is SaaS a full secure fact help and to it's facing purpose differentiated we applications. reliable fully platform observability therefore, built our unified that native security. customers And wins the and note to

scale delivers native data can digital generate. resilience is and architecture unparalleled modern built Second, cloud that on applications it handle a that that microservices volumes

Third, unstructured, and data, structured, learning output it's majority data of and patented including for any powered particular, applications. the semi-structured machine is analytics proprietary modern by in which by type of

and enable our our growth cloud we platform our the for platforms our data one value supplemented scale but machine cloud. of economically least, the flexible is of allows exponential audited industry analyze by tiered most certified economics as in licensing architecture, regulations. Additionally, model to customers not and And definitely the lastly, data credit-based

Distro our logs, last some and source turning support. enhancements and OpenTelemetry applications. the collector announce and democratize Now the product Distro. many The cloud OT collector to traces collection modern OT availability metadata is excited to of We're which quarter, to metrics, of or highlights of the open developers on designed to from tailored Distro simplify focused of for

embracing open telemetry. further critical collect source open are to establishing to and model its future proprietary gather all infrastructure data, application of legacy from breaking We using the machine standard telemetry and agents as

production monitoring. catalog, integration support marketplace catalog ready turnkey application open critical released speed and and We available The also self-service integration, integration is the source developer infrastructure, remains to to sensor GitHub. We now community. open believe is which an that strongly built featuring on XX interoperability over

gaming Web data, AWS to Services, scale. at experiences sensitive we game with for AWS, great With AWS Logic, initiative developers the digital continue for for accelerate we our game advance as Lastly, and can support safeguard accelerate experiences, partnership player Amazon to releases. ensure or Sumo announced games

areas between quarter. into rolled the new externally I into to model focus, alliances, out to walk channels better We've APAC model the intended quarter year, Next, leaders global hired and amazing business fiscal go-to-market more settled internally, customers, also alignment the sales, in this prospects theater. beginning across some We're early drive new well over the and and in of leading We're organization, generation some us pipeline through help seeing teams, business. and to America to our the our as of new partners. last of feel changes team our including and growth. efficient scale sales we updates our with the all our roles, want as traction At

of hired to and We a new hiring build sales our best-in-class discipline sales organization. go-to-market leader rigor motion, enablement in also and and operations implement learn strategy a to the

Doherty, professionals IT allowed Tej track autonomous Lynne focus strong our Human continued Chief we demand and Product building system Resources infrastructure. on is by a also organization, strong and the created our In platform. Sophie deeply and a hired go-to-market security analytics, cloud Kitson, Redkar with to President talent-centric analytics Chief great leadership, in bring that addition a these has experiences, led our Tej DevOps, of observability, scale. SaaS, customers operational security Sophie Ops, to Officer, In Officer, securing record brings computing, shortage knowledge Field Worldwide coupled of our as threats in hires escalating and versed them our domain durable and for and summary, digital organization

events, data able Officer, comprehensive as economics. it more for threats QX. end to Financial pleased credits-based ARR troubleshooting to platform differentiated Further, to analytics automates and with and it's that, Stewart our our reliability out, our start Our with to year financial licensing and deliver now and And guidance have customers our Grierson, exceeded model results With on have best-in-class users. resonate best we in outlook issues correlates both and our provide for supplemented provides customers, pleasure security solution experience growth. again diagnosis. quarter. exceeded who their XX% for security our by strong revenue I'm flexible our reliability my details single and QX our continues with Chief will the they're possible our tiered for the Netting all for ensuring the

Stewart Grierson

go Thanks, a for thanks, the would and Ramin, start call. on for quarter, brief on into summary detail the and topic. to the financial each then us more with I of everyone joining like highlights

First, had XX% mentioned, to XX%. growth start our a revenue strong with we as and Ramin fiscal of year-over-year ARR XXXX performance of growth

year-over-year. XX% that was year continued customers spend as than with customers us driven QX by traction and Our XXXk our ARR revenue a these more with grew growth

As shared. the use cases, we customer highlighted by

deliver winning both markets, cloud to and successfully also while cross secure observability applications. are new the reliable security We of our platform customers selling cloud customers and we analytics as benefits enable the entire in our

improvement leading ARR a business. As when is with growth of last ARR mentioned of of ended on year-over-year last growth significant quarter best from We ARR representing we XX% growth. our million was the XXX.X is in believe SaaS QX the This a XX%. call, indicator year

comparison last few While QX year, Accordingly, with the year ARR into as to we prior to dollar percentage Last a further expect of modeling, ending business. your this Relations will retention assist the trends continue quarter, our and growth year, less growth percentage quarterly expect it data better points ARR we four meaningful acceleration be for drive reporting we Investor to align a current we this tougher year. half to makes growth levels. To ARR back of website. our this quarter a we retention ARR our way year in get base make and metric net visibility trailing the on into simple dollar changed the will in base better available our our we net provide with methodology than calculate

realignment dollar early with in rate result go-to-market XXX% We part as relatively focus for continued was higher improvement the the in in of base retention re-segmentation Both expansion a seen over believe net customer combined in these our a of acquisition. the contributed retention. teams to strongest quarter factors Our on we've will time sales retention the improvement team the customer traction have the quarter-over-quarter. new

we result, we before in sustained take retention a our net will several to it As see rate. improvement based start expect quarters dollar a

billings, for calculated XX% our up trailing over look of metric larger from Recall million XX-month year-over-year. renewals the duration we the as calculated to timing billings fluctuate billings customers. at period this billings a and period, to trailing can Turning due was quarter-to-quarter XXX.X XX-month for that

or to Moving obligation, performance remaining RPO.

commitments We and larger multi-use and continuing differentiated our are to see customers licensing platform make our model. to long-term flexible case due

XXX.X expansion million duration size by increased XX% contracts. the and and This quarter's new RPO, of to year-over-year driven

these statement review income detail. in more I'll Now

As our otherwise all included GAAP metrics to reconciliation in a non-GAAP posted A of measures and and reminder, noted, non-GAAP. our on release unless is are earnings website.

year-over-year. to margin $XX.X As the increased was previously up QX million, prior stated, XX% total revenue compared QX quarter. XX% in to gross XX%

which our that we ingest Our to than onto year-over-year, to do of XX% has not encouraging platform. a everyone have to more grow strategy license data data I consistent want continued our with model. more consumption consumption customers is remind

Our of data store customers take data their and which flexible as see tiers they our can includes capture advantage licensing credit for to fit business. model

consume they credits. more utilize more As data, they

lot last benefit on a a However, including unified our We've offering also in revenue of analytics released near-term of trails sales. the for traces cost has functionality quarters, full created the the platform. metrics impact few which observability new of and over stack

We future. to pressure of creates data take our unique all us our and in NGO's as the on optimize additional features and to New time functionality a tiers near-term drive will some differentiator downward margins. the gross believe allow that to continue growth

remain the Looking in forward, on execute the strategy gross to further to as we adoption expect our margins drive low range to continue of platform. order XX% in we

period. than and expenses. or ago operating million revenue, XX.X XX% of the year to on was Sales Moving expense marketing slightly better which was

marketing increase more Given focusing a the moderate opportunities growth same ahead, million, in to expect of 'XX. sales XX.X the or team revenue ago was productivity XX% year continue as near efficient to term, as expense the in and we the in in FY revenue, drive our plan investing development in and expense period. Research of future. the was In go-to-market and a it enablement we percentage on

to the same foundation make In company more ago revenue, continue on as XX.X as While in XX% the it of in will period. as our investments invest public slight future. the of security, was we observability was million R&D operate building while in operating platform G&A for we a year. FY’XX, of the for this do improvement we differentiated expense year to leverage revenue focusing in continue required or expect a to percentage a

our managing loss weighted was than in the per was outstanding. the quarter guidance ahead better the share, million, of diluted guidance. diluted in $X.XX $X.XX was negative performance based negative our XX.X high-end million on negative driven revenue margin several range, Net and points by costs. operating XX%, QX quarter the or XXX.X This of shares approximately was average our partially carefully which high-end Our of

Turning and flow. to our sheet balance cash

on well negative We the variability growth, revenue. linear, in flow year. basis. timing or the free million, annual Free flow payments. an meaningful as indicator to last margin free based we quarter-to-quarter from deliver ended on was from in recommend margin of fiscal to We can expect flow cash cash in to be there we that of cash expect quarter as at driving efficient period X X% and flow collections cash and looking free leverage XXX.X We free profitability capitalized continue cash on a improvements do and leading and cash in flow free not focus cash marketable believe We of with flow we and improvements more negative be is are securities. million as

guidance, relevant full year as reminder, basis is it a of to on potential volatility to that business given Turning from measure the we believe quarter-to-quarter. our a more growth

our strong while our marginally we've We annual are increasing the of of our on team. changes the in remaining made go-to-market the of midpoint based number cognizant start revenue to year, guidance

our growth expense operating structure our continue evaluate efficient annual accordingly We guidance. prior opportunities loss drive to decreasing identify more to to are and

average full of share $X.XX expect year-over-year XXX XX% of negative XX% per Non-GAAP fiscal XXXX, XX% shares loss total XX% and XXX.X million we $X.XX negative to representing to on year non-GAAP to revenue to the approximately For of outstanding. negative XXX margin negative operating growth. million million weighted

year. fiscal XX% loss negative For the to second average non-GAAP with margin negative shares approximately per start summary, pleased a and weighted are to XX% XX% million In non-GAAP outstanding. negative we we $X.XX XX growth, million representing of expect million share of to operating total XX% year-over-year and revenue XXX quarter, an this XX of strong

transformations, with we large are for that, With we take Ramin your opportunity unified Operator? believe for platform market digital modernization. any customers. well I are migration positioned and happy to and to the And reliability driven continues security by Our questions. of cloud and resonate our security

Operator

Thank you.

Thank now be We question-and-answer you. Instructions]. [Operator conducting a will session.

Kamil Blair. with your Please proceed William with comes Our Mielczarek first question from question.

Kamil Mielczarek

thinking severe and leaning Thank you, out seen Ramin, pandemic you're quarter. of see the we decision do the a recent seeing And through year coming as more into does and cash even if a leading so, on industry, macroeconomic out on stronger next the you broader maybe to the look weakness other end? experience in business. preserve [indiscernible] you acceleration how over are decision? the We've strength downturn, pockets about Sumo congrats solid clearly how of your the versus tech or

Ramin Sayar

Yes. thanks of investments were lot Kamil, have feel already Obviously, us and product IP up last us. like for on of Many setting those which changes, in joining the side. go-to-market we transpired. year a execute to operationally really made

to to on as So year. our and as we're areas of investment that business efficiencies. going do that well basis quarter-by-quarter we've getting continue QX, throughout we'll in this constant a continue to of half back where we're and return, measure the for look And proven

Kamil Mielczarek

just if could international And expansion? growth few business, investments And the last making over are up helpful. steps quarters. next quickly, just That's you're follow the Can your what you've on us update strong delivered I there? you of driving very the on to some

Ramin Sayar

that us of around macroeconomic we're is channel cloud value to in thing, markets, and market, it's alliances news of us is mean, a for but it's thing. that I Sumo and lot global security going markets. deliver our modernization our go-to-market uncertainties now great with not also in in macro think And in continue digital APAC we're helps around direct a a transformation, a environment, terms that becoming the of just obvious customers our migration, save of regional success, major not money more I a the the capacity. the invest is all of seeing trends minor a lot major Yes. just all and to

Operator

you. Thank

next is with Hedberg Matt Please question. Our Capital Markets. question from your with RBC proceed

Matt Swanson

from Yes, my thank the you. This Matt Swanson quarter. congratulations actually on is on Matt on and

need channel the off made. It's seeing to around with side go-to-market far Where strategy, make see and fruits of to MSSPs. be So that to But hear the your the last the on realign question that restructuring we about to need Are where waiting expansions that you left as as the to ongoing traction, still great where still versus actually maybe stand still there picking investments labor. kind happen? do of up changes you to need point? you're

Ramin Sayar

Yes.

structural underway. last took And farmers, biggest which the place week obviously, of is was of the and So change well that bifurcation first transition the quarter. hunters

it's think, course the I ongoing, to and this incremental capacity versus markets right strategically year. markets that invest hitting where about versus of and metrics, productivity make over emerging established investment continue balancing we and we're markets new the do sure

major made. So well to where sure the right the continue about think of the seeing we we're with make productivity, pour we investments growth return, as bit to the back we on change has respect it's as or it we've fire done. been And slow as fuel where drive to already a the and

Matt Swanson

lot tier That's credit-base well. every feel macro data? are any comments I model now, company If the we it between your you but because anything in like that and of kind of flexible moving things right helpful. more Ukraine, model prices, inflation, from that'd challenges, on a resilient doing as in chain, be may the that, other one on almost on how asking a pricing sound on we And additional of talked given the don't differentiation be the there's that's this really quarter seeing import all And are market then supply different certainly the macro just the of just going about parts? a helpful maybe little any silly kind headwinds,

Ramin Sayar

Okay, sure.

to become demand point service secure as and to first need important that deliver reliable deliver environment, are they digital to the respect So, more as and out they it's all mission to provide with that -- we companies for trying critical experiences. foremost

transformation a well return there's doing a as so, aspect. growth cost in a so as aspect aspect, And always and

the our other value don't from licensing, they providers. well transparency question for And we any and news second that cost as transformation, good and that as your provide get agility, so given around the platform, the of that part

help sure and platform as need to to drive we're able look their to to going run they not critical of but all our their the data to be down we also So able security these get services continue businesses. reliability, customers to be into pipe, just make analyze mission that that

Operator

Thank you.

proceed question your next comes Derrick Cowen Our question. with with Please from Company. Wood &

Derrick Wood

trends for And greater the ability guys, nice comment question. you security you're my demand. Ramin, then on markets, those markets, And just, health taking the of observability how Hey, quarter. do structure? on where job look the thanks to there's could you're as at seeing the go-to-market much just the you maybe focus and thinking and more the as is about the the this two, year, new of cross-selling that two

Ramin Sayar

Sure.

is provided in observability. business we've the quarter, So logo security quarters, about XX that past from wins observability spoken the we've about. plus few This we a enhancements as trend has what that expansion/cross-sell, our and to some the saw and come similar percent where last of year from pretty we remainder the to strong with do business well last lot as new around seen

buying work the have better fact for look we differentiated and And positions allows we talked single kind different together, we've as Now, that us centers of markets, about budgets. to always two uniquely distinct those being teams the these platform one that forward, have. platform we

at to land of try either and once. to both walk don't cross-sell. we agendas We in and then in to expand So push the look try and organizations

exactly able that on farmers hunters that's capitalize these aspect. hunting be changes question go-to-market your efficiencies we business new of go to made crossarm to point and second that the expansion why to and versus now around So

we've the portion of viral focus. quarter mid-market will around we the new dent we've strong business, our labor just So to that see in And more selling similarly, last logo from fruits of lands expansion tend in well. sheer that contributed of model seen which because as

Derrick Wood

of the XX% Okay, Steward, revenue XX%, end you saying think growth QX, XX% up half kind is XX% you And I in that's of growth QX. you're helpful. maybe the maybe revenue guidance year, from that But which around year. ARR want healthy. the in guys quite back in second implies the did to

the disconnect measures, help So those growth bridge just there us two two? kind between a seems be you to can of rates, two between the kind of those difference

Stewart Grierson

Derrick. Sure,

what way this need and at the you I think the about is think think really the was looking to annual call basis. I on way an our said we and on growth

the an XX% your so, growth if about is are we revenue acceleration And guidance, the business guiding guiding But the at of 'XX, in point, year. over to re which we to FY'XX. of think, our midpoint to I accelerate they last FY just think we're started beginning

And year for at look to of a us you compare, so last half the when of year. first easier acceleration the slightly the is half the last

So I think referencing. you're that's the Does that help? dynamic that

Derrick Wood

Okay, Thanks. got it.

Operator

you. Thank

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

Sterling Auty

for question. Mark Hi, This Auty Thanks taking already guys. on for on Murphy. is the And congrats the quarter.

and access, ransomware others side, the for side. First off, are of about concern security some attacks general sustained kind of putting the greater around Ukraine emphasis the kind continued kind events on going providing tailwinds security thinking on of the and and

Ramin Sayar

always supply the think cloud mind moving chain I Yes. organizational transforming I operational has the are mean, to of their needs. for lot a been ransomware attacks that top of companies and and

what we're because the I vice have and security of dev is into champions provides we've of for of that analytics. side seen whether us for us uniquely think and secure lines to or ability one versa, the reliable platforms that teams, business our the existing and be only opportunities, the new help

necessarily well yet. I given that's tailwinds there. think I us so some we're think And don't necessarily positioned

observability in year. that on sale see side, execute partners side. on out plays the probably continue this channel we'll the direct security and distinct the throughout these more markets to think I of how We'll through such and a working

Sterling Auty

the the just that driving progress in guys kind sales on of kind be Got that? are probably is it. maybe farther seen Thank to And kind a already double of what you Thanks, there little hunter the about side? benefits the some talk levers the motion. terms of expansion what toward -- Did there, a you. for specifically, just year? seen are bit go-to-market end And are more other of down particularly on of clicking being that, then going two, pulled And then line,

Ramin Sayar

Sure. I committed driving it you mean, more And value allows I hunters efficient farmers. it and to allows into simplicity sales we're and think, and and partners first this typically, and prospects size customers. at scale, profitable the growth. teams and foremost, to and a And to focus, lot earlier allows channel bifurcate, your started

it are and within farming them roles new go a it's roles for to so those a align in have that accounts, cross-sell bit for drive and in base hunting set and the that installed logos. And of obvious expansion who makes or an across organizations little easier

accordingly split reps of growth, segments the the in engine. the also velocity and up cross-sell as to drive to organization efficient those we as so engine one drive well each but profiled to the drive the the And commitment right

Operator

Thank you.

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

Sanjit Singh

solution? you for you of Thank a talk and questions nice were homegrown QX. about was solution. could sort the really you had really Ramin, a DIY replacing win, we've nice observability of of that for the if taking wondering opportunity framing I a represents and displacing bit of to DIY catalyst commercial Anyway, how little to the is an Sumo more an out And move versus that your much commercial box existing solution? maybe view, sort how much the out a there, opportunity

Ramin Sayar

oftentimes in in shift the supplement security two is have of huge and stuck built the workloads the of to to let right, you want take win. is early right? is And still, go you that what see lot we the are alone that we've What same Sumo add-in to number end-to-end, to the that. is last observability I those all in quarters, cloud, happened you And still of start to Sanjit, initially including opportunity that workloads reliability a and or microservices at Greenfield alone a that sentiment there's I look source. moment apps, new the yet advantage to let share the seen the a of do-it-yourself monitored the based are market start release being you exactly answer, in open that data gives and shackled to that and of Similarly been migrated tools predominantly fact. products a commercial development around do think vendors, not migrated architected center, scale for used much build If that. the and which set that very

the the money in second open because QX, easier days information. So and we in the metrics. feel much we're in the cost enhancements that placed to memory center really Sumo for too portfolio make well open year, ultimately, telemetry proprietary gets those to provides. should particularly value it latency, that source, traces for And are that be be metadata to metrics, those for that basic collect brings able collect insights customers, made we Long CPU, the terms as question reduce into part the of telemetry charging to analytics disk, agents the side value together open commitment of such, to opportunity, of logs, and And to positioned, customers. platform provide last the your broader gone of the our of that

Sanjit Singh

sense. of free of then, improvement in to margin, the line of It an is free cash we when I couple a I on the sort other that you wanted left a and total expect we're position. get have at go-to-market I on free expect sounds comments transition cash of your should the flow side any Makes has any business the in around to still journey. And terms organization free some flow, to positive least make flow like of sight cash But it. sort in of going to of flow. understand to sustainably to phases milepost positive that getting cash know sure

Stewart Grierson

Sanjit. Sure,

roughly going improvement that we're from But free going year a make a this XX% margin flow this obviously, yet. We as revenue for to indicated, meaningful haven't the I year. timeframe negative year, cash last established of

will hadn't driving a we as continue are so established but And nearing progress And get iterated, start very we efficient we you specific focused at growth. timeframe point. give we'll breakeven we will more Ramin that this as on clarity, to towards

Operator

Thank you.

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

Janet Zhang

Zhang Janet Thank Powell. on for you much taking the is this so Gray Hey, question. for

tracking be is I see in there color you is might the buying So on you you May to any us customer quarter. about patterns? linearity able talk any could was in so And how give if Did changes far? wondering

Ramin Sayar

We on strong I May obviously, into you color QX. but talk about one will give won't and two. pretty I month tracking started some month and forward,

at, each sure we're we trade accelerate look making we're I looking right as think the to now, to segments in continue that. is at and then making region, what our our offs coverage effectively what our investments and linearity

Operator

this comments. any floor Sayar like at to over There for no time, I'd turn further Ramin questions to the Thank back are closing you.

Ramin Sayar

Thank you, operator.

revenue started revenue the We I've of to year our a first are again, of quarter. ARR guidance. We exceeding and accelerating to in XX% deliver and growth performance with the continuing the on strong off growth XX% our delivered commitment high-end

we've the to and improvements meaningful we're already full driving both committed year. as in free flow operating growth, while for Additionally, showing margin mentioned, cash

native reliably to help we manage is and Our very positioned their platform, cloud applications. believe securely customers mission uniquely critical

the we market us with organizational still that that steadfast have are and thank belief in of believe with of for migration, and that, that large modernization you call I'm cloud with we pleased transformation, forward very us. our first the such, our obviously, on initiatives. already we're digital joining early speaking growing operational we changes resonates As product our and underway you in very earnings With ahead a look and to and are today security innings the customers soon. opportunity that differentiated

Operator

conference. This concludes today's

your disconnect may your time. You Thank this at participation. for you lines

Sumo Logic (SUMO) 27 May 222023 Q1 Earnings call transcript