KNBE - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the KnowBe4 First Quarter 2022 Results Conference Call. Please be advised that today's conference call is being recorded. [Operator Instructions] Now it's my pleasure to turn the call over to Ken Talanian, KnowBe4's Senior Vice President of FP&A and Investor Relations. Please go ahead.

Ken Talanian

As a reminder, our commentary today will include non-GAAP financial measures. with financial non-GAAP limitations in may results release, website was non-GAAP our reconciliations our investors.knowbeX.com. also our today at on which and X-K our the GAAP can furnished information be regarding found results, SEC supplementary and their of earnings with in Information the Form financial and available our be Relations found Investor

in subject forward-looking assumptions to or those some uncertainties the related today, to the SEC's from statements These of can that company projected may are Investor guidance, that our should on be described accordance addition, implied SEC. be Should filing are In assumptions. found and in sec.gov, filed materially Relations XX-Q actual including contain risks, with established materialize and deadlines These could any prove our our website. this those these the or documents by call. our differ results incorrect, on comments of risks Form to website, be during our will

call, you will Stu will our Stu. President, our Co-President, and Bob Officer And today's and session. that, I Revenue the remarks with turn call prepared question-and-answer over CFO, Chief CEO Lars Sjouwerman; founder, Reich. join from and will Letonoff, hear our During to

Stu Sjouwerman

cash results revenue this free strong a quarter year-over-year annual Thank you, first XX% started for you a you growth flow record morning. of share with execution margin. quarter thank and seasonally joining all with We us Ken, guidance. to about another and our results today. We're recurring We XX% with our excited strong exceeding year had

company help only know, the I manage social problem to layer. the As many human public securing engineering. ongoing organizations We're you KnowBeX of started to the dedicated of

of We cybersecurity emphasis in to prime been innovate has and I'll Response, on Detection legacy Human this remarks. of and continue The announcement in controls. example my brand-new back that is our later a in called a category this. HDR, layer to come traditionally

organizations during However, rely this conflict the and security growth seen infrastructure. attacks software that solely cannot Ukraine. in proves of success the on and exponential examples cyber cyber tragic ongoing are the Russia between attacks their relative Recent

government of near Ukrtelecom, their example, the the nation's the end pre-war communications attacks connectivity Ukrainian of crippled March, providers, severe largest one that cyber reported network levels. of to XX% For collapsing

month a Another grids factories, malware a about ago. Department malware sophisticated joint the kit tool highly was used In a specifically and NSA This industrial designed tool the report Energy, the more that CISA, of recent came of FBI new all in set oil Pipedream. example mid-April, utilities to and the are power target released about advisory called controls refineries. water kinds

the look than oil potential on we password access able found year incident that production being single Poor originates to across this crippled to less the reported bad devastation human from the a later the with an to could ago gain that have back due on dark batch were context, achieve, compromised Eastern attack For was web. to Pipeline. only which password credentials like of breached hygiene, Colonial that error, the a now actors seaboard. a the in It's

ago that to from to an days ongoing shut of chemical and down X the economy. the only only at critical it and has a as of how human mission-critical the experience the the would is human crippling you accelerate before of afford attacks continues Unfortunately, the factories national by XX% of these predicts element, refineries of physical transit, securing X this multiple a to don't A is a that cyber the the reported years to country have that started becomes of mass security are subsets occasions. but of administration or situation echoed clear combine in halting what is result distribution. abundantly entire realize been security. diesel time, of This system. the Gartner escalating declassified already infrastructure layer that breaches data had Department involve fuel, trend problem headlines down XX% this disruption matter could Verizon's later an XXXX on in saw lack Biden we many with like private operations close shutting that by so breach organizations other Energy Now came so another assessment the that a that clear by It sentiment sector is reported statistic well. of When will will much widely part

Phishing the attacks early in Group number that saw of attacks XXXX ever They're XXXX, Anti recorded. XXXX. effective of December tripling an Just last high that more as highest reported becoming hit phishing February, well. the Working all-time of

transform sure manipulating XXXX, Untrained With we their QX organizations. being in successful properly security phishing assets have that the falling as space to cyber to one that no surprise our again an not enviable an against I ranking unnoticed. through security of come organizations the believe to to number which effective statistics while training great using our KnowBeX are of industry. vision is the regard unfortunate a simulations that are brings across trained is a potentially these of the and We years, we're most or employees vendors past gone trajectory. strong X and In now category, last poorly our reality consequences work to employees most product any organizations but highlight attacks, established bad anyone. into hitting all say human lot employees results of our element dedicated potential in am realistic size I'm their and leader in has scoring cases, platform are to With efforts or highest in awareness That become and that seen ransomware defense in a as were same during victim why we Wave their frequently proud the onwards, are of doing. have a said, operations liabilities these largest once The any alarming, numbers and their line QX that actors that the kind their of Forrester the this helping of in criteria. that to the an customers I those recognition of our you will as the highest walking before of XXXX. organization. one confirms trained walk key growth devastating sent is execution a size, this the who recognized without powerful established

expectations up verticals. in to We our which in and direct million with order human-centric we cybersecurity seasonally balanced innovation customers XX% as in deliver continued is both strong to in board about and This resulted top needs this teams industry continues $XXX believe the exceeded remain The results both flow enterprise to performance SMB focused demonstrates line on continue and our across cash growth customers. space, productivity quarter ARR, our in wins profitability for channel our nearly sales all free the generation. across and year-over-year. of First well as market-leading position our the of meet

half so we're in features new and the Security our following market layers Coach, a awareness new connect them of called our Security in category defines of to Our Detection the is second existing HDR. great this example interface pull through we works of exciting the A customers' are cybersecurity their for product planning we we this real-time products. believe software includes analyze security cloud KnowBeX's creating and to and release How take Coach, action. can new this or security integration roadmap. stack and alerts Human acquisition. security SecurityAdvisor Response, in vision year that both we in This is, product the With

previously, well. that estimated billion discussed we believe track year. As new the integration will second in on of this still announce add for SKU the I'm a is release as pleased we this TAM full $X half an to

making in technical an way well the is will is SKU, into our highly velocity of new in kind sales high proven This simplest cross-sell our our is go-to-market as upsell, motion R&D reinforces possible. existing that sure which Our focused team supports on base customer automation nature, engine. this be easy the laser as

in an begin Coach. early of will in QX, later general An follow QX the timeline, release in we'll QX. Security a open with update for poised closed beta beta on For product the

features at platform, Looking for no there we are the is about. one KMSAT particularly excited

core capabilities for feature further We of the Intelligence-driven a platform with have and even stands Artificial for AIDA Agent, AIDA our expanded been it's learning. years. AI optional recommended

campaign. This content to that One to at interests. how attack then vectors specific apply feature The failed this adds of those an end now and their training recommend functions recommending look on phishing user user deliver is additional the security We results for ML suspicious phishing e-mails. reports by personalized of and informed attacks. often failures, an on its latest to based

With these organization. individual new across reduces our in risk continue the path turn, risk reduction at we scale, features, towards which,

features a new products the wins. New business are momentum of driving factor key and in strong our

space with this replacement to the a that we're greenfield few low the a be overwhelmingly purely a that cybersecurity, one is still reminder, only believe a digits. the single is within one, of in As we penetration not areas that operating global if market. isn't believe in We

awareness to further support competitive While above to wins also we of number are wins competition. are most and wins greenfield, rank of platform well proof greenfield our our security customers, competitive our show continue believe is we that resonating the and with that continue business value new that a of see The displacements. our customer

last competitive opportunity had technology customer immediately XXX,XXX the current examples of that world. a products our this with in Here a frustrations platform displacement. example could a perfect capabilities was the few global account are We of wins we've This seat The for. quarter. of companies cited that had deal our their largest with one

with the Some ability our templates. chosen content localized our our one directory global the seat a switch. run world. a campaigns the in for capabilities were in multi-language XX,XXX to of group's the clinical smart that active synchronization as was and primary the robust stale platform with an of They displaced labs arsenal the phishing truly customer's reason reasons largest We deal of competitor cited functionality,

array been a printing won where process have XX,XXX-seat continued The opportunity we've has automation seeing through we company. were the well. closed due wide Finally, a nation. momentum in of content with a training capabilities. our to in markets This one RFP we the largest went seat deal an school as and we international In XX,XXX deal chosen of with the Japan, strong top districts

one multinational, We gas We a building processing XX,XXX a the also companies specializing the not top XX,XXX our the multinational they that company. in with seat occurrence In continue IT world. had in examples of our are we technology. with deal a of food the deal seat XX,XXX thousands XX,XXX-seat University. believe These British just Australia, multinational we but of with demonstrate we in types for with And a security a seat German only closed customers French deal closed had largest a material a departments deal hours a brings, to us. how embrace monthly few the of the become that events. wins considerable platform save also triaging the risk reduction have We finally,

of #X proud seventh for USA top Tampa the said, the super unnoticed. to Top our that IT current We of the roadmap. for I of gone not XXXX named its being our financial building employee for shortage Workplaces and Energage customer a Times our With this workplace people that critical Awards and This partners only employees also consecutive off. skilled of our in spot Given paid In communities. market-leading Bay thank into to focus X,XXX time-saving QX, platform KnowBeX strategy focus commitment to and dedication, also great our Bay by brought company workers, the not features this for to And results, we but year. our the position driving a would earned I has category. today. remains has like has Tampa X,XXX group in am their the were the product contributing

the themselves, forces driving that trends. for behind I'd here speak of results the award-winning like to we've Bob And with company that, financial culture financial continued is one our execution. unique that believe we this discuss While developed our

Bob Reich

everyone. morning, again joining today. good us and Stu, Thanks, for Thanks

XX saying let the a opportunity enjoyed get excited role to start the very executive rest new and of and KnowBeX's is been the transition I my This last me group, has partner the so team. of I've First, leadership Stu relatively to and and part the or with know seamless, aligned I'm high-performing be story. believe quite by over to much this into having transitioning days how

move let's our quarter to on So first results.

As a revenue otherwise except non-GAAP. all noted, my numbers, unless are during quick reminder, mentioned remarks,

ago, $XXX.X business. total recurring see just revenue, the strong Stu, we from reached a for quarter, to or across $XX.X up versus $XXX.X year-over-year. million same the totaled XX.X% the year to continue increase first of a year-over-year. period Similarly, In $XX.X ARR, our revenue million performance million $XX during million million quarter or you an heard As reported year XX.X% up annual first the revenue compared ago,

was initiatives, cross-selling key of each to growth the success growth by quarter. across during expansion. logo and international each our QX driven saw Our existing expansion, strong another first new areas in new and customers We of these quarter

pillar logo expansion. of growth first Our new is

We're XX,XXX that as churn. logos now churn, customers. very March total announce logos During in XX. of of the X,XXX first also we of increase count or new bringing XX.X% nearly nearly excess sequentially today, net of as added net a to quarter, added to we That's XX,XXX of our XX,XXX excited customer year-over-year are

customer our in organizations space, with total about of as with XX% enterprise in growth space, than over define the we've past Our less the we and the remains customers employees, organizations seen few we significant greater which employees which relatively consistent define distribution about X,XXX than XX% where years. as of X,XXX SMB

quarter we reminder, between ARR continue and Enterprise, ended and a again on As mix with a SMB these to the driving focus we X. balanced generally ARR balanced between

software, rate enterprise considering to retention, customers. of especially is SMB In greater excess We in that both customer terms XX,XXX is this that believe when continues of to our base difficult XX%. remain than logo find XX% SMB and retention nearly retention in

report believe also as earlier. this a Stu such consistently is the that reasons one we're We of Wave mentioned our in latest leader primary space, recognized Forrester the

second is Our cross-selling and growth of to existing new pillar customers.

and in power new global We of customers. both strong platform the see continue to across our interest existing

is the resulting you the or products within quarter Part customers subscribing our new to customers of To quarter, give multiple to in show adoption, nearly end who continue in see some the products we purchasing we perspective, driven of roughly continued percentage this time X,XXX During multiple first at strong their customers XXXX, with had to multiproduct growth of XX.X%. customers to growing interest strong first XX.X% the XX,XXX purchase. multiple first of of the at products. by

customer products. our doubling We've customers tremendous As are now of to the count more over QX, growth year-over-year. subscribing end here, XX,XXX of made than multiple multiple product

the closed we result, These And products. with customers now these our don't result for products Compliance quarter, reached having that seeing X are of even cross-sell to of GRC PhishER, Plus a KCM products separately, some record all levels although and our As for success. digits have report of the X. without and deals the continued year-over-year growth were growth we individual combined triple bundle revenue this all

value is stickier Our get as much retention. a more our up customers. our from increase but result, success to PhishER purchased only both expand customer and cross-sell end KMSAT relevant to also being help Numbers not that ARR who customers support and base, platform,

of international remains expanding our key growth. Our of Penetrating markets is third growth internationally. of one pillars pillar

revenue previous now continuation of our continues Our for XX.X% XX% approximately complementing revenue evolve which XX% of international The consistent GAAP our international distribution with derives and year-over-year revenue the grew a momentum year-over-year reported growth domestic our revenue of our roughly for quarter, geographic quarter. markets. momentum, from the to our delivered strong

to this our network capitalize growth. awareness. outside U.S., international market, compelling go-to-market by of previously building to domestic. and to market. America, total revenues significantly of higher domestic key brand opportunity, there which seeing seen a we similar closely to our international talent the than a continue which also in key in inflection pillar for a sizable invest the that Although hiring represented greenfield order on both EMEA we a is of the North by growing partner on is We're In And our APAC majority strategy number at us believe point regions is is execution which focusing is internationally, continues expanding KnowBeX tied on of come fourth this market from addressable and

make to and channel and initiative to for continue resources our distribution capabilities partners, for channel this team will key us. an important be our progress, We marketing meaningful execution international continue building hiring and in

global international earlier our early While and results, on of these remarks. client in producing base, adding we're in of our is still global his just wins mentioned markets in marquee expansion, evidenced few strategy our investment was which we're the brands a by Stu to

of the margins. rate part philosophy our our of As business, sustaining focused growth strong remain running we with high on

to on year quarter, first margins XXXX. as improved non-GAAP gross XX% from continued up Total deliver for non-GAAP cost operating quarter from improved ago XX% of to structure. performance XX.X% an in quarter also a XX.X% to direct we the efficient margin our First the

a acquired As and compensation acquisition expenses, of non-GAAP our stock measures reminder, exclude amortization intangibles and integration-related costs.

$XX.X quarter expenses the operating $XX.X non-GAAP for up Our million, million the prior totaled year. in from

We marketing total the all continue increases XX% Year-over-year higher for which operating invest quarter substantial as and the in primarily increases. as versus our and revenue non-GAAP QX growth. expenses marketing, end our by the attributable in well of headcount sales drove costs about higher to were headcount-related increasing across contributing generation of business majority the demand PR to with to headcount XXXX, expense vast

core support, growth increases We deploy international headcount to in tech in costs to growth. support of team continue support invest and to product Technology development markets, still expansion, in and markets. to increased and early to in these while resources due have continue expect year-over-year, our our capacity courseware we sales additional in the our stages we're primarily to

talent connection this later planned will product the our have you to see been additional support new offerings investments efforts the offerings, expand for Stu in with to continue year, key product investments as technical These referenced earlier. critical development we globe. As across our in

life We and are increases truly costs build to public attributable to international company. capabilities establish we scale. at teams. across in headcount general from to own year-over-year platform short are foundational administrative a investments headcount as our and product The a moved support in administrative period execute and expansion to a also costs, to These internal continue IT to have to time. multiproduct resources HR primarily and necessary ensure first support These single necessary headcount-related and a investments included finance, in investments efficiently the legal, our of to

with Turning of to up year-end, liquidity. and on our finished equivalents We capital million $XXX.X and million, utilization from $XXX.X flow cash level the cash and cash focus at liquidity. of continued efficiency a our of illustrating high quarter maintaining

and for which in $XX Note, our the profitable given XX% Our We're to resulting invest contracts cash Stu of layers related during anywhere is me healthy our for efficiencies as the is This to flow as the maintaining that strong the both respect million continued cash of quarter expand compares of our timing-related the first very a from margins, pool, flow sales guidance free well this there flow our expenses sheet, margin the strong of established as while result new flow free This The resource some With a process resilient the $XX.X change XX.X% of pleased profitability. to cybersecurity. we overall in state favorable million, realized cash ranged organization of X free timing let year free for results, growth SaaS a quarterly the transition. quarter a with has over We're cash quarter. seasonality X% quarter. category sales related which and topline to and is investments period philosophy our performance profiling and as on cash margin first is continuing disbursements of don't cost by performance, of in This products lead supporting driven as quarters. cash-generating balance which well year primarily flow first of was free generally during last cash the we the first future partnership same model close during flow inputs to quarter collections any free results indicative and involving and were XX.X%. ago. capabilities to in cash throughout billings Lars. as and balance the expect just growth across in development sustainable many CFO is and new with an a

numbers updated revenue expect the total now second the is expect for current themselves, XXXX, year $XX.X in million. based quarter guidance As for we for range million for guidance our the XXXX, revenue $XXX to of of $XX.X $XXX to XXXX. product on of we expectations in range million and mix revenue the the This million, full

small an our product reminder, our portion and impact can a recognized is that upfront, on has a KMSAT in result, a As of product revenue as reported revenue. have variability mix

now to I also margin the cash seasonality is quarter-to-quarter. expect result in equal variations or from full XX% flow, than free We there mentioned, for as to flow greater can year. free be cash which And our in

XXX modeling between year million million and QX both full the For assume and share for purposes, XXX weighted XXXX. can you shares count average diluted of

look forward momentum we XXXX, the continue energized be business. growth the in and rest to by to As very we continued the of

which to the to year. laser-focused on to that, maintaining defense to human introduce this layer innovation around We excited to driving we'd our we category ecosystem of later the HDR, any leadership it are market And questions. new open the and with dedicated are up like cybersecurity

Operator

first Our Instructions] question Cowen. from Shaul is [Operator Eyal with

Shaul Eyal

Congrats on results. the

feedback far is mentioning Password for IQ, and thus on follow-up. actually for half planned Security of And weeks, partners? a second just question customers over update discussing the give from met second you've I thanks the seen Maybe past and have what the release. course or Coach. and since maybe product and talked, My an last we've take maybe So the

Stu Sjouwerman

Shaul. Thanks, Yes.

calls, more your interested Know and IQ in follow-up Coach, KBX-CON there. though The at first that focused feedback on that was mainly Security I'm out with first, on we some are information you got following we from customers in will and getting we Password positive. provide

Shaul Eyal

quarterly a maybe Again, annual is from other but has also And Understood. it the perspective. is up fairly annual little current the the bit, doubt, guidance about we without a been think and Understood. matching as consensus, the second a the quarter versus when intact. guidance about it question

you are should about Or a half? and guys on? be anything loaded second So worried anticipating we focused back-end

Stu Sjouwerman

me comment Lars throw on with, maybe a just can and begin you to Let bit current that Bob, Bob to over what trends. do one think?

Bob Reich

I there than is I -- we there's activity sort of profiling there's year regarding sales that has of seasonality think QX different of previously messaged. be -- unusual from just -- in Shaul, the QX don't been or tend from to and have standpoint, anything think than sort the business. QX the I and activity And lower QX like a sales mean standpoint.

ultimately reflecting in ends And so in actual the of QX, sort QX. recorded certainly, and that up revenues and in showing up

is of anything he's in seasonality of to guidance So the business. what in Lars sort in activity speak would trends really can change that a on. sort absolutely seeing the there there so of terms that pipeline isn't of suggest of the and the

Lars Letonoff

But haven't we been Yes, seen our recently. creation. in Lars. to regard that or any significant it's changes said, gen, with Shaul, macroeconomic pipeline opportunity really pretty lead there's trends some with developments our with

building trends in pressures that inflationary So kind are to carefully up, but for internally the our of haven't we war again, really Ukraine and business. coming any seen considering the changes we are the

Operator

from Owens Sandler. The next question with is Piper Rob

Rob Owens

couple cash Should the here, up you and you free What's confidence strong. to couple couple given could going going the of products million half, here. see in X with some expectation new remains a gross lift margins outlook margin. forward? dollars giving around line by the that by the up a our with second outlook Number change ARRs revenue Just compression? flow the points one, million? Or And very the alternatively, that goes by probably only of a margin

Bob Reich

Bob. it's Rob,

to management reasonable to the universe. didn't question, some needs in -- total margin all our think line. in some population and new compression CSM materially the CSM of all see we our gross count as that are I universe we move ends a through in new in as the basically -- and the the to quarter is of gross first for up margin grow a there service pretty customer to in direct do we did to can of properly ends customer servicing year grow, customer change continue continues the expectation those customers. that customers order We most that cost The That order first aggressive have CSMs the we're sure in obviously, make terms hiring cost that very really up quarter, have quarter. plans but efficient On

XX%. I I to we've it's margin that and in gross level of do between margin that sort always expect some reasonable to of assume of So think of And think gross sort compression. term sort XX% messaged we be long

So an the really performance XX.X% non-GAAP was in exceptional first quarter.

strong in On flow the collections. free very terms of very, cash side, honestly, a we had

when sales cash in to of in had a of the the that cross transactions generated a really really, of to for fourth in which -- fourth quarter. relates lot the the the actually really the quarter, goal year, we quarter. transactions XX% But We timing end year flow Some us printed quarter. and first a line Last strong a the printed a little margin over first ended XX% flow XX%. margin we cash cash over free free the in -- first we're at we quarter,

ended similar is sort plus, cash relationship a relationship. Again, the -- just printed a relationship, in So XX% the that free do if range. year We we with math, in which we're the margin in just in ended XXXX, quarter, you QX the consistent. honestly, flow XX% of and XXXX looks we've first XX% pretty of now think XX we that guiding

So that's why confident really we're on that.

Operator

Essex from with Sachs. Goldman question Brian next Our is

Brian Essex

domestic were conference, particularly have, of -- breadth one just new GRC. we When you around I observation guess me. the Europe, low had with And from the one platform with the just spoke that as markets, the that particularly Stu, your question that penetrate one which user the awareness thing I I at those is, of was recent mid-market work you on from markets rates of expand? traction do that land attach rather U.S. with key awareness the more initial have customer sales and you've to focus, or anticipate guess how some are initial marketing had your platform? And than in I of observations you spending the may getting -- what improve really the

Stu Sjouwerman

to accounts. First X,XXX of We a attendees. we big was fun -- was kind of KBX-CON. at at to to It great having to you see KMSAT the time, The pretty all the you That It was point need is lead all, today. Brian, the success. everyone they successful with have in we there that it manage need thing This again. had address. understand, platform that they into is manage. and problem And to one immediately are continue

Our team of XX% direct always attach is able sales almost new with PhishER. to sales

customers are new that the sell starting marketing we into The focusing existing our team on base, So and cross-sell. a dedicated expand that is to customer is customer actually campaign immediate existing marketing an base.

that huge your are now. there starting to Brian? answer tap an So question, is potential Is just to that we there

Brian Essex

that's Yes, very helpful.

Operator

The Joshua next from question Wolfe is Tilton with Research.

Joshua Tilton

wanted that quick. can seasonality flow more year. timing to year what come similar that confirm, last you wanted the quarter? that I investment be was way maybe the I broadly, guys flow the real the just to any benefit of to there that free cash to cash you free said Is And this quantify back should Is Bob, from correct? in

Bob Reich

Yes.

isolated have in that example. absolutely outflows there's have we have the seasonality for So flow. we unique but in unique -- and I this, mean happen second all free absolutely quarter, cash companies cash

company. We new a public are

It's anniversary insurance We across door out our time same line the a sort amortized year. our that cash the the IPO, at actually of renewal goes not trivial and that's that full we straight disbursement. have

cash affect doesn't operating just -- that customer April, in our conference free we customer to does the results, obviously Stu did in-person second the but flow. conference GAAP referenced the it quarter. So our it affect isolated that's

our bit was little year, our was are that So overall -- the that conference so it's there different that a And -- of honestly, -- are past. referenced the I timing will to seen face-to-face a you a think last because pace Joshua. that's mean talent. we're facing we've in margin of relates the cost hiring have different and year, This virtual. conference really profile. and plans, in the they of remarks, world those more and be dynamic dynamics think of acute, XXXX, I Maybe we the the truth, even with really same consistent and we've macro I on in other type in with seen in -- sort mean seasonality tell was terms it I faced the around that ambitious the prepared all attracting companies are of dynamics hiring

headcount in disciplines timing the of and really in sectors timing reference, organization. had we the we around or that So think, I of in certain ramp more -- inside certain terms how is

Stu Sjouwerman

Yes.

to Let increased that. actually have headcount. and we We've both me something international ramp-up in add and our recruiters, accelerated our domestic international,

into pulling growth. international pulled QX are have our we more and still fuel QX, So into to simply

those numbers. influences that And so also same

Joshua Tilton

just That a was helpful. And then quick follow-up.

later impact On see maybe result the are any impacts a crisis? Russia-Ukraine are any as expecting And guys you're to positive seeing business, you negative the international the of you guys in not, if yet year? or

Stu Sjouwerman

don't We or in don't physical Europe, with don't China. obviously, business have Eastern we and Russia do really. presence We any

you at that any the cut. believe and I last industry, if sane that the Given conflict our thing look cybersecurity is would organization of nature the

Our speaks platform decision. which really platform that does that it's This it's And attacks, area I TAM. opportunity offer the gloves relevant relevant that no-brainer is to today been, is risk internationally than tangible result speaking, times this still priced an the represents more where environment purposely domestic is already the for believe in reduction volumes an come cyber super it off. ever be a a strong years. been like And definitely is our many because is

Operator

next question Fodderwala from with Stanley. Morgan is The Hamza

Hamza Fodderwala

for one quick Lars. and/or one for me Stu Just

cycle selling like Can a success or difference when between lot customers, your of had Plus. like X? just standalone KMSAT to multiple looks products plus PhishER say, us cycle of customers. the selling, new the particularly in among KMSAT a let's you sales plus difference you're you in the sales the So remind there Compliance Is KMSAT what versus

Lars Letonoff

Stu to sold a well, there's to focusing or with And process, Hamza, KCM that I or little a think is then CMP. KMSAT. whether different because through different really earlier. the bit audience. KCM sales alluded not, on our upsell we're We PhishER be is a it cross-sell start as

no, in with get CMP KCM going we're just different So difference would a that's we outside it companies. sale. They're a little much switch. really because initial a only of flip because typically with upselling the pretty to the platform, we a your get question, no the very within have the you But with area add when do of sale, different The large there's stakeholders but -- to add enterprise the those handoff that is them the platform. where to products answer especially to is

-- So we CMP deal, in at might SMB have and PhishER whereas, with sale the all once. an

now, enterprise, the get handoff you'll to if the the groups. really megas a different into you With getting were

be, say, hit the the PhishER apart, that at X but And of or So that POs while working X KMSAT, one compliance will are we're initially, CMP with with group months KMSAT, also part the the there's and company. might those but purchase sale. they maybe initial

Operator

America. with question Tal The from next of Liani is Bank

Madeline Brooks

on It's on Madeline Tal. Congrats for the Brooks quarter.

quick me. Just two questions from

The first delays seen first you the quarter? in any customer one is, have implementation

Stu Sjouwerman

Madeline, on going pretty trend. all much No, that's

Madeline Brooks

Got more it. to just then one And follow question up.

your Security based mix in should for the the on we is or guidance, Coach expectations current you of 'XX, revenue that mix include no? mentioned rest So product

Stu Sjouwerman

QX. Not really because we're releasing in

revenue to accounts up. majority couple you slowly it should of -- so questions sort have more And vast XXXX. the for A and we really, wrap

Operator

Canaccord. with next Hynes David question is from The

Unidentified Analyst

for on This is Luke DJ.

about recognition your X you examples remind So or vendor? think that gave nice some as customers, an existing or typical can I you is prepared you help there traction just gain the what enterprise us replace us know in you to? a point you remarks, theme common to is catalyst would with and but for

Lars Letonoff

one. testament is going to this a I'm it's -- take just Yes to team. Lars. Really, that products our

AI they're all away implement maintain in our into We moment have at and it's demo to I've when company. blown when to best-of-breed displacement and it a begins well our an how enterprise, when typically to the it's product, typically features the a it easy the past, automation demo. said with sale, product it. And the the we And how built product. this is easy And enter it sale is

answer your question, to specifically driven. product So very it's

Unidentified Analyst

the sort reverse? out a then in Plus, KMSAT Great. as security you or of follow-up, expand standalone play add than see as are you products Compliance that eventually an door get seeing today? into strategy and And the And your do to other you That's foot something helpful. then with opportunity to like awareness [indiscernible] foothold

Stu Sjouwerman

the the still We're the entry rest couple still a I of #X would really. the the really of up number in that a to The that released that itself. happy No, KMSAT us. follows. now. for the And think, space of building the spend say opening into actually months the total up platform library that, exceeded months PhishER. not be first We're X are adding are They account, being I'm international is modules first CMP might years case. X CMP

well executing question. CMP. answers on we're hope that your So I

and We have very time have we because tight follow-up a we up calls. for to one more wrap with then question, need it schedule

next? who's So

Operator

with Roger UBS. is final Our from Boyd question

Roger Boyd

Terrific.

rates macro on the conversation. a plus on Just both Very follow-up XX% quick and strong SMB enterprise. retention

and baked for assuming around rest around year? of the what's your guidance the churn you're macro Just facing, any color on maybe of retention in light in the concerns what

Stu Sjouwerman

a angle, that. Does that platform could how like soft a macro they isn't are question, answer attacks And answer and to Roger? at headwind using targets Honestly, a ours looking All of essentially in the [packers] us phishing but the with Europe, also phishing must. Yes. this why are us X a your level. U.S., state-sponsored macro essentially conditions for from that on becomes on

Roger Boyd

does. It

Stu Sjouwerman

session. That's the end Q&A of our

Operator

any Sjouwerman, Mr. with closing proceed may you remarks.

Stu Sjouwerman

soon. very see and We to everyone Thanks strong we've for believe good. we much had hope attending. really Very a quarter, again very

Operator

this you conference participating. call. Thank gentlemen, and for today's concludes Ladies

now You may disconnect.

KnowBe4 (KNBE) 14 May 222022 Q1 Earnings call transcript