AvePoint, Inc. (AVPT) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome again to the BMO Technology Summit 2021 here. With me today, I'm very excited to have TJ Jiang, the CEO of AvePoint, with me. Welcome, and glad you could join us, TJ.

Good morning, Robert.

Well, good afternoon. Yes. So I think with that, we can jump right in. And I think it would be super helpful, TJ, if you could perhaps give us an overview of AvePoint to really help set the stage and give a basic understanding to investors out there.

Sure. Yes, we'll have a -- I'll do a quick 15-minute overview. We have a quick presentation here. That also includes some of the Q2 -- the latest earnings that we did for Q2 2021. And then yes, we'll open up for questions.

That's great.

So good afternoon, everyone. It's a pleasure to be here. So if we go to the first slide, please. Next one, yes. So very quick overview of AvePoint. We are today the largest data management SaaS provider for Microsoft 365. Microsoft 365 is the moniker for Microsoft Office 365, which is their office product in cloud. Out of our solution sits in the Azure compute cloud. And over 8 million enterprise users are using it to manage their data in the Office 365 cloud. So the area that we focused around is data integration, data protection and clients. So the -- collectively, this area is called collaboration, security and governance. Last 12-month revenue for the company is $170 million. We are a calendar fiscal year company, so we're now in our current Q3. We just completed our Q2 earnings call a couple of weeks ago and -- where I announced that we completed our tenth consecutive record quarter of growth. So it's -- since we have completed the subscription conversion in 2018, so our predictable and consistent high growth started in Q1 2019. This is prepandemic. So we were able to consistently grow our ARR by 30% year-over-year. So the next slide, please. You will see that here, it's really the revenue trajectory of the company. AvePoint has been around for some time. It's very rare to find a 19-year-old software company. That is the most exciting part of its evolution era. So we have always enjoyed high growth. That plateau you see from '14 to '18 is what's called a subscription conversion. So not only did we put our technology into fully cloud to manage data for our customers in Microsoft, but we also completely changed our business model from a perpetual license model to a subscription license model. And of course, that also entails how do we count salespeople and all the revenue recognition that goes with it. So most companies that go through this transition is not for the faint of heart. Not only is the technology transition is a complete business model transition, we went through it without borrowing any money. So we actually built this business with just $60 million primary capital with no debt. So today, we're a 30% revenue grower, SaaS, B2B, quite global. 45% of our revenue is in North America, 30% in Western Europe, 25% in APAC. And by APAC, we are talking about the Tier 1 B2B software markets. That's Japan, Australia, New Zealand, Singapore, South Korea. And Japan is actually our largest market outside the U.S.A., followed closely by Germany. So we went through this quite a journey. We started back in 2001 in the exchange space, and then we quickly went into what's called Microsoft SharePoint, which at the time was their fastest-growing product, their enterprise content management platform. So we really became the largest SharePoint data management provider. And in order to do that, we actually had to do the whole end-to-end data management capabilities from the integrations to the backup, to the archiving, to the compliance. And of course, SharePoint today is the fabric -- is the middleware, if you will, for the entirety of Office 365, which is now encapsulated into this co-moniker of Microsoft 365. And the reason is that we've used Teams, for example, for collaboration. For any sort of document sharing, coauthoring, you have to go through SharePoint. So in the Microsoft world, any time you exchange any sort of Microsoft documentation for collaborative workloads, you fundamentally have to use SharePoint. And because we were the global #1 in that space and we're able to move that capability to cloud, we were able to expand our total addressable market to not just SharePoint but into the entirety of Office 365, which includes Exchange, OneDrive, of course, Teams, Yammer, Project Online, SharePoint Online, et cetera. And of course, as we follow our customers, we have 16,000 enterprise customers around the world, we also are supporting multi-cloud. So we support Google, Salesforce, Box, Dropbox today. So today, we're actually quite multi-cloud. Although majority of revenue is generated in the Microsoft ecosystem. Next slide, please. So the overall market landscape, what's driving a lot of our growth here, as everyone, I think, is very familiar with the market trend, explosive enterprise data growth. Of course, this massive transformation to cloud because then we can have latest software stream to you. So the cost of maintaining, operating and secure those assets are passed on to the cloud platform providers, which takes a lot of the headache away from the enterprise. And at the same time, though, enterprise, because they're computing needs, they do have more complex deployment scenarios, whether it's multi-cloud or hybrid cloud. So of course, Microsoft is the largest digital collaboration platform provider, the largest SaaS enterprise platform provider with now 280 million users, Microsoft 365 estimated [ we're into norths ] 500 million users. So that's a massive addressable market for us. Next slide. So we also saw that this whole digital transformation of every business have to be a technology business. It's happening much faster due to this, what's called a COVID acceleration. So when normally it takes the enterprise a couple of years to go through a proper transition into cloud, thanks to the special scenarios brought about by remote work, by pandemic, by VPNs that doesn't scale, by the legacy technology that doesn't scale, folks are actually -- enterprises and small companies have gone to cloud in record pace. So what took usually a 2-year process is narrowed down to a few weeks. So this is really evident during the last 1.5 years, and we see Microsoft continue to dominate the collaboration space. So it's worth noting that, again, for the audience here, that Microsoft actually has 3 clouds. There's the Office cloud, which is called Office 365, wrapped under the whole moniker of Microsoft 365. That -- the only competition in the market, viable competition to that, and a distant second is Google. So it's Google Docs, Google [ G3 ] and now [ Kakao Workplace ]. And then the other cloud that most people know about and hear about in the industry is Azure, which is their compute cloud. It's second only to Amazon AWS, Amazon Web Services. So that's a general purpose compute cloud, which, again, really some new services, machine learning, AI, which we also have our solution running on across with 14 data centers around the world. And that's also, again, well ahead of Google compute cloud. The third cloud is actually called Dynamic 365, which is their CRM and ERP cloud. We also have a product for that as well. Think of the CRM portion as competitive to a Salesforce. So there's actually a broad range of offerings, and we play actually now in all 3 clouds. So that's where an exciting tailwind for us. But majority of our revenue come from the Office 365 today, right? Next slide, please. So what do we do? We actually bridge the gap between what Microsoft Cloud offers versus what the enterprise actually really need, the so to speak in the telco lingo, the last -- we solve the last mile problem. We make the tech work for the enterprise according to their needs across different license types, across multi-clouds and across hybrid scenarios. So those are very, very important. Microsoft recently also increased prices across their portfolio of license types for Office 365. And you see that there's actually quite differentiated functionalities and offerings across license types. Our software actually make that consistent, coalesce and make -- help our customers maximize their ROI on their Microsoft stack, but also very importantly, to have a cohesive data management, governance and security treatment across multi-cloud, across AWS, across Google, across Box and Dropbox. So those are important features that we actually provide. And it does take a third party to provide that type of last mile problem for companies and customers so that they can effectively deploy Microsoft cloud for their specific needs. Next slide. So what do we do? We actually have over 30 products on our SaaS platform. We actually categorize them into 3 major pillars of data transformation, data governance and data compliance. So transformation is actually -- prepandemic, used to be quite a door opener for us to get into account in sense of migrating customers, integrating different systems into Microsoft cloud and also migrate in between. So for example, we were the first vendor in the world to support Slack to Teams migration. So that's data transformation. That's just 10% of our business. Governance, we talk about actually data asset management. That include backup as a service, which is even named by the White House as a very, very important aspect of recovering from a ransomware attack. So you need third-party to intermediate a segregated backup, so bringing on to storage, bring authentication and bringing on security. And whether you want to store off on premises or in different cloud, provide that business continuity and resiliency, those are the flexibility we offer our customers, and that's what business are looking for. So we're actually one of the largest Backup as a Service SaaS provider for Office 365, much larger than, for example, Rubrik and other vendors, [ EMV ], because we are actually done SaaS offering for now almost 8 years in that space. In addition to that, we talk about Teams security and governance. Think of the way Teams and Slack, the social collaboration platforms, are designed to be very viral out of the box. So Teams today has 250 million active monthly users. So what does that mean? That means you can create channels. You can share content files internally, externally very easily. But for enterprise, that also means there's data sprawl. There's also oversharing. In fact, our partner, International Association of Privacy Professionals, IAPP, estimated that 90% of enterprise data leakage happen unintentionally by internal actors. So we hear hacking, we hear phishing attacks, social engineering, but that's just the tip of the iceberg. So this is where -- there's no silver bullet to data security for enterprise. It's a multilayer approach. And we are the layer that actually help companies maintain and govern their internal data assets much more effectively. So basically shut down data assets when the conversation is over or highlight and flag contents that are potential overexposure. Or the person's role change, then the assets they have access to must be automatically kind of turned off or redacted. So think of us almost like what Varonis does for Azure is what we do for Microsoft Office 365 content. So that's the security and governance aspect of it. That's actually the big piece of our business. Well over 2/3 of our business is in that pillar. And then we also have compliance. And that's essentially record management, data privacy, classification tagging. And this is where risk officers, compliance officers really care about how you sunset, how you actually do proper data retention. For example, there, the Internal Revenue Service of United States is our biggest customer, talk about transform their records, whether it's physical records or digital records, into electronic records and have a proper life cycle management -- record management of all their contents, on-premises as well as in the cloud. So that's also 1/3 of our business. And the remainder piece of business is services. So over 80-plus percent of our business is software today. Around 20% is services. And we do enterprise deployment services, consulting services. That's where we also generate innovation. But that service component, over the next few years, will go down to 10% as the business continued to grow at 30-plus percent year-over-year. The reason is that we are actually investing very aggressively through channel. We're actually offloading many of the service work to our channel partners. We will still have some services because a majority of our customers are large enterprise, government regulated industry. So we continue to leverage service to generate innovation. But overall, we expect our service mix to be just 10% of the business, while all the reoccurring software piece of it is going to be 90% from today's 80%. So next slide, please. So the AvePoint advantage is really what I already highlighted: the enterprise scalability, the ROI for the customers, the consistency and automation that we baked into the Microsoft cloud data management capabilities. So we cut across license types, cut across multi-cloud, cut across hybrid. And you can easily see why Microsoft doesn't necessarily want to do all of this or have the bandwidth to do all of this. So this is where Microsoft has a massive ecosystem. They always talk about for every $1 of Microsoft revenue, they generate $9 of partner opportunities. And for a $2 trillion market cap company, that space continue to get geometrically larger. And that's a space that we operate in. So it's actually a really, really strong tailwind market for us to continue to grow the business. Next slide, please. So some ROIs that we talk about for our actual customers. We actually talk about -- we accelerate Teams adoption within -- by 94%. And we also, on average, save our customers from data -- with data governance and data loss issues about $500,000 per savings. So actually, overall, I think we are -- annual aggregated savings we estimated for our customers is around $127 million on a yearly basis. Because you think about automation and security that goes in, you can actually save IT and security a lot of work, manual work to maintain that infrastructure. On the compliance side, we also save our customers. This is a great example of a defense contractor. They were able to lower their fine on an ITAR violation, which is a weapons treaty where they invariably actually disclose some sensitive data to third party that they're not supposed to. But by implementing our solution, the judge were -- was able to lower their fine by $20 million because again, no one is perfect, but if they actually have the right technology, people and process in place, they can try to make themselves more compliant going forward. So these are the type of things that we actually help regulate the industry, public sector, large businesses to help govern and protect their data. Next slide, please. So in terms of compete landscape, we actually don't have a singular competitor. We have point competitors. The reason also is it came from our genesis of doing this enterprise content management platform, data management to Intuit, right? We talk about, again, the transformation, the governance and the protection aspect of it, which is compliance as well. So in migration, for example, we will run into the enterprise space a Quest Software. And in management, for example, we will run into like a Veritas and a Veeam. And in security, we will run into Varonis, for example. So for the enterprise segment, which we make most of our revenue in today, we define enterprises companies doing $250 million annual revenue and above. We're actually even -- over there, we have another segmentation. So we have inside sales that focus on $250 million to $2 billion annual revenue companies and field sales focusing around $2 billion of revenue companies. So in those spaces, which we previously primarily do direct sales, the competitor -- we just mentioned the point competitors, they're late to the SaaS game. We've been doing SaaS in the Microsoft space for now 8 years. So that kind of first-mover advantage, it's a massive advantage. For example, in our earnings, we announced that we are FedRAMP-authorized, and we picked up a 50,000 events contractor as a key customer for data governance and security needs. The FedRAMP certification process took 3 years to get. And you think about also the ISO audits that we did, the ISO security audits for our SaaS platform. That took 1.5 years to get. So it's not just about putting some technology VMs and running it in cloud and cloud SaaS, it's actually fundamentally changed the way you actually continues integration, continue deployment. We actually release our software every month, new updates, just like Microsoft with our SaaS platform, so to all the multi-tenancy. And as well as all these certifications secure audits. So those literally takes time. This is where we have a first-mover advantage. We, of course, also has a platform advantage. So that's the complete landscape. Next slide, please. So on the Microsoft side, also a lot of folks ask, "Hey, what's the relationship with Microsoft?" We have been a Microsoft ecosystem partner for the last 19 years. We don't compete with Microsoft. We compete within the Microsoft ecosystem. The Microsoft ecosystem is fast. So how do we stay ahead of it? We're actually considered top 5 global SaaS partner, especially around Teams and also around Azure adoption. Our team's app, which is called My Hub, is actually the #1 team's app in Japan, top 5 globally, so insurance teams, governance, automate, again, provisioning and sunsetting of content in Teams across channels. But we also, from a Azure consumption perspective, Microsoft actually have an incentive program for their sales organization to work with partners to make sure that our customers are consuming. We're in the consumption world. So it's no longer good enough just to sell a license. We need to -- all the software vendors are focusing to make sure that customers are happy. At the end of the day, the customers are consuming the tech that they bought, the license that they invested in. So we're actually top 5, what's called IP cosell. So a partner for Microsoft around the world. When our sales guys close a deal, 10% of that TCV goes towards Microsoft account reps, quota retirement for cloud consumption. So that means they're actually getting paid on it. We're actually top 5 partner in that program in the same category as Adobe and DocuSign. And we're, of course, a much smaller company compared to Adobe and DocuSign. So this also highlights asymmetrically how important AvePoint to -- in the Microsoft ecosystem. And very importantly, we actually have a number of MVPs as well as RDs. So these are basically most valuable professionals picked by Microsoft as influencers in the community. And RDs, there's only 100 plus of them. They're called research directors. They're basic -- MVP of MVPs. So these folks actually get to see the latest Microsoft road maps, get to participate in feedback loops to Microsoft product teams. So we're actually going to see what's coming down the pipe 1 to 3 years ahead of the game. So we also get to provide feedbacks. So this means we know where to invest, where to avoid as we continue to grow within this Microsoft ecosystem. And also lastly, on our Board, so Mr. Jeff Teper, who's actually Head of Engineering for Microsoft Teams, OneDrive, SharePoint, a very large organization, has been a Board member since 2014, an independent Board member. So we also have a very senior access. He's a corporate VP, so 1 level away from Satya. So that there, we also have connectivity with Microsoft. Next slide, please. So in term of the TAM, the total addressable market is vast. We talked about going from over 8 million users today to close to 50 million users, and that would just be 10% of the overall total possible market. And that will make us already $1 billion reoccurring annual revenue business. So this slide, sorry, I apologize. The data is a little out of date. It says just 7 million. We announced that we have over 8 million active users already. So a lot of folks say, "Hey, why so little?" In fact, if you look at all the vendors out there, we have the most. Again, it's a matter of, one, the speed to adoption of cloud and also the number of folks using advanced workloads. So previously to Teams, most people in Microsoft Office 365 space only use simple workloads just like e-mail and file share, which is OneDrive. But now, of course, with Teams adoption, that has exploded with advanced workloads. So that's document sharing, that's document management, record management. Then that -- of course, that involves also SharePoint usage across the board. So those events workloads, those data explosion really means that a much more increased need for AvePoint product and solutions. If you recall, for a while, Teams -- Microsoft Teams and Slack had this ongoing battle on who has more user seats, so much so that actually Slack took a 1 page ad on Wall Street Journal to talk about they're not afraid of Microsoft Teams, and that was 2018, right? In 2019, Teams went from 20 million users to 90 million users. And of course, over 2020 and 2021, they went from 90 million users to now 250 million users. So that explosion in collaboration and explosion in Teams usage, especially now with Windows 365, which is Cloud PC release, which is bundled in, every instance has Teams bundled in. And of course, our apps is also in the Teams. We're one of the very few security-certified apps within Teams. That evergreen delivery capabilities through Windows 365 is another massive channel for us to get our solutions into more hands. So we're feeling very, very good about the strong demand and the tailwind of this part. Next slide, please. So one more thing I want to highlight before we go into the financials section is that what's really interesting for us is while we're very, very enterprise-focused because of our heritage in the enterprise content management and governance space, servicing large enterprises, we have found that since we have gone to SaaS, many small to medium businesses are coming to us. And again, our definition of SMB is very generous. It's $250 million annual revenue companies or 500 employees or fewer companies. And that's actually the space where Datto and Veeam make all their market, Rubrik. So actually, for Microsoft, that's 40% of the headcounts for the entirety of Office 365. So it's actually a very, very big market. Historically, that was not reachable to us because we're very focused on enterprise. But we discovered that since we have gone to SaaS, where again, we're maintaining the upgrades, the operations and facility of our software, our software is also very, very accessible to the SMB. And we quickly realized that just because you're small, if you're a 10-man law firm, 20 men accounting firm, doesn't mean that your data is worth less to you than a Citibank or American Express. So they're coming to us. They don't have IT in that segment, mostly. They rely on their service providers. So the folks that maintain their Zoom call infrastructure, their e-mail infrastructure, these folks are actually generating what's called a managed services practice, monthly reoccurring managed services that bundles in, of course, the Microsoft Office 365, M365 license subscriptions. So those folks are becoming the buyers of our SaaS solution. And our SaaS solution are designed so that the MSPs can actually manage and govern hundreds of tenants data from 1 [indiscernible] glass. So that allowed them to scale, allowed them to capture much better margins. And now we just rolled out a global channel partner program. That allowed them to also tap into our APIs so they can do DevOps. They can generate unique IP on top of our data management SaaS offerings for their Microsoft customers. So that's also a massive value add. And we feel that today, it's already a fast-growing segment. It's 5% of our ARR, but it's growing 3 digits very, very quickly. So we feel that there, while there's SaaS competitors, point competitor like a Datto, we feel that our enterprise-grade SaaS and our platform play, again, we don't just do Backup as a Service, we don't just do governance and compliance, and we don't just do integration and migration, we do all of it from a SaaS platform. We feel that with our platform approach. And now that we're also public, we have the marketing capabilities and capital structure to grow much more aggressively. That's the space we're very, very excited about. Next slide, please. So overall, we have been around. And for some time, we have great splash of blue chip clients. So there's also talk about the resiliency of the business. We didn't actually add headcounts in '19 and '20. Our business still grow 30% ARR year-over-year, 50% revenue in '19 and 20 -- over 25% revenue in 2020 as revenue kind of catch up pace with ARR from the recruiting aspect of it. So this year, we're looking at 30% revenue growth. So consistent growth with blue chip clients and very resilient business. Again, we were able to get a lot more sales productivity despite not increasing headcounts in '19 and '20. And start at end of '20, we invested -- we have increased our sales customer-facing organization. So sales channel, customer success by over 50%. So that allow us to ensure our continued growth into 2022 and beyond. Next slide, please. So I spoke a bit about the growth vectors. So I'll just highlight here that the major drivers, we have truly multiple driver for growth. So firstly, taking care of our existing customers. Our net dollar retention for our existing customers is already at 111%. So that means if we don't do anything but to take care of our existing customers, our revenue will grow 11% year-over-year. We're working aggressively to get that to 120%, which is the industry benchmark in the short to medium term. And second, of course, I mentioned already, we continue to invest into our direct sales force, and also -- so that allow us to grow that. And also the SMB segment, the expansion of channel. We're already in 100 digital marketplaces, integrated with Ingram Micro, SYNNEX, SoftBank, rhipe in APAC. So we have a great distribution channel. We're doing active partner recruits. We have already over 1,000 partners that's selling our solutions. When we launched the global partner program in mid-June, within a month, we actually recruited close to 400 partners. So that momentum is very, very encouraging. And of course, we also have industry solutions as we build additional sophistication on top of our data management platform. So we can stream upstream and do more business audience-focused critical applications, so like our EduTech offering. So that allow us to be more sticky and become a more strategic partner with our customers. And last but certainly not least, continued global expansion. We're quite global today already. But as Microsoft dropped data centers in-country, we see our SaaS business grow in those countries. This is very evident with South Korea. It's happening in UAE. And of course, Microsoft announced data centers for Philippines, Indonesia and those countries. So it's -- we're in this anti-globalization climate. Every country want their cloud. So this is actually, again, something that works really well within our wheelhouse. Talk about data sovereignty, talk about regulations, talk about different data centers around the world. Next slide, please. So the management team, a vast majority of it have been with the company for over 10-plus years. I also have Jim Caci, our CFO, joining us. He was with the team in 2010, 2013, and recently rejoined the team. So Jim knows the organization very well, so he can hit the ground running. So again, it's the same veteran, experienced team that has taken this company from 0 to what are we today? With just $60 million primary capital and no debt. So we're very, very excited about the next phase of our growth as a public company. Next slide, please. So on the financials, I'll just go through real quick. Next slide. So as we already mentioned, we -- because of the recurring and predictable nature, it's a very predictable business now. Well over 70-plus percent of revenues already spoken for going to any new year. As we've also mentioned, we have multiple growth drivers and strong operating leverage. We were actually profitable last year as well. So it's also very rare to see high growth and profitable SaaS companies going out there. And we're also quite capital efficient. Next slide. Just to highlight the overall recurring mix. So already this year, we're looking at $190-plus million revenue, and that's 81% recurring. And going forward, as I already mentioned, we are intentionally offloading the services component to our channel partners. So we expect that to go -- continue to go down from 20% to eventually down to 10%. So we're already forecasting for next year, 85% of our revenue is all software and all recurring. Next slide, please. And also, this is another way to highlight our investment into customer success. We have already meaningfully improved our net dollar retention by 19 basis -- 19% actually to 111% now. So we'll continue to work on improving our retention. And the goal is to get to 120% in the short to medium term. Next slide. And here, you actually see the growth of our ARR. And we believe that because we have pure SaaS licenses of all of the recurrings component of our revenue, we have pure SaaS, and we also have our term licenses. Actually, SEC asked us to wait that out. So term licenses, our customers, whenever they have any sort of hybrid scenarios, so it's a term license. So the revenue recognition -- our revenue is different as ASC 606. But the best way, we think the most accurate transparent way to reflect the growth of our business, this ARR, annual recurring revenue, so today, it's already $139 million, as you can see, is 33% growth quarter-over-quarter. And from a revenue and recurring perspective, it's also very, very healthy. So the growth rate on the recurring side is also much higher than the overall revenue because again, revenue has some services component as well. Next slide, please. This is our last slide before we open up for questions, Robert. So we want to just highlight, I think also, yesterday, William Blair released their report about diamond in the rough. So yes, I think the stock prices have some volatilities because they're a retail component. But overall, this is -- we're very bullish about where we are as a company. There's often a number of software SaaS companies out there, NYSE as well as NASDAQ. The number of company that has $150 million last 12-month revenue and over 25% growth of revenue as well as over 10% of EBITDA margins. Again, in that rule of 40 [indiscernible], there's only essentially 5 other companies like AvePoint. So that puts us in a very unique category as high-growth, profitable, SaaS B2B software companies. So with that, Robert, let's open up for some questions.

Great. Great presentation there, TJ. So if any of the audience have questions, please use your app. I think there's a button with 3 lines on it, and you're more than welcome to submit your questions. I have a few that I'd love to jump into here, TJ. So good overview on your competition and also a fantastic set of customers. What is it really that helps you to win and achieve this leadership position? You talked about first-mover advantage and also platform advantage. Are those really it? Or are there other things that really help you in terms of winning over new customers here?

Yes, Robert. Historically, we have always been a very technically focused company, technical execution. So all the founders are all computer scientists. My background is actually writing trading systems on Wall Street for Deutsche Bank and the Lehman Brothers. So our -- it's also a bit of an accident history that we got into this enterprise content management space with Microsoft platform, SharePoint. And of course, SharePoint now is the middleware, the foundation fabric for the entirety of Office 365. So that's office cloud. So that allow us to essentially execute this whole end-to-end data management capabilities and then expand to support the entirety of office cloud. So every company you see out there, the competition, they all have their -- kind of their core strength, where they come from. Some companies come from e-mail space. Some company come from Google and AWS space. We came from the ECM space, and we were able to successfully pivot towards cloud back into -- we started doing that pivot in 2010, when, at that time, remember, Ballmer was still the CEO. Microsoft wasn't cool anymore. Their stock price hasn't moved for 10 years. So there was all kinds of naysayers, right? So we were able to forecast early and be able to make that investment. I think really, early mover, it's actually a very, very important thing because to become a enterprise-graded SaaS provider that's global, there's quite a bit of things that goes into it. And also just like I highlighted earlier, it's not just a technical issue, right? It's a regulatory issue. It takes time. It's also a people issue of having a 24/7 cloud operations team. I have a 24/7 security team. All that investment takes time to get in. And so this early-mover advantage, it's actually a pretty big advantage. We talk about FedRAMP authorization. It's a 3-year process to get into U.S. government data centers and become one of the very, very few that are able to sell at that level. So I think that's an important one. Of course, the platform one is also very important. We're able to cross-sell and upsell. That's how we can meaningfully increase our NRR so quickly. And we're very confident to get to the industry best of 120% NRR because we are allowed to become more sticky, right? We're not just one trick kind of solution provider. We don't just do backup. Without backup, we can do GDPR, we can do [ prospect specification ] tagging and then we can do governance off of that. So of course, now, the biggest trend is ransomware protection and recovery. So there's a lot of additional use cases. We're now opening APIs, and we're now offering DevOp opportunity for partners to generate new IP. So that, together, I think, is really the crux of our competitive advantage. This platform advantage that's been offering this integration advantage to our partners will be a true differentiation for us.

Okay. Perfect. So I think you also highlighted your growth plan, and I think I'd read somewhere that you have -- you see an ability to get to $1 billion of annual revenue, which is fantastic. In terms of how you get there, what are some of the additional growth avenues? Are you guys thinking about looking at other platforms? It feels like you've got a lot of runway still in Microsoft. Are there other vendors that you're looking at?