Datadog, Inc. (DDOG) Earnings Call Transcript & Summary

Okay. Good morning, everyone, and welcome to the second day of the Oppenheimer technology conference. I was going to stay here in Boston, but we're everywhere, I guess, at this point. So thank you for joining us. My name is Ittai Kidron. I'm a technology analyst at the firm. And I've got the pleasure of hosting David, the CFO, of Datadog. David, how are you?

I'm good. Thank you. Thanks for inviting us.

No problem. Elbow high five, very good, in the spirit of the times.

Yes.

Thanks for joining us today. I really appreciate it. Quite an interesting year, quite an interesting event yesterday in Dash as well.

Yes.

And so maybe then since we're right off Dash, literally hot out of the oven as they say, why don't we talk about the portfolio because you made some very interesting announcements yesterday. So why don't we go over the evolution of the portfolio? And maybe you can kind of work into that the announcements that you've made yesterday, which were quite interesting.

Okay. Yes, thanks. Thanks a lot. Sort of from the beginning, the company was founded in 2010 and it was founded, as we've talked about previously, as an integrated data platform with a common data language. So that's how it started and that's one of the reasons that we've been able to have rapid product innovation as the years have ticked by. In 2012, we hit our first end market. The company was not founded as an infrastructure monitoring company. But in 2012, we launched infrastructure monitoring. That has been the majority of the revenues and it's proven to be a very effective and ubiquitous landing spot with our clients. In 2017, we added APM, and yesterday, a number of the announcements had to do with build-out of APM. The most prominent was adding Profiling, which allows us to diagnose down to the piece of code 24/7 real time with low CPU consumption. That's now GA. And in addition, we added Tracing Without Limits. We have been adding Without Limits to most of -- to a number of our products to allow our clients to investigate real time. And so that was some of the major announcements yesterday in APM. In 2018, we introduced Logs, and the motion of adding APM and Logs to the infrastructure land has been the dominant selling motion. We announced that -- updated everyone on the earnings call, 68% of our customers now use more than one product and the other product is usually either APM or Logs or both. And 75% of our lands now have more than one product. So those are the big 3 and the pillars. In 2019, we added -- we were very active. We added Synthetics, Network and RUM. And yesterday, we made a number of announcements around Synthetics and RUM that included Mobile RUM being able to monitor out to mobile applications, error tracking features in RUM, aggregating errors. And we've also been able to push a little more into the CI/CD side developer tests. We added some functionality yesterday in Synthetics. So that will allow us to monetize more RUM and Synthetics, which are denominated by tests. That takes us through last year. And then this year, our big announcements were the launch of Security. We started out with a penetration analysis and we added yesterday -- another of the major features was Compliance, another part of what we're building out as the modern SIEM. And this right now is in private beta. We're basically, like we always do, working with clients to develop the products. But that was another of the announcements. In addition, yesterday, we announced some cross-platform functionality, including some mobility. We also announced Incident Management and that is going along with having mobile Datadog, et cetera. And that's -- we're helping our clients with their workflow and collaboration in analyzing issues. And in addition, we extended ourselves more into the community by announcing Marketplace, and that will allow clients to buy pieces of the solution that we usually integrate with, but they can buy from us all integrated and we announced a number of partners. Very early days there. We are in the market with that, and we'll extend the partners over time. So sort of that takes us up to the present, it's a little bit of presence, a little bit of a long history. But that's the evolution of the company product-wise.

That's great. There's a lot in this, so let me start slicing through if you don't mind. As you look at -- clearly, you've made very good progress in APM and Logs and you've talked about the attach rates of those, both as far as revenue and as far as lands are concerned. Help me think of the new products or maybe just from a big picture standpoint, how do you think about when you introduce a new technology, whether to introduce it as a separate SKU or just an enhanced feature within an existing platform? I mean yesterday, some of the announcements were completely new SKUs. And some of them are clearly enhancements on the road map. What is the thought process behind that? And how likely are these new SKUs that have introduced, what do we think about time line as contribution to revenue? How do we think about that?

Good question, yes. And yesterday was a real mix of that. So I think the way we think about it is, if it's sort of a new data set or a new functionality that can be a new SKU. For instance, Profiling is a new SKU and will be added on the public website right now. And when we go to GA, Compliance will be a SKU within Security. So we think of it as, are we adding new functionality or data. As far as modernization is concerned, we've been pretty good. We like the results from Security -- from Synthetics, sorry, which was the first of this newer group that we launched. And we have traction in RUM, NPM and in Security, all of which are growing significantly quarter-to-quarter sequentially. As far as monetizing, I think that we will be able to monetize Profiling currently since Compliance is in private beta. So I think it will be, like we always do, working with clients, getting it out, having clients use it. Discovering the most effective way to go-to-market has proven very effective for us, and so some of this will be over time as we work with our clients once they've used it.

Got it. Do any of the new solutions or enhancements change the persona that you talked to within the broad IT department?

No. I think that we're essentially still talking to the DevOps world, adding more functionality to them. And also as we -- as those listened to the keynote, as we are continuing to break down silos, even in Security, I think we think that what's happening is what happened in DevOps, which is Security and DevOps coming together. So, so far, we haven't had the need or the products to go to a different type of buyer. We said in Security that may happen and -- as we roll out the product. But we're in learning mode right now and we'll see as we go.

Got it. So this morning, early this morning, I went to your website and I looked at the pricing page. And boy, that was a very busy page. You had, needless to say, lots of solutions, but they also -- each and every one of them was almost priced in a different metric: per function, per session, per host, per gig. Where do you draw the line about risking confusing customers, where overwhelming them with a lot of different -- if they want to bring all of this again, ultimately, you'd like to sell all of this together, how do you help them get their hands around what could really be the real cost of deploying of all of the business? They're all running on a different clock. How do you avoid confusion, streamline this? At what point do customers perhaps get overwhelmed by all of this?

Yes. Stepping back, our pricing really is either by device or host. That would be infrastructure, APM, for instance, Profiling's going to be by host, or by piece of data consumed. We like the fact so far that we've been able to get transparency in the use functionality and value of the products by pricing them uniquely. It means -- and the fact that we're very transparent in our pricing, even though we have a lot of it, on the website means that our clients are also able to be -- see transparently. We have meters and clocks, et cetera, so they can see that. So far, that's been our strategy. I think one of the ways that we've packaged effectively, given that clients may not know their distribution of the different parts of the functionality, is to use what we call drawdowns where a client is buying capacity in a certain time off of the price list and then they are able to use it in any way they see fit. That's proven very popular. And in greenfield, when a client may not know exactly what they're going to do, that has proven to be popular. It also allows a client -- it's client-friendly, and that allows a client to use more products, see what they're like and then we found it to be a very effective way to cross-sell and grow the overall platform relationship.

Interesting. Interesting. So they -- all right. So they're capped at a certain dollar number and they get to choose how they spend it between the products, lets them experiment and try and kind of figure out what the right balance is between all of these. Interesting.

Another thing that has been in our philosophy, which again, has proven to be -- to promote the spread of the use of the product is not do it by user or seat, but do it by device or data. That also we found promotes the ubiquitous use because you don't have the clients who are making decisions potentially of adding users. And certainly, we do that in our use -- when we're consuming software on a user basis, have to make that decision all the time and may make incremental decisions not to spread it out as ubiquitously.

Got it. Okay. That's interesting. That certainly helps with planning. I mean they don't -- I guess, they don't need to plan too much. They just kind of play around with it and then figure things out the right balance. So infrastructure is still the main entry point with our customers typically still today. But do you think that if you and I talk 2, 3 years down the road, that's still going to be the case? Or do you see the potential for another product area to perhaps take the lead, if you feel like to call it, in kind of -- in penetrating it to customers?

Right now, we think that's a pretty good entry point. When you think of it being something that you would buy right after or as you're migrating to the cloud, it's proven very effective. We don't see any near-term plans to change that. It's really facilitated the entrance and sale of the platform. I think that to the extent that we're going to another user profile, that may be the case. But right now, we don't see that. It's been a very effective way to land and expand, and it hasn't prevented us from being in hyper-growth and reaching real scale on the APM and long products. So it's been a good synergistic relationship in growing the platform.

Got it. Excellent. And then on Security, clearly, you made a step a year ago and this year you've kind of enhanced your offering there. Help me think about the limits of what you can or cannot do, or maybe put differently, want and don't want to do within Security?

Yes. Well, first of all, we're focusing on production environment -- digital production environments, outward facing to customers, similar to our other. We are not focusing inside the firewall or end point. So that's an important area. A lot of the Security is that way. So I think that's one way to think about. That leads us to Security DevOps. And it's also, I would say, a newer category where, as we're seeing and following the trend of more security responsibilities in production engineers as well as in developers, we're seeing the requirements change and the silos be broken down. So there's not really -- so essentially, we're following the users. I think we're early. We're early in our product development. We were early in that evolution. We're still sort of informative stages. But I think the best way to think about it is if you think about DevOps and application production environments rather than end points and inside, that's really where we're focused.

Got it. Okay. And I guess we should expect many more announcements on the Security path longer term. Fair?

Yes. It's a build-out. And it's a build-out that we're doing organically, and we may look at acquisitions as well. So I think there'll be many other features. As Oli has said a number of times, we're early stages and learning on this.

Right. While infrastructure is always going to be a majority, a big part of your business, do you think Security could be bigger than APM longer term? I mean is this like one category that you think can really emerge to be a substantial part of your business?

Yes. Security can be a market size that's equal to observability. And yes, I think that's right that, that could be a TAM multiplier. I think, again, we said we're early in the evolution of Security and DevOps. But yes, that could be a significant TAM multiplier.

Got it. And from a go-to-market standpoint, is there anything you need to adjust in order to kind of penetrate this opportunity a little bit more forcefully?

Yes. That's a very good question. There may be. We're not there right now, given where we -- given the influencers and where we are. But as the product set evolves, we're open to that. As you know, we have a multiproduct sales force that sells a platform. And either through sales engineers, product experts or sales teams, that may have to happen. We don't think we're near that right now, but we're open to it if that's the right way to go to market.

Okay. Sounds like TBD on that. Depends, I guess. So I guess it sounds like the answer is more like the product still needs to get to a certain place before you find that to be an appropriate path?

And we also have to see how quickly the silos come together. For instance, if the decision we may not have thought 10 years ago that dev and ops would be sold to the same buyer. And so we'll have to see. It's, I think, a combination of those 2. And -- but we're open to it. We're going to -- we're looking to solve client problems. So if our clients are segregating that buying decision, we'll have to adjust our go-to-market in some way to address that.

Okay. That makes sense. Now you've talked about APM and Logs as kind of the second and third product areas that you've seen strong traction and attach on the infrastructure side. Can you talk about Network, Synthetics and RUM because those are, what, about a year now almost out in the marketplace? What has been traction there? What did you learn from this so far? What's more to come here?

Yes. So the traction has been very good. Synthetics, which has been out the longest is we don't give revenues by product, but it's a fairly substantial product right now. And we think the whole sort of testing can lead us closer to the developer and to the CI/CD. And along those lines, you see we made a small acquisition in Undefined Labs. And so we think that this both enhances APM and also brings us more into testing, which allows us to get closer to preproduction code creation. And so they're synergistic, and we think they're -- in their own right, they've been successful products that are growing rapidly and also, depending on how things evolve, could bring us into a newer tangential market. I think we said the friction there is not that high. It's been fairly easy for us to sell -- or not easy, but it goes along. Same buyer. Network, more complementary to infrastructure, a little more friction going into potentially a different buyer or a little bit of a lift. And so I would say, Synthetics is the largest revenue right now followed by RUM and then Network. Security, we're early on where we've gotten some good traction, we've got some good feedback, we have revenues, but we're still in that mode, as we talked about, of getting feedback and developing the product.

Got it. Interesting. On the Network side, it's a different constituency, one that probably also uses a lot of legacy stuff and very difficult to dislodge probably from what they're doing. But...

It's really -- we're aiming towards the sort of the flow and digital side of things. But yes, you're right, there's a very strong embedded base and we're not looking to displace them. We're not in a displacement. We're looking to add complementary products to enable our customer base to get more signals. They want it. They -- it's great that they're able to get it in there. So it's complementary, and we'll see what happens as that product evolves.

Got it. Interesting. And with regards to the CI/CD, I mean, you guys clearly started from the monitoring side. When I think about the DevOps cycle, the monitoring side, it sounds like you're doing more on the security side as well. You're getting closer to testing without doing testing. You're getting closer to CI/CD, but without doing CI/CD. Is there a line here that perhaps get crossed? I mean is there a bigger aspiration around DevOps itself, not just the monitoring side of it?

Yes, I mean, I think that bringing information, it depends really how the user evolves. I don't think we're going to be the code repository or the main deployment software. But bringing those signals and bringing that information from the seat that we have to that process is something that we can do effectively. And I think that's what you're seeing in some of the product announcements as well as the acquisition we just did. So we'll learn. I think we'll learn a lot from this. And as we bring that functionality in, we'll learn a little more about what the limit, but we're not trying to be a GitHub, GitLab or a deployment.

Got it. All right. Very good. Now a little bit of a theoretical question there. If you had only one more engineer to hire, into what product area would you put him or her?

We're trying to avoid that type of decision. We've been expanding very rapidly. So I think that's a hard question because we want to see it in a meaningful way, things like security, which is a heavy lift. But we -- there's more functionality and integrations, et cetera. So I'm going to evade that question and say, we're a good resource planner and we've been able to afford to expand in a number of different areas and want to continue to do so.

Okay. All right. You're going to have to answer a hard one later then I think. Then the last thing I want to talk about from a product standpoint is the Marketplace. It was a quite an interesting announcement yesterday. Can you go a little bit into the detail of that? What is it that one can go and find on the Marketplace? And how would it -- does it fit with your long-term strategy? What are you really trying to do here?

I think it's also early, we've got -- we'll learn. But I think that essentially, we always believe that the data, that problem-solving doesn't end at one piece of data or the other. Many of our clients use our product as a central data hub to analyze. So I think both in terms of learning from the market, allowing partners and others to go for one-stop and adding functionality that we might not have, for instance, let's say, in cost management, I think, is the aspiration. I think if you think about AWS Marketplace and others, that's where it could be. Some clients want to buy through one marketplace, and we want to offer that opportunity. I think it's also -- we also think it's a good way to get close to the market and understand what's going on with our client needs. It's still very early. And -- but this is monetizable. Right away, we're in the market right now and able to monetize that.

But to be clear, what is it that we'll find on the Marketplace? Are those kind of widgets that customers build that interact with the Datadog platform? Is that...

Exactly, exactly. Yes. Exactly that's the kind of Marketplace.

Okay. Interesting. So that could be -- is there going to be a revenue-sharing mechanism here?

There is a revenue-sharing mechanism. I don't think we've announced it publicly, but it's already set up with those partners. And we're ready. We're going to -- we're in the market with that right now. So it will be a revenue share. And that's the mechanism similar to what you see in AWS. Yes.

I guess your corporate development people can also use that as a feeder from an M&A standpoint, right? If we see something very broadly adopted, that could be a great feeder from an M&A standpoint.

Definitely. I think that we are -- the integrations that we do also are. So we're in a position with our front-end integrations and the Marketplace that we're able to understand client use. And so I think you're dead on in that.

Okay. Excellent. All right. Let's shift to the dollars and cents a little bit and talk about the business activity. Can you give us kind of -- let's walk through this last quarter and talk about the business patterns. Especially in June and July, you highlighted some large enterprises and large cloud deployments slowing activity a little bit. Can you go into the details? And again, if you could talk about also from a sequential standpoint how this evolved for the quarter?

Yes. So stepping back to where we were last quarter, we said that there was some spike as clients sprinted towards being ready for COVID. That continued into the second quarter. But once -- but we saw some optimization rationalization that started towards the end of April. And in May, we had the slowest organic, this was usage. What we saw was clients beginning -- we saw this in the cloud numbers, too, clients beginning to look at cost savings and rationalization. That doesn't mean that they're stepping back. It means that maybe they're turning off instances in the background, looking at things that weren't optimized. We do this all the time. Our clients do this all the time. It's lower hanging fruit. And then we saw in June, it started to go the other way and the rate increased. In July, we saw usage that was similar to pre-COVID usage in terms of sequential month-to-month. We said on the call that we're not making -- given the volatility, we're not making a call that we're back, but we saw a more healthy and more consistent type of usage. That could be from a number of things. It could be from people starting to relax into normal business expansion a little more. It could be that our clients cut back a little or optimize a little too much, and therefore, they pushed back, and we could see that happen. And that happens throughout, as Oli mentioned on the call, that happens regularly to our clients, just not as concentrated as it was in this quarter.

Got it. Interesting. And was this, by the way, broad-based? Is there any color from a region, vertical, type of product that you can make with respect to this behavior?

We saw -- it's certainly evidenced in our COVID-affected industries like travel and hospitality, which was, as we said, it's about 10% of our ARR. But given the small exposure there, that happened, but wasn't the majority of it. What we saw was it was in the larger customers who had deployed more rapidly and had more opportunity for optimization. We did not, and we were surprised to see that type of motion in the smaller customers that were newer to the cloud. That was a surprise to us. We also saw, in addition, we saw a number of customers like video services, home delivery, et cetera, continue to accelerate in the cloud. And we also saw less churn, gross churn. Our gross churn really didn't change very much, meaning we didn't see that much death of customer, which also was a positive surprise.

Okay. That's interesting. As you mentioned, I mean, it makes sense in a time like this to start scrutinizing every dollar that one spends. I'm just trying to understand if you have a sense on whether the slowdown kind of -- you had the ramp and a little bit of a kind of normalization, if you like to call it. Was that tied directly to cloud deployments of applications that you're monitoring? Or perhaps people over-provisioned Datadog and had to under -- and had to kind of cut it to size, if you like to call it?

Yes, I think it was optimization can go in terms of either leaning into provisioning or could be not attending to efficiency. And so I mean, when we've talked about our gross margins, we lean into expansion and there's always an opportunity to go back without cutting services to optimize. So I think what we saw was larger customers either having leaned in a little bit at the beginning of COVID or not clean things up and optimize and go back and circle back and do that. That's manifested mainly in sort of the on-demand or the variable piece of our revenues.

Got it. And does that also mean usually that they've used more, what you call -- what you mentioned before, the drawdown is kind of a way to work with you instead of kind of picking up the products, maybe perhaps use more drawdowns now, take a general dollar number and then figure out a little bit more closely as you go, as you evolve into what to spend it?

Definitely, the pace -- drawdowns, the pace can accelerate. The major motion in the company's histories have been drawdowns have been gotten used more quickly than their term, was usually a year. That still is the case. In other words, organic use continued to grow. Since we have device-based pricing as the number of devices, this is not something we can control. As they are modulating their devices or their servers, et cetera, that -- it would happen automatically in the system. So I think, mainly, we saw -- since the gross retention didn't change, what we really saw was the activity or the devices get optimized. We saw that in the numbers with the cloud providers, and that would flow through to us. What we did control, we think we did a very good job. In other words, new logos, and we'd get that strong. Cross-sell, strong. Platform adoption, strong. So the thing we can't control, up or down, it helps us a lot of times, it was slower this time, is the natural per-device or data volume growth that happens in the system.

Got it. Okay. That's great. And so as you mentioned, new logos, very strong activity again in the quarter. Any color from a vertical or region? And can you talk about the sales cycles? Have they changed or the initial deal sizes?

Yes. Deal sizes didn't change that much. So you saw that our amount of gross new logos was fairly consistent with the past couple of quarters, plus or minus. And the new logos were accelerating. Not really. I think that we had in -- we didn't see that much difference in the new logos. We also had quite a bit of diversity. We had hospitality companies, resort companies come in, which I think shows as they needed to exercise the cloud a little more, despite the fact some of them were fighting for their lives, they came in. We saw -- we talked about a car company. We talked about expansion of a video platform. We talked about a food delivery. So I think it was pretty consistent with what we've had and I would say more correlated with the development of the go-to-market in that region. We had good lands across-the-board geographically. So that motion pretty much was very similar to Q1.

Got it. Okay. And then going again back to this normalization of activity, how do I think about -- I know you always talk about your net retention rate being greater than 130%. But is it fair to say that if you look back the last couple of quarters, same behavior over there? Meaning, whatever it was, you moved up and then it kind of moved down? Is that the right way to think about it, while still remaining above 130%?

Exactly. We said that the net retention rate did decline sequentially driven by this usage, but stayed above the 130%. And so that's correct.

Okay. Very good. FedRAMP. You recently achieved it. What's -- how long should we expect before government is a good 10% of your business? Government and financial are the 2 biggest IT spenders on the planet.

Yes. And we think it's a big opportunity if you look at some of the other vendors who've done this. There's a lot of reason for optimism. Right now, we passed low-impact. So we are selling to a number of government entities that now were at smaller contracts, et cetera. So there is some traction. It will be into next year because essentially, we have to do is complete the high-impact. That's what we're doing right now. It's sort of a separate instance. And we have been working on the go-to-market in terms of partners and salespeople. But I think it's going to be into next year before we see meaningful revenues from government, although there is success that we're seeing right now. And we agree, it could be a very big sector for us. And I think there's just -- in this case, there's a little -- there's lifting, which has to do with the platform and the certification in order to get there. But it's a big opportunity for us.

Got it. In the past, you've talked about how a lot of your new business activity typically comes in greenfields and not necessarily displacements. When I think about the government, I don't know in what inning they are in moving to the cloud. But aren't they -- for the last couple of years, they've been moving quite aggressively as well, not only consolidating data centers, but moving a lot stuff to their cloud. Are you coming to the party perhaps a little bit late in that vertical? Or you still have -- you think have a lot of opportunity there?

We think there's still a lot of opportunities still, even though there's been some accelerated spending. It's still early days there as well. And we'll learn, but we think we can target the new projects and the new workload movements going forward. We think there's a long runway in this as well.

Got it. All right. So considering on how you finished this last quarter, talk about hiring here. Are you more inclined to accelerate hiring or decelerate hiring right now?

We had a very aggressive plan this year and we've really stuck to it, meaning it was already a very ambitious plan and we are continuing on that. In fact, we've been very successful. Q2 had the highest net hires in the company's history. And we are going to continue, given the opportunity and the long term, we're going to continue right on that path. There may be opportunities for talent acquisition that may not have been there. We may be able to lean in a little more. But I think that we're also cognizant that we're hiring very rapidly and we want to make sure those people are integrated well and are successful. And our plan already had that up to the limits we thought we could execute, and we're executing well on that.

Got it. All right. Great. We have some questions from the audience, and I was going to go right into that as well, naturally myself. But on the competitive front, and we clearly had some vendors that have now broadened their portfolio quite substantially. So they overlap with you in multiple areas. And specifically, there's been a question about your competitive differentiation versus New Relic and Dynatrace? And also whether the new pricing structure of New Relic, can it impact your sales cycles? Or could it cause a little bit more evaluation -- a longer evaluation process by customers?

Yes. So first of all, we haven't really seen -- it was a very quiet, competitive quarter. We really didn't see that much activity, acquisition or otherwise. And it probably gets back to trying to replicate the platform at the core is very challenging. And so it's not a package, just a packaging or something, it's really the platform. It's been hard. We've gotten the lead in that. So that has some challenges. We really haven't seen much. We continue to see Dynatrace in more of the legacy market. They've done a good job there. In terms of greenfield, we haven't really seen them that much operate in -- near us, but not right on top of us. For New Relic, if you look at the numbers, the market has been speaking and this platform buy, if you look at our types of numbers and the market has been speaking there, we -- it's too early to tell. But one of the things that I would note is that our strategy in pricing and pricing the different products as well as not pricing on a user basis, but either on a device or an information basis has been intentional to try to build ubiquity. So we'll have to see. We don't -- we'll watch it. We certainly will watch it. But we haven't seen any effect so far in the competitive landscape from either the development of that platform or the announcement of the pricing change.

Got it. When I look at the environment, there's a lot of competitors out there. Some of them are real big installed base as well. And I guess the question I have, given the performance that you're delivering in the marketplace, which is undeniably the best of all the other competitors, the technology leadership that you have, the pricing modeling that you have, why not do something unnatural, right, to accelerate? I mean you're in the midst of a massive displacement opportunity. Why not be far more aggressive than you have been in the marketplace in favor of what is likely going to be a longer-term displacement than consolidation of market share?

Well, first of all, in terms of displacement, we are not trying to displace existing vendors. We're trying to do -- work on greenfield. So -- and we can't control cloud migration, meaning we're not going to go in and tell people to migrate. So essentially, we tried to optimize on a pricing model that creates little friction and wins the hearts and minds at cloud migration in order to offer the compelling solution. I think also by focusing on dynamic architecture, cloud, et cetera, we've been able to concentrate our development and be excellent and be the leader there. If we were to circle back at this point into on-prem, one, we think we're sort of that might be years away. That might dilute our R&D. There's a huge opportunity of where the puck is going. That may be something we do eventually. But right now, I think our legacy and our integrated data platform and our cloud nativity has served us very well in becoming the leader in that market.

Got it. So basically, the market is coming to you, so why...

Exactly. Yes.

Very good. Excellent. Well, I think we're out of time.

Good.

This has been great. David, I really appreciate your time. Thank you very much, and have a good rest of the day. And folks, if anyone has any questions, follow-ups, feel free to e-mail me and we'll help you out. Thank you very much.

Thanks a lot. Thanks, Ittai. Thanks for inviting us, and have a good rest of the week. Thanks.

Thank you very much. Bye-bye.