Varonis Systems, Inc. (VRNS) Earnings Call Transcript & Summary

So I think we're live here. Good morning, everybody, and to those of you joining to Day 1 of UBS' Global TMT Conference. My name is Fatima Boolani, I'm UBS Software Analyst for the mid-cap space here at UBS. And today, I am trilled to have on the line with me the [ Varonis ] -- actually have a great representation from the C- today, Guy Melamed, CFO, COO; as well as Brian Vecci, Field CTO; and we also had Jamie Arestia on the line. So like I said, the full suite is here, we can talk about all of the angles of the business in a very animated way. So I'm very excited to have you on board today, gentlemen. Thanks for joining me.

Thanks for having us.

Thank you.

Terrific. Well, I want to kick start the discussion and maybe just to level set with everybody listening in today. Maybe we can begin with a recap of the last 2 years at Varonis. It's been a pretty monumental and pivotal time at Varonis in the last 2 years, marked by your transition to a subscription model. And by all accounts, it's been a success. And so while this is a pretty understood story, can we talk a little bit about some of your motivations, the customer impetus behind your move and sort of some of the mile markers and milestones you've hit with the model transition?

Absolutely. I think this transition really came from our customers. It was a transition that was directed to provide customers the ability to be better protected. And obviously, it worked very well from a financial perspective for the company, but it was very much driven by the customers. So I think in order to understand the story, it's important to note that today, we have 26 licenses. But when we went public in 2014, we only had 10. So under the perpetual model, when a new customer would come and buy a license, it usually was buying anywhere between 2 to 3 licenses in that first initial purchase and then they would see the value in the product and they would come back and they would buy more when the renewal came or even before that, and it worked very, very well. But when you think about kind of the additional number of licenses that we came out with over the last couple of years, mainly between 2015 and 2018, and the fact that so many of those licenses were geared towards automation, it came to a point where we started hearing from the field that customers just want to buy more of the licenses and they want to be better protected and they want to have more of this platform play. So we started doing work and we did some work with an outside consulting firm to try and build the commission the right way, and we worked through that in 2018. We did a pilot in the second part of that year, where we took 2 teams and we tried out kind of the different variations of the commission plan. We did that in Q3 and Q4, and then we felt very confident to roll this out globally in the beginning of 2019. Now what is interesting to note is that when we worked with this outside consulting firm and was talking to a lot of CFOs that have done this transition, companies that have gone through a successful transition, usually take between 4 to 6 years. And we were hoping to do it quicker, but we didn't even realize how quickly this will happen, and we were very happy to see how, in the beginning of 2019, customers were adopting this very nicely. We didn't go back to our existing customers and try and convert them from subscription -- from perpetual licenses to subscription, but we were just thinking that the additional licenses that they buy would be under the subscription model and they were very receptive, they like that very much. At the end of the day, they were buying OpEx, whether it was maintenance of perpetual, any additional licenses that were under the subscription model. And that really allowed us to move through this transition very, very quickly. We ended 2018 -- Q4 of 2018, we had less than 40% recurring revenue and about a 6% subscription mix. We are at 99% subscription mix in 2020, and recurring revenue is north of 98%. So this transition has very much allowed us to do what we were hoping for and even more than that. We have seen new customers buy in the first initial purchase more than 5 licenses, and that's compared to the 2 to 3 licenses that they bought under the perpetual. And the fact that we're providing them more value is also allowing them to buy additional licenses, and we can talk about that more. The path to double-digit licenses on average per customer for us has never been clear. So we're very happy with kind of the evolution of this model and the fact that it's been very much received so well by our customers.

Guy, I appreciate that historical context. And I want to come back to how the model has changed and the complexion of the business has changed as you are pretty much rounding out the corner on fully converting the model. But what I did want to do is take a step back and ask you about the unique year that we've been in and how the circumstances of work-from-home in the pandemic, how has that impacted the demand levels and appetite levels for the Varonis platform outside of just to the ease of being -- customers being able to transact with you on an OpEx model? So more specifically on observations from this year in terms of demand.

I will talk about the kind of the semantics of the quarters in 2020, and then Brian can give some color on kind of what we're seeing from a demand perspective and conversations that we're having with customers. I will start just by saying that in Q1, the shelter-in-place that happened was probably at the worst time for us. And we saw that customers were very much focused on getting set up from a laptop perspective, working from home perspective. But in Q2, Q3, we've seen how customers are thinking much more strategically about how to protect their data and realizing that they're significantly more exposed and obviously, Brian can talk more about what we're hearing, but I'll just tell you that this confidence that we have seen from customers and the fact that we're seeing this COVID be a long-term tailwind for us, this digital transformation with its short-term headwind, but the fact that longer term, we're absolutely seeing this as a driver for us. And it doesn't even matter if people go back to the office tomorrow, this digital transformation is here to stay. And we definitely see the ability to benefit from it. And all of that has made us kind of reinvest and increase our investments because we want to capitalize on this opportunity on the longer term. And that's part of the reason we had this the first acquisition ever, and we can talk more about that. But everything that we're analyzing and everything that we're looking and all the discussions that we're having with customers, where the potential customers or existing customers, are showing us that this can be a driver for us in the years ahead.

Yes, Guy mentioned the digital transformation, and it's important to put this year in context in that. We've been -- the world has been undergoing a digital transformation for many years. But what happened in March was that suddenly, that was accelerated. Everybody was sent home and now expected to be to work from anywhere using any device that they have, accessing data from wherever they are at any time, and they'll also be able -- they expect to be able to collaborate with anybody, both inside and outside the organization. What that does is it creates two huge problems. The first one is kind of an infrastructure problem. How do you get people connected? How do you make sure that they have a laptop and that you have enough VPN capacity? And that your data and workflows are in Office 365 and people know how to use Teams. So that's the first major issue. And that didn't really affect us so far. And the second big problem is, once you've got everybody to work and once now 95% of your workforce is remote rather than 5%, just to use a pretty basic metric, how do you make sure that all that collaboration is safe? How do you make sure that people don't have access to data that they don't need that once they're getting into the network that it's not exposed that you can quickly detect when something goes wrong, whether it's an outside attack or a piece of malware, something sophisticated like an APT, which we've seen a massive uptick in the last 6 months or an insider poking around something that they're not supposed to because maybe they're about to walk across the street to a competitor metaphorically. Making sure that once you've got everybody working remotely and that data is properly protected that you understand and can measure risk appropriately that you can reduce it safely, we do risk assessments as a matter of course, it's how we engage with new customers and existing customers. We do ransomware readiness assessments. We do remote work assessments. We do data risk assessments on-premises and in Office 365. And on average, we publish this as part of our data risk report, 20% of the data that we see during risk assessment is open to every single person in the company. It's like a bank trying to secure the money in a vault by giving every single person that works at that bank a key, I used to work at UBS. Imagine, if every single financial account that UBS had access to was available to every single person in the company, there's no -- it's no way to run a business. And if you start thinking about data, not as a technology asset but more of a business asset, something that becomes an untenable proposition. You need to make sure that data is properly locked down. We've seen organizations try to solve this problem. The only way to do it is with intelligent automation, and that's -- and the only way that we've seen it work at scale is to use Varonis to do it. So what this transformation has done is not just made these problems bigger and made the threat landscape much bigger and more complicated, they've also given organizations much more of an impetus to fix those problems. And so it's been a boon for us. It's -- what it's done is it's made these conversations even more relevant than they were before.

Brian, that begs the question. I mean, it really seems like the secret sauce and really the aha moment where customers is when you come in and you do these assessments and you're illuminating all this data that employees or malicious insiders have unfettered access to. So I'm curious, is that part of a monetized franchise for Varonis, as you typically see with pen testing services or other cybersecurity readiness assessment services? Or do you typically use this as a diagnostic and sales engagement tool?

Much more of the latter. We do risk assessments totally for free because it offers us an opportunity to install our platform, which is an on-premises solution. So it gives us an opportunity to install it, show our customers the value that it can provide. The risk assessment on its own, as you say, has a huge amount of value. Just understanding getting visibility into data and behavior that you did have before has a massive amount of value. But when we can also provide a road map for remediation, while at the same time, providing far more useful threat detection and investigation functionality. It's the risk assessment deploying Varonis has value on its own, and we use it as a way to engage with a potential customer. We're providing something at no cost that they couldn't have done otherwise and then showing them how having the Varonis platform in place is going to provide value over time. It also gives us an opportunity to talk about our incident response services, which we also offer for free. As you say, this is the kind of thing that other security vendors charge huge amount of money for. We offer them for free for a couple of reasons. First of all, because we can. Because when a Varonis alert fires, it's not noise. We only generate a small number of really useful alerts that have a lot of context. So we reduce time to detection. Our incident responders aren't chasing ghosts, they're not following up in hundreds of thousands of noisy alerts. We also make it far easier to investigate a potential incident. Varonis is the only way with one click to see exactly how somebody authenticated to Office 365? What data they accessed? Whether they then access the VPN and then traverse down to an on-prem data store and access file systems behind the firewall? We're the only way to connect all that behavior together, just as one example. So when you've got Varonis deployed, you reduce time to detection and you also reduce time to resolution or time to investigation. So our incident responders aren't spending days, weeks or months in a given incident, they're resolving in a couple of hours a month. So we can offer incident response services for free to any customer that even does a risk assessment with us. And that's all designed to show the value of the platform. We know that customers that understand and use Varonis are going to, first of all, purchase it and buy more, which is why not only do -- we do the risk assessments and offer incident response services for free, we also sit down every quarter with them and do a quarterly business review to make sure that the goals that were there when Varonis was invested in to begin with, are being met that the use cases that apply to meet those goals are working properly, that we understand exactly who cares about it, that we're measuring things appropriately. And if there are any other resources that we need to bring to bear we can. So we are focused on making sure that our customers are using the platform because we know when they use it, they'll buy more.

Brian, you mentioned that the diagnostic services. You deployed Varonis for free in the customer environment on-premise. So within the current health care pandemic backdrop, how has that changed your ability to be effective remotely? And what consequences or ramifications has this had on your success in remote engagements and still delivering that aha moment when we're in a time where access to on-premise environments is maybe more challenging, from a go-to-market perspective.

It's an excellent question. Yes, it's an excellent question. And it's a really good thing for us that we're totally software-based, and we delivered all of our risk assessments remotely before the pandemic. So it really hasn't changed the way we've engaged with customers. We can install everything remotely. We can run the risk assessments totally remotely. We don't need to rack and stack any hardware. Well, it's certainly valuable to be in the room with somebody and being able to look them in the eye and all -- look at the same projector screen, you're going through a risk analysis. We can do the exact same thing remotely, and that's what we have been doing. So it hasn't really changed our sales motion at all, and it's highlighted the value of the fact that we are completely virtual -- we are completely software-based. We can be virtualized, we can deploy and be managed remotely. It's -- this helped show the value of the Varonis platform to our customers. The fact that we needed to -- we didn't really shift the deployment model at all. The deployment model was ready for this kind of environment.

And maybe extending this point a little bit further in terms of how these proof of concepts and clear demonstration of value, how that is impacting platform adoption? Maybe the question is for you, Guy, since you alluded to the ramp you're seeing in the number of modules that are being taken up across the broader platform. Can you talk a little bit about your top-selling modules? I know you probably love all your modules equally, but your top-selling modules? And how has the pandemic backdrop changed that composition of top-selling modules?

So I think it very much goes back to the conversation of what would a typical customer buy under the perpetual model and how much -- how many more licenses they can buy now under the subscription and what they are. So if I take a step back and talk just about the typical purchase under the perpetual model, it would be usually a DatAdvantage license, a data alert license and a data classification, and that would kind of be the security bundle that we would start with. What's been very interesting under the subscription model is that now it very much relates to what the customer is using? What type of platform they have? What are their concerns? And there's many more licenses that can help depending on the customers' needs. They could be an automation engine license. It could be one of the Office 365 licenses, which have been a significant driver for us over the last year or so, and we're seeing customers buying more of those. I think the simplistic way to see how this has evolved is that when you look at the number of companies that have 500 or more employees and the number of licenses that they have purchased, when you look at the evolution and how that's increased, the numbers are very healthy, the very nice that we went from 50% to 60% on the 4 or more licenses, and we went from 17% to 26% over a year's period on the 6 or more licenses. So the increase has been far better than we expected, but it also shows how under-penetrated we are within our existing customer base. The fact that only approximately 1/4 of our customers own 6 or more licenses still shows how much more room we have to grow within our base. And I will say that one of the biggest kind of statements we got from investors and analysts throughout 2019 was that, yes, you might be selling more licenses in that first initial purchase, but does that mean that you're cannibalizing your growth? Does that mean that customers would buy less when the renewal comes or expand -- or the expansion would be slower. And we gave the NRR number being greater than 120 this year. And the fact that customers buy more licenses, and we said that all along throughout 2019. The fact that they're buying more licenses in that first initial purchase doesn't diminish our ability to increase an upsell. On the contrary, we feel that the more licenses you have and the more you see that automation at play, the higher the likelihood of you as a customer to get to that double-digit license number. So like I said before, the path for us to get on average per customer to double-digit license is more than 10 licenses, has never been clearer.

And, Guy, just on that point, I appreciate the breadth of the solution portfolio is so wide, but 26 is certainly a lot of modules. And so how do you -- with your COO hat on sort of determine how to manage customer analysis paralysis on what modules they can and should buy? And how that influences your pricing and packaging decisions in order to more meaningfully affect module uptake?

The discussions that our sales force has with customers is not on 26 licenses one by one. It's easy to look at it as what are the different functionalities and the fact that those functionalities have different licenses, which are just simply different platforms. So DatAdvantage has more than 10 licenses to offer, but the functionality of DatAdvantage is very much the same. It's just the different platforms that customers need to use. So the discussion is much more simplistic when it sounds from a license perspective. The fact that we have the offering really helps us protect different platforms, but the conversation can stay on what is the -- what are you trying to protect? What are the needs of the customer and then we can show them kind of the value. So from a pricing perspective, we have -- if you take 5 licenses or more, the price list is set in a way where if a customer wants to get it as a bundle, they can. Sometimes the procurement want to show that they're buying -- they're getting more for their buck, and they like the line items on the invoice. But we have the ability to bundle things up and provide them the value, if needed.

That makes sense. Just a last question kind of around this topic and maybe to think about the increasing complexity of IT environments. I mean, that's going to show no signs of abating, especially in this environment and the fragmentation of organizations, network architectures and security architectures. What implications does that have in terms of your ability to support these growing needs and growing sprawl of both data and network environments? And how does that impact you and the way you go-to-market and even develop the product breadth further?

Sorry, I was muted there. I think what it highlights is the need for Varonis as a platform. As you've said a couple of times, Varonis is not a portfolio of different products that are glued together, a tool set where we have licenses that are trying to support individual use cases. It's a single platform that -- where everything is tightly integrated together. And it's one of the primary reasons that, in our case, 1 plus 1 doesn't equal 2, 1 plus 1 equals 10. The more licenses that you have, the more value you get out of the Varonis platform exponentially because everything enriches each other. As you say, data and workflows are expanding, not just on-premises and in the cloud, when it comes to a file system perspective, but also to other applications and other data stores and connecting what a single human being or a single service account has access to across a variety of cloud services and understanding what they actually can access or whether that's appropriate, whether there's any risk there and especially connecting different behaviors together, so that you can both understand and reduce risk, but then investigate a potential incident, let alone detect it, is becoming ever more important. And the Polyrize acquisition was a way for us to speed our time to market to support other cloud data stores and application stores and integrate them into our platform. So Polyrize built a unique solution to understand potential and actual access and alert on misbehavior on data stores that Varonis didn't yet cover. So while we certainly think there's more innovation in front of us than behind us with the Varonis platform, what Polyrize does is give us the ability to speed the time to support these data stores to understand risk holistically and connect behaviors together far more quickly. And so the plan is to sell Polyrize side-by-side initially, but the long-term plan is to integrate it completely into our platform. It's also a technology that's designed from the ground up to quickly support other cloud data stores and other information stores. So we're able to expand beyond Salesforce, G Drive, AWS, Zoom, Slack, -- Jira and other cloud data stores that Polyrize supports now will be able to support more in the future as well. So that's -- what you're describing is a big part of why Varonis as a platform is successful now, and it's a huge part of our strategy going forward.

That's super helpful. And I want to put a pin in that because I think that acquisition and the capabilities there are super interesting, especially for your cloud aspiration. So I would like to come back to that. But before I do, maybe just to round out some thoughts on the business model. And Guy, you sort of mentioned this in your opening remarks around the success you've had with the model transition. But as we think about the opportunity to convert the perpetual base, you have mentioned that none of that has really happened yet. So I'm curious what the inhibiting factors are? And if you do have a program and/or deliberate incentives in place to actually move some of your perpetual customers to a subscription payment model and a subscription delivery model? And how do you think about that?

At this time, we're happy with the fact that the customers that own perpetual licenses pay the maintenance and they buy additional licenses under the subscription model. There's no intention from our perspective to generate friction with customers. We're very much kind of keeping the customer at the forefront of any decision we make and the fact that we have very good relationships with our customers, we don't want to shake that boat. We don't see a need to do that because like I said before, we're under-penetrated within our existing customers so the fact that they are very much in need to protect their platforms and they have the ability to consume more of the licenses under the subscription model, and they would pay everything under an OpEx line item. So it really is a win-win for everyone, and we don't see a need to change that. So I think when you look at where we are today and the fact that we have been able to kind of complete the transition in such quick pace, puts us in a very good position for the next couple of years. We talked a lot about our plan to get to $1 billion in sales. And we felt at the time when we started talking about it publicly, a couple of years ago, we talked about the fact that we have the right customers. We have the right technology. We have the right partnerships with our VARs. And I think all of that is still the case. The one kind of point that we felt could increase our probability of getting there is changing from a perpetual model to a subscription model. And I think the fact that we did it so quickly kind of sets us up for not only going to new customers and continuing to attract customers with more than 1,000 employees. That's really kind of the sweet spot for us because having a risk assessment and doing that installation for 1,500 user shop and a 500 user shop pretty much takes the same time, yet you can extract more license revenue from the larger customers, obviously, and the fact that companies with more than 1,000 employees usually have a CECL, which is kind of the person we're targeting as well and that selling process is really beneficial for us. So I think when you look at where we are today, and we didn't have the revenue headwind and we did have the non-GAAP operating margin headwind because of this transition, we were willing to take that "hit" because it made our company much stronger. And now that we're at a point where it's much more apples-to-apples and when you look at Q1 2021 with a 99% subscription mix and Q1 2020 and the fact that we plan to continue in kind of the same pace of our subscription numbers, it truly is apples-to-apples and you eliminate the revenue headwind and you can start benefiting from that renewal component that's coming and kicking in. And with a high renewal rate as we expect it to continue, we're very much positioned to capitalize on this opportunity longer term.

Guy. That's a very helpful jumping off point for me just around the model and your near-term and medium-term growth expectations. So how should investors digest your product platform, the differentiation you have, especially against the current backdrop and now the fact that you've completely -- successfully completed your model transition, how does that impact the financial targets that you guide the business around and run the business on -- in 2020, certainly, and then 2021?

So the 3 components that we've always been very focused on are, obviously, top line growth, non-GAAP operating margin and cash flow -- generating cash flow from operations. And I think that, that philosophy has been at the forefront for us as a company for years. If you think about the fact that we were cash flow positive from operations for 4 years straight, prior to going public, it just shows you kind of how the company has thought about what's important. And when we raised money in order to capture market share and we've been very frugal with the way we kind of invest our kind of the proceeds and been very cautious, responsible, but at the same time, trying to take advantage of the opportunity. And that philosophy hasn't changed. If you put aside or if you look prior to announcing the transition, we had non-GAAP operating margin improvements. We've showed leverage that was anywhere we had some years where it was 300 basis points, other years where it was higher a couple of years, it was slightly lower. But at the forefront, we were very much committed to showing operating margin improvement year-over-year, and we're still there. But at the same time, you want to make sure that you're making the right investments right now. Because you want to show a higher operating margin percentage, much higher revenue number. So we're very much trying to balance the investments and our growth. And our investments are very much dependent on the growth levels that we can show with that kind of desire to show year-over-year margin improvements and generate, obviously, significantly higher levels of cash from operations. So when we try and make the investments currently, they're not necessarily for next year. There are investments that we make for the years ahead. The acquisition of Polyrize, we talked about it in the last earning call, is not expected to generate revenue in Q4 or in 2021, but it's definitely something that we're hoping that can help us drive the business in the years ahead. And it was this discussion of build versus buy. And we've had great ROI from our R&D investments. But where we are currently and the way the market is kind of moving towards this digital transformation and the fact that those customers are not buying licenses that would be instead of the Varonis licenses, they would be on top of what they currently own. So in a way, it's increasing our TAM. All of it made sense to speed time to market because we want to capture the opportunity, and we want to capitalize on it. So I'd say the short answer is that the philosophy of those 3 components, top line growth, operating margin and cash flow are still at the forefront of every decision we make, and we're trying to balance them to increase our top line growth and at the same time, show operating margin leverage. And I'll just kind of end the long-winded answer with -- when we entered this transition, we got asked a lot by investors, what is the right growth for the company? And we said that as we exit this transition as we're like fully apples-to-apples, we feel very good with our ability to continue to grow 20-plus percent for the next couple of years. And we're still standing behind that statement. We feel very good with our ability to grow. Obviously, we understand that there's a difference between growing 20%, 25% or 30-plus percent, where we sit today, I'm still talking about the 20-plus percent, understanding that there are differences in that level of growth. But we do feel that the business has become stronger, we do believe that the ability for customers to consume more of the platform is making them happier and they would come back and buy more and we can capitalize on that.

Guy. Maybe just to flesh that last point out a little bit. What would you say is the #1 determinant or maybe consideration of your growth rate inflecting beyond 20%? So if you have sort of a magic wand to take 20% to 30%, maybe even 40%, what would that consideration be?

So I think that where we sit today, there are many drivers that can help us grow the business. And without quantifying which one would be the one that would drive us in the years ahead, I'll just kind of mention a couple of them. There's the fact that there is so much more opportunity with new customers. There's so much greenfield opportunity even within the mature territories that we have been in for the last 15-plus years, there are areas that we haven't even focused on. If you look at APAC, that's still a very small component of our business. And the reason it's a small component of our business is because we're still focusing on North America and Europe as kind of the key drivers. But in the years ahead, that doesn't mean we won't make additional investments in that area. There is the under penetration within our existing customer base, which is also a driver. And if we wanted to grow for the next couple of years just through our existing customers, we could. Obviously, we would never do that. And that's part of the reason that the commission plan has a significant component for our reps, acquiring new customers and they have to be at the right size, but the majority of them, it's companies with more than 1,000 employees, as I kind of mentioned before being our sweet spot, but getting and selling both the new existing and the fact that we're under-penetrated is definitely a driver. And then you have our R&D coming with additional licenses, as we've done in the past and kind of "feeding the beast" is definitely something that is part of our plans and something that can help us. And then you have the acquisition of Polyrize, which can so you see everything kind of adds and there's different component that can help us kind of drive the business over the next couple of years. And as I said before, we're going to try and capitalize on this opportunity.

That's very helpful. And maybe just the last question to really frame up some of the opportunities that you have on the horizon I'm wondering if you can comment on the competitive landscape and competitive back drop? Historically, there was certainly a missionary and an evangelical motion involved with your platform. Can you sort of give us an update on how that has -- that awareness learning curve has changed in the last couple of years? And I imagine the success that you're seeing has certainly invited competitors to come in and try to go at the same opportunity as you. So how do you see that backdrop evolving and your ability to sort of continue to execute in the way you have?

So as you say, we still need to educate customers on Varonis as a platform because we're unique. Nobody does what we do the way that we do it. What's changed in the last few years is that the market as a whole understands more of the importance of making sure the data is properly protected that you can detect and respond to threats quickly. That has certainly changed, especially on the data stores that Varonis supports. What hasn't changed, though, there's still no budget item for Varonis. We're not like a firewall or an endpoint where we're competing against a number of vendors that do broadly the same thing. Nobody actually does what we do. So when we see competition, and we measure it very closely. We only really see competition in about 1 out of every 20 deals or about 5%, and that's scattered amongst a variety of different competitors really adjacent technologies. Most commonly, what we see is that an organization, it's going to try to solve a piece of the problems that Varonis solves on a much smaller data set tactically. So we're competing against point tools or manual methods of doing things that we just know aren't going to be successful. One of the stories that I tell a lot is one of the big banks on Wall Street tried to clean up open access to file system data, and they had 40 people spend 4 years to try to do it. They only got through a couple of percentage -- a couple of percent of their total data. It just doesn't work.

Wow!

So we've seen other organizations -- we've seen other vendors try, but it's important to remember that this is software. Varonis is unique. We have a lot of the intellectual property wrapped up in what we do. We have a huge technical moat. And even if you were trying to -- to try to attack one use case on one data store, we've got 15 years and thousands of customers that have actually used this where we know we've been able to make our platform work. And that's setting aside all of the innovation that's happened over that time, and we've expanded into data stores in the cloud and other behavior streams, [ blank ] directory services and the perimeter of the network. All that is to say, there is still nobody that does what we do the way that we do it. Varonis is a unique value proposition and part of our sales motion has been and remains doing a risk assessment, installing the platform in production on real data and showing just how big of a technical problem this is and how much value Varonis as a platform provides, especially when you start talking about enriching different behavior streams and the automation we have in place to clean things up.

That's super helpful, Brian. Certainly, you're in a unique position where your backdrop isn't necessarily a cut throat and the opportunity remains for you to execute, that's really good to hear. But we will cap off our discussion there so we can keep you on schedule. I wanted to thank you again for spending some time with us this morning. I thought it was an awesome discussion. So I appreciate your insights and perspectives, Guy and Brian and Jamie.

Thank you so much.

Thank you very much.

Thanks, Fatima.

Thank you, gentlemen.