Core Points - The EU Data Act, effective from 12 September 2023, requires businesses in Europe to reassess their data management strategies [1] - The Act aims to clarify data value creation and usage rules, particularly for data generated by Internet of Things devices [2] - The legislation seeks to redistribute data control from large manufacturers and cloud providers to users and smaller EU companies [3] - Cloud providers are mandated to facilitate platform switching and interoperability, while technology firms must provide data to public sector bodies in emergencies [4] - The Data Act adds regulatory complexity for foreign multinationals already subject to GDPR and other EU regulations [5] - Companies are advised to review their data processing services and update contractual terms to comply with the new regulation [6] - The Act may create opportunities for businesses to access valuable data and innovate services, while also necessitating the protection of trade secrets [7] - "Access by design" must be integrated into certain IoT devices, ensuring secure data accessibility for users [8]

Core Insights - Egnyte is enhancing its data management solutions with the introduction of the ACC Connector, which integrates with Autodesk Construction Cloud to streamline workflows and extend governance capabilities [1][2] - The integration aims to reduce duplicative work, eliminate data silos, and ensure consistent file versioning and governance, providing a comprehensive view of the content lifecycle [2][3] - The ACC Connector allows firms to migrate data throughout the project lifecycle and implement automated retention policies to meet legal and compliance requirements [3] Company Commitment - Egnyte is dedicated to improving workflows for AEC professionals by integrating with Autodesk Construction Cloud, facilitating secure access to large files, remote collaboration, and governance controls [4] - The company emphasizes the importance of a familiar desktop interface for users in the AEC industry [4] Customer Base - Egnyte serves over 22,000 customers across various industries, including architecture, engineering, construction, life sciences, and financial services, focusing on improving productivity and safeguarding critical data [5]

Financial Data and Key Metrics Changes - Record revenue for Q4 FY 2025 was $1,730 million, up 4% year over year and up 6% sequentially [20] - Q4 billings were $2,030 million, up 12% year over year, marking the sixth consecutive quarter of year-over-year growth [20] - Total revenue for FY 2025 was $6,570 million, up 5% year over year, with billings at $6,780 million, up 8% year over year [26] - Q4 operating margin was 28.6%, up 50 basis points year over year, representing the highest for Q4 in the company's history [24] - EPS for Q4 was $1.93, up 7% year over year, driven by lower operating expenses and an effective tax rate [24] Business Line Data and Key Metrics Changes - Hybrid cloud revenue for Q4 was $1,570 million, up 3% year over year [20] - Product revenue was $845 million, up 5% year over year, while support revenue was flat at $625 million [21] - Public cloud revenue was $164 million, up 8% year over year, and grew 22% year over year when excluding the recently divested SPOT business [21][28] - First-party and marketplace cloud storage services grew 44% year over year in Q4, comprising roughly 75% of public cloud segment revenue [11][12] Market Data and Key Metrics Changes - All flash array annualized revenue run rate grew 14% year over year to a record $4,100 million in Q4 [8] - The company gained almost 300 basis points of all flash market share in calendar 2024, more than any other vendor [9] - Public cloud revenue growth was driven by strong performance in first-party and marketplace services, which are expected to continue accelerating [47] Company Strategy and Development Direction - The company aims to lead in the enterprise AI market and has positioned itself to capitalize on the growth of all flash systems and public cloud services [6][7] - Focus on modernizing data infrastructure and enhancing cloud transformation to meet customer demands for AI readiness and operational efficiency [7][8] - Plans to make prudent investments in R&D and sales capacity to drive ongoing innovation and capture additional market share [17] Management's Comments on Operating Environment and Future Outlook - The global macroeconomic outlook shows mixed signals, with expectations of increased spending caution and ongoing friction in the US public sector and EMEA [16] - Management remains confident in the company's ability to deliver strong performance despite uncertainties, driven by alignment with key IT priorities [16][17] - The company expects FY 2026 total revenue to be in the range of $6,625 million to $6,875 million, reflecting a cautious outlook due to macroeconomic factors [28][29] Other Important Information - The company exited FY 2025 with $4,540 million in deferred revenue, an increase of 7% year over year [22] - Cash flow from operations was $675 million, and free cash flow was $640 million in Q4 [24] - The company announced an increase in share repurchase authorization by $1,100 million [26] Q&A Session Summary Question: Guidance for Q1 and full year - Management acknowledged Q1 guidance appears light but emphasized strong momentum and large deals in the pipeline for the year [35][38] Question: Execution and macro concerns - Management noted that while there are macro concerns, strong execution in Q4 and a robust pipeline provide confidence in growth [42][44] Question: Public cloud revenue performance - Public cloud revenue in Q4, excluding SPOT, was up 22% year over year, with expectations for continued acceleration in FY 2026 [47] Question: AI infrastructure deals - Management confirmed ongoing negotiations for sizable AI and data infrastructure modernization deals, contributing to FY 2026 outlook [53] Question: Product gross margins outlook - Management expects product gross margins to improve gradually throughout FY 2026, with Q1 margins expected to be flattish [65][70] Question: Public sector exposure - US public sector accounts for low teens percentage of business, with ongoing concerns about budget approvals impacting growth [100][116]

Financial Data and Key Metrics Changes - Total revenues in Q1 were $93.1 million, up 25% year over year, exceeding guidance [22] - SaaS revenue for Q1 was $68.9 million, representing year-over-year growth of 34% on a constant currency basis, comprising 74% of total revenues [22][23] - Gross profit for Q1 was $69.8 million, with a gross margin of 75%, an improvement from 74.1% in Q1 of the previous year [28] - Operating income for Q1 was $13.4 million, with an operating margin of 14.4%, compared to 8.9% in the prior year [29] Business Line Data and Key Metrics Changes - Term license and support revenue grew 12% in Q1, driven by large deals in the APAC region [23] - Maintenance revenue declined year over year, while service revenues grew 4% but represented less than 12% of total revenues [23] - Combined SaaS and term license revenues grew 31% in Q1, indicating strong subscription revenue growth [23] Market Data and Key Metrics Changes - In North America, SaaS revenues grew 31% year over year, representing 82% of total North America revenues [24] - EMEA SaaS revenues grew 36% year over year, representing 85% of total EMEA revenues [24] - APAC SaaS revenues grew 40% year over year, representing 51% of total APAC revenues [25] Company Strategy and Development Direction - The company aims to become the world's leading data management software company, targeting $1 billion in ARR by 2029 [7] - Focus on integrated platforms to address converging challenges in data security, governance, and resilience [13] - Continued innovation in multi-cloud capabilities and AI-powered solutions to enhance customer value [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the demand environment remains stable, with top needs being AI and security [38] - The company is well-positioned to navigate macroeconomic uncertainties, leveraging its historical experience [9][88] - Management expressed confidence in the ongoing demand for data management solutions amid increasing regulatory pressures and AI adoption [20][83] Other Important Information - The company ended Q1 with $351.8 million in cash and equivalents, including $87.3 million from warrant exercises [30] - The company repurchased 800,000 shares for approximately $12 million in Q1 [31] Q&A Session Summary Question: Are you seeing any change in the demand environment? - Management indicated that the demand environment remains stable, with no significant changes noted [38] Question: What is the competitive environment like? - Management highlighted that data governance is driving new customer acquisitions, especially as companies prepare for AI deployment [40] Question: Can you discuss the momentum on the MSP side? - Management expressed optimism about the MSP segment, noting significant growth and the recent acquisition of Identiq [48] Question: How far along are companies in their data modernization strategies? - Management stated that companies are still in the early stages of data modernization, emphasizing the complexity of implementing AI [66] Question: Is there a shift in the direct sales strategy? - Management confirmed that direct sales focus remains on large enterprises, while the channel targets small to medium businesses [72]

Financial Data and Key Metrics Changes - Total ARR growth accelerated to 24% year-over-year, and 25% when adjusted for foreign exchange [31][40] - Total revenues for Q4 were $89.2 million, representing year-over-year growth of 20% [35] - Non-GAAP operating margin for Q4 was 16.2%, a significant improvement from the previous year [44][50] - Cash generated from operations for the full year was $88.9 million, with free cash flow of $85.9 million, more than doubling the previous year's figures [46] Business Line Data and Key Metrics Changes - SaaS revenue for Q4 was $64.8 million, growing 43% year-over-year and representing 73% of total Q4 revenues [36] - Term license and support revenue declined to $9.4 million, representing 11% of Q4 revenues [37] - Maintenance revenue also declined year-over-year, representing 3% of total Q4 revenues [37] Market Data and Key Metrics Changes - In North America, SaaS revenues grew 46% year-over-year, while EMEA and APAC saw growth rates of 37% and 50% respectively [38] - North America ARR grew 21%, EMEA ARR grew 24%, and APAC ARR grew 29% [39][40] Company Strategy and Development Direction - The company aims to become the world's leading data management software company, focusing on durable, profitable growth at scale [8][9] - The "Beyond Secure" philosophy addresses traditional data management inadequacies, promoting a comprehensive approach to data security and governance [27][28] - The strategic acquisition of Ydentic aims to enhance automation and IT management capabilities for Microsoft Managed Services Providers [28][82] Management's Comments on Operating Environment and Future Outlook - Management highlighted the growing demand for data management solutions amid digital transformations and AI adoption [10][17] - The company is positioned to capitalize on the urgent need for data modernization and governance as businesses navigate complex regulatory environments [15][18] - Management expressed confidence in the demand environment and plans to invest in sales, marketing, and R&D for long-term growth [100][101] Other Important Information - The company ended Q4 with $290.9 million in cash and short-term investments [45] - The full-year 2024 results showed total revenues of $330.5 million, representing growth of 22% [48] Q&A Session Summary Question: What is the U.S. Federal exposure and outlook? - The company's federal business exposure is around 2% of total ARR, with ongoing discussions about digital transformation and AI readiness with agencies [58][59] Question: What is causing the gap between ARR growth and revenue growth in 2025? - The gap is influenced by foreign exchange impacts and a shift in revenue mix, particularly the decline in term license revenue [60][92] Question: How are pricing changes impacting ARR and NRR? - The primary driver for NRR growth is customers consuming more of the platform, with price increases contributing minimally [67][68] Question: What is the significance of the new data security solutions for Google? - The expansion into Google enhances the company's multi-cloud capabilities, positioning it as a strategic partner for customers [72] Question: How is the competitive environment evolving in data security posture management? - The market remains competitive, but the company is confident in its platform approach and ability to expand into mid-market segments [78] Question: What are the integration goals for the Ydentic acquisition? - The acquisition aims to enhance managed services offerings and expand into SMB and medium-sized customers [82][84] Question: What are the expectations for seasonality in the next fiscal year? - Seasonality is expected to remain similar to previous years, with Q1 typically being the lowest ARR quarter [113][115]