Varonis(US:VRNS)2021-02-09 04:02Financial Data and Key Metrics Changes - Total revenues grew 31% to $95.2 million in Q4 2020, with a subscription mix of 99% compared to 82% a year ago [31][39] - Non-GAAP operating margins reached 14.6%, a significant improvement from an operating loss of 2.4 million in Q4 2019 [34][39] - Net income for Q4 2020 was $12.3 million, or earnings of $0.34 per diluted share, compared to a net loss of $2.8 million in Q4 2019 [36] Business Line Data and Key Metrics Changes - Subscription revenues grew almost 100% year-over-year to $62.7 million, while maintenance and services revenues were $32.1 million [31][39] - ARR (Annual Recurring Revenue) reached $287.3 million, growing 37% year-over-year as of the end of Q4 [29] Market Data and Key Metrics Changes - North America revenues grew 35% to $66.7 million, representing 70% of total revenues, while EMEA revenues grew 33% to $25.9 million [32] - The dollar-based net retention rate (NRR) was 116% at the end of Q4, indicating strong customer retention and expansion [30] Company Strategy and Development Direction - The company is focused on capitalizing on the acceleration of digital transformation and aims to reach a $1 billion revenue target [25][39] - The acquisition of Polyrize is expected to enhance the company's ability to provide more licenses and address customer needs as they move sensitive data to cloud applications [24][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the growth experienced during the pandemic is sustainable due to ongoing digital transformation trends [47] - The company anticipates increased demand for data protection solutions as organizations face heightened risks from cybercrime and regulatory compliance [19][80] Other Important Information - The company announced a 3-for-1 stock split to make shares more accessible to employees and investors [42] - The company ended 2020 with $298.3 million in cash and cash equivalents, indicating strong liquidity [37] Q&A Session Summary Question: What gives confidence that growth will continue post-pandemic? - Management believes the acceleration of digital transformation and the increasing complexity of data protection needs will sustain growth [47] Question: Can you provide a total customer count update? - The focus is on the quality of customers rather than the total count, emphasizing larger enterprise customers [49] Question: How does the SolarWinds breach impact your business? - The breach has increased pipeline activity, highlighting the need for robust data protection solutions [55] Question: What are the expectations for sales and marketing investments in 2021? - The company plans to balance profitability with growth, focusing investments on sales and marketing and R&D [57] Question: How is the integration of Polyrize progressing? - Integration is on track, with expectations for revenue contributions in 2022 [74] Question: Are larger companies showing increased interest in the Varonis platform? - Yes, there is significant interest from larger enterprises, indicating a strong market opportunity [90] Question: What is the outlook for achieving the $1 billion revenue target? - Management believes the product portfolio is in place to support this goal, although no specific timeline was provided [94]