Q3 2019 Earnings Call
Brief question answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host and her Demarco Vice President Investor Relations and strategy. Thank you you may now begin. Thank you operator, and thank you all for joining us on today's conference call to discuss Tenable third quarter financial results with me on the call today, our meet your end Tenable, Chief Executive Officer, and Steve That's Chief Financial Officer.
Part of this call we issued our earnings release for the third quarter financial results, which is available on the Investor Relations section of our website.
Let me remind you that we will make forward looking statements. During the course of this call, including statements relating to tenable guidance and expectations for the fourth quarter and full year 2019 growth and drivers untenable business changes in the threat landscape in the security industry and our competitive position in the market growth in our customer demand for it and adoption of our solutions.
And planned innovation and new products and services.
These forward looking statements involve risks and uncertainties.
Sure beyond our control, which could cause actual results to differ materially from those anticipated by these statements you should not rely upon forward looking statements as a prediction of future events.
Forward looking statements represent our managements beliefs and assumptions only as of today and should not be considered representative of our views of any subsequent date, we disclaim any obligation to update any forward looking statements or outlook.
For further discussion of the material risks and other important factors that could affect our actual results. Please refer to those contained in our most recent quarterly report on Form 10-Q filed with the FCC and subsequent reports that we will file with the FCC.
Which are available on the FCC website at <unk> Dot com.
In addition, during today's call, we will discuss non-GAAP financial measures. Our earnings release that we issued today includes GAAP to non-GAAP reconciliations for these matters before I turn the call over to a meat, we'd like to know a few upcoming IR event.
Well be participating and steeples mid west one on one conference in Chicago November seven.
And Barclays Annual Tech conference in San Francisco on December 11.
We hope to see many of you went person and appreciate your interest untenable.
Now, let me turn the call over to me.
Thank you Andrea it. Thank you for joining us on the call today I'm pleased to report we delivered strong financial results in the quarter and achieved a number of significant milestones to demonstrate our innovation and leadership in the market.
Steve will discuss our financial performance in greater detail, but year over year calculated current billings grew 28% to 110.6 million and revenue grew 32% to 91.9 million in the quarter.
Also you Pos was notably better than expected.
We believe this indicates a favorable trend on the topline and bottomline results that positions us well for continued success.
In terms of customer will that them, we ought to 387, new enterprise platform customers. This quarter, a record for us and 51 that new six bigger customers.
A couple months of demonstrates increased traction inland customers upscale you enterprise market.
Underpinning the successes our innovation in three key areas core vulnerability management capabilities.
The expansion into additional and modern asset types.
And delivering participation differentiator analytics.
Together these deliver a strong approach to managing cyber exposure.
To put it simply accuracy and coverage matter in vulnerability management and Sunborn remains deeply committed to being the best be I'm solution available.
Our investments in vulnerability research and product development have earned US a number of number one positions in vulnerability coverage, 20% more cbds covered our next closest competitor.
Our investment in vulnerability coverage also translates into better accuracy, delivering a lower false positive rate, what six sigma accuracy. According to our own benchmarking.
Federal Research also leads the industry in Jordi discoveries with more than diabetes zero days in 2019 to date dramatically more than our competitors have announced.
<unk> is the number one platform in the market for vulnerability and security configuration coverage. According to testing an analysis performed like principal technologies.
This investment the knowledge translate into helping customers find it fixed security problems faster add more accurately.
With that I'd like to highlight a few examples from the quarter as evidence vulnerability management is growing strategic importance.
In one of our larger customer wins in the quarter, a large international government agency was using an AD hoc solution based on that's this pro deliberate through a manual process.
Across 150 agencies.
Customers target was to implement an enterprise understanding of exposure through more automated solution specifically they wanted to talk over the I'm at scale with centralized results in high frequency reporting to drive risk reduction due approved infrastructure network management.
It's customer consolidation efforts in F G and transform their VM capability.
In another example, new logo add a large U.S. telecom provider was challenged by speed and quality of assessments from a competitive solution.
Doubles cloud platform tableau integrations into key partners met their need for scalability trust the data speedy assessments and integration into their existing infrastructure.
And lastly in an example, demonstrating the convergence of Archie and operational technologies, a large international utility longtime tenable customer purchased or industrial security solution to cover multiple facilities.
Just one example of the increasing demand that we're seeing for operational technology coverage well. This sector are still in the very early stages more and more of our customers are seeking a unified you have Archie and Oh Gee cyber exposure.
Yeah evidence continues to Mount the customers desire a best of breed strategic risk based approach to understanding their cyber exposure across their entire environment.
Aside from extends our leadership position in core vulnerability management.
It continues to enhance our coverage of modern asset types, and innovation and analytics and automation.
Participation has been a huge challenge for the VM sector.
Well as predicted participation technology addresses this challenge head on.
We leverage machine learning to automatically correlate vulnerability data with analysis of which vulnerabilities or exploitable, which I've actually called written for them and threat intelligence to dramatically improve remediation efforts.
This focus the security teams on vulnerabilities that are most likely to be exploited.
Let's see so one of our customers shared insights into how predictive participation provides his group more context about the real world threat potential of a particular vulnerability significantly enhancing engagement across the security Nike operations team.
The second part as they should meet their patching process much more efficient and productive.
Federal is leading security analytics industry by going beyond predictive participation with our release of little bit.
Woman enhances our predictive participation innovation by shifting the analysis, Mr. <unk> centric approach to one focus through a risk lens.
We made little bit available in phases, starting in early Q3, and you just know broadly available to our tenable Io customer base.
Based on the tremendous and enthusiastic reception in demand.
Accelerating the timeline for making lumen available to our tenable, let's see customers before the end of year.
We're combining an aggressive data science approach with natively collected vulnerability data today lumen correlates vulnerability data with threat context data from our enterprise platform with our determination of asset criticality information to provide a more precise understanding and scoring a risk.
Overtime lumen will integrate more diverse set of data types from multiple sources within and beyond cannibals platform to give organizations are more holistic view of cyber exposure.
We've heard the sentiment from our customers evaluating woman.
Once he still at a large health care provider said benchmarks are the language of the C suite.
And that's what we're delivering with little bit you build your translate what's historically remain deeply technical conversation into the language that executives and boards speak daily.
Another customer said, whom it allows us to get a better view of how we compare against our peers. It gives us a clearer picture of where we began where we are today I want to focus on tomorrow.
And another lumen user said the thing I Love most about movement is it now I have one number that I can show management when they ask how vulnerable are we.
Answering that question is really the point of cyber exposure.
We've already begun to tali customer wins with little bit.
It's early innings for lumen, but we already see examples of lumen pulling in other products of our platform as customers prefer this comprehensive and risk based approach.
We pride ourselves on transforming the via market through innovation, we're pleased to be named a leader in vulnerability risk management in the Forrester wave vulnerability risk management for Q4 2019. This report ranked the company the highest among 13 vendors in both strategy and current offering.
Category.
This is a huge accomplishment for tenable and one that signals to the market, but the old style and approach to be up is adequate for modern enterprises. The new way forward is a risk base to be a continuous dynamic and correlated with data for business contacts a market where tunnel has been and is recognized leader.
We are proud of the brand product portfolio, we have built with tenable in fact analysts have told us. It's a rare case when I take a call from a customer leading tenable, that's a reflection of our leadership position in the market. We're very pleased with the progress we're making the enterprise market in the traction, we're gaining with larger opportunities where trends.
Forming the via market into something much larger and much more exciting well delivering continued leverage and growth.
I'd now like turn the call over to speak to walk through our financial results for the quarter and outlook for the year.
Thank you and me.
I will discuss our Q4 and full year guidance momentarily, but we'll start with a review of our Q3 results.
I'll begin by reminding you that except for revenue all financial results. We will discuss today are non-GAAP financial measures unless stated otherwise.
Andrea mentioned that started this call GAAP to non-GAAP reconciliations maybe found in our earnings release issued earlier today and posted on our website.
Now onto the results for the third quarter.
Revenue for the quarter was 91.9 billion, representing 32% growth over the same quarter last year.
Revenue in the corner exceeded the midpoint of our guided range by 3.4 million aided by strong execution globally.
At approximately 1 billion of revenue from nonrecurring sources.
Worth, noting that approximately 92% of our revenue recognized in the quarter was recurring which is a benefit of our subscription model.
Document a current beliefs.
The change in current deferred revenue plus total revenue recognized in the quarter, 20% year over year 210.6 million.
We're pleased with our growth in the quarter, which is up from 27% in Q2 and 25% growth in Q1.
One of the highlights in the quarter is our continued strength in the enterprise and our ability to transact larger deals both in terms of land and expand.
We had at 51, new six figure customers in Q3.
Bringing the total number of customers spending in excess of $100000 annually.
589.
Our continued success here as result of our investments in named account reps and the ability of our products. The scale observe some of the largest and most sophisticated organizations in the world across a myriad of industries, including retail consumer Telecom financial services and public sector name appeal.
Large deals the side, we've got it at a record 387, new platform customers. This quarter, which is a testament to the growing global presence of our Salesforce and the value of our channel network and Alliance partners.
I'll now turn to expense and profitability.
Gross margin was 84% what just flat from Q3 last year and down from 85% in Q2 2019.
Gross margin continues to be better than expected as the investments that we're making and public cloud infrastructure with the delivery of our tangible I O platform.
Give me more efficiently than anticipated.
That's that's notable given our increasing that's the sales for our cloud based products.
Overall tenable continues to enjoy attractive gross margins on increasing demand and adoption for our cloud platform, despite adding new functionality and adds additional points of presence globally.
Now turning to operating expenses were focused on improving operating leverage in our business over the long term.
They continue to see some natural leverage in the business in Q3.
Sales and marketing expense was 53.2 million compared to 41.8 million in the third quarter last year.
That's represented 58% of revenue for the quarter, which isn't improvements from 60%.
Q3 of 2018 and 61% in Q2 of 2019.
We're very pleased with the leverage we have demonstrated the date, which we attribute to healthy productivity levels and a maturing salesforce and expect to see continue levered and business in future periods.
R&D expense was 18.6 million compared to 18.1 billion in third quarter last year.
As a percent of revenue R&D was 20% this quarter versus 26% and the same period last year and 23% in Q2 this year.
Innovation remains a top priority for us across all of our products.
Especially around risk based via including data science analytics cloud security in coverage a modern assets.
I will discuss guidance momentarily, but with the release of Bloom ending Q3, R&D expenses expected to increase sequentially in Q4, as we will no longer capitalized development costs for love it.
<unk> expense was 13.3 million compared to 10.3 million and the third quarter last year.
As a percent of revenue DNA was 14% this quarter, which is down from 15% in the same period last year and the same as Q2 this year.
So you ever hear increase largely reflects higher professional fees.
Putting incremental costs associated being a public company such as the adoption of Sox as most of the commencement of double Red light. It's the construction of our new headquarters, which we expect to occupy and the first half of next year.
Our non-GAAP loss from operations was 7.7 billion.
Or to a loss of 12.2 billion in Q3 last year.
non-GAAP operating margin was negative 8% compared to negative 18% <unk> third quarter last year and make it a 13% in Q2 of this year.
Overall, we're very pleased with the significant operating leverage we have demonstrated today.
non-GAAP operating losses have improved quarterly in 2019.
18.2 million in Q1 to 10.7 billion in Q2 and down to 7.7 billion this quarter.
All of this has translated into significant upside and yes.
Our pro forma non-GAAP net loss per share for the third quarter was seven cents.
Which is four cents above our guided range of a loss of wall centsper share to 11 cents per share.
Now, let's turn to the balance sheet.
The third quarter with 296.6 million in cash and cash equivalents in short term investments.
Free cash flow burn was 9.6 million in the quarter.
This includes 3.7 billion dollar reduction from the employee stock purchase plan activity.
And also approximately 2.4 million related to the construction of our new headquarters, which we've discussed previously.
And as a reminder, we are expecting another five to seven nine and additional capex in Q4, well some incremental costs and the first half of next year in connection with the project, which again, we expect to complete in the first half of next year.
Onetime expenditure is above and beyond our normal quarterly capex.
Now, let's turn to guide.
For the fourth quarter of 2019, we currently expect revenue to be the range of 93.5 million 10 94.5 million.
non-GAAP loss from operations to be in the range up 12 Megan.
11 million.
non-GAAP loss in the range up 11, and a half million attended a half million.
Pro forma non-GAAP net loss per share in the range of 12 cents, So 11 cents.
So I mean, a weighted average common shares outstanding 97.7 million.
For the full year 2019, we currently expect revenue 351 million to 352 billion.
Hockey later current billings 407 million to 417 billion.
non-GAAP loss from operations in the range of 43 point, Sixmillion 42 point Sixmillion and non-GAAP net loss in the range of 40.8 million for 39.8 million.
And finally pro forma non-GAAP net loss per share in the range up 42 cents, a 41 cents assuming weighted average common shares outstanding 96.1 million.
In summary, we're very pleased with our Q3 results I believe we're well positioned for continued success.
Now I'll turn the call back to meet for some closing comments.
Thanks, Steve we continue to be excited about the opportunity in risk based vulnerability management and pioneering cyber exposure. We're very pleased to be recognized as a leader in this transformational and increasingly strategic market. We believe the combination of our differentiated technology, even stronger now with the movement or did it integration capabilities in order.
<unk> approach to risk based via position panel to successfully eight our customers and their journey to secure their digital transformation.
We now look to open the call up for questions.
Thank you we will now be conducting a question and answer session. If you'd like to ask your question. Your May Press Star one on your telephone keypad confirmation total indicate your line is any question Q New made press star too. If you would like to remove your question from the Q4 participants using speaker equipment, and maybe necessary to pick up your handset but.
More pressing the star key.
Our first question comes from the line of Sterling Auty with JP Morgan. Please proceed with your question.
Yeah. Thanks, guys.
So [laughter] last quarter you guys made some changes in sales leadership just wondering if you can update us on if there's any additional changes that were made and try to what you see in terms of the transition.
Post those changes.
Oh.
Hey, certainly were you I think we're very comfortable with the sales leadership that we haven't place. We have Ah you know as you know and as much on last call.
Dave brings its been what the company since the beginning the year.
Has had very good ramp up time, and we don't anticipate any.
Significant additional changes in the sales organization or the foreseeable future.
Right right and then one follow up you talked about feed the operating leverage which really is showing through both last quarter and this quarter. This quarter seem to be more on the R&D side you didn't mention the innovation priority. So should we think about what's the increasing operating leverage from here being more focus on sales and marketing.
[laughter] Hi, certainly in this is Steve I think it's a combination of a couple of factors and it's something that I called out earlier, but you know the leverage that you're seeing in R&D, we're demonstrating good leverage in R&D, but part of that was aided by the capitalization of development costs in connection with let's say with with lumen. So we.
Launch looming in the third quarter or made it available in the third quarter and so you're no longer see those calls coming out of the piano I'm going to the balance sheet.
But in summary.
Yeah, we're demonstrating laboratory in sales and marketing I think was 58% of revenues this quarter, it's down from the beginning of the year and our expectation going forward is that theres, just a lot of leverage in the business.
And you'll see leverage and primarily in sales and marketing to a lesser degree R&D, but some and of course DNA as we grow larger and fully absorb you know public company costs.
Got it thank you guys.
Our next question comes from the line of Melissa Frenchie with Morgan Stanley . Please proceed with your question.
Okay. Thanks for taking my question I wanted to follow up on Sterling's question on the sales organization. So last quarter you commented on longer sales cycles, as you're selling more enterprise wide deals I'm wondering if that was still the case in Q3 or if that was more moderate than you initially expected, particularly in light of that.
You had it fails and new sales leadership.
Oh, no I think it's fairly consistent so you know as as we noted earlier we're seeing.
Got it.
Longer more complex or sales cycles in the large enterprise work Oh segment of the market, where they're doing enterprise wide transactions or do us any going through a more strategic.
Jeremy process, we do have.
And the continued consistency in our kind of bread and butter market that operate as it has consistently.
Well. So this is Steve you know the one thing that I would add is.
Sales cycles overall are not getting longer for us. They are we're doing more larger deals and these larger deals come with longer sales cycle. So a bread and butter 30000. The 40000 dollar deal sales cycles have been pretty modest and they really haven't changed but what you've seen over the years.
It's tremendous progress and our ability to transact larger deals years ago. We had 15 customers that are spending in excess of six figures today. We're almost at 600, we're adding 50, new six figure customers a quarter and it's not just 100 K deals were doing 250, K. and five you know and half million dollar deals we had it named accounts.
Last year. So the success in enterprise corresponds with the investments were making the focus on larger organizations serve larger more you know more complex customers and so with that you know we are doing larger deals that have larger sales cycles, but all this really underscores the opportunity in the market and the demand that we're seeing from.
From large organizations.
Okay. That's helpful and one follow up I wanted to I see how your fed business did this quarter given the fat earlier and I'm, particularly wondering if there's been any change and that competitive environment and in the federal space.
No our federal business remains on target for the year, we've got a.
Very strong positions in the federal market Weve got strategic relationships with.
Just about every department and agency out there we've got a lot of confidence in that business and we have not seen any significant shift in the ER.
Other dynamics in that market.
Sounds good thank you.
Our next question comes from the line of Girls type has with Stifel. Please proceed with your question.
Okay. Thank you.
I mean, you're painting, a pretty bullish picture here with a with with low men.
Would you classify initial interest serious hadn't exceeded your expectations and if so why do you think demand is so meaningful here just just out the gates.
Yeah, we're so I have high expectations for the products I don't know the busy exceeded my expectations, but I.
I think it's a transformative type of products, you've got you know very technical cyber security industry that has historically really struggled with data and metrics that answer to the simple question, that's being asked by the business leadership Howard.
Our school, we how exposed or we help vulnerable or we see how do we do relative to our peers are we exercising a a reasonable standard of care or not with all right. She systems and that is your seemingly a very obvious question you asked but you can't answer that with things like firewall logs and I'd, yes, a lot.
<unk> and a protective application on an endpoint or host or a you know not worked perimeter type of application or bankrupting your data that.
That data is system of record type of security inflammation, which stems from its core.
At its core from Vietnam.
Program do you know and we think building asset criticality building benchmark building proposition on top of its just become a very natural way for our.
Business to translate or for our solutions to translate to the business level. So we're extremely excited about the market potential for limit.
That's a that's super helpful. And then Steve maybe one for you you've maintained a pretty wide range here on the current billings guide and nowhere about a month through Q4 here can you talk about some of the puts and takes your as to why you sort of maintain that that range what could drive it towards the higher end what could you know because they drive towards the middle arrange thank you.
Sure well, we're pleased with the results for the quarter, which I think it's fair to say it gives us more confidence in our our business and our outlook. So we're reiterating.
Guidance for CCB, we're keeping the same range, we think position, which positions us well I'm first successful Q4 and keep in mind the fourth quarter represents our largest corner, we can transact as much as 30% of our total sales in the quarter. So the range reflects a myriad of possible outcomes.
But we think positions us well to pick a cap a a very good year for us.
That's great. Thanks, guys.
Our next question comes from the line of Jonathan Ho with William Blair. Please proceed with your question.
Hi, Good afternoon can you maybe talk a little bit about what you're seeing in the macro environment and just maybe demand trends in general around a foreigner told me management [noise].
Yeah, I think give me a you know in the macro environment, it's something that we're trying to keep a very close eye on obviously, you're getting a lot of coverage getting a lot of tension in the business Crescent immediate has the potential to impact your customer budgets and customer spending habits, we have not.
She not behavior that change in behavior to date, we're seeing.
Strong performance.
It's especially in our international markets and in Indonesia. So.
No that potential exists and we're trying to keep a close eye on it.
But that said you know we do feel it.
Tolerability management understanding your your assets and you and your cyber exposure is incredibly strategic and relatively low cost in today's operating environment and so we're optimistic that will continue to get prioritized even in tough economic times.
Got it and then what drove the the 1 million dollar nonrecurring revenue bump I can just maybe remind us of what that's coming from.
Yeah, we wanted to call it out because it is a discrete item, but it's a million hours that we recognize in the third quarter in connection with the termination of a contract keep in mind. This has nothing to do with our ability to deliver the product, but you know we're confidentiality.
You know requirements with our contracts I couldn't specifically called out, but we wanted to know what it since it's something that's gonna be nonrecurring.
Got it got it thank you.
Our next question comes from the line of Daniel Ives with Wedbush Securities. Please proceed with your question.
Thanks So.
And in terms the head of sales and just execution, maybe can you just talk a little more granular with deep rather than had the sales how maybe things are changing in terms of the.
The way that you're going after customers, especially the woman you more enterprise going further upstream maybe just give some examples.
Thanks.
Yeah, I think there's there's.
A lot of consistency in how we're going after customers, but there's probably a you know the addition of more disciplined sales process, particularly in the so called the non sales into the process, but it's.
No its understanding what's required to forecast and close the transaction, it's not just having a great sales call getting customer excited about getting the user to say docs, what I want but understanding the full budget cycles the procurement processes.
Legal compliance privacy, all the folks that might have to get involved in making sure. We've got line of sight.
Into that with greater discipline and ultimately we.
Resulting in a greater forecast accuracy in terms of the messaging and positioning I think we've had this vision you know if you rewind back a year here and how much of that the IPO time youre paying this this vision for cyber exposure, it's not just vulnerability management, but its understanding modern assets can.
Painters, a cloud based infrastructure web applications, and Dev ops environments, and 14 environments and and and the more complex analytics that are available to help make use of the data that's being exposed and the study you I think drumbeat of releases.
Yes, this to the product portfolio, new innovation, whether its predicts privatization Lisa bloom in some of the other products and enables our sales team to.
Talk about the vision of the company, but also point out very tangibly that we're delivering on that vision not just of the young company with a with very hopes and aspirations.
I mean bits that point live with lumen.
Does it really feel like as you're talking to customers products out there. There's a change now in terms of how they're looking at tenable, what would that product launch new something interest.
Yeah, and I'll give you an example, before the release of lumen.
Because we had a phased rollout during the course of Q3, we had a child's where you know one of the customers are one of the prospects. Rather was you are looking sort of deploying if you have solution. They were deploying time, while they came back and said hey, we're not going to issue a purchase unless we can also get a quote.
Alumina, because that's a key part of.
Our vision for how we want to driving and manage our exposure. We had another example in the car in a at the end of Q3, where we had a long time.
Tenable customer come back to us and purchase both the O.G. solution as well as a go through the evolve process with women say Hey. This is yeah. This is exactly the way I wanted to understand the more complete.
Attack surface and have a deeper understanding of it so we see lumen is.
Oh wait a trends or how customers use vulnerability data from compliance purposes to the in the business inside they need to make informed brisk decisions and so we think it there.
A tremendous appetite for.
Great. Thank you.
Our next question comes from the line of Gary Powell with Deutsche Bank. Please proceed with your question.
Great.
Thank you.
Okay, great right maybe.
Oh can you let me now we can we can now okay. All right. Thanks, Yes, I just a follow up on a earlier question on moving so I mean, you guys sound pretty positive or is there any material contribution to billings from women expected in Q4, and I guess, just how should we think about the uplift so a customer's bill.
As needed.
Okay. Great. This is Steve I'll answer the first part of the question. Yeah. I think the early data points are very positive as a neat alluded to earlier.
But it is early innings and you know will have a more insight with woman as time goes on and just given your normal sales cycles, we expect very little contribution from women in the fourth quarter. However, and we'll update you on what we expect for you know from lumen and 2020 on our Q4 earnings call and in February .
[laughter].
Okay cool thank you very much.
As a reminder, ladies and gentlemen, it is star one to ask a question.
Our next question comes from the line of Nick Yulico with Cowen and company. Please proceed with your question.
Great. Thank you maybe maybe just another one on lumen do you guys see luminaries as a driver of incremental spend with existing customers already or do you think lumen can really evolved our to become another wending product for new customers.
Oh, yes, the answer to that and I think we believe this very methodically is both.
Lumen.
As shown in the already in the early innings that it will allow us to drive additional revenues through existing.
Customers. We also have examples in the early innings of lumen, helping to pull other products and the purchase of other products each and not only see your vulnerability data, but other exposure that you have in lumen as part of this sort of vision for cyber exposure enough becomes a compelling.
A cross sell product opportunity.
For limited we also believe it can bring be a substantial land product for us for customers are for Ah Ah those in the market using other solutions for their VM requirements are really want to understand their exposure, what I understand the translation to risk benchmarking business contracts.
Again, we feel like it can be a very strong outland product for us as well.
[laughter].
Okay, and maybe just one follow up.
Any update in terms of the mix between I see an Io, particularly as you as you move further up in the enterprise.
Yes, I think you know what we said we continue to say as that.
Our sales of our I O platform continue to represent a significant growing percentage of our overall sales.
So but keep in mind, if the demand for whether you want fcr I'll really depends often on the market and maybe even the geo, sometimes there's a procurement bias and a inside and public sector more towards I see which is an on prem all frame and maybe even parts of Asia as well, whereas another market.
Such as North America, and May skew more towards cloud.
But you know we also often sell it together we have over a thousand customers that use ball and that's really important because we have a technology stack in a solution that really reflects the compute environments of our customers customers don't have 100% nowhere close in the cloud and they don't have 100% on Prem and so we.
Are able to sell both because customers are increasingly looking to secure.
You know, but both environments.
Okay, great. Thank you.
Our next question comes from the line of Josh what tilting with Bamberg. Please proceed with your question.
Hi, guys. Thanks for taking my question.
Just one more on lumen if I could.
Correct me, if I'm mistaken, but I would assume that the customer would need a certain percentage of their total assets on the platform in order for the product actually produce an accurate representation of their overall exposure. So if we look at it from that perspective, you know what percentage of the customer base would you say the good fit for lumen.
So.
You are you are correct and part of the.
The vision for lumen is providing them a or an assessment of their program maturity as well, so being able to say hey.
How are well or what percentage rather of assets do you have under coverage. How frequently are you, giving looks to your data. How quick frequently are you assessing the assets in your environment.
How frequently are you update in the you know the Plugins, if you will own the checks whether they're on the security configuration side or vulnerabilities or you know being discovered so there's a number of factors which can.
Oh, it impacts the us the maturity of a program and part of the aluminum score in exposure score will include a score for.
Your level of program maturity. So I'd say the short answer is every customer is a prospects for lumen and every enterprise <unk> is a prospect for lumen, how much data they feed in will dictate their level of program maturity.
Okay that was helpful. Then just maybe another one on a at fevers I O I noticed earlier. This month. There was some features relief that were just for as fee, but it doesn't look like there were leased Io could you maybe just comment on how you think about balancing investments into each product.
Yeah, we have a strategic commitment to both products both platforms, rather and we have a.
Hey, you know whatever makes sense in the timeline that makes sense type of approach. So you saw.
I think.
Predictor privatization come out first on top of the let's see and then sure follow shortly thereafter with pretty good proposition on on Tumblr like thanks.
Our industrial security Archie product came out first on Io and then and then shortly thereafter on SC and so we arts.
Particularly focused are biased if it takes a you know an extra couple of weeks couple of months to deliver some of the capability on one platform versus the other you know, we're not going to hold up Ah delivering capabilities to either of our.
Customer bases, and we've got a a tremendous number of customers you're well over a thousand at this point that use both platform. So we're committed to both and we're going to drive a development roadmap that produces innovations for both of those product lines.
Alright, thanks very much.
There are no further questions and Nick you. This does conclude todays teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
Good bye.