Q4 2019 Earnings Call
Tom Your lines were once again to be placed on old. Thank you for your patience.
[music].
Well need to press star one on your telephone please be advised the today's conference is being recorded.
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Thanks, operator, good morning, everyone and thank you for joining Twoq and final fourth quarter 2019 results conference call.
With me on the call today are Ruby key topics, our chief Executive Officer jockey like our Chief Financial Officer.
Before we begin I'd like to remind everyone. The any statements made on todays conference call that expressive belief expectation projection forecast anticipation or intent regarding future events and the company's future performance, maybe considered forward looking statements as defined by the private Securities Litigation Reform Act. These.
Forward looking statements are based on information available to Twoq his management team as of today and involve risks and uncertainties, including those noted in this mornings press release in Twoq is filings with the FCC.
Such forward looking statements are not guarantees of future performance.
Actual results may differ materially from those projected in the forward looking statements.
Tubin, specifically disclaims any intent or obligation to update these forward looking statements, except as required by law.
Please note that a reconciliation of any non-GAAP number two the most directly comparable GAAP number can be found in the tables of our earnings press release located in the Investor Relations section of our website.
A telephone replay of this call will be available shortly after its completion.
On the dial in information in todays press release.
The archive webcast will be available for one year on the company's website at <unk> Dot com.
With that.
Let's turn the call over to two can CEO and co founder Ruby Quito.
[music], Thanks, Ryan and good morning, everyone. Thank you for joining today.
Total revenue for the quarter was $3.1 million up 3% well into the fourth quarter 20 team and the full year revenue was $103.3 million up 22% year over year.
As we discussed on our preliminary results Colin January Q4, 29, Ti revenue was weaker due to unexpected till the execution challenges, particularly North America.
Since the end the year, we've been very focused on analyzing our sales operations and taking actions to improve.
Before I talk about that in greater detail.
Want to take a moment and recap 29 team.
2019 was a transformative year for two fun and I'm proud of all the we've accomplished notwithstanding our challenge is very late in the here.
We generated 22% revenue growth surpassed $100 million revenue, while at the same time transitioning to life as a public company.
We continue to grow a customer base and World class Global 2000 companies, while also expanding our footprint within our existing customer base.
Maintaining or net renewal rate above 90%.
We're confident that theres lots of room for continued growth within our target market, both from new logos Atlanta expand opportunities.
29 team. We also continue to invest in our products to ensure that we always meet and exceed our customers' needs and further solidify our technology leadership position.
We now support for Cisco Ace <unk>, and BMR NSX team, putting us at the forefront of SDN policy management solutions.
We've refined our cloud products as you may have seen earlier. This week, we were happy to announce general availability for two for secure cloud, which I'll talk more about in a minute.
In addition to these bigger milestones we added significant new functionality in three new product versions, all aimed at helping our customers increased business agility and security at the same time.
We also took some important steps on the go to market from starting with Bill building or U.S. federal effort.
We're just starting to see green shoots emerged from that investment you see much more potential overtime.
We expanded our channel presence in our engaging more closely with key partners than ever before.
We continue to push further into international markets like Latin American, Japan, and grew our sales team and infrastructure globally.
You can see we were very busy in 2019 laying the groundwork for durable growth in the future.
But we have a lot more work to do and we're well underway on those plants, let me start with how we're fixing the disappointing sales execution issues that held us back in Q4.
Since January we carefully analyze their sales processes to fully understand underlying issues and we've taken steps to improve these processes and drive better execution in 2020.
I'm happy to report that we've now hired a VP of sales operations.
In addition, we've added several new sales managers in North America to better align our north American field structure with other regions and a lot for the increased oversight over our sales processes.
As I previously discussed our video sales in North America, Jeff Woman, who joined US late in Q3 of last year will oversee the improvements in that region.
These actions along with ongoing analysis and refinement of our sales processes should help us improved sales execution in 2020.
We've made some early progress and we've seen some of the deals that slipped from Q4 close in Q1, although we're not gonna sure specifics about that today, but we have much more work to do.
Regaining our momentum is a critical action for all of us.
Now, let me shift some exciting deals that we closed in the fourth quarter, which gives me confidence in the long term opportunity ahead of us.
We closed the seven figure expand deal with a global systems integrator that has been a large customer of ours for several years.
This customer with a heavy secure truck user and wanted to further automate their network change process to reduce risk reduce cost and improve efficiency across the business.
Their existing process with a homerun solution that could not really compete with secure change and the customer ended up moving forward with us.
Another deal I want to mention is a seven figure deal with a large pharmaceutical company.
This company has been a customer for a few years and own secure truck.
It was taking them three weeks on average to make a network change and the decided to automate were too.
There were also interested in single pane of glass for visibility across all of their network security infrastructure.
They ended up buying more secure track and added secure change to reach zero touch automation, while maintaining consistency with our internal policies.
Both of these deals are good examples of our potential to expand within our existing customer base as companies look to automate than or choose process and our strong technical position automation as highly attractive.
Now, let's move to some of the overall developments were seeing had.
We expect 2020 to be a year in which several of the long term growth engines that we've been working on begin to take shape.
First of these engines is secure cloud, which is now generally available to all of our customers.
Secure I will allow our customers to gain visibility and control of the security posture of their cloud native and hybrid cloud environments.
It establishes to fund the first and only vendor to unified security policy management across on premises cloud native and hybrid cloud environments.
I'm very excited about the possibilities that are ahead for secure club.
The U.S. federal space is another area that is gaining momentum, which we would like to build on in 2020.
We started this effort from scratch in late 2018, and since then we've signed on some key partners our products have become generally available on the chase a scheduled 70 and we've closed her first few deals.
The U.S. federal market as large given its myriad regulatory and compliance requirements, it's a great fit for solutions.
Well breaking into the U.S. federal market can take time, we're focused on making more progress on this long term growth driver with more partnerships and new customers relationships. This year.
The international markets have also been agreed sorts of opportunity for us and we'll continue to look for growth in these regions in 2020.
Our presence and brand and APAC and Latin America regions is growing and we believe the opportunity there for two front as large.
2020 will be another very busy year for to fund these initiatives position us well to cheaper goals this year and beyond.
With that.
I'll turn the call over to Jack will Keeley to review financial results and guidance John.
Thanks Toby.
Let's turn to our fourth quarter and full year 29000 results and guidance for Q1 full years Twentytwenty.
Total revenue was $30.1 billion in Q4, Ftwenty uniting up 3% compared to Q4 last year.
Product revenue decreased 16% year over year to $14.3 billion and there were maintenance and professional services revenue grew 30% to 15 point equally.
As I talked about on our preliminary results scored in January or Q4 revenue closed weaker due to sales execution and sales process. These challenges that resulted in lower conversion rates at the very end of the quarter.
The revenue recognized from deals at the end of quarter is nearly 100% product, which is why product revenue absorbed them is.
For the full year 2019, total revenue was $103.3 million up 22% and that's where we don't did crossing $100 million for the first time.
Product revenue increased 11% to $47.4 billion and or maintenance and professional services revenue grew 32% to $55.9 billion.
Looking at the geographic mix of living in Q4, Americas represented 64% of all revenue EMIR represented 42% and the remaining 4% came from Asia Pacific.
For the full year 2019 that geographic mix of revenue was 65% Americas, 40%, EMEA and 5% a buck we closed one tonineteen with 568 employees compared to 424 at the end of 2018.
Moving to margins and expenses I will discuss our results based on GAAP financial measures and were applicable Nongaap financial measures.
Non-GAAP numbers exclude stock based compensation expense the totaled $4.6 million for Q4 compared to $1 million for Q4 of last year.
Full year stock based compensation expense was $10.9 million compared to 3.2 million in 20 team.
Non-GAAP numbers also excludes zero point $9 million in costs associated with those secondary offering in Q4.
Please note that the GAAP to non-GAAP reconciliation can be found in the tables of <unk> earnings press release located in the investors relations section of website.
GAAP gross bookings for the fourth quarter was 24.1 billion or 80% of revenue compared to 25.2 million or 86% of revenue in Q4 last year.
Non-GAAP gross profit for the fourth quarter was $24.8 million or 82% of revenue.
There are $225.4 million or 87% of revenue in Q4 quickie team.
GAAP gross profit for the full year, 2019 was 83.4 million or 81% of revenue compared to $71.5 million or 84% of revenue in 2018.
Non-GAAP gross losses for the full year, 2019 was $84.9 billion or 82% of revenue compared to $72.2 million or 85% of revenue in 2018.
Gross margins compressed in 2018, primarily due to the planned expansion of the professional service teams to support faster time to bad deploying goes solutions with a global 2000 customers.
Total GAAP operating expenses for Q4 was $31.5 billion up from $21.7 million in Q4 last year.
On a non-GAAP basis operating expenses for Q4 was $26.7 million up from $20.9 million in Q4 2018.
GAAP operating expenses for full year, 2019 were $110.4 million up from $73.5 billion in 20 team.
On a non-GAAP basis operating expenses for food Eurtwenty 19 were $100.2 million up from $70.9 billion in 20 team.
Breaking down non-GAAP expenses in two line items R&D expense for Q4 was $8 million or 27% of revenue compared to $6 million and 21% of revenue in Q4 2018.
Full year, R&D expense was $29.2 million or 28% of revenue compared to $20.6 million and 24% of revenue in 2018.
R&D expenses increased as we continue to invest in product development to maintain our strong technological leadership position in the markets.
Sales and marketing expenses for Q4, 2019 was $15.3 million or 51% of revenue compared to $12.5 million or 43% of revenue in Q4 of last year.
Full year sales and marketing expenses was $59.1 billion or 57% of revenue compared to $44.6 million and 53% of revenue in 2018.
As we've talked about since our IPO, we believe we're addressing the large primarily greenfield opportunity and we've invested in sales and marketing and R&D in 2019 to position us to capture this opportunity in the future.
Jenny expense for Q4 was $3.4 million or 11% of revenue compared to $2.2 million and 7% of revenue in Q4 Ftwenty team.
Full year, Ginnie expense was $11.8 million or 11% of revenue compared to $5.7 million and 7% revenue in 20 team.
The increase in Germany expenses was primarily driven by expenses related to becoming a public company.
GAAP operating loss for Q4, 2019 was $7.4 million compared to an operating profit of $3.5 million in Q4 Ftwenty team.
On a non-GAAP basis operating loss for Q4 was $1.9 billion compared to an operating profit of $4.5 million in Q4 Flinty 18.
For the full year 2019.
GAAP operating loss was $27 million compared to an operating loss of $1.9 million in 20 team.
On a non-GAAP basis full year 2019, operating loss was $15.2 billion compared to non-GAAP operating profit of $1.2 million for last year.
GAAP net loss was $7.2 million in Q4, Flinty 19, compared to net income of $2.8 million in Q4 Ftwenty team for the full year GAAP net loss was $28.1 billion compared to 4.3 million in 2018.
Non-GAAP basis net loss for the fourth quarter was $2.4 million compared to net profit of 3.8 million in Q4 Ftwenty team.
For the full year non-GAAP net loss was $17.1 million Mtwenty 19 compares to 1.1 million in 2018.
Turning out or balance sheet as of December 31st we had cash cash equivalents and deposits of $121.7 billion compared with 125.9 million as of the end of Q3, 2019, and 17.6 million as of December 31st 20.
Before giving you want or balance sheet as of December 31st 2019 was $35.6 million compared to 31.5 million as of December 31st 20 team.
These figures represent the deferred revenue balance after netting of the portion of deferred revenue that has not been collected as of December 31st with the 19 and 2018, respectively.
The gross deferred revenue as of December 31st went to 19 was $57.6 million compared to $56.6 million as of December 20 team.
Going forward will provide books deferred revenue only on an annual basis.
In the fourth quarter of 2019, we used $6.6 million of cash from operating activities.
Compared with generating 6.6 million in cash from operating activities in Q4 Ftwenty team.
Turning to guidance for the first quarter of Twentytwenty, We expect total revenue of 23 to 26 million.
We expect non-GAAP operating loss range between $10.5 million to $30 million.
For the full year Twentytwenty, we expect total revenue in the range of $117 million to $123 million.
We expect non-GAAP operating loss to range between $22.5 billion to $27.5 billion.
With that I will turn it back to Ruby for his closing remarks roby.
Thanks Jack.
I'd like to wrap up by saying that overall 29 team with a transformative year for us.
We didn't execute where potential in the fourth quarter, but we're working very hard to to improve execution in 2020.
And we believe that several of the long term growth drivers are starting to take shape.
I continue to feel very optimistic about the large market opportunity ahead of us in our ability to capture that opportunity.
I'd like to thank our customers our partners, our investors and all the to fund employees for helping us a cheaper goals.
Now, let's open up the line for questions.
Operator.
At this time I would like to remind everyone in order to ask your question. Please press Star then the number one on your telephone keypad, we will pause for just I'm on chicken Barbecueing thereafter.
Your first question comes from a line of Sterling Auty from JP Morgan Your line is open.
Yes, Thanks, Hi, guys. So really as you went back in scrubbed the pipeline.
The post the quarter setting up for the new guidance you know anything that's really popped out at you in terms of the health of the pipeline or change in pipeline or or where maybe some of the larger deals in terms of the different stages with the close process.
Hey, Sterling good morning.
So when you know we're looking at Q4.
The pipeline was during Q4, we just weren't able to execute on it.
You know we applied the same process, we had in the past.
And have we converted the pipeline and close deals up historic rates that we've seen we would have met our guidance. So I think it's an execution issue in Q4 and not a pipeline issue and like I've said before the vast majority of the slip deals are still on the pipeline and the 2020 pipeline is healthy compared to the same time.
In 2019.
Okay, and then one follow up you mentioned the hiring of the VP of sales operations any other critical you know open positions that you need to Phil.
To be able to deliver on the 2020 outlook.
So.
In terms of structure I think hiring the VP of sales ops was a significant change. We also added a few more line managers in the Americas for better span of control.
And geographic spread so I'm just want to keep in mind that Jeff our VP of America's only started in September last year. So he was still learning to fund in ramping through Q4.
So when I compare our sales organization now, especially in the Americas to 29 team is much stronger in terms of management and oversight.
Understood. Thank you.
Your next question comes from the line of Circuit Calia from Barclays. Your line is open.
Okay, Great, Hey, Ruby Hey, Jack I was doing.
Hi.
Hey, Thanks for taking my questions here, maybe maybe first for rupee.
You know, where we can you just talk a little bit about the competitive environment.
A little bit in the fourth quarter against sort of a post mortem question did anything change in terms of competitive when rates and maybe just as part of the answer if you could just touch on some of the news out of one of your competitors and some of the work that they're doing but with some of the large networking.
Companies out there that'd be helpful.
Sure. Thanks Saket so.
You know when we're looking at the competitive environment in the fourth quarter.
We haven't seen any significant changes.
You know when loss ratio.
Remained steady.
And I think we executed well you know we lost some deals but I think overall, we won the vast majority of deals and that was not the reason for the mess in Q4.
Specifically when I'm looking at other competitors.
I I'm not Privy to the results are private companies one of our competitors.
I think man made noise about being on Cisco's price list.
Or you know for one of the business units from our perspective, we have not seen any effect on our business from that perspective. So.
Yeah, no changes on the competitive environment.
I'm thing at this point.
Okay got it that's really helpful. Maybe maybe for my follow up but you check.
You know clearly the growth died growth rate guidance for next year on revenue is lower than what Soufun has grown out historically, you know, especially with a healthier pipeline entering the year can you just talked about some of the assumptions you've made I mean conversion rates was one metric that you'd mentioned here in Q4 that there was a little different than what you've seen.
Maybe any assumptions on sales cycles. For example, anything that that you are assuming that that is significantly different.
In fiscal 20.
Versus what you saw 19 or Q4 that what sort of drive kind of that that slower growth rate.
Yes, thanks for the questions. So you are right.
The wafer that did it we are showing lower growth and it back.
Coming to planning Twentytwenty, we cannot ignore the fact that ended the they were missed or Q4 numbers. So the guidance. It does take into account execution challenges that we had in Q4.
Plus the fact that supporters are backend loaded and this is stood there was concentration of.
Phil Norton authors, that's still though.
Inherent in our business.
And from my perspective, it's still need more time to gain visibility and confidence about fixing what needs to be fixed and this is also.
Yes.
It was of conversion rates, yes. So.
That covers that as well, we're still looking in more visibility and confidence, but we did factor some improvement in conversion rates based on already.
We have identified that started the.
Okay got it that's helpful. Thanks, guys.
Exactly.
Your next question comes from a line of Brent Thill from Jefferies. Your line is open.
Hey, guys. This is Joe Entre Brent. Thanks for the question Cisco noted last night, it was seen longer decision, making cycles across customer segments for a variety of reasons, including macro as well some unique geo issues. Just curious if you guys are seen if at all it seems like you've been pretty clear is execution and you can look on it for a month and half, but how confident.
I read that it was just execution and then it's been rectified.
So.
Hey, Joe Thanks for the question.
So we're looking at the execution challenges obviously.
You know, we're taking multiple action in parallel in terms of sales processes and oversight.
And these changes you know they take time to be internalized by the sales organization. So I hope to see some initial improvements quickly but in terms of fully recovering ultimately moving to high levels of productivity I don't have an exact timeline.
When we're looking at macro you know there's nothing on macro that I can report on Q4.
Q4 was not a macro issue.
But looking forward potentially the impact from Corona virus.
Something that we're looking at I think right now, it's primarily confined to a back so there's some risks there, but you know things might be moving slowly in heavily impacted region.
But other than that we're not seeing any anything off on a macro environment.
Okay. Thanks, that's helpful. And then just kind of a follow up on the previous question Jack understanding the caveats that a perpetual model on a quarterly basis, what's your level of visibility or confidence on the full year 2020 guide.
Thanks.
Well I can tell you that the methodology and approach to what we're forecasting has not fundamentally changed right. So it's the way we can't we had it in the Bakken came into 2019 with that.
Looking for chicken I'd.
Over the quarters, we met them did better than numbers in the first three quarters and the Miss that in Q4, and that's what I referred to in terms of what we're looking at gaining.
Visibility and confidence.
So we did as I said sector as a bit of improvement just based on what's within the last month.
But basically it's still a.
Perpetual model.
Based on the same methodology and the approach that we've been having to that.
Okay. Thanks, guys.
Your next question comes from the line of Jonathan Ho from William Blair. Your line is open.
Hi, Good morning, I, just wanted to start out with I guess to the U.S. federal government opportunities are there any specific frameworks or maybe compliance mandates that maybe would fit pretty well with some of your solutions and maybe how quickly can can you sort of take advantage of that.
Hey, Josh Thanks for the question, yes, So I think we covered that on the last call as well.
There is a.
New regulations in the U.S. federal market I've actually got him to walk so.
They're all organizations need to comply.
With new standards, they actually need to show that they're checking their policies. All the time that every change that has made.
Does not violate their policy.
So that's relevant for us and that's driving more and more demand in the U.S. middle market. So that's one thing that we're saying.
We're also seeing more engagement from partners, there's more partnerships in the works ultimately you know we're seeing a lot of pipeline that's being created so I don't have anything specific to report on that but we're seeing very good early signs in this market.
Great and then how should we think about the secure cloud contribution for 2020 is this primarily going to be pipeline build or should we expect some conversion on you just want to get a sense for how you're thinking about that for this year.
Thanks, So you know its and maybe it's a good opportunity that to address secure cloud little more broadly so secure cloud really addresses the unique challenges of cloud security by taking a hyper automated an agile environment and making them more secure really without compromising either security or business agility.
So in the EPA, we found a customers we're using the benefiting both from Orkin Iris they want to visualize flows in security policy, both at the cloud layer like security groups and I am profiles as well as kubernetes controls in the same view so in large companies many of the applications have.
The footprint both on the on premise network and the cloud, which is the definition of a hybrid cloud application. So in a hybrid cloud application the ability to view conductivity and security controls end to end is critical and that's why you know secure cloud is important not just in terms of integration that we've done between our snorcher, but.
The integration that we're doing the secure track unsecured change we're the only vendor that provides end to end up because you're kind of activity visibility across heterogeneous networks and hybrid cloud environments.
So specifically on the pipeline you're right.
You know we're not.
We have a healthy pipeline.
You know, we're not expecting a very significant contribution in 2020, but in Q4 I mentioned that previously we booked the first deal ever for secure cloud right. So that will the six figure annual subscription deal with a large retail in Europe.
And they need secure cloud for two important needs first the gain visibility over cloud native applications deployed across public cloud and companies.
They wanted to have insight is the overall security posture second they wanted to significantly lower business risk by defining and continuously enforcing strict micro segmentation essentially controlling how the different compute instances and microservices can connect to each other within the cloud applications.
So.
It's very exciting no. It's very important validation from the first deal and the opportunity ahead of us on the club.
Great. Thank you.
Yes.
Your next question comes from a line of Andrew Nowinski from D.A. Davidson. Your line is open.
Okay. Good morning, Thank you for taking the questions.
It sounds like you're hiring more line managers and as opposed to a quota carrying sales reps. So there really I guess shouldn't be any delay in terms of <unk>.
Those hires getting up to full productivity. So I guess is it fair to assume that these.
She was our now fixed or could this go beyond Q1.
It's a good question. So we're obviously looking at things we believe we have identified the issues and working a fixed.
On the timeline or we're going to be able to fix everything that we need to fix within one quarter, sometimes it takes time to.
Implement change across the sales organization, so I'm not sure I can commit to that but we're seeing some early signs of improved.
Execution and we're working on it now in terms of line managers and quota carriers were continuing to grow quota carriers as well I think also when you look at the spend.
We're growing sales and marketing and R&D.
Because when we're looking at the long term opportunity. We think it's still very significant which is why we're continuing to invest.
Okay. Thanks, Ruby and then.
Maybe Tom can you give us any color with regard to how much of the annual outlook is based on renewals versus sort of new customer revenue. We're just trying to get understand kind of how conservative the guidance.
Thanks.
So I think for US if you think about us in a perpetual model always a majority of the year is new business right. So we have a.
We have a growing.
Growing part of the business is renewals and we also had some subscription deals. So we have more and more revenue visibility as we start each year, but still I would say the majority of the revenues into your are going to be new business deals.
Okay. Thanks.
Thanks, Andy.
Your next question comes from a line of Gur Talpaz from Stifel. Your line is open.
Okay, great. Thanks for taking my questions really starting with you can you talk about what you're seeing within SDN environments like NSX and they see I and when you think about secure cloud how do you think about that in relation to the work you're doing in SDN.
Hey, good things for the question so.
Yeah, it's interesting, we're seeing more and more customers looking at Cisco ACI specifically.
SDN.
The next generation network, it's interesting I she met a customer this week and spoke to them and they asked me is Cisco, we see the only game in town anybody else using anything else.
Interesting question, you know, what we're seeing large enterprises.
Standardize on Cisco Ace T I as a next generation network overlap.
And then when they're looking to provide actual security controls within it a lot of times they need.
The other things within a C. Like a plug ins. So people are using Palo alto checkpoint afford that or be more on a sex on top of Cisco ACI.
Because fiscally sound does have contracts, but I think customers are finding that if they need advanced security a lot of times they need.
And advanced security firewall, even if its virtualized within Cisco ACI environments.
So that's a trend that's growing and with NSX T. Obviously, there's a lot of NSX would be customers and customers that are buying NSX now are buying and 60. So a lot of customers are thinking how do I migrate from NSX beat on 60, we could actually help them without migration from everything that has to do with security policies. So a lot of.
Work going on with customers on.
Moving to the next generation network SDN. So I would say the forward thinking companies are all either already implementing it or have acquired or about to acquire an SDN solution.
Okay. That's really interesting and then maybe Jack for you or for Ruby when you look at the projected operating loss you clearly calling for increased spend here, where should we think about increased investment.
Sales and marketing R&D. After you think about the balance going forward.
Yeah, I'll take that to so when you're looking at those model.
We said the 2019, then twentytwenty, you're going to be investment years, and we executed them thinking Nike and ramped up the business really for the month to put you need that we're seeing ahead of us it's capture so a little hour.
Reflects into Twentytwenty. This is to begin with a significant part of our Twentytwenty operations is going to be there up a propionate within 18.
And then when we're looking.
At Twentytwenty. It. So there are investments that we're still doing at this point of time I see the opportunity and feel confident about it there are some expense increases. It's there's also went twentytwenty. So what you're seeing the guidance. If you like is it call. It a balance between continuing to invest the opportunity it had.
Again, some prudence as we progress.
That's helpful. Thank you.
Thanks.
Again to ask your question. Please press Star then the number one on your telephone keypad. Your next question comes from the line of Rob Owens from Piper Sandler Your line is open.
Thanks for taking my question.
You talked about bringing on additional sales capacity could you remind us how long it.
It takes them to reach full productivity and how ramped your existing sales force is right now.
Hey, Rob good morning, so it typically takes us between six to seven month to ramp.
Sales manager, obviously depends on on how much background behalf.
In in the domain and we're working on that right. So one of the things that we're going to do field operations is actually focus on better sales enablement getting people trained better and faster getting them up to speed. So with the additional line managers and having better span of control, especially in the Americas, We think that's actually going.
Work hand in hand, so we're going to have more managers that have less direct reports so they'll have their ability to manage those people and get them up to speed while at the same time, improving the training and Onboarding programs that we have.
And relative to the basis, so folks how ramped.
Would you say.
What is fully productive at this point.
So I won't get into specifics, but I can say that you know we hired quite a few people in a in 2019, both R&D and sales, including quota carriers were hiring more people now.
The fact that we grew significantly for 19 is actually reflect that if you look at the total number of people into fin.
You know in end of 2018 and 2019, it's a significant growth in terms of total head count and specifically within sales as well.
So I think we've got a good number of quota carriers and we're adding more this year.
Great and then one more quick one as you look at the federal pipeline and some of the optimism around that should that fall into the traditional federal spending cycle. So would you expect a lot of those deals to come Q3 or should that be throughout calendar year.
I think it's going to be throughout the calendar year. Obviously, you know the calendar Q3 is a bigger quarter because there was more flush spending.
But we have a nice pipeline that's been built and I expect some of the business to start coming in earlier, you know not just in Q3, but before that.
Great. Thank you.
Thanks, Rob.
There are no further questions at this time going to turn the call back to the presenters.
Thanks, everyone. So just to recap.
The 19, where the transformative year for us and we're very busy we're going to be very busy in 2020, and we look forward to implement all the sales process changes and or changes and get back and stronger growth. Soon thank you very much every day.
That concludes today's conference call you may now disconnect.
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