Q1 2020 Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the Radware Q1 20 earnings call.
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Thank you Adam Good morning, everyone and welcome to graduate first quarters 2020 earnings conference call joining.
Joining me today I raised is it better president and Chief Executive Officer, and do whatever Marguerite Chief Financial Officer.
A copy of today's press release and financial statement, it's mostly investor keeps it affects clinic.
Well in the Investor Relations section of our website.
During today's call, we may make projections or other forward looking statements regarding future events or the future financial performance as a company.
These forward looking statement I subject to various risks and uncertainties and actual results could differ materially from ride with current forecast an estimate.
Factors that could cause or contribute to such differences include but are not limited to the impact of the company from the coffee 19 been Danny you know business conditions, and our ability to address changes in the industry.
Changes in demand for products to timing in the amount of orders and other risks detailed from time to time in Redwood side.
We refer you to the documents the company files or furnishes from time to time with the FCC specifically the company's last report on form 20-F as filed on April 2nd to anything.
We undertake no commitment to revise or update any forward looking statements in order to reflect the events or circumstances. After the date of such statement did me.
Please note that in May management, who participate into a virtual constant it the Oppenheimer Israeli conference and they need and technology and media content with that I will tell nickels to ROI positive.
Thank you and I can think you all for joining us.
The World has changed dramatically since we last minute.
And obviously, we like many others has moved on people used to work for improved.
I'm locations such as these ROI, we don't know slowly that go into warmer based on government seems books and.
We transition to work from home smoothly and continue to serving suppose or customers globally with no interruption.
The one will cover these aspects in more detail.
From a business perspective, we entered the crisis in the strong position.
Glued to us the dollar fundamentals, though school.
And while in the short end there might be visibility children tooth and other uncertainties. We continued to boot there's still a long term goal.
Birth, we've been executing on our strategy of focusing on security and cloud solutions and positioning major parts of our business to subscriptions for a few years no.
The major heavy lifting of our business one of the completion is behind us.
We know enjoy better visibility than ever before is that result of all large and growing subscription and recurring business.
Our total deferred balances at $181 million up 14% from left to you the highest growth in two years.
This metric is obviously, a leading indicator door over the future health of our business. These strong results translated to 65% of our Q1 revenues being decides to only coatings Evans.
In the enterprise verticals, we focus on seem to be more resilient to the current crises.
We have a relatively high exposure to service providers financial services and technology in SaaS companies.
Low exposure to the suffering troubling must be dilutive equity goes into the small and mid doing business segments.
Third we have a solid balance sheets and the cost cash generated business model even in these market conditions.
Let's see Linfield means we can afford to continue to invest in our business for the long term.
We were also more aggressive bidding bango shoes in the first quotas and plan to continue to do field.
Turning now to the first quarter results, we feel several impacts from copied 19.
On one end the surgeon internet traffic and the shift to a remote workforce.
Oh, driving purchases from customers, who rely on us to enable and secure with these changes.
Remote access became the most critical I'd resource the availability of which must be insured.
We recently announced a couple of deals that reflect that.
Well major business information provider to invested in additional application delivery solutions.
Both a rapid increase in coffee you through a combination for sharp increasing the consumption of data and services that they provide and the transition of 17000 perfect that keeps employees to remote work.
A leading global bank invested in additional detail Stuckey integration solutions to protect the increased capacity needed to support the people to a remote workforce.
On the other than.
The pandemic, a significant impact on I'd budgets and spending outside the immediate and critical work from home investments.
During the first quartile we fill.
Phenomena, mostly in the a buck region and selected European countries.
Towards the end of the first quartile this became evident in the U.S. as well.
We're also seeing delays in some deals involving appliances.
And that continues shift towards subscription and cloud solutions.
Supposed to get to do these trends negatively impact our short term revenues and increases the already filled revenues.
The 14% growth in total deferred revenue the overview used $22 million in absolute dollars while revenues decline.
Roughly 2 million Eagles easing the first quarter.
The first quarter and specifically much saw strong uptick in the number and complexity of attacks.
During March we blocked over 300000 denial of service attacks.
In 81 million web application attacks on the customers, we protect throw cloudy Dawson cloud WAF solution.
The total de Ddos attack volumes were blocked in March is almost quadrupled from February.
These data of course does not include the ducks that are blocked by thousands of our appliances in our installed base.
In addition attacks have become more sophisticated and we see that very clearly through analysis of the both traffic would block.
Switching to the OEM side of the business.
We had good the results from both checkpoint and Cisco.
And see continued traction with them.
For example, we've been invited like Cisco to collaborate in the global strategic business continuity campaign.
And to help protect those customers VPN links with other cloud based de those sinuous.
In the recent online event, we hosted.
Cisco's VP of global Security system Engineering, Shelly Blackboard explained that Cisco is making this offering as overarching it's possible to cover all the challenges and could not do it without the hardware in the mix.
Looking forward forecasting and visibility into budget allocations are difficult.
We assumed that the worldwide economic condition will affect availability budget even.
Even though our solutions are critical to securing the digital transformation of larger enterprise and carrier.
We also believe cloud and subscription projects will get priority over on premise Capex project.
As such we believe our total deferred revenues will continue to increase with some headwind to show them revenues.
With that I would turn the call to dawn.
Thank you Roger.
Before I review, our first quarter results I would like to say a few words to address the carbon 19 situation here, it's rather from operation. So the point of view.
Starting with the organization.
The health and safety or for employees in communities is our top priority and we adhere to the guidelines of the health and governmental authorities in all territories in which we operate.
Beginning in mid March.
Most of our teams started working from home and avoiding unnecessary travel and we are pleased to report this change had minimal impact on our work and productivity.
From an internal operations from that perspective, we operate in accordance with a very detailed pre existing business continuity plan.
The impact on customer service and equipment. The Liberal in implementation has also been contained.
Because our customer service is predominantly based on remote access using teams across the globe soon with honestly, we can comply with the committed Esa led to our customers with no disruption.
In a few of locations delivery were delayed due to airport local Dom and these had some embark on revenue recognition in Q1 results and we continue to money, though the situation closely.
Other than that we have not seen and meaningful negative impact on our supply chain and we believe we are managing well these from.
With that I will turn to the results of the first quarter.
Revenues for the quarter was 60 million dollar though.
2% below Q1, my team and below items.
Revenues from Asia Pacific Region were down 31% from Q1 last year to 12.6 million dog as this region was the most affected from the Corona virus in Q1.
Revenues from EMEA were down 1%, you'll have a you to $18.2 million predominantly due to the continued weakness in some selective countries.
Revenues from the Americas increased 19% Youre going to you to $29.2 million, reflecting successful execution of our value of the growth initiative as well as several wins related to project supporting the increased remote access environment.
As Roy mentioned, our recurring revenues for the first quarter represented 65% of the total this is up from Q4 2019, 63%.
The total deferred revenue balance was approximately $181 million as of the end of March up 14% from 159 million dollar as at the end of March 2019.
Out of the total balance 62% for approximately 113 million dollar you to full recognition in the next 12 months up 10% from $103 million that was beautiful recognition within 12 months from March 2019.
I will now discuss expenses and profit all in non-GAAP terms the differences between the GAAP and non-GAAP results for the quarter are detailed in our press release.
Gross margin for the first quarter was 83.1% slightly up from last years, 82.8%.
Operating expenses in Q1 were below expectations at $45 million compared with $43.2 million in Q1 2019.
Throughout most of the quarter our activities were inline with our initial plans, including increased investments in our workforce and all cloud infrastructure.
The difference from our expectation is reflective of normal activity in January and February, but lower its rather expensive and to a certain extent lower marketing expenses as a result of event cancellations in March.
We continue to invest in the business for the long term and continued hiring it during the quarter.
Our emphasis was threatening our sales talent, especially in the U.S., where we believe the market opportunities are fundamentally strong despite covenant in Austin. This.
Headcount the date of March was 1112 up 18 people.
From December 2019.
Operating profit and margin in Q1, 20 were $4.8 million, an 8% respectively.
Net income for the first quarter was $6.6 million or 14 cents per diluted share in line with our guidance is lower travel expenses and this and cost discipline compensated for the small revenue shortfall.
Turning to the balance sheet and cash flow items.
We have a very strong balance sheet. We ended the quarter was approximately $427 million in cash and financial investment most of our cash invested in U.S dollar marketable securities and deposits.
Net cash provided by operating activities in the quarter was 21 million dollar Libyan by another quarter of strong collections.
That's for the use of capital.
During the first quarter, we spent approximately $19 million on the purchasing approximately 880 thousands of our own shares.
During the quarter, we utilize the entering 2019 share repurchase plan almost in full as discussed in our last earnings call.
In March we announced the $20 million stock repurchase plan today, we announced an additional one year $40 million, which showed a purchase Glenn so combined we have $57 million outstanding on our buyback plan.
I will now move to our guidance for the second quarter and our outlook for the rest of 2020.
Given the level of uncertainty about the length of the koby 19 impact and the economic recovery attempting to focused especially second half of 2020 is very complicated.
Well, therefore withdrawing our full year financial guidance for Twentytwenty. We believe this is a prudent thing to do until the environment stabilizes, but this is no way diminishes, our optimism regarding Colorado's bright future.
For the second quarter, we expect revenues to be between 57 and $61 million.
We continue to expect gross margin to be approximately 83%.
Operating expenses are expected to be slightly lower than in Q1 and between 44 and $45 million, mainly due to continued robyn restrictions.
We continue to support our sales and marketing initiatives through increased digital marketing and digital alternatives to physical meetings and events. We believe we are aligned with the market environment successfully addressing customer needs and capturing market opportunities.
We expect EPS for Q2 to be between 12 and 14 cents.
I will turn the call back to refer you to summarize.
These are indeed unprecedented times, but the fundamentals of our business remain healthy.
We have best in class portfolio that caters for strong and growing markets.
We continue to innovate this portfolio and are excited about the opportunity to expanding.
We have a very strong customer base that includes tier one companies in resilient verticals, such as service providers financial services technology and stuff.
And we also have strong partnership with Cisco checkpoint and others that continues to improve and expect to help us to acquire additional talk to customers.
Oh recurrent revenues are 65% of total revenues and growing.
And our total deferred revenues that grew 14% people division Q1 provide us with stability and visibility.
Our cash generation is strong and consistent as demonstrated in Q1 before the last couple of years.
All of the above lead us to be very confident in our long term success.
With that I will open the call for acuity.
And once again, ladies and gentlemen, if you would like to ask the question over the phone lines that historically the number one on your telephone keypad. Once again for a question over the phone lines that is star then the number one.
And we'll pause for just one moment topology kuni roster.
And your first question comes from line of George Notter with Jefferies.
Hi, guys. Thanks, very much I guess I wanted to maybe start out by understanding sort of the dynamics around cobot 19, and how it a impacted the business in the quarter. I think you mentioned that there was an airport locked down in Houston.
There were some revenue that was delayed or deferred and in that can you talk about how much that was in the quarter and then Conversely. It also be curious about how much incremental business. You think you got as the result of yeah. The increased emphasis on work from home traffic and remote access to kind of activity.
Yes.
I think there were several live phenomenon.
And first you can see by region, you can see that our APEC region.
The suffered a lot almost 30% deals that real declines EMEA or you know might minus 1% and the U.S. is actually up 19%.
Thank you see very much to co relation to hold the coffee 19, a spread in the world in making the Q1. So we definitely saw an impact from from that perspective, the that's very much aligned from a a project perspective.
On one end, we saw I think to $3 million off this work from home and directory attached opportunities that to a recognized validated in Q1 I think since then we so the more they entered in Q2.
And at the same time, we did have delays of sumit or I'd projects that were put on hold because of a.
Because of the you know the uncertainty.
In addition to that there was roughly another $1 million to $2 million of the of shipments that we could not recognize Rome airport slows down around the world.
And you know specifically towards beneath that mainly and that has the performance. So that's a I would say deals the all in all the different parameters.
We saw.
Got it and then I'm sorry, just to see just to be clear then if you look at the high key projects type of delays, how how significant do you think that wasn't the quarter in terms of.
The the amount of revenue Navy it Ah pushed out into the future for you.
Let's think several millions as well as you know it's hard to tell but three 4 million definitely.
Got it.
We can we think we've started the core do very well and actually also these schools are from a booking perspective.
I think you can seem to U.S. that oh.
Oh, you know performance was was quite strong where we where I would say at least in Q1 were free from the impact So say of Cobiz 90.
Got it okay.
And then I guess, maybe I wanted to ask also about.
You know the the hiring efforts. Obviously you guys are focusing on adding had county in selling and marketing in the United States can you just talk about 'em, where you are in that efforts I think 50 hires for the year was sort of the goal and.
You know.
Where are you right now and then how is that you know chance translating into the strength in U.S.
Yeah, So I think were around.
40% to 40% the in our goal so around 18, we added another 18, so we're progressing well and we are going to continue to invest we see good trends there.
And by our own activities and through the Oems. So we continue to higher according to the plan we've shared with you.
Got it Okay and then as you look at Q2 are you thinking again about [noise], it's sort of the different dynamics in your different regions. If is it fair to say that you'd see you know a step down in terms of year on year compares in the U.S. is is there kind of virus impact kind of rolls through Q2.
So.
So so its hard it's hard for us to say and that's why we we guided a wider range at this time and we were we think conservative in our guide because that it's very fluid you know all those projects can be stopped like we saw in the end of Q1 any day.
And so it's very hard you know even if the projects are approved you get all the signatures it can be blocked by.
Decision, that's that's not specific due to our efforts our projects than any driven by other company wide or industry wide and issues.
And so far you know we started a print very strong and our bookings are growing very nicely and we still see friends in the U.S.. We we're just very concerned whether that strength would continue given you know the unemployment the work from home the budget the freezes that we see around the world. So.
Hey, we're hesitant in that but so far the business the business performed well.
Great. Okay. Thank you very much.
Thank you and your next question comes from the line of show Young with Oppenheimer.
Thank you.
Good afternoon, ladies and gentlemen.
Of course and.
What about extending payment terms some customers well you approached by some customers there have been asking a quick stands at some payments.
Maybe on the SMB front.
Yeah.
So.
Actually you know we were up we were approached by customers do a him to provide some discounts insomnia and all these extended terms and so in general are especially for our long term customers. We are a consideration.
Oh D.A. of the period, so to its generally coming with an extension of the cone trucks and so some.
No I wouldn't say shorten easing plus increased commitment and sometimes we just need to give a discount because it's a long term customer and are suffering like to you know a larger line, we see that they don't have to be the snow and we know that when things will improve and they will they will buy waiting more from us. So we.
Considering it's not a bit we it's not something that we see huge scale across our business, but it definitely happened.
From the you know from customers, especially in the segments that downhill tomorrow as I've mentioned, our exposure to this segments. These small they were generally selling to the very large enterprise indicator is predominantly in financial services.
No the said that I've mentioned less to the other low speed dial it in so long and at the same time you can see that also our collections.
They have been very good I think last quarter was the they called it collection quarter. So all in all it happens and we are a very considerate of that but again I don't see that is a major impacts for the business definitely not for the long.
Fair enough Mariana and ROI decline challenging environment no doubt.
Also note some longer term opportunities, maybe even benefit a and I'm totally understand that everyone like now it's stealing Nielsen perspective.
Psyche Mohammed tactical decline.
Is there any internal thinking about the longer term scratchy, what that might look like when we will be on the other side of called 19 whenever that might be couple of quarters you won.
More than a year, who knows but is there any internal thinking along these lines.
Yeah. So no of course lives. We are trying it's early on in the in this cycle, but you know for US it's clear that.
The transition to cloud public cloud to cloud service would accelerate.
It's clear for us that the they need to be able to supply pro vision men edge, you know remotely and the services around that that would enable that in scale you would increase.
And from what we can tell about our portfolio and our investments were very much align because you know everything that we've done in the last several years is around things with those prisons of cloud and security and I tried to point that also in my prepared comments I do believe there will be less.
Appliance they own the brand business in general and there will be more cloud recurring subscription software business.
And the impact of that is the significant goals I think in the third and some a headwind I'm not sure that big but some headwind to a game to a short term leverages all in all we think for our business. It's a it's a very good long term man phenomenon.
Definitely encouraging that so we were quite pleased overall with the booking of Q1.
Thank you.
And your next question comes lineup, Alex Henderson beat them.
Thanks, Hey, guys.
Hi.
[noise] couple assemble questions upfront I know you guys don't normally catch but obviously the shekel shell out of bed during late.
The last couple of months and then sharply recovered did you guys have the opportunity to take advantage of that.
Odd situation, maybe get some locking or did you choose not to us to address.
<unk> costs.
Yeah, Alex [noise]. So yes, we did some a protection although you know that we usually don't but the as you.
I don't understand this is a unique time. So we were quite quick pads, we were very.
Active on this one is so we did some a.
Nice hedging for a Q and then and then fuel for Q2 in Q3.
And I hope this will be getting to be because a during Q1, there was some negative impacts on their own on the currency Yeah, we managed away.
The way it reduced day part of it and I hope that in acute in Q3 with us away again get some gain name from from the current a currency.
Super if that's a good smart management I'm glad she did that second question I wanted to ask around.
Around the.
The orders in the quarter obviously.
14% to good growth rate, but to some extent I'm always nervous about those numbers in the first quarter because they get a lot of renewals on the maintenance in the first quarter can you parse between how much was just simply renewals strengthen how much was actually subscriptions fronts.
Yeah generally for US. The Q4 is this quote unquote, though for the full did a new laws.
You won these the is an okay quarter, but nothing or.
You know a fly significance, we do see strength across the board in all these ssli collaring the recurring business. We saw it also lost you.
But as I said, it's accelerated and the figure from this quarter is the best we had in terms of go fleets.
In two years, so we definitely see your strength.
Right.
Little bit more granularity would be helpful. In terms of what you're seeing in terms of deal flow sense. It.
Clearly, there's a little bit of sugar high around.
The work from home phenomenon in late March into April.
Sure that caused a temporary.
Stall on projects that were in flight I assume.
We've been hearing from our field checks it a lot of those in flight projects, which are little bit more strategic generally I have been.
Closed in April, but then there's a real question coming out of April into May whether the pipeline is there for.
The rest of the quarter or whether.
You know.
We just finished up.
[music].
The business that was in hand, and then flight.
From work from home and and and projects in process can you talk about whether you're seeing any pipeline.
Change that.
That might give you some concern about a there.
The may and June window.
Uh huh.
So you know we are checking the total pipeline in new pipeline creation for a week to see whether those declines in new projects creation versus always statistics, and our expectation and so far all those metrics behave well.
There's no issue dips and from that point of view, we're optimistic because we're seeing that Steve we see and we're seeing strength seen activity and the feedback we're getting from our field is good and continues to be and as I've mentioned April was strong and so all of that these do let's look we've seen in.
The last week or for March.
Is that those projects are not stopped in the regular level and the declines are not in the regular level. So there's an obvious example of a large airport project that we had been a in Q1 and it was clear to us.
That it would not close given the airport. It you know the upwards or shutting down however, the resale little bit large system integrators behind the thousands our team the custom there.
They will close east until the final day, Wendy you know that airport authority of that country said, we're not going forward. So while the pipeline is strong and all indications are good I think this is a different time window scrutiny on projects budget is going to different levers in the organization and they.
And the change of fifth Poli Sci can affect us so while all the indications that I have from the activity from the field pipeline arch our policy is a very solid.
You know leading the news.
In the overall.
At forecasts makes us very very worried inline with what you said and I don't think we can easily forecasted.
I understand.
Last question, then I'll cede the floor. So we've been doing a lot of work and understanding.
The nature of the changing security delivery, particularly around.
Ah, Yes, kubernetes containers.
See I see the pipelining of applications and as I look at that segment.
It seems pretty clear that.
The 80, she functionality in the security functionality are being embedded in multiple layers.
We.
Container image, including.
At the application layer or application design at the container at the pot athlete cluster and.
Oh so.
Includes ingress controller within that so.
You don't seem to have that much penetration into that space. Obviously, that's why five bought.
Geninex, which has a higher per cents exposure there how do you guys take advantage of that and how do you get into that space more aggressively particularly.
[music].
Playing into the code or Ah.
Yeah, Bob swirled around get hub and the like I know you made some much more significant inroads and.
That is evident to us at this point, so could you give us some thoughts on that.
Yeah, So our view and then talking no specifically on kubernetes.
It might be a bit different than than it five so incl Burnett. If there was the reason and embedded proxy that's part of the environment called invoice in the third refinished coatings steel that's part of D.A.
The native environment Native services.
We don't think that we should replace that.
With our own alteon or another <unk> open source, a plus or open source.
I mean, a framework by our sales within the community and that's what we see from adoption rates will stick to what natively, though.
We think the light approaches to open in that.
With that I'd security services that are specialized on one end, but play extremely well with the C. <unk> C D pipeline with the native environment than for that we've announced our kubernetes swap that sits.
Next to envoy plays with its doing involving natively without any change we think that's the way throughout the world to played with think it's a very very a.
Community oriented and very in line with with the Kubernetes, a community and we got good very good traction so far from customers because it simply plays well with everything they've done and invested in in the you know future development of leasing environment. So that's how we're looking on that.
We are investing their insecurity attached to the integrated and delivered.
Okay see an 80 sees in that environment, and we think that's the right approach.
Well, one last [laughter] denim to that question, how does cisco's relationship with you pull you into that environment. If you could extend to that into the Cisco partnership how does that luck.
Yeah.
It's more of that can make sure yeah, I think it's a more future point I'm not from Cisco currently.
Or you know the other large security providers. We deal with are currently playing in that specific environment definitely with the school there was a lot more to gain with our cloud services with our public cloud the solutions I think the school Burnett. These development environment CIA C. D is not.
Yes the.
Yeah, you know our first next steps with Cisco and we're seeing with them very good progress on the you know on the core solutions, we have plus our cloud solution. So we have a lot to work with them on that first.
Great. Thank you very much.
And your next question comes from one.
Lee with Oppenheimer.
Thanks for taking my question guys. Just one quick follow up on Sean Castle Football. This joined this quarter I think well you mentioned that it had a record collection maybe to right. If you could quickly comment or what are the puts and takes.
That talked about outperformance in the capital generation for the quarter and how should we think about the linear at linear Maggie for the next three quarters for the year. That's yeah. Yeah. So linear gravity is quite a challenge in in this area, where we mentioned that.
In Q4 from our a booking perspective, you usually see higher because of the maintenance and other renewals. So basically a we have some fluctuation between the quarters. If you will follow you will see this Q on it is quite strong and Q3 and again it depends on day on our booking in our performance all in reality is not.
It's something that something that a I can now I can I can now say, but they overall you know we plan daily beside there with drove the guidance we plan for a stronger cash flow for Twentytwenty for now we see a restocking fairly well.
Yeah, we don't have a almost any collections issues a and other stuff. So we we are on our plan and these domain so but the I don't have forecasted the next quarter or anything that we have to deal more than we gave it even though.
Okay. Thanks, very much store.
[music].
And your next question comes from Lineups, Andrew King.
Already and company.
Hi, guys. Thanks for taking my question. So first off just looking back at your analyst day, you'd mentioned that you had doubled your revenue or your booking number from Cisco in the past hearing you back to double that number again, obviously you had a good quarter with them, but do you see that you're still on track with doubling that book.
In number from Cisco and how are those other oh, yeah partnership common.
No.
So so far so good with Cisco you know, we buy mentioned also a name.
A couple of a.
Very large global marketing events with them and I suppose so the two weeks ago, we made there the Cisco we know the week.
For security with one of the deals that we'd be together. So that was published on a global level and then.
It was explained how the joint solution makes the difference no significant deal obviously for them to become the we know the week. So we're progressing the well the pipeline is a is getting stronger. We also are seeing a recently and nice uptick from checkpoint and especially in <unk>.
Some larger council of them that we already winning together and I hope with that we wouldn't be able to take this partnership to a higher level when it from where it where it was in leasing deal. So all in all we're seeing good traction in the Oems were seeing them, bringing us to new customers pulled out well.
And very large ones.
And and so far so good.
Okay, Great and then I'm just trying again to the geographical numbers you backing that a lot. The reasons the decline in APAC was due to the timing of endemic and everything so what do you back then.
In Q2 for EMA, and the Americas get harder and harder by the impact of the Cobot Nike.
And in a it's a high level the yes, we're seeing the or there's a fine you know others.
So then it doesn't impact on budgets across the world. The and you know is the pandemic is moving also the impact on different economies is there.
As I've mentioned I don't see getting the pipelines I don't see it yet in April, but I think it will come but that would be the only logical.
I would say outcome that they see for this situation. So we're getting prepared we are focusing our teams on the solutions and the segments.
It should be way more immune and way more critical in this environment, but I do believe we'll deal we'll see that teeth into the U.S. economy in the European economy, and as a result to us as well.
Great. Thank you.
And your next question comes from the line of Tavy Rosner with Barclays.
Hi, Good afternoon. Most of my questions have been ask I quickly, who talked about the anti boats solutions that we spoke to become a pure plays with ours seeing some solid gross me piece I'm just wondering looking at she'll square how's it been performing.
For the past couple of months.
Yeah.
It did or did the record in Q1, that's actually grew very very well.
And obviously, it's a cloud cloud and their subscription solutions. So from a recognition point of view again very minimal may be even back to Q1, but the good contribution to our ray So total deferred a major wins in customers around the world as a stand alone and on top of our cloud.
Bluff solution and some of those lanes also with the with some of our OEM and global system integration partner. So we're seeing some of our partners. It taking that a hey, I would say offering and and bedding meeting their portfolio as well, which is obviously very encouraging for us.
That's a that's helpful and then on the maintains inside them I might've missed a in your prepared remarks, but did you comment on the increase in subscription revenues and OEM revenue specifically this quarter.
Yeah, we don't break subscription, but we've talked about the total deferred being up 14% deal over the year regarding OEM. We did say that it was a it was good performance from our OEM than we named the Cisco in check point specifically.
Great. Thank you.
And your next question comes why no show Yahoo with Oppenheimer.
Thank you God I had a quick follow up again, I don't know what didn't close but how much of your product has really gone virtual and what's the growth rate over there was not burke for product, a and maybe and one final on my.
And I want to go back to Alex's question.
Do you actually he didn't lopsided has anything relevant long term opportunity for a further one.
Yeah, Okay, so regarding neutral.
And we have multiple ways to deliver our solution. So for example on on a B C. It can be a virtual instances in a public clouds public cloud image. It can be a beautiful instance will be aware cavium and all the other like devices like advisors and it can be a mutual instances on top of our own.
Oh, so it can be a X 86 will draw it can be on all of the hardware. It can be on the public cloud and full years, obviously, Doug do you form factors are growing.
We have similar capability for our WAF and for all defensible for the details mitigation.
It was predominantly vitriol form factor on top of the fiscal firepower, but we're now taking AIDS in the coming quarters more to public cloud environments. We got.
We go to request from key customers, especially in gaming and other they in other segments as they move to public cloud they want to take the deals protection with them. So we see a we see good demand for that day in that environment. So it practically all our solutions have the field trials.
Oh, I'm, sorry, Bill and obviously, we see they'll go.
Regarding devo up so we think a you know our stands to lead you through security.
And at some point security and devote.
It would need to come to at least to get too because develops needs. The agility, yet security needs to be part of it. So people are talking about SEC, devops and security operations and their votes and what we're trying to do is to provide the security teams was best of class security. So they will field.
Very confident on what's being deployed and then the same time provide dev ops the ability to deploy these very extensive security frameworks without any change.
The Devil, so no and no friction.
Yes, Hi, a security level and we think that's the right approach with the Devil ups.
Security might be a necessary evil, but it doesn't need to change anything you can continue to work with the tools environments processing CIA C.D. whatever that he wants to and at the same time to security or the SEC devops or the c. So wherever we can.
And can trust that he really has the best of breed security deployed across all their applications. So that's the that's how we are progressing though.
Thank you.
And there are no further questions at this time.
Okay. Thank you very much for attending and.
Be healthy and have a great. Thank you.
And this concludes today's conference call. Thank you for them. They should you may now disconnect.