Q4 2020 SailPoint Technologies Holdings Inc Earnings Call
Greetings.
Welcome to Sailpoint Technologies Holdings fourth quarter 2020 earnings conference call at this time, all participants will be in listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero from your telephone keypad.
Please note this conference is being recorded.
I'll now turn the conference over to Josh Harding, Vice President of financial planning analysis, and Investor Relations. Josh you May now begin good afternoon, and thank you for joining us today to discuss Sailpoint fourth quarter and full year 2020 financial results. Joining me today are Sailpoint, CEO and co founder Mark Mcclain, and our chief financial.
Officer, Jason Ream.
Please note that today's call will include forward looking statements. Because these statements are based on the company's current intent expectations and projections. They are not guarantees of future performance and a variety of factors could cause actual results to differ materially.
Since this call will include references to non-GAAP results, which excludes special items. Please reference this afternoon's press release in the investors section of Sailpoint Dot com for further information regarding forward looking statements and reconciliations of GAAP to non-GAAP results.
And now I'd like to turn the call over to Mark Mcclain.
Thanks, Josh and thanks to each of you for joining the call today.
You and your families remain safe and healthy.
I'm very pleased to share both our fourth quarter and fiscal year end 2020 results with you today.
Our results in both periods were driven by solid execution across the business and strong demand for Sailpoint identity platform for.
For the full year of 2020 total revenue was approximately $365 million, representing 27% growth year on year.
Revenue for the fourth quarter was approximately $103 million the largest quarter in our history and the first time, we've exceeded $100 million in quarterly revenue.
Our team and our partners executed extremely well around the globe throughout the year and I'd like to thank each one for their contribution to our ongoing success, especially during such a tumultuous time.
Now I'd like to spend a few minutes talking through some key business highlights from 2020 before shifting to our focus and strategy for 2021.
Sailpoint business performed at a high level throughout 2020, despite the economic disruption related to the pandemic.
We experienced significant demand and subsequent growth throughout the year as the relevancy and criticality of identity security became even more apparent.
The Sailpoint team responded well to this increased demand delivering a high level of tight execution across all geographies.
The events of 2020 reinforced many of the positive trends in our business, which we expect to continue going forward.
For example, this past year, the rapid shift to working from anywhere drew significant attention to an issue that many companies simply hadn't seen before.
We helped numerous companies understand the extent of risk exposure in their business due to loosely managed and largely ungoverned access.
Providing access for remote workers proved to be a light bulb moment as more organizations realize they were operating under a false sense of security. If they were only focused on connecting their people to technology without properly securing their access.
With Sailpoint, serving as the foundation for securing all of their digital identities, including both human and nonhuman our customers can confidently enable access critical systems and data, while eliminating business risk.
As a result throughout 2020, we saw increased demand for our solutions as more and more companies sought to dramatically improve their identity security program.
This included a strong and growing interest in our SaaS solution from larger enterprises, and many of them have become increasingly comfortable shifting their identity security infrastructure into the cloud.
For example, a large media and information services conglomerate chose sailpoint to help them securely enable their digital transformation.
Their goal is to achieve a 360 degree view of access needs across the 25000, plus employees and contractors that make up their workforce.
On this visibility into all their organization's access capabilities across every application data and cloud infrastructure is critical to both securing and enabling their expansive business.
With Sailpoint at the center of their transformation they have been multi tenant SaaS identity platform needed to quickly deliver on their vision for comprehensive identity security across their business.
Our product leadership team leveraged a strong vision and SaaS expertise to help us accelerate our ability to innovate at scale.
Delivering a high volume of new identity security solutions to market this year.
Investments benefit all customers and have helped us to extend our industry leading platform to be the most comprehensive SaaS identity platform in the market.
A few of these recent capabilities include.
New SaaS delivered AI services like access modeling roll insights and access request recommendations.
Deeper integration into critical business applications that enable remote work and the sensitive data housed within including applications like slack, Microsoft teams zoom and <unk>.
And finally, the ability to govern and secure access to cloud infrastructure like AWS Azure and the Google cloud platform within the Sailpoint identity platform.
Turning to 2021, we believe we are well positioned to continue to build upon the strong market momentum established in 2020.
Let me highlight a few of the ways, we're executing against the attractive opportunity in front of us.
First we are investing to meet the growing market demand at the upper end of the market.
I mentioned earlier that we expect to see more large enterprises embrace a SaaS delivered approach to identity.
To address this increased interest we're laser focused on building innovation into our SaaS platform that address the needs of global enterprise customers.
This requires us to take a sophisticated get intuitive approach to identity that supports the complexity and velocity of our customers' business environment.
Second we're reorienting our business to focus on subscription based pricing, regardless of how a customer chooses to deploy with us.
Obviously, our SaaS solutions have always been subscription based but we've also seen increasing demand for this pricing approach from customers deploying our software whether on prem or in the cloud.
This decision is primarily a reflection of our customers choice, but it will also simplify our selling contracting and renewables process across the company.
In addition, the simplified pricing model will lead to lower upfront investment for customers and higher customer lifetime value and more predictable revenue per sailpoint.
And third we're expanding upon our market opportunity by pivoting to address adjacent market needs for customers. For example, we recently announced the acquisition of <unk> Tello SaaS management platform.
This acquisition helps us to address an emerging need for companies, who lack visibility into the entirety of their SaaS app landscape due to a sharp rise in shadow it happening across most businesses today.
This additional capability will help our customers to see and understand the full extent of their SaaS application landscape and then put the right identity security controls around who should have access and how that access is being used.
This acquisition will allow our customers to securely achieve their SaaS adoption goals by ensuring they understand the risks associated with new SaaS applications, even those in the realm of Shadow I T M.
And this new functionality will fit neatly into what companies are already doing to govern the rest of their critical business applications and sailpoint identity platform.
Taken together, we believe these strategic moves will drive incremental value for both our customers and sailpoint in 'twenty 'twenty, one and will continue to strengthen our competitive position.
We will be discussing in greater depth, our 'twenty 'twenty, one and focus our business strategy and our long term financial goals during our first ever analyst day, which takes place Tomorrow February 'twenty six 'twenty 'twenty, one beginning at 11, a M eastern time.
We hope you can join us.
In closing, we're very pleased with the strong performance of the business over the course of 2020 and believe that we're well positioned for continued success in 2021.
We believe our differentiated platform and an increased depreciation for the criticality of identity securities role in securing the modern enterprise will continue to drive interest and demand.
We have the right team technology and vision to continue to grow our global footprint throughout 2021.
With that I'd like to hand, it over to Jason who will cover our financial performance in greater detail.
Thanks, Mark and thank you to everyone joining us on the call today.
As Mark mentioned at the beginning of the call. We're pleased with our performance in Q4 and throughout 2020.
Here are some of the financial highlights that I'd like to call out with respect to Q4.
First total revenue of $103 million, representing 16% growth year over year and more than $8 million above the high end of our previous guidance range.
Second subscription revenue of $56 million, representing 38% growth year over year and $3 million above our previous guidance.
This outperformance was driven by strong sales performance and by better than expected retention of our SaaS and maintenance customers.
Third non-GAAP operating income of $13 million well above our expectations.
This outperformance was driven by revenue well ahead of our plan and by expenses slightly under plan.
While we are aggressively investing in the business our teams disciplined intends to find efficiencies as we execute to our plan.
And lastly, we have two new metrics will be disclosing go going forward.
We will go into more detail on those tomorrow.
Our analyst day.
But to give you a quick preview we closed the year with a R. R of $251 million, representing 40% year over year growth.
And SaaS revenue for the year was $67 million, an increase of 58% from 2020.
In terms of execution throughout the quarter, we had a very balanced performance with all of our geographies contributing nicely to growth.
Recently, we saw a nice balance of deals in the quarter was a healthy number of good sized transact transactions, but without any reliance on the mega deals.
In Q4, we continued to see our business transition towards SaaS with SaaS, representing the highest percentage of new bookings in our history.
At the same time, just as we did in Q2 and Q3, we saw our software customers continue to move towards subscription.
Opting for term license.
In Q4 subscription arrangements, either SaaS or term license made up more than two thirds of our new bookings in the quarter.
As we move on through the rest of this call. Please note that unless otherwise stated all references to expenses and operating results are calculated on a non-GAAP basis and exclude the items outlined in the GAAP to non-GAAP reconciliations provided in today's press release.
Combined gross margins in the quarter were 81% the same as last quarter.
Underneath the covers SaaS gross margins improved quarter over quarter and year over year, reaching record levels.
SaaS gross margins benefited from both increase in scale.
One is continued focus by our Dev ops and engineering teams on efficiently delivering our SaaS platform.
Operating expenses were a bit below what we expected to spend in the quarter.
Largely driven by some conservative assumptions on non head count expenses, we entered the quarter.
As well as some operating efficiencies created by our team as we executed throughout the quarter.
Turning towards the year in front of US there are a few points to keep in mind as we discuss our discuss our expectations for 2021.
First we expect to continue to see strong demand for our solutions and to drive a high growth rate in our new bookings.
Second we expect for our business model to continue to shift as we accelerate the transition towards SaaS and subscription.
In fact, we are now taking a more proactive position on the subscription shift, which we'll talk about in depth tomorrow during our analyst day.
But as a result of the transition I'll focus on guidance a bit differently than we have in the past.
And third we plan to aggressively invest in our business confidence in the operating opportunity we see in front of us not just for 2021, but for years to come.
So the first few I'll give as we initiate our 2021 guidance is around total are are we.
We finished 2020 with total <unk> of $251 million and expect to grow that to $333 million to $339 million by the end of 2021.
Representing growth of 33% to 35%.
Total error or does get a little tailwind as we make the transition to subscription.
We believe it's a great indicator of the shape of our business capturing not only new recurring bookings, but also the scale and the retention of our recurring revenue base.
As a result, we'll be providing total air our results every quarter going forward and we'll update our annual guidance as required.
In terms of revenue our current expectations for total revenue for the full year of 2021 are in the range of $404 million to $412 million.
Out of the total we expect subscription revenues to be in the range of $256 million to $260 million.
Representing a growth rate of 30% to 32%.
And to help you build your model I'll.
I'll say that we expect license revenue to be in the range of $100 million to $104 million.
Was the remainder of our revenue coming from services and other.
And you may have seen that given the focus on SaaS and on a go forward plans, we're now providing SaaS revenue and are reporting as well.
Our current expectations for 2021 are for SaaS revenue of $96 million to $100 million.
Representing year over year growth of 43% to 49%.
There is some conservatism in that number which you may see as you compare it to our 2020 result of 58% growth versus 2019.
There is still some short term uncertainty around how much of our new bookings will be SaaS in any given period, but we are very bullish about the growth prospects for SaaS revenue overtime.
Lastly on revenue I mentioned, a few minutes ago that we expect our business to accelerated shift to subscription.
And as I'm sure you're aware that impacts the growth rate that we see and recognize revenue.
In 2021, we expect that headwind to be approximately 12 points of recognized revenue growth in other words head on.
Our current expectations for new bookings if the mix in 2021 was the same as it was in 2020, our revenue growth expectations would be approximately 12 points higher or.
<unk> in the range of 23% to 25%.
In terms of profitability for the full year of 2021, we expect to be in the range of breakeven to a non-GAAP operating loss of approximately $10 million.
There are a few things to keep in mind with our earnings outlook.
First we plan to aggressively ramp our investment in go to market capabilities and capacity.
And our investment in product development.
Fundamentally we're focused on building the foundation for the multibillion dollar business that we believe sailpoint can become.
Second keep in mind that 2020 was a year on which expenses were a bit lower than you might normally expect.
And as we look forward to 2021 from today, we are assuming some renewed travel on facilities expenses, which were lower than planned in 2020.
Lastly, our investment plan is essentially aligned with the fundamental economic growth of the business.
Said differently our earnings outlook would largely be in line with our 2020 non-GAAP operating income if you were to adjust for the incremental revenue headwind, we will face in 2021 as part of our transition to a subscription model.
Turning to the first quarter, we expect total revenue to be in the range of $95 million to $92 million.
Representing 20% to 22% growth over Q1 of 2020.
And we expect subscription revenue to be 58 to $58 5 million or <unk>, 32% to 33% growth year over year.
And we expect non <unk>. So we expect to see non-GAAP operating income of breakeven to $1 million.
As I close I'll say that we're proud of the performance that we delivered in Q4 and the full year of 2020.
But really we're looking forward to what we can do in the future.
We believe we're well positioned in an attractive market.
With an exciting product portfolio and roadmap.
<unk>.
And a business model shift well underway that we expect will deliver significant value to our investors and to our customers.
And we're also looking forward to giving you more detail on our business at our analyst day Tomorrow.
With that I'd now like to turn to the operator to begin the Q&A portion of the call.
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One moment, please while we poll for questions.
Thank you and our first question is from the line of Matt Hedberg with RBC. Please proceed with your questions.
Oh, Hey, guys. Thanks for taking my questions. Congrats on the strong close to the year.
I guess and thanks for the disclosures to obviously, we're all I think we're all looking forward to Tomorrow's analyst day.
When we look at the SaaS mix I think it exited the year at about 19% mix and I think youre guiding for the full year 'twenty, one about 24% of full revenue being SaaS I am curious you know as you progress here or are you going to start to incent reps and maybe even customers too.
Lean into SaaS is it more just sort of wondering on on the go to market side there.
Yeah, Thanks, Matt and thanks for the comments about the quarter.
We provided a slight incentive to reps last year and that worked very well.
A slight incentive for them to sell SaaS rather than to sell the on.
Pam product and that works very well, we're dialing that back a bit this year Theres still look we're always consenting sales reps to do the things that we want them to do.
And obviously SaaS as well as our future direction. So we're aligned there, but no there's not it's not as if we have to do anything on natural here that there's a there's a very natural market pull in that direction the product as a fit and so it's a there's sort of a synergy coming from both sides.
That's great and then I guess on the acquisition of Intel on I think Mark you touched on it briefly in your prepared remarks, but maybe just a little bit more on on how you. How you expect to integrate this into the platform M. Because obviously, it's a little bit different than your historic focus on just pure identity with now SaaS App management, but.
Maybe just a little bit more details there in terms of the integration plans and kind of the go to market there.
Yeah, sure, Matt and thanks for the comments as well.
Yeah, No. We've found them as we were looking for some ways to accelerate our ability to cover the kind of explosion in SaaS apps in particular, we felt like they had some kind of slipped technology that enables them to see some of the less less aware unmanaged SaaS absolutely environment now the shadow it concept.
Other thing we like we had some activity data technology that allows us to kind of parse through activity data. So they had a couple of early technology wins that we felt were very attractive.
And yet they they themselves were getting pulled toward integration with identity tools. We found that they had started to kind of get into their market a little bit there very early stage with great Young group of folks and so yeah, we see it as a nice extension and.
Kind of analogous to what we're focused on with a little more of an explicit focus on those areas.
Thanks, guys.
Thanks, Matt.
Our next question is from the line of Rob Owens with Piper Sandler. Please proceed with your questions.
Great. Thank you guys very much and I'm going to let me just one question because I have a lot sort of on for Jason for Tomorrow. So mark.
High level relative to some burst maybe you can talk about the role and governance when we see an attack rate that they go after identities and where customer conversations have been since weakness on potential growth for your space and you see an uplift from this or is it just another security events. It just raises awareness overall thanks.
Thanks, Rob and Jason only minor league Cringed. When you said, what you said no I'm kidding, he's fine when looking for new molecules.
No look I think it's more to the latter Rob Wow Wow Nobody's happy about what happened there at least of all the folks at <unk> and Fireeye and others. It was not a particular spike that we think will fundamentally shift the demand curve for us we felt like a lot of customers are already well aware of these kinds of risks this is obvious.
As we all know learned.
What we know of at least a very sophisticated coordinated attack and it just continues to keep the spotlight on the importance of you know as we like to say, knowing who has access to what and so I think it won't create a really stark shift or anything in that in the demand profile coming up but yeah and in like our guys haven't seen a sudden spike in interest and just kind of.
More like head nodding like yet you know that.
There's another ugly story and this is why we got to keep our focus on getting our security even stronger on our business. That's the kind of reaction we hear on the field.
Sounds good thanks Mark.
Thanks, Rob.
Thank you.
Our next question is from the line of Brent Thill with Jefferies. Please proceed with your question.
Hey, guys. This is Joe on for Brent. Thanks for the question it's.
It's great to hear about the increased traction with fast from the large enterprises, what's reduce that friction is it more of a feature rich solution now I know full parity might not be the way to think about it but are you where you want it to be or is it more just the sales force is more confident leading with SaaS.
I think Joe it's Mark I'd say, it's all three factors.
I think you articulated to clearly and sort of implied a third it is a market pull from customers. It is an increasing strength of the product the SaaS product to be kind of relatively equivalent from a use case coverage and it's a comfort level in our field and our partners to bring that solution to the large scale enterprises. So it's really all three all three converging to create a.
A very good environment for us to win there.
Okay, and then really appreciate the extra color on as it relates to the model I'm. Just curious of that I think 100 to 100 and foreign license whats. The mix are you continuing to sell perpetual going forward I was a little unclear with that or like what's the expected mix with term there and then as we think about the SaaS line you gave fantastic guidance for next year how much.
So that is implied transition from maintenance customers today that you're trying to up sell.
So Joe this is Jason let me take that in reverse order, there's no transition in our model.
We have a installed.
Installed base of identity IQ customers that that represents our maintenance stream as a happier customer base, we're not going to try and move them.
If they want to move at some point, if they're looking to move to SaaS or if it's a customer than older deployment that thinks the easiest way to upgrade is to move to the SaaS offering them there will be there for them and we'll make that happen, but where there's no transition program.
So nothing in our numbers from that perspective.
The <unk>.
Other part of your question was around license.
And our license revenue does have both perpetual license and the upfront portion of term license that gets recognized.
At the beginning of a contract per 606 accounting rules.
And we'll talk a little bit more about that tomorrow.
We are definitely moving more towards subscription and.
And more towards term license and more proactively than we did last year.
Okay, great to hear very helpful. Thanks.
Thank you. Our next question is from the line of Brian Essex with Goldman Sachs. Please proceed with your questions.
Hi, good afternoon, and thank you for taking the question I guess I was wondering if I could.
Diana license guidance, great to see our number and subscription revenue guidance that's fantastic.
On the license side, what's your visibility into long trajectory.
What do you see on the pipeline is that based on renewals or is it more.
New.
Enterprise traction on pipeline and maybe just a little bit of color there.
Yeah that the license guidance is more based on new there are under under 606, if we renew a term license we will get some license revenue again upfront in the renewal portion of the contract, but we just don't have that many old term license contracts that are up.
For renewal and that wasn't something we were doing a lot on the business three years ago.
In terms of visibility you know look that's.
No change necessarily there other than I would say directionally.
As we've progressed in the business.
Particularly on the last year and a half with Matt Mills, no, but just.
Generally maturing as a business we've put more instrumentation, we put more focus.
<unk> focus and we put more resources around our sales pipeline and around visibility into what's happening going forward, but at the end of the day, it's a pipeline in the forecast.
There's nothing structural necessarily there thats that much different.
Got it and then maybe just a follow up is there any change in the way that you're incentivizing the sales force and the channel.
With regard to selling identity right now versus like any IQ.
And any progress in terms of channel relationships that are notable.
Yeah, I'll talk about the incentives and <unk>.
And Mark if you want to jump in about about the channel and partner relationships.
As I mentioned before you know look we have obviously always some incentive in terms of which direction. We want people to go but in terms of selling SaaS or in terms of selling term.
Versus perpetual that's not something we need to put incentives.
In any meaningful way.
To drive those results, we're really talking about coal on the market here with customers actually these days really more interested in a subscription arrangement.
Really how they're buying software and technology. These days and so it just fits with their buying patterns.
And Brian to the channel part of that I'd say in general the great majority of our partners have been actively getting their people specced up on our SaaS products identity now.
More and more comfortable selling SaaS products themselves in the marketplace.
They are balancing the need to keeping a stable group of folks who can do the services work around our identity IQ because it again those are large deployments and they stretch out over many years in some cases as customers expand and get into new divisions and such so they have a lot of bench strength of identity IQ and they're building bench strength I'm doing now, but theyre all.
Seeing the momentum we are in the market and they've kind of re re jiggered their teams to get ready for that sort of a momentum even increasing in 'twenty. One so yeah in general they're seeing the same thing in their pipelines that we're seeing is that the bulk of the pipeline is beginning to shift to SaaS.
Got it very helpful. Thank you.
You bet. Thanks.
Thank you. Our next question is from the line of Hamzah firewall with Morgan Stanley. Please proceed with your question.
Hey, guys. Thank you for taking my question and I Hope you guys are all doing well down there in Texas.
So just I wanted to ask.
Couple of questions I am sorry, if this was touched upon earlier, but just on the license revenue.
Decline this quarter I appreciate the the SaaS transition.
Early accelerating but any color you can give around sort of why that.
Decline in perhaps a more more material pace than some of us might've been expecting given.
Given the fact that.
Three quarters year to date.
It's definitely been growing quite strong.
Yeah. Thanks Hamzah. This is Jason then and.
Down here in Texas, where warmer this week than we were.
Excellent.
And then it's brighter at night than it was last week.
No on the on the line.
Since I'd look that's something we've been signaling for a long time and.
We expect that to decline overtime.
We don't expect it to go away.
We think Theres a segment on the market for whom identity IQ is the right product, but identity now is capable of serving every segment on the market.
You know, we talked before about well identity now might might not be able to serve the high end or it might not be able to serve the largest et cetera. It's there.
It's their right. It is it is a product that can serve any any part of the market now there are certain customers, who might want their day to on prem or who might need to have single tenancy for regulatory reasons or for their own security policy policy reasons, whatever it might be and identity IQ is there for them but.
But fundamentally our growth is coming from identity now and you should expect for identity got queued up to be declining we're gonna go into more detail on that tomorrow and give you a picture of what that looks like in 'twenty and 'twenty, one versus 'twenty 'twenty and what that looks like over the next few years and our and our current expectations.
But that's that's definitely the view that you should have is is that that is becoming a smaller piece of the business.
Alright, that's helpful well wait till tomorrow morning debt.
<unk>.
Thank you.
As a reminder, you May press star one if you'd like to ask a question at this time.
The next question is from the line of Andrew Nowinski with D. A Davidson. Please proceed with your question.
Great. Thank you and congrats on a on.
Another great quarter.
So you talked about the market shifting to SaaS and I would imagine that's loosening up some of the customers that are running legacy solutions from the likes of Oracle, CA and and I B M and I know you also talked about AI, possibly being the feature that starts to convince those customers to move to a better platform like sailpoint and so on.
I'm curious if you've seen any sort of change or increase in your competitive displacements.
<unk> to prior quarters.
Hey, Andy Thanks, It's mark.
Frankly, no really it's still a good solid steady drumbeat.
Thank you.
We would say we see good momentum in the field customers engaging with our field that have those legacy platforms.
So it's still a good steady drumbeat, we have never seen a sudden uptick from all the many things that might have created such [laughter] COVID-19.
Solar winds.
Any other things, but yeah, the technology capabilities, and our SaaS products, including the AI capabilities, which I think really are a step function forward from from the kind of traditional capabilities of their legacy products all of that seems to create a lot of interest in dialogue and some set of those customers are moving quarter by quarter by quarter, but there hasn't been a new.
<unk> uptick in the rate of that.
Oh, okay, yet to come it sounds like.
Maybe then also hearing from channel partners about how the remote work environment may have increased the need for an Iga solution.
On providing customers with better visibility into who has access to what application. So I'm wondering if you could just discuss kind of your you know.
How how that has impacted growth if at all and maybe just rank order. Your your key growth drivers that you're seeing right now.
Yeah. The way, we think of it Andy is use.
It was a metaphor a couple of times so hopefully that's helpful.
In some ways customers.
Before the pandemic, we're somewhat aware of their lack of great visibility and control over true security of who had access right. There's the whole digital transformation.
Movement has been a lot about increasing new access to new systems, because customers are buying and are building. All these new systems to drive their business forward and so there was a rapid enablement of rapid gain or granting excuse me of access.
And that was maybe a bit of concern as to how well controlled it was so what we sort of described the effect of the pandemic, which again was drove people to be remote and working from home or working from anywhere was it sort of like shining a spotlight on cob webs in a quarter, the cobwebs, where they're the light just expose them, but now that they're exposed.
People feel an urgency to deal with it and I think it's more that the pandemic on the working from home phenomenon on sort of caused people to go while I do need to deal with the fact that I don't have great visibility and control it didn't necessarily change dramatically just because of working from anywhere.
Yeah, well the thing is we don't want to give you. The best of as you know people used to have five access points and now they have 50, that's not what happened, but but they might have gone from five to eight and they did never had access to those eight from less secure fundamental environment at home and that caused people to be worried about exposure and risk. So it's been a general tailwind for the business not us.
Sudden surge like zoom experienced for instance, but a good tailwind, but more more along the lines of accelerating a trend that was already visible and it just made it better.
Great. Thank you keep up the good work guys.
Thank you Andy appreciate it Andy.
Our next question is from the line of Joshua Tilton with <unk> capital. Please proceed with your questions.
Yeah, Hey, guys. Thanks for taking my question. The first one and apologies if I missed this but in regards to the term contribution was there any meaningful contribution this quarter to license revenue from <unk>.
Yeah, we had a fair amount of term license in the quarter and our new bookings.
It.
Consistent with what we saw in Q2 and Q3.
2020, there was strong customer interest in term licenses and that's something we were capable do you feel comfortable with and capable of doing.
So yeah, we did have term license contribution as well.
And then.
Just a follow up on that I guess some of the feedback that we've received from the channel is basically the on premise business would've done even better in 2020, if there wasn't COVID-19. So given that you guys kind of gave us a similar message.
Around the on premise business going into 2020 last year and then it obviously meaningfully outperformed I guess what gives you. The confident today that this is the year of SaaS and that identity Ikea is going to start to decline.
So.
There's kind of two questions in there Joshua on one is confidence around around identity now and the other one I guess is confidence in a different sense around identity Iq direction.
And on identity now, we'd look we get the confidence from all sorts of places, but particularly starting with the product and its capability and the success that we've had are selling that to and deploying with very large complex customers.
And the feedback that we've gotten from them as they as they use the product so it it.
You know as Mark answered one of the questions earlier around sauce. You know is that the market is the product is at the <unk>.
Our confidence it's all of those right.
And so I think you.
All of those together tell a story that makes us very confident that.
Last year was a year of SaaS like the acceleration that we saw on the SaaS business.
You know relative to historical trends will certainly there.
And I think this year will be another year of SaaS now the question around identity IQ is a little bit different.
And.
Last year, we had a you know.
So that's the dynamic that the pipeline going into the year was built during a time when SaaS was not you know the lead product for us and even during the early parts of 2020 it had.
Not have this sort of level of confidence around the house that we do now.
Confidence on identity now that we have currently so what.
What we closed even at the end of the year when our confidence level was really high in SaaS. What we close was built during a time when that wasn't necessarily the case right. So.
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I wouldn't take last year's results as indicative of the direction that.
Identity IQ was going.
As you look at this year, we've given you the guidance on what we believe is going to happen right that that this is not hedging one direction or another on the mix of identity now versus identity Iq.
Look our pipeline as you would imagine going into the year and throughout the course of the year is larger than the bookings we need to meet our expectations and within that pipeline, there's both SaaS and on Prem software.
It can always happen that the mix ends up shifting one direction or another based on that pipeline on based on the new pipeline that we built throughout the year.
But our current expectation is for what you know from what we've guided to and then long term.
Right.
As I think I said too.
Hum Joes question book.
We believe that debt the identity IQ portion of our business will be declining now it'll be there we think for as far as forward as we can see at this point.
There'll be some portion of our new bookings and some portion obviously of our of our.
Installed base and recurring revenue based on its identity Ikea related.
But not only is that a smaller piece going forward of the business every year, but we believe it actually will be declining year over year as well.
Thank you very much look forward to book.
Thanks.
Thank you at this time, we've reached the end of the question and answer session. I will now turn the call back to Mark Mcclain for closing remarks.
Well again, thank you to everyone.
Anticipated today, it might be a little tremor, because we've got a full full day or half day I guess it is roughly a plan with you all tomorrow on those that can join us I appreciate those who could island tonight for sort of the quarter end and year end results, but we'll we'll look forward to a much deeper longer conversation tomorrow.
Thanks for taking the time to join US Tonight, and we will talk to you tomorrow. Those are enjoying this thanks again bye now.
Thank you. This concludes today's conference you may disconnect your lines at this time and thank you for your participation.