Q4 2020 Datadog Inc Earnings Call
Ladies and gentlemen, and thank you for standing by and welcome to the Q4 and so any Chinese data Dog earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question and during the session.
And it will need to press star one on your telephone.
Acquire any further assistance press star zero and thank you all the lights are on the call over to your speaker today, Mr. A J Lubich. Please go ahead.
Thank you Shannon and good afternoon, and thank you for joining stage gated on fourth quarter and full year 2020 financial results, which we announced on your press release issued after the close of market today joining.
Joining me on holiday or on the vehicle.
<unk> co founder and CEO, and David <unk>, CFO and <unk>.
Hold on and make statements related to our business and our forward looking at your federal Securities laws and we proceed to the Safe Harbor provisions and the private Securities Litigation Reform Act and 1995, including statements related to our future financial performance.
For the first quarter and for the full year 'twenty 'twenty, one and our strategy the potential benefits of our products partnerships and investments in R&D and go to market, our ability to capitalize on market opportunity and the impact of COVID-19, pandemic customers usage of our platform and key industry trends as well as the bill.
And just benefit from new streams.
As anticipate believe continue estimate expect intend will and signal expressions are intended to identify forward looking statements were similar indication and future expectations. These statements reflect our views only as of today and not as of any subsequent to these statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations for and especially on the material risks and other important.
Actual results. Please refer to our quarterly report on form 10-Q, and a quarterly periods ended September 32020 filed with the SEC on November 12 2020.
Additional information will be available and.
Report and 10-K for the period ended December 31, 2020, and other filings and reports that we may file from time to time with the SEC our.
Our filings with the SEC are available on the Investor Relations section of our website. A replay of this call will also be made available there for a new data.
Non-GAAP financial measures will be discussed on this conference call. Please refer to the tables and earnings release, which can find on the Investor Relations website.
Website for reconciliation of these measures and the most directly comparable GAAP financial measure with that I'd like to turn the call over to Olivier.
Thank you a J and thank you all for joining us today.
We are very pleased with up to four months and Q4, which once again showed high growth at scale and demonstrated efficiencies.
Despite the unique challenges and read by Colgate.
And in 2020 to introduce new products at the high velocity growth top line at a rapid rate and demonstrate strong operating efficiencies.
We are in particular and very proud of the way our teams have handled the pandemic as well.
Others unprecedented challenges.
We ended the year with 2185 employees globally, and 56% increase year over year with high growth above both our go to market and R&D teams.
One of our strategic decisions at the beginning of the pandemic was to keep on hiring and we have been able to each of you hire and onboard remotely.
And a high employee engagement and productivity.
So one thing we have worked to keep our employees safe and productive and to be good citizens of al communities as they face significant challenges.
And I'm very proud and exceptional grants will have awarded to employees in Q2, and Q4, both to support them individually and two on all of them to donate nearly $1 billion to charities focused on Kobe and beliefs and that's what I.
Our social and Rachel just T shirts.
Last but certainly not least we have maintained a relentless focus on delivering value to our customers and while the pandemic has been a source of challenges to business because each year. We believe it will prove to be and actually at a weighted towards cloud migration and digital transformation over time.
In other words, we learned a lot this year, including our ability to execute and to pick up challenging as well as confirmation of our very large and growing market opportunity.
Now onto a review of the quarter to summarize Q4 at a high level.
And you was $178 million and increase of 56% year over year and above the high end of our guidance range.
We also and you figure with 97 customers with me on.
On a $1 billion on more almost doubled to 50 last year and more than three towns and 2009 and I just two years ago.
We ended the year with 1253 customers with them.
On a 100000, a little more up from 858 last year. These cash.
And most generated over 75%.
And.
We have about 14200 kits and married up from about 10005 hundred on last year.
Which means we added about 1100 customers and the quarter, making it another strong quarter of AD. After the 1000 and we added in Q3.
We also continue to be capital efficient with free cash flow of $70 million and.
And as in past quarters on database and net retention rate was up a one and 30% as customers increase their usage and attitude on new product.
For the full year would you know weighted revenue of $603 million at 66% increase year over year, which was above the high end of our guidance and.
And free cash flow was $83 million on a margin of 14% from New York.
Now to review Q4 in more detail.
Execution was very strong with outstanding test performance, particularly against the macro backdrop.
And you look at generation was very strong, including a new record on new logo.
And our added that was significantly above last year's number.
Very strong performance across the board from commercial and enterprise sales channel and.
Well as a record number of million plus new logo customers.
Gross on existing customers was robust as customers of all sizes continue to grow their usage of debt a dog to both increased consumption and cross selling and Q4's growth of existing customers was broadly in line with pre COVID-19 trends.
Lastly, churn remains very low and consistent with pre pandemic historical rates.
Next on our platform strategy continues to resonate and we and the market.
As of the end of Q4, 72% of customers are using two or more products, which is up from 58% last year.
Additionally, 22% of customers are using full <unk> products, which is up from only 10% a year ago, and we have another quarter in which approximately 75% on new logos and ended with two or more products.
And I'm very happy with our platform traction.
Including uptake of the new U S products and P. M run on security and each of which has reached hundreds or thousands of customers and a short amount of time.
As a reminder, on newer products are often at a piece first by steps that I keep customers at small scale before on land and expand model enables gradual adoption and overtime.
And friction and like production from a single integrated platform is a key value proposition for our customers.
Overall, our ability to both land and expand and a very challenging time speaks to our strong execution.
And in product and to our status as a strategic partner to our customers as they prioritize debt used to operations.
No on two product and R&D today, we announced two acquisitions.
We announced an agreement to acquire on screen SaaS based security platform that enables enterprises to detect.
And respond to application live on attacks screens.
Screen technology provides runtime application self protection or rack and <unk> web application firewall, so and that's why.
And he is already used by hundreds of companies today.
Security issue and the application layer on complex to solve because application and security courses and lines of responsibility between Dev ops and security teams.
As a result, we believe this will be a powerful combination for our customers using APM Austin days.
Next we also announced the acquisition of steamboat technology developers on Victor and vendor agnostic and high performance observer ability that our pipeline.
And with Victor customers can collect and reach and transform logs and all the signals across multiple tools and data sources and both on premise and cloud environments and then Rod These data designation of their choice.
We expect this technology to further empower our customers to control their observer ability data, what providing broader points of entry to our platform.
And I speak for everyone and debt, a doc and saying that we are extremely excited for the teams of both companies to join us and our quest to break on titles.
Beyond the acquisition, we had a number of new developments and Q4.
We don't have a general availability of incident management, which allows users to take net incidents and investigate with kohl's and collaborate without leaving that a dog.
And we also delivered more than 60, other new capabilities and features across our products, including new and enhanced integration such as Snowflake Oracle cloud well, if you've never been 80, and 96 barring sneak with a brand new continuous provider.
Now taking a step back we exit 2020 with nine generally available products. Good decent context, just four years ago, we had only one product.
And we have been able to build the most complete integrated and cloud native absurdity platform because of our funding is an integrated integration platform.
Tensible could you just gave you.
Yeah.
Looking forward to 2021, we continue to feel that we're just getting started.
First we are doubling down on building out a platform for <unk>.
These core market alone is a very large opportunity and it's growing quickly and with the re platforming to cut architectures.
We are still early and just transition and on.
Creatively, adding functionality to both the new skus as well as the more mature products.
Second we are just getting started and and security was our first product launch in 2020.
And we consider security and very large opportunity with a long runway of plant productive up net and we envision the silos between Dev and ops person down and a similar way to what we have seen between debt and ops.
Third we are investing and the platform and ecosystem.
In addition to building up the debt marketplace and now have strategic partnerships with all of the major cloud vendors. For example, we announced the expansion of our partnerships with Azure on DCP, this quarter, which should be the market and 2021.
And we're also introducing new cloud instances and regions such and go cloud.
Our goal is to gain distribution across vendors and regions and meet customers, where they are to lower friction to adoption and to lower time to value.
And as we think longer term beyond 2021.
We do believe that maybe more use cases, we can solve for customers beyond reach of our platform.
Let's move onto the sales and marketing.
As I mentioned earlier and I'm very pleased with the continued productivity of our go to market teams and.
And Q4 was a very strong sales quarter. So, let's just get some of them and weeds in the quarter.
First let's talk a bit about the what COVID-19 has accelerated digital transformation.
As expected in the quarter, we saw seven figure increases from Covid beneficiaries, such as consumer and consumer debt, yes, Sir.
Besides the consumer debt and device company.
Largely commerce platform and.
Global video games company.
Perhaps more surprisingly, though we also had a number of notable net sales from companies that were negatively impacted by the pandemic, including a seven figure upsell to a travel technology company and.
And six figure up sales through two separate airlines as well as a physical 11th company.
These deals demonstrate and better dog is a key strategic partner to companies that are scaling rapidly overlap on line as well as the fact that business day event in the most negatively impacted industry and investing heavily in debt digital operations.
Now, let's dive into some of our other key wins for the quarter.
First and we'll hire.
And I too notable seven figure land book with Fortune, 100 company, a retailer and and insurance company.
Both have been struggling with teams and separate silos and our cash.
Solid net in dozens of tools into debt a dog using a single view to both Dev and ops teams and.
Next we had a seven figure land on a streaming sports platform and Asia, which was enabled by our new debt and our partner program.
The company adopted a full data platform and on tracing without limit approach was a key differentiator at their previous APM solution and separate from blind spots you can simply and two a lack of integration with infrastructure data.
Next we had yet another 17, new land this time from a SaaS company based in EMEA.
The company moves to us from a build it yourself approach and food and engineers, so they could be of more products and deliver innovation.
Lastly, we had a nearly $1 million upsell to a very large and management consulting firm.
Company is now using on that what would you like monetary and product to replace legacy point solution and getting visibility into physical network devices.
I would also note that this was one of the first expansion deal to benefit from a brand new marketplace offering in this case with partner developed integration with office 365.
Now moving onto our outlook is.
It is clear to us that the market trends that have driven on circuit, so far I've only got and stronger.
Businesses must be digital first like never before.
And Matthew Thank you for your platform being driven by cloud migration is still in its early stage Inc.
And engineers and developers are truly strategic employees, whose productivity and ability to collaborate on key drivers of business performance.
Well there is the possibility for more near term volatility caused by the macro environment. We are increasingly country next and our ability to execute and no long term opportunity and.
And we believe that we can continue to sustain strong growth both in the near term and over time.
With that I would like to turn the call over to our Chief Financial Officer, David Ochsner David.
Yeah. Thanks Olivier.
Mentioned, we delivered strong fourth quarter top and bottom line results.
Net a difficult macro backdrop.
Revenue was 177 $5 million up 50%, 56% year over year against the challenging year ago comp.
And the logo generation was very strong.
Usage trends were solid platform traction continued to be strong and churn was in line to better than historical norms.
<unk> some more contacts first new logged out results were very strong.
Both new logo.
And the number of new logos were records for day to dog displaying strong growth versus a year ago.
New business contributions came across regions and from both our commercial and enterprise sales channels.
And remember that given our usage based revenue model new logo wins down lead do not immediately translate into revenue.
Growth of existing customers was robust and our dollar based net retention remained above 130% for the 14th consecutive quarter.
We are pleased with the usage growth of existing customers, which showed continue adoption of our platform and their cloud migration, even and the pace of the macro pressures.
On to a little more detail growth of existing customers was broadly in line with long term trends and meaning we can be better than the level experienced in Q2 of last year.
As a reminder, even though we have now experienced two quarters of usage growth that was approximately in line with pre pandemic levels Q2 was meaningfully pressured and that pressure will impact our year over year metrics, including revenue growth and net retention until we lap that compare.
And the fourth quarter, we saw continued strength of our platform strategy with over 70% of our customers using two or more products and 22% of our customers now using four or more products up from only 10% a year ago.
Given that 75% plus of our lands now come from two of our products. We believe the overall share of customers using two plus products and closing in on that number.
Lastly, churn wasn't in line to slightly better than historical levels. This demonstrates the importance of our solution for our customers even during challenging times. Our dollar base gross retention rate has remained largely unchanged and the low to mid nineties.
Now turning to billings, which were $219 $4 million up 68% year over year.
After adjusting for the timing up $6 million of billings and last year's fourth quarter pro forma billings growth.
61% year over year strong and approximately in line with revenue growth.
Remaining performance obligations or RPE L was 440 and $34 million up 78% year over year.
Both billings and contract duration extended and the quarter driven by strong annual billings and commitments as well as a few larger multiyear connects it.
It is important to note that those multi year commits where bill annually and we do not incentivize our sales force for multiyear deals given our high net retention rate.
Current RPI growth was strong in the mid <unk> similar to billings growth.
As a reminder, billings and.
And RPM can fluctuate versus revenue based on the timing of invoicing and the signing of customer contracts, while revenue incorporates customer usage.
Now, let's review the income statement and more detail as a reminder, unless otherwise noted all metrics on a non-GAAP.
We have provided a reconciliation of GAAP to non-GAAP financials, and our earnings release.
Gross profit and the quarter was $137 $6 million, representing a gross margin of 78%.
And this compares to a gross margin of 79% last quarter, and 78% and the year ago period.
The slight decrease in gross margin sequentially, it's been a minor inefficiencies created from our investments and product and platform innovation as a reminder, our gross margins may fluctuate quarter to quarter within an acceptable range as we prioritize product development and innovation as well as the build out of our cloud.
Data centers and newer geographies.
R&D expense.
<unk> expense was $53 5 million or 30% of revenues compared to 27% and the year ago quarter.
We have continued to invest significantly in R&D, including high growth of our engineering headcount cloud accounts.
Which was which we added approximately 370 net R&D heads over the course of 2020.
We have been able to attract talent and execute on hiring and on bolt on boarding during COVID-19.
Sales and marketing expense was $52 $5 million or 30% of revenues.
And that's a 35% and the year ago period.
Similar to R&D, we continue to make substantial investments and sales and marketing, but the pace of revenue growth has now passed that investment.
And another quarter of no and person Tradeshows and marketing events.
We have successfully redeployed much of the events budget for advertising and other lead generating activities. It was not on a one for one ratio.
G&A expense was $13 5 million or 8% of revenues slightly lower than the 9% and the year ago quarter.
And operating income was $18 $1 million or 10% operating margin compared to on operating income of $7 $9 million with a 7% margin and a year ago period.
Our continued production and marketing events travel and entertainment and facilities overhead due to Covid were the primary drivers and the year over year leverage head count growth was approximately in line with revenue growth in the quarter.
Non-GAAP net income and the quarter was $19 1 million or <unk>.
Per share based on a 334 million weighted average diluted shares outstanding.
Turning to the balance sheet and cash flow, we ended the quarter with $1 $5 billion and cash cash equivalents restricted cash and marketable securities.
Cash flow from operations was $23 $8 million and the quarter.
After taking into consider capital expenditures and capitalized software free cash flow was $16 $7 million for a margin of 9%.
For the full year free cash flow was $83 $2 million.
Or 14% margin.
Now turning to the outlook.
For the first quarter and the full year of 2021.
As Olivier mentioned, we believe we can deliver high growth for the foreseeable future.
We are addressing a very large greenfield market and are executing well against that opportunity.
As we look out to 2021 Covid continues to present some uncertainty.
On the one hand, we believe the pandemic will accelerate digital transformation and cloud migration once the near term pressure subsides, however, the timing and path of normalization remains uncertainty.
And in combination we are initiating the following 2000 and 'twenty one guidance, which includes continued high growth.
Beginning with the first quarter, we expect revenue to be and the range of $185 million to $187 million, which represents a year over year growth of 42% at the midpoint.
Non-GAAP operating income is expected to be and the range of $8 million to $10 million and non-GAAP net income per share is expected to be two to three cents per share based on approximately 345 million weighted average diluted shares.
For the full year revenue was expected to be and the range of $825 million to 835 million, which represents 38% year on year growth at the midpoint.
Non-GAAP operating income is expected to be and the range of $35 million to $45 million and non-GAAP net income per share is expected to be and the range of 10 to <unk> 14 per share based on approximately 348 million weighted average diluted shares now.
Now some notes on the guidance Mb.
Embedded in the guidance are prudent assumptions on growth of existing customers as well as new logo attainment, which reflect some of the current macro uncertainties.
Our strategic focus remains on investing to optimize for long term growth.
Therefore, we're planning to continue aggressive investments in both R&D and go to market throughout 2021.
While we have been profitable throughout 2020 and plan to be in 2021, we are not focused on optimizing and near term profitability.
Rather the efficiencies of our business are clearly ever net evident and we are confident and our ability to be a sizable and materially profitable company over the long term.
Additionally, our model assumes a return to the office and a resumption of travel and in person events and the second half of the year.
We have limited visibility presently on these topics and I believe it's prudent to incorporate that and our outlook.
Next on the two acquisitions.
<unk> technologies have closed.
And has no impact to our guidance.
We also announced the agreement to acquire screen for total transaction costs of $260 million.
Of which approximately 25% is deferred and a mix of cash and stock.
We expect screen for clothes, and Q2 subject to customary closing conditions, including regulatory approvals.
Screen is not included in our guidance, but we expect it to have an immaterial impact to both our revenue and operating income guidance and 2021 upon deal closure.
Now below operating income.
We expect approximately $1 $2 million of quarterly non-GAAP other income.
Which is net including the interest income on our cash and marketable securities less the interest and expense of our convertible.
Next we don't expect to be a federal taxpayer next year, but have a tax provision related to our international entity and expect that tax provision to be approximately 600000, and Q1 and $3 million for the full year.
Lastly, we have early adopted ASC 2026 as of January one.
With changes the accounting for convertible debt.
And therefore going for forward, our convertible notes will be accounted for wholly as debt on our balance sheet.
GAAP and other expenses should now be more aligned to non-GAAP as there was no longer and non cash component related to the debt discount.
More importantly, our share count forecast now considers an additional $8 1 million shares as the new standard requires all underlying shares of the convert to be included and this has been taken into account and our EPS guidance.
To summarize we are pleased with our results for the quarter execution was very strong including strong sales results and continued product innovation customers continue to consume more data dag growth in terms of usage and the cross selling to newer products are.
Our continued execution throughout the challenges of 2020 give us even greater confidence heading into 2021 and the importance of our solutions will only be heightened long term by the pandemic. Therefore, we're continuing to reinvest in our business and are very excited for the year and.
On a year ahead sorry.
Finally, we would like to thank AJ, who is having his last earnings call with us today at day to Das and I'm sure investors have appreciated with contributions as much as we have.
And with that we will now open our call for questions operator, let's begin the Q&A.
Alright, so as a reminder to ask a question you will need to press star one on your telephone to resolve your question price, Japan key again that is star one on your telephone.
First question, we do have Sanjay Singh from Morgan Stanley Your and all on.
<unk>.
Hi, This is mark Randy on percentage it thanks for taking my questions and congrats on the results and and constrict and continued strong growth here.
First I just wanted to quickly and update on the headwinds Youre seeing the top line from the lower expansion you see you saw last summer it seemed like those trends have largely turned around and we should expect another quarter or two to kind of work through those impacts I guess my question is as we get into the back half of next year and the growth comps become easier and should we be expecting.
The combination of easier growth comps and ramping kind of products and partnerships with like Azure to result in and an acceleration of growth is that and appropriate way for us to be thinking about it.
I think that we've given our guidance taking into account and you know all of the potential upsides and risk, but you are right. The headwinds created and in Q2 do create a drag on the revenue growth as we talked about through Q2 of next year and why.
We are not providing quarterly guidance through next year, we expect that that headwind in terms of the comp to abate and the second half of the year.
Got it helpful. And then maybe just on the two acquisitions announced so on the security side with screen, you're building out quite a portfolio now across observer ability and security of data dog and I guess my question on screen and kind of how how does this integrate with the core day to day old platform. How does it work with core day to dog versus being a stand alone <unk>.
<unk> and then.
And on the timber purchase.
And what is what's the need for and observe ability data pipeline and the platform can you help us kind of better understand what timbers, bringing to day to dog and and the platform and my customers really need this functionality.
Thanks, so much really helpful.
Yes, so I'll take the.
Question is on M&A.
On the on the screen size and what's really interesting is that the focus is our application security and.
And reputation securities one of the areas we already.
I would say between application and they have basically.
And security is the is the most president and the responsibilities on that really clear cut them there and.
We think it's whenever you're on what we can show particular strength because on APM is already deployed and is already in the heart of the application and we can inject the debt.
And the security protection and detection and directly.
So.
We think this is a product will make a lot of sense to our customers that are using APM.
And that's going to be deployed the same way basically.
And so that's both screen for the timber.
And Victor which is the product whats really interesting theories.
And we were here and we see from customers over and over again debt.
And a number of different data sources that produce.
Loved and in particular, but also other kinds of the observer ability data and many of those sources of our legacy system.
Log management systems for example.
And one thing they want to be able to do is to aggregate all that data before it leaves their own network environment.
And make sure they have the rights.
Privacy controls on them and they can filter P. I for example, and things like that.
And then decide to write these data to US for example, and up to a cloud service, but also maybe to other places maybe two and archived they want to keep them in house.
And so what we think this will allow us to do is to satisfy that need from customers make sure they're fully in control of the opposite obviously data and make it a lot easier for customers to India and send us older debt at Ids, we live and to them.
Great. Thank you.
Next question comes from the line of Chris Merwin from Goldman Sachs fewer and our lives.
Okay. Thanks, so much for taking my question.
I wanted to ask about new land I think you called out that 75% of those lands are with two or more products. So beyond infrastructure can you give us a sense of where you're seeing the strongest traction more recently with the rest of your suite. Thanks.
It's easy it's pretty much in the order of introduction and other products. So the.
Most of my share behind that our APM and logs that are we say, Nick and neck in terms of the which are the other ones that I get getting at that first and then you go once they've done to synthetics and then you go one step down too.
N P M and Enron and then you go down to security and so that's the that's the order.
Which by the way I think the question we might get later, but.
We're planning to invest a lot more because we see so much success with that platform approach. We see all these products have a pretty interesting growth curve.
And we think there's a lot more permanent space force to cover which is why we are aggressively.
And the team and the hiring and we're also proceeding to these acquisitions.
Great. Thank you and just a follow up if we look at.
Billings I mean on a pro forma basis I think you said it was up 61% <unk> was up and the mid Sixty's, but then the revenue guide for 'twenty, one is and the high 30, so I realize billings aren't going on and a factor and usage, but can you help us think about how to reconcile that really strong billings growth, we saw exiting 'twenty and with the revenue.
Growth guidance for 'twenty one.
Yes, I think we had we had a strong new logo. We also had as we mentioned.
Extension of the duration of billings and and contracts.
And from our clients.
So.
So those were some of the factors that caused the strong performance, we try to get everyone sort of back to <unk>.
On the revenue growth and then the linearity within the quarter of which one can look at a are because of the variability and billing and RP O due to billings, but we did have strong new sales as well as the extension of duration in the quarters, we mentioned and which contributed to that.
<unk> performance.
Understood. Thank you.
Next one on the line is Sterling Auty from JP Morgan your and our lives.
Yeah. Thanks, Hi, guys wanted to revisit the securities topic again and <unk>.
Traditionally when we think about WAF adoption, that's usually been the security.
So organization kind of driving that adoption rasp as a newer area and what I'm curious is do you need a dedicated security sales force to properly penetrate the opportunity or is there enough buying decision and influence coming out of the Dev ops M.
Areas that your existing sales force can adequately pushed the security products that you have.
So the short answer to that is we don't know yet and we are.
First of all after.
So the deal's not closed yet right. So we are.
And again continue the hypothetical with the companies and the company is on up Mark yet.
But the.
The way we're seeing it.
By counting from and APM product.
We really lower the friction that is involved and deploying and application security product.
Typically the problem you have net when you try and deploy our last product is a high friction to the low and the person who wants to deploy these and loved the person who actually has the authority to do retail actually manages the servers and manage the application.
And we sold that with their dog and so we think it opens up new avenues of friction Leslie deploying those products now who we translate on the go to market side, and if we need to have especially sale, we don't know yet and we're open to it.
Alright, Great and then one follow up.
Would be just in the two plus products, you mentioned kind of the land and and the adoptions by the maturity curve, but what I'm curious about is are you seeing the use cases, especially for logging and APM driving into newer areas than what you saw let's say, maybe three or four quarters ago are you getting.
Pension of those products in particular and new areas of your customers.
So those products are still extending a lot right. So the adoption curve for customer these and they usually start small and then they grow index and the products to more and more and more up there.
And SG&A and and.
All of this activity and so.
Loved and the P M on the different but they keep growing with customers that way so even when we say 70% of new customers.
Have adopted the product there's still a lot of growth to be had within those kept so much.
Got it thank you.
Next one on the Q is Brad Zelnick from credit Suisse, Your and all lives.
Great. Thank you so much and congrats on a strong and two a crazy year.
Ali and my question is on timber yeah for sure my question on timber.
Is the idea of vector to be and agnostic data pipeline and to be able to feed.
Data to any observed ability platform and and in that case, how should we think about then rolling that into your offering potentially.
Potentially create co-opetition, if you will amongst observed ability platforms or am I not thinking about it right.
Express it that way.
And I mean, you're right I mean, it's important for like if you want customers to send all the data from all the sources and they have to be have to have some flexibility to send it to our two vice place. He isn't right. So that's actually part of the mix. There. We think it's actually it's actually makes sense for us to do it.
Well, usually the integrated.
Experience with debt a dog will be.
Fantastic and so that it makes the most sense and it is the most interest income payout value perspective to send them any better.
But he is important for these to be opened and two to cater to the value use cases, where customers have and.
Other another destination they want to consume the data or another source they wanted to add or some flexibility to filter on the fly with this and in a.
And where you can see that does and extension of blogging without limits.
And reaches backing to the customers and infrastructure.
Got it thank you and maybe a follow up for David David How should we think about the level of sales hiring this year and the ability to ramp reps on the entire portfolio, which has expanded quite significantly.
Yeah, we've been successful last year as well as our plans for this year and ramping sales higher.
Slightly ahead of revenues. So we've been you know as we talked about it and the <unk>, we have plans to do it again and as we've talked about.
It involves.
Both expanding into new geographies and involves building out the teams within geographies, where we've been successful.
And it's what we did last year and believe we can do it again the next year.
Great. Thank you guys.
Yes.
Next one on the line is Mohit <unk> from Barclays Your and all lives.
Hey, guys. Thanks for taking my question and I'll offer my congrats on a very strong quarter as well.
So my first question is.
Or on the mend excuse if you guys.
Announced last week. So I'm wondering if you can give us some more color there. It sounds like this is mainly ex standardizing on data dog as it flips that liquidity platform and the release also mentioned that you guys would have placed.
And the existing and income bearings, which were low.
Like five or six tools that the customer is using so.
And go into some sort of like the dynamics of offshore.
And then there or maybe you already did and expanded from there, but any more color on the customer orders.
And I actually don't have much more color I can provide you because I'm not sure what they can but again speak to publicly.
We didn't prepare anything for that but interestingly enough. This was not one of the customers. We mentioned in the AR and the rest of the call.
And the prepared notes.
But I think it's Ali has mentioned it happens to be a press release, but it's typical of what has been happening with the expansion of the products across the platform where most of the motion is.
And as landing smaller and then expanding and given the value of the platform to across the product set so it's a typical type of.
Motion.
Understood.
My follow up question is for David.
So David in terms of sourcing you've followed up on the record new.
And.
And Q3 with another strong quarter and Q4 were actually fly and obviously, we understand the puts and takes to billings and our appeal, but if I just look at yard and it seems to be things coming together very nicely Oscar sort of like a slight or other dip in Q2.
Like how should we think about the guidance on on this question was already asked but if I, if I sort of flow compared debt of next fiscal year guidance.
And whats the grille at two strong quarters of <unk>.
Can you help us reconcile that.
Yes, as we said last time and its a typical approach.
There's there's lots of positives and we're very proud of it but we continue to take a conservative approach towards guidance, given the uncertainty and the world.
From Covid and what might happen to enterprises.
And as we said, we see a lesson we've seen a less volatile world in terms of both the growth of client usage and new logos, but continuing to Maine.
Prudent and conservative when we provide guidance as we have and our quarters as a public company.
One thing I will I will say when we look at our metrics internally and I'll use this metrics in particular those are field noisier than they were before the pandemic.
And that's because you know the basically track the the way the device and then equal impacts of depend and it can ripple through the world.
And device layers of the economy.
And so we want to be a little bit cautious there.
People's behaviors have changed to abuse lead each year and it keeps fairly different from what it was the year before and an example of that E T.
Typically at the last year and last week of the year. There is a drop in activity because pretty much everyone takes too.
It was more pronounced I think because many people hadn't taken any time off during the year and everybody took their time off at that time, so we want to be able to be careful about what we what we predict and the future.