Q4 2021 Commvault Systems Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Commvault Q4, FY 2021 earnings conference call. At this time all participant lines are in a listen only mode and.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero and I would now like to hand, the conference over to your speaker today, Mr. Michael Melnyk director of <unk>.
Mr Relations. Thank you. Please go ahead Sir.
Good morning, and thanks for dialing in this morning to discuss our fourth quarter and fiscal year, 2020 one earnings results for.
And we begin I'd like to remind everyone that the statements made during this call, including and the question and answer session. At the end of the call May include forward looking statements, including statements regarding financial projections and future performance all the statements that relate to our beliefs plans expectations or intentions regarding the future are pursuant to the safe Harbor provision.
And of the private Securities Litigation Reform Act of 1995 and are based on our current expectations.
<unk> results may differ materially due to risks and uncertainties, such as competitive factors difficulties and delays inherent with development manufacturing marketing and sale of software products and related services and general economic conditions for discussion of these and other risks and uncertainties affecting our business. Please see the risk factors contained in our and.
And the report on form 10-K, and our most recent quarterly report on form 10-Q, and and other SEC filings and the cautionary statement contained in our press release and on our website.
The company undertakes no responsibility to update the information and this conference call under any circumstance and edition the development and timing of any product release as well as features or functionality remain at our sole discretion. Our press release related to today's announcement was issued over the wire services earlier. This morning and has also been furnished to the SEC as an 8-K filing.
And the press release is also available on our Investor Relations website.
And this conference call, we will refer to non-GAAP financial measures a reconciliation between the non-GAAP and GAAP measures can be found on our website. This conference call is being recorded and a replay is available for the webcast. An archive of today's webcast will be available on our website. Following the call with me on the call. This morning are Sanjay Mirchandani President.
And that and Chief Executive Officer of Commvault, and Brian Carolan, Chief Financial Officer of Commvault, Sanjay and Brian will each share opening remarks and commentary before we open the call for Q&A now I will turn the call over to Sanjay Sanjay.
And Mike Good morning, everyone and thanks for joining us today I'm pleased to report the Commvault finished Q4 and full year fiscal year 'twenty one on a high note with record quarterly sales and earnings results we have.
This and a year, where the pandemic focused customers to adopt solutions that will remain a core part of their strategy as they accelerate their migration to the cloud.
But nearly all accounts, which performed well our portfolio and roadmap are aligned with our customers' highest priorities our vision is resonating.
And the marketplace and our team is focused on our continued execution.
This was evidenced in our Q4 results.
We have software revenue growth of 35% and total revenue growth of 16% year over year.
We accelerated our recurring revenue transition as Q4 subscription revenue represented 59% of software revenue.
And recurring revenue represented 76% total revenue.
We increased our total annual recurring revenue <unk> by.
And by 15% year over year.
So continued adoption of our cloud offerings and metallic doubled.
Quarter on quarter again.
Our results were led by us and largest regions with the Americas posting record software revenue.
And our better than expected growth drove strong operating leverage with a non-GAAP EBIT margin of 23% and record non-GAAP EPS of <unk> 59.
We outpaced the industry growth rate gained market share and solidified our place as a market leader all while weathering the unprecedented macro environment.
We could not accomplish this without our loyal customers and partners and the hard work and dedication of our employees worldwide I'd like to extend my appreciation to each of them.
I've never been prouder of our achievements or more excited about the opportunities in front of us.
Now, let's discuss why.
As we discussed at our Investor event in January we believe the markets are at a tipping point no longer our data protection and data management and nice to have their organizational imperatives face.
Faced with multi generational data sprawl CIO and 90 professionals are grappling with massive data fragmentation, new security threats unknown failure points and economic inefficiencies, which are only magnified by exponential data growth.
This creates what we call the business integrity GAAP set simply it is a GAAP between the companies need to transform and their ability to actually do it.
We saw this coming and built a robust and future proof platform to help our customers close the business integrity GAAP accelerate their cloud journeys and deliver on the digital transformation strategy.
In fact, we estimate that we've now help customers moving over to extra bytes of data for the cloud and we expect this acceleration to continue.
We're also seeing existing commvault customers rapidly modernize the data environments by expanding with our newer solutions, including our metallic SaaS offerings and longtime customer chart industries, a leading independent global manufacturer of cryogenic equipment recently added metallic to support the growing office 365, and Salesforce Dot com work.
Close.
And if any will harvest season.
<unk> global infrastructure manager said quote commvault and metallic together, a trusted partner and the bullet proof solutions means that we will have the scale flexibility and reliability that are critical to our business and quote.
Not only do customers see the value for our intelligent data services, but the industry has taken notice cri and recently named US as one of the top 20 coolest cloud storage companies.
And make no mistake Commvault is built for the cloud and hybrid cloud and bonds.
As you know <unk>.
Innovation has always been a hallmark of commvault over the past two years, we built a core offering pricing and licensing to better align with customer priorities.
Our intelligent data services platform and spill for today and for Tomorrow.
And be conveniently provide these services.
Software on premises and the cloud as a managed service through our partners or as software as a service. We believe that this creates incredible opportunities for us and meeting customers, where they are and taking them to where they want to go.
We're seeing a gradual shift to multi product deployments and.
And as customers embrace what they're calling the power of and which is essentially the ability to easily and simultaneous simultaneously and leverage our on premise solutions like hyperscale ex for disaster recovery for the cloud native solution like metallic.
Hyperscale ex embodies all think commvault, giving customers, the ultimate and choice and flexibility it can be deployed and the amount of hours and seamlessly integrates with metallic cloud storage to provide future proofed aircraft ramps and way protection and other top extensions.
And Q4, Hyperscale, Exxon increased momentum and new customer wins and.
Additionally, our standalone commvault distributed storage offering formerly known as <unk> is also gaining traction and software defined storage and modern container based environments.
So, Spain, a worldwide leader and driving environmental sustainability recently chose Hyperscale extra protect the company and their customers.
And as Daniel for startup suicide, and noted quote I cannot overstate, the absolute criticality of data protection and management and our industry weighted.
And when we assess our options Commvault came out and talk to your scale simplicity flexibility security and resiliency.
And we're protecting our customers and our company with Commvault Hyperscale acts and not thrilled with our choice and quote.
And last but certainly not least metallic the gold standard and data management and the service is now available in 24 countries and customers have noticed.
We doubled the number of new metallic logos more than half of which were net new for commvault.
From a source bookings for metallic also doubled in the quarter.
Enterprise customers now make up over one third of metallics space.
And the <unk> more than doubled and was a significant component of our total company sequential AOR growth.
By all accounts fiscal year, 'twenty, one with a tremendous inaugural year from metallic.
Innovation and metallic across SaaS and hybrid multi cloud is helping our customers accelerate their cloud transformation metallic and most of the key driver of our land and expand motion.
Thats Submetallic also sell more commvault core and customers to buy metallic spend more and have a high retention rate on average.
Looking forward, we plan to accelerate development cycles, and add capabilities and exciting platform. What makes US unique is the power of and the ability to leverage on premise and SaaS with a single user interface.
Changing gears.
Throughout this past year, we've seen significant progress and our go to market execution, our regions are hitting their stride and finding success across industry verticals with customers and coal sizes.
Our record quarter was fueled by large deal momentum and significant productivity increases.
And we also posted strong growth and our velocity business across all three regions.
Complementing our sales force is a world class customer success team, that's critical to our retention and expansion efforts by any measure the first Europe a renewal cycle was a success, we finished the quarter and the full year with a net dollar retention firmly over 110%.
Across our installed base, we are increasingly selling a suite of intelligent data services that ultimately should drive higher lifetime value.
Couples had a good year, we will continue to work diligently to deliver similar results and fiscal year 'twenty, two and beyond now I'd like to turn it over to Brian to discuss the numbers. Thanks, Sanjay and good morning, everyone. Hopefully you had a chance to review our fourth quarter and full year results were released earlier. This morning, we once again set numerous records this past quarter.
And fiscal year, 2020, one represented a breakout year for Commvault.
And we're entering FY 'twenty, two with wind at our backs, but before I discuss our Q1 'twenty two outlook I'll review the results for the quarter and the full year.
Fourth quarter total revenue was a record $191 million up 16% year over year for the full year total revenue increased 8% to $723 million.
Fourth quarter software and products revenue increased 35% year over year to $89 $4 million another quarterly record.
For the full year software and products revenue rose, 19% to approximately $327 million.
Large deals represented 69% of software revenue and the quarter compared to 67% a year ago.
Revenue from software transactions over $100000 increased 39% year over year to a quarterly record $62 million.
The volume of these transactions increased 30% year over year and the average deal size was approximately $313000. We closed multiple seven figure deals and the quarter led by the Americas.
We also saw continued improvement and deals under $100000 revenue from these transactions grew 26% year over year with increases across all three regions.
Fiscal fourth quarter services revenue increased approximately 4% year over year to $102 million growth was driven primarily by improvements and professional services and metallic.
For the full year services revenue was flat at approximately $397 million. This is the result of our efforts to strategically transition certain perpetual maintenance customers to subscription licensing arrangements. We believe these conversions benefit us over the long term because of the associated opportunity.
To drive higher lifetime value with an active customer.
Let me now discuss our accelerated transition to a recurring revenue based model.
As a reminder, FY 'twenty one was the first significant year of our subscription renewal cycle, which represented a positive inflection point and our transition. We expect subscription renewals will continue to be a revenue tailwind for the next several years.
Fourth quarter subscription software revenue more than doubled year over year and represented 59% of total software revenue.
We added over 200 subscription customers and the quarter for the full year subscription revenue increased 70% year over year and also represented 59% of total software revenue.
And the subscription net dollar retention rate exceeded 110% for both the quarter and the full year.
Total Q4 recurring revenue, which includes subscription software maintenance support services and SaaS increased approximately 24% year over year to $146 million and represented 76% of total revenue and the quarter.
For the full year recurring revenue grew 17% to $556 million and represented 77% of total revenue.
Annual recurring revenue or <unk> increased 15% year over year to approximately $518 million during the quarter metallic.
And more than doubled sequentially and meaningfully contributed to the sequential increase and consolidated <unk>.
Now I'll discuss expenses and profitability and Q4, we reported gross margins of 85% for.
For the full year gross margins improved approximately 240 basis points to 85, 3%.
And I'm happy to report, we sold through our remaining hardware inventory and Q4, 'twenty, one and we enter FY 'twenty two as a software and services only model.
Q4, FY 'twenty, one total expenses, including both cost of sales and operating expenses increased 4% year over year to $150 million for the full year total expenses increased 1% to $577 million.
Fourth quarter EBIT more than doubled year over year to approximately $39 million, representing a margin of 23% for.
For the full year EBIT grew 57% to $137 million full year, EBIT margins was 19%, representing a 600 basis points year over year improvement.
Now I will discuss cash flows and the balance sheet for the quarter, we generated approximately $63 million of free cash flow Q4 free cash flow was favorably impacted by a record Q3 performance the timing of our biweekly U S payroll and late December and the receipt of IRS tax refunds associated with the cares.
Act.
We ended the quarter with $397 million and cash and cash equivalents and continue to have no debt on the balance sheet.
As we mentioned during our January investor event through FY 'twenty, two we are committed to repurchasing stock equal to $200 million plus.
Plus 75% of annual free cash flow.
From our Investor event through the end of the quarter, we repurchased approximately 943000 shares for $62 million.
Now I'll discuss our financial outlook for Q1, FY 'twenty two.
For the first quarter of FY 'twenty, two we expect software and products revenue of approximately $81 million and total revenue of approximately $181 million as a reminder, and Q1 of fiscal 2021 Commvault closed its largest single deal in company history.
Now, let's shift to expenses, we expect Q1 'twenty two total expenses to be up approximately 7% year over year, resulting in EBIT margins of approximately 18% to 19%.
Remember that Q1, FY 'twenty, one and benefited from numerous onetime temporary expense reductions during the depths of the lockdown, including temporary salary reductions lower G&A and lower health care costs. This creates a more challenging year over year comparison on the expense side our.
Our projected share count for Q1 is approximately 48 million shares.
Given our record Q4, 'twenty one results and our current Q1 'twenty two outlook, we remain confident that we're on track to deliver against our near term targets that we outlined during the January investor event.
Our belief is underpinned by the following first we're landing new subscription customers and taking share and the market set.
Second subscription renewals are tailwind, we estimate the FY 'twenty to software subscription renewal opportunity to be approximately $80 million. This compares to approximately $50 million and FY 'twenty, one and the opportunity is weighted about 60% towards the back half of the year with Q1, representing.
<unk> $17 million.
Third our retention and expansion motion works, our subscription net dollar retention rate currently exceeds 110% and we're seeing existing customers adopt more of our intelligent data services at a faster pace for.
Finally, the metallic effect has arrived it's called the power of and on premise and SaaS is resonating with customers, we expect metallics to be a meaningful contributor to incremental <unk> growth each quarter.
While we are pleased with where we are today, we want to remind you that there may be quarterly variability and our results as we progress towards these targets and.
While we have made significant progress we're still in a period of transformation and to remain remains work to be done during a period of global uncertainty now I'll turn the call back over to Sanjay for some closing remarks Sanjay.
Thanks, Brian.
<unk> 21 was a record year, but as Brian noted we have more to do.
And our fiscal year 'twenty, two virtual company kickoff, a few weeks ago I updated our employees and how we're approaching the year ahead.
Briefly share the key themes that we discussed for the year ahead.
We will relentlessly innovate, especially around hybrid cloud and SaaS data services.
Vigorously build on our leadership position to take share and widened the gap with the rest of the market.
We will continue to improve our endo and customer experience looking as one organization with all partners. We will maintain a laser focus on execution excellence as we look to build on the performance we achieved this past year.
And all of those lines up to deliver against our near term targets that we outlined at the Investor event.
In January.
With that I'd like to thank you for your time today, and we will now open it up for questions.
As a reminder to ask a question you will need to press star one on your telephone to withdraw.
For all your question press, the pound or hash key.
Your first question comes from Jason Ader with William Blair.
Yes. Thank you.
Brian just a quick question on services.
I know that you had outlined for the.
The near term kind of a 6% to 7% total revenue growth and software 9% to 10%.
And that implies.
Pretty pretty low services growth and just given where you are and Q4 and the momentum you have and metallic.
Is that is that still reasonable to assume like a low single digit growth for services and 2022.
I think it is Jason first of all good morning.
Great to have and here I think a reasonable services growth rate for FY 'twenty two.
Low single digits is probably appropriate again, we're going through a period of transformation and we've been strategically converting many of our older perpetual and maintenance customers to more modern.
Workloads that could be and SaaS, it could be converting them to new subscription offerings.
And that has a bit of a headwind.
Services growth and general but longer term, we're feel very confident about our near term targets. We laid out during the investor event metallic is going to be a key part of that that growth.
And just to be clear the term the support elements of a term license goes into the services line correct.
Correct.
Alright, and then for Sanjay.
<unk>.
I guess my question is on the data protection market and.
It does seem like.
More customers are starting to look at data protection through a data security ones.
Which is not totally new but it seems like it's it's ticked up a lot just with the.
With the kind of ransomware scourge out there can you just talk to that I don't know if you have any anecdotes, but.
And I'd be interested in hearing about what youre hearing from your sales folks from customers around data protection being viewed through a somewhat new lens.
Fair question.
This is the way.
We look at it is that protecting against.
And that actors as part of the it's part of the construct.
And how we think about data protection and data management.
While back you would say that that's a security play and this is a data protection, but now it's sort of it's morphed a little bit more.
Morphing and and what we do is make sure that.
And we're giving our customers.
Newer tools newer ways newer angles by which to stay safe stay protected so for example for.
For example, if our customers are using hyperscale ex big and automatic and I call. It the easy button and they've got and automatic extension into <unk> and metallic cloud storage services for an air gapped copy if their data should they want it they don't need to be cloud experts. They don't need to have a cloud account and we just take care of it and give them that additional.
A layer of protection are you, 100% protected always no, but do we give you I'll be constantly innovating and putting more into the technology. So that it's sort of seamless yes.
Great. Thank you.
Your next question comes from Aaron Rakers with Wells Fargo.
Yes, thanks for taking the question and congratulations on another quarter of really strong results.
And for the full year.
I guess I wanted to ask first dog and metallic.
You threw out several metrics that were quite impressive.
<unk> <unk> quarter over quarter.
I don't know if I missed it but did you say how much metallic is of a or how we should think about.
And for metallic kind of penetrating the existing installed base of the commvault customers, new customers et cetera, and any kind of additional kind of just color on just the momentum and short what you deemed as being kind of the Arab metallic now short term.
So we're really excited about the progress, we're making with metallic and in effect. This was a product that really came to market at the start of the pandemic about a year ago and if you recall, we were giving it away to customers and non customers to try our endpoint because of the.
Everyone is working remotely.
And the products made some good progress we've gone from two countries, you're roughly a year ago to 24 countries. We've gone from three offerings to real multi cloud hybrid cloud offerings, including office 365 database, Vms Cobra and Eddie's containerized apps on premise edge, so we've and.
And we've also tightened back to Hyperscale ex so that customers don't have to choose they get both I guess the power and like I was saying so we've been focused really on making sure that the product capabilities, our seamless and with the workloads customers want the outcomes of that and we did not put out the numbers and believe me, we would love to but.
We need a little more time.
We've doubled the number of customers.
<unk> has doubled every quarter since inception.
<unk> 50 per cent of our customers metallic customers also have another software solution because they see the power of and coming to play and.
And we've scaled its about a third of our customers plus minus or in the enterprise and so we're really excited about the both the breadth of the appeal on the product and the depth of the capabilities that we've built and and we're not going to slow down. So standby, we will share more over time, but right now.
We're very pleased.
Fair enough, Brian just a quick other question here is that when I look at the reported results one of the numbers that really stands out is that your free cash flow I think I think it's like 70% higher than the prior peak.
I know that deferred revenue has grown quite well over the last two quarters is there anything that kind of structurally we think about changing and the free cash flow or the trajectory of the free cash flow for the company because it is quite impressive this last quarter.
They are and thanks for the question.
I think longer term you will see a normalization of that I think we had a very strong Q4 free cash flow and it was driven by as I said, a record Q3 performance and we did have some one time items that showed up and they're in the form of timing of a payroll and also some IRS.
IRS tax refund so we can't count on those repeating every quarter so longer term I would just say keep mimicking basically our free cash flow follows our EBIT non.
Non-GAAP EBIT performance and there is a correlation there overtime.
Okay. Thank you.
Your next question comes from James Fish with Piper Sandler.
Hey, guys good morning.
And the quarter a lot of good things are really going on just was curious if you could maybe rank order or not.
Give us a little bit more color as to how to think about that day.
And for data management overall versus the Federated product portfolio being able to address any workload and any form factor against kind of the change and the go to market efforts over the last year that that really led to the upside and and really the momentum and that business and is there any rank order that you could give there.
James Hi, Sanjay.
So I guess.
With a part of your question out and hopefully I'll cover what do you need me to it but.
The first thing is.
If you if you if you look at where we were a year ago and wherever you are today data management data protection.
Our imperatives and customers are now looking at this.
And as part of our core at.
Strategy as they transform so it's not just about it's not just about moving stuff into the cloud it's about saying, okay. We're helping a customer move the data to the cloud and then help them digitally transform what's that okay. So they are there is.
There is.
And one that's job one and the second is.
As much as everyone wants to transform there is what we will be addressing as improvements integrity GAAP.
Which is which essentially.
And the chasm between your desire and often from certain transform level digitally and your ability and it's not for lack of trying and it's about being able to get it done and Thats, where we come in and we're helping customers with giving them a unified data platform through our intelligent data services consumed EBIT through SaaS or on Prem.
Both <unk> and.
And that's total of a differentiator that is what is allowing us to really get out there and do some mission critical work for customers as they moved to the cloud. So the scope of work is has has increased now we have also we have also curated our product offerings, so that it's easier for customers to consume it.
And let's say they want let's say they want Dr assets.
And as a service if you would book.
We've got we're seeing Dr as a capability being being consumed by customers.
And the for the last quarter for example, we saw a good uptick from that.
Good morning, and in the case of specialized workloads like office 365 or sales force.
We do that off of off of our metallic suite. So it's all all managed through one pane of glass. So I'm not sure. If I answered your question directly but that is the approach for taking to help our customers through their top two day tough.
So data issues.
Happy to take a second question, if you have and if I didn't cover everything you want if you can talk about we can talk about it offline okay.
Just a follow up on Aaron's question non metallic Sanjay you and you had mentioned that.
Metallic you were kind of giving away to customers during the pandemic to try and give them just being a good vendor and good.
Support overall, just curious maybe it's for Brian I guess, how should we think about the monetization strategy of that over the next year and you shift from kind of free to paid offering.
I'll take that question so the free offering was for <unk>.
Points, Okay as customers started working remotely we gave them the endpoint capability.
For a period of time I think if it was through September and from that point on I mean customers can do the basic trial program, but it's it's it's all.
It's all paid services and and and really.
And the endpoint piece was for a while it gives us great feedback customers appreciated that some converted and we move forward.
Got it thanks guys.
Your next question comes from Jack Andrews with Needham.
Good morning, Thanks for taking my question and congratulations on the results.
Sanjay and Brian was wondering if you could maybe drill down a bit more on what's been driving your very strong large deal performance.
And this happening just organically with customers is there sort of a subconscious sales motion changes that you've undertaken to really drive this and.
Any additional thoughts does this get back to some of the pricing and packaging changes that you've made to make commvault easier to consume any sort of thoughts on more details about what's driving that large deal strength.
Hey, Jack and Sanjay Hawaii.
Sure.
So it's a little of a couple of things one is.
As we share the course of last year, we've been very focused and I'll go to market activities for a segment of the market and the way that.
That we think we can really we can really get into and help our customers. We've aligned the portfolio and the workloads to match that and now with our with our.
And with would be with the compounding of Hyperscale ex and and metallic.
This gives us the breadth the customers want and now we are appealing to their digital transformation from a data point of view, but not just taking the data to the cloud it's using the data with them.
And that is appealing so a lot of our a lot of our.
Bigger deals if you would a more strategic.
It's both the journey to the cloud with the data and then optimizing and using it and our portfolio is completely aligned around it like we shared and Jen when we did the analyst day, it's all about aligning our portfolio with the workloads that customers are having the hard data issues. So.
And then I think and not to geek out on you, but what's really appealing to customers and if I wasn't I hope the day put appeal to me very much is that I get a single pane of glass for any workload what day.
It originated on Prem on our clients and the cloud managed services.
And you'll get a single pane of glass. So that is very appealing when skills at a premium okay because.
Especially in the and the World we're living today and the macro where people are working remotely and things that change on the head.
And I know there has been making things easier to do remotely with a single pane of glass wood and.
And optimizing on it professionals that better and the organization becomes Paramount and wheat.
Really focused on that.
Thanks, I appreciate the color around that just as a quick follow up question.
And you've completed the first year of a subscription renewal cycle, which has been a new motion for Commvault and I was just wondering when you think about entering <unk>.
Brian alluded to a larger renewal opportunity here in the new fiscal year, just what are the lessons learned from this what do you think has gone well and where do you think you can still improve in terms of.
Executing on the subscription renewal opportunity.
Hey, good morning, Jack it's Brian here. So, yes, so FY 'twenty, one was that kind of inaugural year for us in terms of a meaningful subscription cycle, but we got ahead of this.
And when Sanjay came in a couple of years ago. He saw that the need to build out and customer success function and that's really dedicated to paying attention to this this group of customers and it was only going to compound from there and become more of a tailwind for us and we're really pleased with the results that we had and our first year this whole land adopt.
Expand and renew formula that we have I think is just starting for us and we're really starting to hit our stride and what is nice to see is that we also have the portfolio that's well aligned for expansion capabilities. So we can go in and have that conversation with those customers is not just about the renewal it's about what else can we do with them.
How can we broadened our portfolio footprint.
And also help them on their journey wherever that may be to the cloud or to SaaS for to a hybrid type environment.
And what's nice to see is that.
As a reminder, what Sanjay mentioned is that with the power of and I mean about 50% for metallic customers have another commvault solution and it really gives us something to hone in on and and.
And talk about during these conversations.
Great. Thanks for taking my questions.
Your next question comes from Jacob Stevens with Lake Street capital.
Hi, good morning, Thanks for taking my question.
So large deals successes kind of and the focus.
Pretty prominent over the last two quarters was that more of a pipeline anomaly or is that.
The new status quo.
I would say that we were seeing success across the board Jacob So yes, we are seeing success and the large deal execution and pipeline and I think that has to do with <unk>.
Our restructured go to market infrastructure, we've got a sales force thats hitting its stride.
Theres just execution excellence thats happening in that area, but we're also seeing.
In the sub 100, K category, which would be kind of the mid enterprise. We're also seeing success there across all three geographic regions. So thats a credit to.
Our velocity sales our channel relationships and again, just better execution all round. So we like this balanced formula where we can.
Have those large enterprise transactions kind of drive.
70% of the quarter for us, but we need the stability of also selling into enterprise and also complementing that with metallic as well which spans across all categories.
Great and.
So just moving forward and.
22 here.
Where do you see your sales force trend and.
And youre going to.
Invest more and that or do you think.
Right.
At the level its at currently.
How do you think about that.
But by and large I think we've got what we want from a structural point of view from a segmentation point of view there.
And there are areas of the world or parts of the segment and some segments where people continue to <unk>.
And vast but by and large I think we're in a good place and we are focused on productivity like we saw last quarter and.
And I think.
We kicked off the year, we're on our way. So I think I think we're in a pretty good place Jacob.
Great. Thank you and congrats on the quarter. Thank.
Thank you.
I'm showing no further questions at this time, ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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