Cognyte Software Ltd (CGNT) 2024 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Cognyte First Quarter Fiscal Year 2024 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dean Ridlon, Head of Investor Relations. You may begin.

美好的一天，感謝您的支持。歡迎參加 Cognyte 2024 財年第一季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言人、投資者關係主管迪恩·里德隆 (Dean Ridlon)。你可以開始了。

Thank you, operator. Hello, everyone. I'm Dean Ridlon, Cognyte's Head of Investor Relations. Thank you for joining us today. I'm here with Elad Sharon, Cognyte's CEO; and David Abadi, Cognyte's CFO. Before getting started, I would like to mention that accompanying our call today is a presentation, if you would like to view these slides in real-time during the call, please visit the Investors section of our website at cognyte.com, click on the Investors tab, click on the webcast link and select today's conference call.

謝謝你，接線員。大家好。我是 Cognyte 投資者關係主管 Dean Ridlon。感謝您今天加入我們。我和 Cognyte 首席執行官埃拉德·沙龍 (Elad Sharon) 一起來到這裡。以及 Cognyte 首席財務官 David Abadi。在開始之前，我想提一下，今天的電話會議附帶一個演示文稿，如果您想在電話會議期間實時查看這些幻燈片，請訪問我們網站 cognyte.com 的投資者部分，單擊在“投資者”選項卡上，單擊網絡廣播鏈接並選擇今天的電話會議。

I would also like to draw your attention to the fact that certain matters discussed on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other provisions of the federal securities laws.

我還想提請您注意，本次電話會議中討論的某些事項可能包含 1995 年《私人證券訴訟改革法案》和聯邦證券法其他條款含義內的前瞻性陳述。

These forward-looking statements are based on management's current expectations and are not guarantees of future performance. Actual results could differ materially from those expressed in or implied by these forward-looking statements. The forward-looking statements are made as of the date of this call, and except as required by law, Cognyte assumes no obligation to update or revise them. Investors are cautioned not to place undue reliance on these forward-looking statements.

這些前瞻性陳述基於管理層當前的預期，並非對未來業績的保證。實際結果可能與這些前瞻性陳述中表達或暗示的結果存在重大差異。這些前瞻性陳述是在本次電話會議之日做出的，除非法律要求，Cognyte 不承擔更新或修改這些陳述的義務。請投資者不要過分依賴這些前瞻性陳述。

For a more detailed discussion of how these and other risks and uncertainties could cause Cognyte actual results to differ materially from those indicated in these forward-looking statements. Please see our annual report on Form 20-F for the fiscal year ended January 31, 2023, and other filings we make with the SEC.

更詳細地討論這些及其他風險和不確定性如何導致 Cognyte 的實際結果與這些前瞻性陳述中所示的結果存在重大差異。請參閱我們截至 2023 年 1 月 31 日的財政年度的 20-F 表格年度報告以及我們向 SEC 提交的其他文件。

The financial measures discussed today include non-GAAP measures. We believe investors focus on non-GAAP financial measures in comparing results between periods and among our peer companies to publish similar non-GAAP measures.

今天討論的財務指標包括非公認會計準則指標。我們認為，投資者在比較不同時期和同行公司之間的業績時，會重點關注非公認會計原則財務指標，以發布類似的非公認會計原則財務指標。

Please see today's presentation slides, our earnings release, and the Investors section of our website at cognyte.com for a reconciliation of non-GAAP financial measures to GAAP measures. Non-GAAP financial information should not be considered in isolation from, as a substitute for, or superior to GAAP financial information, but is included because management believes it provides meaningful information about the financial performance of our business and is useful to investors for informational and comparative purposes.

請參閱今天的演示幻燈片、我們的收益報告以及我們網站 cognyte.com 的投資者部分，了解非 GAAP 財務指標與 GAAP 指標的對賬情況。非 GAAP 財務信息不應被視為獨立於 GAAP 財務信息、替代或優於 GAAP 財務信息，而是包含在內，因為管理層認為它提供了有關我們業務財務業績的有意義的信息，並且對投資者提供信息和信息有用。比較目的。

The non-GAAP financial measures the company uses have limitations and may differ from those used by other companies.

公司使用的非公認會計準則財務指標有局限性，並且可能與其他公司使用的不同。

Now I would like to turn the call over to Elad.

現在我想把電話轉給埃拉德。

Thank you, Dean. Welcome, everyone, to our first quarter conference call. I'm pleased to report a good start for the year with solid Q1 results across several key metrics. Revenue grew sequentially and came in ahead of our expectation at $73 million. I'm very pleased with our gross margins increasing by 800 basis points compared to Q1 last year and gross profit increasing 7% year-over-year on an SIS adjusted non-GAAP basis.

謝謝你，迪恩。歡迎大家參加我們的第一季度電話會議。我很高興地向大家報告，今年有一個良好的開端，第一季度在幾個關鍵指標上都取得了堅實的業績。收入連續增長，超出我們的預期，達到 7300 萬美元。我對我們的毛利率比去年第一季度增長 800 個基點感到非常滿意，並且按照 SIS 調整後的非 GAAP 基礎計算，毛利潤同比增長 7%。

Free cash flow was very strong, coming in at $70 million, also ahead of our expectations. Today, I'll start with a review of our first quarter significant wins and market dynamics. Next, I will discuss our differentiated technology and how we believe we're well positioned to leverage latest AI innovations to increase customer value. And lastly, I'll discuss our updated outlook for the year.

自由現金流非常強勁，達到 7000 萬美元，也超出了我們的預期。今天，我將首先回顧我們第一季度的重大勝利和市場動態。接下來，我將討論我們的差異化技術，以及我們如何相信我們能夠充分利用最新的人工智能創新來增加客戶價值。最後，我將討論我們今年的最新展望。

I would now like to review some of our significant wins in the quarter that highlight our differentiated technology and deep customer relationships. Our investigative analytics solutions have national security, law enforcement, national intelligence and other security organizations to accelerate investigations. The first deal is for approximately $8 million with an existing national intelligence customer for its mission to combat drug trafficking and other high-impact crimes around the borders.

現在，我想回顧一下我們在本季度取得的一些重大勝利，這些勝利突出了我們的差異化技術和深厚的客戶關係。我們的調查分析解決方案讓國家安全、執法、國家情報和其他安全組織加速調查。第一筆交易金額約為 800 萬美元，與現有的國家情報客戶合作，旨在打擊邊境地區的販毒和其他高影響力犯罪活動。

We believe we were selected because of our cutting-edge technology that consistently outperformed solutions from other vendors during a variety of operational activities performed by this customer. The second deal is with an existing national security customer for approximately $9 million. It represents an expansion of our customers' capabilities and functionality for its mission to address an increase of the and criminal activities in the country. We believe we were selected due to our ability to accelerate security investigations and the long-term relationship we have with this customer.

我們相信，我們之所以被選中，是因為我們的尖端技術在該客戶執行的各種運營活動中始終優於其他供應商的解決方案。第二筆交易是與現有的國家安全客戶達成的，金額約為 900 萬美元。它代表了我們客戶的能力和功能的擴展，以解決該國日益增加的犯罪活動。我們相信我們被選中是因為我們有能力加速安全調查以及我們與該客戶的長期關係。

The third deal is for approximately $5 million from an existing national security customer. The deal is to expand capacity and widen the operational capabilities of their solution to more effectively combat our activities. We believe we are selected based on our long track record of success in value creation. The common thread we see through these wins is our innovative and differentiated investigating analytics solutions and our ability to help customers successfully create operational value.

第三筆交易是來自現有國家安全客戶的約 500 萬美元。該協議旨在擴大其解決方案的容量和運營能力，以更有效地打擊我們的活動。我們相信，我們被選中是基於我們在價值創造方面的長期成功記錄。我們通過這些勝利看到的共同點是我們創新和差異化的調查分析解決方案以及我們幫助客戶成功創造運營價值的能力。

Looking at the current market dynamics, we see a noticeable change versus what we saw last year. A year ago, many customers suffered from budget uncertainties, which impacted the visibility and ability to plan ahead. This year, more customers are expressing confidence in the budgets and plans. Our customers increased confidence, supports our expectations for the year and is translating into more discussions about future needs.

縱觀當前的市場動態，我們發現與去年相比發生了顯著變化。一年前，許多客戶遭受預算不確定性的困擾，這影響了可見性和提前計劃的能力。今年，更多的客戶對預算和計劃表示有信心。我們的客戶增強了信心，支持了我們對今年的期望，並正在轉化為對未來需求的更多討論。

For example, at recent industry conference, we saw a higher level of attendance and interest from customers. Overall, we clearly see more customers returning to normal behavior this year compared to what was happening a year ago. Next, I would like to discuss our innovation and differentiation. Our customers face unique challenges when it comes to investigating analytics and decision-making. They have to use and analyze data at scale from a large variety of different sources, including sensitive data.

例如，在最近的行業會議上，我們看到了更高的出席率和客戶的興趣。總體而言，與一年前相比，我們明顯看到今年有更多客戶恢復正常行為。接下來我想談談我們的創新和差異化。我們的客戶在調查分析和決策時面臨著獨特的挑戰。他們必須大規模使用和分析來自各種不同來源的數據，包括敏感數據。

The objective is to uncover insights quickly to accelerate investigations. Cognyte is focused on investigating analytics in order to uncover hidden connections inside large diverse data sources. We have been doing this for many years by continuously improving advance analytics and incorporating artificial intelligence models in our solutions.

目標是快速發現見解以加速調查。 Cognyte 專注於研究分析，以發現大量不同數據源中隱藏的聯繫。多年來，我們一直在這樣做，不斷改進先進的分析並將人工智能模型納入我們的解決方案中。

The recent developments in AI provides us with new opportunities. We are currently focused on leveraging the latest day innovations to enable our customers to derive even greater value from their data. We believe there are new market segments that face investigative analytics challenges that present us with good expansion opportunities over time. We believe that our long-term market leadership in investigative analytics combined with our technological strength and our strong relationships with our large customer base across the globe position us well to leverage AI innovation and drive long-term growth.

人工智能的最新發展為我們提供了新的機遇。我們目前專注於利用最新的創新，使我們的客戶能夠從他們的數據中獲得更大的價值。我們相信，一些新的細分市場面臨著調查分析的挑戰，隨著時間的推移，這些挑戰為我們提供了良好的擴張機會。我們相信，我們在調查分析領域的長期市場領導地位，加上我們的技術實力以及與全球龐大客戶群的牢固關係，使我們能夠很好地利用人工智能創新並推動長期增長。

Looking at our outlook for this fiscal year, given the improved visibility, we are raising our revenue guidance for the year to $303 million, plus or minus 2%, representing 7% year-over-year growth at the midpoint on an SIS adjusted non-GAAP basis.

展望本財年的前景，鑑於能見度的提高，我們將本財年的收入指導上調至 3.03 億美元，正負 2%，相當於 SIS 調整後的非中值同比增長 7%。 -GAAP 基礎。

With revenue expected to grow by 7%, we now expect gross profit to grow faster at more than 10% year-over-year. As for cash flow, we are now expecting positive cash flow from operations for the full year. Looking beyond this year, given recent innovations in AI, we have identified potential opportunities to expand our business with both existing and new customers. We believe that the combination of positive industry trends, our innovative technology and large global customer base position us well for long-term growth.

由於收入預計增長 7%，我們現在預計毛利潤同比增長速度將超過 10%。至於現金流，我們目前預計全年運營現金流為正。展望今年，鑑於人工智能領域的最新創新，我們已經確定了與現有客戶和新客戶擴展業務的潛在機會。我們相信，積極的行業趨勢、我們的創新技術和龐大的全球客戶群相結合，將為我們的長期增長奠定良好的基礎。

To summarize, our customers continue to face significant investigative challenges across many use cases. Our mission is to help them accelerate investigations and mitigate the wide range of threats before they unfold. And our customers view us as domain experts and trusted partner. We are pleased with our first quarter results and positive momentum and are raising guidance for the current year. Long term, we target continued growth and margin expansion. Now let me turn the call over to David to provide more details about our results and outlook. David?

總而言之，我們的客戶在許多用例中繼續面臨重大的調查挑戰。我們的使命是幫助他們加速調查並在廣泛的威脅出現之前減輕威脅。我們的客戶將我們視為領域專家和值得信賴的合作夥伴。我們對第一季度的業績和積極的勢頭感到滿意，並提高了今年的指導。從長遠來看，我們的目標是持續增長和利潤率擴張。現在讓我將電話轉給大衛，以提供有關我們的結果和前景的更多詳細信息。大衛？

Thank you, Elad, and hello, everyone. Our discussion today will include non-GAAP financial measures. The conciliation between our GAAP and non-GAAP financial measures is available, as Dean mentioned in our earnings release and in the Investors section of our website. Our website also includes a financial dashboard with a tab that details our historical results, excluding the divested Situation Intelligence Solutions.

謝謝你，埃拉德，大家好。我們今天的討論將包括非公認會計準則財務指標。正如 Dean 在我們的收益報告和我們網站的投資者部分中提到的，我們的 GAAP 和非 GAAP 財務指標之間可以進行協調。我們的網站還包括一個財務儀表板，其中一個選項卡詳細介紹了我們的歷史結果，不包括已剝離的態勢情報解決方案。

We are pleased with our Q1 financial results, as we had solid performance across revenue, gross margin, cash flow and bookings. The ongoing demand for our cutting-edge investigative analytics solutions continued to be strong during the quarter, and we continue to win deals from a variety of customers. Q1 revenue came in at $73 million, up $2 million from Q4.

我們對第一季度的財務業績感到滿意，因為我們在收入、毛利率、現金流和預訂方面都有穩健的表現。本季度對我們尖端調查分析解決方案的持續需求持續強勁，我們繼續贏得各種客戶的交易。第一季度收入為 7300 萬美元，比第四季度增加 200 萬美元。

Software revenue came in at $25 million, representing 6% sequential growth and 11% year-over-year growth. Gross profit was up 9% sequentially and 7% year-over-year, and our software gross profit grew faster than software revenue and was up 90% sequentially and 80% year-over-year. Q1 gross margin was 68.4%, up 250 basis points from Q4 and up 800 basis points from Q1 last year, primarily due to an increase in software revenue.

軟件收入為 2500 萬美元，環比增長 6%，同比增長 11%。毛利潤環比增長 9%，同比增長 7%，軟件毛利潤增長快於軟件收入，環比增長 90%，同比增長 80%。第一季度毛利率為 68.4%，比第四季度增長 250 個基點，比去年第一季度增長 800 個基點，主要得益於軟件收入的增長。

Our gross margin reflects our competitive differentiation and ability to create value for our customers. All of the revenue, gross profit and gross margin, growth rates I just discussed are on SIS adjusted non-GAAP basis. Our Q1 non-GAAP operating expenses were $55.7 million, slightly higher than the Q4 level. Over the last few quarters, we improved our distribution, better focus the organization and improve our cost structure, resulting in sequential revenue growth, higher gross margin and the significant reduced operating costs.

我們的毛利率反映了我們的競爭優勢和為客戶創造價值的能力。我剛才討論的所有收入、毛利潤和毛利率、增長率都是在 SIS 調整後的非 GAAP 基礎上得出的。我們第一季度的非 GAAP 運營費用為 5570 萬美元，略高於第四季度的水平。在過去的幾個季度中，我們改善了分銷，更好地集中組織並改善了成本結構，從而實現了收入的連續增長、毛利率的提高和運營成本的大幅降低。

Our Q1 non-GAAP operating loss was $5.5 million, and non-GAAP adjusted EBITDA loss was $2.3 million. Turning to cash, we generated significant positive cash flow from operation of $90 million during Q1. The positive cash flow was driven by our improved financial results and strong cash collection. In terms of the balance sheet, we ended the quarter with cash of about $73 million and no debt. Our long and short-term RPO continued to be strong. Total RPO at the end of Q1 was $581 million, and short-term RPO was $283 million, approximately the same level as of Q4.

我們第一季度的非 GAAP 運營虧損為 550 萬美元，非 GAAP 調整後 EBITDA 虧損為 230 萬美元。說到現金，我們第一季度的運營產生了 9000 萬美元的大量正現金流。正現金流是由我們改善的財務業績和強勁的現金回籠推動的。就資產負債表而言，本季度末我們擁有約 7300 萬美元的現金，沒有債務。我們的長期和短期恢復點目標仍然強勁。第一季度末的總 RPO 為 5.81 億美元，短期 RPO 為 2.83 億美元，與第四季度大致持平。

This healthy backlog and continued demand allow us to increase again our outlook for the current year. Turning to fiscal '24. For the full year, we are raising our revenue outlook to $303 million plus or minus 2%, reflecting approximately 7% year-over-year growth on an SIS adjusted non-GAAP basis at the midpoint of the range.

這種健康的積壓和持續的需求使我們再次提高了今年的前景。轉向 24 財年。對於全年，我們將收入預期上調至 3.03 億美元正負 2%，反映出按 SIS 調整後的非 GAAP 基礎計算的同比增長約 7%，處於該範圍的中點。

Our revenue outlook is driven by our current view of the backlog deployment schedule for this year and assumes similar macro environment conditions. Let me share with you more color on how we see the remainder of the year evolving. For revenue, that's for current short and backlog deployment schedule, we expect Q2 revenue similar to Q1 and the second half to be higher than the first half. As a result of the strength of -- and quality of our backlog and recent bookings, we are increasing our full year non-GAAP gross margin expectation to 66.5%, an improvement of 150 basis points versus our previous outlook and year-over-year improvement of 375 basis points on a SIS adjusted non-GAAP basis.

我們的收入前景是由我們目前對今年積壓部署計劃的看法決定的，並假設了類似的宏觀環境條件。讓我與您分享更多關於我們如何看待今年剩餘時間的演變的信息。就收入而言，這是針對當前的短期和積壓部署計劃，我們預計第二季度收入與第一季度相似，下半年收入將高於上半年。由於我們的積壓訂單和近期預訂的實力和質量，我們將全年非 GAAP 毛利率預期提高至 66.5%，比我們之前的預期和同比提高了 150 個基點在 SIS 調整後的非 GAAP 基礎上提高了 375 個基點。

Gross margin will fluctuate between quarters based on the revenue mix.

毛利率將根據收入組合在季度之間波動。

For our non-GAAP operating expenses, we continue to expect total expenses of about $220 million for the full year and to be relatively flat throughout the year. Our improved cost structure combined with revenue growth and higher gross margins will allow us to improve operating margins over time.

對於我們的非 GAAP 運營費用，我們仍然預計全年總費用約為 2.2 億美元，並且全年相對持平。我們改善的成本結構加上收入增長和更高的毛利率將使我們能夠隨著時間的推移提高營業利潤率。

We remain on track to achieve our goal to drive positive non-GAAP adjusted EBITDA during Q4 of this fiscal year. As a result, we are now expecting a smaller annual EPS loss.

我們仍有望實現我們的目標，即在本財年第四季度推動非 GAAP 調整後 EBITDA 為正值。因此，我們現在預計年度每股收益損失將會較小。

The midpoint of the revenue range, we are now expecting a $0.53 annual non-GAAP EPS loss, an improvement of $0.07 versus our previous outlook. Our non-GAAP EPS will fluctuate quarter-to-quarter, partially due to our non-GAAP tax expenses. We expect our Q2 non-GAAP EPS loss to be larger in Q1, primarily as a result of our non-GAAP tax methodology.

在收入範圍的中點，我們現在預計非 GAAP 年度每股收益虧損 0.53 美元，比我們之前的預期提高了 0.07 美元。我們的非公認會計準則每股收益將按季度波動，部分原因是我們的非公認會計準則稅務費用。我們預計第一季度第二季度非公認會計原則每股收益損失將更大，這主要是由於我們的非公認會計原則稅收方法造成的。

Turning to cash flow. Given the strong cash flow from operations we generated in Q1 and improved financial outlook, we are now expecting positive cash flow from operations for the full year. We continue to expect about $10 million of payments for CapEx, partially offset by additional receipts from the SIS divestiture related to the holdback and price adjustment which we expect to receive during the second half of the year.

轉向現金流。鑑於我們第一季度運營產生的強勁現金流以及財務前景的改善，我們現在預計全年運營現金流為正。我們仍然預計資本支出約為 1000 萬美元，部分被 SIS 剝離帶來的額外收入所抵消，這些收入與我們預計在今年下半年收到的保留和價格調整相關。

To summarize, we are a market leader in investigative analytics and have a strong and lengthy track records with customers around the world. We continue to add capabilities and improve the performance of our solution by leveraging the latest technologies, including emerging innovation in artificial intelligence.

總而言之，我們是調查分析領域的市場領導者，並與世界各地的客戶建立了良好而長期的合作記錄。我們利用最新技術（包括人工智能領域的新興創新）不斷增加解決方案的功能並提高其性能。

We believe these technological innovations increased the operational value our customers be generated for our solution and help drive demand. We are pleased with our first quarter results. We now expect about $303 million of revenue, plus or minus 2% and improved gross margin and profitability for FY '24. We're expecting positive cash flow from operations for the year. Looking beyond FY '24, we believe that the combination of our cutting-edge technology, large and loyal customer base and the opportunity to order the needs of new customers position us well for long-term growth.

我們相信，這些技術創新增加了客戶對我們的解決方案產生的運營價值，並有助於推動需求。我們對第一季度的業績感到滿意。我們現在預計 24 財年的收入約為 3.03 億美元，正負 2%，毛利率和盈利能力將有所改善。我們預計今年的運營現金流將為正。展望 24 財年之後，我們相信，我們的尖端技術、龐大而忠誠的客戶群以及訂購新客戶需求的機會相結合，將為我們的長期增長奠定良好的基礎。

With that, I would like to hand the call over to the operator to open the line for questions. Operator?

至此，我想將電話轉交給接線員，以開通提問線路。操作員？

(Operator Instructions) And our first question will come from Mike Cikos of Needham.

（操作員說明）我們的第一個問題將來自 Needham 的 Mike Cikos。

Mike Cikos here. I wanted to start out with the quarter itself and then going over some of the upside and outperformance that you guys were able to deliver. First, obviously, revenue was above what we had anticipated. I know you guys were talking about flat sequentially versus this up, right? So can you help us think about how the revenue came together in the quarter that was able to help you guys deliver that outperformance? That's the first question I'd like to delve into. And then I have a couple of follow-ups.

邁克·西科斯在這裡。我想從本季度本身開始，然後回顧一下你們能夠提供的一些優勢和出色的表現。首先，顯然，收入超出了我們的預期。我知道你們談論的是連續持平與向上，對吧？那麼，您能否幫助我們思考一下該季度的收入是如何幫助你們取得優異業績的？這是我想探討的第一個問題。然後我有一些後續行動。

Yes. So Mike, yes, indeed, we see a healthy demand positive month in the market over the last 2 quarters already, and we continue to win significant deals. The reasons for the -- being ahead of expectations for Q1 is mainly related to backlog conversion scheduling. And that's the reason we were able to deliver more within the quarter.

是的。所以邁克，是的，確實，我們在過去兩個季度中已經看到市場需求健康積極，並且我們繼續贏得重要交易。第一季度超出預期的原因主要與積壓轉換計劃有關。這就是我們能夠在本季度交付更多產品的原因。

And just to call it out because like your backlog bookings, right, if I think about the disclosures you guys provided today with RPO and current RPO climbing from 4Q to 1Q by a couple of million dollars, right? So when you're calling out that backlog conversion, should I interpret that as like backlog came in earlier than you guys had anticipated, and you were still able to backfill that based on the fact that those RPO and current RPO balances climbed sequentially? Like can you tease that out?

只是想指出這一點，因為就像你們的積壓預訂一樣，對吧，如果我考慮一下你們今天提供的 RPO 披露信息，以及當前的 RPO 從第四季度到第一季度攀升了幾百萬美元，對嗎？因此，當您提到積壓工作轉換時，我是否應該將其解釋為積壓工作比你們預期的更早出現，並且您仍然能夠根據這些 RPO 和當前 RPO 餘額依次攀升的事實來回填該積壓工作？你能把這個弄清楚嗎？

Yes. So maybe before talking about the RPO, I want to share with you a little bit about the market dynamics today because I think it's important. We discussed the healthy demand, we discussed the positive momentum. We have strong backlog long and short term, but we also see more and more customers that are more confident in the budgets and plans. And the -- actually, the Q1 results are derived by accelerated customer readiness and for us being able to convert more backlog into revenue within quarter. And that's what we see.

是的。因此，也許在談論 RPO 之前，我想與大家分享一下今天的市場動態，因為我認為這很重要。我們討論了健康的需求，我們討論了積極的勢頭。我們有大量的長期和短期積壓，但我們也看到越來越多的客戶對預算和計劃更有信心。實際上，第一季度的業績是通過加快客戶準備程度以及我們能夠在季度內將更多積壓訂單轉化為收入而得出的。這就是我們所看到的。

Actually, we see more and more customers in better position. And this is the reason we were able to deliver more in Q1 and also raise the outlook for the year for [Q2 or Q3].

事實上，我們看到越來越多的客戶處於更好的地位。這就是我們能夠在第一季度交付更多產品並提高[第二季度或第三季度]全年前景的原因。

Got it. I appreciate it. And I know that you guys had also, again, coming back to the RPO for a second. But RPO and current RPO, you guys said that's flat sequentially. If I go back to my notes, it's actually up by a couple of million dollars. So call it flat on a percentage basis, but you did grow it from 4Q to 1Q. One of the things that I'd like to hear what has the typical cadence been? Like if I go from 4Q to 1Q last year, the year before, the year before that, traditionally, is RPO and current RPO climbing sequentially from Q4 to Q1 or no?

知道了。我很感激。我知道你們也再次回到了 RPO。但是 RPO 和當前的 RPO，你們說連續持平。如果我回顧一下我的筆記，它實際上增加了幾百萬美元。因此，按百分比計算持平，但您確實將其從第四季度增長到了第一季度。我想听聽的一件事是典型的節奏是什麼？就像我從去年第四季度到第一季度、前年、再前年一樣，傳統上，RPO 和當前的 RPO 是從第四季度到第一季度依次攀升還是沒有？

So RPO is reflected by multiple elements, including a multiple year support contract and other elements that can impact on the total. There is no specific pattern like we could see like that RPO in general can grow from quarter-on-quarter. But overall, our RPO is very strong and our ability to convert more backlog in and giving the Q1 overall results gave us the ability to improve our outlook for the year. I believe that the RPO that we have, the short term and the long term support our future growth, and it's very solid.

因此，RPO 由多個要素反映，包括多年支持合同和其他可能影響總體的要素。沒有像我們看到的那樣的具體模式，RPO 一般可以環比增長。但總體而言，我們的 RPO 非常強勁，我們轉換更多積壓訂單並提供第一季度總體業績的能力使我們有能力改善今年的前景。我相信我們擁有的 RPO、短期和長期支持我們未來的增長，而且非常穩固。

I do appreciate the fact that you guys are talking about the 1Q outperformance with this backlog conversion and customer readiness. But at the same time, both RPO and current RPO balances remain strong. So thank you for calling that out. I think the last item that I really wanted to talk to appreciate the color on Q2 and the fact that you're able to maintain that flat OpEx for the remainder of the year, which I know we had spoken about last quarter, but if I look at the gross margins, that's the last item I really wanted to hit on with you guys before I turn it over to my colleagues.

我確實很欣賞你們談論第一季度的出色表現以及積壓訂單轉換和客戶準備情況。但與此同時，RPO 和當前的 RPO 平衡仍然強勁。謝謝你指出這一點。我認為我真正想談論的最後一個項目是欣賞第二季度的表現，以及您能夠在今年剩餘時間內保持平穩的運營支出這一事實，我知道我們在上個季度已經談到過這一點，但如果我看看毛利率，這是我在把它交給我的同事之前真正想和你們討論的最後一個項目。

With gross margins, obviously, you guys were well ahead of expectations. So can we do a similar, I guess, line of questioning versus what we just did with revenue. First, for gross margin, what helped drive that outperformance in Q1. And then second, what provides you the confidence to now take up gross margin 150 bps for the year versus what we had anticipated previously.

顯然，就毛利率而言，你們遠遠超出了預期。因此，我想，我們是否可以對收入進行類似的質疑。首先，就毛利率而言，是什麼推動了第一季度的優​​異表現。其次，是什麼讓您有信心讓今年的毛利率比我們之前的預期提高 150 個基點。

Yes. So Mike, maybe I'll start and then David will continue. We do see higher quality of the bookings. So the mix is better. Mix better means more software revenue in the mix. And this drives higher gross margin overall. We do see also that we do expect that when revenue goes up, the gross margin will also improve over time. About the specifics, David, do you want to add?

是的。邁克，也許我會開始，然後大衛會繼續。我們確實看到預訂質量更高。所以混合效果更好。更好的混合意味著更多的軟件收入。這推動了整體毛利率的提高。我們確實還看到，我們確實預計當收入增加時，毛利率也會隨著時間的推移而提高。關於具體細節，大衛，你想補充一下嗎？

Yes. I will elaborate on that. So obviously, we are very pleased with our gross margin in Q1 and also the ability to improve our outlook for the year. In total, we believe that year-over-year will be almost 400 basis points, 275 basis point improvement. The main reason behind it is the quality of the booking more software revenue. We see also in the mix in Q1 that our total software revenue were in a higher mix. It was almost 90% of our revenue. This trend that we are able to continue to deliver our -- as we said, our premium solution with high margin drives the gross margin over time. And now we are looking for the year with the 6.5%. And the main reason is the Q1 performance continue with last year and overall backlog give us the confidence that we'll be able to drive it.

是的。我將對此進行詳細說明。顯然，我們對第一季度的毛利率以及改善今年前景的能力感到非常滿意。總的來說，我們認為同比將提高近 400 個基點，即 275 個基點。其背後的主要原因是預訂更多軟件收入的質量。我們還從第一季度的組合中看到，我們的軟件總收入處於更高的組合中。這幾乎占我們收入的 90%。正如我們所說，我們能夠繼續提供這種趨勢，我們的高利潤率優質解決方案會隨著時間的推移推動毛利率的提高。現在我們正在尋找 6.5% 的年份。主要原因是第一季度的表現與去年持平，總體積壓讓我們有信心能夠推動這一趨勢。

That's great. And I know we're talking about the mix. So just to put a finer point on it. So the assumption is that, I guess, the mix will normalize a little bit for the rest of the year, and that's why we should expect Q2 through Q4 to come down from the 60% level in Q1, but at the same time, the bookings quality is what's benefiting that overall gross margin. Is that a fair characterization?

那太棒了。我知道我們正在談論混合。所以只是為了說得更清楚一點。因此，我猜想，今年剩餘時間裡，這種混合會稍微正常化，這就是為什麼我們應該預期第二季度到第四季度會比第一季度的 60% 水平有所下降，但與此同時，預訂質量有利於整體毛利率。這是一個公平的描述嗎？

Yes, that's fair.

是的，這很公平。

And our next question will come from Peter Levine of Evercore.

我們的下一個問題將來自 Evercore 的 Peter Levine。

Your commentary earlier on the call, you said better budget discussions seems like customers are returning to normal behavior versus last year. Can you kind of just maybe dive into that a little bit deeper, expenses kind of what you're seeing on the top of the funnel, conversion rates and then your expectations, I think, throughout the rest of the year in terms of the macro impacting your ability to further reaccelerate?

您在電話會議早些時候的評論中表示，與去年相比，更好的預算討論似乎讓客戶恢復了正常行為。您能否更深入地探討一下您在漏斗頂部看到的費用、轉化率以及我認為在今年剩餘時間裡宏觀方面的預期影響您進一步重新加速的能力？

Yes, sure. Thanks, Peter. So we see a healthy demand and positive momentum, and it's over the last 2 quarters already. We continue to enlarge deals. The backlog is strong, as we discussed before. And also our customers are saying more -- and more of our customers saying that actually they are more confident about the budget and the plans. And we also expect the demand for our solutions to continue and increase. And there are actually a few drivers for that.

是的，當然。謝謝，彼得。因此，我們看到了健康的需求和積極的勢頭，而且已經過去兩個季度了。我們繼續擴大交易。正如我們之前討論的，積壓情況很嚴重。我們的客戶也說得更多——而且越來越多的客戶表示，實際上他們對預算和計劃更有信心。我們還預計對我們解決方案的需求將持續增長。實際上有一些驅動因素。

First of all, we discussed it earlier in the call that customers' challenges are becoming more complex and growing. So in order for them to be able to do the job, they need more analytics, more capabilities related to dealing with big data, and it's really important for them to get this technology. Also, our customers' objective is being able to accelerate in time. The investigation. This is one. Second, to improve the accuracy of the investigation and third, to make it successful, make it successful means to reach conclusive outcome.

首先，我們之前在電話會議中討論過，客戶面臨的挑戰正變得更加複雜且日益嚴峻。因此，為了讓他們能夠完成這項工作，他們需要更多的分析、更多與處理大數據相關的能力，而獲得這項技術對他們來說非常重要。此外，我們客戶的目標是能夠及時加速。調查。這是一。第二，提高調查的準確性，第三，要成功，成功意味著得出結論。

So it's about time, strength of the insights that they generate from the solution and being able to conclude investigations. And more analytics and more AI capabilities are extremely important for them and actually present even greater value over time. So for that reason, we see the demand of customers improving along the way. And we believe that the recent AI developments will also generate more demand. I can give you an anecdote, just to give you more color, we participated an industry trade show a couple of weeks ago in Europe, big one. And actually, we saw that is [Royal] attendant, more participants than we used to see before.

因此，關鍵在於時間、他們從解決方案中產生的見解的強度以及能夠完成調查的能力。更多的分析和更多的人工智能功能對他們來說極其重要，並且隨著時間的推移實際上會帶來更大的價值。因此，我們看到客戶的需求一直在改善。我們相信最近人工智能的發展也將產生更多的需求。我可以給你講一個軼事，只是為了給你更多的色彩，我們幾週前在歐洲參加了一場大型行業貿易展。事實上，我們看到有[皇家]隨從，參與者比我們以前看到的要多。

Many requests for meetings and demos, a lot of interest in modernizing the technology with more analytics, more AI. Customers are now unlike last year that they were talking about pressing current needs. They were talking to us about future needs and what else needs to be done in their side in order for them to be able to accelerate their performance. So all of those are very encouraging signs. So I feel good about where we are today. And I feel good about being able to continue growing in the long term. I hope this give you some color about the dynamics of the market.

許多會議和演示請求，對通過更多分析和更多人工智能實現技術現代化的濃厚興趣。現在的客戶與去年不同，他們談論的是當前緊迫的需求。他們正在與我們討論未來的需求以及他們還需要做什麼才能加快績效。所以所有這些都是非常令人鼓舞的跡象。所以我對我們今天的處境感覺很好。我對能夠長期持續增長感到很高興。我希望這能讓您對市場動態有所了解。

And maybe just the last one is good to see free cash flow tick higher. Maybe just talk about the levers that you're pulling internally on like marketing side, R&D side, where -- what's the trade-off if you're going to deliver a little bit more leverage. Maybe talk about what the trade-off is or maybe just again, just emphasize on kind of where you're cutting costs while still being efficient in terms of growth.

也許最後一個因素是自由現金流走高的好消息。也許只是談談你在內部使用的槓桿，比如營銷方面、研發方面，如果你想提供更多一點的槓桿，那麼需要權衡什麼。也許談談權衡是什麼，或者也許只是再次強調一下你在削減成本的同時仍然保持增長效率。

So actually, just to make sure that we understood the question, the question is about our margin expansion and the ability, the trade-off between increased investment on the OpEx versus growth. Is that correct?

所以實際上，為了確保我們理解這個問題，問題是關於我們的利潤擴張和能力，以及增加運營支出投資與增長之間的權衡。那是對的嗎？

Correct.

正確的。

So last year, we had like to make a lot of decisions about our cost structure and versus the opportunity. And when we look at, we believe that the opportunity is here. We are playing in this market for a long time, we are market leader. We know our customer base for a long time. Our solutions are very innovative and customer love what we provide them. When we are to think about like cost structure and what is the right thing to do, you need to balance between your short term and long term.

所以去年，我們想就我們的成本結構和機會做出很多決定。當我們審視時，我們相信機會就在這裡。我們在這個市場上玩了很長時間，我們是市場的領導者。我們很早就了解我們的客戶群。我們的解決方案非常創新，客戶喜歡我們提供的產品。當我們要考慮成本結構以及什麼是正確的做法時，您需要在短期和長期之間取得平衡。

I think that we built a very well organization that allow us to be there when the growth will come and capture it. I think that you can see that in Q1, the results, we are growing. We are improving our margin, and I believe that it will continue over time.

我認為我們建立了一個非常好的組織，使我們能夠在增長到來時趕到並抓住它。我認為你可以看到第一季度的結果，我們正在成長。我們正在提高利潤率，而且我相信這種情況會隨著時間的推移而持續下去。

(Operator Instructions) Our next question will come from Shaul Eyal of TD Cowen.

（操作員說明）我們的下一個問題將來自 TD Cowen 的 Shaul Eyal。

Of the 3 contracts that you've mentioned during your presentation, are these all existing clients? Or are these also new clients, any displacement opportunities that you're seeing out there?

您在演示中提到的 3 份合同中，這些都是現有客戶嗎？或者這些也是新客戶，您在那裡看到了任何替代機會嗎？

Yes. So the examples I used this quarter, our existing clients, it's upgrades of capacity and functionality. And we did have also new logos in the quarter. And we did give a few examples of large deals coming from new customers in previous quarters. So timing is changing from time to time whether it comes from existing or new customers, but those examples are with existing customers, and the reason they upgrade is that they have the solution, they have the value that they need.

是的。因此，我本季度使用的示例是我們現有的客戶，它是容量和功能的升級。我們在本季度也確實推出了新徽標。我們確實舉了一些前幾個季度來自新客戶的大筆交易的例子。因此，無論是來自現有客戶還是新客戶，時機都會不時發生變化，但這些例子都是針對現有客戶的，他們升級的原因是他們擁有解決方案，他們擁有他們需要的價值。

And the drivers for expansions and upgrades are either functionality adding more analytics, more AI in order for them to be able to accelerate what they need to do or they're dealing with more data. So those are the drivers, and we see it more and more with large customers that are expanding even further as the value is greater now with analytics.

擴展和升級的驅動力要么是添加更多分析、更多人工智能的功能，以便能夠加速他們需要做的事情，要么是他們正在處理更多數據。這些就是驅動因素，我們越來越多地看到大客戶正在進一步擴張，因為現在分析的價值更大了。

Got it. And maybe I want to maybe double-click on duties prior reply to Peter was alluding to the fact when growth returns. What internal steps have you taken to be ready for what might be the next cycle, not that you're seeing that stability and maybe even reacceleration? What steps have you taken internally?

知道了。也許我想在回复彼得之前雙擊職責，暗指增長恢復時的事實。您採取了哪些內部步驟來為下一個週期做好準備，而不是看到穩定甚至重新加速？您在內部採取了哪些步驟？

So given the situation in the macro environment last year, we took several steps. The first one was to focus on the -- where the highest opportunities are in terms of market conditions, going to countries and to organizations that have more pressing needs but also have the budget. This is one. Second. We restructured organization and adjusted the operating expenses to where it should be.

所以針對去年宏觀環境的情況，我們採取了一些措施。第一個是關注——就市場條件而言，機會最多的地方是那些有更緊迫需求但也有預算的國家和組織。這是一。第二。我們重組了組織，並將運營費用調整到應有的水平。

And David mentioned that actually, we balanced it in a way that on one hand, we are able to overcome these macro environment conditions temporary disruption. But on the other hand, continue and innovate in order for us to be able to capture the growth when the market is recovering, and that's what we are trying to do now. We flattened the organization. We actually slowed down road map that was more to modernize infrastructure and focusing more on value to customers and more analytics and actually focuses and realigned the sales force to countries where we see more opportunities.

大衛提到，實際上，我們以一種方式平衡它，一方面，我們能夠克服這些宏觀環境條件的暫時干擾。但另一方面，繼續創新，以便我們能夠在市場復甦時抓住增長，這就是我們現在正在努力做的。我們扁平化了組織。我們實際上放慢了路線圖，更多的是實現基礎設施現代化，更多地關注客戶價值和更多分析，實際上將銷售隊伍集中到我們看到更多機會的國家並重新調整。

So we, on one hand, focused on the market. If I have to summarize, we focus on markets and countries where we see the potential that is higher and they have budgets, one hand. On the other hand, adjusting the OpEx and prioritizing the activities to increase customer value versus modernizing platforms. Those were the highlights for last year. And I see now that I think we took the right decision. I see now that this is actually working for us.

因此，我們一方面專注於市場。如果我必須總結一下，一方面，我們專注於我們認為潛力更大並且有預算的市場和國家。另一方面，調整運營支出並優先考慮提高客戶價值的活動，而不是現代化平台。這些是去年的亮點。現在我認為我們做出了正確的決定。我現在發現這確實對我們有用。

And I would now like to turn the call back to Dean Ridlon for closing remarks.

現在，我想將電話轉回迪恩·里德隆 (Dean Ridlon)，讓其致閉幕詞。

Thank you, operator, and thank you, everyone, for joining us on today's call. Should you have any additional questions, please feel free to reach out to me, and we look forward to speaking with you again next quarter. Thank you.

謝謝接線員，也謝謝大家參加今天的電話會議。如果您還有任何其他問題，請隨時與我聯繫，我們期待下季度再次與您交談。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。