Varonis Systems Inc (VRNS) 2023 Q1 法說會逐字稿

Greetings, and welcome to the Varonis Systems First Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎來到 Varonis Systems 2023 年第一季度收益電話會議。 （操作員說明）提醒一下，正在錄製此會議。

It is now my pleasure to introduce your host, Tim Perz, Director of Investor Relations. Thank you, sir. You may begin.

現在我很高興向您介紹主持人，投資者關係總監蒂姆·佩爾茲 (Tim Perz)。謝謝你，先生。你可以開始了。

Thank you, operator. Good afternoon. Thank you for joining us today to review Varonis' first quarter 2023 financial results. With me on the call today are Yaki Faitelson, Chief Executive Officer; and Guy Melamed, Chief Financial Officer and Chief Operating Officer of Varonis. After preliminary remarks, we will open the call to a question-and-answer session.

謝謝你，運營商。下午好。感謝您今天加入我們，回顧 Varonis 2023 年第一季度的財務業績。今天與我通話的有首席執行官 Yaki Faitelson； Varonis 首席財務官兼首席運營官 Guy Melamed。在初步評論之後，我們將開始電話問答環節。

During this call, we may make statements related to our business that would be considered forward-looking statements under federal securities laws, including projections of future operating results for our second quarter and full year ending December 31, 2023. Due to a number of factors, actual results may differ materially from those set forth in such statements. These factors are set forth in the earnings press release that we issued today under the section captioned forward-Looking statements. And these and other important risk factors are described more fully in our reports filed with the Securities and Exchange Commission. We encourage all investors to read our SEC filings. These statements reflect our views only as of today and should not be relied upon as representing our views as of any subsequent date. Varonis expressly disclaims any application or undertaking to release publicly any updates or revisions to any forward-looking statements made herein.

在此次電話會議中，我們可能會做出與我們的業務相關的聲明，根據聯邦證券法，這些聲明將被視為前瞻性聲明，包括對我們截至 2023 年 12 月 31 日的第二季度和全年的未來經營業績的預測。由於多種因素, 實際結果可能與此類聲明中的結果存在重大差異。這些因素在我們今天發布的收益新聞稿中的“前瞻性陳述”部分有所闡述。我們在提交給美國證券交易委員會的報告中更全面地描述了這些和其他重要的風險因素。我們鼓勵所有投資者閱讀我們提交給美國證券交易委員會的文件。這些聲明僅反映我們截至今天的觀點，不應被視為代表我們在任何後續日期的觀點。 Varonis 明確否認任何申請或承諾公開發布對此處所做的任何前瞻性陳述的任何更新或修訂。

Additionally, non-GAAP financial measures will be discussed on this conference call. A reconciliation to the most directly comparable GAAP financial measures is also available in our first quarter 2023 earnings press release and investor presentation, which can be found at www.varonis.com in the Investor Relations section. Lastly, please note that a webcast of today's call is available on our website in the Investor Relations section.

此外，本次電話會議還將討論非 GAAP 財務措施。我們的 2023 年第一季度收益新聞稿和投資者介紹中也提供了與最直接可比的 GAAP 財務指標的對賬，可在 www.varonis.com 的投資者關係部分找到。最後，請注意今天電話會議的網絡直播可在我們網站的投資者關係部分獲得。

With that, I'd like to turn the call over to our Chief Executive Officer, Yaki Faitelson. Yaki?

有了這個，我想把電話轉給我們的首席執行官 Yaki Faitelson。燒？

Thanks, Tim, and good afternoon, everyone. Thank you for joining us to discuss our first quarter 2023 performance. I'm happy to share the progress on our SaaS transition, excited by the initial SaaS adoption we saw and feel optimistic about our ongoing SaaS journey.

謝謝，蒂姆，大家下午好。感謝您加入我們討論我們 2023 年第一季度的業績。我很高興分享我們在 SaaS 轉型方面取得的進展，對我們看到的最初 SaaS 採用感到興奮，並對我們正在進行的 SaaS 之旅感到樂觀。

So let's start with our first quarter results. The reception of the Varonis SaaS continues to exceed our expectations, and this quarter provided us with additional proof points that our strategy to transition to SaaS is working. Our first quarter SaaS mix came in at 37%, well ahead of our guidance for 15%. And ARR grew 18% year-over-year to $478.1 million. We reported revenues of $107.3 million and free cash flow of $35.7 million. At the same time, the economic slowdown continues to impact our customers. And as a result, our near-term growth remains below where we believe it can be over the long term.

因此，讓我們從第一季度的業績開始。 Varonis SaaS 的反響繼續超出我們的預期，本季度為我們提供了額外的證據，證明我們過渡到 SaaS 的戰略正在奏效。我們第一季度的 SaaS 組合為 37%，遠高於我們 15% 的指導。 ARR 同比增長 18% 至 4.781 億美元。我們報告的收入為 1.073 億美元，自由現金流為 3570 萬美元。與此同時，經濟放緩繼續影響我們的客戶。因此，我們的近期增長仍然低於我們認為的長期增長水平。

We are still seeing additional scrutiny on deals in Europe and North America, but Varonis SaaS has come out at just the right time in an environment where all spending is being highly scrutinized. Varonis SaaS offers customers a faster time to value with drastically reduced overall total cost of ownership because of the lower infrastructure and head count-related expenses required to operate. We are pleased with the team's performance despite the difficult macro backdrop. And though we are only a quarter into the year, we are raising our SaaS mix and ARR guidance. Guy will review our Q1 results and our updated outlook in more detail.

我們仍在對歐洲和北美的交易進行更多審查，但 Varonis SaaS 在所有支出都受到嚴格審查的環境中出現得正是時候。 Varonis SaaS 為客戶提供更快的價值實現時間，同時大幅降低總體擁有成本，因為運營所需的基礎設施和員工人數相關費用較低。儘管宏觀背景困難，但我們對團隊的表現感到滿意。儘管今年才過去四分之一，但我們正在提高我們的 SaaS 組合和 ARR 指導。 Guy 將更詳細地回顧我們的第一季度業績和更新後的展望。

Before I talk more about the progress of our SaaS rollout and what we are hearing from customers, I want to remind you why Varonis exists and the problem we solve. Data is the most important asset that a company has next to its people. And because of its importance, data is a prime target for bad actors. At the same time, data is out of control. The growth of the cloud and remote device usage has only made securing data more challenging. Varonis helps companies locate sensitive data, visualize who has access to it and automatically lock it down. This allows companies to collaborate safely and get the most value from their data while, at the same time, managing risks. Recent events made it obvious how hard it can be to protect data from risk of insiders, but it's less obvious that outside attackers become insiders when they compromise the system of a person. In either case, without our solution, employees and contractors can always access more sensitive data than they should.

在我更多地談論我們 SaaS 推出的進展以及我們從客戶那裡聽到的消息之前，我想提醒您 Varonis 存在的原因以及我們解決的問題。數據是公司擁有的最重要的資產，僅次於其員工。由於其重要性，數據是不良行為者的主要目標。同時，數據失控。雲和遠程設備使用的增長只會使保護數據更具挑戰性。 Varonis 幫助公司定位敏感數據，可視化誰有權訪問它並自動鎖定它。這使公司能夠安全地協作並從他們的數據中獲得最大價值，同時管理風險。最近發生的事件清楚地表明保護數據免受內部人員風險是多麼困難，但外部攻擊者在破壞個人系統時成為內部人員的情況就不那麼明顯了。在任何一種情況下，如果沒有我們的解決方案，員工和承包商總是可以訪問比他們應該訪問的更敏感的數據。

Now let's turn to some of the feedback that we have recently begun hearing from customers who are using Varonis SaaS. As a reminder, last quarter and at our Investor Day in March, I spoke about 3 key benefits our customers get from our SaaS platform. First, customers are much better protected with much less effort with our automated remediation and proactive incident response. Second, SaaS is easier to deploy and has significantly lower infrastructure costs. And third, SaaS is easier to maintain and upgrade.

現在讓我們談談我們最近開始從使用 Varonis SaaS 的客戶那裡聽到的一些反饋。提醒一下，在上個季度和 3 月份的投資者日，我談到了我們的客戶從我們的 SaaS 平台獲得的 3 個主要好處。首先，通過我們的自動補救和主動事件響應，客戶可以用更少的努力得到更好的保護。其次，SaaS 更易於部署並且基礎架構成本顯著降低。第三，SaaS 更易於維護和升級。

At our Investor Day, I spoke about 3 benefits that we expect to realize: one, shorter sales cycle; two larger plan; and three, margin benefits over time. While it is still early, we as a company and our customers are already beginning to see evidence of these benefits.

在我們的投資者日，我談到了我們希望實現的 3 個好處：第一，更短的銷售週期；兩個更大的計劃；第三，隨著時間的推移，保證金收益。雖然現在還為時過早，但作為一家公司，我們和我們的客戶已經開始看到這些好處的證據。

One example is a specialty chemical manufacturer with 1,000 employees that suspected that they had issues with overexposed data but, prior to installing Varonis SaaS, found it difficult to visualize who had access to data and configuration risks, let alone remediate them. Within the first day of installation, Varonis enabled them to see exposed sensitive information that was open to the entire company and even sensitive files that were open to anyone on the Internet. Through this link, security team stopping its visibility alone wouldn't have been enough. Manual remediation was a nonstarter as it does not scale and never ends.

一個例子是一家擁有 1,000 名員工的特種化學品製造商，他們懷疑他們存在過度暴露數據的問題，但在安裝 Varonis SaaS 之前，發現很難想像誰有權訪問數據和配置風險，更不用說修復它們了。在安裝的第一天，Varonis 使他們能夠看到對整個公司開放的暴露的敏感信息，甚至是對 Internet 上的任何人開放的敏感文件。通過此鏈接，安全團隊僅停止其可見性是不夠的。手動修復是行不通的，因為它無法擴展且永無止境。

Before installing Varonis, this team has successfully tried to use multiple other point solutions that did not meet their needs due in part to the lack of automation. Leveraging the power of automation with Varonis SaaS has allowed them to classify PII, alert around ransomware and, most importantly, remediate overexposed links in Microsoft 365. In the end, they purchased Varonis SaaS packages to protect their on-prem Windows and Microsoft 365 deployments.

在安裝 Varonis 之前，該團隊已成功嘗試使用多個其他單點解決方案，但部分原因是缺乏自動化，這些解決方案無法滿足他們的需求。利用 Varonis SaaS 的自動化功能，他們可以對 PII 進行分類，針對勒索軟件發出警報，最重要的是，可以修復 Microsoft 365 中過度暴露的鏈接。最後，他們購買了 Varonis SaaS 軟件包來保護他們的本地 Windows 和 Microsoft 365 部署.

Another example is one of the country's largest convenience store operators. This company was performing a gap analysis on its security architecture and realized that it's failing to understand who can and does access data in Microsoft 365 and also had no way to locate sensitive data in their environment at scale. They could not see links shared with anyone on the Internet older than 30 days, and there was no way to remediate old links without breaking collaboration.

另一個例子是該國最大的便利店運營商之一。該公司正在對其安全架構進行差距分析，並意識到它無法理解誰可以訪問 Microsoft 365 中的數據，也無法在其環境中大規模定位敏感數據。他們看不到與 Internet 上任何人共享的鏈接超過 30 天，並且在不中斷協作的情況下無法修復舊鏈接。

Prior to bringing us in, they were trying to address these problems using Microsoft's building functionality but is proved to be manually intense and ultimately unsuccessful. Once they installed Varonis, this organization gained real-time visibility into these overexposed links. Not only this, but our proactive incident response team identified and stopped a live ransomware attack on their network. A customer had a number of perimeter technologies that were bypassed, but because we looked at the data and we found files that were being encrypted on the networks and immediately locked the bad actor out, stopping the incident.

在引入我們之前，他們曾嘗試使用 Microsoft 的構建功能來解決這些問題，但事實證明手動操作密集且最終沒有成功。一旦他們安裝了 Varonis，該組織就獲得了對這些過度暴露鏈接的實時可見性。不僅如此，我們的主動事件響應團隊還發現並阻止了對其網絡的實時勒索軟件攻擊。一位客戶有許多被繞過的外圍技術，但由於我們查看了數據，我們發現網絡上正在加密的文件並立即將壞人拒之門外，從而阻止了事件的發生。

What started as a data classification project quickly expanded into much more. This customer purchased Varonis SaaS for Windows and Microsoft 365, which allow them to realize the benefits of proactive incident response with this infrastructure spend, streamline the procurement process and simplify the ongoing maintenance of the Varonis deployment.

最初是一個數據分類項目，但很快就擴展到了更多。該客戶購買了適用於 Windows 和 Microsoft 365 的 Varonis SaaS，這使他們能夠通過這種基礎設施支出實現主動事件響應的好處，簡化採購流程並簡化 Varonis 部署的持續維護。

In addition to these new customer wins, we also had several existing customers convert to Varonis SaaS this quarter. One of these conversions was a Fortune 500 insurance company and at first became a customer in 2020. As we prepared for renewal discussions, our customer mentioned a multiyear plan to migrate its on-premises data center into the cloud and wanted to leverage the power of Varonis SaaS. Prior to the renewal, they had 13 on-prem subscription licenses. After the renewal, they purchased Varonis SaaS package for Windows, Microsoft 365, Active Director and Exchange Online as well as DA Cloud for AWS and S3.

除了贏得這些新客戶之外，本季度我們還有幾個現有客戶轉換為 Varonis SaaS。其中一家轉型公司是一家財富 500 強保險公司，它最初於 2020 年成為我們的客戶。在我們準備續約討論時，我們的客戶提到了一項將其本地數據中心遷移到雲端的多年計劃，並希望利用瓦羅尼斯軟件即服務。在續訂之前，他們擁有 13 個本地訂閱許可證。續訂後，他們購買了適用於 Windows、Microsoft 365、Active Director 和 Exchange Online 的 Varonis SaaS 軟件包以及適用於 AWS 和 S3 的 DA Cloud。

As a result of this conversion and upsell, we recognized an increase in ARR of greater than 30%, which gives us additional confidence in our pricing model. We are in discussions to protect those Salesforce.com and Jira environments as well as expanding into additional geographies they have in Europe and Asia.

由於這種轉換和追加銷售，我們認識到 ARR 增加了 30% 以上，這使我們對我們的定價模型更有信心。我們正在討論保護這些 Salesforce.com 和 Jira 環境，以及擴展到它們在歐洲和亞洲的其他地區。

In my conversation with customers, it is clear that the simplicity and automated protection of Varonis SaaS is resonating, which leaves me feeling optimistic about our outlook in spite of the economic slowdown that is impacting our customers.

在我與客戶的談話中，很明顯 Varonis SaaS 的簡單性和自動化保護引起了共鳴，這讓我對我們的前景感到樂觀，儘管經濟放緩正在影響我們的客戶。

With that, let me turn the call over to Guy. Guy?

有了這個，讓我把電話轉給蓋伊。伙計？

Thanks, Yaki. Good afternoon, everyone. In addition to providing more color on our first quarter performance and our updated 2023 full year outlook, I plan to focus my time today on our SaaS transition and how the economy continues to affect our customers and, in turn, our business.

謝謝，雅基。大家下午好。除了為我們的第一季度業績和更新後的 2023 年全年展望提供更多色彩外，我還計劃將今天的時間集中在我們的 SaaS 轉型以及經濟如何繼續影響我們的客戶，進而影響我們的業務。

We are pleased with how the team performed during Q1 and are encouraged about what this means for the rest of the year. Although it is early and we have a lot of work to do, the reception of SaaS from our customers and our sales force, together with our confidence in the pipeline and the ARR uplift we are seeing, allows us to raise both our SaaS mix and our full year ARR guidance. As I discussed in length at the Investor Day in March, ARR, free cash flow and ARR contribution margin are the leading indicators for our business during this transition.

我們對團隊在第一季度的表現感到滿意，並對這對今年剩餘時間的意義感到鼓舞。儘管現在還早，我們還有很多工作要做，但我們的客戶和銷售人員對 SaaS 的接受，以及我們對管道的信心和我們看到的 ARR 提升，使我們能夠提高我們的 SaaS 組合和我們的全年 ARR 指南。正如我在 3 月份的投資者日上詳細討論的那樣，ARR、自由現金流和 ARR 邊際收益是我們業務在此過渡期間的領先指標。

The shift from on-prem subscription licenses, where approximately 80% of the deal value is recognized upfront, to a SaaS model with fully ratable revenue will cause initial headwinds on reported revenue as the SaaS mix increases. However, these headwinds are simply a function of accounting treatment and are not indicative of the trajectory of our transition or of our overall business. In fact, the greater these accounting-related headwinds are, the faster it means we are progressing throughout our transition, which we obviously view as positive.

隨著 SaaS 組合的增加，從約 80% 的交易價值被預先確認的本地訂閱許可轉變為具有完全可評定收入的 SaaS 模式將對報告的收入造成最初的阻力。然而，這些逆風只是會計處理的一個函數，並不代表我們的轉型軌跡或我們整體業務的軌跡。事實上，這些與會計相關的逆風越大，這意味著我們在整個轉型過程中取得的進展越快，我們顯然認為這是積極的。

Given the momentum we saw in the first quarter and our pipeline and expectations going forward, we are raising our ARR and SaaS mix outlooks, which also means we are adjusting lower our revenue outlook. Our better-than-expected start is being driven by Varonis SaaS, which is resonating with our customers and our sales force. Our first quarter SaaS mix represents 37% of new business and net new upsell ARR versus our guidance of 15%.

鑑於我們在第一季度看到的勢頭以及我們的管道和預期，我們正在提高我們的 ARR 和 SaaS 組合前景，這也意味著我們正在調整較低的收入前景。我們好於預期的開端是由 Varonis SaaS 推動的，它引起了我們的客戶和我們的銷售人員的共鳴。我們第一季度的 SaaS 組合佔新業務和淨新追加銷售 ARR 的 37%，而我們的指導值為 15%。

And the examples that Yaki just discussed are evidence of this reception. Early feedback and the average deal sizes we have seen so far gives us further confidence in the pricing uplift that we previously provided. To that end, during the quarter, some of our reps did decide to go back to deals where an on-prem subscription quote was already put in front of the customer and introduced the SaaS product into the conversation. While some of these did convert, for other deals, it created some near-term disruption and elongated those sales cycles. We think this will work itself out in the second part of this year and is already factored into our guidance. We even saw some existing customers that during the renewal conversations were happy to convert their entire platform to SaaS and buy additional SaaS licenses.

Yaki 剛才討論的例子就是這種接待的證據。到目前為止，我們看到的早期反饋和平均交易規模讓我們對之前提供的價格提升更有信心。為此，在本季度，我們的一些代表確實決定回到已經將本地訂閱報價擺在客戶面前並將 SaaS 產品引入對話的交易。雖然其中一些確實轉化了，但對於其他交易，它造成了一些近期中斷並延長了這些銷售週期。我們認為這將在今年下半年自行解決，並且已經納入我們的指導方針。我們甚至看到一些現有客戶在續訂對話期間很樂意將他們的整個平台轉換為 SaaS 併購買額外的 SaaS 許可證。

Although the ARR impact of these renewal conversions wasn't material this quarter, it was ahead of our projection. As it relates to our updated guidance, we're not assuming significant conversions or a material change in the dollar value of these conversions versus Q1. But as a modeling note, if these conversions continue to trend ahead of our projections, this will further benefit our North Star metrics, which are ARR, free cash flow and ARR contribution margin. At the same time, this would cause a headwind to reported revenue and operating margin, which you should view as a positive in terms of the progression of the transition. As I look at our Q2 pipeline of renewal conversions, it has increased significantly versus Q1, which you should keep in mind as you think through your models.

儘管這些續訂轉換對 ARR 的影響在本季度並不重要，但超出了我們的預期。由於它與我們更新後的指南相關，我們不假設這些轉換與第一季度相比發生重大轉換或美元價值發生重大變化。但作為建模說明，如果這些轉換繼續領先於我們的預測，這將進一步有利於我們的北極星指標，即 ARR、自由現金流和 ARR 邊際貢獻。與此同時，這將對報告的收入和營業利潤率造成不利影響，你應該將其視為過渡進程的積極因素。當我查看我們第二季度的續訂轉化渠道時，它與第一季度相比有了顯著增加，您在考慮模型時應該牢記這一點。

Turning to our sales force. As expected, we did see some turnover, but we are pleased with the engagement of the vast majority of our sales force and their ability to transition to selling SaaS is tracking better than our initial expectations. Further, some of this success is being driven by our learnings from our 2019 transition around setting up programs to reduce friction while providing the right incentives for both the rep and the company.

轉向我們的銷售團隊。正如預期的那樣，我們確實看到了一些營業額，但我們對絕大多數銷售人員的參與感到滿意，他們過渡到銷售 SaaS 的能力比我們最初的預期要好。此外，這種成功的部分原因是我們從 2019 年的過渡中吸取了教訓，圍繞製定計劃來減少摩擦，同時為代表和公司提供正確的激勵措施。

As Yaki mentioned, we believe we have the right solution for the market since Varonis SaaS allows customers to achieve a faster time to value with significantly lower infrastructure costs. And while it's still early in the year, we feel good about the benefits both our customers and we will achieve as a result of the SaaS transition.

正如 Yaki 提到的，我們相信我們擁有適合市場的解決方案，因為 Varonis SaaS 允許客戶以顯著降低的基礎設施成本更快地實現價值。雖然現在還處於年初，但我們對我們的客戶和我們將因 SaaS 過渡而獲得的收益感到滿意。

In the first quarter, ARR grew 18% year-over-year to $478.1 million. And assuming the same SaaS mix as we guided for, we would have been well ahead of our revenue guidance. We generated $35.7 million of free cash flow, which was up from $21 million in the same period last year, reflecting our commitment to top line growth while improving cash flow generation.

第一季度，ARR 同比增長 18% 至 4.781 億美元。假設採用與我們指導的相同的 SaaS 組合，我們將遠遠領先於我們的收入指導。我們產生了 3570 萬美元的自由現金流，高於去年同期的 2100 萬美元，反映了我們在提高現金流產生的同時實現收入增長的承諾。

I'd like to elaborate on what I said earlier regarding the macro environment. During Q1, we saw the slowing economic climate continue to weigh on customers' purchasing patterns. Across the board, we continue to see an elevated level of deal scrutiny and extended sales cycles involving multiple layers of approval, with Europe in particular seeing the largest impact. We expect longer deal cycles to continue as a result of ongoing budgetary scrutiny, and our updated guidance already takes this and more into consideration.

我想就我剛才所說的宏觀環境做一個詳細的說明。在第一季度，我們看到經濟環境放緩繼續影響客戶的購買模式。總體而言，我們繼續看到更高水平的交易審查和更長的銷售週期，涉及多層審批，尤其是歐洲受到的影響最大。由於正在進行的預算審查，我們預計交易週期將繼續延長，我們更新的指南已經考慮到這一點以及更多因素。

Turning now to our first quarter results in more detail. Before I get into the numbers, let me remind you of what we've said from the beginning. ARR, free cash flow and ARR contribution margin are the leading indicators for this transition. Remember the shift of our business from term licenses to a SaaS model will make our traditional income statement metrics less indicative of the true health of our business than they have been in the past. We have again included several slides in the investor presentation that illustrate the impact of the transition on various metrics.

現在更詳細地談談我們的第一季度業績。在我進入數字之前，讓我提醒你我們從一開始就說過的話。 ARR、自由現金流和 ARR 邊際收益是這一轉變的領先指標。請記住，我們的業務從期限許可到 SaaS 模型的轉變將使我們的傳統損益表指標不像過去那樣能夠反映我們業務的真正健康狀況。我們再次在投資者介紹中加入了幾張幻燈片，說明過渡對各種指標的影響。

Now onto the numbers. Q1 total revenues were $107.3 million, up 12% year-over-year. During the quarter, as compared to the same quarter last year, we had approximately a 7% headwind to our year-over-year revenue growth rate as a result of having increased SaaS sales in our bookings mix, which are recognized ratably versus the upfront recognition of our on-prem subscription products. Subscription revenues were $83 million, and maintenance and services revenues were $24.4 million as our renewal rates, again, were over 90%.

現在進入數字。第一季度總收入為 1.073 億美元，同比增長 12%。在本季度，與去年同期相比，由於我們的預訂組合中的 SaaS 銷售增加，我們的收入同比增長率受到了大約 7% 的阻力，這與前期相比得到了認可認可我們的本地訂閱產品。訂閱收入為 8300 萬美元，維護和服務收入為 2440 萬美元，因為我們的續訂率再次超過 90%。

In North America, revenues grew 18% to $81.2 million or 76% of total revenues. In EMEA, revenues declined 5% to $22.9 million or 21% of total revenues. Currency was a 7% headwind in the region. Rest of the World revenues grew 9% to $3.2 million or 3% of total revenue. Just to remind you, reported revenue growth rates throughout all regions were impacted by a higher SaaS mix.

在北美，收入增長 18% 至 8120 萬美元，佔總收入的 76%。在歐洲、中東和非洲地區，收入下降 5% 至 2290 萬美元，佔總收入的 21%。貨幣對該地區造成 7% 的不利影響。世界其他地區的收入增長了 9%，達到 320 萬美元，佔總收入的 3%。提醒您，所有地區報告的收入增長率都受到更高的 SaaS 組合的影響。

Moving down the income statement, I'll be discussing non-GAAP results going forward. Gross profit for the first quarter was $92.9 million, representing a gross margin of 86.5% compared to 85.6% in the first quarter of 2022. Operating expenses in the first quarter totaled $97.1 million. As a result, first quarter operating loss was $4.3 million or an operating margin of negative 4%. This compares to operating loss of $7.9 million or an operating margin of negative 8.2% in the same period last year.

向下移動損益表，我將討論未來的非 GAAP 結果。第一季度的毛利潤為 9290 萬美元，毛利率為 86.5%，而 2022 年第一季度為 85.6%。第一季度的運營費用總計 9710 萬美元。因此，第一季度營業虧損為 430 萬美元，營業利潤率為負 4%。相比之下，去年同期營業虧損為 790 萬美元，營業利潤率為負 8.2%。

During the quarter, as compared to the same quarter last year, we had approximately a 6% headwind to our operating margin as a result of having increased SaaS sales in our bookings mix, which are recognized fully ratable versus the upfront recognition of our on-prem subscription products. First quarter ARR contribution margin was 5.6%, up from 4.1% last year, reflecting our ability to drive strong incremental margins while growing ARR and transitioning to SaaS.

在本季度，與去年同期相比，由於我們的預訂組合中的 SaaS 銷售增加，我們的營業利潤率出現了大約 6% 的逆風，與我們預先確認的在線-預訂閱產品。第一季度 ARR 貢獻利潤率為 5.6%，高於去年的 4.1%，反映出我們在增加 ARR 和向 SaaS 過渡的同時推動強勁的增量利潤率的能力。

During the quarter, we had financial income of approximately $7.2 million driven primarily by interest income on our cash, deposits and short-term investments. Net loss for the first quarter of 2023 was $0.1 million or $0.00 per basic and diluted share compared to a net loss of $10.2 million or a loss of $0.09 per basic and diluted share for the first quarter of 2022. This is based on 108.4 million and 108.2 million basic and diluted shares outstanding for Q1 2023 and Q1 2022, respectively.

本季度，我們的財務收入約為 720 萬美元，主要來自現金、存款和短期投資的利息收入。 2023 年第一季度的淨虧損為 10 萬美元或基本股和稀釋後每股虧損 0.00 美元，而 2022 年第一季度的淨虧損為 1020 萬美元或基本股和稀釋後每股虧損 0.09 美元。這是基於 1.084 億美元和2023 年第一季度和 2022 年第一季度分別發行了 1.082 億股基本股和稀釋股。

As of March 31, 2023, we had $756.3 million in cash, cash equivalents, marketable securities and short-term deposits. For the 3 months ended March 31, 2023, we generated $36.8 million of cash from operations compared to $24.5 million generated in the same period last year. And CapEx was $1.1 million compared to $3.5 million last year. During the first quarter, we repurchased 100,000 shares at an average purchase price of $25.19, and we have $41 million remaining on our share repurchase authorization. We ended the quarter with approximately 2,150 employees, roughly flat versus last quarter.

截至 2023 年 3 月 31 日，我們擁有 7.563 億美元的現金、現金等價物、有價證券和短期存款。在截至 2023 年 3 月 31 日的三個月中，我們從運營中產生了 3680 萬美元的現金，而去年同期為 2450 萬美元。資本支出為 110 萬美元，而去年為 350 萬美元。第一季度，我們以 25.19 美元的平均購買價格回購了 100,000 股股票，我們的股票回購授權剩餘 4100 萬美元。本季度結束時，我們擁有大約 2,150 名員工，與上一季度大致持平。

Turning to our guidance in more detail. Our second quarter and full year guidance now assumes a 35% SaaS mix of new business and upsell ARR, up from 15% previously.

更詳細地轉向我們的指南。我們的第二季度和全年指導現在假設新業務和追加銷售 ARR 的 SaaS 組合為 35%，高於之前的 15%。

A few additional modeling notes on this metric as we look to the back half of the year. First, Federal's largest quarter is the third quarter. And because we are not yet Fed-run certified, we expect this to be a headwind to our SaaS mix in Q3. Second, despite the momentum we saw this quarter, Q1 is still the smallest quarter of the year. And as such, we are taking a prudent approach in building our outlook as the dollar value of deals we expect to close in the second half is much larger than in the first, which is in line with historical trends. And third, we're not assuming significant conversions of renewals from on-prem subscription to SaaS or a material change in the dollar value of these conversions versus Q1. We are raising our ARR guidance, which reflects the faster adoption from our customers to Varonis SaaS. This also results in greater ARR contribution margin, which reflects our ability to focus on operating leverage during the transition. The higher SaaS mix drives corresponding adjustments to revenue and operating income guidance because of the ratable accounting treatment of SaaS versus the upfront accounting treatment of on-prem subscription.

當我們展望今年下半年時，關於該指標的一些額外建模說明。首先，聯邦最大的季度是第三季度。而且由於我們尚未獲得美聯儲認證，我們預計這將成為我們第三季度 SaaS 組合的不利因素。其次，儘管我們在本季度看到了勢頭，但第一季度仍然是今年最小的季度。因此，我們在構建我們的前景時採取謹慎的方法，因為我們預計下半年完成的交易的美元價值比上半年大得多，這符合歷史趨勢。第三，我們不假設續訂從本地訂閱到 SaaS 的重大轉換，或者這些轉換的美元價值與第一季度相比發生重大變化。我們正在提高我們的 ARR 指南，這反映了我們的客戶更快地採用 Varonis SaaS。這也導致更高的 ARR 貢獻利潤率，這反映了我們在過渡期間專注於運營槓桿的能力。較高的 SaaS 組合推動了對收入和營業收入指導的相應調整，因為 SaaS 的會計處理相對於本地訂閱的前期會計處理。

Ultimately, we view the update to our guidance as a clear sign that the transition is progressing in a positive direction and continue to view ARR, free cash flow and ARR contribution margin as our North Stars during this transition.

最終，我們將指南的更新視為轉型正朝著積極方向進展的明確跡象，並繼續將 ARR、自由現金流和 ARR 邊際收益視為我們在此轉型期間的北極星。

Lastly, as a reminder, our guidance continues to factor in headwinds from macro perspective, which includes ongoing budgetary scrutiny, longer sales cycles and an increase in unemployment as well as worsening of other economic conditions. From a SaaS transition standpoint, we are still factoring in a ramp-up period in the first half of the year, which assumes increased sales force turnover, lower sales productivity and longer sales cycles as an on-prem subscription deals in flight may convert to SaaS.

最後，提醒一下，我們的指引繼續從宏觀角度考慮不利因素，包括持續的預算審查、銷售週期延長、失業率上升以及其他經濟狀況惡化。從 SaaS 過渡的角度來看，我們仍在考慮今年上半年的增長期，假設銷售人員流動率增加、銷售效率降低和銷售週期延長，因為正在進行的本地訂閱交易可能會轉化為軟件即服務。

Now turning to our guidance. For the second quarter of 2023, we expect total revenues of $118 million to $120 million, representing growth of 6% to 8%, non-GAAP operating income of $0.5 million to $1.5 million and non-GAAP net income per diluted share in the range of $0.01 to $0.02. This assumes 127.2 million diluted shares outstanding.

現在轉向我們的指導。對於 2023 年第二季度，我們預計總收入為 1.18 億美元至 1.2 億美元，增長 6% 至 8%，非 GAAP 營業收入為 50 萬至 150 萬美元，非 GAAP 每股攤薄淨收入在該範圍內0.01 美元至 0.02 美元。這假設有 1.272 億股攤薄流通股。

For the full year 2023, we now expect ARR of $520 million to $528 million, representing growth of 12% to 14%; free cash flow of $20 million to $25 million, which includes a $6 million to $8 million headwind related to the TCJA capitalization of R&D provision; total revenues of $510 million to $520 million, representing growth of 8% to 10%; non-GAAP operating income of $29 million to $34 million; and non-GAAP net income per diluted share in the range of $0.30 to $0.34. This assumes 126.8 million diluted shares outstanding.

對於 2023 年全年，我們現在預計 ARR 為 5.2 億美元至 5.28 億美元，增長 12% 至 14%；自由現金流為 2000 萬至 2500 萬美元，其中包括與 TCJA 研發準備金資本化相關的 600 萬至 800 萬美元逆風；總收入為 5.1 億美元至 5.2 億美元，增長 8% 至 10%；非美國通用會計準則營業收入為 2900 萬至 3400 萬美元；非 GAAP 每股攤薄淨收入在 0.30 美元至 0.34 美元之間。這假設有 1.268 億股攤薄流通股。

In summary, despite continued challenges in the macro environment, the year is off to a solid start with the adoption of Varonis SaaS, showing positive momentum reflected by our first quarter SaaS mix of 37%. These results in our pipeline give us the confidence to raise our full year ARR outlook while driving strong incremental contribution margins.

總而言之，儘管宏觀環境持續面臨挑戰，但隨著 Varonis SaaS 的採用，今年開局良好，我們第一季度 37% 的 SaaS 組合反映出積極勢頭。我們管道中的這些結果使我們有信心提高我們的全年 ARR 前景，同時推動強勁的增量貢獻利潤率。

With that, we would be happy to take questions. Operator?

有了這個，我們很樂意回答問題。操作員？

(Operator Instructions) Our first question comes from Matt Hedberg with RBC Capital Markets.

（操作員說明）我們的第一個問題來自 RBC Capital Markets 的 Matt Hedberg。

Congrats on the execution. The environment certainly does not seem to be easy out there. Yaki, obviously, a lot of the focus on the call was on SaaS adoption, and I really enjoyed the example you gave, the large insurance customer. I think you said they saw a 30% uplift to ARR when they converted to SaaS. I'm curious, is that sort of a standard uplift that you're seeing across the base when it converts? Or maybe said differently, if a customer just goes straight to SaaS initially, is kind of 30% more ARR or ACV spending typically what you're seeing versus an on-prem contract?

祝賀執行死刑。那裡的環境似乎並不容易。 Yaki，顯然，電話會議的很多重點都放在了 SaaS 的採用上，我真的很喜歡你舉的例子，即大型保險客戶。我想你說過他們在轉換為 SaaS 後看到了 30% 的 ARR 提升。我很好奇，當它轉換時，你在基地看到的是那種標準的提升嗎？或者換句話說，如果客戶最初只是直接使用 SaaS，那麼與本地合同相比，您通常看到的 ARR 或 ACV 支出是否多出 30%？

Matt, we're just in the early stages, Matt. As we discussed before, 25% to 30%, it's very easy -- relatively easy to justify in terms of the total cost of ownership, it's a wash. But when we convert to SaaS, we also believe that a lot of the customers will buy significantly more bundles. You know what is very exciting for us is that the automated outcome and coverage is really working. And so far, the conversion to SaaS is really surprising us from every aspect and primarily the overall value proposition.

馬特，我們才剛剛起步，馬特。正如我們之前所討論的，25% 到 30%，這非常容易——就總擁有成本而言相對容易證明是合理的，這是一種洗禮。但當我們轉向 SaaS 時，我們也相信很多客戶會購買更多的捆綁包。你知道對我們來說非常令人興奮的是自動化的結果和覆蓋範圍確實有效。到目前為止，從各個方面，尤其是整體價值主張，向 SaaS 的轉變確實讓我們感到驚訝。

So in terms of the total cost of ownership, when it's apple-to-apples, we think that it's -- this should be the overall increase. But we also believe that customers will consume significantly more licenses.

因此，就總擁有成本而言，當它是蘋果對蘋果時，我們認為這應該是整體增長。但我們也相信客戶將消耗更多的許可證。

Our next question comes from Hamza Fodderwala with Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Hamza Fodderwala。

Hamza here. So I just want to clarify, Yaki, the point you made earlier. Is it fair to say that the environment got worse in Q1 versus Q4? Or was it relatively consistent?

哈姆扎在這裡。所以我只想澄清一下，Yaki，你之前提出的觀點。可以說第一季度的環境比第四季度更糟嗎？還是比較一致？

Yes, it's -- overall, I will say that it was relatively the same. It's a hard macro environment, but I will tell you what we do see, and historically, this is something that worked for us. At the end of the day, attacks can come from anywhere and any device, but they're always going in one direction, and this is the data.

是的，總的來說，我會說它是相對相同的。這是一個艱難的宏觀環境，但我會告訴你我們確實看到了什麼，從歷史上看，這對我們有用。歸根結底，攻擊可能來自任何地方和任何設備，但它們總是朝著一個方向前進，這就是數據。

When you have this hard environment, what happen is that people are really analyzing what is going to give them the biggest ROI. And when you need to protect data and if you're protecting data, if the data is protected with us and you failed with everything else, you did your job right.

當你處於這種艱難的環境中時，人們真正在分析什麼會給他們帶來最大的投資回報率。當您需要保護數據時，如果您正在保護數據，如果數據受到我們的保護而您在其他方面都失敗了，那麼您的工作是正確的。

But if you -- if the data is not protected and you have 99% perimeter security and you have one insider, as we saw with the Pentagon incident, one compromised user or a machine in the blast radius, so much of the data is exposed, then you have what we call lasting damage.

但是如果你 - 如果數據沒有受到保護並且你有 99% 的邊界安全並且你有一個內部人員，正如我們在五角大樓事件中看到的那樣，一個受感染的用戶或爆炸半徑中的一台機器，那麼很多數據都會暴露，那麼你就有了我們所說的持久傷害。

So what we see is that its customers are very attentive. And with the SaaS, we're just reducing a lot of friction. And what we have discussed in the Analyst Day is 10% of the effort, orders of magnitude of the value is really working. And with DA Cloud and everything that we are doing, we see more coverage. And really with the incident response, it's pretty amazing. They need to do very little in order to get a lot of value.

所以我們看到的是它的客戶非常細心。使用 SaaS，我們只是減少了很多摩擦。而我們在分析師日討論的是 10% 的努力，價值的數量級才是真正有效的。通過 DA Cloud 和我們正在做的一切，我們看到了更多的覆蓋面。真的，對於事件響應，這真是太棒了。他們只需要做很少的事情就能獲得很多價值。

So hard macro, but I think that at the end of the day, data security is a secular trend. And if we keep doing what we are doing in terms of coverage and automation, I think that we can -- on a relative basis can do very, very well.

如此艱難的宏觀，但我認為歸根結底，數據安全是一個長期趨勢。如果我們繼續在覆蓋範圍和自動化方面做我們正在做的事情，我認為我們可以 - 在相對的基礎上可以做得非常非常好。

Our next question comes from Saket Kalia with Barclays.

我們的下一個問題來自巴克萊銀行的 Saket Kalia。

It's Saket from Barclays. Yaki, maybe for you, clearly, the SaaS transition is going faster than you expected. Maybe I could just shift to a product question. What's been the early feedback from customers in terms of feature parity between the SaaS products and the on-prem? And to the extent that there's still a gap, right, and you'll tell us whether there's a gap, how do you sort of think about that sort of narrowing over time? Does that make sense?

這是來自巴克萊銀行的 Saket。 Yaki，也許對你來說，很明顯，SaaS 轉型的速度比你預期的要快。也許我可以轉向產品問題。就 SaaS 產品和本地產品之間的功能對等而言，客戶的早期反饋是什麼？就仍然存在差距而言，對吧，你會告訴我們是否存在差距，你如何看待這種隨著時間的推移而縮小？那有意義嗎？

Yes. So thanks for the question. So for new customers, it's a completely -- it's just a no-brainer because we have so much more advanced capability in remediation, mainly in 365, in the proactive incident response and just all the benefits that are coming with SaaS. So this is -- it's a nonissue.

是的。所以謝謝你的問題。因此，對於新客戶來說，這完全是——這只是一個明智的選擇，因為我們在補救方面擁有更先進的能力，主要是在 365 中，在主動事件響應方面以及 SaaS 帶來的所有好處。所以這是 - 這不是問題。

With customers that have some of the features that we still don't have in the SaaS platform we are moving very fast to narrow the gap. And we believe in several quarters, we are going to narrow everything. And also, we'll be able to do frictionless migration. Now we have 80% of what we have on the on-prem platform, but we are moving very, very fast. As I said before, so far, it's just in every aspect of the SaaS transition, we have just very good indicators.

對於擁有我們在 SaaS 平台中仍然沒有的一些功能的客戶，我們正在非常迅速地縮小差距。我們相信在幾個方面，我們將縮小一切範圍。而且，我們將能夠進行無摩擦遷移。現在我們在本地平台上擁有 80% 的內容，但我們的發展速度非常非常快。正如我之前所說，到目前為止，在 SaaS 轉型的各個方面，我們都有非常好的指標。

Our next question comes from Joel Fishbein with Truist Securities.

我們的下一個問題來自 Truist Securities 的 Joel Fishbein。

It's, Guy, for you. Can you just go through what the percent of business that were going to renew? I think you said something about a decent renewal in Q2, but I'd like to understand the cadence of that throughout the year. And then your assumptions around conversion rates, that would be helpful.

蓋伊，是給你的。您能否介紹一下要續約的業務百分比？我想你說了一些關於第二季度的體面更新，但我想了解全年的節奏。然後你對轉化率的假設會很有幫助。

So first of all, if you're talking about the renewal rate, our renewal rate is consistently over 90%, and that's continuing. But in terms of the conversion, I think that's a very good question. And when we look at Q1, the conversions in Q1 weren't significant. It was a couple of hundred thousand dollars. But as we look ahead, in Q2, we've seen increased renewal conversions in the pipeline. Now more reps are talking about SaaS when they talk to our existing customers when the renewals are coming up.

所以首先，如果你在談論續訂率，我們的續訂率一直超過 90%，而且這種情況還在繼續。但就轉換而言，我認為這是一個很好的問題。當我們查看第一季度時，第一季度的轉化並不顯著。這是幾十萬美元。但展望未來，在第二季度，我們看到管道中的續訂轉換有所增加。現在，當續訂即將到來時，更多的代表在與我們的現有客戶交談時正在談論 SaaS。

Now to be clear, we're not providing any additional incentives for us to do this. They're really doing it on their own. But it's happening because customers see the benefits of SaaS, it's a much better product, and reps are getting more commission on the uplift. And because of this larger pipeline, we have baked in just over $1 million into our Q2 guidance, which again isn't a significant number, but we do want to highlight this for the modeling's sake because if that renewal conversions do end up being more significant, it will be an even larger headwind to revenue and operating margin. But that is a positive development for us, especially on ARR.

現在要明確一點，我們不會為我們這樣做提供任何額外的激勵。他們真的是在自己做。但它正在發生，因為客戶看到了 SaaS 的好處，它是一種更好的產品，而且銷售代表因提升而獲得更多佣金。由於這個更大的管道，我們在第二季度的指導中投入了超過 100 萬美元，這也不是一個重要的數字，但我們確實想為了建模的緣故強調這一點，因為如果續訂轉換最終會更多重要的是，這將對收入和營業利潤率造成更大的阻力。但這對我們來說是一個積極的發展，尤其是在 ARR 方面。

Our next question comes from Fatima Boolani with Citi.

我們的下一個問題來自花旗的 Fatima Boolani。

Guy, you talked in your script about elevated sales turnover, which was pretty much in alignment with your expectations and what you articulated to us when you were talking us through some of the risks around the transition. I'm curious how you're thinking about sales capacity for the remainder of the year and how we should see you maybe rehire or backfill? Or should some of the dynamics with ASP uplift and some of these conversations you're having around higher ACV conversations with existing customers, is that supposedly going to make up for some of the turnover? So just any commentary on sales capacity given the elevated turnover.

伙計，你在劇本中談到了銷售營業額的增加，這與你的期望以及你在與我們討論過渡期間的一些風險時向我們表達的內容非常一致。我很好奇您如何考慮今年剩餘時間的銷售能力以及我們應該如何看待您可能重新僱用或回填？或者，ASP 的某些動態是否應該提升以及您與現有客戶圍繞更高的 ACV 對話進行的一些對話，這是否應該彌補一些營業額？因此，鑑於營業額增加，只是對銷售能力的任何評論。

So as you mentioned and as I talked in the prepared remarks, we did see some turnover, but it was very much as expected. And we're very much pleased with the engagement of the vast majority of our sales force and their ability to transition to selling SaaS, and that's tracking better than our initial guidance. We're getting great feedback from our reps and our customers on the product and the benefits. We're hiring in strategic positions and locations. We want to continue to invest. We'll do it in a prudent way, as we have done in the past. But overall, we're very pleased with the reception of SaaS and the way the sales force has received that.

因此，正如您提到的以及我在準備好的發言中所說的那樣，我們確實看到了一些營業額，但這非常符合預期。我們對絕大多數銷售人員的參與以及他們過渡到銷售 SaaS 的能力感到非常滿意，這比我們最初的指導要好。我們從我們的代表和我們的客戶那裡得到了關於產品和好處的很好的反饋。我們正在招聘戰略職位和地點。我們想繼續投資。我們會像過去一樣謹慎行事。但總的來說，我們對 SaaS 的接受度以及銷售人員接受它的方式感到非常滿意。

Our next question comes from Roger Boyd with UBS.

我們的下一個問題來自瑞銀集團的 Roger Boyd。

Congrats on the execution. Just to be clear, I think you talked about the prior revenue guide of 10% and 12% growth, assuming that the environment would deteriorate further from what you saw in 3Q and 4Q. I guess I'm wondering, did you add any additional macro considerations to the model? Or absent the outperformance you had in SaaS mix, would you likely have been reiterating the full year revenue guidance?

祝賀執行死刑。需要明確的是，我認為你談到了之前的 10% 和 12% 增長的收入指南，假設環境會比你在第三季度和第四季度看到的情況進一步惡化。我想我想知道，您是否在模型中添加了任何額外的宏觀考慮因素？或者沒有你在 SaaS 組合中的出色表現，你可能會重申全年收入指導嗎？

That's a great question. Our reduction of revenue, revenue coming down by $9 million is entirely related to the increase of the SaaS mix from 15% to 35%. There's obviously revenue headwind coming from the accounting treatment, and that's why we reduced that revenue number and increased our ARR number, which moved up by $6 million for the year. We definitely baked in macroeconomic uncertainty. We did that at the beginning of the year. We didn't change anything related to that. And the entire reduction of revenue is related to the SaaS uplift.

這是一個很好的問題。我們的收入減少，收入減少 900 萬美元，完全與 SaaS 組合從 15% 增加到 35% 有關。會計處理顯然對收入不利，這就是為什麼我們減少了收入數字並增加了我們的 ARR 數字，今年增加了 600 萬美元。我們肯定受到宏觀經濟不確定性的影響。我們在年初就這樣做了。我們沒有改變與此相關的任何內容。整個收入的減少與 SaaS 的提升有關。

Our next question is Brian Essex with JPMorgan.

我們的下一個問題是摩根大通的 Brian Essex。

Maybe I guess for either one of you, if you could give us a little bit of color. I think you mentioned during the prepared remarks that you had some customers that decided to convert to SaaS, and then some stuck with on-prem. Could you give us a little more color around like what the gating factors were there of customers that were in the pipeline? And what kind of got them over the hurdle to convert? And then conversely, maybe which ones decided to stay on-prem and why?

也許我想你們中的任何一個，如果你能給我們一點顏色。我想你在準備好的評論中提到你有一些客戶決定轉換到 SaaS，然後一些客戶堅持使用本地部署。你能給我們更多的顏色嗎，比如管道中客戶的門控因素是什麼？是什麼讓他們跨過了轉換的障礙？然後相反，也許哪些人決定留在本地，為什麼？

Yes, we are not pushing conversion. It's just they understood that some of the features that we have with 365 and proactive IR, and they just almost forced us to do the conversion. It just made much more sense for them to do it. Over time, we don't see the vast, vast majority of customers who want to move to SaaS. It's a no-brainer for them. It's just a question of timing and feature parity.

是的，我們不推動轉換。只是他們了解我們擁有 365 和主動 IR 的一些功能，他們幾乎迫使我們進行轉換。他們這樣做更有意義。隨著時間的推移，我們看不到絕大多數想要轉向 SaaS 的客戶。這對他們來說是顯而易見的。這只是時間和功能對等的問題。

And Brian, just to add, there is basically 2 types. There's new customers that received quotes that had on-prem subscription pricing on them. We did see many of those deals convert to SaaS within the quarter, and we expect that to continue. But as Yaki mentioned, the conversion of existing customers with their renewals from on-prem subscription to SaaS wasn't a material number in Q1, but the color that I gave on the increased pipeline that we see in Q2 is kind of the reason we called and gave some commentary on that.

Brian，補充一下，基本上有兩種類型。有新客戶收到了對他們有本地訂閱定價的報價。我們確實看到其中許多交易在本季度內轉換為 SaaS，我們預計這種情況將繼續下去。但正如 Yaki 提到的那樣，現有客戶的續訂從本地訂閱到 SaaS 的轉換在第一季度並不是一個重要數字，但我在第二季度看到的增加的管道上給出的顏色是我們在某種程度上的原因打電話並對此發表了一些評論。

Our next question comes from Rob Owens with Piper Sandler.

我們的下一個問題來自 Rob Owens 和 Piper Sandler。

Curious how the shift to SaaS is impacting the top of the pipeline or top of the funnel, anything that you can give us from a quantification standpoint.

好奇向 SaaS 的轉變如何影響管道的頂部或漏斗的頂部，從量化的角度來看，您可以提供給我們的任何東西。

Overall, what I can say more than anything else that it's resonating much better with the customer. So if you will go to every organization in the world and say do you want that only the right people can access the right data, you know what is critical and reliably can alert and stop any abnormal behavior, everybody will say yes. The question is how can you do it with -- in a frictionless manner and to make sure that you can do it completely automatically. And this is something that we are doing with SaaS. So the overall reception in terms of the way that they receive value, in the way that they can deploy it and just get value from the platform is much, much better.

總的來說，我最能說的是它與客戶產生了更好的共鳴。因此，如果你去世界上的每個組織並說你是否希望只有合適的人才能訪問正確的數據，你知道什麼是關鍵並且可靠地可以警告並阻止任何異常行為，每個人都會同意。問題是你如何做到這一點——以一種無摩擦的方式，並確保你可以完全自動地做到這一點。這就是我們正在用 SaaS 做的事情。因此，就他們獲得價值的方式、部署價值的方式以及從平台獲得價值的方式而言，總體接受度要好得多。

It's basically eliminating 2 of the biggest hurdles and objections that we got from customers when we sold on-prem subscription, which is, one, we don't want to deal with the hardware, and that gets eliminated when we have the SaaS offering. And the second objection is we don't have enough people. And those 2 benefits are pretty significant, which basically generates a total cost of ownership that is lower for the customer with much more of the automation that Yaki talked about.

它基本上消除了我們在銷售本地訂閱時從客戶那裡得到的兩個最大障礙和反對意見，即，一個，我們不想處理硬件，當我們提供 SaaS 產品時，它就被消除了。第二個反對意見是我們沒有足夠的人。這 2 個好處非常顯著，它基本上為客戶帶來了更低的總擁有成本，並且 Yaki 談到了更多的自動化。

Our next question comes from Josh Tilton with Wolfe Research.

我們的下一個問題來自 Wolfe Research 的 Josh Tilton。

I just have a quick one on the numbers. I just want to make sure I have a handle on everything here. But I think the previous commentary, you ended 2022 with $3.5 million in ARR from DA Cloud. You also had a 10% SaaS mix. And I'm just trying to understand, is that 10% SaaS mix, which is new and upsell business, is that part of the $3.5 million that you finished the year with in DA Cloud? Or is that on top of the $3.5 million in ARR from DA Cloud?

我只是快速了解一下數字。我只是想確保我能掌握這裡的一切。但我認為之前的評論是，您在 2022 年結束時從 DA Cloud 獲得了 350 萬美元的 ARR。您還有 10% 的 SaaS 組合。我只是想了解，10% 的 SaaS 組合，這是新的和追加銷售的業務，是你在 DA Cloud 中完成的 350 萬美元的一部分嗎？還是在 DA Cloud 的 350 萬美元 ARR 之上？

35% SaaS mix is related to Q1 2023. And I think there's been some confusion in the way that metric is defined, so let me spend a second by just clarifying it. The SaaS mix is the percentage of new growth ACV. So it's out of a much larger denominator than if you do that based on a calculation from net new ARR. But in relation to your question, it relates to Q1 new ACV sales, not related to last year.

35% 的 SaaS 組合與 2023 年第一季度有關。我認為指標的定義方式有些混亂，所以讓我花點時間澄清一下。 SaaS 組合是新增長 ACV 的百分比。因此，與根據淨新 ARR 進行計算相比，它的分母要大得多。但關於你的問題，它與第一季度新的 ACV 銷售有關，與去年無關。

Our next question comes from Chad Bennett with Craig-Hallum Capital Group.

我們的下一個問題來自 Craig-Hallum Capital Group 的 Chad Bennett。

So yes, kudos on the accelerated shift to the SaaS business, and you're seeing kind of deals in flight shift, which I think is good. But just, Guy, considering the ARR, pretty dramatic ARR shift on a percentage basis from 15% to mid-30s in your expectations for this year from an ARR perspective to SaaS. And it sounds like the price improvement related to the SaaS deals or ACV related to those has held, right, based on your commentary. And you're not really baking in more macro negativity.

所以，是的，加速轉向 SaaS 業務的榮譽，你看到了一些航班轉移的交易，我認為這很好。但是，蓋伊，考慮到 ARR，從 ARR 的角度到 SaaS，你對今年的預期中，ARR 從 15% 到 30 多歲的百分比基礎上發生了相當大的變化。根據您的評論，聽起來與 SaaS 交易相關的價格改善或與之相關的 ACV 已經保持不變。而且您並沒有真正陷入更多的宏觀消極情緒中。

I just would have thought the magnitude of going from 15% to 35% of bookings coming from SaaS would have more than a $6 million benefit in the guide. Am I not -- is there -- are there puts and takes I'm not thinking about there? Or is there more to it?

我只是認為來自 SaaS 的預訂從 15% 增加到 35% 的幅度會在指南中帶來超過 600 萬美元的收益。我不是——有沒有——有沒有我沒有考慮的地方？或者還有更多嗎？

Well, I can walk you through how we're thinking about this. First of all, this is the first quarter into the year. And as I mentioned before, it's the smallest one of the year, and there's a lot of macro uncertainty still out there which we continue to bake into our guidance. And we take the commitment to the Street very seriously.

好吧，我可以告訴你我們是如何考慮這個的。首先，這是今年的第一季度。正如我之前提到的，這是一年中最小的一個，而且仍然存在很多宏觀不確定性，我們將繼續將其融入我們的指導中。我們非常重視對華爾街的承諾。

So we definitely feel extremely encouraged about the SaaS transition with the feedback that we've been getting. And the pricing we've realized, as you've asked, so far gives us the confidence in that 25% to 30% uplift. So I think this is early in the year, but we feel very confident in where we stand today after 1 quarter of the year.

因此，根據我們收到的反饋，我們對 SaaS 過渡感到非常鼓舞。正如您所要求的那樣，我們已經實現的定價到目前為止讓我們對 25% 到 30% 的提升充滿信心。所以我認為這是今年年初，但我們對今年第一個季度後的今天所處的位置非常有信心。

Our next question comes from Andrew Nowinski with Wells Fargo.

我們的下一個問題來自 Wells Fargo 的 Andrew Nowinski。

So you mentioned an existing Fortune 500 insurance company that renewed, and you upsold DA Cloud to that customer, which I think contributed in part to that 30% increase in ARR you saw. So how much of that 30% increase was attributable to DA Cloud? And then what kind of attach rate of DA Cloud are you seeing when a customer buys the SaaS platform?

所以你提到了一家續約的現有財富 500 強保險公司，你向該客戶推銷了 DA Cloud，我認為這在一定程度上促成了你看到的 ARR 增長 30%。那麼這 30% 的增長中有多少歸因於 DA Cloud？那麼當客戶購買 SaaS 平台時，您看到 DA Cloud 的附加率是多少？

So one of the things that we talked about in the Investor Day is that we're going to talk about the Varonis SaaS as one mix because we want to avoid the confusion and the puts and takes. So the 35 -- 37% SaaS mix in Q1 and the guidance that we gave for 35% for the year kind of combines everything under SaaS. I can tell you that we're pleased with the adoption of both of the products, the Varonis SaaS and the DA Cloud. I think that the customers definitely see the benefits, and we're very excited to raising the number from 15% SaaS mix to 35% after 1 quarter.

因此，我們在投資者日討論的一件事是，我們將把 Varonis SaaS 作為一個組合來討論，因為我們想避免混淆和推銷。因此，第一季度 35% - 37% 的 SaaS 組合以及我們今年給出的 35% 的指導結合了 SaaS 下的所有內容。我可以告訴你，我們很高興採用這兩種產品，Varonis SaaS 和 DA Cloud。我認為客戶肯定看到了好處，我們很高興在 1 個季度後將 SaaS 組合的比例從 15% 提高到 35%。

But in terms of DA Cloud and the attach rates, when you look at our customers and everything we have in the platforms in terms of DA Cloud, each and every one of our customers have several DA Cloud platforms, SaaS platforms that we support. And we just believe that just on paper, we can sell it to all of them, and we think that everything related to the protection of this SaaS platform is -- the market is becoming more ready. And everything that we had on the on-prem and with 365 we bring to these platforms, and we just believe that the overall platform and the value proposition has massive potential.

但就 DA Cloud 和附加率而言，當你查看我們的客戶以及我們在 DA Cloud 平台上擁有的所有內容時，我們的每個客戶都有多個 DA Cloud 平台，我們支持的 SaaS 平台。我們只是相信，就在紙面上，我們可以把它賣給所有人，我們認為與保護這個 SaaS 平台相關的一切——市場正在變得更加準備就緒。我們在本地和 365 上擁有的一切都帶到了這些平台上，我們相信整個平台和價值主張具有巨大的潛力。

Our next question comes from Shrenik Kothari with Robert W. Baird.

我們的下一個問題來自 Shrenik Kothari 和 Robert W. Baird。

So you mentioned from SaaS transition standpoint you're still factoring the ramp-up period in the first half of the year, which kind of assumes increased turnover, productivity and longer cycles. So given that you mentioned the faster transition and especially increased renewal conversions without any additional incentives and the larger pipeline visibility that you also spoke, can you provide some more granularity around the implications on the turnover, the ramp productivity, et cetera? That would be greatly appreciated.

所以你提到，從 SaaS 轉型的角度來看，你仍然在考慮今年上半年的加速期，這是假設營業額增加、生產力增加和周期更長。因此，鑑於您提到了更快的過渡，尤其是在沒有任何額外激勵措施的情況下增加了續訂轉化率，並且您還談到了更大的渠道可見性，您能否更詳細地說明對營業額、斜坡生產力等的影響？那將不勝感激。

So when we gave guidance at the beginning of the year, we basically talked about the first 6 months, the first 2 quarters, where we expect to see the majority of the friction. And that friction is coming from 2 places. One is the expectation for higher sales turnover, which I can tell you we were pleased with kind of the adoption of our sales force. They very much understand the benefits for both the customers and the company. And it's -- obviously, when you see the numbers, the 37% SaaS mix was well ahead of our guidance.

因此，當我們在年初給出指導時，我們基本上談到了前 6 個月，前 2 個季度，我們預計會出現大部分摩擦。這種摩擦來自兩個地方。一是對更高營業額的期望，我可以告訴你，我們對採用我們的銷售隊伍感到滿意。他們非常了解客戶和公司的利益。而且很明顯，當你看到這些數字時，37% 的 SaaS 組合遠遠超過了我們的指導。

But the second thing we talked about was the fact that deals that were in flight that were introduced to customers with on-prem subscription pricing as part of the negotiation and the conversation, we expect our sales force to go back to those customers and try and move them to SaaS, which will add some friction in the conversation. And we expect to kind of go through that.

但我們談到的第二件事是，作為談判和對話的一部分，通過本地訂閱定價向客戶介紹正在進行的交易，我們希望我們的銷售人員回到這些客戶那裡並嘗試將它們轉移到 SaaS，這會在對話中增加一些摩擦。我們希望能夠經歷這些。

And for the vast majority of those deals in the first part of the year and on the larger deals, we should clean through that pipeline in the second part of the year. But the majority of that friction happens in the first 6 months, and we called that out, talked a lot about that in the last call in the Investor Day that we had. And that still holds, that's still part of the expectation, but I think we can clear through those conversations with customers for the most part in Q2.

對於今年上半年的絕大多數交易和較大的交易，我們應該在今年下半年清理該管道。但大部分摩擦發生在前 6 個月，我們在投資者日的最後一次電話會議上談到了這一點。這仍然存在，這仍然是預期的一部分，但我認為我們可以在第二季度的大部分時間通過與客戶的對話來澄清。

Our next question is with Shebly Seyrafi with FBN Securities.

我們的下一個問題是來自 FBN Securities 的 Shebly Seyrafi。

So you noted that you're seeing additional scrutiny on deals in Europe and North America, but your European business or EMEA business declined by 5% -- actually, grew by 2% in constant currency. That was versus like 24% constant currency growth the year before, so a 22-point decel year-to-year. North America decel-ed only 13 points. So it looks like EMEA is slowing down more than North America on a constant currency basis. Can you elaborate on why that's the case and what actions you're taking to improve results in EMEA?

因此，您注意到歐洲和北美的交易受到更多審查，但您的歐洲業務或 EMEA 業務下降了 5%——實際上，按固定匯率計算增長了 2%。這與前一年 24% 的恆定貨幣增長率相比，因此同比下降了 22 個百分點。北美僅下降 13 個百分點。因此，在固定匯率的基礎上，歐洲、中東和非洲似乎比北美放緩得更多。您能否詳細說明為什麼會這樣，以及您正在採取哪些行動來改善 EMEA 的結果？

So first of all, when you look at the numbers, I think there's a bit of a confusion there. We saw FX headwinds related to EMEA that was about 7% on the EMEA revenue number. We also had the Russia business impact that -- still impacted us and we still recognized in Q1 of last year, and that was another 2% headwind. But on top of that, you're also seeing the headwind related to the SaaS transition, so selling SaaS with the way the accounting treatment related to that will generate headwind. And the adoption of SaaS in Europe was very good, not similar to our transition from perpetual to on-prem subscription, where we had conversations with our European teams at the time. For all of you that were part of that transition, I'm sure you remember that.

所以首先，當你看數字時，我認為那裡有點混亂。我們看到與 EMEA 相關的外匯不利因素佔 EMEA 收入數字的 7% 左右。我們還對俄羅斯的業務產生了影響——仍然影響著我們，我們在去年第一季度仍然認識到，這是另一個 2% 的逆風。但除此之外，您還看到了與 SaaS 轉型相關的逆風，因此以與此相關的會計處理方式銷售 SaaS 會產生逆風。 SaaS 在歐洲的採用情況非常好，這與我們從永久訂閱到本地訂閱的過渡不同，當時我們與歐洲團隊進行了對話。對於所有參與該過渡的人，我相信您還記得這一點。

But in this transition, our European teams have adopted the SaaS transition very well, and that also has an impact on the comparison. So I don't think it's the right way to look at revenue numbers year-over-year, and that will probably be a bit of a confusion going forward, and that's why we talked about the ARR. I will say that we're definitely seeing longer sales cycles and deal scrutiny, and that's -- for the most part, we're seeing that in Europe. We're also seeing it in North America. But the numbers themselves should not be looked on a year-over-year basis because of the items I mentioned.

但是在這個轉型中，我們歐洲的團隊很好的採用了SaaS的轉型，這對對比也有影響。所以我不認為這是逐年查看收入數字的正確方法，而且這可能會讓人感到困惑，這就是我們談論 ARR 的原因。我要說的是，我們肯定會看到更長的銷售週期和交易審查，而且——在大多數情況下，我們在歐洲看到了這一點。我們也在北美看到它。但由於我提到的項目，數字本身不應按年計算。

We have reached the end of our question-and-answer session. I would now like to turn the floor back over to Tim Perz for closing comments.

我們的問答環節已經結束。我現在想將發言權轉回給 Tim Perz 以發表結束評論。

Thanks, everyone, for joining us. We appreciate your interest in Varonis.

謝謝大家加入我們。感謝您對 Varonis 的關注。

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.

今天的會議到此結束。感謝您的參與。此時您可以斷開線路。