Varonis Systems Inc (VRNS) 2024 Q3 法說會逐字稿

Greetings, and welcome to the Varonis Systems, Inc. third-quarter 2024 earnings conference call. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tim Perz, Investor Relations.

您好，歡迎參加 Varonis Systems, Inc. 2024 年第三季財報電話會議。（操作員說明）。提醒一下，本次會議正在錄製中。現在我很高興向您介紹主持人蒂姆·佩爾茲（Tim Perz），投資者關係部門。

Thank you. You may begin.

謝謝。你可以開始了。

Thank you, operator. Good afternoon. Thank you for joining us today to review Varonis' third quarter 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，接線生。午安.感謝您今天加入我們回顧 Varonis 第三季的財務表現。今天與我一起參加電話會議的是執行長 Yaki Faitelson；以及 Varonis 財務長兼營運長 Guy Melamed。初步發言後，我們將開始問答環節。

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 fourth quarter and full year ending December 31, 2024. 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.

在本次電話會議中，我們可能會發表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，包括對截至2024 年12 月31 日的第四季度和全年未來經營績效的預測。由於多種因素，實際結果可能與此類聲明中所述的結果有重大差異。這些因素在我們今天發布的收益新聞稿中的「前瞻性陳述」部分中進行了闡述，這些因素和其他重要的風險因素在我們向美國證券交易委員會提交的報告中進行了更全面的描述。我們鼓勵所有投資者閱讀我們向 SEC 提交的文件。這些陳述僅反映我們今天的觀點，不應被視為代表我們在任何後續日期的觀點。Varonis 明確否認申請或承諾公開發布本文中任何前瞻性陳述的任何更新或修訂。

Additionally, non-GAAP financial measures will be discussed in this conference call. A reconciliation for the most directly comparable GAAP financial measures is also available in our third-quarter 2024 earnings press release and our investor presentation, which can be found at www.varonis.com in the Investor Relations section.

此外，本次電話會議也將討論非公認會計準則財務指標。我們還可以在我們的 2024 年第三季財報新聞稿和投資人簡報中找到最直接可比較的 GAAP 財務指標的調節表，這些內容可以在 www.varonis.com 的投資者關係部分找到。

Lastly, please note that our webcast of today's call is available on our website in the Investor Relations section.

最後，請注意，我們今天電話會議的網路廣播可在我們網站的投資者關係部分查看。

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

接下來，我想將電話轉給我們的執行長 Yaki Faitelson。燒？

Thanks, Tim, and good afternoon, everyone. Thank you for joining us today to review our third-quarter results. Today, I would like to discuss our SaaS transition progress and the key drivers of our business.

謝謝蒂姆，大家下午好。感謝您今天加入我們回顧我們的第三季業績。今天，我想討論一下我們的 SaaS 轉型進展以及我們業務的關鍵驅動因素。

First, as I often do on these calls, I would like to remind you why Varonis exists and the problem we solve. Next to its people, data is the most valuable assets of any business. So it is the primary target for bad actors and cyber-attacks.

首先，正如我在這些電話中經常做的那樣，我想提醒您為什麼 Varonis 存在以及我們解決的問題。除了人員之外，數據是任何企業最有價值的資產。因此，它是不良行為者和網路攻擊的主要目標。

Most organizations focus on securing endpoints and perimeters but leave many gaps for cyber-attacks on their data. With the expansion of the cloud and the emergence of generative AI, productivity and collaboration have improved, but the risk of overexposing sensitive data has greatly increased.

大多數組織都專注於保護端點和外圍，但為資料網路攻擊留下了許多漏洞。隨著雲端的擴展和生成式人工智慧的出現，生產力和協作得到了提高，但過度暴露敏感資料的風險也大大增加。

Since the inception of our company, we have taken a data-first approach to security, which allows our customers to locate their sensitive data, visualize who has access to it, lock it down and detect and respond to threats on it.

自公司成立以來，我們一直採取資料優先的安全方法，使我們的客戶能夠定位他們的敏感資料、視覺化誰有權存取這些資料、鎖定資料以及檢測和回應資料上的威脅。

Now with the automation of our SaaS platform, our customers can spend less time and effort protecting their data. Our managed data detection and response offering, which we call MDDR save them even more time and make them much more protected.

現在，借助我們 SaaS 平台的自動化，我們的客戶可以花費更少的時間和精力來保護他們的資料。我們的託管資料偵測和回應產品（我們稱之為 MDDR）可以為他們節省更多時間，並使其受到更多保護。

Simply put, Varonis allows organization to use the and collaborate in a much safer way.

簡而言之，Varonis 允許組織以更安全的方式使用和協作。

Turning to our third-quarter results. ARR grew 18% to $610 million in SaaS. ARR now represents approximately 43% of total ARR or approximately $260 million, which reflects the growing momentum of our SaaS platform and our MDDR offering as well as a small contribution from GenAI.

轉向我們的第三季業績。SaaS 領域的 ARR 成長了 18%，達到 6.1 億美元。ARR 目前約佔總 ARR 的 43%，約 2.6 億美元，這反映了我們的 SaaS 平台和 MDDR 產品的成長動能以及 GenAI 的小額貢獻。

Year-to-date, we generated $88.6 million of free cash flow versus $46 million last year while our federal business underperformed our expectations, our strong performance this quarter was led by our enterprise business with healthy contribution from new logos growth in conversion activity from both on-prem subscription and perpetual maintenance customers. Guy will review our results and our updated guidance in more detail shortly.

今年迄今為止，我們產生了8860 萬美元的自由現金流，而去年為4600 萬美元，而我們的聯邦業務表現低於我們的預期，本季度我們的強勁表現是由我們的企業業務帶動的，新徽標的轉換活動成長做出了健康貢獻本地訂閱和永久維護客戶。蓋伊將很快更詳細地審查我們的結果和更新的指南。

Our SaaS transition continue to gain momentum because of the many benefits our customers realize, as a reminder, they are customers achieve automated outcomes, which means to ensure data is protected with very little effort. SaaS is quicker to deploy and operationalize with significantly lower infrastructure and personnel investments and SaaS is easier to maintain and upgrade. Additionally, the three key benefits we continue to realize are shorter sales cycles, larger initial lands and margin benefits over time. This quarter, we continue to see more proof of these benefits in our SaaS transitions and MDDR offering as well as very early contribution from Generative AI solutions.

我們的 SaaS 轉型繼續獲得動力，因為我們的客戶意識到了許多好處，提醒一下，他們是客戶實現自動化結果，這意味著只需很少的努力即可確保資料受到保護。SaaS 的部署和營運速度更快，基礎設施和人員投資顯著降低，並且 SaaS 更易於維護和升級。此外，我們繼續實現的三個主要好處是更短的銷售週期、更大的初始土地和隨著時間的推移的利潤效益。本季度，我們繼續在 SaaS 轉型和 MDDR 產品中看到更多證據證明這些優勢，以及生成式 AI 解決方案的早期貢獻。

At the beginning of the year, we introduced MDDL, the first managed service for monitoring and protecting critical data built on top of our SaaS platforms and therefore, only available to our SaaS customers. It protects data in a more automated way. This offering is so important for an organization because the threat environment grows more dangerous by the day. And when a breach happens every second counts. Security teams are stretched in and struggle to see and respond to threats as quickly as they must with today's threat actors.

今年年初，我們推出了 MDDL，這是第一個用於監控和保護建置在 SaaS 平台之上的關鍵資料的託管服務，因此僅適用於我們的 SaaS 客戶。它以更自動化的方式保護資料。此產品對組織來說非常重要，因為威脅環境日益危險。當違規發生時，每一秒都很重要。安全團隊面臨著當今威脅行為者的壓力，難以盡快發現威脅並做出回應。

With MDDR, we address the problem for leveraging our unique telemetry, user behavior analysis and use of experience building highly accurate threat models to detect and stop potential data breaches. While we have been selling MDDR for only two full quarters, customers are seeing immediate and impactful benefits and MDDR is becoming a key driver of new business wins in SaaS conversions. As we previously said, we believe that MDDR is a game changer and that we are just scratching the surface of this opportunity. Another tailwind that we have discussed is the impact of Generative AI and large language models. These topics remain top of mind and a key theme in our discussion with prospects and customers.

借助 MDDR，我們解決了利用獨特的遙測、用戶行為分析和利用構建高度準確的威脅模型的經驗來檢測和阻止潛在資料外洩的問題。雖然我們只銷售了兩個完整季度的 MDDR，但客戶已經看到了直接且有影響力的好處，並且 MDDR 正在成為 SaaS 轉換中贏得新業務的關鍵驅動力。正如我們之前所說，我們相信 MDDR 是一個遊戲規則改變者，而我們只是抓住了這個機會的表面。我們討論的另一個推動因素是生成式人工智慧和大型語言模型的影響。這些主題仍然是我們與潛在客戶和客戶討論的首要考慮因素和關鍵主題。

The productivity benefits of GenAI are well understood and companies are rapidly starting to understand the related risks. As a reminder, the usage of AI makes it easier to create and access data which benefits employees but makes the job of an insider threat or outside attacker much easier. Generative AI tools utilize native access controls to determine which data is available to the identity and that is using the pump. These controls must be optimized or Generative AI tools will create immense risk for organizations, increasing the risk of cyber attacks. Varonis help organizations mitigate these risks, but ensuring that only the right people have access to the information that they need to do their job and monitoring what they do access either directly or through AI.

GenAI 的生產力優勢已廣為人知，公司也迅速開始了解相關風險。提醒一下，人工智慧的使用使得創建和存取資料變得更加容易，這對員工有利，但也使內部威脅或外部攻擊者的工作變得更加容易。生成式人工智慧工具利用本機存取控制來確定哪些資料可供身分使用以及哪些資料正在使用泵浦。這些控制措施必須進行最佳化，否則生成式人工智慧工具將為組織帶來巨大風險，增加網路攻擊的風險。Varonis 幫助組織減輕這些風險，但確保只有合適的人員才能存取他們完成工作所需的信息，並監控他們直接或透過人工智慧存取的資訊。

Once the bad actor bypasses perimeter control, Varonis can automatically lock out the compromised user or machine preventing damage from happening. In the third quarter, Generative AI is a small positive impact to our reported metrics. It is very early. So we are taking a measured approach with regard to our expectations around GenAI contribution to our results, but the behavior we are seeing from customers to give us additional confidence that we should see momentum grow is its adoption increases. With that, I would like to briefly discuss a couple of key customer wins in Q3.

一旦不良行為者繞過週邊控制，Varonis 就可以自動鎖定受感染的使用者或機器，防止損壞。在第三季度，生成式人工智慧對我們報告的指標產生了微小的正面影響。現在還很早。因此，我們對 GenAI 對我們結果的貢獻的期望採取了謹慎的方法，但我們從客戶那裡看到的行為讓我們更加有信心，我們應該看到其採用率的增長，從而推動增長。說到這裡，我想簡要討論第三季的幾個關鍵客戶勝利。

A large medical company became a Varonis customer this quarter. This organization is subject to many state privacy and data regulation and wanted to better protect its data after it suffered multiple ransomware attacks. They were focused on visualizing the risk automatically locking their data down and being able to monitor it as they continue to grow through M&A. They also wanted to ensure their data was protected when deploying Microsoft Copilot prior to bringing in Varonis, the team and successfully tried to lock down their data using the DLP solution. Our risk assessment revealed over 40% of the sensitive data was open to every employee, including 60,000 files shared with anyone on the Internet.

一家大型醫療公司本季成為 Varonis 的客戶。該組織受到許多國家隱私和資料法規的約束，並希望在遭受多次勒索軟體攻擊後更好地保護其資料。他們專注於可視化自動鎖定數據的風險，並能夠在通過併購不斷發展的過程中對其進行監控。他們還希望在引入 Varonis 之前部署 Microsoft Copilot 時確保其資料受到保護，團隊並成功嘗試使用 DLP 解決方案鎖定其資料。我們的風險評估顯示，超過 40% 的敏感資料對每位員工開放，其中包括與網路上任何人共享的 60,000 個檔案。

Ultimately, they purchased the Varonis SaaS hybrid package with MDDR, Varonis for Copilot, GitHub, Salesforce and databases. This will allow this customer to safely adapt Microsoft Copilot automatically reduce overexposures at scale and meet its regulatory requirement. We also saw continued strong demand with existing customers looking to convert the Varonis SaaS with MDDR protection. One example of this was a large insurance company that has been a perpetual license customer since 2015 using Varonis to audit user access activity for its on-plan Windows environment. This organization was looking to change their data classification vendor while locking down their overexposed data in the unmonitored Microsoft 365 environment.

最終，他們購買了包含 MDDR、Varonis for Copilot、GitHub、Salesforce 和資料庫的 Varonis SaaS 混合軟體套件。這將使該客戶能夠安全地適應 Microsoft Copilot，自動大規模減少過度暴露並滿足其監管要求。我們也看到現有客戶希望將 Varonis SaaS 轉換為具有 MDDR 保護的持續強勁需求。其中一個例子是一家大型保險公司，該公司自 2015 年以來一直是永久授權客戶，使用 Varonis 審查其計劃內 Windows 環境的用戶存取活動。該組織希望更換其資料分類供應商，同時在不受監控的 Microsoft 365 環境中鎖定過度暴露的資料。

Our risk assessment in Microsoft 365 identified trials with social security numbers that we're open to all employees. It also uncovered 10 terabytes of unlabeled files in OneDrive after paying to protect their data with their existing DLP and SIM vendors they ultimately purchase the Varonis SaaS hybrid package with MDDR and Varonis for databases in addition to automatically locking down their data at scale, Varonis MDDR will proactively monitor their hybrid environment. In summary, the sustained momentum that we saw from our SaaS platforms and MDDR this quarter leaves us excited as we head into the fourth quarter. we are confident in our ability to capitalize on the tailwind of MDDR or GenAI and increasing data-centric compliance regulation to capture our significant market opportunity. With that, let me turn the call over to Guy.

我們在 Microsoft 365 中進行的風險評估確定了對所有員工開放的社會安全號碼試驗。它還在OneDrive 中發現了10 TB 的未標記文件，在向現有的DLP 和SIM 供應商付費保護其資料後，他們最終購買了包含MDDR 和Varonis 資料庫的Varonis SaaS 混合軟體包，此外還自動大規模鎖定了數據，Varonis MDDR將主動監控他們的混合環境。總之，本季我們從 SaaS 平台和 MDDR 看到的持續勢頭讓我們在進入第四季度時感到興奮。我們對利用 MDDR 或 GenAI 的順風以及加強以數據為中心的合規監管來抓住重要的市場機會的能力充滿信心。接下來，讓我把電話轉給蓋伊。

Guy?

蓋伊？

Thanks, Yaki. Good afternoon, everyone. Thank you for joining us today. When looking at the quarter, this was our strongest performance across the business since embarking on the SaaS transition. These results reflect the strong adoption trends of Varonis SaaS and MDDR coupled with a small contribution from GenAI.

謝謝，亞基。大家下午好。感謝您今天加入我們。從本季來看，這是我們自開始 SaaS 轉型以來整個業務中最強勁的表現。這些結果反映了 Varonis SaaS 和 MDDR 的強勁採用趨勢以及 GenAI 的小貢獻。

Our performance this quarter gives us increased confidence as we look to close out the year, and our SaaS transition continues to gain momentum with SaaS now representing 43% of our total company ARR. We saw a strong contribution from both new logos and existing customer conversions, including conversions from perpetual maintenance customers and many of the secular tailwinds we have noted this year are continuing to have a positive impact on our business. Our enterprise business was the driver of our strong performance this quarter with strong new business activity healthy conversions and very early contributions from GenAI to our reported metrics. Our federal business, however, underperformed our expectations by several million dollars. We have decided to make changes to the management team of our federal business and believe those changes, coupled with our expectations to FedRAMP authorization next year will better position us to capture that market opportunity going forward.

我們本季的表現讓我們對今年的收官充滿信心，而且我們的 SaaS 轉型繼續保持勢頭，SaaS 目前占公司總 ARR 的 43%。我們看到新商標和現有客戶轉換的巨大貢獻，包括永久維護客戶的轉換，以及我們今年註意到的許多長期順風因素繼續對我們的業務產生積極影響。我們的企業業務是我們本季強勁業績的推動力，強勁的新業務活動、健康的轉換以及 GenAI 對我們報告指標的早期貢獻。然而，我們的聯邦業務的表現比我們的預期低了數百萬美元。我們已決定對聯邦業務的管理團隊進行調整，並相信這些變化，加上我們對明年 FedRAMP 授權的預期，將使我們能夠更好地抓住未來的市場機會。

Looking at the quarter in more detail. The key drivers were, again, SaaS and MDDR. Our SaaS platform and MDDR offering together eliminates the two biggest pushbacks of one, not wanting hardware; and two, not having the headcount to manage the platform or respond to alert. The automation of our SaaS offering, together with the simplicity of the story, continued to drive positive momentum and shorter sale cycle when compared to the on-prem subscription deal. As we have said for a few quarters, GenAI continues to come up in nearly every customer conversation, but this was the first quarter where it began to contribute to our results.

更詳細地了解本季。關鍵驅動因素仍然是 SaaS 和 MDDR。我們的 SaaS 平台和 MDDR 產品一起消除了兩個最大的阻力：一是不需要硬體；二是不需要硬體。第二，沒有足夠的人員來管理平台或回應警報。與本地訂閱交易相比，我們 SaaS 產品的自動化以及故事的簡單性繼續推動積極的勢頭並縮短銷售週期。正如我們在幾個季度中所說的那樣，GenAI 繼續出現在幾乎所有客戶對話中，但這是它開始為我們的業績做出貢獻的第一個季度。

We believe GenAI is still very early in the adoption curve, which keeps us measured in our expectations around the timing and sizing of its contribution to our results. This quarter gave us additional confidence that we should benefit from this tailwind as its adoption increases over time. The strong Q3 performance, coupled with our healthy pipeline allows us to raise our full year ARR guidance. Because it is still very early in its adoption, we're not assuming material GenAI contribution in our updated guidance. As we look ahead to the fourth quarter, we anticipate converting more customers to our SaaS platform.

我們相信 GenAI 仍處於採用曲線的早期階段，這使我們能夠衡量其對我們結果的貢獻的時間和規模的預期。本季讓我們更有信心，隨著其採用率隨著時間的推移而增加，我們應該從這輛順風車中受益。第三季的強勁表現，加上我們健康的產品線，使我們能夠提高全年 ARR 指導。由於其採用仍處於早期階段，因此我們在更新的指南中並未假設 GenAI 會做出實質貢獻。展望第四季度，我們預計將有更多客戶轉向我們的 SaaS 平台。

Pricing continues to be in line with our price list increase of 25% to 30% and in some cases, we see deal sizes increase in access of that as customers consume more of the platform upon conversion to SaaS. We expect that the ramp-up of this phase will not be linear and momentum should grow each quarter with SaaS conversion showing further acceleration in dollar terms in 2025 and 2026. In the third quarter, ARR grew 18% year-over-year to $610 million, and year-to-date, we generated $88.6 million of free cash flow which was up from $46 million generated over the same period last year. These metrics demonstrate our commitment to balancing top line growth with improving cash flow generation during the transition. Turning now to our third quarter results in more detail.

定價繼續與我們的價目表上漲 25% 至 30% 一致，在某些情況下，我們發現隨著客戶在轉換為 SaaS 後消耗更多的平台，交易規模也會增加。我們預計這一階段的成長不會是線性的，而且勢頭應該每季都會成長，SaaS 轉換在 2025 年和 2026 年以美元計算將進一步加速。第三季度，ARR 年增 18%，達到 6.1 億美元，年初至今，我們產生了 8,860 萬美元的自由現金流，高於去年同期的 4,600 萬美元。這些指標顯示我們致力於在轉型期間平衡營收成長與改善現金流產生。現在更詳細地討論我們的第三季業績。

As a reminder, the leading indicators of our transition are the three [North starts] ARR, free cash flow and ARR contribution margin. As we have said many times, the faster we progress through the transition, the more headwinds we will experience to our traditional income statement metrics, but we view these in a positive light. The macro environment remains stable, while SaaS and NPDR are resonating well, and we feel increasingly confident in the trajectory of the business following our third quarter results. Q3 total revenues were $148.1 million, up 21% year-over-year, reflecting our strong performance as well as a higher contribution from perpetual maintenance converting to SaaS. During the quarter, as compared to the same quarter last year, we had approximately a 5% headwind to our year-over-year revenue growth rate as a result of having increased SaaS sales in our booking mix.

提醒一下，我們轉型的領先指標是三個[北啟動] ARR、自由現金流和 ARR 邊際貢獻。正如我們多次說過的那樣，我們在轉型過程中取得的進展越快，我們傳統的損益表指標就會遇到更多的阻力，但我們以積極的眼光看待這些。宏觀環境保持穩定，SaaS 和 NPDR 產生了良好的共鳴，我們對第三季業績後的業務軌跡越來越有信心。第三季總營收為 1.481 億美元，年增 21%，反映出我們強勁的業績以及永久維護轉換為 SaaS 帶來的更高貢獻。在本季度，與去年同期相比，由於預訂組合中 SaaS 銷售額的增加，我們的年比收入成長率下降了約 5%。

which are recognized ratably versus the upfront recognition of our on-prem subscription products. In the third quarter, SaaS revenues were $57.8 million, Term license subscription revenues were $68.8 million, and maintenance and services revenues were $21.5 million as our renewal rates were again over 90%. We Maintenance and services revenues declined by 13% year-over-year, with the majority of the decline driven by perpetual maintenance customers converting to our SaaS platform. Moving down the income statement, I'll be discussing non-GAAP results going forward. Gross profit for the third quarter was $125.8 million, representing a gross margin of 85% and compared to 87.3% in the third quarter of 2023.

與我們的本地訂閱產品的預先認可相比，這些認可度更高。第三季度，SaaS 收入為 5,780 萬美元，定期授權訂閱收入為 6,880 萬美元，維護和服務收入為 2,150 萬美元，因為我們的續訂率再次超過 90%。我們的維護和服務收入年減 13%，其中大部分下降是由於永久維護客戶轉向我們的 SaaS 平台所致。向下看損益表，我將討論未來的非公認會計準則績效。第三季毛利為 1.258 億美元，毛利率為 85%，而 2023 年第三季毛利率為 87.3%。

Gross margin continues to be strong and the year-over-year change is due to the revenue headwind associated with a higher mix of SaaS sales increased headcount to support the transition and increased hosting costs. Operating expenses in the third quarter totaled $116.7 million. This includes approximately $6.7 million of acquired in-process research and development expenses within the R&D expense line due to a small asset purchase made during the quarter. As a result, third quarter operating income was $9.1 million or an operating margin of 6.1%. This compares to operating income of $4.9 million or an operating margin of 4% in the same period last year.

毛利率持續強勁，年比變化是由於 SaaS 銷售組合增加、支持轉型的人員數量增加以及託管成本增加帶來的收入逆風。第三季營運費用總計 1.167 億美元。這包括由於本季度進行的小額資產購買而在研發費用項目中獲得的約 670 萬美元的過程中研發費用。結果，第三季營業收入為 910 萬美元，營業利潤率為 6.1%。相較之下，去年同期的營業收入為 490 萬美元，營業利益率為 4%。

During the third quarter, as compared to the same quarter last year, we had approximately a 4% headwind to our operating margin as a result of having increased SaaS sales in our booking mix which are recognized ratably versus the upfront recognition of our on-prem subscription products. This quarter, ARR contribution margin was 15%, up from 11.1% last year. The significant leverage improvement even during the transition reflects our ability to drive strong incremental margins while growing ARR and transitioning to SaaS. During the quarter, we had financial income of approximately $9.7 million, driven primarily by interest income on our cash, deposits and investments in marketable securities. Net income for the third quarter of 2024 was $13.8 million or $0.10 per diluted share compared to net income of $10.4 million or $0.08 per diluted share for the third quarter of 2023.

在第三季度，與去年同期相比，我們的營業利潤率下降了約4%，這是由於我們的預訂組合中SaaS 銷售的增加，與我們本地部署的前期認可相比，這一銷售額得到了顯著的認可。本季，ARR 貢獻率為 15%，高於去年的 11.1%。即使在轉型期間，槓桿率也顯著改善，這反映出我們有能力在增加 ARR 和過渡到 SaaS 的同時推動強勁的利潤增量。本季度，我們的財務收入約為 970 萬美元，主要由現金、存款和有價證券投資的利息收入推動。2024 年第三季的淨利潤為 1,380 萬美元，即稀釋後每股收益 0.10 美元，而 2023 年第三季淨利為 1,040 萬美元，即稀釋後每股收益 0.08 美元。

This is based on $134.7 million and $126.7 million diluted shares outstanding for Q3 2024 and Q3 2023, respectively. As of September 30, 2024, we had $1.2 billion in cash, cash equivalents, short-term deposits and marketable securities, $332.3 million of which is included within long-term marketable securities. Our liquidity position also reflects $394.1 million of net proceeds from the successful issuance of convertible notes in early September, which strengthens our already healthy balance sheet. For the 9 months ended September 30, 2024, we generated $90.9 million of cash from operations compared to $49 million generated in the same period last year and CapEx was $2.3 million compared to $2.9 million last year. Turning now to our updated guidance in more detail.

這基於 2024 年第三季和 2023 年第三季分別為 1.347 億美元和 1.267 億美元的稀釋後已發行股票。截至 2024 年 9 月 30 日，我們擁有 12 億美元的現金、現金等價物、短期存款和有價證券，其中 3.323 億美元包含在長期有價證券中。我們的流動性狀況也反映了 9 月初成功發行可轉換票據的 3.941 億美元淨收益，這增強了我們本已健康的資產負債表。截至 2024 年 9 月 30 日的 9 個月，我們從營運中產生了 9,090 萬美元的現金，而去年同期產生了 4,900 萬美元，資本支出為 230 萬美元，而去年同期為 290 萬美元。現在更詳細地討論我們更新的指南。

For the fourth quarter of 2024, we expect total revenues of $162 million to $167 million, representing growth of 5% to 8%. Non-GAAP operating income of $20 million to $22 million and non-GAAP net income per diluted share in the range of $0.13 to $0.14. This assumes 135 million diluted shares outstanding, which includes 6.8 million shares related to the issuance of convertible notes maturing in 2029. For the full year 2024, we now expect ARR of $635 million to $639 million, representing growth of 17% to 18%. Free cash flow of $95 million to $100 million, total revenues of $554.4 million to $559.4 million, representing growth of 11% to 12%; non-GAAP operating income of $20.6 million to $22.6 million non-GAAP net income per diluted share in the range of $0.26 to $0.27.

2024 年第四季度，我們預計總營收為 1.62 億至 1.67 億美元，成長 5% 至 8%。非 GAAP 營業收入為 2,000 萬至 2,200 萬美元，非 GAAP 攤薄後每股淨利為 0.13 至 0.14 美元。假設稀釋後的已發行股票為 1.35 億股，其中包括與發行 2029 年到期的可轉換票據相關的 680 萬股。對於 2024 年全年，我們目前預計 ARR 為 6.35 億美元至 6.39 億美元，成長 17% 至 18%。自由現金流為 9,500 萬美元至 1 億美元，總收入為 5.544 億美元至 5.594 億美元，成長 11% 至 12%；非 GAAP 營業收入為 2,060 萬美元至 2,260 萬美元，非 GAAP 攤薄後每股淨利潤為 0.26 美元至 0.27 美元。

This assumes 134.9 million diluted shares outstanding. In summary, when looking at the quarter, this was our strongest performance across the business since embarking on the SaaS transition. This strength was driven by Varonis SaaS, the strong reception to MDDR and the secular tailwind benefiting our business. The growing demand for Roni is strengthening our ARR performance and cash flow generation. And these tailwinds position us to unlock meaningful value for our customers, our company and our shareholders.

假設稀釋後流通股數為 1.349 億股。總之，從本季來看，這是我們自開始 SaaS 轉型以來整個業務中最強勁的表現。這種優勢是由 Varonis SaaS、MDDR 的強烈歡迎以及有利於我們業務的長期順風推動的。對 Roni 不斷增長的需求正在增強我們的 ARR 績效和現金流產生。這些有利因素使我們能夠為我們的客戶、我們的公司和我們的股東釋放有意義的價值。

With that, we will be happy to take questions.

這樣，我們將很樂意回答問題。

(Operator Instructions). Matt Hedberg, RBC.

（操作員說明）。馬特‧赫德伯格，加拿大皇家銀行。

Yaki, there's a lot to unpack. It's hard to think about one question here, but I guess if I were to focus on one. I couldn't help but hear you talk about GenAI, although early positively impacting results. I guess I just wanted to put a finer point on what aspects of the portfolio are contributing to customer GenAI spending. And if we look forward another couple of years, I mean how do you think the products that attribute to GenAI spending could expand over time?

Yaki，還有很多東西要打開。在這裡很難思考一個問題，但我想我是否應該專注於一個問題。我忍不住聽到你談論 GenAI，儘管早期對結果產生了積極影響。我想我只是想更詳細地說明該產品組合的哪些方面對客戶 GenAI 支出做出了貢獻。如果我們展望未來幾年，我的意思是，您認為 GenAI 支出帶來的產品會如何隨著時間的推移而擴展？

Matt, so it's primarily now related to Copilot and you see it a lot on the 365. But eventually, obviously, you have unstanding sales growth and you have it for GitHub. I think that it's going to be part of every walk of life.

Matt，所以它現在主要與 Copilot 有關，您在 365 上經常看到它。但最終，很明顯，你的銷售成長驚人，而且 GitHub 也有這樣的成長。我認為它將成為各行各業的一部分。

The reality is that at the beginning, we saw just the smaller POCs in the hands of IT that immediately exposes the problem, the data security problem, you have this massive blast radius. But what we're starting to see now is that it's more knowledge workers are using it. And once they are using it, is just solving the problem becomes almost inevitable.

現實情況是，一開始，我們只看到 IT 人員手中的較小 POC 立即暴露了問題，即資料安全問題，以及巨大的爆炸半徑。但我們現在開始看到越來越多的知識工作者正在使用它。一旦他們使用它，解決問題幾乎就變得不可避免了。

So we just see that people get to a lot of critical data they don't need to get, generating a lot of critical data, they shouldn't generate outside of policy starting to just using the wrong intent, and it's just extremely dangerous in terms of losing the critical data. So at the beginning, it was on the POC stage, but now when knowledge workers are demanding it, and they are trying to buy it and you're just starting to hit critical mass within organizations that are using the product they generate a lot of urgency to buy protection for GenAI and Copilot mainly and it's just working extremely well for us. We just -- unbelievable solution to solve it automatically.

因此，我們只是看到人們獲取了很多他們不需要獲取的關鍵數據，生成了很多關鍵數據，他們不應該在政策之外生成，開始只是使用錯誤的意圖，這在以下方面是極其危險的：丟失關鍵數據的條款。所以一開始，它處於 POC 階段，但現在，當知識工作者要求它，並且他們試圖購買它時，你才剛開始在使用他們生成的產品的組織內達到臨界質量。購買保護，它對我們來說效果非常好。我們只是——令人難以置信的自動解決方案。

Hamza Fodderwala, Morgan Stanley.

哈姆扎·福德瓦拉，摩根士丹利。

Yaki, you and Guy teased this a bit with a lot of the Jenai contribution commentary, but didn't quite size the opportunity at least today. I know it's early innings, but we're seeing some of the problems in terms of over permissioning and data leakage with Copilot. You've had some customer case studies already where customers are using Varonis for there's GenAI readiness program with some of your partners like ePlus. So there seems to be some momentum there. I'm just curious if you're not willing to sort of give ARR revenue contribution today, what percentage of your pipeline would you say is GenAI related customers coming to you and trying to prepare themselves for this for GenAI going forward?

Yaki，你和 Guy 在 Jenai 貢獻評論中對此進行了一些調侃，但至少今天沒有充分把握機會。我知道現在還處於早期階段，但我們已經看到了 Copilot 過度許可和資料外洩方面的一些問題。您已經進行了一些客戶案例研究，其中客戶正在使用 Varonis 與您的一些合作夥伴（如 ePlus）進行 GenAI 準備計劃。所以那裡似乎有一些動力。我只是很好奇，如果您今天不願意做出 ARR 收入貢獻，那麼您認為 GenAI 相關客戶來找您並試圖為 GenAI 的未來做好準備，佔您的管道的比例是多少？

Hamza, we've been talking about Copilot for about a year now. This time is slightly different. I think you kind of noted that, and here's why. This quarter, we finally started to see some deals close. But as you said and as we've talked a lot about it, it's still early on, which is why we're not baking in any material amounts closing into our Q4 guidance.

Hamza，我們已經談論 Copilot 大約一年了。這次略有不同。我想你已經注意到了這一點，這就是原因。本季，我們終於開始看到一些交易完成。但正如您所說，正如我們已經討論了很多，現在還處於早期階段，這就是為什麼我們沒有在第四季度指導中投入任何實質金額。

But the fact that we started to see deals close this quarter gives us increased confidence that we should benefit as GenAI adoption increases. And as Yaki mentioned, it's not just around the Microsoft Copilot, it also includes the internally built LLMs, Salesforce, Einstein and others. When we look at the pipeline, it comes up really in every conversation with our customers. A lot of our customers are talking to us about it. But again, this quarter, we started to see some deals close, but it's still a very small amount and immaterial amount for the quarter.

但本季我們開始看到交易完成的事實讓我們更有信心，隨著 GenAI 採用率的增加，我們應該會受益。正如 Yaki 所提到的，它不僅圍繞著 Microsoft Copilot，還包括內部建置的 LLM、Salesforce、Einstein 等。當我們審視管道時，它確實出現在與客戶的每次對話中。我們的許多客戶都在與我們談論此事。但同樣，本季度，我們開始看到一些交易完成，但對於本季度來說，這仍然是一個非常小的金額且無關緊要。

But it's front and center in every conversation. We believe that over time, it will be inevitable that it will be in the hands of any knowledge worker, so just the productivity gains are tremendous. And once enough people are using it within the organization, just exposing many times the data security problem, the fact that data is overexposed. The fact that you can use these robots in malicious intent, and it's very, very dangerous. But we just -- we believe that it's going to be a big part of the future of IT, and we are well positioned to be -- to protect organizations and make sure that they can use it and secure it.

但它是每次談話的前沿和中心。我們相信，隨著時間的推移，它將不可避免地掌握在任何知識工作者的手中，因此生產力的提高是巨大的。一旦組織內有足夠多的人使用它，就會多次暴露資料安全問題，即資料過度暴露的事實。事實上，你可以惡意地使用這些機器人，這是非常非常危險的。但我們只是 - 我們相信它將成為 IT 未來的重要組成部分，而且我們處於有利位置 - 保護組織並確保他們可以使用它並確保其安全。

Saket Kalia, Barclays.

薩基特·卡利亞，巴克萊銀行。

To Matt's earlier point, a lot to unpack, particularly in GenAI, but maybe I could switch gears a little bit. Guy, I've gotten the question from investors just around how much of the net new ARR generally through this process has come from conversion. And of course, that isn't something that we disclose but I think that what a lot of people are trying to figure out is, how does demand look excluding that conversion activity. So is there a way that you can talk to us about that qualitatively. Just as we think about sort of base net new ARR next year plus any conversions plus a lot of the other good things that you talked about with GenAI.

對於馬特之前的觀點，有很多東西需要解開，特別是在 GenAI 中，但也許我可以稍微改變方向。夥計，我從投資者那裡得到了一個問題，即透過這個過程產生的淨新 ARR 通常有多少來自轉換。當然，這不是我們披露的內容，但我認為很多人試圖弄清楚的是，排除轉換活動後需求看起來如何。那麼有沒有一種方法可以讓您與我們定性地討論這個問題。正如我們考慮明年的基本淨新 ARR 以及任何轉換以及您與 GenAI 談論的許多其他好東西一樣。

Saket, I think one of the biggest misconceptions and we've talked a lot about this during a lot of the conversations that we've had with investors is this conception that the conversion, you just plug it in the Excel and it happens very quickly and very easily. When you look at what drove the momentum and the strength this quarter, it definitely came from the SaaS platform and the MDDR. We continue to see shorter sales cycles on SaaS and very strong new logo activity, which was really driven by the MDDR offering. And that's really because the SaaS value proposition eliminates the two biggest pushbacks of customers. And we've talked a lot about it, one being not willing to buy hardware and the second that they don't have enough people to support the solution.

Saket，我認為最大的誤解之一，我們在與投資者進行的多次對話中對此進行了很多討論，即轉換，您只需將其插入 Excel 中，它就會很快發生。 。當您查看本季推動勢頭和實力的因素時，您會發現它肯定來自 SaaS 平台和 MDDR。我們繼續看到 SaaS 的銷售週期更短，新標誌活動非常強勁，這實際上是由 MDDR 產品推動的。這實際上是因為 SaaS 價值主張消除了客戶的兩個最大阻力。我們對此已經討論了很多，一是不願意購買硬件，二是他們沒有足夠的人員來支持該解決方案。

The conversions -- without the conversions, we wouldn't have gotten to 43% of total ARR being SaaS or approximately $260 million, but the conversions take time and conversions are -- you have to talk about the legal elements of it with a customer, and it takes time to flip them. It's not a plug and play. But at the end of the day, it provides more value to our customers. That's why we do it. That's why our customers are buying SaaS and converting to SaaS.

轉化——如果沒有轉化，我們就不會達到 SaaS 總 ARR 的 43%，即大約 2.6 億美元，但轉化需要時間，而且轉化是——你必須與客戶討論其中的法律要素，並且翻轉它們需要時間。這不是即插即用。但最終，它為我們的客戶提供了更多價值。這就是我們這樣做的原因。這就是我們的客戶購買 SaaS 並轉換為 SaaS 的原因。

But at the end of the day, what drove the momentum this quarter and also last quarter, when you look at kind of the commentary that we gave last time, is the new logos, the MDDR offering, and that's really what's driving the business.

但歸根結底，推動本季和上季動能的因素是新商標、MDDR 產品，這才是推動業務發展的真正原因。

Brian Essex, JPMorgan.

布萊恩‧艾塞克斯，摩根大通。

Maybe Yaki, I think last quarter, we caught up in terms of talking about the transition, I thought you had a great analogy where I don't know if it was either you or guy talked about stage one of the transition with the [carrot] phase and then Phase 2 is the stick. And then you said that the carrot phase is going so well. You don't feel like you need to use the stick. Is that still the case? I mean, how much visibility do you have in that transition pipeline?

也許Yaki，我想上個季度，我們談到了過渡，我認為你有一個很好的類比，我不知道是你還是那個人談論了過渡的第一階段[胡蘿蔔] ] 階段，然後階段2 就是堅持。然後你說胡蘿蔔階段進展順利。你不覺得你需要使用棍子。現在還是這樣嗎？我的意思是，您對過渡管道有多少了解？

And how smoothly is it going for those existing customers that that you're converting over now, how much runway do you have left with those easier converts, if I can maybe put it that way.

對於那些您現在正在轉換的現有客戶來說，進展順利嗎？

In terms of the overall value proposition and our ability to get to outcomes, the SaaS is second to none. The reality is that bad actors, many times were not breaching in, they are logging in. And once you have an identity, there is no perimeter anymore, and we are your best bet. So data-centric -- data security platform is the first thing you need to do and the last thing that really will save you. So anytime our customers are just tasting the value, this automated -- the automated outcomes that we provide, it's just -- it's a game changer.

就整體價值主張和我們實現成果的能力而言，SaaS 是首屈一指的。現實情況是，很多時候，不良行為者並不是入侵，而是登入。一旦您有了身份，就不再有界限，我們是您最好的選擇。因此，以數據為中心——資料安全平台是您需要做的第一件事，也是真正能拯救您的最後一件事。因此，每當我們的客戶剛剛品嚐到價值時，這種自動化——我們提供的自動化結果，就是——它改變了遊戲規則。

You have stuff that's related with all the remediation robots the MDDR. We just released the MDDR and what we just catch on a weekly basis, it's mind blowing even to us and our ability to automate everything. And also with the way that we are covering more data and user repositories just elevate the whole value proposition. So once customers take it and understand just the regular value of high-quality SaaS architecture, but primarily these automated outcomes that can get to most of the value is literally doing nothing automatically, it generates a lot of appetite to do the conversion.

您擁有與 MDDR 所有修復機器人相關的內容。我們剛剛發布了 MDDR 以及我們每週捕獲的內容，這甚至對我們以及我們自動化一切的能力來說都是令人震驚的。而且我們覆蓋更多資料和用戶儲存庫的方式也提升了整個價值主張。因此，一旦客戶接受並了解高品質 SaaS 架構的常規價值，但主要是這些可以實現大部分價值的自動化結果實際上什麼都不自動執行，就會產生很大的轉換慾望。

One thing to add, and I think it's a very good question in terms of kind of the value proposition and kind of the commentary that we gave about the fact that many of our customers are asking for SaaS and wanting to switch to SaaS because it's a much better product. But if we take a step back for a second and when you look at kind of when we announced the transition, we're just under two years into the transition, and we expect to be at approximately 50% of the business coming from SaaS. That's a huge milestone for us. So when you look at kind of the progress that we have had through this transition, it's been extremely healthy. We're very happy with the progress that we are.

需要補充的一點是，我認為這是一個非常好的問題，無論是價值主張還是我們對許多客戶要求使用 SaaS 並希望轉向 SaaS 的評論，因為它是更好的產品。但如果我們退後一步，看看我們宣布轉型的時間，我們會發現我們的轉型不到兩年，我們預計大約 50% 的業務將來自 SaaS。這對我們來說是一個巨大的里程碑。因此，當你看看我們在這轉變中取得的進展時，你會發現這是非常健康的。我們對目前的進展感到非常高興。

And you noted correctly, we're doing that with significant generation of cash flow. So when you look at the free cash flow, upping our guidance and getting to levels that are very healthy. We're very happy with that. We think we can continue on that path and do better, but we're very happy with the progress we've had so far.

您正確地指出，我們正在透過大量產生現金流來做到這一點。因此，當您查看自由現金流時，會提高我們的指導並達到非常健康的水平。我們對此感到非常高興。我們認為我們可以繼續沿著這條道路走下去並做得更好，但我們對迄今為止所取得的進展感到非常滿意。

Joel Fishbein, Truist Securities.

喬爾‧菲什拜因 (Joel Fishbein)，Truist 證券公司。

Yaki, you mentioned on the call that the federal business underperformed. Just curious there, whether or not that was sort of self-inflicted execution or if there's something going on there. It's been a good area of business. I know you're still on track for FedRAMP. I'd love to get a little bit more color there.

Yaki，您在電話中提到聯邦業務表現不佳。只是好奇，這是否是一種自殘，或者是否有事情發生。這是一個很好的商業領域。我知道您仍在為 FedRAMP 做好準備。我很想在那裡多一點顏色。

I really appreciate it.

我真的很感激。

So that's a great question. I'll take that. The federal business did underperform by several million dollars. But let's keep things in perspective. That vertical accounts for mid-single-digit percentages out of total ARR.

這是一個很好的問題。我會接受的。聯邦企業的表現確實落後了數百萬美元。但讓我們正確看待事情。此垂直領域佔總 ARR 的中個位數百分比。

So when we look across the remaining 95% of the business, this was the best quarter we've had since the start of the transition and that momentum was driven by continued strength in the enterprise segment. If federal did what it was supposed to do, this would have been a picture-perfect quarter for us. So after several years of underperformance from the federal business, we decided to bring in a new management team. And we believe that these changes, coupled with the expectation for FedRAMP authorization next year will better position us to capture that market opportunity going forward.

因此，當我們縱觀其餘 95% 的業務時，這是我們自轉型開始以來最好的季度，而這一勢頭是由企業部門的持續強勁推動的。如果聯邦政府做了它應該做的事情，這對我們來說將是一個完美的季度。因此，在聯邦業務幾年表現不佳之後，我們決定引進新的管理團隊。我們相信，這些變化，再加上明年獲得 FedRAMP 授權的預期，將使我們能夠更好地抓住未來的市場機會。

Great. Thank you.

偉大的。謝謝。

Fatima Boolani, Citi.

法蒂瑪·布拉尼，花旗銀行。

Guy, I wanted to double back on an earlier question with respect to some of the conversion momentum that you're seeing in the base understand that it's not like flipping a switch, but I'm just curious to understand how much of your installed base has actually converted, and as a related matter, is your guidance for SaaS ARR mix for the full year at 48 still intact?

夥計，我想再次回答之前的一個問題，涉及您在基礎中看到的一些轉換動力，了解這不像翻轉開關，但我只是想知道您的安裝基礎有多少實際上已經轉換了，與此相關的是，您對48 全年SaaS ARR 組合的指導是否仍然完好無損？

So again, when we look at kind of where we are from SaaS out of total ARR, getting to 43% were definitely -- you can't get to that percentage without having existing customers converting our Q3 conversion was very similar in dollar terms to the Q2 conversion amount. So again, as the same commentary that we gave in Q2, the strength of the quarter came from new business, the MDDR and the fact that we're seeing shorter sales cycles on the SaaS offering. And when we look at kind of where we want to end, we talked about 48% kind of finishing the year. We're looking now to be in that 49% SaaS mix at the end of the year. And we think that even that metric gives us a lot of confidence to deliver in the same manner we've delivered on other metrics to (inaudible).

所以，當我們再看看 SaaS 在總 ARR 中的位置時，絕對達到 43%——如果沒有現有客戶進行轉換，你就無法達到這個百分比，我們的第三季度轉換以美元計算非常類似於Q2轉換金額。因此，正如我們在第二季度給出的相同評論一樣，本季的優勢來自新業務、MDDR 以及我們看到 SaaS 產品銷售週期縮短的事實。當我們考慮我們想要結束的地方時，我們談到了今年的 48% 的結束。我們現在希望在今年年底實現 49% 的 SaaS 組合。我們認為，即使是這個指標也給了我們很大的信心，可以像我們在其他指標上提供的相同方式來提供服務（聽不清楚）。

Roger Boyd, UBS.

羅傑·博伊德，瑞銀集團。

I know there's a variety of ways you're monetizing MDDR, but are we getting to a point where you might be able to quantify the size of that business? Or alternatively, any color you can give on the typical uplift you see to ACV when you do bring that into customer engagements?

我知道您可以透過多種方式透過 MDDR 獲利，但我們是否已經達到了您可以量化該業務規模的程度？或者，當您將 ACV 引入客戶互動時，您可以對 ACV 的典型提升給出任何顏色嗎？

Roger, one of the things that we've talked a lot about is our desire to be able to extract more dollars from our customers through the MDDR offering. It's part of a bundle, basically, and there are multiple ways to buy the MDDR. If you want to buy it separately without additional licenses that we have as part of the bundle, you will pay a higher price. But what we wanted to see and what is actually happening is that many of our customers are actually buying more of the platform and getting MDDR at a reduced price trust, it doesn't really matter. We want to provide the value, and we think that if they consume more of the platform, they get a much better value for money.

Roger，我們經常談論的事情之一是我們希望能夠透過 MDDR 產品從客戶那裡獲得更多資金。基本上，它是捆綁包的一部分，並且有多種方式可以購買 MDDR。如果您想單獨購買它而不需要我們作為捆綁包的一部分提供的附加許可證，您將支付更高的價格。但我們希望看到的以及實際發生的情況是，我們的許多客戶實際上正在購買更多的平台並以更低的價格獲得 MDDR，這並不重要。我們希望提供價值，我們認為如果他們使用更多的平台，他們就會獲得更好的性價比。

And at the end of the day, it allows us to increase our ASPs. So at the end of the day, everyone wins here. When we look at kind of the adoption of NDDR, we only had two full quarters. Don't forget, we introduced it at the beginning of the year. So January was the first time it was introduced to our sales force, is very well adopted by our customers, very well adopted by the sales force because it's a no-brainer.

最終，它使我們能夠提高平均售價。所以最終，每個人都贏了。當我們查看 NDDR 的採用情況時，我們只有兩個完整季度的時間。別忘了，我們在今年年初就推出了它。所以一月份是它第一次被引入我們的銷售團隊，我們的客戶很好地採用了，銷售人員也很好地採用了，因為這是理所當然的。

It helps on the sales cycles, it helps on the conversation, the value that is provided to customers is great. We haven't quantified it because we're providing a lot of color in terms of the numbers. And I think that MDDR at the end of the day needs to be with every single customer we have. We've talked a lot about that. It doesn't happen overnight, but at the end of the day, it's something that can help all of our customers.

它有助於銷售週期，有助於對話，為客戶提供的價值是巨大的。我們還沒有量化它，因為我們在數字方面提供了很多顏色。我認為 MDDR 最終需要惠及我們的每一位客戶。我們已經就此談了很多。這不會在一夜之間發生，但最終，它可以幫助我們所有的客戶。

Andrew Nowinski, Wells Fargo.

安德魯諾溫斯基，富國銀行。

I just want to get a better understanding of how you're defining a material impact from GenAI. I mean are you guys measuring it based on the number of new logo adds you get when they tell you they're buying Varonis for an LLM support? Or can existing customers that roll out in LLM also have an impact on your ARR. I guess I'm just trying to understand how you define a material impact and what that might look like.

我只是想更了解你們如何定義 GenAI 的實質影響。我的意思是，當他們告訴你他們要購買 Varonis 以獲得 LLM 支援時，你們是根據添加的新徽標數量來衡量的嗎？或者，在 LLM 中推出的現有客戶也會對您的 ARR 產生影響嗎？我想我只是想了解您如何定義物質影響以及它可能會是什麼樣子。

Well, thanks for the question. We are analyzing every POC, really looking at the pipeline and understanding very well. Historically, while customers and prospects are buying the product and many times, we just -- we see in what we call a risk assessment that when they're using Copilot is just exposing the problem in a big way, and we also see that our customers just many times expediting the purchasing process in lockstep with the intent to release the Copilot product to more and more knowledge workers. This is really how we see it. And before it was very contained in IT departments, but as time goes back just see that once they release it to a broader population, they need to understand that they must make sure that only the right people can access the right data.

嗯，謝謝你的提問。我們正在分析每個 POC，真正查看流程並非常了解。從歷史上看，雖然客戶和潛在客戶多次購買該產品，但我們在所謂的風險評估中看到，當他們使用 Copilot 時，只是在很大程度上暴露了問題，我們也看到我們的客戶多次加快購買流程，旨在將Copilot 產品發布給越來越多的知識工作者。我們確實是這樣看的。它之前被 IT 部門嚴格控制，但隨著時間的推移，一旦他們將其發布給更廣泛的人群，他們就需要明白，他們必須確保只有正確的人才能訪問正確的數據。

They need to be able to audit activity. They need to make sure that they maintain the queries themselves queries that make sense because if not these tremendous tools will pick a lot, a lot of damage.

他們需要能夠審核活動。他們需要確保他們維護的查詢本身是有意義的，因為如果不這樣做，這些巨大的工具將會帶來許多許多的損害。

One thing to add. When we look at kind of the Copilot, and we talked a lot about it, we have it as a separate SKU. We have it as part of the MDDR, and we've talked a lot about the fact that when customers have the Office 365, they have a lot of protection that can help them with the Copilot. The Copilot has additional functionality, but the true value in dollar terms is selling Copilot to new customers. And when we quantify materiality, we quantify it in dollar terms.

要補充一件事。當我們研究 Copilot 的類型時，我們談論了很多，我們將它作為一個單獨的 SKU。我們將其作為 MDDR 的一部分，我們已經討論了很多這樣的事實：當客戶擁有 Office 365 時，他們可以獲得很多保護，可以幫助他們使用 Copilot。Copilot 具有附加功能，但以美元計算的真正價值是將 Copilot 出售給新客戶。當我們量化重要性時，我們用美元來量化。

So when we looked at kind of the Copilot SKUs in -- sold in Q3, as a stand-alone, it didn't have a material impact. But as I said before, there is difference, and that was part of our prepared remarks. We did see deals closed that were related to Copilot in a way that gives us increased confidence that it will become a tailwind in the near and medium-term future.

因此，當我們查看第三季銷售的 Copilot SKU 時，作為獨立產品，它並沒有產生實質影響。但正如我之前所說，這是有區別的，這是我們準備好的發言的一部分。我們確實看到與 Copilot 相關的交易已經完成，這讓我們更有信心它將在近期和中期的未來成為一股順風車。

Joseph Gallo, Jefferies.

約瑟夫·加洛，杰弗里斯。

I appreciate the federal commentary earlier, but anything else to note on the overall business environment. And then just any expectations for 4Q budget for us? Just trying to understand your 4Q guide where net new ARR is relatively similar to your 3Q. So just trying to understand if there's anything else we should be aware of.

我很欣賞聯邦政府早期的評論，但關於整體商業環境還有其他需要注意的地方。那麼我們對第四季預算有什麼期望嗎？只是想了解您的第四季度指南，其中淨新 ARR 與您的第三季度相對相似。所以只是想了解是否還有其他我們應該注意的事情。

So when we look at the philosophy of guidance, that really hasn't changed, and that's why we didn't bake in any additional GenAI contribution. We've always been under kind of the assumption and our philosophy has always been that we don't bake in any positivity until we see it translate into data, and that's why we're kind of staying with the same philosophy for Q4. In terms of budget flush, it's not something that we've seen in the past. There is the regular seasonality within the business where Q4 is the largest quarter of the year, and we expect that to be the same this year. But we haven't seen any changes in terms of budget flush when we move to SaaS.

因此，當我們審視指導哲學時，它確實沒有改變，這就是為什麼我們沒有加入任何額外的 GenAI 貢獻。我們一直處於這樣的假設之下，我們的理念一直是，在我們看到它轉化為數據之前，我們不會注入任何積極性，這就是為什麼我們在第四季度堅持同樣的理念。就預算充裕而言，這是我們過去從未見過的情況。該業務存在一定的季節性，其中第四季度是一年中最大的季度，我們預計今年也將如此。但當我們轉向 SaaS 時，我們並沒有看到預算充裕方面有任何變化。

If we see anything, we'll obviously provide commentary post quarter.

如果我們看到什麼，我們顯然會在季度後提供評論。

Jason Ader, William Blair.

傑森·阿德，威廉·布萊爾。

I just wanted to see if you had any early thoughts on 2025. I know you're not providing any specific guidance, but just maybe can you help us think through the impact of the SaaS transition on 2025 relative to elements like revenue growth, operating margin and operating margin was down this year from last year, primarily, I would assume, from the SaaS transition will it stabilize, you think, in 2025? Could it go down more? And then on the revenue growth side, same thing. I mean, it actually probably outperformed probably what most people expected this year.

我只是想看看您對 2025 年是否有任何初步想法。我知道您沒有提供任何具體指導，但也許您可以幫助我們思考 SaaS 轉型對 2025 年相對於收入增長、營業利潤率和今年營業利潤率比去年下降等要素的影響，主要是，我認為，從SaaS 轉型到2025 年，它會穩定下來嗎？還能再跌嗎？然後在收入成長方面，同樣的事情。我的意思是，它今年的表現實際上可能超出了大多數人的預期。

But we're -- what are some guideposts for 2025? And how should we be thinking about that?

但我們 - 2025 年的一些指導方針是什麼？我們該如何思考這個問題？

So Jason, I'll start by kind of reemphasizing the three North Stars, which are ARR contribution margin and free cash flow. I think looking at regular standard financial statement metrics that relate to revenue and operating margin through a transition are very misleading because of the ratable recognition of revenue through SaaS versus the upfront recognition of the on-prem subscription -- so I would highly, highly, highly recommend not looking at revenue and the regular operating margin because it really is not reflective of anything within the business. So when I look at the ARR contribution margin, it was actually moving very nicely throughout this year. We're showing nice leverage compared to 2023. And when we look at kind of our commitment, we've talked about our desire to continue to grow, but also from an ARR contribution margin show improvement and generate more cash.

Jason，我首先要再次強調三顆北極星，也就是 ARR 邊際貢獻率和自由現金流。我認為，查看與轉型過程中的收入和營業利潤率相關的常規標準財務報表指標非常具有誤導性，因為透過SaaS 對收入的可評估確認與對本地訂閱的預先確認相對比——所以我非常非常，強烈建議不要查看收入和常規營業利潤率，因為它確實不能反映業務內的任何內容。因此，當我查看 ARR 邊際貢獻時，實際上今年它的變化非常好。與 2023 年相比，我們表現出了良好的槓桿作用。當我們審視我們的承諾時，我們談到了我們繼續成長的願望，而且 ARR 貢獻率也顯示出改善並產生更多現金。

And I think when you look at the free cash flow, generation, it's been progressing really nicely. We believe that, obviously, that's one of the essence of having a company want to generate healthy free cash flow. In terms of the 2025 color, we'll provide more color as we finish Q4. Obviously, Q4 is the largest quarter of the year. We're very focused, and we feel good getting into the quarter, and we'll provide additional color on 2025 as we see kind of the trends in Q4.

我認為，當你看看自由現金流、產生情況時，你會發現它的進展非常好。我們相信，顯然，這是公司想要產生健康的自由現金流的本質之一。就 2025 年顏色而言，我們將在第四季度完成時提供更多顏色。顯然，第四季是全年最大的季度。我們非常專注，進入本季度感覺很好，隨著我們看到第四季度的趨勢，我們將提供 2025 年的更多資訊。

But overall, we're entering Q4 with a strong pipeline and believe that we can do well.

但總的來說，我們在進入第四季時擁有強大的管道，並相信我們可以做得很好。

Rob Owens, Piper Sandler.

羅伯歐文斯，派珀桑德勒。

And just a quick one for me. I think you called out in your prepared remarks a small asset purchase that you made during the quarter. Could you elaborate on that?

對我來說只是一個快速的。我認為您在準備好的發言中提到了您在本季度進行的小額資產購買。能詳細說明一下嗎？

Yes. We bought just a small team of programmers that can help us accelerate our roadmap. We have just a lot -- we have many exciting new products and features in the roadmap, and this was just a shortening time to market. It's just a very small acquisition that help us accelerating (inaudible).

是的。我們只購買了一個小型程式設計師團隊，可以幫助我們加快路線圖。我們有很多——我們的路線圖中有許多令人興奮的新產品和功能，而這只是縮短了上市時間。這只是一次很小的收購，但可以幫助我們加速發展（聽不清楚）。

And just to give some color from the financial statement side. As Yaki said, we purchased (inaudible). So this is a small technological tuck-in. And as Yaki mentioned, helps shorten our time to market. From a cash flow perspective, the asset purchase at MAX totaled $6.7 million.

只是從財務報表方面給予一些說明。正如Yaki所說，我們買了（聽不清楚）。所以這是一個小小的技術整合。正如 Yaki 所提到的，有助於縮短我們的上市時間。從現金流角度來看，MAX 的資產購買總額為 670 萬美元。

And on the income statement, the full amount is expensed immediately. So you will see that amount of acquired in process research expense within the non-GAAP R&D expense line item. We don't expect any ARR or material expense because of the very small size of the asset purchase.

在損益表上，全額立即計入費用。因此，您將在非 GAAP 研發費用行項目中看到所獲得的過程中研究費用的金額。由於資產購買規模非常小，我們預計不會產生任何 ARR 或材料費用。

Joshua Tilton, Wolfe Research.

約書亞‧蒂爾頓，沃爾夫研究中心。

One for me, I guess, it's clearly a positive that you guys are calling out a contribution from GenAI. And I guess we can interpret that as Copilot adoption is possibly going a little bit more mainstream in the enterprise than it was maybe 12 months ago. And I guess my question is, it feels like prior to this AI hype cycle and thus want or need to adopt some type of Copilot strategy, you guys kind of lived on this very secluded island when it came to competition. I think part of the reason why we all loved the story is because there was really no competition for your core offering, especially when it was on-prem. And I guess my question is, as you see Copilot adoption become more mainstream, more customers want to deploy this technology, look for ways to secure their data.

我想，對我來說，你們呼籲 GenAI 做出貢獻顯然是一件正面的事情。我想我們可以將其解釋為，與 12 個月前相比，Copilot 的採用可能在企業中變得更加主流。我想我的問題是，感覺就像在這個人工智慧炒作週期之前，因此想要或需要採用某種類型的副駕駛策略，當談到競爭時，你們有點生活在這個非常僻靜的島上。我認為我們都喜歡這個故事的部分原因是因為您的核心產品確實沒有競爭，特別是當它是本地的時。我想我的問題是，隨著您看到 Copilot 的採用變得更加主流，更多的客戶希望部署這項技術，尋找保護資料的方法。

It just feels like the competitive landscape is getting increasingly more noisy. And I'm curious how you think about the fact that there are so many companies coming after the data security market, the data security opportunity as you head into 2025 and maybe how that changes the competitive positioning that you once had as an on-premise business.

只是感覺競爭格局變得越來越激烈。我很好奇您如何看待有如此多的公司追逐資料安全市場這一事實，以及進入 2025 年時的資料安全機會，以及這可能如何改變您曾經作為本地部署的競爭地位。

At this point, we see no change to the competitive landscape. We sell our products through POC. We analyze each and every one, and we know where we have competition. But what we do see is that there is just a lot of noise, a lot of awareness around data. Most data are -- most breaches are of data breaches and this whole notion that organizations spend an arm and a leg on security and constantly have breaches that are more sophisticated and attacking data, is just losing proposition.

目前，我們認為競爭格局沒有改變。我們透過 POC 銷售我們的產品。我們分析每一個，我們知道我們在哪裡有競爭。但我們確實看到的是，圍繞數據存在著許多噪音和很多意識。大多數資料都是——大多數洩漏都是資料洩露，而組織在安全方面投入了大量精力並不斷出現更複雜的洩漏和攻擊資料的整個觀念正在失去主張。

So I think that what you see is that data security becoming front and center and organizations understand that they need data security. It's a very complex problem to solve. And you have massive volumes of data with a lot of data stores and you need to integrate and you need to marry them with a lot of additional streams in order to really solve the problems to make sure that only the right people can access the data to understand if you have any abnormal behavior and to find critical assets. And this is something that we are experts in doing extremely well. But at this point, there is no change whatsoever to the competitive landscape.

所以我認為你看到的是資料安全成為首要和中心，組織明白他們需要資料安全。這是一個需要解決的非常複雜的問題。您擁有大量數據和大量數據存儲，您需要集成，並且需要將它們與大量附加流結合起來，以便真正解決問題，確保只有合適的人才能訪問數據了解您是否有任何異常行為並找到關鍵資產。我們是這方面的專家，在這方面做得非常好。但目前來看，競爭格局沒有任何改變。

Rudy Kessinger, D.A. Davidson.

魯迪·凱辛格，D.A.戴維森。

[Similar to Socket], I get a lot of questions from investors just on the conversions and contribution towards growth. Guy, you said in response to a question earlier, you converted about the same amount in Q3 as you did in Q2. If I look at the numbers here, the step down in your term and perpetual ARR was about $5 million higher Q2 to Q3 than Q1 to Q2. So it looks like from those numbers, you converted a good chunk more. So I'm curious how gross retention has been trending and how it was in Q3 versus Q2 and prior quarters just as you've started to lean into the conversion notion more of your existing customers.

[與 Socket 類似]，我從投資者那裡收到了很多關於轉換和對成長貢獻的問題。蓋伊，您之前在回答問題時說過，您在第三季的轉換金額與第二季的轉換金額大致相同。如果我看一下這裡的數字，您的任期和永久 ARR 的降幅比第一季到第二季高出約 500 萬美元。所以從這些數字來看，你轉換了很多。因此，我很好奇總保留率的趨勢如何，以及第三季與第二季和前幾季的情況如何，就像您開始更專注於現有客戶的轉換概念一樣。

When we look at our renewal rates, they're consistently over 90%. So we're happy with what we're seeing there. I can tell you that when you look at kind of the conversions, we have seen more conversions happen from our customers that own maintenance of perpetual. And that's part of the reason you're seeing that revenue increase because in a way, there's no headwind when you convert the maintenance of perpetual to SaaS. When you look at the maintenance and services line item, and when you look at the decline there, the majority of that decline in that line item is actually coming from conversion.

當我們查看我們的續訂率時，它們始終超過 90%。所以我們對在那裡看到的情況感到滿意。我可以告訴您，當您查看轉換類型時，我們發現更多轉換來自擁有永久維護的客戶。這就是您看到收入增加的部分原因，因為在某種程度上，當您將永久維護轉換為 SaaS 時，不會遇到阻力。當您查看維護和服務行項目並查看其中的下降時，會發現該行項目的大部分下降實際上來自轉換。

So when you look at our conversions, I think we're happy with customers converting. But again, I can't emphasize this enough. When you look at what drove the momentum in this quarter, it was new customers, it was the MDDR. We're very happy with what -- the way our new customers are adopting and the way our sales force is selling to new customers, and we saw growth in the new customers and very healthy dollar increase with our customers.

因此，當您查看我們的轉換情況時，我認為我們對客戶的轉換感到滿意。但我再次強調這一點。當你看看本季的成長動能的推動因素時，你會發現是新客戶，是 MDDR。我們對新客戶採用的方式以及我們的銷售人員向新客戶銷售的方式感到非常滿意，我們看到新客戶的成長以及客戶帶來的非常健康的收入成長。

Shrenik Kothari, Robert W. Baird.

史萊尼克‧科塔里 (Shrenik Kothari)，羅伯特‧W‧貝爾德 (Robert W. Baird)

So Guy, you mentioned about the upsized convertible notes offering and the strategic flexibility it provides. And with M&A being one potential avenue, right? And Yaki, please feel free to chime in. Any specific areas in your product portfolio or market segments that you might be eyeing that kind of align with your core data security focus. Specifically, would you be focusing on certain technologies that complement our existing offerings, expand overall reach, or kind of provide new capabilities, either in context of competitive dynamics or not, if you can just kind of provide some sense there.

蓋伊，您提到了擴大可轉換票據發行及其提供的戰略靈活性。併購是一種潛在的途徑，對嗎？Yaki，請隨意插話。您可能關注的產品組合或細分市場中的任何特定領域都與您的核心資料安全重點一致。具體來說，您是否會專注於補充我們現有產品、擴大整體覆蓋範圍或提供新功能的某些技術，無論是否在競爭動態的背景下，如果您能在那裡提供一些意義的話。

I think that we just built a very unique asset with this data security platform that can take all the activities, a lot of telemetry in business software production that provide the automated outcomes. And with that just opens up a lot of the logical extension. There is just a lot of meat on the bone to do very, very interesting things that provide a lot of value. We have great engineering organization and a lot of capacity there. But we also shoot business people, and we look at opportunities and we see something that makes sense to a good team that can help us accelerate our roadmap we will consider.

我認為我們剛剛透過這個資料安全平台建立了一個非常獨特的資產，該平台可以進行所有活動，以及商業軟體生產中的大量遙測，從而提供自動化結果。這樣就開啟了很多邏輯擴充。骨頭上有很多肉可以做非常非常有趣的事情，提供很多價值。我們擁有出色的工程組織和強大的能力。但我們也拍攝商業人士，我們尋找機會，我們看到一些對優秀團隊有意義的東西，可以幫助我們加快我們將要考慮的路線圖。

To add some more on in terms of the convert and kind of how we look at it. Obviously, our 2020 convert was coming due in August 2025. So we obviously didn't want to wait for the last minute and decided to opportunistically raise in a really favorable convertible market. But as Yaki mentioned, the convert really allows us to be more offensive as we've talked about the fact that our opportunity has never been bigger than it is today. But we did not think that doing a deal is a necessity to achieving our $1 billion ARR target.

在轉換和我們如何看待它方面添加更多內容。顯然，我們的 2020 年轉換將於 2025 年 8 月到期。因此，我們顯然不想等待最後一刻，並決定在一個非常有利的可轉換市場中機會主義地籌集資金。但正如 Yaki 所提到的，轉變確實讓我們更具進攻性，因為我們已經談到了這樣一個事實，即我們的機會從未像今天這樣大。但我們並不認為達成交易是實現 10 億美元 ARR 目標的必要條件。

Rather, this sets us up to grow at healthy levels way beyond the $1 billion of ARR with additional capital allocation flexibility. But I think that what's very important to note is that this allows us to look at slightly larger M&A, but nothing crazy or changing the risk profile of the business. So I just want to emphasize that.

相反，這使我們能夠以遠遠超過 10 億美元的 ARR 的健康水平增長，並具有額外的資本配置靈活性。但我認為值得注意的是，這使我們能夠考慮規模稍大的併購，但沒有什麼瘋狂的或改變業務風險狀況的。所以我想強調這一點。

There are no further questions at this time. I would like to turn the floor back over to Tim Perz for closing comments.

目前沒有其他問題。我想將發言權交還給蒂姆·佩爾茲 (Tim Perz) 發表結束評論。

Thanks for joining us today. We appreciate the interest in Varonis, and look forward to speaking with everybody at the conferences this quarter.

感謝您今天加入我們。我們感謝大家對 Varonis 的興趣，並期待在本季的會議上與大家交談。

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

再見。今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。