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The company sees machine identity as a top priority for customers and a significant opportunity. Pricing will be value-based and is still evolving. Competitively, SailPoint focuses on authorization (what a machine identity can do), which differentiates them from others who focus on authentication (keys and certificates), allowing for coexistence.

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CFO Brian Carolan revealed that the Machine Identity Security product, launched in October 2024, secured double-digit customers and contributed low-millions in ARR in Q4. He stated the current pricing is about one-third of a human identity. CEO Mark McClain added that customers see a coming "tidal wave" of AI agents, positioning SailPoint to address this emerging challenge.

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President Matt Mills explained that machine identity is a top customer priority and pricing will be value-based and is still evolving. CEO & Founder Mark McClain differentiated SailPoint's focus on authorization (what a machine can do) from competitors' focus on authentication (keys and certificates), suggesting potential for coexistence.

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Co-Founder, CEO & Chairman Bipul Sinha reiterated Rubrik's platform-first strategy, contrasting it with the tool-centric cybersecurity market. He explained the vision is to create a single platform for data and identity across enterprise, cloud, and SaaS environments. The goal is to provide a singular view of data security and ensure rapid recovery from inevitable attacks. This platform approach, which avoids cobbling together third-party tools, is central to maintaining leadership and giving customers peace of mind.

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CEO Bipul Sinha stated that Rubrik believes it has the right sales capacity in place to execute on its opportunity but remains vigilant for high-ROI investment areas. Regarding the channel, he said the company has the right partners in its major markets and is focused on deepening those existing relationships to build a larger ecosystem around the Rubrik platform, rather than expanding the number of partners.

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CFO Kiran Choudary highlighted the significant year-over-year improvement in subscription ARR contribution margin. He identified key future leverage drivers as increased sales force productivity, greater partner leverage, the natural leverage from a growing renewals base, and continued cost efficiencies in R&D through the use of global development centers.

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CFO Michael Scarpelli attributed the strong new customer additions to the groundwork laid last year when the company created a dedicated new logo acquisition team, a successful model now being replicated in EMEA. He also confirmed that both of the $100 million-plus contracts signed in Q1 were in the financial services vertical.

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CEO Sridhar Ramaswamy described the Microsoft partnership as broad and deep, noting that the specific OpenAI integration makes the models accessible within Snowflake's security perimeter—a critical feature for customers. This allows customers to build world-class applications using OpenAI models out-of-the-box without data leaving their environment. CFO Mike Scarpelli added that while it's too early to quantify the revenue impact, the company believes it will be impactful and represents potential upside to the current forecast, though it will take time to roll out to customers.

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EVP of Product Christian Kleinerman described the typical adoption pattern for Iceberg, where customers start with a small, incremental use case on an open format to validate engine interoperability before expanding to larger-scale deployments. This pattern is seen as a repeatable model.

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Chief Product Officer Lee Klarich responded that as AI makes attacks more novel, threat intelligence must evolve. He argued it will become less about sharing specific indicators of compromise (IOCs) and more about sharing attack techniques and approaches. AI-based protections, informed by this new type of intelligence, will be critical for defense.

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CEO Matthew Prince expressed satisfaction with the ongoing improvements in sales productivity, crediting the leadership of the go-to-market organization. He confirmed that sales capacity is expected to increase as new hires continue to ramp, highlighting the high caliber of candidates joining the company, which he believes will translate directly into future sales growth.

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CEO Matthew Prince noted that while the public sector continues to perform, it was less of a standout than in 2023. He believes the goodwill generated from securing U.S. elections for free will drive future growth. He confirmed they are building out the sales capacity with experienced leaders and are not currently constrained in the federal space.

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CEO Yaki Faitelson explained that MDDR is critical for preventing data breaches by providing a data-centric approach to security, forensics, and automated response. CFO and COO Guy Melamed added that MDDR, introduced just five quarters ago, has been the fastest-adopted platform in the company's history, with a belief that every customer will eventually adopt it for better protection.

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CFO and COO Guy Melamed clarified that while conversions weigh on the growth rate compared to new business, it's a manageable situation. He stated that Varonis has a healthy pipeline with many active conversations with existing customers about converting to SaaS and that the company feels very good about its position for 2025 on both new and existing customer fronts.

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CFO & COO Guy Melamed confirmed the federal business underperformed by several million dollars but contextualized it as a mid-single-digit percentage of total ARR. He stated that the rest of the business had its best quarter since the transition began. Due to several years of underperformance, the company has replaced the federal management team and believes these changes, along with expected FedRAMP authorization next year, will better position them for that market.

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CEO George Kurtz highlighted Charlotte AI's value in boosting security analyst efficiency, noting it's frequently attached to Falcon Flex deals. He shared an interesting finding that advanced Level 3 analysts are using it even more than the intended Level 1 analysts due to their skill in prompting. Kurtz emphasized that it is still 'early innings' for agentic AI, where CrowdStrike continues to lead.

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CFO Burt Podbere did not provide a specific number but confirmed that the company observed that Falcon Flex deal durations were 'slightly longer' than typical contracts, which he noted was an exciting trend.

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CFO Burt Podbere explained that the guidance methodology has not fundamentally changed and remains based on what the company can see. He noted the largest impact stems from the customer commitment package, which is expected to reduce revenue by $60 million in the second half, and this was prudently factored into both top and bottom-line guidance.

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CEO William Staples expressed excitement for the new CRO, highlighting his deep operational and analytical experience. He clarified that any changes are expected to be incremental, building on existing strengths. Current initiatives include incentivizing new customer acquisition, launching a new inside sales team, and expanding partner channels. He confirmed the team is aligned and the new CRO will help accelerate their existing plans.

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Co-Founder Sytse Sijbrandij asserted that the market is still in the "first inning." He argued that most enterprises still use a fragmented, DIY DevOps toolchain, and given the $40 billion market size, there is a massive opportunity for consolidation and growth.

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CEO Sid Sijbrandij stated that the search for a new sales leader has attracted high-quality candidates and praised the smooth interim transition under Chief Marketing and Strategy Officer Ashley Kramer. CFO Brian Robins reiterated that while growth remains the top priority, the company is committed to responsible growth and continues to increase operating leverage, as demonstrated by the quarter's results and raised guidance.

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Interim CFO Eric Prengel stated there is nothing abnormal about the Q4 renewal cohort. However, he reminded listeners that Q4 of the prior year (FY24) had a $15 million pull-forward of business that is unlikely to repeat, creating a tough year-over-year comparison for some metrics. He reiterated that the Q4 guidance prudently accounts for the Q1 commitment shortfall, fewer days, FX headwinds, and normalized consumption expectations.

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CFO and COO Janesh Moorjani explained that the new guidance fully reflects the impact of the deals that slipped in Q1. He stated that while corrective actions are showing encouraging signs, the company has incorporated 'prudent assumptions on deal closures' and is not assuming an immediate return to normal. The guidance builds in a multi-quarter period to resolve the execution issues, which he believes provides a solid foundation for the forecast.

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CEO Jay Chaudhry reported continued share gains in the federal market, highlighting that Zscaler now serves 14 of the 15 cabinet-level agencies. He sees a significant opportunity in defense and believes that any government push for cost reduction will be a positive catalyst, as the Zscaler platform helps agencies eliminate redundant security products and reduce complexity.

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CEO Corey Thomas responded that while the federal business is strategic and includes some key agencies, it was not a material factor for new business growth in the quarter or for the year. He indicated that the company has been doing precursor work and has certifications in place, with plans for a more aggressive push into the U.S. federal space starting next year.

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President and CEO Sumedh Thakar explained that TruRisk Eliminate is a compelling evolution of their successful Patch Management product. It adds mitigation capabilities without patching and asset isolation, addressing both technical and political challenges for customers. He noted that the product just rolled out to production this quarter and expects momentum to build early next year as it's offered as an upgrade to existing patch customers and a new option for those resistant to patching.

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CEO Amit Yoran explained that monetization for these new AI capabilities occurs primarily through increased usage and higher asset counts. He noted that while a few market-leading CNAPP vendors offer similar AI security, there is a significant gap between them and the rest of the market.

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Founder and CEO Gil Shwed acknowledged that the cloud business saw a more positive trend in the last few quarters after a challenging start to the year. He expressed pride in the modernized CNAPP product but admitted there is a 'big long road' to reach its maximum potential and that the judgment is still out on which cloud technologies will be the biggest winners for the company.

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