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01/10 19:42
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company reported strong financial performance with a 23% revenue increase and a record high free cash flow margin. Despite elongated sales cycles, the outlook improved in May, and Q2 ARR growth is expected to double. The $200 million share repurchase authorization signals confidence, while AI integration boosts average deal size by 25%. Challenges like macroeconomic factors and federal budget uncertainties are noted, but the strong pipeline and improved Q2 guidance suggest a positive stock price movement of 2% to 8% over the next two weeks.
Revenue $229 million, up 23% year-over-year. The growth was driven by strong demand across international markets, which grew 27% and represented 38% of quarterly revenue.
Total ARR $948 million, up 24% year-over-year. This growth reflects continued success with platform solutions across endpoint, cloud, data, and AI.
Customers with ARR of $100,000 or more 1,459, up 22% year-over-year, indicating strong platform momentum across all market segments.
Average deal size (ARR per customer) Expanded double digits year-over-year, highlighting platform momentum.
Remaining performance obligations $1.2 billion, up 33% year-over-year, driven by larger deal sizes and longer-term agreements.
Gross margin 79%, maintaining an industry-leading position.
Operating margin Negative 2%, improved over 4 percentage points year-over-year, driven by scale and cost discipline.
Free cash flow margin 20%, a record for the quarter, with a trailing 12-month basis expansion of 5 percentage points.
Cash, cash equivalents, and investments Increased to $1.2 billion, providing flexibility for growth and shareholder value.
New Product Launch: Introduced the unified cloud security suite, integrating multiple cloud security features into a single solution.
Product Innovation: Launched Purple AI Athena, the next evolution of Purple AI, aimed at delivering an end-to-end agentic AI platform for cybersecurity.
AI SIEM Offering: Achieved significant traction with AI SIEM solutions, addressing operational inefficiencies for large enterprises.
Market Expansion: Revenue from international markets grew 27%, representing 38% of quarterly revenue.
Customer Base Growth: Expanded customer base with a 22% increase in customers with ARR of $100,000 or more.
Federal Sector Growth: Achieved FedRAMP High authorization for multiple products, enhancing competitive positioning in the public sector.
Operational Efficiency: Achieved a record 20% free cash flow margin, demonstrating strong cash generation.
Margin Improvement: Operating margin improved over 4 percentage points year-over-year to negative 2%.
Longer Contract Durations: Customers are committing to longer-term agreements, indicating trust and satisfaction.
Strategic Shift: Transitioning from a product-centric sales approach to a platform sales strategy.
Investment Strategy: Announced a $200 million open-ended share repurchase authorization to enhance shareholder value.
Macro Economic Uncertainty: The company noted pronounced macro uncertainty in April, which impacted Q1 net new ARR. Although there were no project cancellations or lost deals, elongated sales cycles were observed as some customers paused their spending decisions.
Regulatory Challenges: There is near-term uncertainty around federal budget allocation and spending, which may affect deal timelines in the public sector, although the broader pipeline remains strong.
Competitive Pressures: The cybersecurity landscape is undergoing a transformation, with legacy tools becoming less effective. The company must continuously innovate to maintain its competitive edge against evolving threats and market demands.
Supply Chain Challenges: No specific supply chain challenges were mentioned, but the overall economic environment could imply potential risks in this area.
Customer Spending Behavior: The company is taking a more measured stance on full-year growth assumptions due to the impact of macroeconomic factors on customer spending behavior.
Revenue Growth: Q1 revenue growth of 23% with expectations of 22% growth for Q2 and full year revenue projected between $996 million to $1.1 billion.
Free Cash Flow Margin: Achieved a record free cash flow margin of 20% in Q1, with expectations to exceed operating margin for the full year by several percentage points.
Gross Margin: Maintained an industry-leading gross margin of 79% in Q1, with expectations to remain around 79% for Q2 and between 78.5% and 79.5% for the full year.
Operating Margin: Expected to be break-even in Q2, with a full year target of 3% to 4%, improving over 650 basis points compared to fiscal year 2025.
Strategic Initiatives: Launched PartnerOne program to enhance partner engagement and access to the platform, and achieved FedRAMP High authorization for multiple products.
AI Innovations: Introduced Purple AI Athena and Hyperautomation, enhancing the AI-driven capabilities of the Singularity platform.
Q2 Revenue Guidance: Expected revenue of approximately $242 million, reflecting a 22% growth.
Full Year Revenue Guidance: Projected revenue between $996 million to $1.1 billion, representing 22% growth.
Operating Margin Guidance: Reiterating expectation for operating margin to be between positive 3% and 4% for the full year.
Share Repurchase Authorization: Announced a $200 million open-ended share repurchase authorization to support shareholder value.
Share Repurchase Authorization: $200 million open-ended share repurchase authorization announced, reflecting confidence in long-term business trajectory and belief that current stock price does not fully reflect underlying fundamentals or future potential.
The earnings call highlights strong financial performance with 22% revenue growth, improved margins, and a raised full-year revenue outlook. Positive developments include strategic investments, robust AI and data solutions growth, and promising Flex deals. Despite lighter guidance due to macroeconomic factors, the overall sentiment is optimistic with stable net retention rates, strategic M&A plans, and no significant disruptions from competitors. These factors suggest a likely positive stock price movement.
The earnings call highlights strong financial performance with 22% revenue growth, record free cash flow margin, and a high gross margin. Strategic initiatives, such as AI innovations and the PartnerOne program, coupled with a significant share repurchase plan, bolster investor confidence. The Q&A section reveals positive analyst sentiment and potential growth from new offerings like Flex and Prompt AI. Despite some prudence in guidance, the overall outlook remains optimistic with continued growth and strategic partnerships, justifying a positive sentiment rating.
The earnings call summary reflects strong financial performance with 23% revenue growth and robust international expansion. The company shows promising AI integration and platform adoption, with a positive outlook for ARR and operating margins. The $200 million share repurchase authorization indicates confidence in the business. While Q&A reveals concerns about longer sales cycles, management expects improved trends and highlights competitive advantages in AI and cloud-native solutions. Overall, the positive financial metrics, strategic initiatives, and shareholder returns suggest a positive stock price movement.
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