Sanjay Mirchandani: Yes. And Howard, Sanjay here, it’s quite honestly, it’s still early to quantify in dollar terms, the impact, but we’re very, very positive about it from what we see as the pipeline builds. I’ll give you some, I’ll just give you an anecdotal point of view. The number of conversations I’ve had with security teams and CISOs since we launched on November 8th has been unprecedented. We’re seeing really deep dives on the fact that what we call shift right, our ability to really take the customer journey and make sure that protection and then resilience are at the core of how they think about cyber recovery is key. And we’re having deep conversations, proof of concepts more than we ever have because we’ve been able to really bring to light the completeness of the platform.
Howard Ma: Thanks guys, really exciting stuff. Thanks.
Sanjay Mirchandani: Thanks Howard.
Operator: Your next question comes from the line of James Fish with Piper Sandler. Your line is open.
James Fish: Hey guys, great quarter. Just building off the last few that we’ve asked around cyber resiliency strength. Look, I know it can be hard to really parse out, but what percentage of customers are buying the cyber, buying for cyber-security use cases at this point or what’s really the exposure to cyber budgets rather than kind of the traditional backup and recovery? How often is a chief information security officer, for example, in the room as you guys are in that final pitch?
Sanjay Mirchandani: Hey Jim, it’s Sanjay. I just sort of touched on that in the previous Howard’s question. We’re seeing a lot of security conversations. And by the way, this wasn’t our first foray into security. We’ve had security in our product for a long time. Last June, we announced a series of innovations and then we followed it up in November and we continue to follow that up now. Data, even before cyber resilience, data protection without information security was pointless. There was nothing there. So we had security built into our overall data protection platform, which we’ve extended end to end with our cyber resilience capabilities. Okay, let me give you an example. And I’ve said this for a long time, data protection and data security are merging and I think they’ve officially come together.
So if you’re recovering from a breach or a threat or an attack and you’re recovering data, you can’t just blindly bring data back. You have to make sure that you’re threat scanning that data for any vulnerability that may have been, that may have been added since you backed up, okay, or new in the environment. So threat scanning, which was a typical security shift left capability is completely integrated with recovery capabilities. So that’s what we’ve been doing. And so it’s very hard to sort of segregate and say this is security versus this is protection. It is resilience. And we’ve been doing this for a while. I mean, yes, customers may talk to us and say, hey, we want to talk about data protection, but it’s really with light of the fact that the threat that they’re protecting against the cyber.
So it’s all one platform, one capability.
James Fish: Makes sense, Sanjay, I appreciate that. And Gary, you had mentioned, you guys are looking to invest on the go-to-market side. Just can you elaborate a little bit more on the details there, how many heads should we be looking for you guys to add in this upcoming quarter in order to hit those objectives? Is it going to be mainly on the inside sales team or looking more at the kind of field. Thanks guys?
Gary Merrill: Yes, thanks, Jim, and good morning. Yes in some of my prepared remarks, I had to talk about investment. So I think foundational to what Sanjay and I have always talked about, it’s about profitable and responsible growth. So that’s all, that is our foundation. But as I look at it in the next year, some of the investments that we’re starting to make is to really be able to capitalize on the growth opportunity that’s in front of us. We’re seeing the world of cyber resilience come together to give us this amazing opportunity to hopefully accelerate growth. And with that does require some level of investment. And it’s more about making sure that we continue to generate the demand around cyber resilience, make sure that we are targeting the right buyers and the decision makers that can help drive the decisions related to cyber resilience.
And more and most importantly, continue to make sure we have the right resources and campaigns around accelerating our SaaS model. What some of these investments require is that alignment, especially into the partner ecosystem. So if I look at the partner ecosystem, there’s really three key pieces that we’re focused on. Number one is hyperscalers. We’re starting to see some great acceleration with hyperscalers. We did the largest amount of revenue ever through marketplaces this quarter. And we want to capitalize on that momentum. It’s also building out the MSP route, especially with our SaaS focused product. And third is a lot of these large transformational cyber projects are totally integrated with the GSIs and Lines. Okay, so if you’re trying to think about some of the areas that are important to us to capitalize on the growth, they’re the key areas we’re focused on.
James Fish: Makes sense, great quarter guys.
Gary Merrill: Thank you.
Operator: Your next question comes from the line of Rudy Kessinger with D.A. Davidson. Your line is open.
Rudy Kessinger: Hey guys, thanks for taking my questions and I’ll add my congrats to what looks like a great quarter, some really good numbers here. On SaaS, a growth re-accelerated last quarter a bit, sustained this quarter at 77% SaaS ARR growth. The net new SaaS ARR is just really impressive. Could you talk about just when you look at the growth in Metallic quarter-over-quarter, just what percent of that new SaaS ARR is coming from cross sales versus new customers? And also, do you have any conversions in there yet? Or is it still mostly true organic ARR growth?
Gary Merrill: Hey, Rudy, thanks Gary. Good morning and nice to hear from you today. One of the key things that we look at to relate to SaaS is how we look at sequentially from an ARR basis, okay? And hitting the 152 million ARR, the sequential growth we had from last quarter to this quarter with an old pipeline. So in a numerical, we had the highest sequential increase in SaaS ARR, which is shows to the acceleration we’re seeing in the as-as-a-service delivery model. Okay? And it’s a combination of two things as you highlighted. One is, I’ll call our lane and expand, new business. And we’re still seeing the majority of that from upsell. Okay? Upsell meaning more of the same workloads, our primary workloads. We’re starting to see the cross-sell start to commit, but it’s still relatively less than the additional workloads of similar functionality.
Now, in introducing with the new cyber resiliency offering, we’re setting ourselves up for that cross-sell opportunity as we get into the next fiscal year. So we look the next fiscal year for that. But the key driver on the 125% NRR has been upsell. The other key piece though is the maturing renewal cycle and driving to really strong gross removal rates. So we’re doing a very good job of now maturing and having a fully mature renewal cycle as well. So those pieces are help driving that momentum.
Sanjay Mirchandani: And Rudy, Sanjay, I think you didn’t directly ask the question, but new customers, part of our land, a new customer acquisition, momentum with our SaaS workloads is growing in the hundreds every quarter. And the attach, the cross-sell of software with SaaS is actually quite something we appreciate and are working on because, which is also testimony to our single platform strategy as customers move to the hyper cloud. So they start with one workload and then quickly move into a data center based workload because you may have products that you want to back up in a different way in the data center. So not only do we look at cross-sell within the SaaS offers, but also cross-selling between software and SaaS and having a single platform with the capabilities we have enables that hybrid journey for customers. So they can start anywhere either in the cloud or on premise and then go both ways. That’s a key differentiator for us.
