SentinelOne, Inc. (NYSE:S) Q4 2023 Earnings Call Transcript

SentinelOne, Inc. (NYSE:S) Q4 2023 Earnings Call Transcript March 14, 2023

Operator: Good afternoon and thank you for attending today’s SentinelOne Q4 FY 2023 Earnings Conference Call. My name is Timea and I will be your moderator for today. It is now my pleasure to pass the conference over to your host, Doug Clark, Vice President, Investor Relations. You may proceed.

Doug Clark: Good afternoon, everyone and welcome to SentinelOne’s earnings call for the fourth quarter and fiscal year 2023 ended January 31. With us today are Tomer Weingarten, CEO; and Dave Bernhardt, CFO. Our press release and the shareholder letter were issued earlier today and are posted on our website. This call is being broadcast live via webcast. And following the call, an audio replay will be available on the Investor Relations section of our website. Before we begin, I would like to remind you that during today’s call, we will be making forward-looking statements regarding future events and financial performance, including our guidance for the first fiscal quarter and full fiscal year €˜24 as well as certain long-term financial targets.

We caution you that such statements reflect our best judgment based on factors currently known to us and that the actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, in particular, our annual report on Form 10-K and our quarterly reports on Form 10-Q. These documents contain and identify important risk factors and other information that may cause our actual results to differ materially from those contained in our forward-looking statements. Any forward-looking statements made during this call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future.

During this call, unless otherwise stated, we will discuss non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with Generally Accepted Accounting Principles. A reconciliation of the GAAP and non-GAAP results is provided in today’s press release and in our shareholder letter. These non-GAAP measures are not intended to be a substitute for GAAP results. The financial outlook that we have provided today excludes stock-based compensation expense, employer payroll tax and employee stock transactions, amortization expense of acquired intangible assets and acquisition-related compensation costs, which cannot be determined at this time and are therefore, not reconciled in today’s press release. And with that, let me turn it over to Tomer Weingarten, CEO of SentinelOne.

Tomer Weingarten: Good afternoon, everyone and thank you for joining our fiscal fourth quarter earnings call. We reported a strong close to the year and exceeded expectations across all key metrics, including ARR, revenue, gross margin and operating margin. We are delivering high growth with substantial margin improvement. Macroeconomic headwinds remain consistent, yet we achieved two significant milestones. We crossed $0.5 billion in ARR and our global customer base now exceeds the 10,000 mark. This is tremendous progress in terms of the scale and speed in which we achieved it. Our sites are much higher. These results reflect strong execution and competitive position across both endpoint and cloud security markets. We are a proven technology leader in all three major industry valuations, MITRE, Gartner Magic Quadrant and the top ranking in each Gartner critical capabilities for endpoint protection, signifying that SentinelOne is a top choice for businesses of all sizes and complexities.

Our technology is helping enterprises consolidate point solutions, realize better business outcomes and modernize their security stack to the power of machine speed automation. Our singularity platform is designed to be cost efficient in ways that incumbent solutions can’t match. Our platform breadth across endpoint, cloud, identity and data delivers best-in-class security and value for our customers and diverse growth opportunities for our business across multiple large TAMs. As always, please read our shareholder letter published on the Investor Relations website, which provides a lot more detail. On today’s call, I’ll cover three key areas: one, details of our quarterly performance showing outperformance on all key metrics, better execution and stronger competitive position; two, we are focusing our investments and roadmap in areas of key technology differentiation, large addressable markets and critical enterprise needs; three, I will discuss the broader demand environment.

We are committed to delivering high growth with continued margin improvement and long-term profitability. Let’s first turn the discussion to our quarterly performance. We delivered strong revenue and ARR growth driven by continued adoption of our singularity platform across endpoint cloud identity and adjacent solutions. For the full year, we achieved 106% revenue growth. Our teams executed beyond my expectations to close the year. We are taking market share and we significantly exceeded the Rule of 50 again in the fourth quarter. We have consistently combined rapid growth with meaningful margin improvement, showcasing strong unit economics and scalability of our business model. Our gross margin reached a new record and our operating margin expanded over 30 percentage points in Q4.

Overall, we have expanded operating margin by more than 25 percentage points year-over-year for six consecutive quarters. These are great results. I am proud of the dedication and hard work of Sentinels around the world, who make this sale possible. Q4 was one of our strongest quarters of win rates and new customer additions, including enterprises with ARR of over $1 million. We added nearly 750 new customers in the quarter and our total customer count grew about 50% year-over-year, exceeding 10,000. Keep in mind this is dramatically understated as we don’t count the customer service by our MSSP partners. Our customers with ARR over $100,000 grew 74% year-over-year. We added a record number of Global 2000 enterprises in the quarter, spanning major U.S. federal agencies, global financial institutions and technology pioneers for both endpoint and cloud footprints.

Putting this altogether, our ARR per customer continued to increase, showing our success with large enterprises and increasing adoption of our platform solutions. Existing customers are doubling down on their commitment and consolidating on our singularity platform. Our gross retention rate improved sequentially and net retention rate remained above 130%, driven by footprint expansion and module adoption. Singularity cloud is hitting exit velocity. We once again remained our fastest growing solution in Q4, followed by strong contributions from other adjacent capabilities like data retention, vigilance MDR and identity security. For the full year, our emerging capabilities represented over one-third of bookings demonstrating strong growth from both endpoint and adjacent solutions, providing another growth vector for the future.

Our partners supported go-to-market model continues to unlock meaningful scale and enhance our market position. We achieved another quarter of standout growth from our MSSP partners whose businesses are increasingly turning to managed security protection. Many of the leading MSSP providers have built successful practices on top of our singularity platform. We are also starting to see the early adoption of modules to the MSSP channel, adding another growth driver in this channel. Together, we are providing enterprise-grade protection to customers of all sizes. Let’s turn to the cloud security market and our success. Cloud Workload Protection is a critical enterprise need with a potentially unbounded greenfield market opportunity. The number of cloud workloads can easily surpass the number of employees at any enterprise.

The cloud security market has the potential to become even larger than the endpoint market over time. As enterprises are rapidly shifting workers to the cloud, rising cloud-based attacks are bringing awareness to this critical enterprise need. Q4 was our strongest ever quarter for cloud security. It contributed about 15% of our quarterly ACV and more than doubled quarter-over-quarter. The growth of our cloud work or protection solution is being propelled by rising customer adoption, multiple million dollar wins and critical competitive replacements. In the fourth quarter, the global Internet platform ripped out a competitive cloud security solution and replaced it with SentinelOne in a multimillion dollar one-to-one takeout. There were clear architectural shortcomings in the competitive solution.

It was breaking production services in Linux environments and was cost prohibitive due to their agents’ resource over consumption. The enterprise turned to SentinelOne for superior technology and experience. Singularity cloud has distinct security performance benefits and operational stability compared to our endpoint peers. In general, cloud is opening new customer opportunities for us regardless of endpoint incumbency. The growth potential is substantial. And I am excited to share that our partnership with Wiz, the leader in CSPM, will allow customers to get more comprehensive cloud protection through the addition of cloud security posture management. This combination creates a far superior cloud security offering more than any other single vendor on the market.

Let’s look at the broader competitive landscape. Q4 was one of our strongest quarters. Our overall win rates improved, including against large next-gen vendors. We are winning in a significant majority of competitive situations and our ASPs remained stable and we expect this trend to continue. We are focused on expanding our pipeline, leveraging our channel, and generating more at-bats. Let me share an example of a large financial institution that moved away from Microsoft to SentinelOne, a solid platform win where we help the customer consolidate point solutions across endpoint cloud and many other adjacent modules. After an unpleasant experience with technological limitations and high total cost of ownership, the customer realized the huge difference between expectations and outcomes.

After years of security gaps and difficult operability, the customer replaced Microsoft with SentinelOne. We were able to deliver broader coverage from a single platform. We see this time and time again. Customers most commonly select SentinelOne for leading security performance and breadth, ease of use and better platform value. Our AI-based security and unified data architecture provides performance benefits and a cost structure that allows us to remain highly competitive, enabling us to increase deal sizes and expand our gross margins, while consolidating costs and reducing complexity for our customers. Our competitive advantages also extend to our partner ecosystem. For years, we have taken a partner-friendly go-to-market approach, where we enable their business instead of competing against them.

This is especially important for strategic partnerships like MSSPs. We have architecturally designed capabilities that enhance these relationships like multi-tenancy, automation and role-based access control. We have cultivated an extensive and diverse network of channel partners that’s very hard to replicate. It’s not just a package design, but a true competitive technology moat. We are enabling our partners through thousands of accreditations and technical training and these initiatives drive more channel engagement, more deal registrations, larger pipeline and continue to expand the SentinelOne brand and platform. I want to be clear this is a large and competitive market, like many areas of security and software. It always has been. We continue to succeed with win rates and share gains.

We are addressing multiple large TAMs and opportunities for growth. Our customers value SentinelOne’s culture of trust and transparency, a philosophy we bring to every potential relationship. Positive customer experience and feedback cuts through any marketing noise and speaks for itself. We lead in Gartner peer reviews for both endpoint and cloud security, where we are recognized for capabilities, platform value and superior business outcomes. Let’s turn the discussion to our innovation and product roadmap. Superior technology is the foundation of how we help our partners and our customers build more resilient enterprises. The platform is only as good as the sum of its parts and we intend to remain best of breed in all aspects of our platform.

We are pursuing the most focused roadmap we have had as a company. It ensures alignment amongst customer needs, product development and go-to-market. In the new fiscal year, we are focusing on three core areas of innovation and product development: one, advancing our leadership in endpoint security; two, strengthening our cloud security advantage; three, expanding our platform capabilities and market opportunity. Why these? Each one represents a core area of technology differentiation, significant market expansion potential and addresses critical enterprise security needs. Our platform extends across endpoint, cloud, identity and data. This cuts across multiple growing TAMs that are likely to exceed $100 billion in the coming years. Our top priority is to ensure enterprises are secure and protected today and for the future.

Building upon 3 consecutive years of leading in the MITRE ATT&CK evaluations, we are committed to staying ahead of the threat landscape, adversaries and our competitors. Once again, Gartner recognized SentinelOne is a leader in the Magic Quadrant for Endpoint Protection Platforms. Our placement in the Magic Quadrant validates our go-to-market execution and vision of AI-based modern cybersecurity. More importantly, we are ranked the highest across all 3 customer use cases in the Gartner Critical Capabilities for Endpoint Protection Platforms. These top rankings emphasize our superior platform depth, breadth and relevance for organizations of every size, maturity and industry. We are delivering on our mission to be a force for good, fortifying customer defenses against the most sophisticated threats at machine speed.

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Our second area of focus is to extend our cloud security advantage. As I discussed, we achieved new highs in cloud security growth and large customer wins in Q4. These are sizable deals, including several multimillion dollar wins and can easily match or exceed the size of the endpoint deployment for these customers. Singularity cloud architecture, operational stability, resource efficiency and leading protection stand out clearly from the competition. We are in an excellent position to address the critical and rapidly growing greenfield opportunity. We are extending our cloud security advantage by combining forces with Wiz, the leader in cloud security posture management. Through this exclusive go-to-market partnership, we are combining two of the leading cloud security assets in the market and creating an unbeatable choice for enterprises delivering full coverage with end-to-end cloud security.

Our joint customer base and new prospects will benefit from having both singularity clouds, leading workload protection for real-time, runtime protection and Wiz’s leading posture management capabilities to detect and remediate misconfigurations across diverse cloud environments. And lastly, we will continue to expand the breadth of our platform capabilities, specifically around security data lake, identity security, and vulnerability management. Our platform approach helps enterprises consolidate point solutions and gain favorable total cost of ownership. These innovations will magnify our competitive advantage in the coming years. As one innovation example, we are the first and only security platform protecting multiple effect surfaces with a unified and fully integrated security data lake.

The ability to integrate all enterprise data in one place with a single pane of glass is critical for securing a modern enterprise parameter. This is the true evolution of XDR driven by superior cost performance and scale. Our fully integrated data architecture eliminates the need for multiple query languages and outsource SAM for logging solutions. This provides for superior outcomes and meaningful advantage over incumbent data analytics solutions. The impact is material, faster speeds, lower cost and easier to deploy and to use. Being first to market gives us an edge of our peers. We are just scratching the surface of a massive security data market opportunity ripe for disruption. Finally, let’s shift gears to the demand environment. We are committed to delivering high growth with continued margin improvement and long-term profitability.

Global economic conditions remain similar to last quarter. We continue to see customer cost consciousness and prudence around IT budgets, which has led to longer sales cycles and deal rightsizing. We expect these dynamics to continue. Customers are evaluating deals to ensure they are getting the best product and value at a rationale price. Fundamentally, the enterprise need for cybersecurity remains mission-critical. Our platform solutions, including endpoint cloud identity and security data are among the top IT spending priorities. Our AI-based security and platform approach allows us to be flexible in meeting diverse budgetary needs and deliver our customers a favorable cost of ownership, especially important in today’s environment. I am incredibly encouraged by our pipeline entering the year as well as our record pipeline generation so far in Q1.

Our pipeline has nearly doubled year-over-year. Most importantly, our win rates increased. We are seeing high retention and expansion from customers and our teams are executing well. We are focused on maintaining high growth and we expect to deliver 51% revenue growth this year. This puts us in the rare category of high-growth security companies, substantially outgrowing our industry and peers. We have also made tremendous progress on margin improvement in a short period of time. In Q4, we delivered record gross margin driven by increasing scale and data-enabled efficiencies. We completed the migration of our entire back end into dataset a couple of quarters ago. This gives us more control into our forward cost structure as we continue to scale and improve gross margins.

In addition, our significant operating margin improvement in Q4 clearly shows our agility and sharp focus on cost management. Looking ahead, we will remain dynamic by strategically investing in key growth areas and ensuring that our path to profitability does not deviate across different economic scenarios. We expect to deliver another year of significant operating margin improvement and continue our progress towards achieving profitability in fiscal year €˜25. Before handing the call over to Dave to discuss the details of our financials and outlook, I’d like to share progress on our recent initiatives undertaken to elevate execution and enhance team structures. As discussed last quarter, our focus as a team has been to elevate our execution and performance management.

These are important ingredients to scale the business. I am extremely pleased with improving execution of Sentinels, which is clearly demonstrated by our fourth quarter outperformance across all aspects. Our total employee retention is about 10% better than the industry average. This is also true if you just look at the sales organization at a subgroup level. This is no trivial during a time when our key competitors are instituting multiple rounds of layoffs. We have intentionally made enhancements and incorporated performance management into our operations and it’s already having a positive impact on our delivery, innovation roadmap and financial performance. Two quarters ago, we decided to unify the product and engineering organizations, consolidating the CPO and CTO roles under a single leader, Ric Smith.

This allows us to achieve better alignment and higher velocity. We strengthened our leadership in the past few quarters with several executive additions that bring scale, experience and technology expertise that spend beyond the endpoint market that are important for the future of SentinelOne. These are the right moves as we evolve from endpoint to a broader security platform, covering endpoint cloud identity and data. We strive to foster a productive and rewarding culture and our efforts to show results. Our Glassdoor ratings are near perfect at 4.9 and easily the highest among peers. I’m proud of SentinelOne being named as the best workplace and technology on Fortune’s U.S. ranking for 2022. Our people are some of the best in the business and are highly motivated.

In closing, the world is going to see change on geopolitical, economic and technological funds. Just think about the evolution of AI in the past few months. Right before our eyes, we’ve seen AI go significantly, unlocking massive opportunities across endless applications. AI is a tremendous disruptor, but all of us should be mindful of the benefits and risks of innovation. This puts massive power and influence in the hands of certain technology companies but also in the hands of those that seek to inflect harm. How that power is used is a choice. Left unchallenged, there can be serious and potentially dangerous externalities. Responsibility, good business practices and safeguarding operations are essential. We should also be mindful of the deep societal impact and widening gap in the evolution of the human mind, especially in an AI-assisted reality.

Coupled with the fragility of trustworthy information in the age of global social media, disinformation and deep rate technologies, AI can be used to undermine world order and shape false narrative that can severely disrupt our way of life. Inversely, AI can also be harnessed to help with cybersecurity and safety. This is why we’re using AI in a directed, structured and targeted way. From early on, we developed a fully automated AI-based security platform, integrating neural networks to serve a specific use case and function, combating cyber attacks and protecting our digital way of life is the force for good. We continuously work to evolve our models and provide cutting-edge capabilities to customers around the world while responsibly ensuring safety and ethics.

Our growth and innovation journey continues. I want to thank all Sentinels, our customers, partners and shareholders for their contributions and support. With that, I will turn the call over to Dave Bernhardt, our Chief Financial Officer.

Dave Bernhardt: Tomer, thank you. I’ll discuss our quarterly financials and provide additional context around our guidance for Q1 and fiscal year €˜24. As a reminder, all comparisons are year-over-year and all margins discussed are non-GAAP, unless otherwise stated. Our fourth quarter results exceeded expectations across the board. We delivered high growth and substantial margin expansion. Revenue grew 92% in the fourth quarter and 106% for the full year. Our ARR grew 88% to $549 million, crossing $0.5 billion, a significant milestone. Once again, we meaningfully exceeded the Rule of 50 in the quarter, indicating the strength of our competitive position and unit economics. Revenue from international markets grew 125% and represented 35% of revenue.

We are just beginning to tap into our global growth potential. Macro headwinds remained, yet we added net new ARR of $61 million in the quarter, reflecting sequential growth of 25%. Our ARR per customer increased sequentially, reflecting the continued momentum from large enterprises and a higher customer adoption of our platform, notably in cloud security. We continue to see a healthy mix of new customers and existing customer expansion. Existing customers are doubling down with SentinelOne as our gross retention rate improved sequentially. Plus our net retention rate remained north of 130%, well above our target of 120%, driven by strong subscription expansion and cross-sell of adjacent solutions. Expansion of our platform with existing customers and MSSP partners has proven to be durable and resilient, fueling a solid base of growth regardless of broader conditions.

Turning to our costs and margins. Our gross margin reached a new record of 75% in Q4, reflecting an increase of 9% versus last year. This demonstrates our tremendous progress within the past 12 months. It shows the success of our land-and-expand strategy and platform unit economics where we collect data once and enable more and more capabilities. It also underscores the importance and benefit from our fully integrated data analytics back end. Adjusted for certain non-recurring benefits, our Q4 margin was about 73.5%, up about 2 percentage points sequentially and above our guidance. These items included reconciliations and benefits of outstanding credits under a prior cloud hosting agreement. We recently signed a new agreement with one of our cloud hosting partners as a result of our increasing scale.

Going forward, we expect this new agreement to enhance cost efficiency and support further margin improvement in fiscal €˜24 and beyond. Looking at the rest of our P&L, we delivered 31 percentage points of operating margin improvement year-over-year to negative 35% in Q4. This marks the sixth consecutive quarter of over 25 points of margin improvement. On a dollar basis, we also reduced our operating losses sequentially in Q4. For the full year, we achieved 36 percentage points of operating margin improvement. Our focus on cost discipline continues to show meaningful progress towards our profitability targets. Moving to our guidance for Q1 and the full fiscal year €˜24. In Q1, we expect revenue of about $137 million, reflecting growth of 75% year-over-year.

For the full year, we expect revenue to be between $631 million and $640 million, reflecting annual growth of 51% at the midpoint. We expect the macro-related uncertainties to persist for the full year and a conservative view on revenue and ARR expectations is prudent in today’s environment. We have the raw materials to deliver against Q1 and our full year targets. Our pipeline has nearly doubled year-over-year, and throughout Q1, we’ve continued to build pipeline at a record pace while elevating our brand. We are winning with new customers and our existing customers continue to adopt more licenses and broader platform capabilities. We’re encouraged by the diverse and large growth opportunities in front of us. Turning to the outlook for margins.

We’ve taken a major step forward as a company, moving closer to our long-term gross margin target of 75% to 80% or higher. We’re benefiting from data efficiencies inherent in our business model and our platform approach. We expect Q1 gross margin to be about 73.5%, a slight increase compared to steady-state Q4 levels and over 5 percentage points of year-over-year expansion. For the full year, we expect gross margin to be between 73.5% and 74.5%, up about 2 percentage points year-over-year at the midpoint. We expect benefits from our increasing scale and improving data processing efficiencies to continue. Finally, for operating margin, we expect negative 41% in Q1, implying an improvement of over 30 percentage points year-over-year. For the full year, we expect operating margin to be between negative 29% and negative 25%, an improvement of about 22 points at the midpoint compared to fiscal year €˜23.

We’ve made significant investments in innovation and talent over the past few years. This gives us ample runway to deliver against our product road map and growth targets. We expect to benefit from operating leverage as we moderate headcount growth and continue to unlock more productivity in fiscal year €˜24 and progress towards profitability. We don’t intend to sacrifice growth or market share. Our investment approach will remain highly selective and focused on key areas of competitive strength. We will remain dynamic and are committed to delivering on our margin improvement regardless of how the broader macro environment unfolds. We have and will continue to pace our investments with our growth. We have a very strong balance sheet with $1.2 billion in cash, cash equivalents and investments and no debt.

That’s substantial. As a note, our exposure to Silicon Valley Bank’s insolvency was immaterial, and we have no financial risks associated with them. Our balance sheet provides us with the durability, flexibility and the path to generating positive cash flow. Our goal remains to deliver positive free cash flow by the end of the year, subject to global economic conditions. And we remain committed to balancing compelling top line growth with consistent margin improvement and to our goal of achieving profitability in fiscal year €˜25. In summary, our Q4 performance was a strong end to a strong fiscal year €˜23. We expect to continue to outgrow the market in fiscal year €˜24 while progressing towards profitability. We’re addressing multiple large markets, providing multiple vectors for future growth and success.

Thank you all for joining us today. We can now take questions. Operator, can you please open up the line? Thank you.

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Q&A Session

Operator: The first question comes from Brian Essex with JPMorgan. You may proceed.

Brian Essex: Hi, good afternoon. Thank you for taking the question. Dave, I was wondering if you could dig in a little bit into the gross margins. I caught you that there were some adjustments there. I think investors this quarter were a little bit concerned about what they heard was increased pricing competition or competitiveness on a pricing front. Could you maybe unpack that a little bit? How much of this gross margin is credit? It looks like even backing out adjustments? It was still pretty robust, which would kind of refute any kind of pricing pressure commentary out there? And then how do we think about that from a €“ I guess, from a scale over data migration efficiency perspective with regard to your guidance for next year? Thank you.

Dave Bernhardt: I don’t know where the narrative about the pricing pressure. We hear it a lot, but we’re really not seeing it. We had stable average selling prices during the quarter. And in terms of the percentage, I guess, of €“ if we want to call it a reconciliation at the end of the existing €“ or end of the prior contract as we signed the new one, we had to reconcile some usage against the credits that we earned under the existing contract. That was a little less than about 1.5 points. Obviously, that would have put us around 73.5% margin on a steady-state basis, which is the low end of what we’re guiding for Q1 and the low end of what we’re guiding for next year. So we’re looking at this as the ability to continue our expansion of gross margin. 73% to 74.5% is getting a lot closer to the 75% that we’ve given everyone is a long-term forecast.

Operator: Thank you. The next question comes from Trevor Walsh with JMP Securities. Your line is open.

Trevor Walsh: Great. Thank you for taking my question. Appreciate it. Tom, regarding the partnership with Wiz, can you give us a little color around €“ you mentioned kind of some go-to-market partnership or kind of strategies there in both kind of new logo and current customers. Can you give us a sense of the current overlap between the two customer bases and is the kind of initial low-hanging fruit to basically sell into your respective kind of non-overlapping accounts and then go after new logos? Just maybe just give us some color on how you see that playing out. And then maybe for Dave, as a follow-up, is that baked into the guidance at all around kind of how you guys are looking at that partnership and heading into FY €˜24? Thanks.

Tomer Weingarten: Of course. It’s a great partnership. It’s something that allows us to deliver end-to-end cloud security from the security posture management, which obviously Wiz is one of the best companies out there and for us on the workload protection side, where we deliver on-time protection for workloads of any kind. So it’s a great complementary capability set. In terms of the go-to-market element of it, obviously, there is a high degree of non-overlapping customers, which is why we’re very excited about the partnership. It’s a two-way partnership, which means that Wiz can resell and take our best of breed worker protection to their customer base, and we can take their leading CSPM capability set into our customer base, which I think on both ends is highly penetrated on each other’s offerings.

I mean obviously, we’re seeing great success with our workload protection platform. They are enjoying massive success with their CSPM product and solution. So to us, I mean, this is just a great marriage of two adjacent capabilities that both customer sets are looking for. And again, it’s completely reciprocal.