Shrenik Kothari: Yes. Thanks for taking my question. So Yaki, you touched up on Gen AI. I just wanted to double click. You said healthy leading indicators with respect to Gen AI, but adoption not expected to be measured as their companies are considering potential risk. And it looks like, of course, it’s data security at the center of it. And mostly Co-pilot adoption is kind of getting start due to security concerns. So it almost seems it should even further drive demand for you guys in the current stage of sort of pre-Gen AI adoption from a data prep and governance standpoint to help them arrive at a point where they can adopt Copilot. So just curious why the pipeline would not start kind of flowing through to deals already if you are offering what they need right now at this point of time, if you can please help us understand. Thank you.
Yaki Faitelson: Organizations are still in the very early meanings of how to use these AI based tools, the reality is in order to reap the productivity benefits of these new products, you need to make sure that you have data security in place, because if not, you could have horrible consequences, but it’s still doing it in a very measured way, they’re still testing. And we believe that once, it didn’t reflect in Q1 revenues, but it’s definitely starting to impact the pipeline, and we believe that over time, it has the potential to be a tailwind for the business.
Operator: Next question comes from the line of Junaid Siddiqui with Truist.
Junaid Siddiqui: Great. Thank you for taking my question. Just had a question regarding opportunities in the channel. Any particular areas of emphasis you’re focusing on, be it MSPs or SIs, as you transition to a predominantly SaaS company?
Yaki Faitelson: Well, we’re working with everyone, definitely a challenge-focused company. The one thing we see with our SaaS solution that it’s much, we’re reducing all the friction in the installation, in the time to value, ongoing value, the story becoming simpler, and the overall offering more strategic, so just more compelling to partner with us.
Operator: Next question comes from the line of Rudy Kessinger with D.A. Davidson.
Rudy Kessinger: Hey, thank you for taking my questions, guys. Guy, just I don’t know if you gave it earlier or not. I joined a little late, but can you share how much your existing ARR converted to SaaS this quarter, or just directionally, did you convert more or less in Q1 than you did in Q4?
Guy Melamed : We talked a little bit about it, but I’ll give you more color. When we look at the results in Q1, we were really happy with the conversions in Q1. They really helped us get to SaaS, where you look at SaaS coming 30% of total ARR, or where you look at the number. It’s actually $165.5 million. When we look at the metric itself, we didn’t talk about the actual dollar value of the conversions, because the metric you should focus on is SaaS ARR. That really measures the progress in completing the transition, which is one of our overarching goals. But SaaS ARR was very strong in Q1 and the existing customer conversions obviously played into that.
Operator: Next question comes from the line of Steven Schwartz with Wells Fargo.
Steven Schwartz: Hi, this is Steven on for Andy Nowinski, thanks for taking my question. I wanted to ask about your focus on new logos, maybe the role that MDDR can play into that. How much education maybe do you need to do to make that a driver of new logos and is it something that you’re thinking about?
Guy Melamed : It’s very clear that MDDR can help with new logos because it keeps the conversation very, very simple. When you go to a prospect and you’re talking about an SLA that assures Varonis will respond to a ransomware attack within 30 minutes, you get the customer’s interest. And in a way, the whole purpose of MDDR is to allow us to help the customer and protect them in a way that doesn’t require the same headcount that they had to have if we were selling them the on-prem subscription solution. So MDDR definitely fits within our offering in the simplicity and kind of doubles down on the SaaS simplicity that we had there. And that allows us to target new customers and I think that that story together with the way we structured the comp plan where reps in order to make real money need to focus there, I think that’s working really well.
Operator: Next question comes from the line of Joshua Tilton with Wolf Research
Unidentified Analyst : Hey, this is Patrick. I’m from Josh. Thanks for taking my question. Sort of piggybacking off of a few questions earlier around the healthy pipeline builds with respect to AI and sort of asking it a different way. Can you kind of talk about, and I know it’s early, but talk about the sales cycles you’re sort of expecting to see around the Copilot offering. Do you expect them to be sort of in line line with what you see with the rest of the business or potentially longer, as customers are sort of pushing off adoption of AI? Thanks.
