Varonis Systems, Inc. (NASDAQ:VRNS) Q4 2022 Earnings Call Transcript

Brian Essex : Hey great. Thank you. Good evening. Thank you for taking the question. Maybe my one question for Yaki, if you will. — it sounds like guidance is kind of on the conservative side if you’re modeling it kind of incremental deterioration and conversations with CIOs that we’re having indicate kind of more back half-weighted seasonality is they’re taking a cautious approach to spending this year. Could you help us understand what your conversations with customers are like with regard to spending intentions for the year? It sounds like your backlog is building quite nicely. And how to think about how they might be prioritizing data security within this, I guess, stratification of security spending that they have, what does that fall on the priority scale?

And are you just assuming deferrals into the back half of the year and then deterioration on top of that? Or what might your outlook be for like better-than-expected spending environment in the second half as it relates to customer conversations that you’re having?

Yaki Faitelson : Most of the customer security efforts — the objective is to protect the digital assets. And now we have this technological platform with the SaaS to be completely automatically. So you’re trying to solve something that is hard. Many times, they will postpone it. And what we see now is the SaaS, but still early stages. But we see that it’s much easier for us to get budgets, to show value and customers don’t need to put a lot of effort. So we believe that with time when the sales force will know how to sell it in the right way, the customer will understand it, we really reduced so much friction in every — in every step in the sales motion and in the value journey of our customers. So this is very exciting. The other thing that we sold historically is that many times, at hard times organizational setting and really analyzing and scrutinizing where they need to put the dollars, and we always benefit from it because you want to protect data.

And in this environment, after COVID, it’s very hard for almost — very easy for almost every organization, very easy to understand where the critical data and what we need to do with it. So where you have cynical data with a lot of collaboration, all the right directory services. So today, we can say, yes, on almost all the automation and the support almost all the critical data repositories on-prem and in the cloud. So I think that over time, we believe that there are — there is a high probability that more and more budget will come towards us because this is the problem that customers are trying to solve. And if you can do it automatically, it just should be a top priority for most of them. I see many customers, and I can tell you that data protection, protecting their digital assets is a top priority for almost every organization out there.