Dynatrace, Inc.
Q4 2021 Earnings Call Transcript

Published: 12 May 2021

[Operator:]

Hello, and welcome to the Dynatrace Fourth Quarter and Fiscal Year 2021 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Noelle Faris, Vice President of Investor Relations. Please go ahead.

[Noelle Faris:]

Great, operator. Good morning everyone and thank you for joining Dynatrace's fourth quarter and fiscal year 2021 earnings conference call. With me on the call today are, John Van Siclen - Chief Executive Officer and Kevin Burns - Chief Financial Officer.

[John Van Siclen:]

Good morning everyone. Thank you for joining us today. I am pleased to report that we had another quarter of strong execution, exceeding guidance across all our key operating metrics. ARR was $774 million up 35% year-over-year. Subscription revenue was $183 million, an increase of 35% year-over-year. And unlevered free cash flow was $86 million for the quarter bringing full year unlevered free cash flow to $237 million dollars or 34% of revenue. These continued strong results were driven by the ongoing combination of solid new logo additions to the Dynatrace platform, the ongoing expansion of existing customers and an inherently efficient business model allowing us to deliver a sustained balance of growth and profitability. Encouragingly, we're starting to see signs of stabilization in the vertical markets most heavily impacted by the pandemic. These previously challenged verticals are once again investing in their digital transformation journeys. Our ability to successfully navigate through this past year is a testament to the resilience of our value proposition, our commitment to customer success and our incredible team. I want to take a moment to thank them, our 2,800 employees worldwide for their focus diligence and teamwork throughout this past fiscal year. Their talent, attitude and customer-first mindset are key to what makes Dynatrace such unique and strong company. The strength of our Q4 and year-end results as a baseline and solid outlook and fundamentals to build on as we go forward, we will be setting guidance for fiscal 2022, which, Kevin will provide more detail on shortly.

[Kevin Burns:]

Thank you, John and good morning to everyone. As John mentioned, we delivered another great quarter across the board, driven by strong ARR performance well above our guidance range. The Dynatrace team has done a tremendous job executing in a challenging year. As you know, we believe ARR is the key performance metrics of the overall strength and health of the business. ARR was up $201 million over last year, ending the fiscal year at $774 million. This represents 35% year-over-year growth or 32% in constant currency. Excluding the perpetual license headwind which negatively impacted ARR by $19 million or 3 percentage points, our adjusted ARR growth rate was 38% on an as reported basis and 35% on a constant currency basis. As we have communicated, the building blocks for ARR growth continue to be the combination of new logos and our net expansion rate. We continue to see momentum and new logo additions exceeding our expectations from a few quarters ago and well above the 9% growth rate last quarter. We added 173 new logos in the fourth quarter, representing 19% growth over the 145 new logos we added in Q4 of last year.

[Operator:]

Our first question today is coming from Bhavan Suri from William Blair. Your line is now live.

[Bhavan Suri:]

Thank you everybody and congratulations. That was just a strong, strong finish there. I guess I wanted to touch a little on the sale investments and the partner investments and maybe this is for, John here but -- but as you think about, you're accelerating sales investments to 30% growth in headcount, you're increasing the partner investment. I'd like to -- how you're balancing a two because obviously one feels more profitable than the other one and the partners do the pushing of the sales process and you're brought in kind of at the end. And then, the second piece is how does the drive because that is going to be 30% growth in sales plus partners means that potentially ARR could grow well north of 30%, so love to hear how you think about that?

[John Van Siclen:]

Sure, Bhavan. And thank you for the comments there. So the combination of investments, they really do go hand in hand. We don't look at partners as necessarily a separate channel. We see it as augmentation to our go-to-market approach, whether they are the ones that source an opportunity or we do, we work hand in hand to make sure that we do sort of the right thing for our customer base. Remember, our customer base are the largest companies on the planet, $1 billion plus companies, so they pretty much always have someone in there helping them with their digital transformation. So, we see it sort of hand in glove and the combination actually driving greater momentum and productivity for our sales organization. And you're right in that, if we do our job right and we execute well that we have an accelerant ahead of us. It's yet to -- yet to pay off in that manner, but we're working hard at it and see some great opportunity ahead.

[Bhavan Suri:]

Understood. And just I appreciate the color.

[Kevin Burns:]

I'm sorry, Bhavan, just to jump in right, in terms of the tailwinds to productivity as I think about in the next couple of years as you mentioned, there is the 30% quota capacity, there is the partner program which we're investing in which is great. We've also came off the conversion program and I think this is the first quarter where we saw some tangible results there and also something we've talked about historically as well as the maturing of the sales organization and we've seen a nice improvement over the last 12, 18, 24 months of reps that have been here for a longer period of time, which we believe can deliver higher productivity over time. So all those we believe are good tailwinds to the business and support long-term sustainable ARR growth.

[Bhavan Suri:]

That's really helpful. I want to follow on that but next question for you guys about the ServiceNow relationship, you want to share the productivity improvements that we create. But I do want to close on ServiceNow. ServiceNow, you've had a great partnership and obviously you do a ton of work for Bill McDermott and other company when this previously -- where you were instrumental in supporting that, they entered the observability space. Just give your thoughts in terms of did that change in relationship. How you are thinking about that, what does that mean, because that was a great sort of somewhat unique partnership you have with ServiceNow.

[John Van Siclen:]

I know it's a good question and I'm sure timely question on people's minds. Our relationship with ServiceNow has really been in the field with joint customers and those joint customers need our platforms to work extremely well together and that's where our focus has been and that's why sort of pulled us -- pulled us together. The fact that they added a little bit of sort of observability sort of a future piece part tool, it will make sense for them, they need to be relevant inside cloud, they are outside looking in at the moment. So, it makes sense that they would try to get into a conversation there not in yet. But as far as our relationship, our platform is much larger and much more strategic to customers than sort of a piece part add on. So I don't really see any change to the relationship with service now in the field as we go forward.

[Bhavan Suri:]

Thanks. Great, thank you, gents. And congrats, again, on solid results.

[John Van Siclen:]

Thank you.

[Operator:]

Thank you. Your next question today is coming from from Barclays. Your line is now live.

[Unidentified Analyst:]

Thank you and congrats from me as well. And on a slightly is similar topic, John, you mentioned in the quarter and it's really nice to see how you guys kind of move on to the top right and that kind of distancing yourself from the other guys, but you also saw like some of the newer entrants Kind of coming up here, can you just, for our benefit, help us understand a little bit where they might be playing versus you are playing in that broader space to get a little bit of differentiation to me from our checks, it seems more without winning the enterprise and someone comes more on low-end but like just help me understand that a little bit better. Thank you.

[John Van Siclen:]

That's the right observation, we've been clear since sort of IPO and actually years before that we were going to focus ourselves on what are more challenging customers, bigger and more scalable problem set, which we excel at. So we focus on that global 15,000 and we consistently win in that world. There are other entrants that enter sort of in the departmental or SMB markets, some excelling in those -- in those markets, but that's really a quite a different -- different market space. In our world, the combination of observability with automation and AI assistance, you know, it's a critical intersection. There is no way to deal with the volume velocity and variety of data explosion, the dynamic orchestration of these multi-cloud environment, frequency of change, you know, of multiple DevOps teams. Without some level, in fact, sophisticated levels of automation and so that's really setting us apart giving us fuel. You can see it in our numbers, you can see it in the new logo growth, the expansion growth that combination resonates with these large enterprise class customers. So we're happy with where we are, we appreciate Gartner's support for the unique value proposition that we bring to the market and we see a lot of great opportunity ahead with this combination and then continuing to fuel it. As I said in my prepared remarks, with the continuous innovation engine that we have that's just rolling the long like crazy right now.

[Unidentified Analyst:]

Okay, perfect. Thank you. And then, one follow-up and more for Kevin maybe, as we start the New Year like and your investments are increasing on the sales and marketing side, et cetera. Anything we should be aware of in terms of field structure as the year starts to kind of get more the logo driven or change in the sales force a little bit, anything on that side. Thank you.

[Kevin Burns:]

We've been doing some minor adjustments along the ways but at the end of the day, we're an enterprise sales organization with a named account strategy and that will be complemented by our partner program as well. So our goal is just making sure we're hired at all levels of the organizations, from the VPs to VRDs, account down to the account executives and scaling these things out globally. So no fundamental changes, it's more of the same, albeit at a better -- at a faster clip hopefully going into fiscal '22 here.

[Unidentified Analyst:]

Perfect, congrats.

[John Van Siclen:]

Thank you.

[Operator:]

Thank you. Our next question today is coming from Gray Powell from BTIG. Your line is now live.

[Gray Powell:]

Great, thanks for taking the question and congratulations on the strong results.

[John Van Siclen:]

Thank you.

[Gray Powell:]

Maybe starting off on just sort of the obvious side, I mean you all had a very good fiscal '21. I think you beat your initial ARR guidance by over 10%. At the same time you talked about how 15% to 20% of your business was from highly exposed industries. So, is it possible to quantify what you think was the headwind from COVID even if it's just a ballpark number of last year. And then, and then how should we think about the slope of recovery within those that impacted customer cohort. Thanks.

[John Van Siclen:]

Sure. Kevin, why don't I start and if you want to put any, you now, a little bit of quant on it because we have quanted it a little bit during the year. So from the challenged verticals where they were -- there were more challenge in the first half than the second half. And as I said in my remarks, we're starting to see a recovery of those verticals as they prepare for sort of re-emergence into growth verticals going forward. And with that, software is one of the first things everyone invests in to make sure that the most efficient, most agile, and more scalable, they can be. The last thing they want is a fumble on their, sort of, re-emergence from the pandemic. So that's what we're starting to see. It's encouraging and we look forward to having a full set of global verticals and governments investing in digital transformation in 2022 and beyond. Kevin, any point you want to add.

[Kevin Burns:]

Yes, just in terms of our results this year, obviously, as John mentioned in Q2 was the strongest -- was the quarter where we are most heavily impacted from a COVID headwind and that was about 3 to 4 points is the way we sort of frame that at the time and then going into Q3 that number got cut in half and going into Q4, it reduced as well. So there still is a little bit of a headwind, but as John says companies are starting to ramp back up and making those investments and we sort of think at this point, it's somewhat immaterial in terms of the headwind to the businesses, which is why we're not breaking it out as one of those tailwinds or headwinds to growth going forward.

[Gray Powell:]

Understood. That makes a lot of sense. Okay, thank you very much.

[Operator:]

Thank you. The next question is coming from David Hynes from Canaccord. Your line is now live.

[David Hynes:]

Hey, thanks guys, congrats on the strong results. John, I wanted to ask, look, obviously the plans are in place to accelerate sales investment that's awesome. I'm going to be greedy, I'm going to ask why not more, right. I mean do you think the market could support faster sales investments and I'd be curious to get your thoughts on kind of the gating factors there, just about operationalizing a larger team, or is there more to it.

[John Van Siclen:]

No, it's a great question, we ask ourselves out of all the time as well, but I talked about this before. In order to operationalize sales expansion, it takes a superstructure. It takes onboarding, it takes operations for sort of measurement, productivity improvement, assurance that the bodies you're adding are actually turning into quota capacity and so we've stepped up from the 20% range to 25%, we're now 25% to 30%. We see line of sight to be able to do that with the investments we've made in the sales structure as well as the partnerships because that's pretty key as well. Same thing with marketing opportunity development. So we have the building blocks in place that we didn't have maybe a year ago, to be able to step up to 30% and once we hit 30 and we're doing well and scale on that, we'll be -- we'll be talking about 35%. So it's a prudent approach. I think to scaling the sales operation.

[David Hynes:]

Yes, makes sense. Maybe I can follow up with a different competitive question, Bhavan asked about ServiceNow. I want to ask you about Splunk. I know you've talked about having lots of joint customers in the past, I'm curious what you're hearing there as they expand into observability, I mean obviously lots of work for them to do in terms of getting the product together, but I'm curious how you see that playing out. I mean do you think they'll try and be price disruptive. I know they're not a core competitor today but would love any thoughts.

[John Van Siclen:]

Yes. So we really haven't seen a change in the -- in the market environment or any of the conversations with our customers over the last really two years since they've been acquiring companies and I think their recent announcements of their observability cloud is just sort of a repackaging of what they've already been talking about. So, not sure what's -- what's going on over there, and sort of how they're putting things together, but I will say that the customers that we talk to and as you point out, many are sort of have Splunk platforms in as well. They really value the automation and AI assistance that we bring because they know they have a real-time massively scalable cloud challenge in front of them and a suite of tools is not going to cut it. So I like our differentiation whenever Splunk gets sort of their focus together, who knows, but like I said, I think the market is moving more toward us and away from just a simple observability play certainly at the enterprise level.

[David Hynes:]

Yes, very helpful. Thanks guys and congrats, again.

[John Van Siclen:]

Thank you.

[Kevin Burns:]

Thank you.

[Operator:]

Thank you. Our next question today is coming from Matt Hedberg from RBC. Your line is now live.

[Matt Hedberg:]

Hey guys, thanks for taking my questions. Hey John, hearing you talk about maintaining 30% growth over the long time is certainly impressive and I guess part of that thesis I think is continuing to kind of diversify away from APM and last quarter I think you noted 40% of your customers or may be nearly 40% were using infrastructure on non-full-stack workloads. I'm wondering, can you comment on how that might trend this year and then I guess sort of importantly why have you been so successful cross-selling outside of APM?

[John Van Siclen:]

Well, so there are several things going on at that at the same time that are actually helping us giving us a bit of a tailwind. One of them is that the conversations that we're having with customers are less about APM, less about a layer and more about the whole full stack observability approach which is perfect for us because that's what we rebuilt and reinvented our platform around, a full-stack approach, logs, metrics, user experience, topology et cetera. So it's a perfect for us. Perfect conversation and I think that's accelerating the multi-module approach, and we'll continue to do that this year. I mean the fact that we have 35% of our customers now with 3 plus modules is something that I see as continuing to penetrate that customer base whether we take it to 45% or 50%, not sure this year, but it's certainly a key part of our focus. I think the other part of this is that once we relieved the sales organization of conversions, we were able to really step them up and focus them on cross selling, and I think you see that in the numbers this year. I mean, obviously we're maintaining great and healthy net expansion rate and I see that continuing as well. And with the innovation engine adding a few more modules to that portfolio, that's all goodness as well for that multi-module cross selling. So I think you're going to see more of the same, the sales organization is doing a great job absorbing the additional functionality and customers are looking forward to it. I mean the centering of our platform around AIOps capabilities really unifies all these modules into a very powerful combination. So, yes, we look -- we look forward to '22 and beyond and we really do feel like we're in a good place and we're riding a lot of great market momentum at this moment; so we'll keep it out.

[Matt Hedberg:]

That's great. Certainly seems evident to us as well. And I guess, Kevin, you always do a good job of outlining sort of some of your building blocks assumptions for ARR and there's been a lot of focus on NRR and obviously on your kind of your quarter capacity adds this year, but I think you added about 20%. You grew your customer base by about 20% last year, I guess -- I'm wondering sort of within your ARR guide, what is sort of your assumption on customer adds this year, do you think you might grow that -- grow that base even more than you did last year.

[Kevin Burns:]

So, I'd break it into two components. One is when we just look at the new logo additions, last year we added about 584 to new logos to the business and what we've talked about in the call is adding another 15% to 20% and frankly we're hopeful internally that we can overachieve that. So that would be the on the positive side to adding to 2,900 customer base. From a churn standpoint, we still have a couple of hundred customers who are single module, very small customers that came over the last couple of years from some of the -- primarily from some of the conversion programs that we did and if you add up those customers, I think it's the total number is around 300 customers, of the 2900 customers, it represents less than $10 million of ARR, I think it's in that $7 million to $8 million range of ARR. So, I think you will see some of that churn. We will certainly try to make sure that those -- some of those customers become platform customers, but if they don't, Matt, we're going to churn those out and frankly just sort of refocus our energies on more what we believe would be more strategic opportunities. So long way of saying, take the 2,900, you add the new logos that are going to come in over the next 12 months and then there will be some churn component related to that single module non-strategic customer base that has a very low ARR . Hopefully that helps.

[Matt Hedberg:]

Yes, no, that's super helpful. Congrats from me as well on the results, that's very strong.

[John Van Siclen:]

All right. Thank you, Matt.

[Operator:]

Thank you. Our next question today is coming from Andrew Nowinski from D.A. Davidson. Your line is now live.

[Andrew Nowinski:]

Great, thank you. So a couple of questions. I think you mentioned that the ARR per customer increased $260,000 in Q4. Can you just talk about maybe more specifically which modules might be driving that increase and then I have a follow-up. Thanks.

[John Van Siclen:]

Sure. Well, we don't break it out every quarter all the different pieces, but obviously we land in a full stack APM mode in the modern clouds because you need that application, infrastructure, network, logs, metrics, trace, topology, kind of combination in order to really understand how the apps are working in dynamic multi-clouds. So that's still the landing zone. But from an expansion standpoint, it's still a combination of the infrastructure only like extending the Dynatrace platform beyond the full-stack host unit environments to try to get that additional visibility and AI assistance across a wider footprint. So that's continuing to expand within our customer base and the digital experience elements as well where customers, the pandemic really forced a lot of our customers to understand their remote customer pace better because they couldn't interact with them in any other way. So our digital experience business, especially the mobile application monitoring took a big tick up over last year and we don't see that slowing down at all. So those are probably the two primary and then we are seeing more and more metric ingestion areas whether they're business metrics with our business analytics or whether they're additional data elements into our AI engine, which are starting to fuel some of the ingestion metrics as well. So it's actually a combination. I mean, everything's working pretty well but I think the infrastructure extension and the digital experience are the two primary drivers of additional modules.

[Andrew Nowinski:]

Super. Thanks, John. And then, I know the cloud application security module is very new, but I was wondering if you could just comment on how customer adoption was of that solution last quarter and do you think that has enough features in it to see a fairly significant increase in adoption this year or this coming fiscal year here or is there more work to be done before it starts to contribute.

[John Van Siclen:]

Sure. So first of all, we're super excited the feedback we're getting right now is, it supports our thesis. We're entering the right place, it's a greenfield space and there is a little more work to do in order to fill out the product for it to be enterprise ready. You got to remember that our customer base are billion dollar plus companies. They are very, very picky and they expect a pretty wide footprint of coverage before they're willing to add something else to their security portfolio. But that said, we've touched about 10% of our customer base, everyone pretty much to the company is thrilled that we're getting into the space, that this is a great entry point. The DevOps teams are particularly excited as they sort of pick up the DevSecOps approach, so it's early as we said, we knew we had a an early product, there was going to need to fill out in the first half of this year, but I think it's going to start to make an impact in the second half and definitely be ARR driver for us in fiscal '23 just as we had hoped.

[Andrew Nowinski:]

Great. Keep up the good work.

[John Van Siclen:]

Thank you.

[Operator:]

Thank you. Our next question today is coming from Sterling Auty from JP Morgan. Your line is now live.

[Sterling Auty:]

Yes, thanks. Hi, guys. So you talked about a little bit of stability in the hardest hit industries. But I want to go the other way, which industries are contributing the most at this point and how do you see that evolving through the rest of this fiscal year.

[John Van Siclen:]

I'd have to go down, sort of, you sort of a list here and there, and sort of compare, Sterling, what which ones have actually ticked up as a percent and I don't think we notice a big tick-up or tick-down from some of the stronger verticals, but there is one that sort of sticks out for us which I will mention and that is the governments. And these are governments around the world as well as the state governments in the U.S. The pandemic really change the dynamic for government interaction with citizens. And it's put a lot of pressure on sort of older system approaches that need to modernize quickly to modern cloud. And we've seen an uptick across state and national governments around the world in upgrading and digitally transforming faster their environments and so we've been investing some of our sales resources and expansion has been going into that space around the world and we see that is a new augmentation, if you will. I mean it's hard to call it a vertical, but it is something relatively new for us that gives us great promise in continued expansion in the government business.

[Sterling Auty:]

It's great. And then one follow-up, Kevin for you. Can you at least qualitatively give us a bridge of how we go from the operating margin in fiscal '21 to that in '22. So in other words, how much of this is coming from return to business travel, some of the pickup in T&A, how much is coming from sales and marketing expansion as you talked about versus other just so we can kind of understand the puts and takes?

[Kevin Burns:]

Yes. So as I'm sure you can see, over the course of fiscal '21 earlier in the year, we had quite a quite a big cost savings on the P&L that flowed through to Op income and we are prudent about how we put additional money to work over the course of Q3 and Q4 and I think you -- you see the results of that coming through the P&L and those investments were in more R&D resources, right, getting that spend back up to 15%-ish and then getting that sales and marketing the 34%, 36% and those investments in sales and marketing, at this point are primarily the people and around the partner programs, and some of the marketing programs that John talked about as well going forward. So when we think about fiscal '22, you know there's going to be more of the same of that right making sure, we'll keep R&D at 15% primarily through -- making sure we're tracking and hiring the right people, which we've been doing a great above. Sales and marketing is going to be -- it's going to be quota, it's going to be direct sales organization, direct sales people more investments in the partner program and we do expect travel to come back online, more so in the Q3, Q4 timeframe, but given the strength of the P&L on the ARR and the topline growth we can absorb that without sacrificing frankly the investments that we're making in quota capacity right and driving higher quota capacity over time. So, we do expect a rebound a little bit in terms of COVID, some of the stuff we say from COVID but it's -- we still also don't think it's going to get back to normal. So it's -- we're pleased that those investments we're making this year are really about the people right, engineers and people in the sales organization and marketing organization to drive durable growth.

[Sterling Auty:]

Understood. Thank you.

[Operator:]

Thank you. Our next question is coming from Jack Andrews from Needham & Company. Your line is now live.

[Jack Andrews:]

Hi, good morning. Thanks for taking the question. I was wondering if you could just describe how your view of the -- what the opportunity is for your Cloud Automation Module and whether you think this is largely a greenfield or displacement opportunity and how should we be thinking about the potential uplift or contribution of this module relative to some of the others in your portfolio.

[John Van Siclen:]

Yes, great question. No, we actually see it, you know as a greenfield opportunity and a continuation of an effort that we've had in place for a couple of years. It's actually maybe more of a formalization into a product module of an effort we've had, that's been mainly a services approach to date, but we've been productizing the modules and productization of some of that early services work -- its targeted first at the DevOps, continuous deployment or environments and bringing auto remediation and automated quality steps along the way to ensure greater code quality, consistency and efficiency as I said. So it's a -- we've always been involved in the DevOps processes because of our code level detail that we provide. But this actually adds significant intelligent automation to the process. That said, this is the beginning of the autonomous cloud approach. And so, what we then do is we take the same approach that we're taking right now in the DevOps and extended into cloud operations, the production operation environment again driving automatic remediations for the elimination of run books. And so anyway, it's a journey for us, it's the first step we see the opportunity to say if you want to quant it think of it as $0.20 on the APM dollar kind of addition, and as we go this module become more and more valuable similar to what we're doing with the security module as we add capabilities and additional use cases, you know, will become more valuable as I said within the portfolio and for our customers. So, it's fairly early in its evolution. But again some great residents with customers who have been along the Services journey with us and have been looking for this level of productization so they can really scale it out within their organizations.

[Jack Andrews:]

That's really helpful commentary, thanks. And congratulations on the results.

[John Van Siclen:]

Thank you.

[Operator:]

Thank you. Our next question is coming from from JMP Securities. Your line is now live.

[Unidentified Analyst:]

Yes, thanks for taking the question and congrats on a very solid quarter. Most of the questions have been asked, but I'm just curious on the infrastructure module. Can you speak to the competitive dynamics with Datadog can you talk a little bit about whether you've seen any change in terms of efforts that they're making to compete and I presume that they are the incumbent in many of the accounts that you're talking to -- talk a little bit about how the displacements have gone with some of those accounts.

[John Van Siclen:]

Well, I don't have a lot -- we haven't seen a lot of change in our sort of competitive dynamic with Datadog. It's a massive market and so our overlap is still quite light. But what we are seeing is that -- with our infrastructure module we're competing more with a do-it-yourself approach. And what I mean by that is companies with many different products, different tools trying to measure telemetry from all different angles and just running into a massive challenge, it's sort of a tool fatigue, if you will where every man and woman for themselves and no consistent sort of source of truth across a wide footprint, which everyone is looking for in these modern clouds, and so when we extend, we consolidate tooling and provide a single source of automated truth for multiple different teams throughout the digital transformation and process. So, that's why we don't really think about competing against the Datadog. I mean they may be there, Relic may be there, you know, others -- open source tools may be there, but we saw a different problem, a bigger problem that is much more urgent for the larger customers where they really, really need fewer platforms, maybe they're not going to go to one, but fewer platforms to deal with this run away complexity that they're experiencing in their dynamic multi-clouds today. So that's really the dynamic and that's what drives and fuels our expansion and that's really the dynamic we see in the market and we're well positioned for it.

[Operator:]

Thank you. We've reached end of our question-and-answer session. I'd like to turn the floor back over to management for any further closing comments.

[John Van Siclen:]

Yes. Let me just -- let me just say thank you, again, for everybody who joined us this morning. We're coming off a fantastic fiscal '21, great momentum into '22, market is continuing to -- market trends are continuing to be in our favor. Our investments are paying off as I think you've seen in the results and hopefully going forward in the results and I look forward to reporting in July and updating everybody on our first step in fiscal '22. Thank you very much.

[Operator:]

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.