Thank you for standing by, and welcome to the comparable Q4 FY 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. Finally, a reminder, this conference is being recorded. I would now like to turn the conference over to Mike Melnick, Head of Investor Relations. Please go ahead.

Good morning, and welcome to our earnings conference call. I'm Michael, Head of Investor Relations, and I'm joined by Sanjay Mirchandani, our CEO, and Gary Merrill, our CFO. The earnings presentation with key financial and operating metrics is posted on the Investor Relations website for reference. Statements made on today's call will include forward-looking statements about our future expectations, plans, and prospects. All such forward-looking statements are subject to risks, uncertainties, and assumptions. Please refer to the cautionary language in today's earnings release and the most recent periodic reports filed with the SEC for a discussion of risks and uncertainties that could cause the company's actual results to differ materially from those contemplated in any forward-looking statements. We do not assume any obligation to update these statements during this call. Our financial results are presented on a non-GAAP basis. Reconciliation between non-GAAP and GAAP measures can be found on our website. Thank you again for joining us. Now I'll turn it over to Sanjay for his opening remarks.

Thank you, Mike. Good morning, and thanks for joining us today. Q4 was an outstanding quarter, capping a breakout year for Cobalt and setting the stage for fiscal year '25 and beyond. We ended our fiscal year with continued strong momentum across all primary KPIs. Highlights from Q4 include total revenue increased 10% to $223 million. Total ARR rose 15% to $770 million. Subscription ARR increased 25% to nearly $600 million. SaaS ARR jumped 65% to $168 million. We closed the year with over 5,000 SaaS customers, and we did this profitably. Our Q4 and fiscal year results shine a bright light on the critical role Cobalt plays in a world dominated by ransomware attacks and cyber threats. Organizations need to know that when they are hit, they can recover. This is what we empower our customers to be resilient and pick up. Our financial results speak to the multi-year journey we started five years ago. When I joined Cobalt, I said the company had great bonds with a strong financial foundation and best-in-class technology, and we had a tremendous opportunity to unlock a new level of growth within the company. With that goal in mind, we reinvigorated our brand and go-to-market motion, strengthened our partner ecosystem, and expanded our routes to market. We doubled down on our commitment to drive innovation. To that point, we launched a hyper-growth SaaS offering that is one of the fastest growing of its kind in the industry today. We transformed our business model from legacy perpetual to modern subscription and SaaS. We did all of this while focusing the company on sustainable and profitable growth with some notable results over the past three years. Since fiscal year '22, total ARR increased at a 15% CAGR, subscription ARR grew at 31% CAGR, and ARR from our hyper-growth SaaS offering more than tripled. We consistently delivered profit margins of 20% or better. We generated over $500 million of free cash and returned over $600 million of cash to shareholders through stock repurchases. I'm extremely proud of what we've accomplished and would like to thank our customers, partners, and employees for their trust and commitment to Cobalt. Our job is only getting more exciting. In November, we shifted our company to focus on everything that represents cyber resilience. The biggest challenge organizations face today is the unrelenting breadth and scale of cyberattacks. We're talking about automated, intelligent, and state-sponsored attacks. These attacks put immense pressure on CISOs, the C-suite, and the Board to rapidly recover and be resilient. This is exactly what we enable with the Cobalt Cloud Cyber Resilience Platform. With Cobalt Cloud, we offer autonomous recovery so that customers can recover their environment at scale. Customers can proactively perform health checks and detect anomalies and threats. They can utilize our AI technology to enhance the recovery process, and they can secure and recover their data across any workload, any infrastructure, and from any location to any location, all at the lowest possible TCO. One of our marquee clients this quarter is Albertsons Companies, a Fortune 100 grocer that migrated to strengthen their cyber resiliency using Cobalt's unique and differentiated platform to provide additional security, recovery, workload protection, and cloud integration. Last year was particularly difficult for hospital systems as cyber and ransomware attacks nearly doubled. With the risk of an attack top of mind, a large network of hospitals in Latin America was concerned about their ability to recover from a cyber attack. With Cobalt, they have peace of mind; they can easily and quickly recover if hit with one platform. They can manage their on-prem, remote, and cloud data, and we protect an immutable copy of the data, which is critical for recovery. These are just two examples of why we're winning in the market and are frequently chosen over competitive offerings. But we're not stopping there. We're taking recovery even further with Cobalt's Clean Room Recovery. Yesterday, we announced this new and unique offering empowers organizations to be ready to recover by providing a clean, isolated, and on-demand recovery location in the cloud, allowing them to spin up as many workloads as needed. Clean Room Recovery also enables users to proactively test their response plans, so they can quickly recover when bad actors strike. Building on these unrivaled capabilities, we recently closed the acquisition of a product. With this technology, customers will be able to rapidly discover, rebuild, and make their critical cloud applications and production infrastructure fully operational after an outage or cyberattack. With the dynamics of public clouds, this rebuild will take minutes or hours rather than days or weeks. After all, in the unfortunate event of an attack, time is money. By integrating Cobalt's extensive risk readiness and recovery capabilities with the product's cloud-native mobile capabilities, we help customers shorten recovery times after an attack. This takes cyber resilience to a whole new level. In closing, I believe we are the best company with the best people and by far the best platform for cyber resilience in the industry. With Cobalt Cloud, we can offer the most comprehensive platform for CISOs and CIOs to work together. It was engineered with a hybrid enterprise in mind to enable customers to manage their resilience across any workload environment, all cash available as software, SaaS, or both. That way, if our customers suffer an attack, we help them confidently and quickly recover their business and maintain resilience. We believe fiscal year '25 will be a year for Cobalt to continue accelerating our growth. With that, I'll turn it over to Gary to discuss the numbers and provide more insights on our forward outlook.

Thank you, Sanjay. As Sanjay mentioned, we closed the fiscal year with strong momentum, with all of our key primary metrics coming in ahead of expectations. Our cyber resilience platform and related messaging is resonating in the market, and our team executed well in the field, driving another quarter of double-digit revenue growth. I'll recap Q4 and full fiscal year '24 results before discussing our outlook for fiscal year '25. As a reminder, all growth rates are on a year-over-year basis unless otherwise noted. Total revenue grew 10% to $223 million, driven by a 27% increase in subscription revenue, which now exceeds 50% of total revenue. Subscription revenue growth was fueled by increased contributions from our SaaS portfolio and solid double-digit growth in term software licenses. Our software revenue growth reflected a healthy balance between renewals and our strongest land-and-expand quarter of the fiscal year. Once again, we saw improved close rates in deals over $100,000, which increased by 13% as we closed an accelerated volume of larger deals. From a geographic perspective, the Americas and international regions had strong performance, with those regions posting double-digit term software growth. Our Americas region delivered its best new customer acquisition quarter of the year as our cyber resilience platform gained additional traction in the enterprise market. In Q4, perpetual license revenue was flat sequentially at $15 million, as perpetual licenses are generally sold in limited verticals and geographies. We expect the headwinds from perpetual license sales to diminish in fiscal year '25 and beyond. Q4 customer support revenue, which includes support for both our term-based and perpetual software licenses, was $77 million, flat sequentially and year over year. For the full year, customer support revenue from term software and related arrangements accelerated to 47% of total customer support, compared to just 40% in fiscal year '23. We expect customer support revenue from term-based software licenses to become the majority of our customer support revenue in fiscal year '25, driven by the attach rate on term software license growth. Now I'll discuss ARR. Q4 total ARR was $770 million, an increase of 15% year over year, which reflects the underlying strength of our business when our revenue is presented on an annualized basis. Subscription ARR, including term-based licenses and SaaS contracts, grew 25% year over year to $597 million. This includes $168 million of SaaS ARR, which jumped 65% from a year ago. On a quarter-over-quarter basis, Q3 to Q4 SaaS ARR growth was impacted by $2 million of foreign exchange headwinds as the US dollar strengthened primarily against the euro in fiscal Q4. On a constant currency basis, we added approximately $18 million of net new SaaS ARR in both fiscal Q3 and fiscal Q4 as the underlying strength of our SaaS business continues. New SaaS ARR contributed two-thirds of our total ARR growth for the full fiscal year '24, and that now represents 22% of total ARR compared to just 15% a year ago. From a customer perspective, existing customer expansion was strong with Q4 SaaS net dollar retention of 123%, benefiting from both upsell and cross-sell activities. Now I'll discuss expenses and profitability. Fiscal Q4 gross margins were 83.2%, an increase of 30 basis points sequentially, reflecting the healthy mix and continued SaaS gross margin improvement. Fiscal Q4 operating expenses increased 13% to $139 million, reflecting higher year-end commissions and bonuses against a record revenue quarter. We ended the quarter with approximately 2,900 employees, which was flat sequentially and an increase of 4% year over year. Non-GAAP EBIT for Q4 was $45 million, with non-GAAP EBIT margins of 20.2%. Our Q4 free cash flows grew 18% year over year to $79 million, reflecting continued growth in SaaS. Deferred revenue reflects strength of our software and subscription business, typically including upfront payments on multi-year contracts. In Q4, we repurchased $50 million of stock under our repurchase program. Now I'll discuss the full year fiscal '24 results. Total revenue increased 7% to $839 million, driven by double-digit growth in the second half of the year. We are pleased with the acceleration in total revenue growth throughout fiscal year '24, and we expect our business momentum to continue into fiscal year '25. Subscription revenue increased 23% to $429 million, crossing over 50% of our total revenue. Fiscal year '24 operating expenses were 61% of total revenue compared to 62% in the prior year, demonstrating operating expense leverage in our responsible growth model. Full year non-GAAP EBIT grew 11% to $177 million, with non-GAAP EBIT margins improving by 70 basis points to 21.1%. Moving to some key balance sheet and cash flow metrics, we ended the quarter with no debt and $313 million in cash, with approximately $100 million in the United States. Full year fiscal '24 free cash flows improved 20% year over year, reaching the milestone of $200 million. For the full fiscal year, we returned $184 million to shareholders as part of our share repurchase program, representing 92% of free cash flow. Our average price of shares repurchased during fiscal year '24 was $74. Now I'll provide our outlook for fiscal Q1 and the full fiscal year '25. With our subscription software evolution complete, we are now focused on accelerating our total revenue growth rate while continuing to generate strong free cash flows. For fiscal Q1, we expect subscription revenue, which includes both the software portion of term-based licenses and SaaS, to be $116 million to $119 million. This represents 21% year-over-year growth at the midpoint. As a result, we expect revenue to be $213 million to $216 million, reflecting 8% growth at the midpoint. At these revenue levels, we expect Q1 consolidated gross margins to be in the range of 81% to 82%. We expect Q1 non-GAAP EBIT margins to be in the range of 18% to 19%. Q1 operating expenses will include approximately 200 basis points of investments related to our fiscal year sales kickoff that occurred earlier this month, as well as our normal presence at the RSA Conference in May, which did not incur in the prior year. Our projected diluted share count for fiscal Q1 is approximately 45 million shares. Now I wanted to give our initial outlook for the full fiscal year '25. We expect fiscal year '25 total ARR growth of 14% year over year. We expect subscription ARR to increase in the range of 21% to 23% year over year. From a revenue perspective, we expect subscription revenue to be in the range of $514 million to $518 million, growing 20% year over year at the midpoint, with strong contributions from both term software licenses and SaaS. We expect total revenue growth to accelerate and be in the range of $904 million to $914 million, increasing by 8% at the midpoint. Moving to the full year fiscal '25 margin EBIT and cash flow outlook, we expect gross margins to be in the range of 81.5% to 82.5%, inclusive of the accelerating contribution of our SaaS business. We also expect non-GAAP EBIT margins to be in the range of 20% to 21%, including Q1 event costs that did not occur in the prior year, as well as several focused investments to accelerate our revenue momentum. Operating margins are expected to be seasonally stronger in the second half of the fiscal year compared to the first half. We expect full year free cash flows of at least $200 million. Our Board of Directors recently increased the authorization on our share repurchase program to $250 million. We expect to continue with our existing practice of repurchasing at least 75% of our annual free cash flows in fiscal year '25. We are also lowering our non-GAAP tax rate from 27% down to 24%. We believe that a 24% tax rate is reasonable to expect over the next few years, given the current cyber market tailwinds, the predictability of our large and growing subscription revenue base, and our execution momentum in the field. I'd like to discuss our next major milestone. Today, I'm excited to share that as we exit fiscal year '26, we expect to see total ARR of $1 billion, with subscription ARR representing 90% of total ARR, including an accelerating SaaS contribution ranging from $310 million to $330 million. For additional details and trends on all of our key metrics, please take time to review our investor deck contained in the investor relations section of our website.

Your first question comes from the line of Aaron Rakers from Wells Fargo.

Yes, thanks for taking the question, and congrats on the solid results. I'm curious as we think about the guidance that you've given for the full year on your ARR, particularly with the subscription side. How would I characterize the renewal opportunity relative to the kind of the new subscription growth you're expecting? Any kind of framework of the base of renewables relative to new would be helpful.

This is Gary. Good morning. Thanks for joining us. I'll start off and take your question. Yes, we're really pleased and excited about the momentum that we had in the business, and we're looking forward to accelerated net revenue growth driven by subscription revenue. This contains both our software and SaaS segments. With the momentum we see, we will have balanced contributions from our land-and-expand business and our renewal business. We will see incremental renewal tailwinds again in fiscal year '25, but to a lesser extent than we saw in fiscal year '24. Our average terms are down to about two years now, so the consoles will go up, but the percentage increases will be less than we had in FY24.

Yes, very helpful. And then as a quick follow-up, I'm curious when I unpack the guidance for the full year. You talked about a diminishing headwind related to the perpetual business and the mix shift towards subscription within the customer support power. However, looking at the guidance, it seems like you're implying a 4% or 5% decline in those combined mature or declining portions of revenue. Do you feel that's conservative? What kind of conservatism are you baking into those pieces of the revenue guide?

With the tailwinds we've seen starting to diminish, I think somewhere between flat and low single-digit decline is reflected in our guidance. I would expect that perpetual business headwinds will normalize, with a run rate of about $12 million to $15 million per quarter. We expect that customer support line to hover around roughly $300 million for the full year, meaning those tailwinds have essentially been eliminated and are expected to remain flat to slightly down.

Your next question is from the line of James Fish from Piper Sandler.

Thanks for taking my questions, and congrats on a great fiscal year. Can you explain how much of the additional investments will impact margins? Can you break this down as a percentage of your indirect channel? How should we think about the percentage of the business coming via indirect sources?

It's Gary. I'll jump in and take this one as well. The guidance we provided reflects that our margins will remain roughly flat while we continue to see top-line acceleration. You'll see the impact from our SaaS business, and our metallic business continues to move to accelerate. The margin profile will absorb some differences as we invest in the ecosystem. A significant portion of the investments focus on partner ecosystem growth, specifically with hyperscalers and security partners to build integration into our platform.

That makes sense. Just one follow-up: Can you provide any insight on U.S. Plastics in fiscal '25? Also, regarding the merger, how are you seeing any impacts from that together in terms of customer relationships or partnerships?

We're excited because this acquisition gives us optionality and brings us further into the world of cyber resiliency. It's a young company with about 25 customers and limited employees. As we initiate the integration, we expect to see contributions starting in fiscal Q2 or Q3. Bringing this company into the Cobalt Cloud will provide a competitive differentiation for us, as rebuilding from a ransomware attack is a game changer. We aim to provide recovery capabilities from data to applications.

Regarding the merger and acquisition discussions, we received requests from prospects and existing clients asking us to clarify how our options align with their needs. We've successfully converted several customers from competitors, and partners have also come to us, asking for new ways to collaborate and serve their customers, which is a positive indicator for us. We view uncertainty in the market as an opportunity. As we move forward, we'll be focusing more on building safer experiences through the Cobalt Cloud.

Your next question comes from the line of Howard Ma from Guggenheim Securities.

Thanks, Sanjay. Can you discuss how the Cobalt Cloud portfolio can evolve as you approach your fiscal '26 targets? Many peers in the industry favor a cloud-first approach. How important is this hybrid approach to achieving your long-term goals?

The next eight quarters and beyond is focused on the customer. Our capability has pivoted to enhance Cobalt Cloud for cyber resilience. Cyber resilience focuses on customers' ability to recover in the face of an attack. We don't separate out the on-premise workloads from cloud workloads; our architecture supports all workloads at any given time. This flexibility allows customers to operate their environment more securely. We have migrated over four exabytes of data into the public cloud, showcasing our ability to leverage native capabilities effectively. The architecture we've built allows us to protect customers' data in a difficult world as they move their workloads into the cloud.

Thanks, RJ. Can you elaborate on the recent acquisition? The ability to rebuild on applications and configurations seems unique. Is this for widely used third-party applications, or custom apps? Will this be a standalone SKU or integrated into the platform?

It is the latter; the complexity will be integrated into our core SaaS Metallic platform. We can protect many ready-made SaaS apps and for custom applications, it provides standard capabilities to protect workloads migrated to the cloud. The challenge with cloud-native apps is that managing their resiliency is essential. Our platform allows seamless integration that makes recovery easier and quicker. Our recovery capability provides end-to-end solutions on our platform, ensuring resilience across workloads. The product will be delivered as agile as possible, initially in two SKUs, a basic scenario and an enterprise-grade SKU. We have a rich roadmap ahead, which encompasses capabilities around lifecycle management for broader datasets.

Your next question comes from the line of Eric Martinuzzi from Lake Street.

I wanted to better understand the outperformance in your Q4. What factors contributed to the better performance against expectations for Q4, particularly in terms of geography or verticals?

Hey, Eric. It's Gary. I'm pleased to report that Q4 was an outstanding quarter for us, capping off a really strong year. We saw immediate benefits from our cyber resiliency offerings from our shift event in November. The adoption of our platform approach boosted our packaging and pricing strategies, allowing us to observe customer momentum quicker than anticipated. Our teams executed well, resulting in strong performance in both the Americas and European regions, with the Americas seeing its best new customer acquisition quarter in some time.

Looking ahead, what does your pipeline look like in 2025 with respect to cyber resiliency?

We're not specifying the exact mix shift in the pipeline at this point. However, I would characterize it as moving towards a highly automated disaster recovery capability. Our focus is on seamlessly integrating automation, AI, and cybersecurity into the core of our offering. Every customer wants to ensure they are on the right side of cyber resilience. They recognize the reality of needing recovery capabilities.

Your next question comes from the line of Jason Ader from William Blair.

Thank you. Good morning, guys. I have two quick questions. First, do you expect term revenue to grow double digits in FY25? Second, are you seeing more of your technology being sold into C-suite budgets versus the CIO budget? Is the branding aligning with how customers are actually budgeting?

Yes, I can provide insights on your first question. We have built a repeatable business model with strong recurring revenues. Our contribution from the subscription lines will come from renewal, land and expand business, and the SaaS segment, with SaaS growth being the strongest. You can estimate SaaS contribution by looking at our ARR, which reflects strong sales performance across all segments.

Absolutely, we have seen increased engagement with CISOs in the last several months. Their focus has shifted from traditional perimeter security to recovery and resilience. While recovery has traditionally lived with IT, we have introduced solutions that bridge both security and infrastructure responsibilities. Our integrated capabilities enhance data protection and security, making us appealing to both sides of the organization. The need for unified recovery makes our approach a winning solution for our clients.

Do you foresee the industry consolidating between your line of business and traditional security companies?

Yes, I see convergence happening between security vendors and legacy backup vendors, as there is no resilience without core security capabilities. Our technology is built in alignment with zero-trust principles, making data more secure and verifiable. We integrate intelligence from both perimeter security and traditional backup solutions, optimizing data recovery experience.

Your next question comes from the line of Rudy Kessinger from D.A. Davidson.

Thanks for taking my questions and congrats on the strong numbers. Can you talk about the expected ASP uplift from cyber resilience and when we might begin to see material contributions from this segment?

It's still early for us. We're building the pipeline for cyber resilience seriously. We'll take customers successful journeys towards achieving resilience gradually. We're not comfortable providing specifics on ASP uplift just yet, as this is still in the initial stages.

Customers are gravitating towards our cyber resilience offerings as they recognize the challenges of recovery. Our capabilities in this area have grown immensely, and while we are still finalizing packages, demand for resilience has consistently increased.

Thanks, everyone, for your questions. For those of you attending RSA in San Francisco, we will have an exciting booth with our executive management team and field personnel present. We hope to see you at RSA next week. As a reminder, a recap of this call and the presentation is posted on our Investor Relations website. Please reach out to me with any questions. Thanks for joining today, and we look forward to speaking with you soon.

This concludes today's conference call. Enjoy the rest of your day. You may now disconnect.