Sumo Logic, Inc. (NASDAQ:SUMO) Q3 2023 Earnings Call Transcript

Ramin Sayar: Hey. This is Ramin and I’ll start. I think the first part of that answer is pretty simple. We are really well positioned in two very large markets that are growing, both on the reliability side and security. I think uniquely, we’re well positioned even more so because of that single unified platform, that not only meets the technology requirements, but also the business needs in this circumstance and macroeconomics uncertainty. So more specifically, a lot to do with the tiered analytics and licensing model. Now the other part of your question in terms of a single platform and consolidation. Yeah, we see elements of that. But honestly, there’s still a lot of best of breed that’s out there, a lot of homegrown solutions. And then a lot of other commercial products that just don’t meet the scale, let alone economic needs that are ripe for replacement and displacement by Sumo.

Matt Swanson: That’s super helpful. And then congrats on the Cloud SIEM, again the FedRAMP certification. Do you mind just commenting a little bit on how federal was in general for the quarter?

Ramin Sayar: So our public sector business is something we’ve been investing in more now on the go-to-market side as we’ve now achieved, obviously, FedRAMP moderate for our Cloud SIEM. We’ve had capabilities for logging there, and we’ve expanded that. And so now we’re the only cloud-native solution that’s available through that means and channel. And so a lot of effort will be focused on our channel partners driving that public sector business.

Matt Swanson: All right. Thank you.

Operator: Our next question comes from the line of Derrick Wood with Cowen. Please proceed with your question.

Andrew Sherman: Great. Thanks. It’s Andrew on for Derrick. Congrats on the strong quarter. Stewart, I think the $7 million revenue beat was one of, if not your largest beat ever, and you called out that there was some revenue acceleration there, but any quantification of what that helped drive the beat would be great. And then is that kind of the main driver of the Q4 guide down sequentially, which I think normally would be up sequentially?

Stewart Grierson: Yeah. Sure, Andrew. So just to quantify the Q3, not the beat, but the impact of the acceleration is about $1.5 million of the overachievement. So obviously, it was a nice clean beat irrespective of that, but that definitely helped with the — to your point, larger than usual beat that we saw. And I think as you look at Q4, we signaled as early as last quarter that there was going to be — that number will be smaller. We have raised guidance. And that’s obviously with the visibility we have, but also being cognizant of the environment we’re in and the uncertainty. But I think raising — we raised guidance effectively by $2 million from where we were three months ago.

Andrew Sherman: Yeah. Great.

Stewart Grierson: And just lastly, I think just to — we’ve talked about variability quarter-to-quarter as well and obviously, what we’ve always focused folks on is the annual growth. And so — now we’re guiding to 23% annual growth versus the 19% we were at last year.

Andrew Sherman: Yeah. Great. Thanks. And then Ramin, APAC in Europe were pretty strong last quarter. Just wanted to check the performance was this quarter and how pipelines are looking there for Q4?

Ramin Sayar: Yeah. International combined was strong again. We’ve seen direct business there as well as the partner business continue to perform. It’s really about coverage and capacity on the direct side. And then time in the saddle with a lot of new partners that are VARs or disties, as well as MSPs as we look to grow that segment of our business. So that’s a continued effort of investment for us going forward. I think it was north of 23% or 22% contribution international for last quarter, which was more than 50% growth year-over-year.