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Edited Transcript of MOBL earnings conference call or presentation 1-Aug-19 8:30pm GMT

Q2 2019 MobileIron Inc Earnings Call

Mountain View Aug 27, 2019 (Thomson StreetEvents) -- Edited Transcript of MobileIron Inc earnings conference call or presentation Thursday, August 1, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Erik Bylin

MobileIron, Inc. - Head of IR

* Scott D. Hill

MobileIron, Inc. - CFO

* Simon Biddiscombe

MobileIron, Inc. - President, CEO & Director

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Conference Call Participants

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* Chad Michael Bennett

Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst

* Meta A. Marshall

Morgan Stanley, Research Division - VP

* Raimo Lenschow

Barclays Bank PLC, Research Division - MD & Analyst

* Robert Paul Breza

Northland Capital Markets, Research Division - MD & Senior Research Analyst

* Robert S. Majek

Raymond James & Associates, Inc., Research Division - Senior Research Associate

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Presentation

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Operator [1]

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Welcome to MobileIron's Second Quarter Fiscal Year 2019 Financial Results Conference Call. (Operator Instructions) The conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Erik Bylin. Please go ahead.

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Erik Bylin, MobileIron, Inc. - Head of IR [2]

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Thank you, Christine. Good afternoon, and welcome to MobileIron's Second Quarter 2019 Financial Results Conference Call. Joining us from the company are Simon Biddiscombe, CEO; and Scott Hill, CFO.

The format of the call will be remarks by Simon, then Scott will provide details on the financials. We will then have time for questions. If you've not received the copy of today's press release, please go to MobileIron's Investor Relations website at investors.mobileiron.com.

Today's conference call contains forward-looking statements that involve risks and uncertainties including statements regarding MobileIron's revenue, operating expenses, GAAP and non-GAAP financial metrics, product releases, projections and trends. All of these forward-looking statements are subject to a number of significant risks, uncertainties and assumptions. Actual results could differ materially from the statements made on this call. Please see the risk factors section of our SEC filings.

All statements made on the call are made as of today. We assume no obligation and do not currently intend to update any such forward-looking statements. If this call is reviewed after today, the information presented during this call may not be current or accurate.

With regard to non-GAAP financial metrics, while we believe them to be helpful in understanding MobileIron's financial performance, they are not meant to be considered in isolation or as a substitute for comparable GAAP metrics. They should be read only in conjunction with MobileIron's consolidated financial statements prepared in accordance with GAAP.

A reconciliation of the non-GAAP financial metrics to the GAAP metrics can be found in our press release and on the Investor Relations page of our website. We do not provide a reconciliation of forward-looking non-GAAP financial measures due to our inability to project certain charges and expenses. Unless otherwise stated, results shared today will be non-GAAP.

At this time, I would like to now turn the call over to Simon. Please go ahead.

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [3]

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Thank you, Erik, and good afternoon. In my remarks today, I will provide a brief commentary on our second quarter financial performance, talk about how our innovation is addressing the changing security landscape and then share some recent customer successes.

Let's start with our financial highlights. In Q2, we had another solid quarter and delivered on our guidance. We achieved double-digit revenue growth for the third quarter in a row with revenue coming in at $50.9 million. We also saw continued robust growth in ARR, up 19% year-over-year. As I've previously discussed, we implemented changes in the beginning of 2019 to drive recurring revenue. And as a result, 87% of our revenue was recurring in nature. This was a record for MobileIron and a strong sign our efforts are working.

And now I'd like to share more on the shifting IT security challenge and MobileIron's approach to addressing it. Modern IT environments are being driven by a change in how people work, and the security architecture must respond. IT organizations spent the last 30 years building a perimeter around corporate-owned, locked-down laptops connected over IT-controlled Ethernet and wireless networks to their own on-site data centers. Now they have to guard against employees using their own phones and tablets over unsecured public networks to access company data in third-party cloud services. The IT environment has evolved into a Zero Trust state. 5 years ago, this was not even a security afterthought. And today, MobileIron delivers the most comprehensive security suite to address this new threat landscape.

While IT leaders have been searching for a new framework to address today's security challenges, over the last 2 years, MobileIron has taken a mobile-centric approach to designing the most comprehensive solution suite to address the Zero Trust environment. First, our UEM platform delivers the ability to provision any device per user with the appropriate profile and apps while enforcing the policies to protect corporate data. Second, MobileIron Access utilizes the full context of the user, app location, time and other factors to protect real-time cloud service access. And third, we enable the modern workforce to be productive anytime and anywhere by combining our UEM with our Threat Defense products to protect data both at rest and in motion by containerizing and eliminating threats in the device and across networks.

Together, all of our products deliver the ability to dictate and enforce the security policies required to solve for Zero Trust. You can not only provide this functionality and level of security enforcement with the control that comes with being on the endpoint. And I remain convinced we have by far the most robust solution to solve for the Zero Trust environment that threatens the corporate IT landscape today.

And even with what I've described, mobile devices can be more powerful; mobile devices constantly with you and it is biometrics that are infinitely more trustworthy in identifying you than a username and password. It follows naturally that 9 out of 10 security leaders believe your mobile device will become your identity to the enterprise. With the zero sign-on solution we announced in May, MobileIron can deliver that vision today. Our zero sign-on solution uniquely associates the user and their biometric identity with their mobile device. And IT can leverage this relationship to provide employees' access to all corporate resources from the data center to the cloud. The user experience for employees dramatically improves as they no longer have to worry about remembering usernames and passwords. And most importantly, for IT, eliminating usernames and passwords, dramatically bolsters the security profile. According to Forbes, enterprises spent almost $120 billion in 2018 on IT security services yet 2/3 of companies were still breached, and an outstanding 81% of those breaches were from compromised credentials.

We've spoken to many customers in the past quarter about our approach to remove passwords from the enterprise. Feedback has been incredible, and customers have been extremely enthusiastic about zero sign-on. MobileIron's innovation is clearly outpacing our peers. And as a result, we have gained much greater strategic relevance with our customers.

And with that, I'd like to touch on some of our customer wins from the quarter. In Q2, MobileIron secured a win with the Volkswagen Group, one of the world's leading auto manufacturers and the largest carmaker in Europe. Headquartered in Germany, Volkswagen sells more than 7 million cars, trucks and vans into 153 countries through brands that include Porsche and Audi. The company recognized the importance of protecting this global network and added Access and Threat Defense to make MobileIron their mobile security provider of choice. Volkswagen's vision of shaping mobility for generations to come strives to provide answers to the challenges of today and tomorrow, aligned with MobileIron's mobile-centric vision to revolutionize enterprise security with the solution for the modern threat environment.

MobileIron is always on the cutting-edge of new technology, so it makes sense that our customers also share that same value. I'm pleased to announce that in the quarter, SAS Institute, a trusted analytics powerhouse that helps organizations transform data into intelligence, chose to combine Access with the UEM installation to protect their valuable data the customers entrust them with. A truly global company with almost 14,000 employees and clients across 147 countries, SAS provides itself on providing the very best analytics software, and we feel privileged to help them to bring insights to their customers while maintaining their security piece of mind.

We continued to expand our reach in the financial vertical as we deepened our relationship with Finanz Informatik. This company is the IT service provider for the Sparkassen-Finanzgruppe, one of the largest banking groups in the world. With a client base that spans hundreds of banks and insurance companies across the finance sector, Finanz Informatik chose to upgrade and expand its use of MobileIron's entire EMM portfolio. MobileIron is honored to secure the 5,000 employees of Finanz Informatik and, by extension, help protect Sparkassen-Finanzgruppe's 50 million customers.

Now our global presence was again demonstrated with an important win with Japan Airlines. An award-winning airline, JAL aims to provide the finest level of quality in all that they do while taking every precaution to maintain customer safety, aligning perfectly with MobileIron's dedication to protecting enterprise in the Zero Trust environment. With objectives of customer peace of mind and utmost satisfaction, it is no surprise they once again chose MobileIron to provide them with highly awarded security protection.

And with that, I'll turn the call over to Scott. Scott?

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Scott D. Hill, MobileIron, Inc. - CFO [4]

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Thank you, Simon, and good afternoon.

Today, we will be discussing non-GAAP financial measures unless otherwise noted. Our press release, Form 8-K and website, investors.mobileiron.com, provide a reconciliation of GAAP to non-GAAP financial results.

Revenue in the second quarter was $50.9 million, up 10% year-over-year, our third quarter in a row of double-digit revenue growth. As the company continues to drive growth in recurring revenue, we saw a record 87% of revenue was recurring in nature in Q2. As we have shared, customers are increasingly demanding our subscription solutions, and we are eager to embrace this trend.

At the beginning of this year, we introduced ARR as a metric with the standard software definition. We ended the second quarter with ARR of $172 million, up 19% year-over-year, in line with our guidance of 20% growth for that year. Looking into the composition of our ARR highlights how well our subscription business is performing. Our subscription ARR was $106.1 million, up 31% year-over-year; and our maintenance ARR was $65.9 million, up 3% from last year, each of which reflect our focus on subscription revenue. Our renewal rate remains about 90%.

Our Access and Threat Defense products continue to be well received in the market and our strong drivers of our subscription ARR growth. That said, we have still only sold these products to a high single-digit percentage of our large UEM installed base. We remain optimistic about our ability to sell these products into our existing customer base and are excited to add zero sign-on to our portfolio as we enter 2020.

Gross margin in the second quarter was 82%, and operating expenses were $46.1 million, both in line with guidance. MobileIron reported an operating loss of $4.4 million, and net loss was $4.3 million or $0.04 per share.

Moving to the balance sheet. We have ended the quarter with $100.6 million in cash and short-term investments and have no debt. In the second quarter, cash used by operations was $4.5 million, and we spent $3 million repurchasing shares with an average price of $5.51 per share. Unearned revenue was $106.4 million at the end of June, up 28% from $82.9 million a year ago.

Now I will share our guidance. For the third quarter of 2019, our guidance is as follows: We are projecting a revenue range of $51 million to $54 million for growth of 4% to 10% year-over-year. We expect non-GAAP gross margin to be between 81% and 82%. We expect non-GAAP operating expenses to be between $41 million and $42 million.

Our full year guidance remains unchanged and is as follows: We expect revenue to be in the range of $205 million to $215 million, for growth of 6% to 11%. We expect ARR to grow approximately 20% by year-end. We expect to generate non-GAAP operating profit.

And with that, we can open up the line for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And your first question comes from the line of Robert Breza from Northland Capital Markets.

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Robert Paul Breza, Northland Capital Markets, Research Division - MD & Senior Research Analyst [2]

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Simon, just quickly, if you step back and look -- and you gave a great kind of, I think, lesson or overview and people to -- history lesson help people through and where we've come from an industry's perspective, so thank you for that. But if you think about the next, call it, 1 to 2 years, you've got the new products here. You've -- how are you thinking about where you would be making strategic investments, I guess, going forward?

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [3]

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Sure. Happy to answer that, Rob, and thank you for the question. So there are really 2 significant vectors that are driving how I think about the strategic direction of the company at this point and, frankly, how it drives just higher and higher strategic relevance across our customer base as we move through 2020, 2021 and beyond. The first is obviously the shift towards Zero Trust. And I think what our customers are incrementally understanding is, a, the overall risk profile associated with work being performed on devices that are not necessarily owned by the enterprise and connecting to services that are not the traditional services, so mobile devices connected to cloud services as opposed to locked-down PCs over corporate-owned networks, to the corporate-owned data centers and so on. And I think what's happened over the course of time is every one of the CIOs I engage with is having a broader conversation about that Zero Trust set of challenges that they have. And as we look at the mobile-centric way to think about solving those challenges, it leverages everything we've invested in, in UEM broadly over the course of the last 12 years that the company has existed. And then you add to that the capabilities we've brought to market with Access and the capabilities with Mobile Threat, and you end up with what we believe and continue to believe to be the most robust solution to help CIOs solve for that Zero Trust challenge that is just going to get bigger and bigger for them as you move forward.

But then as I said in my prepared remarks, the next phase of that becomes, well, how do you take advantage of the footprint on the device and all of those incremental capabilities that exist in the device from a biometric perspective and make the device your identity into the enterprise for access to all of the services that you need to be able to get to in order to perform your tasks on a day-to-day basis. And the solutions that we've started to roll out and expect to continue to roll out over the course of the next 4 quarters are incredibly compelling as it relates to being able to take advantage of those capabilities to eliminate that massive risk that exists for every CIO, which is usernames and passwords and all of the breaches that come along with. So I see that has been a second significant area where we're going to continue to invest and, again, because it leverages the fact that we're on millions of devices every day, and it's something that we have to be able to continue to take advantage of as we move forward. So in short, the answer is continuing to make sure that we have the best offering for mobile-centric Zero Trust solution and then making sure that we can prosecute this enormous opportunity that exists from a zero sign-on perspective specifically for the enterprise market.

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Operator [4]

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Your next question comes from the line of Meta Marshall from Morgan Stanley.

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Meta A. Marshall, Morgan Stanley, Research Division - VP [5]

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Just a question on -- clearly, there's the opportunity to go into your installed base and attach kind of some of these new products that you're rolling out. But just what -- any anecdotes of customers kind of being introduced to you for the first time because of some of the Zero Trust and then the opportunity to sell them kind of the full portfolio of MobileIron products?

And then maybe second, just kind of if you could just walk through like are our partners fully trained up on the full solutions that just like -- and what their reaction has been would be helpful.

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [6]

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Sure. So with regard to whether the conversation with our customers or with new customers as well, Meta, is different as a result of what we are focused on at this point in time, yes, it's a different conversation, right? Every customer and every potential customer has to think about Zero Trust and zero sign-on in a different way than they've thought about EMM over the course of the last 5 years, right? Taking advantage of everything we've done in the Zero Trust, Zero sign-On conversation is the magic of what's driving increased strategic relevance for MobileIron across its customer set at this point in time. And it is resulting in new customers and new engagement with customers that we haven't previously had. Frankly, it actually started with the Mobile Threat capability. So the Mobile Threat capabilities that we introduced just over a year ago now have started a new conversation with a buyer who is either a new customer or an existing buyer within our existing customer. And this just layers on top of that. So it's bringing new customers to the table, and it's resulting in better, higher-quality conversations with our existing customer base as well. So it's working in both directions in that regard.

What was your second question again, Meta?

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Meta A. Marshall, Morgan Stanley, Research Division - VP [7]

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Just about kind of any initiatives that have already taken place at this time.

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [8]

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Partners, yes.

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Meta A. Marshall, Morgan Stanley, Research Division - VP [9]

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Yes.

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [10]

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Sorry, yes, the partner community associated with this. So from a Zero Trust perspective, the partners that we have on a global basis are actually well equipped to solve for the challenges that are ahead of us, right? So if you think about leveraging that UEM stack along with the other capabilities necessary from a Zero Trust perspective, our partners are more than capable of delivering that offering to the customer base that they've been dealing with for many, many years on behalf of MobileIron at this point in time.

As it relates to Zero Sign-On, it is slightly different. There's no doubt about it. And we've actually got new partners who are coming to the organization because they recognize the value in what we're doing at this point in time. So we're seeing new partners who want to engage with us based on the zero sign-on type solutions that we're bringing into the market at this point in time. The existing partners should be able to solve for this solution as well, but it's interesting that we're starting to see some new partners come and talk to us about different ways that they can maintain and drive strategic relevance in their customers as well.

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Operator [11]

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Your next question comes from the line of Chad Bennett from Craig-Hallum.

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Chad Michael Bennett, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [12]

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Good to see the overall and secondary metrics progressing really well. So Simon or Scott, for that matter, can you give us a sense or me a sense of within the cloud business, how much of that -- as much as you're comfortable segmenting it, how much of that is net new customer-driven versus cross-sell, up-sell? How much of that -- I think it's -- your traction with Access and Threat Defense are pretty apparent in that business. But outside of those 2 products, can you give any type of color of other products that are driving that cloud revenue line, which looks unbelievably strong?

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Scott D. Hill, MobileIron, Inc. - CFO [13]

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Yes, this is Scott. I'll give you some color on this. So first off, the cloud revenue line is a combination of our cloud UEM product which we call MI cloud and the new products of Access and Mobile Threat Defense. So all 3 are growing well inside that number, so they're all driving for that performance.

To the extent you had -- your first question of...

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [14]

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New customers versus...

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Scott D. Hill, MobileIron, Inc. - CFO [15]

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Yes, new customers. So almost all of our new customers choose the cloud platform. In fact, I think at least 85% in the recent history have chosen the new platform, meaning the cloud platform, for their deployment.

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Chad Michael Bennett, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [16]

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Right. And then maybe a follow-up for me, Scott again or Simon, the zero sign-on solution, I know it just recently [GA-ed], and Simon talked a lot about the customer interest in it. I guess how -- I guess from a market awareness standpoint, in the whole single sign-on authentication part of security, how aware do you think either your customer base or net new customers are of the product? Again, I know it's all of a few months out in the market, just from a market awareness and important standpoint where you think that is.

And then maybe secondarily for Scott, do you -- or should we have anything built into bookings or billings related to that product for the second half?

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [17]

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So to the first part, and this is Simon, so clearly early days, Chad, right? I mean we launched all of these products in early May, and the first place we launched them beyond the broad set of kind of media communications was at our user conferences in the U.S. and then in Europe. So we've got it in front of a large part of the customer base as it exists today at those various different user conferences. And then subsequent to that, we've spent a lot of time at places like the Gartner CSO event, getting the story out there. Then you start thinking about, okay, what are the sources of interest out there that we should be taking advantage of. And I think if you look at things like the fact that we were named by Forbes as 1 of the top 10 security companies to watch in 2019, those are ways that we've got to continue to get the message out that MobileIron is more than the old MobileIron you knew, as either an MDM, EMM or UEM vendor, but now is much more capable of delivering new solutions to sell for Zero Trust and zero sign-on. So I think it's just early days at this point in time, Chad. As we've rolled it out to customers, as the sales guys have been equipped to go have conversations, we're 2 months into that process, and a lot more work to be done. But as I said in my prepared remarks, I'm excited about the type of feedback we're receiving at this point in time.

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Scott D. Hill, MobileIron, Inc. - CFO [18]

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Yes. And then to the financial impact, our expectations are that, that product will impact our 2020 financials. We'll start to see the benefits of it at that point. We have not counted on that in any of our expectations for 2019.

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Chad Michael Bennett, Craig-Hallum Capital Group LLC, Research Division - Senior Research Analyst [19]

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Got it. And then maybe one last one for me real quick. Simon, can you just comment on the traction or progress you made on the U.S. sales front? And it looks like it improved year-over-year again this quarter. Just kind of how you're thinking about that for this quarter and maybe for the second half of the year.

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [20]

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So North American execution improved in the most recent quarter, and the growth rate actually increased. I think we did about 6% growth last quarter versus 4.5% in the prior quarter. That's the highest rate of growth we've actually delivered over the course of the last 6 quarters. And the ARR continues to improve as well. There's more work to be done. There's always work to be done. But with a handful of unfilled quota-carrying positions last quarter that we're in the process of actually rounding out the filling out at this point in time, that will drive improved performance in the second half. And frankly, the quality of the people that we're hiring is actually very high. I'm very pleased with the types of people, from the kind of regional director level down, that we've been able to attract to the organization. And the reason we're able to attract these high-performing sales leaders and quota carriers is the fact that we're offering them something that is a very broad conversation we have around Zero Trust and zero sign-on with the customers, right, and they're not feeling that they're limited by the breadth of the offering at this point in time. So North -- the North American team continues to improve, always room for more improvement, and we're going to continue to drive that as we move forward.

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Operator [21]

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Your next question comes from the line of Raimo Lenschow from Barclays.

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Raimo Lenschow, Barclays Bank PLC, Research Division - MD & Analyst [22]

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Congrats on the nice ARR from me as well. The -- quick question, as you kind of operate in the market with the Zero Trust, zero sign-on, you kind of obviously like changed the messaging away from what your other competitors are doing? Like does that change the competitive field? How does it show up in the -- as you engage with customers? Is that kind of a different buying center for you? Are you kind of, in that way, staying away from the old competitors that you used to have? Can you kind of elaborate on that?

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [23]

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Yes, sure. So there's kind of 3 ways to think about this overall challenge associated with Zero Trust. Let's do Zero Trust first, if we could. So you've got to think about how the different pipes of companies attack the market at this point in time. So as we look at it, we look at it from a mobile-centric approach, right? So we think about it within the context of the footprint. We've established on the mobile device and everything that we can do because we have that very specific footprint on the device itself. There are kind of 2 other ways that people try to solve the Zero Trust at this point in time. One is from a network perspective, right? So the idea there would be that you can move all of the traffic from the mobile device over the network and actually capture it at the gateway level and ensure that the trust exists at the gateway level essentially. And that gets really hard to execute, especially if you got devices that have got both personal data and company data leaving the device. How do you make sure that you're truly segregating personal data and company data and you're not interrogating personal data which causes tremendous consternation when you look at some of our non-U. S.-related markets and so on, okay? So that's part #1. Part #2 is it actually introduces latency as well, right, from the fact that you've got a gateway introduces latency in the overall service.

So you've got network-based approaches to it. And then you've got the identity-based approaches to it as well, which is something the identity providers would put forth. And essentially, what they're trying to do is make sure that the trust is established by you, the carbon you, as opposed to you, the carbon you plus what we would bring which is the carbon you plus the device plus the application level assurances that are necessary in order to assure that, that trust is in place. So yes, there's 3 different ways to approach it.

In our case, the customer is -- the customer starts to blur depending who the company is. At some companies, you've got some segregation of those responsibilities between an infrastructure organization and a CSO organization. In slightly smaller companies, it may just all be wrapped up in one individual who is the buyer for all of those types of technologies. But that's how we think about the market. You can attack it from a mobile-centric approach, you can attack it from a network-centric approach, or you can attack it from an identity-centric approach. And we think we've got the winning strategy based on the fact if you're not on the endpoint, you can't remediate and protect the way you need to be able to remediate and protect, okay? So that's the answer to that question.

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Raimo Lenschow, Barclays Bank PLC, Research Division - MD & Analyst [24]

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Yes. Okay. Perfect. Makes total sense. Okay. And then one for Scott, a little bit on ARR. Can you talk -- so ARR, annual recurring revenue, what are the moving parts as you think about this year's ARR versus into -- going into next year's kind of reported revenue? I mean obviously, you've seen very good growth. What are the things we need to consider if you think like the 20% growth showing up in the P&L next year?

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Scott D. Hill, MobileIron, Inc. - CFO [25]

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Yes. So a couple of thoughts. So first off, on the ARR itself, right, we share that, that has got 2 components, both a subscription base which grew at 31% and a maintenance piece that grew at 3% this last quarter. So the subscription piece obviously getting larger and growing to hit $106 million in terms of ARR this quarter. As we go forward, we still have the continued trend of recurring revenue as measured by ARR, continuing to grow in that 20%, while the onetime revenue, which really is perpetual license piece, coming down. So this quarter, we had a record 87% recurring revenue in terms of the mix between those 2. That trend -- the overall trend is continuing. And as such, then the 20% recurring revenue in terms of our objective for the year will shine through in terms of the expectations for next year, right? In other words, that recurring revenue piece as measured by ARR will become a bigger piece of the business and, therefore, will drive more of the overall growth of the business next year.

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Raimo Lenschow, Barclays Bank PLC, Research Division - MD & Analyst [26]

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So a positive mix effect. Okay. Perfect. Yes, makes sense.

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Operator [27]

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(Operator Instructions) You next question comes from the line of Robert Majek from Raymond James.

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Robert S. Majek, Raymond James & Associates, Inc., Research Division - Senior Research Associate [28]

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Simon, just as a follow-up on the last question, I just wanted to ask you about your strategy and identity and how you stand with the user identity vendors. I know historically, you said that the Access product is positioned as complementary to an [Okta offering], which is with the introduction of the zero sign-on product, at least to me, it seems like the overlap is increasing. Can you just kind of help us understand the dynamic there and if anything has changed?

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [29]

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So they're still important partners as it relates to delivering on the complete solution. We don't want to be the user identity layer, if you will. And for years and years to come, those capabilities are going to be necessary as companies -- if you think about the investment that's been made in zero sign-on technology -- actually, let's do it the other way. If you think about the investments being made in username and password technologies over the course of 50 years at this point in time since that concept of an 8-character password first became known, there's massive investment and deep integrations where usernames and passwords are going to continue to exist for years to come. From our perspective, it's about making sure we got the right partnerships with those guys in order to be able to take advantage of what they can do either from an authentication perspective or from an authorization perspective. So they're going to be important as we partner moving forward. And they're important partners to us today, we've talked about that at length over the course of time, so they'll continue to be important partners as we move forward.

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Robert S. Majek, Raymond James & Associates, Inc., Research Division - Senior Research Associate [30]

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Great. And just maybe one more from me. You launched the beta version of the migration tool a few months ago, and it sounded like it was really important to help reduce some of the friction of physically converting the existing installed base. Can you just give us an update there on what the customer response has been like?

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [31]

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Yes. So it's actually been resoundingly positive. As we think about taking customers on that journey from an on-prem product to a cloud product as they demand with access to cloud-based solutions more broadly and a MobileIron cloud-based solution, specifically our ability to migrate the end user in a seamless way that makes it very easy for the customer to think about going through this process is very competitive. It's a significant competitive advantage would be the right way to say it. So now I'm very pleased with what we've seen. We've got a handful of customers who are actually using the technology today. As one example, with the migration kind of up to 1,000 users per day just as they chunk through moving from the on-prem platform to the cloud-based platform, and so far, very pleased with what we're seeing in that regard.

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Operator [32]

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And there are no further questions at this time. Mr. Simon Biddiscombe, I turn the call back over to you.

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Simon Biddiscombe, MobileIron, Inc. - President, CEO & Director [33]

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Thanks, Christine, and thanks all of you for joining us on the call this afternoon. We look forward to updating you on our progress on our Q3 earnings call. And thanks again, and goodbye.

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Operator [34]

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This concludes today's conference call. You may now disconnect.