Cloudera, Inc. (CLDR) Q4 2021 Earnings Call Transcript

Cloudera, Inc. (CLDR)
Q4 2021 Earnings Call
Mar 10, 2021, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is Gabriel, and I will be your conference operator today. Welcome to Cloudera fourth-quarter fiscal 2021 financial results conference call. [Operator instructions] Please note, this conference is being recorded.

Your host is Kevin Cook, VP, finance, corporate development, and investor relations. Kevin, you may begin your conference.

Kevin Cook -- Vice President, Finance, Corporate Development, and Investor Relations

Thank you, operator. Good afternoon, and welcome to Cloudera's fourth-quarter fiscal 2021 financial results conference call. We will be discussing the results announced in our press release issued after market close today. We have also posted today's prepared remarks and supplemental materials on Cloudera's Investor Relations website, which in combination with our press release, provide additional information as well as greater accessibility to today's quarterly conference call.

From Cloudera, with me are Rob Bearden, president and chief executive officer; Jim Frankola, chief financial officer; Arun Murphy, chief product officer; and Mick Hollison, chief marketing officer. During the course of this call, we will make forward-looking statements regarding future events and the future financial performance of the company. Generally, these statements are identified by the use of words such as expect, believe, anticipate, intend and other words set to note future events. These forward-looking statements are subject to material risks and uncertainties and that could cause actual results to differ materially from those in the forward-looking statements.

We caution you to consider the important risk factors that could cause actual results to differ materially from those in the forward-looking statements in the press release and on this conference call. These risk factors are described in our press release and are more fully detailed under the caption Risk Factors in our annual report on Form 10-K our quarterly reports on Form 10-Q and our other filings with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. Non-GAAP financial measures exclude stock-based compensation expense, amortization of acquired intangible assets, and extraordinary non-cash real estate impairment charges.

These non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results, and we encourage you to consider all measures when analyzing Cloudera's performance. All references to operating income are to non-GAAP operating income. For complete information regarding our non-GAAP financial information, the most directly comparable GAAP measures, and a quantitative reconciliation of those figures, please refer to today's press release regarding our fourth-quarter results for fiscal 2021. The press release has also been furnished to the SEC as part of a current report on Form 8-K.

In addition, please note that the date of this conference call is March 10, 2021, and any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date, including those related to the impacts of COVID-19 on our business and global economic conditions. The forward-looking guidance we will provide today is based on our assumptions as to the macroeconomic environment in which we will be operating. Those assumptions are based on the facts as we know them today. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including, but not limited to, the time frames for and severity of social distancing, and other mitigation requirements related to COVID-19 and the impact of COVID-19 on our customers and partners and its impact on the economy as a whole.

Significant changes in the future, whether related to COVID-19 or other factors could cause us to modify our guidance. We undertake no obligation to update these statements as a result of new information or future events. Now Rob Bearden, CEO.

Rob Bearden -- President and Chief Executive Officer

Thank you, Kevin. Good afternoon, everyone. Thanks for joining us to discuss our fourth-quarter and full-year fiscal 2021 results. Today, we'll quickly reflect on FY '21 accomplishments, discuss how we're positioned for the current fiscal year, and review our financial results in Q4 in detail.

In all, we executed extremely well in Q4 throughout fiscal-year '21, and the opportunity for Cloudera has never been larger. Let's begin with our performance in the fourth quarter. Total revenue was $227 million. Subscription revenue was $207 million, and non-GAAP operating income was $50 million.

Annualized recurring revenue reached $778 million at the conclusion of the quarter, representing 10% year-over-year organic growth. And it's noteworthy that Cloudera Data Platform, or CDP, demonstrated significant momentum in the quarter. Customers migrating to CDP increased from about 10% of our customer base and the timing reported Q3 to more than 15% of our customer base today, which is well ahead of plan. Most impressively, ARR from CDP now exceeds $60 million of total ARR.

I'm pleased to note that there is no year-over-year growth comparison for CDP as we've only had hybrid cloud offerings in the market for a few months. And these early migrations really validate customer demand for a hybrid data cloud platform and the new use cases that we address with CDP. The use cases have enabled the full data life cycle from data collection reporting predictive analytics and AI. This is optimizing enthusiastic customer feedback demonstrates that we have the right strategy and it's working.

The adoption of CDP for hybrid data cloud and data life cycle use cases is what will drive future growth, and we're happy with our progress today, and we'll spend more time on each of these items later in the call. So in fiscal '21, we delivered on a number of key objectives that set us up for continued success this year. And I'll mention just a few of these accomplishments. First, from a product perspective, we delivered the industry's first cloud data in a multi-cloud data and analytics platform that meets the needs of large enterprise customers from mission-critical data-driven applications.

In addition, we developed an integrated suite of analytics capabilities that serve as use cases throughout the life cycle of data from the Edge to AI. We also completely rebuilt our data platform with a modern containerized architecture that separates computing storage, marking the definitive end to the Hadoop era and empowering our customers to migrate to the hybrid data cloud architecture they want. And we executed on a number of critical digital and business transformation initiatives, making everything from CDP trials to customer support faster and easier for our customers and more efficient for our business. From a partnership standpoint, we expanded our hyperscale cloud provider relationships and solidified our partnership with IBM Red Hat, particularly for our private cloud offerings.

Importantly, we also produced steady organic growth above expectations and gained efficiencies that drove operating income margins on a non-GAAP basis from negative 5% for fiscal 2020 to a positive 17% for fiscal 2021. In closing, FY '21 was a year of important transformational work, designed to position the company for growth and to capture the market opportunities that are right ahead of us. So as we consider the opportunity for fiscal '22, we remain firmly convicted that enterprises will require a hybrid and multi-cloud data architecture for many years to come. Enterprises want the agility, ease of use, elasticity in the public cloud, and the performance securing cost advantages of the private cloud.

And only CDP can deliver that, enabling our customers with a modern platform to manage their hybrid architecture and analytics applications. Now let's briefly discuss CDP's traction today, permitting our customers the general availability of CDP Private Cloud late last fall to start the beginning of their migrations from legacy Cloudera and Hortonworks products to CDP. Over the course of just a few months, nearly 300 customers have begun to move some or all of their workloads to CDP. This represents more than 15% of the customer base and has excellent traction since last quarter.

For example, in Q4, we saw strong customer adoption of CDP hybrid private and public cloud by customers like Telecom Italia, ExxonMobil, and Daimler. We're extremely pleased with this in the short time our hybrid data cloud offering with CDP has been available. In terms of the economic impact of CDP, we're seeing that our customers who deploy CDP are growing faster than the rest of our customer base. We only have two quarters of history, but these customers have a net expansion rate in excess of 120% for the Q3 and Q4 cohort of CDP adopters.

And this growth is consistent with our customers moving to modern hybrid data architecture and begin deploying new use cases in the cloud. We believe that most of our customers will move the bulk of their existing workplaces to CDP Private Cloud first. As you know, many of our customers have large data sets and manage mission-critical applications that may not be good candidates for public cloud deployments. Their objective is to create a modern hybrid data architecture and to selectively leverage public cloud infrastructure to extend existing use cases and to build complementary movements.

As a public cloud platform, CDP enables customers to easily and rapidly develop new use cases using cloud-native services. And since the introduction of CDP Public Cloud, we made major advances on threat, functionality, and quality to meet the requirements of both existing and new enterprise customers. As a result, we're now in a position to benefit from the key industry trends of data and workload movement to the cloud and customer demand for hybrid solutions. So based on current momentum, we're expecting the majority of our existing customers will initiate migrations to CDP this year.

We were fully engaged with these customers to assist them with that migration planning and to accelerate the rate at which the clusters and workloads move to CDP. As a result, we believe that we can grow CDP ARR to more than $250 million in fiscal 2022. And we're going to talk in a minute more about our priorities in fiscal '22 to meet these goals that I've just outlined. OK.

Now that we've covered our accomplishments in FY '21, discuss our strategic outlook for FY '22, and shared our progress on customer migrations, let's now turn our attention to the technology and functionality that distinguishes CDP in the marketplace. So it's for everyone. CDP is a hybrid multi-cloud data platform and an integrated suite of analytics applications. It has two form factors: public cloud and private cloud, with shared common security governance and management framework that is powered by SDX.

This delivers a hybrid data cloud architecture, which allows our customers to optimize the performance, cost, and security of data-driven applications across the entire enterprise. And this is a completely new architecture that's divorced from what people used to regard as this allows for easy migration from those legacy platforms for this next-generation data cloud. And this interoperability of CDP public and private is highly differentiated, delivering true hybrid cloud functionality. CDP offers our customers one more stick environment that spans multiple public and private clients.

CDP separation of compute and storage and its use of container technology also means that the user experience is newly identical in CDP public and private. Importantly, CDP is also secured by design and supports the full life cycle of data. CDP can solve real business problems in a wide variety of use cases for both structured and unstructured data ranging from streaming analytics to AI. And although the strategy is definitely hybrid and multi-cloud, the advancements we've made recently with our public cloud services are important.

Entities still deliver tremendous value in terms of TCO and ROI for our customers. And this is clearly demonstrated in a recent cloud data warehouse study conducted by an independent third-party analyst firm, and it was published by DNA. And in this particular evaluation was an analytics performance test that was derived from the industry-standard PPC benchmark. CDP Data Warehouse in the field test 20% faster and more cost-effectively than our nearest competitor.

And I'd encourage you to check out the results for yourself on the GigaOm website. While we are understandably proud of our performance in the cloud data warehousing space, we're also making significant progress in our streaming solutions. Streaming remains one of our fastest-growing businesses. Our strategy has the most comprehensive set of functionality for the 5G including ingestion, flow management, messaging, and real-time analytics.

As part of CDP Public Cloud, streaming and flow management has quickly become two of the most popular use cases. Also, later this month, we plan to deliver the streaming capabilities through the acquisition and CDP Private Cloud. This functionality will enable our customers to create real-time strengths through an intuitive user interface that includes visualization and dashboarding capabilities, driving increased adoption of our streaming offerings by data and businesses. Complementing our success in streaming machine market empowers our customers to rapidly build machine learning models and deliver production use cases with integrated security and governance.

As you may recall, in Q3, our CDP Machine Learning service was recognized as a leader and force of medical predictive analytics in the machine line. This quarter, we introduced a revolutionary new way to deliver enterprise end-use cases, Cloudera or Applied ML prototypes these are prepackaged applications that enable complete machine learning projects to be deployed with one clip directly from CDP Machine Learning. And some examples of the pre-built apps that we've made available include churn modeling, deep learning, anomaly detection, demand forecasting, and model compliance. And this effort significantly enhances our offering in the fast-growing ML and AI models.

OK. So as you've seen, we delivered several new and highly differentiated solutions in FY '21. Our R&D efforts will now be focused primarily on simplifying migrations to our CDP hybrid platform and delivering cloud-native services on CDP Public Cloud. We've also made very target adjustments to our go-to-market model as the year unfolds to accelerate growth, enable a cloud-first business model that focuses more on new customer acquisition.

Specifically, we have several key priorities for fiscal '22. The first is to promote hybrid data cloud adoption. This effort is already well under way as evidenced by strong ARR performance in CDP in Q4. Though the indications or the customer demand remains high and CDP adoption will continue to accelerate.

Second, we significantly more innovation planned for cat this fiscal year. We're dedicating more than 65% of our R&D dollars to public cloud services and hybrid cloud product development. That success, we see big opportunities in streaming ML and Applied AI. And together, these are our fastest-growing businesses, and we intend to enhance our differentiation in each of these areas throughout fiscal '22.

And next, over the course of FY '22, we're making a deliberate shift in our go-to-market focus from almost exclusively existing customers to also now tracking news. We'll accelerate our business transformation to advance digital customer engagement, including increased marketing spend with a portion directed at customer segments below our traditional large enterprise customer base. This is designed to lower our customer acquisition cost and expand our market opportunity to midsize enterprises and line of business futures. In addition to targeting these segments, we plan to formalize our efforts to attract nonpay users of our software.

This is really pretty straightforward now that nearly all of our compiled software is accessible only with a subscription. And since adopting the Red Hat distribution model, we've already had meaningful success in converting nonpaying users to subscribers, and we intend to expand on the success in FY '22. Finally, as mentioned, we have begun to prepackage a handful of our most common and highest-impact machine learning AI use cases in the form of applying on prototypes. These one-click apps make it easy for customers to deploy machine learning AI use cases using CDP Machine Learning.

There seems to be a strong market demand for Applied ML and AI apps. And if package this way, and we believe these prototypes will accelerate CDP ML consumption. As a result, we plan to invest in the development of the digital free-built machine learning apps throughout the course of the year. As you can see, we remain focused on making it easier for our customers to gain valuable insights from their data.

We firmly believe that our hybrid and multi-cloud strategy is the for our customers and our business. We're entering FY '22 with a new level of momentum that customer migrations to see accelerating with our CDP hybrid and multi-cloud solutions that are now in market. That said, there's still much to do. We must continue to simplify and harden our products to make them easier to use and ready to address our customers' mission-critical use cases.

We must also accelerate our business transformation to cloud-first go-to-market model that includes new customer acquisitions. And so before Jim takes us through the numbers, let me close with a quick update on a new strategic partnership. This maybe that semiconductor technologies become increasingly important for machine learning and AI. It's critical that advances in analytics software match the advances in silicon and are optimized for GPUs.

As a result, Cloudera and NVIDIA partnered to deliver massively accelerated process for enterprise data engineering and data science workflows on CDP. And within data, GPUs natively integrated into CDP. Customers will now be able to more rapidly perform data workflows across remits public cloud or hybrid deployments at lower cost. And we're excited to partner with NVIDIA and expect this alliance to help differentiate our solutions in many ways.

So I'll stop there. Jim would be pleased now to review the financials.

Jim Frankola -- Chief Financial Officer

Thanks, Rob. Hello, everyone. Fiscal Q4 was another very strong quarter in the face of a pretty tough operating environment. Total revenue was $227 million, an increase of 7% year over year.

Subscription revenue was $207 million, an increase of 14% year over year. Annualized recurring revenue for fiscal Q4 was $778 million, up 10% over the same period last year. For fiscal-year 2021, total revenue was $859 million, an increase of 9% over fiscal 2020. And subscription revenue was $783 million, up 17% year over year.

Note, information regarding definitions and trends can be found in today's press release or the supplemental materials on Cloudera's Investor Relations website. As we enter a new fiscal year, I'd like to begin with an update on reported financial and non-financial metrics that we use to manage the business. Some of the metrics that we've tracked and reported in the past have lost their utility for predictive character as our business model has evolved. We will see easing some metrics and begin to introduce others for fiscal-year '22.

For example, when we work predominantly an on-premises business, we used to count customers only after they reach $100,000 of ARR. To complete the fiscal '21 disclosure, we concluded Q4 with 1,005 customers who started at or have grown to more than $100,000 of ARR. But this number is much less useful than in the past because we expect many of our new customers to come to us as CDP Public Cloud customers acquired with reduced involvement from our sales force and commencing an economic relationship based on consumption revenue of a few dollars per hour. This is exactly what we want to have happened from a cloud-first standpoint.

However, it is likely to take several quarters before such a customer eclipses $100,000 of ARR. To be clear, the expected ramp in new customers will be modest in the first two quarters of fiscal-year '22 as we focus on supporting our existing base as it upgrades to CDP. In this regard, million-dollar-plus ARR customers are still important, and we will continue to track these. In the fourth quarter, we increased this number again by a record amount.

From 179 in Q3 zero to 190 in Q4, an increase of 23% year over year. As fiscal '22 progresses, we expect the contribution to ARR growth for new customers to increase. Accordingly, we will disclose the proportion of ARR growth from new customers versus existing customers. In Q4 of fiscal '21, three percentage points of the 10 percentage points of ARR growth came from new customers.

With respect to CDP, we will evolve the metrics to match the state of the business. The primary measure of progress in the short term is the continued adoption of CDP products by the customer base and total ARR for CDP. Therefore, we will track and share the percentage of existing customers that have initiated an upgrade to CDP as well as the ARR dollar value and growth rate for CP. For additional context, while the fourth quarter was marked by record profitability, our operating margin came in roughly four percentage points higher than normalized Q4 levels due to lower travel and facilities costs because of the pandemic.

Among the pandemic-related items, we reviewed our real estate portfolio and have taken a $36 million impairment charge to reflect that anticipated sublease income will be less than lease payments. This expense is reflected in our GAAP results and is excluded from non-GAAP expenses and profitability metrics. Please see the supplemental materials on our Investor Relations website for further information. As I review the remainder of the income statement, note that unless otherwise stated, all references to expenses and operating results are on a non-GAAP basis.

Historical non-GAAP results are reconciled to GAAP results in the press release issued earlier today. Our non-GAAP measures exclude stock-based compensation, amortization of M&A-related intangible assets and extraordinary non-cash real estate impairment charges. Total gross margin for Q4 was 85%, compared to 79% in Q4 of last year, driven by subscription gross margin of 91%, up from 88% from the year-ago period. Overall operating income was $50 million for the fourth quarter, representing an operating margin of 22%, a substantial improvement of 17 percentage points compared to Q4 of last year.

Operating cash flow for the fourth quarter was $37 million. Top line growth and ongoing operational efficiencies are driving our strong cash flow. Diluted earnings per share was $0.15 in the fourth quarter, compared to $0.04 in the fourth quarter of fiscal 2020. For the full year of fiscal 2021, total gross margin was 83% compared to 76% for fiscal 2020, while subscription gross margin for the full year was 90%, compared to 87% for last year.

Operating expenses in fiscal '21 were $572 million or 66% of revenue, compared to $646 million or 81% of revenue in fiscal 2020. Operating income was $147 million for fiscal 2021, representing an operating margin of 17%, a 22 percentage point improvement from fiscal-year 2020. Operating cash flow for the year was $156 million, an improvement of $193 million from the year-ago period. Diluted earnings per share was $0.45 in fiscal 2021, compared to a loss per share of $0.13 in fiscal-year 2020.

Now turning to the balance sheet. We exited Q4 with $773 million of cash, cash equivalents, marketable securities and restricted cash, up from $568 million at the conclusion of Q3. Note, in December, we executed a term loan of $500 million on favorable terms, equating to 3.25% floating rate for seven years. At that time, the board also approved a corresponding $500 million share repurchase authorization.

In the fourth quarter, $314 million of the loan proceeds were used to repurchase 26 million shares of common stock. Total contract liabilities were $608 million at the end of the fourth quarter. RPO was $954 million, up 9% year over year. Current RPO grew 13% over last year.

Capital expenditures were $3 million in the quarter and $10 million for the full year. I will conclude by providing initial guidance for fiscal Q1 and for fiscal-year '22, which is subject to the disclaimers provided at the beginning of the call regarding forward-looking information. We expect Q1 total revenue to be between $216 million and $218 million, representing approximately 3% growth compared to Q1 of last year, with subscription revenue in the range of $195 million to $197 million, up approximately 5% year over year. Non-GAAP operating income is our primary bottom-line metric.

We expect operating income for the first quarter to be in the range of $28 million to $33 million or roughly 14% of revenue. Diluted earnings per share for Q1 is projected to be $0.07 to $0.09. For fiscal-year 2022, we expect total revenue to be between $907 million and $927 million, representing approximately 6% growth, with subscription revenue in the range of $822 million to $832 million, up approximately 6% year over year. We expect to steadily supplant revenue from traditional products with revenue from CDP throughout fiscal '22.

By the second half, growing CDP public cloud consumption revenue and CDP expansion activity will begin to push ARR higher. Driven by CDP momentum, we expect ARR to grow by at least 10% year over year for the first two quarters of fiscal-year '22 and one or two percentage points faster for the second half of the year. Once again, ARR is the best measure of recurring economic activity and normalizes for the effects of accounting, M&A and a shift toward 100% open-source software. In fiscal 2022, ARR is expected to grow faster than subscription revenue due to an intentional decline in nonrecurring revenue, particularly nonrecurring engineering.

Nonrecurring revenue is reflected in subscription revenue on the income statement. Nonrecurring revenue is an effect of our on-premises business and is not strategic. We are managing down these commitments to focus resources on hybrid cloud development. Specifically, we expect our nonrecurring revenue to decline from $48 million in fiscal '21 to approximately $20 million in fiscal-year '22.

To be clear, the recurring component of subscription revenue is expected to grow in line with ARR at 10% or higher. With respect to spending, using fiscal-year '21 as a baseline, we expect the following trends in fiscal-year '22. Gross margins will be relatively flat as increased operational efficiencies are offset by slightly higher initial costs associated with the support of customers on new offerings. Sales and marketing will increase as a percent of revenue as we make investments in the hybrid data cloud market opportunity and planned CDP adoption.

Expense will grow due to increased resources associated with traditional go-to-market motions, as well as investments in digital transformation, in particular, creating new go-to-market motions to build awareness and drive consumption of CDP. In addition, we anticipate travel expenses to increase in the second half of the year. R&D will be flat as a percent of revenue as we shift the focus of our engineering teams away from the heavy work required to develop CDP to building increased functionality and extending CDP's reach. G&A expenses, excluding expanded facilities expenses, will continue to decline slightly.

These trends will result in fiscal-year '22 operating margins of approximately 16%, down slightly from fiscal year '21 due to the accelerated investments in sales and marketing to support CDP growth. We expect operating income for fiscal 2022 to be in the range of $137 million to $147 million. For the year, we expect operating cash flow to be slightly above operating income despite absorbing approximately $16 million of interest expense. Diluted earnings per share for fiscal '22 is projected to be $0.35 to $0.39.

Now I'll turn the call back to Rob.

Rob Bearden -- President and Chief Executive Officer

Thanks, Jim. Q4 is a clean quarter, and that outlook for Cloudera is better than it's been for some time. We've demonstrated consistently strong execution for several quarters. We've introduced new products to launch cloud-based services.

We've stabilized our existing customer base and one of their commitment, our new offers. Now excited to be moving through this transformational phase with a view toward more rapid growth. We've got a $900-million plus revenue stream. It takes time for CDP adoption to impact that number, particularly if CDP Public Cloud is an entirely consumption-based revenue.

That said, it's our hybrid data cloud that's driving customer engagement. So the hybrid cloud trend, combined with the exceptional market opportunity for analytics and AI, positions Cloudera nicely. These markets are at the very early stage of development, and CDP enables us to innovate at a faster pace of aggressively acquiring customers. It's a multiyear transition to establish ourselves is the hybrid date cloud category leader, but we're focused on to methodically advanced toward our market rate growth objectives, along with the sense of urgency in achieving our FY '22 objectives.

So I'll leave it there, except to say, thanks to all those who helped us bring us to this point. In addition to Jim and myself, Arun Murthy, chief product officer; Mick Hollison, our chief marketing officer, are also available with Jim and I for Q&A. So operator, please begin the Q&A portion of the call.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question will come from the line of Chad Bennett with Craig-Hallum. Please go ahead.

Chad Bennett -- Craig-Hallum Capital Group LLC -- Analyst

Great. Thanks for taking my question. So you gave off a lot of metrics there, which are great, and it's great to break out the CDP ARR and your expectations there. But just you're trying to unpack, Rob and Jim, probably the 120% plus net expansion in the CDP customers or your base that's migrated to CDP for the Q3 and Q4 cohort.

I guess just in plain English, what does that mean? Just whether they were on Hortonworks distribution or Cloudera distribution before, you're kind of annualizing the contract and you're seeing 120%. Can you just give further color there?

Rob Bearden -- President and Chief Executive Officer

Yes. Sure. Chad, thanks for joining. Appreciate the question.

So yes, I'd like -- it's just foundational. So we've only got two quarters of cohort, Q3, Q4, of CDP customers -- excuse me, legacy customers moving to CDP, recognizing also that really Q3 was not a full quarter of having full CDP hybrid in market holistically, right, so in the full quarter. So what we're seeing from that is though, the customers, whether they be legacy Cloudera or Hortonworks that are moving workloads to CDP and acquiring CDP entitlements, we're seeing the net expansion rate for those portions of workloads to grow at a faster net expansion rate than the traditional legacy environments. And they're tracking at about 120% of that net expansion rate, which is a great signal.

It plays very much into the value creation of CDP hybrid platform and the ability to expand use cases in a high-value way and, to many degrees, also a low friction way.

Jim Frankola -- Chief Financial Officer

And let me just jump in on how we measure it. So we look to see customers that graduated to be CDP customers in Q3 and Q4. They make up a cohort. We then compared their Q4 ARR from last year to Q4 ARR this year, and that results in a net expansion rate calculation.

So that group of customers is growing faster than our average customer and is, quite frankly, growing at a very nice rate.

Rob Bearden -- President and Chief Executive Officer

Yes. And the drivers very principally of that are CDP just represents more capabilities generally. It's faster and easier to get workloads in and to gain insights into the data and to leverage the use case experiences. And it's quicker ROI and a better TCO than the legacy platforms that they were -- and have been traditionally operating on.

Recognize as the last piece of that, Chad, is that our customer base, as you know, are running these very mission-critical use cases and are very large data sets. So the migration to CDP and the hybrid environment has to be a very well-thought-through migratory approach. And we're heavily engaged in assisting the customer base on how to get there in a methodical way and a mindful way. And so it is and sometimes multi-month and can be multi-quarter process as they wag into CDP.

Chad Bennett -- Craig-Hallum Capital Group LLC -- Analyst

OK. And then maybe one follow-up for me. So if I try to connect the dots between the guide, especially for subscription for the year and what appeared to be pretty decent CRPO numbers -- and I know you don't like talking about billings, but billings look actually fairly good. Is it as simple as answer as the nonrecurring engineering revenue headwind of, I think, roughly $28 million? Or can you just kind of give me an update on how churn played out in the quarter, maybe how the IBM partnership played out the quarter? And is there anything that changed relative to your outlook in the last few months?

Jim Frankola -- Chief Financial Officer

Yes. So let me start with some of the numbers. Then I'll turn it over to Rob for some of the color and business. So you know the big news, so to speak, in the guidance, and that is the deceleration of nonrecurring engineering revenue.

That's a conscious and strategic decision that we've made to refocus our engineering team on the hybrid cloud versus, I'll say, the partner certifications and other types of things you do in a legacy on-prem business. So that's one element. The billings piece, we probably pulled ahead about $40 million more billings out of Q1 and hence, fiscal-year '22, above expectations. And that's a reflection of the conversations we're having with customers on CDP right now.

So we're plotting migration plans. We're selling professional services, and that has caused our services bookings to be good in the quarter. And it caused a number of contracts that have formally been signed in Q1 to be signed in Q4. So that's certainly good news, but it's a left pocket, right pocket.

It shifts some billings out of next year. Beyond that, I'll say, we're a 10% ARR grower. We've said that for a while. And as CDP gains traction, we will accelerate to 11 and 12 as we believe will occur in the second half this year.

Rob, is there anything you want to add?

Rob Bearden -- President and Chief Executive Officer

Yes. Just very simply, the NRR that we have moved away from was very, very conscious, and it is an absolute reflection of our shift into CDP, the migration and adoption and traction that we're seeing with that, and we want to make sure that we're allocating our R&D resources onto the platform that's going to give us the highest return in that CDP for hybrid environment versus doing NRR, co-dev in the legacy platform. It's just a dollar in, a dollar out in the old legacy world. And those resources are exponentially better applied on to CDP and driving the acceleration ultimately of the adoption for CDP.

And we're seeing acceleration of that adoption happen before our very eyes this quarter as you can see in the numbers.

Chad Bennett -- Craig-Hallum Capital Group LLC -- Analyst

OK. Thanks for the color.

Jim Frankola -- Chief Financial Officer

Absolutely. Thanks for joining.

Operator

Your next question will come from Sanjit Singh of Morgan Stanley. Please go ahead.

Sanjit Singh -- Morgan Stanley -- Analyst

Hi. Thank you for taking the questions, and congrats on a good end to the year. I had a similar question around the ARR trajectory. I think, first, when we look at the $60 million going to $250 million into next year, if you look at some of the components of that, how should I think about net new versus expansions versus migrations? And when customers do expand or migrate rather, is that going to be sort of a dollar for dollar? Is it going to be more of a compression effect? Or is that going to be sort of net neutral to their preexisting ARR commitment?

Rob Bearden -- President and Chief Executive Officer

Yes. Sanjit, thanks for the question. Thanks for joining also. So let me take the first part of that, and then Jim's probably going to add some color to it.

So look, I think what we are very focused on is, when we look at the traction and the acceleration, as we looked at quarter to quarter going from 10% of the customer base adopting CDP from last quarter to 15% in Q4, significant acceleration. That's driven by the more completeness and stability of -- and increased functionality and candidly, ease of use and ease of migration to CDP, a lot of backlog to get to CDP. And that is driving the consistency and expansion of the net expansion rate that we've seen in the Q3, Q4 cohort right now tracking at about 120%. And so it's actually -- now to your question, for the portion of workloads that need and are able to migrate within the customer base's migration plan as they acquire CDP entitlements, the base is a dollar for dollar, but the net expansion is tracking well above the legacy expansion.

In addition to that, what it does is it allows net new workloads to also come online whether -- for the hybrid environment, whether it be public or private. And so it's just unlocking a lot of the backlog of workloads and data sets that wanted to be applied on the existing use cases that customers have been running. And so that momentum is building really nicely. We're pleased with the progress, and we're continuing to make sure that we're really leaning in both from an assistance standpoint and migration as well as making sure from a tech completion and tooling to move those migrations along in an accelerated way.

Jim Frankola -- Chief Financial Officer

Yes. And I'll just add some quantitative pieces. So regarding the new versus migration versus expansion, three points of our ARR growth as of Q4 came from new. We expect that to be roughly the same for the next quarter or two, and then as CDP matures as our go-to-market efforts against that new opportunity increase, we expect the portion of growth from new to increase in the back half of the year.

So that's a piece of it but a modest piece. Migration is going to be a big piece. And underneath migration, there is an element that will be a short-term drag on ARR growth. And that is, as customers move from a term license to a prepaid consumption on the public cloud, we recognize revenue on the consumption side of our business when it's consumed.

So you'll go from potentially seeing a slight revenue drag at first when customers start moving to the cloud until their usage kicks in months or quarters later. So that is factored into our guidance as well. So the biggest piece of the $60 million to $250 million is the migration, coupled with expansion. $60 million to $250 million, yes.

Sanjit Singh -- Morgan Stanley -- Analyst

That's super helpful. And then just one quick follow-up, again, on a similar topic but this one on form factor as you put it, Rob, public cloud versus private. Where do we stand in terms of public cloud of that $60 million? And it sounds like the driver for that new business coming in the door in the second half of next year is going to be driven by public cloud. So first of all, you guys have been very explicit about public cloud driving near-term ARR the next couple of quarters in quite some time.

So I just wanted to get your latest thoughts on the mix on the form factors going into next year.

Rob Bearden -- President and Chief Executive Officer

Certainly. So we think about CDP in terms of hybrid, and obviously, it has public and a private form factor. And what our customers want is to enable the hybrid multi-cloud data platform. And those workloads will move fluidly between private and public and across public clouds.

And so we're not breaking out deliberately the amount of revenue allocation or consumption by tier, if you will, meaning public or private. As you see, we've had acceleration to CDP in terms of current quarter at $60 million. We are seeing with momentum behind CDP and its adoption in our projections that CDP has generated a $250 million ARR in FY '22. And that will be distributed, as we talked about, between private and public.

Sanjit Singh -- Morgan Stanley -- Analyst

Appreciate your thoughts. Thanks, all.

Jim Frankola -- Chief Financial Officer

Yes. Absolutely. Thanks for joining, Sanjit.

Operator

Your next question will come from Rishi Jaluria of D.A. Davidson. Please go ahead.

Rishi Jaluria -- D.A. Davidson -- Analyst

Hey, guys. Thanks so much for taking my questions. I wanted to start by drilling a little bit into the guidance and specifically for next quarter. So if I look at the subscription guidance, even adjusting for the mix shift away from nonrecurring, it is still calling for a sequential decline if my estimates are correct.

Maybe help us understand what's going on in that guidance and what assumptions are being made into there. And then maybe alongside that, Jim, I know you don't like billings. But as we think about the billings guidance for Q1, maybe can you walk us through a couple of the puts and takes of billings? You're talking about it being down double digits year over year. How much of that is from pull forward into Q4, as you mentioned, versus CDP shifts of going from prepaid to consumption-based and then the headwinds from obviously the nonrecurring shift? And then I've got a follow-up to that multi-part question.

Jim Frankola -- Chief Financial Officer

Yes. So the sequential change in revenue, subscription revenue in particular, in Q4 to Q1 is driven by three things. First and foremost, the number of days in the quarter, that's a little bit more than a 3% cash from revenue. The second piece is that although we're mostly, vast majority of open source software, we still have some proprietary software.

On the proprietary software piece, there's upfront revenue that is associated with FIP, functional IP. Given the fact that close to 40% of our bookings occur in Q4, we have a seasonally high FIP that shows up in revenue. And this is why ARR is the best measure, but you'll see a big decline in that FIP number from Q4 to Q1. And the last piece of it is, and if you go into the supplemental materials, you can see the NRR piece.

So NRR is also nonrecurring revenue is also stepping down Q4 to Q1. So those three things are what's driving the sequential decline. If you strip out the nonrecurring revenue piece and you look at year-over-year growth rates for our recurring revenue, that is up roughly 10% year over year. On the billings piece, once again, if you move $40 million of Q4 billings back to Q1 and do the year-over-year math both Q1 and for the full year, I think you'll see a growth rate that approximate net revenue return.

Rishi Jaluria -- D.A. Davidson -- Analyst

Got it. That's helpful. And then just on CDP as a percent of the business, I appreciate the disclosure, and great to see that 8% around there of total ARR. How should we be thinking about that number trending over time? I mean it should just be a slow ramp-up? Should it gradually or massively accelerate? Maybe just help us understand how we should be thinking about the mix shift on CDP as a percent of total ARR.

Jim Frankola -- Chief Financial Officer

Yes. I'll start. So big picture, we think that more than half our customers who have started a journey to CDP by the end of this year. If you look at our guidance -- well, not guidance, cost guidance for ARR growth, that means that we should have well over $400 million worth of ARR associated with customers who have started that journey.

Now exactly how far they will -- each of them will progress and the risk of their SKUs to be entitled to run CDPs, which we're just at the very start of this journey. So that's where the $250 million comes from. We're pretty confident -- very confident of the $250 million number. How quickly it progresses to that $250 million, how much upside there is above that $250 million, we'll be able to tell you a lot more in 90 days.

Rob Bearden -- President and Chief Executive Officer

Yes. But we're very, very encouraged by the acceleration that's happening over and above the adoption models that we have been anticipating. And I think it's a great testament to the capability of CDP, the value it brings and the TCO that it's driving.

Rishi Jaluria -- D.A. Davidson -- Analyst

Wonderful. Thank you so much, guys.

Operator

Your next question comes from Jack Andrews of Needham. Please go ahead.

Jack Andrews -- Needham & Company -- Analyst

Good afternoon. Thank you for taking my question. Rob, you mentioned that obviously one of the key metrics here is just overall adoption of CDP products. So I was just wondering if there's a way to parse out in more detail maybe which parts of CDP are really gaining traction.

You mentioned some of them around AI, machine learning, streaming. But is there a way to maybe provide some context or metrics around the penetration of individual components and if there's a way to go deeper into how these individual parts may be driving broader adoption of the CDP platform?

Rob Bearden -- President and Chief Executive Officer

Yes. I think that's really the real power behind the model and that you think about CDP, as we've talked about, in two form factors, public and private. And the highly differentiation and value creation is the interoperability for between public and private to enable a true hybrid data architecture and then be able to enable the entire life cycle of data and those analytics applications across that hybrid data with a common security and governance platform and framework. Right? So with that, what we see then is the initial motion is the legacy customer base between Cloudera and Hortonworks moving to CDP as a hybrid platform, distributing their workloads between private and public.

The biggest portion initially go to private. Then we see expansion to either, depending on the workload type, public or private. That embodies the phase one and generally comes with a -- as the numbers, as we talked about in the initial cohorts, are driving that 120% net expansion. Phase two then becomes around that adding net new workloads to either public or private but irrespective on the CDP.

And then within that sort of in parallel and beyond is then enabling the analytics applications for the hybrid platform. And so those and the two fastest-growing use cases that we have right now that we've indicated, I think in previous calls and remains consistent now and in our model through the year, is streaming and ML. Those are growing well above our corporate growth rates. As markets are accelerating, we're getting great acknowledgment of our leadership in these spaces, and we're not breaking out the numbers, but essentially, we're seeing that roughly 25% of our ARR is driven from those two use cases in particular.

And what we're now seeing is incremental momentum if you will. As we talked about in some of our prepared remarks -- I talked about some of our prepared remarks, the things that we're doing with AMPs, and those are the pre-built apps for machine learning, and as you're aware, just to refresh everybody on the call, in many of our customers and the big regulated industry that are heavily data-driven and digital transformations are under way in those industries and across our customers and those are in healthcare, manufacturing, telco, financial services, what they have done is built those mission-critical applications and use cases for things like anomaly detection, fraud, demand forecasting, churn, money laundering, network load management, etc., etc., etc. We've been able to leverage our relationships from a co-dev standpoint and be able to take those industry templates, put them across the machine learning platform and be able to get high-value, single click-through to deploy these workloads on to CDP in a very accelerated time frame. So that's driving incremental expansion across our customer base and also allowing us to move to acquiring new customers in new market sectors and expanding our presence in existing industries we've got strong holds in.

So it's beginning to have a compounding effect, and it's a great testament to CDP now coming online and the improvement and the ease of use of the platform. And now we're able to take the life cycle experiences, lay on to CDP hybrid, create more value, more traction. And as we talked about, again, this is another great example of why we don't want to spend resources on doing legacy NRR work that don't have return and impact to the future. We prefer to move those resources on to things like building more AMPs and more of the life cycle service functionality because it's going to accelerate adoption of CDP and drive net expansion faster.

Jack Andrews -- Needham & Company -- Analyst

I really appreciate that answer. That's super helpful. Just as a quick follow-up. Rob, you had mentioned that one of your new priorities, which you touched on here in your answer is just bringing onboard new customers to Cloudera.

And I was wondering, you referenced sort of targeting line of business users as well as some potential mid-market enterprises. I was wondering if you could just shed some light on how you plan to target those because, to my recollection, I feel like those are different personas than Cloudera has historically targeted.

Rob Bearden -- President and Chief Executive Officer

It has been. Good question. I appreciate you putting that out there. It is absolute a very fundamental and core priority for us as a company, certainly for me, but as a core operating priority.

And so just quickly reflecting to refresh everybody. As we've been making the CDP transformation from the existing legacy platforms to CDP. That has been a very big effort because we have to make sure that CDP's hybrid platform is mission critical, application ready to run those enterprise-viable workloads at scale for our customers. And so to do that, we've been largely focused on finishing the platform, delivering the tech and making sure that we're servicing our customer base extraordinarily well on a high-value, high-touch way.

And we were extraordinarily focused on our legacy customer base, helping them be successful in their current operating environments, as importantly in parallel, helping them plan the blueprint to their migration to CDP to enable their hybrid data strategies. Right? And as you see from the numbers, we delivered certainly, only in the last few months having CDP hybrid available in market, that the work we've done with our legacy customer base and the planning process we've gone through to get them moving is clearly showing up very quickly moving from 10% to 15% of the customer base to CDP driving $60 million in ARR and another incremental 30%, 35% of the customer base by the end of the year, moving us to around the $250-plus million CDP ARR. But what that really now does is give us the ability with the completion of CDP to now leverage the work that Mick and his team has been driving around digital transformation and the go-to-market motion that Scott and his team have built to now we can take through our product packaging, through our digital motion and get to a new customer base in the mid-market that we've not been able to cost effectively either touch or cover as well as now be able to take either digitally and/or the life cycle experiences on a very targeted basis to the line of business users, all of which will drive net new adoption in terms of those CDP platform as well as the life cycle applications. So we're super excited as you can tell.

The work that the team's been doing certainly over the last 12 to 15 months has put us in this position that now we can roll in and execute on with the completion of the product and the enablement of the go-to-market motion and the digital transformation progress that we've made over the last 12 months.

Jack Andrews -- Needham & Company -- Analyst

Got it. That's really helpful. Thank you for taking my questions.

Operator

Our next question will come from Zane Chrane of Bernstein. Please go ahead.

Zane Chrane -- Sanford C. Bernstein -- Analyst

Hi, gentlemen. Thanks for taking my question. I was wondering if you could give me a little bit of elaboration on how the pipeline in Q4, both for new customers as well as existing customer expansion, maybe compares to that ending Q2 and Q3. And then regarding CRPO growing 16%, over 50% faster than ARR this quarter, to me, that seems incredibly bullish.

And I think I understand the dynamics there, but I would love to hear kind of, in your words, the third grade level explanation of how to reconcile the much faster CRPO growth with ARR.

Jim Frankola -- Chief Financial Officer

OK. I'll start with the RPO, hit pipeline real briefly. Rob can add color. So my notes on RPO show that total RPO growth on a year-over-year basis is 9%.

Current RPO on a year-over-year basis is 13%. So the 13% is just a couple of points higher than our 10% ARR growth. RPO does not include contracts with termination for convenience, and there's some other factors that will cause it to move slightly differently than ARR. I'll say, if you look at our current RPO over the past several quarters, you'll see the growth rate averaging to be roughly ARR.

Now I always put you back to ARR as the best measure for both the economic activity that exists as of the end of the quarter and a predictor of where revenue is going to be in the future. Regarding the pipeline in Q4, the pipeline growth in Q4 is good. Conversion rates are also very good in the quarter, so we're pleased with how the market's developing. On the new versus existing, right now, our focus is still primarily on our existing customers.

The efforts that Rob talked about on new are forming now. They're starting to gain traction, but we aren't really counting on a big difference in the amount of new bookings until the back half of the year.

Rob Bearden -- President and Chief Executive Officer

Just to quickly touch on that, there has been a lot of work that's been done and a very disciplined operating cadence within our overall motion to go from building pipeline through the various segments from field, digital and direct as well as make really learning and being very effective and becoming much more efficient in converting that pipeline ultimately into monetization and being able to do that in a way where we've been able to begin to move toward the mid-market and line of business and make those conversions in a way that will be contributory in this year going forward, and we'll have the ability to build and expand on the net new in those new sectors. The other thing that we're seeing really pretty strong benefit from is, obviously, the things that we're able to do in that digital notion that's been affected is, I think, also contributing to the net expansion rate as the customers are moving to CDP with other line of businesses adopting those life cycle analytics applications. So again, we're seeing a compounding effect and it's the great work that's happened and the digital transformation and the go-to-market motion disciplines that Scott, Mick and their teams have been able -- and the hard work they've put in over last year.

Zane Chrane -- Sanford C. Bernstein -- Analyst

Got it. Got it. Super helpful. I must have misheard.

I thought I heard 16% CRPO growth, but 13% makes a little bit more sense vis-a-vis the ARR growth. Just a very quick follow-up question. The net dollar expansion rate or net retention rate, whatever you prefer to call it, how does that compare for those that have migrated to CDP public versus those that have migrated to CDP private? And I asked that as an aspirational question recognizing you may not have an update yet on the CDP public side.

Jim Frankola -- Chief Financial Officer

Yes. And listen, I'll echo what Rob said earlier. That's not how we look at the business. These customers are moving to the CDP cloud, hybrid cloud, public and private.

We don't have it broken out.

Zane Chrane -- Sanford C. Bernstein -- Analyst

Got it. OK. Great. Well, thanks very much.

Congrats, guys.

Jim Frankola -- Chief Financial Officer

Thanks. Appreciate your time.

Operator

Your next question will come from Nehal Chokshi of Northland. Please go ahead.

Nehal Chokshi -- Northland Securities -- Analyst

Thank you for taking my question. So I just wanted -- so the ARR for the quarter was 10% year-over-year growth versus 12% in the prior quarter, and arguably, it was an easier year-over-year growth compare. So what's the narrative on why there was a deceleration here?

Jim Frankola -- Chief Financial Officer

Yes. So I'll start and Rob can add color. So for this year, what we've been characterizing as is roughly a 10% grower as we're going through this transition to CDP. And in any given quarter, you will see ARR move around.

So we were 10, 11, 12, 10. So part of this is just the normal ins and outs of bookings that we've had in the quarter. Our Q4 last year was actually a pretty good quarter. So if you look at the sequential growth in Q4 last year, the comp was pretty good.

A piece of this I touched upon earlier, and that is we're starting to see customers migrate to CDP and CDP Public Cloud. Sometimes that migration takes the form of a prepaid credit where they're swapping out within $1 million of term license for $1 million of prepaid credit. And as they're starting on CDP Public Cloud, their usage and therefore, our revenue may be less than the public cloud than it was on-prem.

Rob Bearden -- President and Chief Executive Officer

Yes. Think of it very simply as really a timing issue. And so as they move from workloads that were being paid for on a subscription basis to workloads that are on a consumption basis, it takes a bit of time for those consumption dollars to catch up with the subscription dollars. But I'll point out that it's much better and healthier for us as a company and a financial model as we're making this transition to that target environment.

Nehal Chokshi -- Northland Securities -- Analyst

OK. Great. And then the 120% net expansion rate, that's a phenomenal number. That's great.

Fantastic. Congratulations. I think this has been asked a couple of times in different ways. Let me try to ask it explicitly.

That 120% net expansion rate, can you break that down between increased nodes and increased functionality/basically getting increased price for the CDP?

Rob Bearden -- President and Chief Executive Officer

OK. So we're not breaking it out at that level of granularity at this point. And what we're seeing is that, that expansion is really not use case-driven -- or is use case-driven, excuse me. It's not price-driven.

And so what that does is it increases the amount of consumption and/or spend because, obviously, they're using more of the platform and the letters that we have there. Right? And so if you want to think about it as dollar for dollar from legacy estate to as is on CDP, but what happens is it unlocks incremental use cases, incremental data sets that they want to add to that insight and it just accelerates. And we're seeing, as you see, continued acceleration, and we think that will continue to exist on a go-forward basis. And just for clarity, because the question has been asked a couple of times, CDP is about hybrid.

And so those workloads and use cases are going to be fluid between public/private cloud. And so right now, we're not breaking out the percentage of allocation between the various form factors, right, because what's a more predictive and healthy and true look is the ARR expansion of leveraging CDP as a hybrid platform. And that's where we're seeing really nice traction. Again, it's driven by use case expansion, incremental data set expansion.

And those are what's obviously giving us better and increased net expansion rate.

Nehal Chokshi -- Northland Securities -- Analyst

Excellent. Thank you very much.

Operator

Your next question will come from Pat Walravens of JMP. Please go ahead.

Pat Walravens -- JMP Securities -- Analyst

Great. And look, congratulations on all the progress on moving to CDP. It's a remarkable shift. Rob, if I can just ask you, because obviously the stock is down, whatever, 10% in the aftermarket, and there's clearly some confusion here.

So did the performance of the sales organization meet your objective in Q4?

Rob Bearden -- President and Chief Executive Officer

Pat, thanks for joining. I appreciate the question. Yes. Resoundingly yes.

Absolutely.

Pat Walravens -- JMP Securities -- Analyst

OK. All right. Great.

Rob Bearden -- President and Chief Executive Officer

Could not be happier holistically. As you guys who know me, I always want more. But I'm very, very pleased with the execution not just in Q4 but through the year, not just in terms of either the delivery but the quality of delivery, especially given we're in a complete work-from-home remote environment, and it's impressive results under any scenario. But it's not just the delivery, but it's also the setup for the go forward that I'm most pleased with and how we're going to have the ability to build off this momentum, certainly in terms of execution but even below that waterline.

The overall digital motion from creating awareness going through a digital education process, generating a great pipeline, and getting very, very efficient in the conversion of that pipeline to the position of monetization, that's what I'm incredibly happy about because that gives us the setup and the platform but obviously continued scale and being very comfortable in executing the model we've outlined to you guys but as importantly, give us the ability to start touching those new market sectors, i.e., we talked about mid-market and going to a lot of business. And it's giving us the platform and reach to be able to now go implement and execute on that. And that's a very long yes, but it's much more than about just yes, happy about execution.

Pat Walravens -- JMP Securities -- Analyst

That's great. And then my follow-up, Jim, is going to be for you, which is I'm sure you realized, as you're preparing for this call, the stock was going to do in the aftermarket what it's doing. And so what do you think is -- like if there's one or two really important things that you think we need to take away from this and then maybe we don't understand as well as we should, what are they?

Jim Frankola -- Chief Financial Officer

It's the NRR-ARR dynamics. Once again, we've put a slide in our supplemental deck to try to give greater transparency. And the messaging is, once again, ARR growth of 10% for the first part of next year, accelerating in the second half, the recurring element of subscription revenue will be growing at that same rate of ARR. So you can see that the entire story in terms of soft revenue growth guidance for next year is all due to NRR.

And as we discussed, that's a conscious, very strategic decision we made over the course of last year to reprioritize our engineering resources toward the hybrid cloud.

Pat Walravens -- JMP Securities -- Analyst

OK. Great. Thank you both.

Operator

We have no further questions at this time. I'll now turn the call back over to the presenters for closing remarks.

Rob Bearden -- President and Chief Executive Officer

Great. We appreciate everybody's participation. We couldn't be more excited about the execution of the team and the opportunity that's in front of us. We've still got a lot of work to do.

As you know, we're very focused on execution, incredibly pleased with CDP, its progress, the adoption rate we're seeing in it. We're obviously focused on continuing to make it easier to use, faster to migrate to, but we're clearly delivering the hybrid data platform that's leading the industry. And we know for a fact that the enterprise requires a hybrid data architecture for many years to come, and we're incredibly well-positioned with it. And looking forward to a great FY '22 with the team and with all of you.

So stay tuned and look forward to seeing you guys in about another 90 days, and have a great rest of the week. Stay healthy and safe. See you all.

Operator

[Operator signoff]

Duration: 75 minutes

Call participants:

Kevin Cook -- Vice President, Finance, Corporate Development, and Investor Relations

Rob Bearden -- President and Chief Executive Officer

Jim Frankola -- Chief Financial Officer

Chad Bennett -- Craig-Hallum Capital Group LLC -- Analyst

Sanjit Singh -- Morgan Stanley -- Analyst

Rishi Jaluria -- D.A. Davidson -- Analyst

Jack Andrews -- Needham & Company -- Analyst

Zane Chrane -- Sanford C. Bernstein -- Analyst

Nehal Chokshi -- Northland Securities -- Analyst

Pat Walravens -- JMP Securities -- Analyst

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