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Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Magnet Forensics 2021 Fourth Quarter And Year-end Results Conference Call. [Operator Instructions] Listeners are reminded the portions of today's discussion contain forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as plans, targets, expects, estimates, forecasts, strategy, intends, believes or variations of such words and phrases In addition, any statements that refer to expectations, inventions, projections or other characterizations of future events or consensus contain forward-looking information. Statements containing forward-looking information are not a source of facts but instead represent management's current expectations, estimates and projections regarding future events or circumstances. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially in those projected in the forward-looking information. For more information on the company's risk and uncertainties related to the forward-looking information, please refer to the factors described in the summary of factors affecting our performance section. The company's MD&A for the year-ended December 31, 2021. And the risk factors section of the company's annual information form dated March 9, 2022, posted on SEDAR. Although the company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking information. There remain the other risk factors not presently known to the company that the company present presently believes are not material, but could also cause actual results or future events to differ materially from those expressed in such forward-looking information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information. Before looking information referenced in today's discussion represents the company's expectations as of the date hereof and is subject to change after such day without obligation to update any forward-looking information, except as required under applicable securities laws. The company reports its financial results under IFRS and all values are U.S. Dollars unless stated otherwise. This morning's call is being recorded on Thursday, March 10, 2022, at 8:00 a.m. Eastern Time. I would like to turn the call over to Mr. Adam Belsher, Chief Executive Officer of Magnet Forensics. Please go ahead, sir.
Thank you. Good morning and thank you for joining us today. With me today are Angelo Loberto, our COO; and Peter Vreeswyk, our newly appointed CFO. It's great to have Peter on this call. He's worked with Angelo and I for coming up on 9 years. And based on that experience, we know he's the ideal fit for his new role. Peter and I will be handling the formal remarks and Angelo will be available for the Q&A portion of the call. This morning we released our 2021 fourth quarter and year-end results, which you can find on our website at magnetforensics.com. We finished the year strong Q4 with a record quarter with $21.4 million in revenue up 37% from the same period last year. ARR was up 48% to $61.3 million at the end of Q4 compared to the same point last year. ARR is an important metric that we monitor to evaluate how the company is performing. Adjusted EBITDA was ahead of our expectations at $4.7 million in the period. A part of our year-end reporting, we are also providing updates on certain key performance indicators that we shared at the time of the IPO and committed to provide on an annual basis. Our net dollar retention remains well in excess of 120%. This speaks to the consistency and predictability of our business model that has built on recurring revenue. Our Average Recurring Revenue per Account or ARRPA grew to $13,500 an increase of 44% compared to the end of 2020. The strength shown across each of these metrics demonstrates the performance of the business. I'm pleased to say it was a phenomenal year. Our comprehensive digital investigations product suite offers forensic specialists, investigators and other stakeholders with innovative technologies to investigate cybercrime and incidents involving digital evidence. Our solutions enable them to quickly identify critical data in their investigation. It is powered by the largest library of evidence types in the market. Our built-in AI and analytics helps investigators get to that critical evidence in a timely fashion. We address a large growing market comprised of public and private sector organizations. There are significant market drivers across each of these 2 major segments for us. Estimates from law enforcement suggest 85% to 90% of crimes today involve digital evidence and the amount of data and its complexity in these investigations continues to rise. The ability of police agencies to uncover the truth from digital evidence is one of their greatest organizational challenges. Their leadership, policymakers and the general public are increasingly becoming aware of the magnitude of the challenge and its impact on the pursuit of justice. They want to see innovative and economically sustainable solutions to addressing this challenge. Our technology solutions, offer the public sector an efficient method to process, analyze and share digital casework and identify critical evidence and report on it in a forensically sound manner that is both easy to understand but can withstand technical scrutiny in the justice system. In the private sector, the frequency and scale of cybercrime, like, ransomware attacks on enterprises are gaining more and more prominence. It's no longer a question of if, but when, and how sophisticated the intrusion is. How we all work is also increasing the risk. As employees continue to work remotely, they're off the corporate network. That could be in a work-from-home setting or from another type of Wi-Fi network. The potential threat vectors are also growing from a device perspective. As more organizations have bring your own device policies or employees connect to critical systems on the same Wi-Fi as their personal devices. The complexity of the network and the challenge of monitoring their cybersecurity and protecting a private enterprise's assets becoming increasingly difficult. Our cloud-based technology empowers our private enterprise customers to conduct investigations beyond their corporate networks from anywhere in the world. It helps them manage the heightened security risks of working off the corporate network. We believe there is tremendous opportunity to grow both in the public and private sector. We have a differentiated approach to the market. We have designed a platform to be the hub for the digital investigation. Our platform for digital evidence is part of this solution along every step of the case. It accepts data and evidence from many types of evidence sources. No one in the market has a larger digital evidence library than we do. We understand and design the platform for the sophistication and power required by the technical forensic expert user. But we also understand the need for intuitive workflows and enable collaboration among the non-technical users like case officers and investigators in the public sector market, and HR and legal within the private sector. We are building a new category, a digital investigation platform for a larger audience. The ability to serve a broad range of users with the widest range of data sources that delivers for the highest caliber specialist is a winning strategy. And our growth backs that up. Our continued growth is driven by a highly successful land and expand strategy. We grow through a few highly focused methods across both the public and private sectors, winning new accounts, adding new licenses at accounts we already serve today, expanding the services and products used by our existing accounts. And within our existing private sector, upgrading them to AXIOM Cyber, which is specifically designed for those private sector organizations from our flagship product AXIOM, which was the first to market and intended for public sector use cases. The team is effectively executing on all these strategies in both segments across all our core regions consisting of the Americas, EMEA and Asia-Pacific. We're delivering new customer wins and generating higher value with accounts as evidenced by our growth in ARR and ARRPA. We are often asked, "Where do you see the most growth?" We have a high level of penetration in the public sector market, including many of the most recognized global public safety agencies. The reality is digital evidence is relevant in almost every investigation type, whether it's terrorism, human trafficking, guns and gangs and so on. We still see a great opportunity to grow in that market with more users, more modules and new accounts, as agencies work on modernizing their operations. On an absolute basis today, more of our growth is derived from the public sector market. That said, private sector is growing faster today on a percentage basis off a smaller base. The overall prospect pool is larger and the ability to bear price is higher. We believe over a period of time private sector will be at a similar scale to our public sector business. As an example at the end of 2019, approximately 3/4 of our ARR came from the public sector and 1/4 from the private sector. 2 years later at the end of '21 that mix had shifted to 2/3 public sector, 1/3 private sector. We expect the 2 markets to move into balance over the next 5 years or so as we continue to generate both -- growth in both markets. We have a strong pipeline of both new potential customers and existing customers that we are engaged with, with our new products or licenses. Our MDIS offering the Magnet Digital Investigation Suite is gaining momentum in less than a year since its launch. The team is closing new business and building a funnel of actively engaged prospects across the different offerings of workflow automation, case management and evidence review. While it's still early days, we are pleased with the progress made on the Magnet Digital Investigation Suite and the increased level of interest from prospects as they look to modernize how they conduct digital investigations. We are also seeing good progress on the conversion of accounts to a term license from our legacy perpetual license model. We are ahead of where we expected to be at this stage as more public sector organizations are increasingly open to this style of contract, specifically in the more mature markets, or developed nations. The sales team has done a good job in helping to convert their accounts. We intend to continue to offer perpetual licenses for public sector accounts, but we lead with the term license model and we're having success. In terms of scaling the team, we added more than a 127 new team members in 2021, which was just short of the goal we set at the beginning of the year of a 140. And we accomplished that in what was a very competitive recruiting environment. Our 2 key areas of investment were sales and marketing and R&D, which accounted for approximately 81% of the new team members followed by G&A which accounted for 19%. Our ability to attract talent in this market is more than just competitive compensation. It is underpinned by the sense of purpose for what we do and the value team members new and old place on it. In 2022, we are targeting approximately a 140 new hires as we continue to invest for growth we see in front of us. We continue to expand our offerings and invest in the product roadmap. A few weeks ago, we launched -- we announced the launch of Magnet AUTOMATE Enterprise. Designed for the private sector, this offering synchronizes detection and incident response solutions to immediately trigger investigations, automates basic and repetitive tasks and enables forensic analysts to simultaneously recover and process evidence from multiple endpoints. It is an approach that reduces the time enterprises need to respond to and recover from cybersecurity incidents. We also continue to expand our commercial relationships in the market. In January, we announced a partnership with NICE, a recognized brand in the market to digitally transform police case building and investigations to accelerate the pursuit of justice. The integration of NICE Investigate and Magnet REVIEW will enable police agencies to automatically merge digital forensic evidence from Magnet REVIEW with other digital evidence sources in NICE Investigate to streamline case building and investigations. We think it is a great combination of 2 complementary solutions that can appeal to a broader audience together. We bring a compelling value proposition to a large and growing market. We continue to attract new customers, expand with existing customers and introduce new innovations into the market. With that, I'll turn it over to Peter to outline the financial impact that it's having on our business.
Thank you Adam, and good morning everyone. As Adam mentioned, we finished our fiscal year strong with Q4 revenue growing to $21.4 million, an increase of $5.8 million or 37% compared to the same period in 2020. The great performance in the quarter was a result of our land and expand strategy where we expanded our portfolio of products within our customer base as well as one new accounts. From a composition perspective, revenue for the quarter was made up of the following: software license revenue of $7.3 million, an increase of $1.7 million or 30%; software maintenance and support revenue of $11.8 million, an increase of $3.5 million or 42%; and professional services revenue of $2.3 million, an increase of $0.6 million or 38%. Each compared to the same period last year. Historically, about 90% of our revenue consists of software licenses and support with the remaining coming from professional services and training where the value is typically dependent on the activity during the period. For Fiscal 2021, total revenue was $70.3 million, an increase of $19.1 million or 37% from fiscal 2020. Moving on to recurring revenue, total recurring revenue was $17.6 million in the quarter, representing 82% of total revenue. This is an increase from 74% in the same quarter in 2020. The growth in recurring revenue is in line with our expectations as we see more customers adopt term licenses of our product as Adam mentioned previously. On a quarterly basis, this percentage of revenue that is recurring can fluctuate depending on the mix of term versus perpetual licensing that are sold in a given period. And looking back at our performance in 2021, we can see it was relatively consistent throughout the year. Adjusted EBITDA was $4.7 million in Q4, a decrease of 19% or $1.1 million compared to the same period in 2020. The change was primarily due to increased investments that we made in research and development and sales and marketing in the back half of the year as well as ensuring that we have the appropriate infrastructure in place to support the company's continued growth. For Fiscal 2021, adjusted EBITDA was $18.6 million, up 21% or $3.2 million from the 2020 period. Our adjusted EBITDA margin profile was 22% and 27% in Q4 and fiscal 2021, respectively, compared to 37% and 30% in the corresponding periods in 2020. Again, these 2020 comparative figures were bolstered by an overall reduction of expenses due to limited travel and marketing programs as a result of COVID-19 restrictions as well as the impact of the pandemic assistance from certain government programs. Moving on to cash flow, we have demonstrated a track record of positive cash flows on an annual basis, which has been a key factor to our growth over the last several years. Cash flow various quarter-to-quarter based on timing of payments, receipt of accounts receivable as well as the impact of certain large transactions. Like for example, the DME transaction that we closed in Q3. Cash flows from operations were $17.7 million in fiscal 2021 compared to $23 million in the corresponding period in 2020. The change was a result of increased investment in the business as we continue to scale for future growth. On an annual basis, we expect to continue to generate positive cash flow from operations. This demonstrates our ability to both invest ahead for future growth and still demonstrate meaningful profitability. As of December 31, 2021, cash and cash equivalents stood at a $118.1 million, compared to $21.2 million at the end of fiscal 2020. The change is primarily a result of the net proceeds from the IPO of $86.5 million as well as cash provided by operating activities during the year. In addition to our quarterly and annual results that we released this morning, we also announced our outlook for fiscal 2022. We expect revenue for fiscal 2022 to be in a range of $91.5 million to $93.5 million, which represents growth of approximately 30% to 33%. We expect our seasonality for 2022 to be generally similar to what we saw in 2021, namely, our strong quarters are Q3 and Q4. Q4 as the year-end for public agencies in Europe as well as the year-end for a large number of private enterprises. And Q3, in large part due to it being the fiscal calendar in many North American public sector organizations. Historically, the lowest contributing quarter to growth is Q1 and we expect that to be the same in 2022. We expect adjusted EBITDA for fiscal 2022 to be in a range of $13 million to $15 million, which represents a margin of 14% to 16% for the year, which is a more normalized range for the business based on our expectation that some of the cost savings we experienced during the pandemic will no longer persist in 2022. Namely, we expect that we will be returning to a more typical in-person sales and marketing process and return to a more regular travel routine than what we experienced in 2020 and 2021. Based on our ability to continue to fuel top-line growth, we believe that mid-teens EBITDA margin profile represents an appropriate balance between revenue growth and further investments in the business, together with a continued focus on unit economics to ensure we're growing in a sustainable and profitable fashion. Thank you again to everyone for participating in today's call. And with that I'll pass it back to Adam.
Thanks, Peter. Cybercrime and security is a fast growing and evolving market. We believe the role we play is important as cybercrimes and other digitally-enabled crimes, like human trafficking, fraud, terrorism, and child sexual exploitation continue to grow at unprecedented rates. We are passionate about assisting public safety agencies and achieving the best outcomes and the pursuit of justice and the support of victims. Equally important is our work supporting private enterprise to safeguard their corporate assets and reduce organizational risk. We appreciate the trust that shareholders have shown in us and I look forward to updating you further on our progress during our Q1 call in May. With that, I'll turn it back to the operator to open up the call for questions. Thank you.
[Operator Instructions] Our first question is from Doug Taylor with Canaccord Genuity.
Congrats on strong close to your first fiscal year as a public company. I'll start with a question for Adam. Obviously, the unfortunate events unfolding in Eastern Europe is relatively recent, but certainly have thrust cybersecurity concerns to the foreground again. And, Adam, I'm guessing -- I'd like to ask you to remind us how you'd expect that to translate into the behavior from your clients. Obviously, there's prevention tools to be considered too. But for your type of customers, private sector, I would guess specifically, is there any shifting priorities that you've observed in the security software spending or you've seen yet or expect to see?
Yes, no, thanks Doug. Yes, what I would say generally is, what we've seen really over the last couple of years and it's certainly been heightened with some of the conflict overseas is organizations -- although, they -- many have invested in some kind of endpoint security, the realization for many of them is that that's not enough and they have to think more broadly around how do they how do they protect their organization, really, from a more defensive posture. Because it's really not a matter of if an attack is going to happen, it's just when. And then do they have the resources, the capabilities in terms of forensics to do that investigation, remediate it, and then really put themselves in a better position moving forward to secure their corporate assets. So yes, I would say the recent conflict is certainly shone an even brighter light on that. We even see that across some of the things that are happening in the U.S. with President Biden and a lot more focus on cybersecurity around critical infrastructure, a lot more investment from private sector as well to invest in the capabilities to prepare. But when we look at the spend across -- CIO spend, cybersecurity is near the top of the list so continued investment, which I think will just -- will accelerate with some of the stuff that's happening in the world today.
The ARRPA or the revenue per account expansion sticks out as being particularly strong at 144%. Can you decompose that a little bit for us to help us understand what is just mix shift between the private and public, what is cross selling, what is new customer additions that lower potential ARRPA, just so we can better understand what's driving that.
Yes. Pete, do you want to take that one?
Yes, sure. I can take that one. Yes, I mean, ARPA as -- I mean you mentioned a bunch of things there. There's a lot of components that go into ARRPA and what we saw in 2021 is a lot of a lot of customers in the private sector taking AXIOM Cyber and we saw AXIOM Cyber does have a higher ARR a higher value than our than our core AXIOM product in the private sector -- in the public sector. And that that was a key component and key driver. So we see a lot of upside in ARRPA as a result of going into the private sector, and that's really the big driver there. The other thing -- and we'll see this probably more layout in 2022 as we expand into our MDIS platform, that will be another key driver of ARRPA our before as we expand the wallet share within the public sector as well.
Last question for me. I mean you're pretty deliberate in the press release about seasonality of your growth profile in 2022. Can you overlay that what you should be expecting with respect to the hiring those 140 bodies you expect to add this year, whether that should be timed relatively consistent with the revenue growth or should we be expecting the margin profile to be stronger in 1.5 of the year or the other. Any help there would be appreciated.
I'll let you take that one, Pete.
Yes, for sure. The -- from a hiring perspective, I mean, we have a pretty aggressive plan for 2022, and we expect most of that to be on the front end. So we have our HR team running pretty heavy to get people in the door. So we would expect earlier in the year is where we would see the most impact of new hires on margin in the back end of the year, those to improve. So in summary, really the front end is where we expect most of those hires to land.
Our next question is from Thanos Moschopoulos with BMO Capital Markets.
Congrats to Angelo and Peter on your new roles. Maybe just continuing on the OpEx question. I know you could call out as far as seasonality, I mean now that travel trade shows are resuming. I know you have user conference coming up. So does that have material impacts in terms of the seasonal aspect of OpEx?
Yes, I can take that one as well. Yes, for sure. As you mentioned, there are some spikes within our expense profile as a result of certain marketing and sales activity. And yes, we do see spikes in Q2 that line up with our user conference as well as spikes into Q4 as we see our media team push sales into that market. But overall, our OpEx is generally driven by headcount. Headcount is the big line item on our expense statement, where that makes up a large portion of our expense and that will be, like I said, more heavy in the beginning of the year and then taper off on the end. So I wouldn't expect necessarily that the sales and marketing activity would have meaningful spikes in any given period. I think I would look to the previous year on the percentage of total expense to give some guidance.
Now if I look at your net revenue retention and your ARRPA growth. I think the implication is that new customers that you're signing are coming on at a much higher ARRPA than the existing base. Is that a fair conclusion?
Yes. That's fair Thanos and we're seeing -- as the enterprise business accelerates, the average selling price or a license there is basically double the private sector. So those customers, although a little bit harder to acquire an enterprise customer. Once we get them, we really see deceleration in ARR and ARRPA.
And in terms of the mix shift towards private, is that progressing as you would have expected a few months back or is it actually -- is private tracking ahead of where you might have thought from a mix perspective?
Yes. I mean, frankly, we were surprised to the upside on the enterprise stuff. I think all these -- the macro trends and we talked a little bit about the cybercrime stuff. But just generally, we're seeing enterprises just investing more in cybersecurity. And again, whether that's form a cyber-attack -- protecting from a cyber-attack or even an insider threat, so we're just seeing more investment there, but we're ahead of where we thought we would be. And we did a lot of hiring last year as well to really set up the team to have focused people to chase that enterprise opportunity. So I expect to see further acceleration this year.
Maybe one last one for me. I know that the hiring has weighed a little bit on the gross margins. Any sense of where gross margins bottom out when we start to get some gross margin leverage again?
I think generally -- and Pete, if you have thing to add, please do. I think generally, last year was a big invest year. This year is -- like in terms of people this year as well, really setting ourselves up both from making sure that we have the product portfolio and making sure we have the go-to-market team to execute on the opportunities. So I think what we'll start seeing in '23 and beyond is, a, improvement on margins, but I think acceleration in the business as well on the top line.
Our next question is from Paul Treiber with RBC Capital Markets.
Just wanted to follow up on the question in regards to Ukraine and Russia. But just more directly speaking, can you just comment if you have any sales or operations in those regions? And then more broadly, could you just speak of sanctions list? And obviously, there's been a lot of changes there. But how do you manage that operationally even proactively?
Yes, sure, Paul. Yes, so we -- last year, in 2021, we see selling any of our products to Russia in the -- to government agencies. So anybody in government, we ended selling. And then this year, as the war unfolded, we also stopped selling in Russia any -- to any commercial accounts as well any enterprises. So today, we're not doing any business in Russia.
And then more broadly to your question, there's a couple -- we actually have a pretty kind of rigid or diligent process in terms of how we evaluate where we sell. The first step of that is if the U.S. or Canadian government has any sanctions or any export restrictions on countries then we obviously don't sell in those countries. So that's step 1. What -- and then the step 2 is we look at -- there's kind of a handful of humanitarian and human rights websites that we leverage to see how those different regimes and how those different governments operate, so that's the second kind of factchecker that we look at. And does it pass that? And then we -- that's step 2. And then the third piece of that is we also have systems in place through a sales force and others that sales reps can't sell any of those territories as well. They're actually restricted from an operational perspective. So we don't buy accident sell to somebody that we don't want to. So it's a pretty rigid process. We obviously follow all the legal restrictions, but then we go one step further and say, looking at these human rights websites as well. So it's core to, frankly, our purpose, it's a core to our mission to make sure that we do what we can to make sure our technology doesn't get into the hands of people that we don't wanted to.
And then looking at the financials, how do we think about ARR growth into '22? I mean the ARR is stronger than total revenue growth in '21. But then as you grow, the base of ARR becomes larger and larger. Like in the sort of the near to medium term, I mean, should we continue to expect ARR growth to exceed revenue growth?
Yes, I'll let Pete if you want to comment on that for 2022.
Yes. I mean -- yes, the simple answer is yes, we expect ARR to continue to grow at a pace that's faster than revenue and driven by a couple of things that we've talked about in the past. I mean, our conversion to -- from perpetual to term -- our conversion of our base from perpetual to term is a strong ARR driver, because more of that contract would be recurring in nature. So we see that push as well as the growth into the private sector that we talked about previously. Selling license into that sector, they have a higher value -- higher ARR value so that will further drive our ARR number higher.
And just a follow up on the point you made about conversion of perpetual to term, what percent of the installed base has converted over or maybe where you sort of see it in terms of, is it like are we halfway there? Are we 3/4 a way there, like just from a high level?
Yes, Pete I don't have that in front of me.
Yes. I don't think -- yes, sorry, I'll take that one, Adam. I mean we haven't -- I don't think we've disclosed exactly the mix of what our base is from a perpetual to a term perspective. But what I will say is that they're running ahead of plan from what we originally thought. And looking at the support base, we're seeing a growing percentage of revenue coming from those term licenses, which is great from our side because those contracts have a higher IRR. And for 2022, we expect that trend to continue, especially given our notes in the private sector.
Our next question is from John Shao with National Bank.
I just have a quick question on the NICE partnership. It's been almost 2 months since announcing the relationship. So I'm just curious how the relationship looking out, what are some of the priorities between the 2 parties? And could you also outline the revenue opportunity from this partnership?
Yes. Sure, John. Yes. I mean the NICE partnership is really impactful because in terms of the -- there's 2 or 3 very, very large kind of public safety providers and NICE is one of them. So strategically, being able to align to them is really, really important. Their strength and where they have come from is digital evidence, but more focused on things like video from -- CCTV video, things like body-worn cameras and video recorders for interview rooms and things like that. So they have this -- they have very deep relationships, very large contracts with these public safety agencies, and they deal with the senior people in those agencies and what's -- where the fit is between what we do. So we obviously take the forensic data and make it easier for them to connect to that from their product called NICE Investigate. So they're a partnered with Microsoft, they're cloud-based. The same with Magnet REVIEW. I know that we've had some great interactions with large customers, kind of joint sales calls. I would say it's still early days. They have a large sales force that we're trying to get up to speed about our products. But I would say the interactions we've had with them and then directly with customers has been really positive. I don't think we've actually modeled any upside in revenue, if you will, as part of our model today because of that. I think it's early days yet but very strategic for us to get us hire in those agencies in terms of key people and key decision makers.
Our next question is from Stephanie Price with CIBC.
Just following on that last question. Maybe if you could talk a little bit more broadly around your partnership strategy and how you kind of think about that rolling for work?
Yes. I mean there's -- we've publicly announced a relationship with Microsoft and NICE. And so we have someone that's focused on partnerships now, that's kind of their role to understand, is there a leverage points for us both in the private sector and the public sector with other technology providers or it could be procurement partners that have large contracts and frameworks and things like that. So I would say, 6 months ago, it really wasn't a big part of how we thought about growth. Now we're getting people organized and aligned to that partnership strategy. So you'll see more from us there. And again, it's something that we really haven't factored into our revenue plans today. But I think as we -- as time goes on, we'll see more impact there from those partnerships.
And then in your prepared remarks, you noted the upgrade of the private sector to AXIOM Cyber from the traditional AXIOM product. Just curious about where you are in that upgrade cycle? And how -- what kind of revenue outlook you see as they transition?
Yes. I mean, maybe I'll start and then Pete, if you have anything to add. Yes. So the -- generally, the ARR, if a customer moves from AXIOM to AXIOM Cyber is doubled. So lots of incentive obviously for us to move those customers to Cyber. And the team has done a phenomenal job there. And I don't know, Pete, if you have anything else you want to add to that?
Yes. I think going back to -- yes, you're right, the ARRPA for Cyber is notably higher than AXIOM. And I would say we're still in early days of that conversion cycle. I mean previously, before Cyber was available, the private sector is using our core AXIOM product. So we're still in -- that conversion cycle is still in its infancy. So we expect some good upside in the coming years as we keep converting to cyber.
And then just one last one for me. Just curious if you could talk a little bit about the hiring environment and your comfort level on being able to add those 140 people to the headcount this year.
Yes. I mean, hey, it's a very competitive market, and we see that across every function. It's not just an engineering challenge. It's really across every discipline. That being said, last year, I think our target was like a 140 and we hired something like a 127 something in that neighborhood. So the team has done an awesome job. We certainly beefed up our recruiting function. We put more folks in HR to help us with that. So given the competitive environment, I think we've done quite well. One of the things that resonates for a lot of candidates is the mission. The fact the work that we get to do, the impact we get to have on investigations and with victims and things like that. People want to have a bigger impact in what they do every day. So that's been a driver in really getting a lot of talent. I guess the other thing that you've been doing is looking at hiring in other jurisdictions beyond kind of our headquarters, but looking at other parts of Canada. And we also have some plans underway to look at other areas for hiring outside of Canada. So that's the -- yes, it's a challenging environment and salaries are moving up, and it's quite competitive. But I think the team did a great job last year and we expect more of the same this year.
The next question is from John Shao with National Bank.
Just one last question from me. On a year-over-year basis, perpetual license was down, but the maintenance support was up. So from a modeling perspective, what are some of the factors that you consider when modeling the maintenance support revenue for 2022 because this one is closely related to the perpetual license stream.
Pete, do you want to take that?
Yes, I can take that one and maybe it's more of a point of clarification. So on our financial statements in that maintenance and support line is also the maintenance and support component that sits within term license. So that maintenance support is not just perpetual license. So online it's our overall broad base of customers who are auto maintenance and support program, which includes those on term licenses. So looking ahead, I would look at 2 things. A, on the license line, yes, you're right, you saw a decline in the perpetual license line and an increase in the term license. This speaks to our conversion of moving people from perpetual to term. And on the maintenance and support line, what you would see is that would grow more in line with our growth in customer base.
We have no further questions at this time. I'll turn the call over to Adam Belsher for any closing thoughts.
Thanks, everyone. Have a great day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.