So that’s second data point. And third, I would say is our expectation from the year is based on when we look at our pipeline and funnel for enterprise versus service provider, we certainly feel that it supports the comments that we expect that to continue to recover and overall grow faster than revenue. As it relates to service provider, I think you are correct. We to the phenomenon I mentioned in the prepared comment, in the last two, three years, right, we have had customers where they had waited or delayed on adding costs, even though there was a clear need for capacity. And I think we saw some of that get realized in Q1. That doesn’t necessarily mean that’s going to be the case every quarter in that region. But that’s an example of where it’s, the customer wants to use more product, but was delaying spending and it happened in Q1.
So that’s more a function of sort of that global SP spending pattern being not exactly very predictable. But because of our geographic exposure, it kind of netted out for us.
Operator: Our next question comes from Hamed Khorsand with BWS Financial. Your line is open. Please go ahead.
Hamed Khorsand: Hi. So the first question I have is, could you just talk about your investment in the sales process, where you’re focused on and why you’re not getting any kind of return as far as your service provider side goes? Are you under-investing in the sales process or just the customers just don’t care? They’re just not buying anything or buying very little?
Dhrupad Trivedi: Yes. So I think, thank you, Hamed. I think if I understand the question correctly, right, I would say the phenomenon is different for us. So service provider for us is existing customers around the world and we, in many cases, 10 plus years customers in many four or five. And so these are not customers where we are trying to prospect the customer, understand the account, find ways to get in. These are customers where we see them every week, every month. We are deeply aligned with them on that network planning and rollout and support once they are deployed. So the investment there is more on our technical capabilities to support them well, to invest in engineering projects that are aligned with the direction they want to go in the future and being seen as the company that is solving their business problems.
So the investment there is more on keeping your customers engaged and happy when doing things for them that increase their kind of business value. On the enterprise side, it’s a little different phenomenon because of our relative presence in the market. Our investments are more around hiring people with enterprise sales experience, more experience selling security solutions, more experience selling to CIOs. And there, obviously, we have an existing customer base, but it’s more about acquiring and adding new meaningful customers. So it’s a different type of investment. It’s a different phenomenon. I would say there’s no, we basically look at it as every sort of account, whether it’s service provider or enterprise, has its own unique profile and needs.
And we find the right resource mix for that. And then on the enterprise side, it’s in addition to that, bringing in new customers.
Hamed Khorsand: And could you provide any kind of data as to what new customers represent to you as far as revenue is concerned?
Dhrupad Trivedi: I think we don’t publish that data, but typically, so typically between service provider and enterprise combined basis, 80% of our revenue is probably existing customers and probably roughly 20 is new customers or new business. And probably that percentage is higher within enterprise side, but we can follow up separately on that.
Hamed Khorsand: Okay, great. And then any particular reason why service provider remains as far as it is soft and to characterize a little bit? I guess you’re in security. I mean, security should be the last investment they should be skimming on.
Dhrupad Trivedi: Yes, no, fair. So, and I think we noted that our security in Q1 period for us continued to be more than 60% of revenue. So we do think that’s true. I think that in service provider case, like every other company has talked about, in North America, particularly the macro environment is causing them to be much, much more cautious than ever before. So while we are discussing specific projects and kind of engagements, they continue to weigh on the kind of timing of when they spend, right? So that’s just the reality of it. And I think we see even when it’s security led, there is probably faster traction with enterprise customers versus service providers who are running their own networks, right? So their needs are a little bit different. But I would say our security growth within service providers is probably the much bigger part of SP growth, more so than them just building new networks. So and certainly that was the case in Q1.
Operator: We now turn to Christian Schwab with Craig-Hallum. Your line is open. Please go ahead.
Christian Schwab: Thanks. My first question is regarding this elongated sales cycle, second or third inning, assuming that we’re kind of at the end of this by the end of ’24, can we return to double digit growth in ’25?
Dhrupad Trivedi: Yes, no, good question. And maybe, Christian, I think just to maybe decouple the two concepts, right? So the question originally before was on the sales transformation where you are, right? And I think I was answering that question as being in the second or third inning of us being able to fully leverage that new capability. In terms of the timing, I would say that is our assumption and our model as well that as we continue to improve our position on enterprise segments, and then SP spending returns to more normalized level, it should bring us back to that growth level. Yes.
Operator: Our next question comes from Hendi Susanto with Gabelli Funds. Your line is open. Please go ahead.
Hendry Cisanto: Good afternoon, Dhrupad and Brian. I have several questions. My first question, service revenue grew 15%. I think that is impressive. Could you share more color on the strength of service growth and how much of that can be attributed to security solution?
