Debbie Clifford: Okay. So let’s €“ taking detailed note. So in terms of the incentives, the incentives for both our channel partners €“ well, for our channel partners are still in place. So that’s part of the programmatic details that we are working through right now as we engage with our partners and we execute on the transition. Remember, a substantial majority of that transition is going to be next year in our fiscal €˜24, and that’s why those details are still in flight. On the customer side, what they have historically had a discount of anywhere from 10% to 5% to have a multiyear contract that’s invoiced and collected upfront and that discount goes away. So the incentive is not there necessarily in the future for those customers to be trying to pay for upfront.
And we think based on the feedback that we have been getting from our customers that they want to have multiyear contracts with annual billings. It’s good for them in managing their cash flow just like it’s good for us. It removes the volatility that we see and as you can see from our guidance this quarter, the volatility that we see with those multiyear upfront contracts. In terms of what drove the behavior that we saw this past quarter, well, the end of the multiyear discount is coming at the start of next year. And so we were anticipating more demand for multiyear upfront contracts. And in the end, we are seeing slightly less demand than we expected. In the current macroeconomic environment, that’s not surprising. The trade-off of the discount versus the cash upfront, it’s not as enticing for some customers right now.
We have assumed that the behavior that we saw with respect to the multi-years in Q3 persists through Q4. And that’s what’s built into our guidance. It’s consistent with our overall guidance philosophy. And we really think that it reinforces our strategy to move to annual billings. We are hopeful that it’s a positive sign for the transition next year. And then finally, in terms of what we can do in order to drive the pace, well, a lot of that’s going to come down to our internal capabilities being available. I have mentioned before, that we are investing in systems to set us up to manage all these contracts at scale, and we are on pace. With those system changes, ultimately, it’s going to come down to what’s on our price list and how we work through these programmatic details with our partners.
And these are all decisions that are very much under discussion right now, and that you will hear more from us over the next couple of months.
Michael Funk: Okay. Great. Thank you for the question.
Operator: Thank you. One moment please. Our next question comes from the line of Gal Munda of Wolfe Research. Your line is open.
Gal Munda: Thanks for taking my questions. The first one is just around Fusion 360 and what you guys are seeing there. I know that when we visited Autodesk University with us, really, really good feedback. At the same time, the macro environment in manufacturing is kind of going a little bit slow. Is there anything particularly that makes you potentially see any sort of slowdown in that, or do you think your Fusion 360 throughout the cycle is going to perform better than what you have seen in the past in your manufacturing portfolio? Thank you.
