So those are a couple of the big areas from a near-term point of view that will fuel that operating margin expansion.
Chad Bennett: Got it. And then maybe just one quick follow-up for me. Just on the non-suite portion of the business, can you just speak to kind of year-to-date, what you’ve seen competitively there? And if that business is I mean I assume that business has kind of got weaker as we went along the year and just kind of how that has played out relative to expectations.
Aaron Levie: Yes. I think certainly, we’re very focused on encouraging any new customer to come into our multiproduct suite, and that’s a core part of our sales motion. That improves our competitive differentiation. Win rates, retention and so on. In terms of the core only population, we do see more pressure in that audience from a retention standpoint and in some cases, a seat growth standpoint, although it can always vary by the quarter but I think no change necessarily in the competitive market or competitive dynamics there. That’s something that’s sort of always been incorporated into our financial plan and model. So no major market change on that front.
Chad Bennett: Great, thank you.
Aaron Levie: Yes, thank you.
Operator: Your next question comes from the line of Rishi Jaluria from RBC Capital Markets. Please go ahead.
Richard Poland: Hey, this is Rich Poland on for Rishi. Thanks for taking my question. So first one for me. I guess when you’re seeing some of the see churn and contracts. Are you having any success trying to offset some of that with the Suites momentum? And maybe perhaps giving any kind of a discount on the Suite side or just kind of walk me through how that conversation typically goes.
Aaron Levie: Yes. I mean there can be a few different flavors, so it would be hard to fully capture. But we do — certainly, if a customer is dealing with a reduction in head count or reduction of investment our at least seat-based model will correlate in some cases to that dynamic within that customer. And so usually, that’s tied to additional cost pressure in that customer. So adding more product and return for fewer seats that customer is most likely dealing with overall cost pressures that make that difficult. So I’d say that’s — we certainly try multiple ways to get our customers to retain their total value, but we also want to be thoughtful with customers and make sure we’re adding the right amount of value and relationship given whatever the environment they’re dealing with is.
I’d say, more typically, what we’re able to do in a renewal motion is find ways to get that customer into expanded functionality or moving up a plan tier based on the kind of overall growth and health of that customer relationship, and that’s certainly a core part of our renewal motion.
Richard Poland: Got it. That’s very helpful. And it’s good to hear the AI driving some of the enterprise plus conversion. Going forward, aside from watching just kind of the Suites momentum trajectory, what’s the best way for us to kind of measure the pace of enterprise plus adoption and I guess alongside that, have you given any thoughts to kind of providing a breakout for Enterprise Plus every once in a while like you have done with core and core plus in the past?
Aaron Levie: Just, to — well, can you clarify, when you say breakout of Enterprise Plus, do you mean relative to our overall multiproduct Suites? Or is there some other metric you’re referring to?
Richard Poland: Correct, correct.
Aaron Levie: I see. Yes, we — I mean we sort of discuss different ways to maybe convey that metric, and we’re happy to take more feedback offline. Because Enterprise Plus is our primary sort of sales motion and more of the other Suites are equivalent to Enterprise Plus in terms of what products they’ve contained, minus no AI but similar price points. We sort of think about them basically as the same metric. So we’re — we probably wouldn’t break it out only because it really does — it’s effectively the same concept. To the extent that it’s helpful, we could consider it over time. But I would just consider Enterprise Plus as the primary suite that’s driving our growth and certainly taking up the bulk of that account base.
Dylan Smith: Yes. And just as a reminder, for the past year or so to kind of echo what Aaron’s been saying, more than 90% of our overall Suite sales have been Enterprise Plus. So that’s certainly effectively all of the new Suite sales as well as some customers moving to Enterprise Plus from a prior suite under the hood. So it is the majority, but we try to capture that in one metric just to keep things simple, especially because as our product offerings continue to evolve, just a cleaner way to track the overall Suites momentum which is what’s most important to really understand how our customers are using Box’s products.
Richard Poland: Got it, that’s all very helpful, thank you.
Operator: Our last question comes from George Iwanyc from Oppenheimer. Please go ahead.
George Iwanyc: Thank you for taking my question. Aaron, maybe going back to your comments on investing for growth. With Olivia coming on board, are there any changes made to the sales organization and go-to-market motion over the next several quarters?
Aaron Levie: Yes. So maybe at a high level as we did a search for the successor for Steph and this is a very collaborative process to find the next person that can take Box to take us from the $1 billion to $2 billion mark. We were extremely intent to bring somebody that understood our model understood both what we had built in terms of seeing similar environments but also seeing where we’re trying to go as a platform. And so we found somebody in Olivia that deeply understand SaaS, our go-to-market motion, the land and expand motion kind of driving higher price per seat through product expansion, driving partnerships with system integrators and channel partners that international mix. So we’re extremely delighted to find somebody that really understood our model, but also where we want to take it.
I think I would say as we look out to next year, I would expect more incremental optimization in the form of things like expanding with more partners going into kind of critical verticals that we need to continue to drive growth in continue to move up customers into higher plans here. So really a continuation of the things we’ve talked about on this call and to — the street about, but obviously, turbocharging wherever appropriate within the context of a financial model where we want to deliver more bottom line efficiency as well. So that’s sort of the balance that we continue to deal with. But I’d expect you to hear updates on more of those kind of strategic initiatives as we go into next year.
George Iwanyc: And coming out of BoxWorks and your new announcement with the GCP marketplace. Maybe give us a level set on new customer outreach and what the pipeline looks like from that perspective?
Aaron Levie: Yes. So the GCP partnership has been something we’ve been working on now for quite some time. So we’re excited to land the plane there. We really kicked off at the start of Q4. So we’re in the midst right now of some of those conversations. And I think the contours of the value really are when a customer is looking to buy box or maybe there’s a gap in their IT strategy that Box can help with and Google seller sort of identifies that, we can be brought in. And you have this much more efficient path for finding budget in some cases where a customer might have those unused credits within the GCP environment. So very — just the earliest days of the partnership, but we are we’re already seeing this in our pipeline and hearing anecdotes of it in customer conversations. But I’d say just it’s sort of effectively day 1 right now. So we’ll share more as we have updates.
