Operator: Our next question comes from Hugh Cunningham with TD Cowen.
Hugh Cunningham: We go with our colleagues in offering our thoughts and prayers for — to all of you and your families and friends. A couple of questions. One, to the question Yossi just answered about Pathfinder and Guardian, and I’m trying to think through what both of those solutions would be displacing. My first — my initial thought that you probably will be displacing some sort of process on the Guardian side and maybe there’s nothing on the Pathfinder side at a lot of your customers. Can you just talk about the ease of penetration or what the difficulty to displace what your customers already have in place performing the functions of Guardian and performing functions of Pathfinder?
Yossi Carmil: So we are talking a lot about the drivers for the growth. And I was talking about it earlier, and one of them is about inefficiencies and the need to bring more digital intelligent solutions into our customer space, because as much as people are sometimes surprised, there is not much to displace. It’s more about creation and about improvement of processes with destructive technologies like ours that come and basically make things more smarter, faster, efficient and by that, enable productivity. The Pathfinder, according to very thorough market studies, and as I said, we know our customers, investigative analytics, so analytics BI for investigation is in the, I would say, single-digit penetration at this stage of our strategic and mid-high prime accounts.
That gives us a place to grow. It’s not about replacing. The onboarding of those solutions, such as Pathfinder is indeed longer. There is a need to educate the customers. There is a need basically to invest in customer success in order to make it . But we are not displacing. We are coming and solving a pain with solutions, which doesn’t exist. Same goes to Guardian in terms of evidence and case management. I would say that if I need to display something is actually help our customers to stop manual and saving of evidence on USB drives and stuff like that. It’s more about creating a better or bringing technology that will create more efficient, more efficiency, save manual work and by that, increase the chain of custody. And that’s in a nutshell.
So we are in the upgrade and displacing manual work and inefficiencies with lots of efficiency, smart, fast and more productive.
Hugh Cunningham: On the federal side, does FedRAMP — in addition to moving you forward on the federal side, does it help you with local and state and maybe even private customers who are using maybe FedRAMP as a sort of shortcut or due diligence or validation, will that help you with them also? And then related to that, do you expect any impact from the potential shutdown of the U.S. Federal Government?
Yossi Carmil: First of all, to the first question, yes, absolutely, benefit from that. As for the shutdown, there is no concerns on our end related to Q4 2023. And we analyze that pretty deep. And when it comes — if there will be a shutdown, it depends, and I’m thinking right now about 2024. On a shutdowns, and we have done this and that we have seen that in the past, the shorter it is, the less impactful it is. The longer it is, then we’ll need to consider. We are assessing, but for Q4 2023, we see no impact on our results.
Hugh Cunningham: And then for the Endpoint Mobile Now, it’s great to see that announcement. Can you talk about the differences in your approach as you target the public sector versus private sector? I know Endpoint Mobile Now targets the private sector. Can you talk about the differences there? And then just to wrap up on FX, could you remind us about your hedging policy? I know, I think Dana mentioned, part of the OpEx improvement was related to FX moves. Can you talk about your hedging policy there?
Yossi Carmil: I’ll take the Mobile Now, and I’ll take the public — the private sector, sorry. For a — as a company, we see lots of potential when it comes to the private sector and especially from the background of a very strong public sector business. In general, good progress that we have done in Q3. And indeed, as part of our innovative steps and the product portfolio, we brought basically the Mobile Now into the market. The Mobile Now is a — it’s a first SaaS offering, by the way, which is targeted as the first step for, I would say, our small to midsized customers in the private sector. It’s — as we said in our press release, it’s a one step before bringing an endpoint complete on the SaaS, which is — which will come in Q4. And that will be focused for more, I would say, large paying accounts that we have as part of our customer base. Dana, would you like to…
Dana Gerner: Yes, for sure. So our hedging policy is mainly aimed to protect the expense in Israeli shekel, which is mostly payroll paid in Israel. We have a 4 quarter rolling policy. But usually the coming quarter is covered 80% to 100%. Then next quarter, we’ll go to 70% and so on and so forth, and we are on a monthly basis based on the currencies updating the hedging that we are executing.
Operator: Our next question comes from Douglas Bruehl with JPMorgan.
Douglas Bruehl: We’d also like to extend my thoughts and support to you guys and all the Cellebrite employees. Maybe we could continue a bit with U.S. Federal. Did you see any budget flush coinciding with the end of the fiscal year? And then how did federal spending trends in Q3 compared to prior years?
