Gary Merrill: Got it. So, hey Tom, it’s Gary. And I’ll jump in and maybe give you a little foundational piece that will help [Indiscernible] 25. Fiscal Q3 is typically our largest because it’s tied to all the accounting year and deals we’ve done over a corporate period. And fiscal Q4 will be modestly lower. So, not significantly, but lower. Okay. So, that means that the signality of the second half is always stronger than the first half of any fiscal year. And that trend, as I look into next year, will continue. On an overall basis, I would expect the renewal population next year to be larger than the renewal population this year, but not by the same amount that we saw this year. Right? This year had a larger sequential year-over-year. Next will be larger, but to a much lesser extent.
Thomas Blakey: Much less from fiscal 2022 to fiscal 2024, but higher than fiscal 2024 nonetheless. That’s helpful. Thank you, Gary. And maybe Sanjay, in the context of the expanding opportunity set that you have here with regard to cyber resilience, we agree with you in terms of the convergence of data recovery and data security the last couple of years here. Talk to us about maybe incentives and the capacity that you have internally to have a combat in terms of attacking the opportunities as you climb up to the CISO suite there.
Sanjay Mirchandani: Sorry, what was the last part of your question?
Thomas Blakey: So, in addition to incentives, what kind of capacity do you have or need to be continued to build out to kind of approach the CISO suite in terms of discussions?
Sanjay Mirchandani: I mean, incentives, we continue to fine tune that as needed, obviously, within the comp plans. But really what’s more important is the investment and focus we put around enabling our sales force and our ecosystem on our new capabilities around cyber resilience. Kind of unprecedented how much time and effort we put and cost we put into getting that right. And that’s an ongoing journey. We’ve also brought in some really, really seasoned security, we call them field CTOs, to really enable our customer conversations alongside our field. We’ve got some specialists as well that understand security inside now, practitioners. We’ve also announced recently a cyber, our cyber resilience board, which is a board of absolute luminaries in the field of cyber security, headed by Melissa Hathaway, who was an advisor and part of two presidential administrations on security and cyber security.
So we’re really amping not just the product, but also the capability, the thought leadership around it, and enablement within that. So there’s a lot of work going on. And yes, I’d be wrong for me to forget, we’ve also, as part of the platform, it’s a subtlety, but it’s an important piece, which is we’ve actually gone, we’ve shifted left. In other words, we have integrated and continue to integrate and continue to increase the ecosystem of connections into what we call the identify and defend, the perimeter security folks, and making sure that the technology our customers use to defend the perimeter and manage it is something we integrate with because it makes both sides, the recovery and resilience side, which we do, and the defend and identify side that our partners do, and working together, we make the customer safer.
And so there’s a lot of work that we’ve been at. We announced it all in November, but we’ve been at this thing for a long, long time. And lots to do. Lots to do. Everybody we hire, we try and bring in with a security background, quite simple. As simple as that, as a litmus test. Okay?
Thomas Blakey: The follow-up there would just be with regarding to the security your budgets at firms who have had, been ever expanding probably for the last decade or more. Do you envision that this is — your initial conversations are along those lines. You mentioned TCO and your preamble. Is this a combalt kind of like taking wallet share and consolidating vendors, or is this more of a, and who would those vendors be, or is this more of just a continued expansion?
Sanjay Mirchandani: I think, Tom, I think the fact that the two pieces that have traditionally been separate are coming together from a solution point of view, like the ART platform. Just we’ve seen customers at the table with the IT organization, the infrastructure team, as well as the security team. And they’re working together, rightfully so, to solve a complex issue, a hard problem. And I think they quite, we’re seeing the budget sort of munch together in many customers to say, we, this is not just a data protection piece or a data security piece. It has to be together. So I think we’re actually seeing deficiencies for customers with the approach we’re taking. It does make it easier because you’re not, you don’t have internal sort of friction inside a customer.
Thomas Blakey: Okay, just, yes, that’s helpful. And just one very quick one, sorry to have four questions here, but the gross margin guidance was impressive, Gary. Just maybe talk about the moving pieces there, specifically with regard to Metallic and the cloud scaling here. That’d be helpful. Thank you, guys.
Gary Merrill: Yes, for sure. And I can wrap up with that question with you. So from a gross margin perspective, getting stability in the gross margin is important. And there’s two pieces. One is when you see acceleration in our subscription and a chunk of that you’re going to buy subscription term software, they’re very high gross margins. So when we get good renewal and good land expand growth, we’re going to see gross margin momentum. The key piece though, to our gross margin is getting stability and leverage on our staff gross margins. Okay, we’re working very clearly towards our goal of getting into that 70% plus range of gross margins. A year ago, we were in the 50s and we’re now well on our way towards that objective over time of getting to 70% plus. And you’re starting to see the leverage that we’re getting right now on driving improvements in the gross margin on that.
Thomas Blakey: Very true. Great, thanks guys. Great quarter.
Gary Merrill: Thank you.
Operator: My apologies. Your next question comes from the line of Aaron Rakers of Wells Fargo. Your line is open.
Aaron Rakers: Yes, thanks guys. Thanks for the quick follow up. I’ll be brief here. Obviously a lot of momentum around the cybersecurity and the resilience attributes of the business. I’m just curious like architecturally as we think about the data center and what’s evolving, overall around AI, are you starting to see any engagements with customers that you could distinctly say that AI is actually driving this kind of change of sentiment or investment cycle for your business as enterprises kind of scrubbed through and think about their data and how they’re going to leverage that more, from an AI perspective going forward?
Sanjay Mirchandani: I mean, the answer, the short answer is you can’t have a conversation without AI coming up. That’s just a fact. Now, what we’ve done is Aaron, we’ve kind of, I’ll turn your question on its head a little bit. And what we’ve done is look at what we can do for customers that makes their life better because of AI. Now, we’ve had AI in our technology for many years, but mostly in machine learning type and automation type scenarios. Now, with the newer generation of AI, our first foray into really delivering value, not just AI washing our technology, but truly delivering value falls into three primary buckets. One is operational scale and resilience, giving them the ability to really work with large volumes of data with deep degrees of automation.
Okay, and so the operational AI just enables that, and that’s in the product today. The second is really threat and risk management and assessment. So with the number of risks, the threats and the volume of data that’s been written and restored, AI can do a wonderful job helping customers really do the anomaly detection, really do the cyber, get real cyber resilience. So we’ve built a lot of that into the product. And the one that I think is getting great traction, which I think has immense value, is predictive recovery. The complexity of recovering data with absolutely solid clean backups for a customer who’s just been breached is very complex because of the sophistication of the breaches. And the time span between entry and payload. And so we’re using AI to help customers really get a great starting point and then applying AI across a clean room recovery scenario to really help customers truly be resilient and recover.
At the end of the day, that’s what matters. And so these are the three, I’m oversimplifying it, but these are the three big buckets under which we’ve applied AI in the first avatar of our technology. And it’s continuing. We have a very rich and robust roadmap and everything I’ve talked about exists. So there’s no AI washing it, of which there’s a lot going on right now. And we have to be, we have to be very, we take a very conservative approach around this because at the end of the day, it’s mission critical data that we’re working with for our customers.
