Allan Thygesen: So you’re absolutely correct. We’ve made a substantial effort over the last 15 to 18 months to attract a world-class leadership team that has deep experience, but it’s also hungry for the excitement and the challenge of DocuSign’s next chapter. I’m really happy with who we’ve been able to attract. I think it speaks to the opportunity into DocuSign’s brand and the quality of the company. The kinds of folks that we’ve been able to attract not just after I arrived, but also prior. I do think we have a relatively full team now, both directly reporting to me and in fact, in the next couple of layers. I don’t have any open positions, the top two layers for me, and that’s not been the case for a long time. So I think we’re really making good progress also in filling in some of the key leadership roles at the next level.
So I feel like the organization is now more ready and poised to fully capitalize on the opportunity ahead of us. In terms of how that plays into that’s — that is the enabler for and the requirement for both the product road map, the GTM transformation and then the growth in the outer years. So we didn’t do that first. We couldn’t make progress on the other things.
Operator: Our next question comes from the line of Brad Sills with Bank of America. Please proceed with your question.
Brad Sills: Great. Thank you so much and I wanted to ask a question around the international strength you’re seeing. Any countries you’d call out there? And as you’ve been investing in international, are there any regions that we should expect to see perhaps some incremental traction from here?
Blake Grayson: I’ll just comment. Regionally, I wouldn’t say there’s necessarily one standout versus the rest. But I just think we had general strength outside of North America, which I actually appreciate because it just goes to the kind of notion about the product and the value offering that we have. And so how do we expand that larger going further. And I think also that as far as like new plans and new regions, we’ll take that on a case-by-case basis. I think it’s the one nice thing for us, I think, in this business is the marginal cost to expand is not terribly large, right, with us. And so for us, it’s opening a sales office and the kind of thing, and you want to have the situation laid out appropriately in order to have the right leadership and scale and things like that. But I don’t have anything with that individual countries to reference other than the anecdotes that Allan already provided around Asia and Europe.
Allan Thygesen: But in general, I’d say I think all the international regions, Europe, APAC, LatAm, all grew double-digits.
Blake Grayson: Yes. It was strong across the world is what I would say for us. Internationally, we’re pleased with our international progress regardless of the region.
Allan Thygesen: Yes.
Brad Sills: Great to hear. And then just with regard to the restructuring effort and the direct sales organization, do you feel like — Allan, I think your comments are that you feel like you got the right team in place. But are the efforts to restructure the existing organization? Is that largely in the past, do you feel like you’re kind of set up now such that you’re kind of in a place where the plan — the organization in place from here can execute? Thank you.
Allan Thygesen: We don’t have any plans for any major restructurings of our sales organizations. I mean, obviously, you’re always tuning things and I think we’re continuing to evolve that, but nothing major and nothing that would — we could be on the scale or considered like a risk or anything like that.
Operator: Our next question comes from the line of Karl Keirstead with UBS. Please proceed with your question.
Karl Keirstead: Okay, great. Thanks. Maybe a couple for Blake. Blake, if you don’t mind unpacking the 3Q billings guide, it obviously implies down $33 million. I know we had that phenomenon two years ago, but it’s typically up sequentially. Is this a function of the greater on-time renewals? Anything else that you might flag around that?
Blake Grayson: Sure. Yes, the guide reflects continued the trends that we’re seeing in the on-time renewals. The function of the on-time renewals for us is that every customer situation is different, right? Deals can renew on time, they can be renewed early or they can be pushed out. So every quarter puts and takes on that. The first half of the year has been strong due to sales execution. There are deals that may normally have slipped out to Q3 and they — that closed in Q2. And so that’s a positive. But renewal is, obviously, well, super important for us and really drive that foundational free cash flow generation, it’s more of a timing thing than it is for on the growth side. And I think the positive to note for us on the on-time renewals is that we’re not relying on discounts or incentives to drive that improvement in that on-time renewals.
It’s better sales execution. And so the teams were really hard just to stay on top of those things when they come up for renewals because an on-time renewal is just a deal that renews on schedule. And so that’s super strong. And with regards to the guide as far as other pressures, that’s just the macro pressures we discussed earlier with the DNR like essentially the net retention components and now the pressures that we’re seeing there.
Karl Keirstead: Yes. Okay. Makes sense. And one more, Blake. Your predecessor, it was never a formal guidance, obviously, around operating cash flow. But the kind of the soft color was that it might land for this fiscal year, a couple of points below operating margins. Is that still roughly your framework as to where cash flow margins might shake out this year?
Blake Grayson: Yes. I’m not in a place where I want to kind of guide to a specific cash flow margin, so to speak. I think for me, what I’m looking for to the business is a long-term cash generation company that drives profitable sustainable growth. I think that the fact that we’ve delivered 100 — I think $211 million of cash flow of operations, $184 million of free cash flow, those were pretty healthy yields. And you’ll see those fluctuate in the quarter based on timing and such. But it’s a cash generation — generating business and model that, as a CFO, I’m selfishly super excited about.
