Blake Grayson: I’ll just take a stab at the DNR follow-up and then Allan take the other one. But we’re not breaking out the level of detail and granularity in the DNR from COVID. I think it’s just an obvious output where we have some pretty strong expansion in those prior quarters. But that said, we are seeing signs of stabilization in the business. And so it’s, I would say, it’s definitely not all related to COVID. I don’t want to have anybody walk away with that kind of thought process or perspective. But I think it’s one of these things that we are seeing stabilizing signs on our business. And we think we have means and mechanisms that we’re going to continue to pursue, where we can work to flatten that out that curve and then hopefully improve it over time. But, Allan, on accounts?
Allan Thygesen: On the second question related to customer acquisition. Yes, I don’t know that we track and measure ourselves that directly on that. But I would just say we have a healthy customer acquisition funnel. It is — there is still white space, particularly internationally and acquiring new customers and we’re benefiting from that and I think getting our fair share, although, of course, I always like even more. But I’m not prepared to make any forward-looking statements about the exact number of acquisitions we’ll have on a quarterly basis.
Operator: Our next question comes from the line of Josh Baer with Morgan Stanley. Please proceed with your question.
Joshua Baer: Great. Thanks for the question. I want to shift over to margins and profitability. Allan, a question for you. If you could just talk a little bit about the change in investment philosophy from the top. And Blake just wondering the comments around commitment to improving efficiency, does that translate to continued margin expansion even after FY’25 as we think about 2026 and beyond?
Allan Thygesen: Yes. So first on our overall investment and expense philosophy. Look, we want to balance solid operational execution and efficiency today with being able to invest for the medium to long-term growth that we think we have in front of us. And so we’re balancing that all the time, as we looked at taking the action that Blake referred to at the beginning of February, we felt we had a little more room to get just a little leaner and be ready and still not impair our ability to grow as we launch new products and so on. So that’s the balance that we’re taking. We will keep looking for opportunities, and it’s obviously not all about headcount. We have gotten tremendous efficiency out of the organization on many fronts, that’s what produced the strong results that you saw in Q4, really, throughout the year, and the operating cash flow improvements.
So we’ll keep looking for those opportunities. But we feel we’re rightsized for our plan right now. And if we start seeing further investment opportunities, then we will invest, but we do that on a cautious and informed basis.
Blake Grayson: And then just a follow-up on your question on just margins in the future. I just want to point out that I’m really proud of this team for the efficiencies that we’ve gained this year. I mean, just specifically, in fiscal ’23, our sales and marketing expense was 40% of our revenue. In this year, fiscal ’24, it improved to 34%. I expect next year to be in the low 30s. And that’s not an easy kind of process to go through. But it’s important, and I’m really proud of the focus of the team to address those gains. I think for us in the future, and the future, what I’m talking about is let’s talk about long term here now without a time line on it, is that we have opportunities to be able to drive further operating leverage with scaling growth.
It’s that — can we grow our revenue faster than we do our expense base? And that’s partly what we’re building here. And one of the things we’re focusing pretty hard on as a team is you hear about PLG motions, and self-service motions and things like that. And I think over the long-term, those opportunities do provide us the opportunity to get better margins into the future, but no specific time line or anything around that.
Allan Thygesen: Yes, that’s great. And maybe just as a reminder to the point that they just made about our sales marketing efficiency. The reduction force that we had last February was 95% focused in the sales marketing area. This time around, it was a little bit more balanced, but still were weighted in sales and marketing, reflecting that we felt we had efficiency opportunities throughout the company, and we wanted to make sure we capture those. I think at this point, to the extent we make incremental investments, it will probably be in R&D first. But obviously, as we launch new products, and if — that we start seeing some leverage there, then we’ll not hesitate to invest there as well. Just want to see that first.
Operator: Our next question comes from the line of Brent Thill with Jefferies. Please proceed with your question.
Luv Sodha: Thank you, Blake and Allan for taking my questions. This is Luv Sodha on for Brent Thill. Wanted to maybe ask first to Allan, if you could just tease out like how much — it sounds like most of the improvement this quarter was because of better execution versus more macro normalizing. Could you just tease that out and which verticals sort of drove the improvement that you saw. And then Blake, it sounds like free cash flow was really strong this quarter. I guess just talk a little bit more about how you’re planning to use that free cash flow specifically for share repurchases.
