Operator: Our next question comes from the line of Patrick Walravens with Citizens JMP. Please proceed with your question.
Austin Cole: Hey, thanks for taking my question. This is Austin Cole on for Pat. So last quarter, it seemed like you mentioned that there was kind of an uptick in interest in CLM, and now you’re seeing strong adoption of CLM among enterprise customers. Is there kind of an incremental improvement in tone there? Or can you just talk broadly about just the CLM opportunity and how you guys are situated? Thank you.
Allan Thygesen: Yes. So I do think the CLM market overall is improving. And I do think we’re executing better in the CLM market. So I think CLM overall, I think more and more companies are realizing that managing your agreements better and getting more value out of them is a very strategic opportunity. It’s definitely rising in the priority list. And so CLM, ours and others, is an increasingly strategic and interesting solution. So we’re seeing more RFPs and so on. In terms of our competitive position, I think we’re in a very strong position as illustrated in the Gartner survey and other measures of our position in the market. I think we are — we have the largest number of accounts and are very well rated by customers for our experience.
And we think there’s more opportunity there to, should we say, popularize CLM to a broader audience, both within companies that are — who are going to adopt it, as well as to smaller companies where the weight of the current solutions might not be appropriate. So it’s a very positive and strategic opportunity for us. And yes, I do would summarize that to say on both fronts, some improvement.
Blake Grayson: Yes. And just a follow-up and maybe to add on to what Allan said. You heard in our prepared remarks, CLM grew faster than the total business and also accelerated from — on a year-over-year basis from Q3 to Q4. Obviously, it’s still a smaller share of our business, but still encouraged by that acceleration for that product.
Operator: Our next question comes from the line of Scott Berg with Needham. Please proceed with your question.
Robert Morelli: This is Rob Morelli on for Scott. Thanks for taking my question. Helping [Technical Difficulty] for margin here with non-GAAP operating margins expanding 500 basis points. However, G&A was actually up as a percentage of revenue. Two questions here. First, why were we not able to drive leverage here throughout the year? And then second, how do we think about spend in 2025 in this line of events? Thanks.
Blake Grayson: Sure. Let me take a stab at that. So, yes, G&A expense, non-GAAP G&A was up 14% year-on-year. There’s two unique items that are kind of contributing to that. One is, we used to have an immaterial dollar amount, so when you look at a relatively small kind of SEC split out bucket, it has a bit of an effect. So a couple of million dollars, we used to allocate out in the prior year. We’re not doing that now, but it’s an immaterial kind of dollar amount overall. And then also a little bit higher litigation cost for us this year versus last year. If you exclude those two, what I’ll call, unique items, G&A would have grown in the low single-digits year-over-year. So what I would say is from the efforts we’ve taken over the past few months and recently not only do I expect that sales and marketing expense declined year-on-year as a percentage of revenue, but I also expect to see some efficiencies and improvements in G&A as well.
So I think we’re focused across this business to drive efficiencies where needed, and I expect to see that next year.
Operator: Next question comes from the line of George Iwanyc with Oppenheimer. Please proceed with your question.
George Iwanyc: Thank you for taking my question. Allan, maybe you could dig in a little bit deeper on the international strength you’re seeing. How much of that is being partner-led? What are you seeing from your digital initiatives there? And maybe give us some color on the regional breakdown.
Allan Thygesen: Yes. Our international growth is led more by our direct channel today. I think we have very substantial opportunity on the digital front and on the partner side, which is relatively mature right now. I think there’s a lot of headroom. So lots of growth opportunity there, but most of the growth today is coming from our direct sales efforts, principally in the larger focused countries. So the top 10 markets outside the US that you would expect. As you know, we’ve been investing in Japan and Germany. But today, UK, Australia, Canada, France are a little larger than both of those. So all of those markets are priorities.
Operator: Our next question comes from the line of Rob Owens with Piper Sandler. Please proceed with your question.
Rob Owens: Hi. Thanks for taking my question. Just a quick one around your LLM training. I know there was some stuff in the media just regarding privacy. Kind of curious, from your perspective, what are internal policies? And how are you training those LLMs? Thanks.
Allan Thygesen: Yes, I’ll take that one. Yes, I want to be very clear. We do not use any customer data for training any of our AI models without specific contractual consent from customers. End of story. So we have a high trust position with customers. They trust us with their most sensitive documents. And we don’t want to do anything to violate that trust. There are probably some companies who — people are willing to move aggressively here, but I think we’re moving responsibly and cautiously on that. We are, with all that said, we are very excited about what AI can bring, and our customers are asking us for how can we extract more value from our [indiscernible] using more modern AI technology. And so you’ll hear a lot more about that in a month at momentum.
