David Jolley: Yes. Thanks for that question. It’s an important observation. So the way that we have structured our contracts and then the way that we have structured our consumption model, that still allows us to have ratable revenue recognition, so providing the same level of predictability that we’ve got today. We’ve spent a lot of times working — a lot of time working together with our outside accountants to make sure that our contracts are structured in a way that will allow us to retain that. And so we don’t really see anything on the near-term or even medium-term horizon that would cause that to change, unless the rev rec rules change somehow. But we’re pretty comfortable with the way we’ve structured it and the resulting ratable recognition.
Sanjit Singh: Great. And Josh, I’ve covered a couple of companies who have gone through a transition to consumption. And some of the things that have come up in the past is around the customer incentive to move to consumption. And I get the idea that there’s no shelfware and things like that. But when you talk about deal sizes being larger in consumption versus subscription, like what’s sort of in it for the customer? Because in the sense, they still outlay more dollars to work. And I get the removal of the seat-based friction. But like what’s in it for the customer to make that initial conversion, particularly the existing customer base, from subscription to consumption?
Josh James: Yes. It’s a great question. I think the first thing is, again, there’s lots of projects internally that they’re like, oh, we can apply this to all these different projects. We don’t have to worry about the incremental cost of having to go back and get more seats. And then the other — the big piece is they get access to the whole platform. So there’s lots of pieces of our platform that we charge incrementally for. And on consumption, we charge incrementally, but we charge it as you use it. So for instance, our data science functionality is used 4 times more frequently by our consumption customers than it is by our seat-based customers because it’s an incremental expense that you have to go through a budgeting process, you have to call us.
And now in consumption, you just click on it and start using it. And if you like it, you keep using it. And they like it, and they keep using it. They’re using it at 4 times the rate, and that’s great because it drives consumption for us. So I think having access to the full — to all the benefits that we offer, to being able to have apps and building apps for all the different projects that you have internally, just it increases their commitment to us because they see the future that they can build with us.
Sanjit Singh: Understood. I really appreciate the thought. Thank you.
Josh James: Yes. Thank you.
Operator: Your next question comes from the line of Eric Martinuzzi with Lake Street Capital. Your line is open. Your line is open.
Eric Martinuzzi: Yes, I was curious on the billings reset for the year. I was just looking at the midpoint of your prior outlook on billings at $344 million and then comparing that to the new midpoint at roughly $318 million. So about an 8% lower number. And I wanted to try and size that up between new logo and renewal. Did we get more pessimistic on new logo? Or is it the same level of conservatism that we had 90-days ago, and it’s really more about the renewals?
David Jolley: Yes. I mean there’s definitely an impact to both of those. I would probably, at this point, on a weighting perspective, it might weight a little bit more towards the renewals for the second half of the year.
Eric Martinuzzi: Okay. And then for the — you talked about ramped capacity historically that — and it sounds like you’re pretty happy with the progress. But what metrics can you give us as far as maybe a percentage of the total sales force that’s ramped versus 90-days ago versus a year ago? Because we kind of — it was a year ago that it first came to light that we were having issues with the ramped capacity?
David Jolley: Yes. So if you — if we go back and look a year ago, when we lost essentially, in a relatively short period of time, about 30% of the overall capacity, and that’s kind of ramped and unramped, that you figure that walked out the door over a short period of time. So we had to rebuild the head count and then get them ramped. We’re to a point now where we’re, I would say, relatively highly ramped. We’re continuing to ramp some of those folks through the rest of the third quarter and a little bit into the fourth quarter. But we feel pretty comfortable with where we’re at in terms of the overall head count. We have the capacity to hit the numbers that are out there. It’s just that we’ve seen, again, the productivity levels have not been what they have historically. And so that’s been — that’s where the challenge is. But in terms of the head count and the ramped capacity, we feel pretty good about where we’re at from that standpoint.
Eric Martinuzzi: Got it. Thank you.
Operator: This concludes our Q&A session and today’s conference call. Thank you for attending. You may now disconnect.
