Michael Farlekas: Yes. Many of the partners we have been partners in the past, and we obviously are making investments to enhance and become bigger partners with them. And again, it takes time with these partners. So, this investment we’re making, again, jump started and to get way more involved and engaged with those companies across the board. And we would see that coming in incrementally over time. And the way to think about our business is you’re not going to see a huge inflection point up for any 1, 2 or 3 things, but all of these efforts we’re doing are really meant to leverage the fact that we have a very diversified product set, the world’s best companies at scale and increasingly a really large ecosystem of network providers and network customers and then also integrators, all just going into the mix of incrementing our subscription revenue, which is our primary focus.
So, that’s kind of how we’ve kind of got here and what we continue to do. So you’ll see us actually do this and other things as we go. Again, none of them are going to inflect our business up dramatically. This is all just incremental expansion of our subscription growth at a very high margin. We’ve been extremely disciplined in terms of balancing our growth profile with our profitability. If you kind of look over the past seven quarters now, we’ve been — have not taken the bait on trying to grow at all costs. We’ve not taken a bait at over investing in things that we don’t think are super sustainable. We’re highly focused on EBITDA, we’re highly focused on free cash flow and highly focused on expanding our subscription revenue that comes in at high-70s kind of gross margin is extremely long term.
So, we’re building a long-term business, and we’re going to stay focused on that.
Chad Bennett: Okay. And just last one for me. It sounds like just from a messaging standpoint, the sustainability and durability of EBITDA margins in kind of that low to mid-30% range is kind of the right way to think. Is that a correct takeaway?
Michael Farlekas: I think it’s 100% the right takeaway, and that’s kind of — since we took the business over in 2015 has been really focused on driving high EBITDA margins and incrementing them up over time and expanding them at a rate faster — growth rate faster than our subscription growth rate. We think that’s the most appropriate way for this kind of business. And there are other business out there that would have a different profile based on where they’re in the business’s life cycle. Our business is one because of the very, very long-term nature of our contracts and the fact that our primarily mission-critical for the world’s largest — biggest and most important companies. That just is going to generate the highest return over time for our shareholders, and that’s kind of our — as Marje says, our North Star.
Operator: Our next question is from Taylor McGinnis with UBS.
Taylor McGinnis: I believe 4Q constant currency subscription revenue growth guide previously implied 14%, so an acceleration. And now the guide implies a deceleration to 8% constant currency. So, can you maybe talk about just what really changed in the quarter relative to your expectations? And maybe provide more color on the assumptions that were down ticked on. And then, Marje, just given the uncertainty, any changes in guidance methodology or additional conservatism that might be embedded in the outlook?
Marje Armstrong: Hi Taylor, thank you for the question. Absolutely. So, when we put out guidance 90 days ago, the range of outcomes was much wider. As we commented on the last call, we had seen some select deal delays. As we’ve discussed in this Q&A session as well, specifically sort of in Europe and in the tech sector. As we move through Q3, we saw definitely some of those deals that slipped close, but then further again — more of them again pushed to the right. And so, as Michael has articulated, this continues to be a choppy environment where we really don’t think that the demand is going away, but it’s definitely getting pushed to the right. And it’s really hard to focus on the specific quarterly growth rates. But as you said, we have lowered our expectation for the Q4.
And then, in terms of conservatism, I think you’ve seen how we’ve been setting sort of we really want to be — we want to give you the information that we have and the best estimate at the time. So, I wouldn’t say that there is anything sort of unnatural in the quarter. We always try to be transparent. I think that’s the reputation as a management team we’re trying to build is to really be transparent with you in terms of what we see in the business. And as incremental information arises, we will update that accordingly.
Taylor McGinnis: Great. And then I know the things are obviously very fluid in the environment. But if you look over the last two quarters, sequential subscription rev growth has been in the low single digits. And it looks like the 4Q guide implies something similar. So, just as we think about next year, is it fair to use that sequential growth as a starting point for modeling next year? And anything in terms of seasonality or with the environment in some of these delayed deals that we could — that we should keep in mind?
Marje Armstrong: Yes. I think there is a lot of moving parts. Obviously, we’ve been — year-to-date, we’ve reported subscription revenue in the double digits. And the macro environment is choppy, so the quarterly growth rates may deviate from quarter-to-quarter. But next quarter, we’ll give you a lot more detail in terms of how we think about the year, and we’ll have further updates on the macro environment, et cetera. But I think it’s too early to fully talk about the year. But, again, just to be super clear, we expect — we don’t expect the demand that has been pushed out to disappear. We expect these deals to come back, and as the macro stabilizes, come back. And we’ve also talked about our PS revenue growth. We expect that to become additive to our growth rate. So, we feel good about the outlook looking ahead of us.
