Dylan Becker : Got it. Super helpful. Thanks, guys.
Mike Rosenbaum : Thank you, Dylan.
Operator: Our next question comes from the line of Ken Wong with Oppenheimer & Company. Please proceed with your question.
Ken Wong : Great. Thank you very much. Mike, I wanted to maybe just check in with you on what you’re hearing from customers in terms of — how they’re thinking about macro last quarter? Obviously, how deal composition maybe changed a little bit. Any sense from your conversations with customers on any incremental caution? Or what were you hearing from them as far as how they’re thinking about core systems and IT budgets?
Mike Rosenbaum : I would say the answer to that question has not changed over the past few quarters. I’d say that the insurance industry is a very stable industry relative to maybe the other, I don’t know, buying behavior you see from other tech companies that are more horizontally focused. We consider that to be a sort of lucky characteristic of Guidewire’s focus. That said, there still is the concerns associated with tracking inflation closely and making sure that the system, the rate changes, the claims expense, all those tons of things are balanced. There’s a deal that we’re working on in the pipeline right now, where there’s some changes to the operating model associated with inflation that’s having an impact on when exactly the Guidewire deal will flow through the system.
But I wouldn’t characterize these things as macro headwinds, but more just normal course of business and selling core systems to the insurance industry. So summary is thing doesn’t seem to be helping things, but it isn’t hurting things for us. And I really feel like our destiny is in our own hands if we execute effectively and we provide the value that we think we need to provide, we’re going to be able to hit the targets and grow the company based on the forecast that we’ve laid out.
Ken Wong : Got it. Fantastic. Thank you for the context there. And Jeff, just one quick one for you. Really nice uptake on that subscription and support gross margin line. How much of that is kind of seasonal? I think typically, Q1 does see kind of a bit of an uptick versus actually getting some solid progress on the efficiency front.
Jeff Cooper : Yeah. That’s one of the highlights from my perspective of the quarter. I wouldn’t categorize it as seasonal. There can be some quarterly fluctuations, but that was a result of some real hard work that we’ve done over the last year and in collaboration with the finance team, the cloud operations team, the product development team to drive much more efficiencies through how we manage our cloud infrastructure. So a real positive element there that we’ve been working on for some period of time. And there’s still a lot of — we’re still learning a lot in terms of how customers consume our products and what this will look like, but some positive signs there that we all felt really confident in. As we look ahead, we were able to kind of adjust our target for subscription and support gross margins up a few percentage points, which was positive as well.
Some of that benefit was a result of, as we saw some of the efficiencies of the platform, we were able to repurpose some headcount and move them back into product development where they were doing more platform-specific work rather than customer-specific work. And so that also was a benefit that’s flowing through our guide as we look for the full year.
Ken Wong : Great. Fantastic. Great work, guys.
Jeff Cooper : Thank you.
Operator: Our next question comes from the line of William McNamara with BTIG. Please proceed with your question.
William McNamara : Hi. Thank you for taking my question. Wanted to just follow up. You mentioned hiring plans and how they’ve slowed down a bit. Just curious to know if there are certain areas you’re aggressively trying to hire in to kind of fill potential like implementation needs things of that nature?
Mike Rosenbaum : There’s no specific area. The pace of hiring has definitely slowed down. And I think that there was a period of time over maybe the last year, I’d say, maybe a little bit further out where we were concerned about attrition. And so when you’re concerned about attrition, you try to make sure you get all the appropriate roles filled you’re really focused on gearing up hiring and recruiting to make sure you can compensate for any attrition that you do see. That didn’t materialize as significantly as we thought it might. And at this point, there’s — we’re not really seeing any gaps or strategic gaps or anything like that. It’s just sort of a slow and steady approach to managing the company and ensuring that we’re making, as Jeff and I have said, steady improvement on the margins. So nothing out of the ordinary.
