But we’re pretty comfortable right now with the dialogue that we have with these customers and the planning and approach that we’re taking. We’re also doing a lot of work to continue to optimize the implementations that support them on the classic approach to Guidewire Cloud. So we feel comfortable about that. We’re always working to make sure that it goes well. But from an investor perspective, I don’t think it’s something that really factors as much as it did into the overall picture at Guidewire as it did maybe 1.5 years ago, I feel really good about this approach.
Jeff Cooper: Yes. Pete, I was going to say the same thing. I mean, I think if you look back to the Analyst Day two years ago or year like a little over a year ago, two Analyst Days ago. The impact that the Classic customers had is a drag on the overall margin was quite significant. As we’ve migrated a group of those over to GWCP as we’ve improved our overall efficiency in managing the classic customers, and just as we’ve grown our business, that’s going to be a smaller and smaller piece of the overall pie. So we’ll be less material to the margins going forward. But it’s something we’re still working hard on.
Peter Heckmann: Good. Well, that’s good to hear. And then in terms of just the this second quarter guidance that just looking at a little bit at — and I want to make sure I’m interpreting this correctly, but it looks like it should be a relatively more solid term license quarter with a little bit lighter growth in subscription and then another kind of down high teens type in services. And so, on the services side, should this be the last quarter where we see that type of decline and then we start to see year-over-year growth again in the back half?
Jeff Cooper: Yes. So on the services side, as we noted in the prepared remarks, we’ve been doing a lot of work to move away from lower-margin subcontracted revenue and pushing more and more business through our partners, that’s impacting top line, but bringing in a much higher quality revenue stream that is a higher margin profile. So that is playing out. Q2 is also the holidays, and so it’s not uncommon for Q2 to be a little bit slower than Q1 with respect to overall services. And then we have capacity and we have a fair amount of work to do in the back half of the year and so are expecting revenue growth in the back half of the year vis-à-vis the first half, and have structured our cost basis in a way that we can do that at a nice margin.
So that’s how we’re thinking about the services side of the business. Term license, as you know, it kind of bounces around with when the renewal activity happens. And so Q1 is always like from a term license perspective, Q2 will be seasonally higher, which is pretty consistent for us. And then on the overall subscription side, the only thing I would call out is that we did have a little bit of what I would call more onetime revenue that impacted subscription in Q1. In general, we feel very good about the start to the year in terms of how we march towards our longer-term targets and our annual target for this year. But some of that did impact the sequential growth rate from Q1 to Q2.
Operator: Our next question comes from the line of Matt VanVliet with BTIG. Please proceed with your question.
Matt VanVliet: I wanted to circle back on some of the commentary you made around HazardHub and some of the other analytics products that you’re adding in there? And I guess as we look at those on a go-forward basis, how much should we think about those being additive to ARR on a specific contract or for customers in general versus being sort of more of a carrot to get customers to move to GWCP and really start to unlock all the value of being in the cloud and using some of those more advanced features.
Mike Rosenbaum: Yes, it’s a good question. I would say, primarily, our expectation — my expectation is that this developed into a — and I don’t want to say independent, but linked an incremental source of ARR for the Company. We can certainly use them as carrots to drive cloud adoption. But I’m more and more comfortable that the core cloud value proposition and the value proposition of insurance suite with the cloud services that we have built to support it creates enough support or direct core sales and then the analytics sales of these products of Predict and HazardHub can be incremental. They can be linked sometimes, and we certainly work hard to link them and sell them both at the same time. But over time, our ambition is absolutely to create an incremental analytics business that, like I said, is linked to, but accelerates the overall growth of the Company.
Matt VanVliet: Okay. Very helpful. And then great to see the Japanese carrier moving to a full GWCP deployment. Do you think this is sort of the breaking of the dam of some of the international clients being ready to make that full switch and really embracing the cloud, maybe as partners are more prevalent and more trained? Or is this still a little bit of a, each carrier needs to make their own decision. There’s not necessarily this bigger group wave from country to country like we’ve seen here in the U.S.
Mike Rosenbaum: Yes. I don’t think we’re ready to call it. And I don’t know if we’ll ever really see it sort of a metaphor like breaking the dam or anything like that. It’s certainly helpful. It is an incredibly positive signal. We had another Japanese customer go to the cloud, and this is our second one, this is a full suite implementation. It’s certainly helpful. It helps us validate the model. It helps us exercise all the particular things we need to do to make sure that the system works and can go live successfully. And so it’s all very, very helpful. That kind of approach played out across each of the countries we operate in, certainly helps. But I wouldn’t — I don’t have a vision and we don’t have a financial plan that sort of imagine some like future flood.
It’s going to just be steady improvement, increased propensity to trust us and to trust the model, and that all just builds country over country quarter-over-quarter. That’s more the approach we’re going to take. It’s modeling the business and really, it’s also our expectation. And I think it kind of relates to what you just said, which is there is this overriding factor of what are their priorities, what are their objectives, what are their timelines, and those factors have a big — those things factor into in a large way the timing of those deals for them. So this is certainly helpful on the progress we’ve made internationally over the past couple of years, certainly points to the eventual success, but I don’t see it coming all at once at all.
Operator: Our next question comes from the line of Parker Lane with Stifel. Please proceed with your question.
Matthew Kikkert: This is Matthew Kikkert on for Parker. So you’re in your non-cloud release now and have a strong amount of go-lives. How would you compare your effectiveness and speed in those cloud implementations this time compared to at the beginning of your cloud push?
Mike Rosenbaum: Yes. That’s a great question. I shouldn’t admit it, but it’s night and day. I mean, we are just so much more confident now around what it takes to run these successfully than we were when we first got started. We did a good job when we got those first cloud deals done, and we got those first cloud customers live. But I don’t know, I want to put it into a measure, but many, many orders of magnitude more confident. Just having done and experienced all of these different circumstances that can arise in one of these projects, and having built really a world-class organization in terms of understanding and assessing what we learned from each one documenting it super effectively building it into better operational processes to enable that we’re more prepared than we’re sort of making sure that the gotches that held up other projects don’t occur again incredibly proud of the work that our teams and our partners have done to ensure that these programs go live more and more effectively with each cycle.
