Michael Turits: Thanks very much Armon and Dave. And then Navam question for you. You talked about these longer-term deals, multiyear – but that’s on a contract basis. What about the invoicing structure? Because as we know, there’s – you have this arrangement, whatever standard, where the annual payments invoicing then it’s licensed up-line – the license rev rec is upfront. But if it’s an upfront multiyear payment, then it’s ratable. So which way did that sway? And so in other words, what was the impact on rev rec of the invoicing structures this quarter?
Navam Welihinda: Yes, sure thing. On the invoicing side, just so you know, we have one standard contract which is, you pay annually regardless of if it’s multiyear or one year. So one year paid annually or multiyear paid annually and the vast majority of our contracts were like that. So the ratability of our revenue remains at 90% plus this quarter.
Michael Turits: Okay. So just to be clear, there was nothing in those multiyear contracts that would force say or drive a larger amount of upfront rev rec?
Navam Welihinda: There’s nothing unusual about the way multiyear was recognized. There were more multiyear contracts, obviously, which drove strong revenue performance. But all that being said, the ratability of our revenue still is 90% plus.
Operator: Thank you. One moment for questions. Our next question comes from Derrick Wood with Cowen. You may proceed.
Derrick Wood: Thanks and nice quarter. First question on kind of a go-to-market. It seems like you guys are really starting to build up more of a solution selling motion around kind of a complete Zero Trust platform, and that involves Vault, Consul and Boundary together. I guess, as you look at your playbook going into next year, how big of a go-to-market focus will this have kind of selling a full multiproduct suite out of the gate versus continuing to kind of tackle the market product-by-product?
Dave McJannet: This is Dave, Derrick. Thanks for the question. I would say, in general, we do tend to land with a single product. I think what the broader Zero Trust conversation is really part of our Expand and Extend motion. So for absolute clarity, we generally land up with a single product rather than trying to land with multiple products. But we know that the next problem along and the next problem along is something that our portfolio addresses, which is why we have that Expand, Extend conversation and Zero Trust is a really good example. So I think that motion will continue because it is certainly working. If I step back and just describe the requirements of having a platform approach or a cloud program approach allows you to have this consistent way to the Zero Trust.
It allows you to have a consistent rate of infrastructure provisioning. So there are actually multiple Expand, Extend conversations we can have all predicated on that single cloud program office. But certainly, Zero Trust is a key part of it, having one partner of the year from Amazon this year is a really good example.
Derrick Wood: Understood. Thanks. Navam, one for you. Just on the number of net new G2K – or sorry, net new 100k customers, it has been trending down this year, I’m sure it could bounce around a bit. But as this metric show that it’s a little bit longer sales cycle and getting customers to expand from kind of five figure to six figure. Or also are you pushing more go-to-market investment kind of upmarket to the six, seven figure deals because that’s where – there’s a little bit more visibility? Just hoping to get your thoughts on this KPI.
Navam Welihinda: Yes, certainly. And it’s an important KPI for us. But in general, there’s variability on that number, right? So quarter-over-quarter, there’s just going to be some movement. And as you know, this is a seasonal quarter and it’s also a quarter where macro plays an impact as well. So in terms of the guidance framework, we expect 80 to 100 on a TTM basis and we’re well within that. The sales team focuses on the Global 4000, which is the prime set of those 100k customers. There was headwinds on land, obviously, due to macro this quarter. But all things being said, the expansion, extension cycle of those customers continue to be very strong. The growth in revenue per customer exceeded 18% this quarter. So we’re very pleased with how that cohort of customers is growing their usage of our products.
Operator: Thank you. One moment for questions. Our next question comes from Mark Murphy with JPMorgan. You may proceed.
Mark Murphy: Thank you very much and I’ll add my congrats on the solid top line performance. Interested in to what extent you might be accelerating any of the monetization efforts that would help the margin profile. For instance, I think what you’ve been doing with Terraform drift detection. And where do you see markets that you feel as though you’ve saturated it enough with open source usage and that kind of the time is right to work on accelerating the monetization?
Armon Dadgar: Yes. Thanks, Mark. I think in general, the way we think about it with every one of our products, we have a kind of, call it, a dial between how much we’re invested in the open source versus how focused we are on commercialization of the product. With our core products both Terraform and Vault, we feel like both of them are established market standards, they’re sort of leaders in their category. And so we’ve turned that dial much further over to the commercialization side. And our focus is really at this point, building commercial differentiation and enabling our field teams and adding value to the commercial customer base. So Terraform, you gave an example of a couple of those key capabilities. Vault, similarly, we’re focused in on that side.
I think our earlier products that are sort of in the emerging category for us, so Consul, Boundary is probably more of a balanced development between commercial and open source, and then we have our community-focused projects.
