Navam Welihinda: Yes, Ittai, I’ll cover your RPO question. We’re very pleased with the RPO growth. It signifies basically that our customers are through this vendor consolidation period. Our customers are entering into longer-term contracts with us, meaning spanning multiple years and placing their faith in us in our products. So that’s obviously a big positive for us, and we’re seeing continued momentum in is the more relevant one as it connects to revenue over the next 12 months. So that’s a closer proxy for revenue. And obviously, we keep a close eye on that, and we’re seeing reasonably good growth rates on the CRPO side as well. In terms of convergence, we — our view of revenue, as I mentioned during the prepared remarks is want to take a very measured view until the time that we see the buying behavior and the macro change.
And we haven’t taken a different view as to how we forecast the next quarter and how we think about the future. So it’s been consistent with the prior period’s forecast.
Ittai Kidron: Thank you.
Alex Kurtz: Thanks, Ittai. Next question.
Operator: One moment for our next question. Our next question comes from the line of Alex Henderson from Needham. Your line is open.
Alex Henderson: Great. Thanks. I was hoping you could talk through the AI issue with us a little bit to understand the mechanics around how enterprises are adopting it versus their alternative uses of investment. It seems to me that there’s two possible solutions here. One would be that you would it would drive app development and internet as — excuse me, infrastructure’s code content and demand as a result, or it could slow app development as they spend time ascertaining the value of how to use it and how to integrate it into their programs. So can you talk a little bit about those two alternative worldviews?
Armon Dadgar: Sure. Yes. I mean I can share certainly what we’re seeing in the customer conversations that we’re having. Our general sense is that there’s a lot of excitement certainly among people about — if nothing else, at least being able to dip their toes in and being able to access these models, start leveraging them, being able to sort of see how they could apply to people’s businesses. And so because of the specialization of these models, in the different cloud providers. We’ve seen this as actually a tailwind for many customers to actually go towards a multi-cloud strategy, right? They might have been single CSP or might had a large percentage of the workload on-prem, and this has been a driver for them to accelerate either going multi-cloud or going to cloud to begin with, so that they can leverage that because I think most customers realize they won’t have access to certain best-of-breed capabilities and certainly, if they’re stuck on-prem.
So I think in that sense, it has been an accelerator in terms of customers pulling forward some of that strategy. On the flip side, I think we’re also seeing a general interesting opportunities across the portfolio. We did talk at our Financial Analyst Day about a very large financial company we work with, the invested in Nomad to build a large-scale compute grid based on thousands of GPUs and really looking at how do they leverage these techniques at scale in a cost-effective way. And we’ve seen that playing out driving interest across the portfolio, certainly Terraform for provisioning [Nomad] for doing large-scale workload orchestration and console for enabling networking across a multi-cloud estate. So I think it’s certainly been a useful tailwind for us.
Alex Henderson: So you don’t see any slowdown in the app development cycle. So that brings me to the second part of the question, which is we’ve gone through the year of efficiency over the last 18 months. more than a year now. And that obviously cleaned up a lot of wasteful cloud infrastructure. It seems likely that those teams are now shifting away from that thought process of how do I fix the waste that I’ve got to how do I keep it from happening again in the future. And to that extent, I would think that Terraform would prove to be one of the key tools that would be used to produce a standardized model to manage resources in the cloud. Where are we on that changeover and how do we think that will play out over the next 18 months? Is it a very shallow slope to recovery? Is it a longer process, or is it something that could actually reaccelerate the growth outlook?
Armon Dadgar: Yes. It’s a really great question. And the observation I would share is, and you’ve heard us probably talk about this at a few different events, is we almost characterize an organization’s adoption of cloud is going through multiple phases, right? Phase 1, we tend to think of as call it almost an ad hoc approach, right? Multiple application teams are all sort of lit up to go build their applications in cloud. But with no sort of standardized process, workflow, center tooling, et cetera, it’s everything sort of free for rolling. And I think what ends up happening is there’s different catalysts. For some organizations, it might be a security issue for others, it’s a compliance issue, for others, it’s a cost issue.
But at some point, there’s a catalyst for an organization to say, you know what, this is unsustainable. We actually need to get to a Phase 2 where we look at a more mature organizational approach, where we have a centralized platform team that creates a standard set of process, standards set of tooling, put some guardrails around it, both from a cost perspective, security compliance perspective. And that Phase 2 tends to then be where organizations really unlock cloud adoption at scale, right? Because now they have the controls in place to really scale, and so I think to your point, I think your observation is exactly right. What this year of optimization has done is basically pull forward that Phase 2 in the construction of the platform team across a broad swath of customers that we certainly interact with, right?
So I’d say we’ve I think that for us is a great tailwind because ultimately, those platform teams are our customers.
Alex Henderson: If that’s the case, is it then causing a pull-in in the time to reaccelerate mean that’s the conclusion.
Armon Dadgar: I think what it’s doing is it’s creating a central — ultimately, these are the groups we sell to, right? So yes, it makes it easier for us over the long term to build a relationship with these platform teams and then ultimately, drive our expand and extend motion, to grow usage of the land product and ultimately sell them the rest of the portfolio.
Alex Kurtz: Yes, we have a bunch of questions left to go, so we’re just going to move along a little bit and please just limit to one question for now, and we’ll try to get more answers later. Next question.
Operator: Thank you. One moment for our next question. And our next question comes from the line of Mark Murphy from JPMorgan. Your line is open.
Mark Murphy: Thank you very much. And congrats on the nice free cash flow generation. I’m wondering, Dave, if you detect any difference in the demand environment or willingness to invest in November or December being that we’re on the heels of softer inflation, strong GDP growth. There’s been very favorable interest rate movements. As you noted, there’s optimization moderation being seen by consumption software companies and stock market kind of breaking out and moving higher. I’m just wondering if any of that is kind of translating into your dashboard at this point.
