Alex Kurtz: All right. Thanks, Derek. Let’s go to the next question, please.
Operator: And our next question is come from the line of Gray Powell from BTIG. Your line is open.
Gray Powell: Great. Thanks for taking the question. I just want to follow up on — I think it was Alex’s earlier question. So if I look at the guidance, the high end of the Q4 guide implies that you exit the year with revenue growth of 11%, and I’m not asking for fiscal ’25 guidance, but maybe could you just talk directionally about like the top factors, whether it be product initiatives, go-to-market, things that could drive improved growth.
Navam Welihinda: Yes, this is Navam. So in ’25, like I said, we really want to go execute Q4 and then get into the new year to see what the demand environment looks like. We’re holding a very measured view into the forecast and the view is that we’re going to grow revenue faster than we are going to go cost and maintain our profitability — our free cash flow profitability and move towards upping profitability on the — by the end of next year or by the back half of next year. So the upping trends and the trends are going to be good, while we wait for or see for signs of macro improvement, which will drive productivity up.
Alex Kurtz: Okay, thanks. Next question, please.
Operator: Thank you. One moment for our next question. Our next question comes from Brad Reback from Stifel. Your line is open.
Brad Reback: Great. Maybe going back to Pat’s question a little bit on the cloud. It’s been three quarters in a row that the absolute dollar adds. I understand they’re small have come down sequentially. What needs to happen to get that absolute spend accelerating? Thanks.
Armon Dadgar: Brad, Yes. I think ultimately, it’s really about flipping the behavior of the enterprise sales team, right? I think we’ve talked about this before. We sort of think about a commercial sales motion versus an enterprise sales motion. Historically, we’ve mostly sold the cloud product into commercial. And I think that’s where you see more macro pressure with the smaller customers, which impacts on the sequential cloud growth. I think for us to really see a dramatic shift in the sort of the dynamics. It’s really about changing the behavior of the core sales team that’s looking at the enterprise. I think that’s where we’re signaling that we feel that demand signals we’re now seeing from the enterprise customers tell us that the appetite is there.
And certainly, we feel like the product capabilities are there, that we feel that at least we’re going to flip Terraform Cloud where the customer appetite is there to a default cloud motion, and we expect that, that would have a significant impact on that quarter-over-quarter behavior.
Alex Kurtz: Okay, thanks. Next question, please.
Operator: Our next question will come from line of Ari Terjanian from Cleveland Research. Your line is open.
Unidentified Analyst: Well, thanks for taking the question. Nice to meet everybody on the call. wanted to double quick on how you’re thinking about the role of the partner ecosystem as you change and reevaluate the go-to-market, specifically CSPs, AWS and the marketplace as well as the global system integrator partner community. Thank you.
Dave McJannet: Yes, I’ll take that one. Thanks for the question. So our partner focuses are really around the cloud providers, Amazon, Azure, GCP, et cetera. And then secondarily, it’s the system-integrated community. And I think we actually had a huge presence at reInvent last week, which I think is indicative our very tight go-to-market relationship with all three of the big clouds. Now, we certainly, won a collaboration partner of the year from Amazon this past year, which is probably the best indicator of how our teams are working together. So it’s very much a co-sell behavior with them. And certainly, we work closely with the material percentage of our opportunities go through their cloud marketplaces, and that’s good for them and good for us.
So very, very close with the CSPs, and that’s been a very strong relationship for us for a very long time. On the system integrator side, our focus is around the skills gap that exists for the deployment and adoption of cloud technologies. And I’d say, like many vendors are scale, the majority of our efforts have been to date with the smaller SIs around the world of which we have hundreds that we work with. But we certainly are working ever closer with the global system integrators. But those are the primary partners we’re working with and we have a large investment in it and we feel really, really good about how they’re both going to be candid.
Alex Kurtz: Thank you. Let’s go to the next question, please.
Operator: And our next question will come from the line of Brad Sills from Bank of America. Your line is open.
Unidentified Analyst: This is Carlie on for Brad. I guess first question I want to ask on the enterprise customers A I guess the customer net add is kind of healthy compared to last quarter, but then just on per customer spend basis. The number — the quarter-over-quarter growth, 0.2% is kind of flattish. You guys definitely mentioned smaller contract size, but just any additional like nuances that you can share on those like bigger like larger customer spending.
Navam Welihinda: Carlie, it’s Navam. No, I think it boils down to the deal volume being higher and the contract sizes being smaller. You’re still consuming our software and still designing us in, but doing that in smaller quantities. This year as they go through that digestion period that Dave talked about following the aggressive investment cycle.
Alex Kurtz: Okay. Let’s go to the next question, operator.
Operator: Thank you. One moment for our next question. And our next question will come from the line of Michael Turits from KeyBanc. Your line is open.
Michael Turits: Hi, guys. Thanks. So on the expansion, where they’ve been expansion from a DR perspective, as the challenge has been more on the expand side or on the expense side? So in other words, just number of seats and units in the entitlement, or is it adding new products and people buying more into the platform?
Dave McJannet: It’s David. I don’t think there’s a real difference to be totally honest. I think every company we engage with has both product side of the problem, the infrastructure road the security problem. And I think it’s pretty consistent. It goes back more towards the digestion process of entitlements that they’ve consumed. And so no real difference between the two is the short answer. They’re very connected to that the meta position of our customer base as they’re just getting through what they got.