Keith Weiss: Excellent. Congratulations on a really nice quarter and a difficult environment. I wanted to ask a 2-parter a lot of new functionality and new product announced at the user conference earlier back in September. And one of the things you guys talked about was the ability for that to pull people up to sort of higher level SKUs and whatnot, particularly the AI functionality. So part one, have you seen any of that start to impact numbers as of yet or perhaps on average pricing as of yet. Part two, behind all that product, is there going to be increased investment in distribution or marketing or whatnot? One of the highlights of the past year has definitely been the margin expansion this quarter, 700 basis points year-on-year was definitely above expectations. Is that durable on a go-forward basis? Or should we be expecting more investment behind all this innovation?
Yamini Rangan: I’ll maybe get started on the 2-part question. On the first part, our overall product and pricing philosophy stays the same. From a product perspective, our philosophy is to deliver powerful tools that are just easy to use. And everything that we announced at INBOUND, and we continue to innovate on consistently drives both power and ease of use. Specifically on AI, as I mentioned a little bit earlier, Keith, we’re still in the march towards getting a lot of the features from data to general availability. And so we’ve not yet seen that impact pricing, and that will be what we’ll continue to focus on in terms of driving usage and adoption as we go into next year. So you will hear more about AI pricing in early Q1 and then we’ll talk about the trends that you’re seeing on the impact to ASP next year on that.
But the strategy that you articulated is exactly the case. And then in terms of how we think about scale and distribution and how we’re looking at investments, look, we do have a great moat. And the moat that we have in distribution is our ability to scale product led, sales led and partner driven. And we want to do it in a way where they get efficient over time. And Kate articulated a number of areas at the Analyst Day. And as we look at the next few years, we want to balance growth and profitability. And — the biggest area in terms of profitability is sales and marketing efficiency. And so we’ll continue to make investments. So we increase our distribution moat, but we do it in an efficient manner.
Operator: The next question comes from the line of Michael Turrin with Wells Fargo.
Michael Turrin: I want to go back to the second part of the last one and just ask Kate on margin. You’ve shown more meaningful expansion this year in this quarter, even with INBOUND we’re seeing a bit more uptick. It also looks like head count adds are coming back, albeit at a modest pace. So can you just walk us through the trade-offs you’re evaluating going forward as we’re still in this what sounds like elongated macro. And what leads you to kind of turn those dials between adding heads and investing into the product side and pushing more margin if growth remains more challenged?
Kathryn Bueker: Yes. Thank you very much for the question. We do continue to strive for a real balance in growth and profitability. A lot of the profitability that we are delivering this year is a result of the fact that we pulled back pretty dramatically on hiring in the back half of last year. We did a risk at the beginning of this year, and we’ve been very focused and targeted on where we’re adding investment. The first place we’re going to continue to add investment is in product and engineering to continue to drive innovation. And you’re seeing that translate into product introduction and over time, long term and sustainable growth. We’re going to continue to invest in the go-to-market to make sure that we have the capacity to service the demand that we are seeing, and we’re going to continue to invest in internal product — internal systems, automation and AI to drive some of these continued efficiency over the next 3 to 5 years as we talked about at Analyst Day.
Operator: The next question comes from the line of Josh Riley with Needham & Company.
Robert Morelli: This is Rob Morelli on for Josh. If you take a look at your tech customers compared to nontech, have you seen a greater calling in seats over this current cycle? Or has it been fairly broad. And if weakness in the broader economy continues to spread, is there a lag where non-tech customers need to take another cycle of cooling seats similar to the deeper cuts already taken by tech customers?
Kathryn Bueker: Yes. Thanks for the question. We talked in the past about the diversity of our customer base, and that just remains true. We have a very highly diversified customer base across industries software is our largest, which — but remains sort of not mid- to high teens in terms of the percentage of ARR. And we have not seen any meaningful shift in the composition of our installed base ARR over time.
Operator: The next question comes from the line of Michael Turits with KeyCorp.
Michael Turits: So first, Kate, no guidance, obviously, for next year, but can you give us something around Clearbit in terms of — is it kind of a low double-digit millions in terms of ARR contribution. Just something that give us some sense on whether there’s any dilution there. And then for Yamini, if I can add two parts. How do you balance that simplicity plus sophistication of the new products as you roll out such that you don’t alienate the base and you appeal up market.
Kathryn Bueker: Yes, I’ll start and I’m sorry to disappoint you, but we are — our 1 week post signing of the acquisition of Clearbit. We have not yet closed. We are expecting that we will close by the end of this year, but that obviously means that we will own Clearbit for a very short period in 2023. And so not surprisingly, de minimis contribution in terms of revenue or any margin impact. In terms of 2024, like we’ll be more explicit with some financial targets or implications of the acquisition once we’ve closed it, likely on our call in Q4.
