Parker Lane: Got it. That’s really great feedback. I was curious if you could talk about the Intapp Time migration, specifically the large law firms or the ones that have held out and been on premise in the past. Why now? Is the simple question. What incentive are people seeing to move to the cloud and what drives that inside of the laggards that you still have remaining on premise?
John Hall: Yes, it’s been interesting. I think we’ve talked a little bit about the fact that when everybody had to go home for COVID, a lot of these firms had a wake-up moment because people could get access and have the right experience for all their traditional in-house built or on-prem solutions. So I think that was a permanent change in the mindset; and the firms have made a cloud-first or a cloud-only commitment coming out of that. Even the most sort of legacy environments have made that commitment. What’s happening now is, firms have had a couple of years to get their IT projects organized, their priorities rolling through, clear everything out and actually start making the meaningful moves to the cloud. So we do encourage our firms to do that.
We haven’t gotten really prescriptive that they must do it on a particular timeline yet and yet a lot of them have flipped and are started pulling us into the market and I think it’s just a great sign. I think, that the firms are going cloud and we’re getting into a stronger and stronger position to help them benefit from all the new technology and particularly all the AI technology that you can really only get in a cloud platform. So, it’s just the normal development of the market and I think this is going to go faster here.
Parker Lane: Makes sense. I appreciate you guys taking the questions.
Operator: Our next question comes from the line of Terry Tillman of Truist Securities.
Terry Tillman: John, Dave and David, congratulations from me as well on the solid results in the quarter. I had just 2 questions. First, as it relates to — just the ongoing relationship at multiple levels with Microsoft. So whether it’s Azure marketplace and being able to use prepaid cloud spend and just them influencing business, how is that shaping up? And then I had a follow up question for Dave.
John Hall: Thanks, Terry. The Microsoft relationship is continuing to grow and develop. We’re forming more and more relationships on the ground in each of the accounts. And we had some really exciting wins here in this quarter where some firms already had minimum Azure commitment contracts with Microsoft and they used that to buy from us. And then, we even had some firms that realized they could do that and they signed up for contracts because they were going to buy Intapp and they could get some additional benefits from Microsoft. So there’s a lot of positive feedback going between our field and Microsoft’s field on this point and I think it is helping us. That’s great to hear. I guess, maybe the follow up question for Dave.
Any way to think about seasonality or just free cash flow the rest of the year as we move into the next couple of quarters of the second half? And then, or maybe what’s the relationship of EBIT to free cash flow conversion? Just trying to understand a little bit more how we should think about our free cash flow.
David Morton: Yes. First and foremost, Terry, I still think we’re working on some continued operational efficiencies, just normal course. I’ve been here for 6 months and we’re just trying to get a little more cadence and some constants around just normal things such as our receivables and simple things like that, right? Which at face value doesn’t really come up with a lot but then there’s still a lot of opportunity for us to move forward. So I would say that seasonality will, in theory come more apparent when we get into FY ’25 about midway through the year. And then we can look at okay, on a normal course, how’s our respective business that leads in. John, already oriented around in June for EMEA and others, as well as December here for U.S. And so, as we continue to look at some of those bigger accounts that may move the needle with standard payment terms of 30, 60 days, clearly that would follow in the following quarters.
So something we can come back and talk a little bit more in detail here in a quarter or two.
Terry Tillman: Understood. See you guys soon.
Operator: Our next question comes from the line of Matt VanVliet of BTIG.
Matt VanVliet: Maybe a quick follow-up on the Microsoft partnership from Terry’s question here. But as you think about sort of the overall contribution margin when you’re getting customers to come through that channel and really leverage some of those existing contracts or prepaid spend, is there a specific margin uplift we can think about? Or is it more of an overtime as more of the workloads move to Azure that you just gained the leverage on the gross margin side? Just help us think about sort of the dollar-for-dollar on a direct sale versus one that comes through the Microsoft channel.
John Hall: So I think generally, I’ll give some color and then Dave, you can talk about anything you want to add. The relationship so far has had a relatively small fraction of our overall business coming through this channel in that sort of way around the Azure commitments. It is something that’s causing us to win in certain large accounts that already have those. And then, as I mentioned, we’ve started to see some more firms come on board. It’s not our overall model today but I think there’s opportunity to continue to grow the contribution that comes from the Microsoft’s relationship in each and every deal as we grow the business. So I think it’s early days generally on this model. At the same time, we’re getting a lot of energy and visibility and buzz working with them and meeting a lot of the clients that they have and working together in a lot of the regions around the world where they have a strong footprint and they have Azure capabilities.
