Tim O’Brien: Yes. I mean demand in Q4 was strong and it was our best booking month — our best booking quarter of the year. December was our best booking month of the year, and demand in pipe has been very solid and very steady as we’ve started 2024. I think some of that’s on the heels of that white space expansion as well that John spoke to with some of the new — the new product offerings kind of coming into the fold and beginning to build the pipeline around those with Cloud Commander and MDR. And the combination of being able to put together more bundling and more multi-SKU deals, I would say, has been a net positive to kind of pipe creation as we’ve entered 2024. But Q4 demand was strong, and that’s been very steady as we’ve gotten into the beginning parts of 2024 here.
Jason Ader: Okay. So growth rate in Q4 was the lowest of the year in terms of revenue on a year-over-year basis, it was 11%. But you’re saying that if you looked at bookings, would it be a different story?
Tim O’Brien: Yes. Yes. And as a reminder, the impact of in-quarter bookings on in-quarter revenue is very, very minimal. A lot of the revenue generated from bookings shows up in the next quarter from a revenue perspective.
Jason Ader: Got you. Okay. And then last question for me. Just on the free cash flow for 2024, what are some of the puts and takes there? It looks like you were about 16% free cash flow margin in ’23. Is there a plan — or is there expectation that it will be higher as a percentage of revenue in ’24? And just again, any of the things we should be thinking about as we build out our models?
Tim O’Brien: Yes. I think I’d expect free cash flow margin to increase similar to how kind of EBITDA margin is increasing. We continue to focus on optimizing and converting EBITDA to free cash flow at a higher rate. One of the wildcards for free cash flow for ’24 will be just what happens with the interest rate environment. But from an unlevered free cash flow standpoint, we’ve been able to drive pretty significant growth on that front, improved conversion. And we’re looking at a couple of things to kind of optimize that from a tax as well as just a working capital perspective as we get into — as we get through 2024 here. So I think there’s room to improve from an unlevered free cash flow margin as well as a free cash flow margin perspective as we kind of chart our way through 2024. But focus is on continuing to grow that.
Jason Ader: If you get more committed contracts kind of longer term, does that help free cash flow because you have more deferred revenue? How does that work?
Tim O’Brien: I would not expect that to impact free cash flow. But the model from like a monthly billing perspective, I would not expect to change via the long-term commitment. The long-term commitment will still drive a monthly billing model. So I wouldn’t expect big swings in additional deferred revenue.
Jason Ader: So there’s no deferred revenue impact from that.
Tim O’Brien: Yes, there won’t be deferred revenue impact there.
Jason Ader: All right. Thank you.
Tim O’Brien: Thanks Jason.
Operator: Ladies and gentlemen, this concludes our Q&A and today’s conference call. We’d like to thank you for your participation. You may now disconnect your lines.
