Jessica Wang: This is Jessica on for Alex. Thanks for taking my questions. Start off with, I was just wondering, when you’re considering your R&D investments and product road map? What are your ongoing R&D priorities? For example, are you thinking about like for developing, enhancing nIQ versus your other existing or possibly new products? Thanks.
Pierre Naude: Yes. So if you look historically at the company, we went public in 2020. It’s just three years ago. And these are probably materials. We spent $34 million on product. And this year, we spent around $100 million. So it’s not that we need to incrementally spend a lot more now. We’ve literally bulked up the situation so that we are ready because remember, we’ve been doing nIQ for four years, okay? So this is not some new revelation to us that, oh, we all of a sudden have to move to intelligence. We’ve been working for years on the daily basis. The analytics on acquiring companies to get us there faster, okay? So what we’re doing now is we always evaluate all the product suites. We look at customer needs, broadening of the markets because when you launch these products, it may be a subset of customers who can use them.
And then over time, as you add feature functions or integrations or different elements, you can broaden that customer appeal. And so what we’re doing now is we evaluate the opportunity ahead of us, and we will shift money around. But there’s clearly an emphasis on driving nIQ because nIQ and all those products underneath that intelligence umbrella, will actually differentiate us through the point where it will be difficult to compete with us in the market. If you combine the intelligence with the platform and client-centric approach, we feel pretty good about our competitive position.
Jessica Wang: Got it. Thanks for that. And I’ve got a follow-up question. When you’re looking at different lines of growth opportunity, like it’s been really great hearing about the big wins you’ve had nationally, what are you thinking as — like where are you most confident in your business today? Is it more international, again, you said it was nIQ the differentiation you have or there is something else? Thanks.
JoshGlover: Yes. As you think about the various markets that we serve in the United States is continuing to grow our single platform presence. We’ve thrown out a few sets earlier that show increased adoption of customers there. In some of our international markets, we’re just focused on continuing to add logos and build that great customer base that we continue expanding and intelligence as part of the conversation in every market that we serve.
Operator: Thank you. And one moment for our next question. And our next question comes from Brent Bracelin from Piper Sandler. Your line is now open.
J.R. Herrera: Thanks for taking the question. This is J.R. asking on behalf of Brent. Touching on CRPO once again, how should we think about the 2024 growth rate with current RPO growth of 10% in Q1 and 8% in Q2, is low double-digit growth doable? Or could we be looking at high single-digit growth? Thank you.
Pierre Naude: Let me first make a comment about RPO. Remember, depending on the seasonality of bookings, renewals could play a significant distorting impact on RPO. In other words, we could have low bookings but a big renewal quarter and all of a sudden, RPO jumps 20%. So I will be very careful to make too much of a deal about RPO. It is, to me, an indicator, but I think you should carefully listen to the additional comments and data we provide you to actually come to a conclusion with that. Greg, do you have anything else to add?
GregOrenstein: I think, again, we do try to consistently remind folks that we don’t manage the business to RPO. And again, there’s a lot of moving parts in it and really point to the guidance that we provide with the visibility that we have in the model, both on the top and bottom line, and that’s what we point you to J.R.
J.R. Herrera: Sounds great. Thank you.
Operator: And, thank you. And one moment for our next question. And our next question comes from Jackson Ader from MoffettNathanson. Your line is now open.
Jackson Ader: Great. Hi, guys. The first question is for you, Pierre. The rate environment outside of the U.S., I mean, I guess, specifically in Europe, it’s a little behind where we are in the state, but still, I think, maybe some room to go higher. And so I’m just curious if the U.S. enterprise segment at the moment is kind of being the most cautious as you look around, what are your expectations maybe for how European banks will react once we get maybe to kind of the peak rate cycle in that geography?
Pierre Naude: Yes. I would always remind people that all problems are relative. And if you look at the starting of the shock of the war last year as well as the energy crisis. The rate complexity today looks like Sunday school picnic compared to what they dealt with last year, okay? And then you add the Swiss Bank who also had liquidity problems and then got taken over. So what I would tell you is that it’s relatively good. It’s not ideal and everybody in banking would like to see declining rates coming forward again. But normally, there’s a cycle that you have to get through where your loan rates, in other words, your income can raise as well because your current portfolio sits there stable and your deposit rates go up, so that’s a squeeze on adding those margins.
But over time, as you renew those loans and you jack the rates up. As long as the economy stays healthy, you don’t see a lot of problems in the credit book. I think these banks will come through this fine. It’s — I’m always amazed about good bankers are to manage the credit side. I think the surprise was the liquidity angle was a big surprise and it came out of left field as well as the ease of withdrawing money today in an Internet-enabled world versus the previous time they saw this, you literally have to stand in line to get your money and they could close the door, okay? So — but what we’re hearing is there is a renewed focus on strategy and how they would like to move forward. I will also tell you that, as I mentioned before, in Europe, there’s a lot more regulation and government involvement in these banks.
And that’s why ESG is a great play for us there. As a matter of fact, I’m going over there to talk to some of the banks in September about this, understanding the industry better, where that’s going to take us. But I’m still seeing significant interest in new technologies and how they can manage themselves better.
Jackson Ader: Okay. All right. Great. That is helpful context. One quick follow-up for Greg. The linearity that you spoke about in the quarter, the June and July impacting billings maybe moving into the next quarter. Was there — was the quarter like more back-end loaded from a bookings perspective than you typically see in the second quarter or than you typically see in any given quarter?
GregOrenstein: No. I think, again, just coming on the other side of the liquidity crisis, we just saw the momentum build as the quarter progressed and things settle down, Jackson. I think that really more than anything would have been — would be the thing to note for Q2.
Jackson Ader: I’m sorry, I just mean like was it more or less back-end loaded than usual or like than you expected?
