Barak Eilam : So I’ll start at the bottom line — and thanks for the question. The bottom line is that we see it all over. We see it both with new logos. We see it both — an expansion of AI within the very large customer base that we have. And we also see customers that just talking to us about AI regardless of the infrastructure that we have and our AI can be vendor-agnostic. So we compete on all of those categories with a great differentiation. And it’s, as I said, I believe our biggest TAM expansion opportunity. And it’s not just theoretical. These investments we have made in the past several years are now materializing into real business and a significant opportunity. The other thing that we like about it is that regardless of how it starts, the expansion — the natural expansion opportunity is significant.
Most of those deals, we price them on a consumption base. And that consumption base is linearly attached to the — how many interaction are ingested by Enlighten. And as a result of that, something that’s small at a certain size, if you think about us forward, it will continue to grow naturally as more and more interaction, digital interaction, voice interactions, agent-assisted, complete self-service, all that are going to Enlighten and with every interaction that go through that, first, there is more revenue. Second, it becomes better and stronger. So this is exactly what we wanted to see. And the results in Q2 on that regard are phenomenal, and it’s more than just early indication. It’s a real and a significant business. And we — the pipeline indicates that moving forward, we will continue to do the same.
Sitikantha Panigrahi : That’s a great color, Barak. And a follow-up to Beth. It’s impressive to see how you expand operating margin despite gross margin going down. So could you help us understand a little bit on the gross margin dynamics like going forward? And how should we think about this margin expansion and where — is the operating leverage mostly going to come from sales and marketing?
Beth Gaspich : Yes. Thank you for the question. As you look at our cloud gross margin and if you look at how we’ve expanded it over the last several years, we’ve expanded our cloud gross margin by over 600 basis points over a few years. And it shows that we have a really strong muscle in scaling our cloud business. Currently, we have a lot of our newer business segments that are kind of in the less mature stages of their cloud business. That includes our financial crime and compliance business, public safety and some of the international expansion we have done with CXone. So as those businesses continue to drive scale, we’re confident that they are also going to be further accretive into the cloud gross margin. And of course, that’s on top of the great expansion that we see in the core of our CXone business, both from strong attach rates that we have of the really deep set of applications across the CXone platform and also, of course, the accretive nature that we see from our digital and AI applications on the cloud gross margin.
So a combination of all of those factors, we’re confident and we actually shared at our recent Investor Day that we continue to see our cloud gross margin. And in fact, share that we’re confident we’ll see a 75% cloud gross margin in the future, and that will continue to drive the operating margin expansion as well.
Operator: Our next question comes from the line of Rishi Jaluria with RBC Capital Markets.
