Rukmini Sivaraman: Yes, that’s right, Mike. So yes, it’s intended to be used for evaluation software, and we discovered that was instead being used for these other inoperability, validation and proof of concept, and so that’s what’s under review right now.
Rajiv Ramaswami: Yes. And I’d just say one thing there, Rukmini, and what this means, therefore, there might be some additional expense, right, in terms of using usage of that.
Rukmini Sivaraman: That’s correct.
Rajiv Ramaswami: So that’s why we are — until we have — this is done, we can’t really specifically give you expenses.
Operator: Our next question comes from the line of Meta Marshall with Morgan Stanley.
Meta Marshall: Maybe one question for me or first question for me just on kind of the beat and better outlook. I’m just trying to get a sense of the blend of how much of that is from earlier renewals? And then how much of that is from the future less future start dates kind of moving in? So just trying to get a sense of kind of what the various contributors to the upside were? And then maybe just a second question, not to belabor the point, but just is there a way to contextualize like in fiscal year ’22 just how much payments were to this vendor just to kind of get a sense of why you have confidence that even with an increase in those payments, you would still be able to kind of meet the free cash flow target that you laid out.
Rukmini Sivaraman: Thank you for the question, Meta. So let me take that one by one. So I think your first question was around just the raise for the full year, right, and what contributed to that. So I mean, clearly, in Q2, we beat both on ACV billings and on revenue, right? And so I think that certainly makes us feel more comfortable raising the guide for the full year. On the revenue piece, we did try to provide some color for you in the prepared remarks around the percentage of future start dates. So that does have an impact. So you saw it had about $11 million impact in Q2. And for Q3, we expect that to be about $5 million more of license revenue that gets recognized in quarter versus deferred. And so there was some of that effect factored in, Meta, to your question on the full year.
And I think on renewals, as Rajiv has said and I emphasize this too that our renewal business is doing well, and so that, again, continues to underpin the significant majority of our growth and lowers the risk somewhat given all of that is based on deals that we’ve already done that are coming up for renewal. Now I think the second part of your question was whether we’d be able to quantify some of these payments, and we are not able to provide any specific quantification on that at this point, Meta, given the review is ongoing. But as I said before, we are continuing to work diligently to try and get this dissolved.
Meta Marshall: Okay. Got it. I mean just maybe following up on the renewal piece. Clearly, those are doing well, but just maybe in the past quarters, early renewals have been a greater contributor to upside. So just — I’m just trying to get a sense if there’s no early renewal component that we should be thinking of here as well.
Rukmini Sivaraman: Yes. I would say, it’s not outside the norm, Meta. So anything we’ve discussed before, we typically do go to our customers as a lot of other vendors do as well, about even 6 months advance of the renewal date to begin those discussions. So there will be some timing movements here and there. We do some co-terming like most subscription vendors do. So — but nothing outside of the normal or what we would expect that contributed to renewals.
Operator: Our next question comes from the line of Ben Bollin with Cleveland Research.
