Stephanie Price: Perfect. Well, thank you so much for the color.
Madhu Ranganathan: Thank you.
Mark Barrenechea: Thank you.
Operator: The next question comes from Raimo Lenschow with Barclays. Please go ahead.
Unidentified Analyst: Great, thank you. This is Jeremy on for Raimo. Just wanted to follow-up on the SMB headwind that you called out. So is it having like, maybe an outsized impact on any of the business lines like with security having six in Carbonite, which is more SMB focus. Is this sort of showing up more there or really anything you call out there would be helpful. Thank you.
Mark Barrenechea: Yes, there’s everything. I would call it a headwind, maybe a light breeze. And, we provided the additional color to help you model. That’s really simple, right? So, there’s no product to point to across the portfolio. Again, it’s not us. It’s the segment, right? PC shipments are clearly down. So there’s less to sell into. Microsoft had delayed certain programs. They’ve now recently declared this is the most important segment. So it’s going to build momentum. So, no, nothing specific to point to. I would not call it a headwind maybe a light breeze. And it’s the segment. It’s not us. It’s not something specific. And we’re excited about being a beneficiary as PC shipments go up. As Microsoft, builds their amazing machine here.
Unidentified Analyst: Got it. Thank you.
Operator: The next question comes from Adhir Kadve with Eight Capital. Please go ahead.
Adhir Kadve: Hey, good evening guys. Thanks for taking my questions. Maybe outside of the AI showing up in bookings and driving that 20% growth. Is there any other particular areas across the six markets that you’ve defined, Mark, that are really driving that confidence in the 20%?
Mark Barrenechea: SaaS. So SaaS and AI. Titanium, was focused on many things, but top of the stack was SaaS applications, having a core content, core signature, core capture, core archive, starting to get into the machine, a SaaS-based service management, which we call SMAX. SaaS-based security through NetIQ, SaaS-based asset management with the universal configuration management database or UCMDB. Also, getting additional products in there as well. Mid market SaaS in business network. So, here, I’d say it’s two things. It’s a titanium delivered product, starts to get in the market, build demand, win business, and it’s the second value on loss of AI, starting to get its first win.
Adhir Kadve: Thanks, Mark. And then just on AI, you guys introduced a fairly robust product roadmap as well as products that are in market right now. Mark, any of those that are really kind of driving excitement or really driving undue, excitement from your clients that you could speak to.
Mark Barrenechea: I have to pick a child, which one I like. No. The — we’re going to follow. I think it’s going to follow where the dataset far and the value that we can unlock. I’ll start right in kind of our heritage in content management. And building these aviator personas next to the human persona for the claims manager, the claims adjuster, the contract offer — so content certainly, is up there. I’d also say in ITOM. We have a very large installed base around service management and the ability to create that AI, aviator persona around the technical support assistant. So content ITOM I would probably shout out. We’re going to leave the way early. Now with that said, the general applicability of search, very interesting for us. And a lot of workloads out there for machine generated and devices generated content via IoT. But I would, I’d look for content in ITOM, here in the early days.
Adhir Kadve: Excellent. Thank you guys. I’ll pass the line.
Operator: [Operator Instructions]. Your next question comes from Steve Enders with Citi. Please go ahead.
Unidentified Analyst: Thanks for taking the questions. This is George on for Steve. I want to talk about the AI products at the Aviator, set of products. You guys were fairly quick out to market with them, which I think is a testament to that 90 day release cycle. But maybe you could just talk about the decision to monetize these when maybe some of your customers are in an experimental phase. And I guess, how are you thinking about the kind of timeline to revenue contributions? Thank you.
Mark Barrenechea: Yes, George. Thank you for the question. As I said, last quarter, until we have revenue signals. We’re not going to kind of change our outlooks, if you will until today. And I look at Q2, and we’re seeing, we’ve gone through this whole cycle of the baby speaks through genitive AI in the consumer world, the rise of algorithms, the ability to do that in the consumer world. We’ve worked with our partners, Google and others, to ensure they’re going to be private environments. We have our own technology that we’ve advanced to do sort of aspects of the AI preparatory work for customers. Embedding factorization. We’ve worked through a lot of the technology hurdles that pluggable language models because they’re going to get very specific.
And we’ve now with 23.4 have wave 1, a very practical capabilities. 24.1 brings the rest of the business clouds, the very practical capabilities And, we’re demonstrating how within contact management, business network, in the ITOM space, in the developer space, where you can apply these aviator personas to sit next to the human to add significant value. So this is the next step. And, we’re seeing the first demand signals and thus calling it out that we expect to see 20% bookings growth year-over-year.
Unidentified Analyst: Got it. Yes. That’s a really encouraging number. Maybe just to double click on that 20% kind of loud and clear that AI and SaaS are the top two drivers. Is there any contribution from Micro Focus adoption of a private cloud in there, or is that maybe a little farther down the pipeline?
Mark Barrenechea: There’ll be some in there.
Unidentified Analyst: Got it. Thanks for taking the questions and congrats on the quarter.
Mark Barrenechea: Thanks, George.
Operator: The next question comes from Daniel Chan with TD Cowen. Please go ahead.
Daniel Chan: Hey, Mark. Earlier you’re mentioning that your customers are trained on your fiscal year end. Micro Focus is fiscal year end is in October. I know you’ve been trying to move some of those customers onto your timeline, but should we still expect a large number of their customers to still beyond the Micro Focus fiscal year end?
Mark Barrenechea: Look, Dan. I think it’s going to take a year or two to kind get the full quarterization from the Micro Focus installed base. And that’s Madhu’s comments on paying attention to the quarterization. And, we’ve spent a lot of time doing — teams spent a lot of time on the quarterly factors for Q2. And just a clear shout out to a balanced models in the second half of the year. So, look, we’re making progress. We’re going to always default to the customer and what the customer wants to do. But we’re going to get to the OpenText cycle. We won’t take a year or two, or we’ll get there.
Daniel Chan: Sounds good. Thanks for that. And then appreciate the color on the SMB impact from the macro. Just wondering if there’s any update on the enterprise side of things. Last quarter, you said things were still looking good. Just wondering if there any updates on the enterprise customers? Thank you.
Madhu Ranganathan: Yes, from the enterprise customers, Dan, thank you again for the question. And I assume you’re referring to the cloud side, things are looking strong. And certainly, that’s why we called out SMB going back to all that Mark said, in addition to the AI, the core solutions that we continue to build upon and innovate that continues to be strong demand for those, all business clouds included, right, it’s on the enterprise side, cloud, non-SMBs, continues to be strong.
