Howard Wilson: I might just add to that in terms of the progress that we’ve seen with being able to do these larger seven-figure deals with large companies where it’s CIOs-, CTOs-sponsored deals has led to a more strategic relationship with our customers. And those multi-year agreements are showing up in our RPO. RPO grew over 30% this quarter. So that is a sign that the move that we’re making in that direction is yielding the right kind of results. It also gives us reason for confidence because we look at the pipeline and now we have pipeline visibility beyond just next quarter. So the deals that our sales team are working on now stretch out multiple quarters ahead. So, we’re getting a better view of the deals that are being developed and being worked on because they’re more strategic in nature and they have higher value and they are going to deliver higher value to the customer. That gives us a better view on how things will play out in the year.
Sanjit Singh: Just one more follow up, Howard, and then I’ll cede the floor. In terms of marking to market, the timing of the reacceleration, which I think you’re sort of pointed to the second half, how much of that is sort of dependent on like hiring, right? We’ve seen software development projects sort of come back online, but the hiring environment still seems out there in tech and non-tech, still pretty sluggish. And so, do we need to see that come back in a material way before PagerDuty starts to reap the benefit of that — of better growth?
Howard Wilson: Yeah. In fact, Sanjit, we haven’t factored in improvement in the macro environment through incremental hiring in tech. We’ve assumed that the macro stays as it is. And in fact, the value that we — or the approach that we’re taking is allowing us to position value for the customer that’s independent of their headcount, right? So, we’re really attaching to the business value.
Jennifer Tejada: I take that one step further and say, if the macro did improve, we would see that as upside.
Sanjit Singh: Okay. That’s a great way to frame it. Thank you, Jen. Thank you, Howard.
Tony Righetti: Okay, thank you. Next we’ll hear from Joel Fishbein at Truist.
Joel Fishbein: Thank you for taking my question. And I have a follow-up to Sanjit’s question about, some of these large customers that you signed, I thought that was one of the most interesting takeaways. If you can peel the onion back just a little bit on the seven-figure multi-year deals that CTO-sponsored, did this involve the entire Operations Cloud? Number one. What were the competitive dynamics around those deals? And then, the third is, were there any tools that you can say that you’ve consolidated as part of that? I know a lot of it’s DIY, but if there’s anything you can point to that’d be really helpful. Thank you.
Jennifer Tejada: Yeah, I appreciate the question. In most of the examples we shared in prepared remarks, the software company that we talked about that expanded in the quarter, they adopted all four pillars of the Operations Cloud. That’s Automation, AIOps, Customer Service Ops, in addition to Incident Management. And in that case, we did displace a point solution in the AIOps space. And one of the trends that we’re seeing is this realization that insight is just insight if you don’t have the ability to action it. And the fact that our AIOps solution now serves centralized teams like SRE, like NOCs or IT operations, but also is integrated into workflow automation. So, you can go from learning to change immediately, really streamlines the process of improving the resilience of your technology ecosystem.
And that has kind of become, I think a really important sort of characteristic that’s driving more demand for the Operations Cloud. Another example I would point to is the entertainment and media company that we described where they adopted all of the Operations Cloud capabilities, but across multiple use cases, retail operations, on-property customer experience, as well as digital resilience, which is something they had been focused on previously with IM. I think what’s unique about these two cases, as well as the semiconductor customer we talked about is they all expanded on top of previous commitments to Incident Management or Incident Management plus Automation, but also took on longer-term commitments. And in many cases our customers are asking for those.
It’s not just us enabling the sales force to position that opportunity. They’re doubling down and saying this is going to be my platform for real-time operations. And that has been super encouraging, and what we’re also seeing in the pipeline, stronger multi product pipeline to start the year, capacity, sales capacity that positions us to exceed targets. So, we’re still investing in growth but with, I think, the momentum of some of these proof points with other customers in hand.
Howard Wilson: Yeah, and I’ll just add to that. Joel, you asked a question about competition. Yes, we are displacing competition, particularly in the area of AIOps. So since we introduced our new AIOps offering in April of last year with the consumption based metric, we’re actually now at over 250 customers who are using that SKU and we are displacing other competitors with that. And that was because that’s an offering that is really geared towards centralized teams that are managing high volumes of data and information having to action at speed.
Joel Fishbein: And are the margins similar in that SKU as to the other SKUs that you have, Howard?
Howard Wilson: Yeah. So, we managed to — even with this consumption based metric we managed to maintain, you saw this quarter of gross margin of 85%.
Joel Fishbein: Great, thank you. I’ll cede the floor. Thanks.
Tony Righetti: Okay. Next, we’ll hear from Rob Oliver at Baird. Rob, please go ahead.
Rob Oliver: Great. Hey, good evening. Hi, Jen. Hi, Howard.
Jennifer Tejada: Hi, Rob.
