Operator: The next question is from the line of Mehdi Hosseini of SIG (sic) [Susquehanna]. You may proceed.
Mehdi Hosseini: Yes. It’s actually Mehdi Hosseini. Thanks for taking my question. Just want to better understand Evergreen//One. To follow-up here, would this impact your working capital requirement? And is there anywhere in the balance sheet that we could look and better track the traction with Evergreen//One model?
Kevan Krysler: Yes. I think the key metric, obviously, we added a new metric this quarter, which was the total sales this year expected for the combined Evergreen//One and Evergreen//Flex model and that being $400 million over doubling year-over-year. So that would be a new metric that we’ve added that hopefully is helpful. The other metric that I think is helpful is the RPO metric and obviously, our strength in growth in RPO is really being driven by our Evergreen//One momentum that we’ve seen throughout the year, including Q3. And then layering on to that would be our subscription services ARR growth, which is also quite strong. So those are the metrics I’d probably point you to in assessing the health around our consumption and subscription services business.
Paul Ziots: Thank you, Mehdi. Next question, please.
Operator: The next question is from the line of Simon Leopold of Raymond James. You may proceed.
Simon Leopold: Great. Thanks for taking the question. I just – first, a quick clarification. I appreciate you’re not ready to guide for fiscal ’25, but I think it would be helpful to get a little bit of handholding given that your April quarter, your first quarter is typically down teens double digits, but you’ve got kind of this tough situation in the January quarter. So just some clarification on that. And then the question I wanted to ask, and I love Charlie’s description of the competitive environment as a nice fight in the phone booth. I’d love to get some updates there, in that what you’re seeing and hearing in terms of competitive actions and your ability to displace both hybrid flash competitors as well as hard disk drive competitors. Thank you.
Kevan Krysler: Yes. I’ll hit the discussion for next year, again without providing a lot of details. But as you think about the setup for next year, it is critical for us to navigate through Q4 and our expectations through Q4. But this is really not, in my mind, a seasonal question. It’s really about Evergreen//One and the performance of Evergreen//One. And if we take a step back, and look at the Evergreen//One momentum and the telco order, we should be for this year at 7% growth. And so what we’ve seen on top of that and what we’re seeing in the second half is strengthening demand. And I would hope to see that as we continue through Q4 and as we move into next year. So that would be a data point for consideration. We talked about 3 points on the annual guide against the annual guide of headwind for Evergreen//One.
Look, we’re expecting momentum to continue on Evergreen//One. We’re actually thrilled that we’re seeing an inflection point with our customers with that model. And so we’ll have to provide more color for you as we move through Q4, specific to the Evergreen//One momentum next year. Charlie?
Charlie Giancarlo: Yes. In terms of selling and what the competitive situation looks like out in the field, I’d say it’s as competitive as ever, perhaps, so a little less gross margins generally have been improving. So perhaps the pricing environment has been a little bit better, but I would say, overall, the competition is as tough as ever, both in the channel and directly with customers overall. What I will say is, having perusing as we always do, our overall win rates and at bets. Our overall win rates hold very steady against our competitors. So – but it is a tough environment without doubt.
Paul Ziots: Thank you, Simon. Next question, please.
Operator: The next question comes from the line of Nehal Chokshi of Northland Capital Market. You may proceed.
Nehal Chokshi: Yes. Thanks. I want to double click here on Slide 17. Your unbilled RPO, I’ve always sort of reviewed that as a good proxy for your Evergreen//One and Evergreen//Flex sales. A, is that true? And then I’ll go from there.
Kevan Krysler: Nehal, that is true. And then I would add on to that specific for this quarter would be the telco order that we’ve been highlighting and discussing as well.
Nehal Chokshi: Right. Okay. So the Q-o-Q change in unbilled RPO $100 million, take out that $40 million for the Telco order, then you’re talking about $60 million. That’s still a significant increase. And if I just simply do it on a cumulative two-year basis, for this year relative to a year ago, that’s more than a doubling on a year-over-year basis. So can you talk about the linearity that you’re seeing in this acceleration in Evergreen//Flex, was there relatively sold in the first two quarters and now an explosion in the third quarter and then you expect sort of some sort of normalization in the fourth quarter here?
