Corey Thomas: Yes. I would tell you that the thing that we probably did not do a great job of in Q1 was actually driving expansion in our installed base, and that’s mostly based on, we were still working through pricing and packaging and did not want to get too far ahead of ourselves. So if you think about net expansion rate, the expansion was definitely not as strong in the start of the year as we expect it to be exiting the year. So I think that — so the clear expectation is that we will actually have clarity coming out of the summer on what the pricing packaging is, the ability to actually sell that into our installed base and drive expansion overall. So when you think about net retention rates, I would say, yes, we had significant pressure in the first half of this year on the expansion, mostly because we’re working a lot of things, and we want to make sure that they’re right before we go in and sign those, but we could have executed that better.
But we do expect that to be a fairly temporary thing, and that’s actually normalized as we actually exit the year, if not actually have some momentum as we go into next year.
Operator: Your next question comes from the line of Eric Heath with KeyBanc Capital Markets.
Unidentified Analyst: This is Shruti on for Eric. I was wondering what pricing dynamics that you’re seeing in the market right now and from some of your peers? And how does that play into the pricing strategy that you laid out in your prepared remarks?
Corey Thomas: It’s a good question. So I think — so I’ll keep — the detection and response pricing has not materially changed. I think we were probably one of the largest changes when we changed from pricing, from storage, to a asset resource basis. So I don’t think there’s any material change in that. If you look at part of the things that we struggled a little bit with is that if you think about the risk market and you want to integrate it, the pricing in this cloud is very different than the pricing in the on-prem environment, and then the value proposition of the visibility on the endpoints is different. And so if you really want to simplify for customers, you have to rationalize both the pricing models and the — also the pricing levels.
And so you have a cloud that is volatility priced by the providers and, in general, quite expensive it keeps a lot of customers out. You have vulnerability management, which is effective, but like people are mix shifting to the cloud. And then you have endpoint, we have lots of visibility resources that you actually have to reconcile. So our goal, specifically, on pricing is how do we actually rationalize and take out the complexity. So make it as simple as possible for customers to actually price across the environment. And then our goal, because we actually have detection and response is we are a price leader. We actually want it to be — we want customers to have full visibility into their environment because full visibility into their environment, we think that we can actually do a good job, and we continue to do a good job of that by then monetizing and selling customers the value of the detect and response.
So in many ways, we think sort of like cost affordable, price leadership and integrated risk management is a great platform and a long-term good ad sell for detection and response. So we want to be pushing the boundaries there of how to get customers the best possible visibility at the best possible value. And then we can continue the success that we’ve seen in detection and response.
Operator: The next question comes from the line of Rob Galvin with Stifel.
Robert Galvin: These past two quarters, the gap between International and North America growth has widened, and international growth remained pretty stable versus the year ago period, while North America growth compressed by about 600 basis points. And I’m wondering if you could provide any commentary into what might be driving that difference in growth rates recently?
Corey Thomas: Yes. No, it’s a good question. I don’t think it’s going to actually something that’s going to sustain. I agree it’s happening over the period. Keep in mind is that I think it was in 2022, we saw lots of pressure in Europe. So you had sort of like a deceleration there, so you had a widening gap there. I think that normalized coming out of last year. And so you do have some fluctuations in the baseline that you’re actually looking at, depending on what period of time you’re looking at. Our general expectation is that ignoring currency rates that we’ll see fairly sort of like consistent growth around the world. And so we think that those are short-term differences, not long-term expectations or differences overall.
Operator: I will now turn the call back over to Corey Thomas for closing remarks. Please go ahead.
Corey Thomas: Well, thank you very much. I appreciate everyone taking time especially on an incredibly busy week. We look forward to talking to you on more important update on the next earnings call.
Operator: Thank you. Ladies and gentlemen, that concludes today’s call. Thank you all for joining, and you may now disconnect.
