Corey Thomas: Yes, we have very high confidence on the $160 million of free cash flow. I would — what I would say is that we have a lot of controls and levers in the overall business. We’ve talked — we’ve taken a very thoughtful approach to planning that looked at growth rates, plus or minus the growth rate of this year. And so we’re very thoughtful about like what — how do we actually deliver that free cash flow across a wide range of scenarios. We have the levers in the business. That’s also a big part of why we’re actually as we’re doing reinvestments. We’re doing the reinvestment steadily, not all in 1 go, because that also gives us levers to actually make sure that our reinvestments are timed up well to the performance that we expect to see. So, I say we have a lot of visibility. We have a lot of controls. But most importantly, our entire company is fairly committed, and we have a good structure from today to deliver on that.
Unidentified Analyst: Great. Thank you.
Corey Thomas: Thank you.
Operator: Your next question comes from the line of Eric Heath from KeyBanc Capital Markets. Your line is open.
Eric Heath: Hey, thanks for taking the question and Corey and Tim, good execution in tough environment. So, just to follow-up on some of the kind of macro kind of guidance questions. Just curious what’s kind of embedded in your guidance for 4Q in terms of conversion rates because — it seems like maybe you had some relatively high conversion rates this quarter. So, just curious if you’re extrapolating that out. And also any color on the macro or expectations on the budget flush. And if you had any commentary on the linearity so far this quarter, that would be great, too.
Corey Thomas: Yes, I may miss something. So, I’ll cover those and Tim will cover for me if I actually miss something. So, what I would say is we’ve seen, I would say, improved conversion rates this year, not just across the one quarter, but it’s been a consistent dean that’s actually picked up. So, we expect consistency more than anything else. And I would just say on that one, I think the early start to the quarter indicates consistency and the consistency that we expect in the overall conversion rates. The other piece of it is, no, we’re not out over our skis from our perspective on expecting a budget flush. We did not factor a budget flush in for this quarter. I don’t see any indicators that would indicate a budget flush right now. If we do, that’s great, but there was no reason to actually factor a budget flush into our expectations and how we think about the overall guidance.
Eric Heath: Thanks.
Corey Thomas: Thank you.
Operator: And your next question comes from the line of Mike Walkley from Canaccord Genuity. Your line is open.
Unidentified Analyst: Hey guys, good afternoon. It’s Daniel on for Mike. Thanks for taking the question. So, could you just provide maybe some color on how the productivity of your sales reps are changing now that they have a few quarters’ worth of experience, really exclusively selling via consolidated offerings. Also, just given your focus on improving profitability and cash flows, do you think the level of investments is sufficient to continue to grow longer term? Thanks.
Corey Thomas: Yes, two great questions. So, on productivity, what I would say is that through Q3, they’re where we expected the productivity to actually be for our direct sellers. We are building larger deals in the pipe, which has some timing impact on the sales cycle. So, you have a mix shift in the size of the deals in pipe. I provided a little bit of qualitative data on that in my prepared remarks. So, that’s more of a timing issue, but we think that washes out. So, what I would say is we see very healthy productivity trends. And we expect, I would say, reasonable, consistent levels of productivity to actually come up next year. So, we’re happy with the trends and outlook on the productivity. Your second question was, I forgot second part .
Tim Adams: With our focus on profitability, are we still investing at the right levels to content?
Corey Thomas: Yes. So, yes, look, I think — but just to be clear is I take a very focused view on, I would say, mid long-term growth. I’m not super — I’m not trying to actually really drive short-term acceleration. And so the way to think about that is that we’re doing heavy investments in products and services. When I talk about services, I’m talking about like us and our ecosystem and making sure we can augment our customers. We’re investing heavily there. We’re going to keep investing heavily there because if you think about what drives long-term growth is we have to be the preferred provider for the extended SOC. We’re committed to doing that. We’re putting lots of resources in the products and services. And we’re very intentional about that.
And those are investments that we’re making now, but it’s also investments that we’re going to be steadily onboarded and increasing over the course of the next year. And so that’s our ongoing plan. The second part of that is the investment in sales and marketing. And while I say we’re very focused, we’re really looking at our engine, and we will be adding resources. We’re going to be adding capacity, but we’re making sure the engine is efficient in this environment. We are taking a more partner-focused approach and aligned approach in this environment. And so again, if you look out, we think in the midterm, we’re actually are going to have a very, very good growth engine, but it’s not something that we’re rushing on the sales and marketing investments.
to actually try to hit a quarter-by-quarter target.
Tim Adams: Yes, Corey. And I think as look analysts pencil out what numbers for the full year may look like for sales and marketing, it is — we think it’s the right amount, but it’s still a healthy investment that carries into next year.
Corey Thomas: Yes. The investments that we made this year actually help for next year. But again, it is a we are taking a more methodical approach on how we actually allocate net investments in sales and marketing.
Unidentified Analyst: Great. Thanks so much for the color.
Operator: [Operator Instructions] Your next question comes from the line of Trevor Rambo from BTIG. Your line is open.
Trevor Rambo: Hi, thanks for taking the question. This is Trevor on for Gray Powell. I was just — I just want to ask, how are you seeing customers react in latest breach an increase in breach headlines. And do you expect it to drive an increase in activity for the company? And then lastly, do you see any product categories that are benefit more than one another? Thanks.
