Tarek Robbiati: So this is a very big question you’re asking, Kash. And I would say if you take the perspective of our customers and you look at what we can do with our integrated UCaaS, CCaaS offerings is we can add value to them at all steps of a conversation before the call, during the call and after the call. And the examples of that are fairly intuitive and easy to understand. Before the call, you can make sure you understand the context in which the call is being placed. During the call, of course, you can do call summaries, but you can do much more than that. You can add a lot of value add, way of understanding what has been said in the call, the tone in which the call took place, really spearheading post-call a number of different actions moving forward.
So there is a ton of things that can be unleash for our customer, thanks to AI, and we are infusing AI throughout our offerings precisely because we see AI as an incredible opportunity for our customers to enhance their own productivity and competitiveness, and this is why we are spending a lot of time there. I will ask Vlad to chime in on this issue because he’s spending and we are spending a lot of time here, and he’s the power behind the AI efforts that we are deploying right now. Vlad?
Vlad Shmunis: Thanks, Tarek. Kash, fantastic question. Look, let me address the retention part of the question. One would think that it should improve retention in a meaningful way because these insights that are being generated or at least in part generated from customers’ own data. Therefore, one would think that the whole system engagement would thus become stickier because now moving to a different platform would mean that they no longer have access to those insights. It’s obviously very early, and it’s too early to talk about empirical data. But in theory, it should work that way. Also just a quick comment on the sales cycle. And I don’t know how to say it any other way. It’s just [indiscernible] as hell. It makes a great demo.
When we show our RingSense, for example, and the type of insights and type of questions that people can get looking at their calls after the call has been made. For whatever reason, it’s emotional for people. They go, “Oh, I didn’t know this. So AI, what I said in the prepared remarks, it truly is the next great megatrend. I called it mother of all megatrends and that stand by it. It’s going to revolutionize the world. Our industry and RingCentral is part of it. Couldn’t to be more excited.
Sonalee Parekh: Kash, I might just add something there as well. You were asking about the impact on ARPU from these new products. Clearly, we are very excited about pricing these in a disruptive manner, but they will still be significantly accretive to our overall ARPU. So you heard in my prepared remarks, I talked about ARPU being stable. We would expect this to be additive to that. And in terms of incremental investment around go-to-market, we actually don’t anticipate any significant incremental investments. So it should also be accretive to LTV to CAC as we look forward.
Operator: Thank you so much. The next question is from Brian Peterson with Raymond James. Please go ahead.
Brian Peterson: Hi. Thanks for taking the question. So Tarek, you mentioned in the call about partners and potential opportunity to expand there. I’d love to get more color on that. And as we think about growth vectors into 2024, how should we think about the ramp in some of your partnership efforts there? Thank you.
Tarek Robbiati: Thanks for the question. We do have a number of partnerships that are working very well for us right now, both in terms of global service providers such as AT&T, TELUS, BT, Vodafone, et cetera, and also strategic partners like NICE inContact, Avaya, Mitel, now Mitel Unify, and we have a great reach, thanks to these partnerships. I do believe that there is a number of additional upside from these partnerships and also new partnerships that we can build. So in particular, we focus on partnership opportunities that will expand our partnership ecosystem, focusing on ISVs so that we can continue to expand our reach and also build more value added offerings, particularly on a industry vertical basis where there is a lot of things that we can do to ensure that our product is connected with a broader ecosystem of verticals to penetrate those verticals selectively.
So this is one of my key focus areas for the future. And in terms of the ramp, it will take time, but you know how these partnerships are. They take time to set up. But when they are in full motion, the volume that we expect there can be considerable. And so this is why it is a critical focus area for me.
Operator: The next question is from Meta Marshall with Morgan Stanley. Please go ahead.
Meta Marshall: Great. Thanks. Maybe just following up on that question. Just trying to get a sense of as you guys incorporate more direct versus channel versus some of the revisions that were made to the partnerships earlier in the year to allow them to kind of sell direct. Just is there a blend of the business where you feel you’d like to see a certain percentage come direct or certain percentage come through the channel, through partnerships just forms as a rough guide? And is there any kind of channel conflict that’s kind of coming about just given some of the changes to the sales model? Thanks.
Tarek Robbiati: So this is a great question, Meta, and thanks for asking it. I’d say rather than talking about a blend, I think what we need to focus on is penetration of our offering across the market. If you really look at UCaaS, we are the largest player, and we still have only about 10%, 12% market share in that space, which goes to show that there is a lot of upside in the market remains pretty fragmented. And if you look at CCaaS, it’s a little bit more concentrated, but my overall comment is roughly the same. There is lots of opportunities there for us to penetrate the CCaaS market with both our NICE inContact offering, but also our RingCX new offering, that was in controlled availability up to today and that we are ramping up in the upcoming days.
So if you also want to add to that, the international dimension, there is a lot that we can do internationally. Internationally, we are — still at the beginning, I would say. Our international revenue as a percentage of total is only 10%. And if you really think about the fabric of the European economy or the Asian markets, they rely on a different distribution mechanism and different distribution tiers. Hence, the need for us to be ready capability-wise to go and penetrate those markets with a different set of capabilities, either on a direct basis or indirect basis with partners, and that is what we are focused on.
Meta Marshall: Great. Thanks.
Operator: The next question is from Siti Panigrahi with Mizuho. Please go ahead.
Siti Panigrahi: Thanks for taking my question. It’s good to see the sequential growth now more than 3% in subscription revenue versus 1% we saw last two quarters. So could you talk about what are the key drivers of that growth? Is it something upsell in enterprise? Or is it something churn stabilizing? What’s driving that growth? And how sustainable or even we could expect any kind of improvement on that going forward?
