Mike Chang: Yes.
Alex Zukin: Perfect. First of all, again, congrats on another great quarter as well as the materials presentation in the deck and the letter really insightful and helpful. I guess maybe just the first one. I want to ask Jim asked a really great question. I want to ask it on a different — slightly different cohort of customers, which Sanjit is your largest customers. I think one of the things that comes out is the level of strategic value that you’re adding for kind of I think what some investors would consider non-traditional customers for you guys, the airline that you called out as an example, like how big can your biggest customers get to? And what evidence in those like 1 million plus customers. If you look at — obviously, your net retention is higher in your larger customers today.
But as you look at that wallet share potential and you think about how strategic you can ultimately become with the new offerings that you’re launching, how should we think about that? And then I’ve got a quick follow-up for Dom.
Sanjit Biswas: So Alex, we’re excited to be working with these large customers. As we called out, we now have over 60 customers that are over $1 million in ARR. I think it’s early in terms of penetration. The use case that we highlighted earlier in the call with the airline and the equipment, that’s just one piece of their operations, and it’s really very early in terms of overall deployment footprint. So, I think there’s a lot of room to run and a lot of upside. And we are just beginning to explore all the different possibilities to generate ROI for them.
Alex Zukin: Perfect. And then, Dom, it’s rare to see the combination of net new ARR acceleration whilst like sales and marketing expense growth decelerates. So maybe was there anything special, unique, one-time in nature? Or are we now at that point where from an incremental margin perspective, like do you feel like at some level, you’re going to start a new hiring cycle to take advantage of all the opportunities you’re seeing in the market or just making sure we’re kind of not missing anything there.
Dominic Phillips: No. You’re not missing it. I think it’s just — we’re hitting on kind of both sides of this. We have been investing in more sales capacity, and we’re getting that sales capacity is ramping, and we’re getting more productive or becoming more and more strategic for our customers. We’re moving even more up market and grabbing more of that wallet share. And that’s allowed us to accelerate net new ARR for the last two quarters. At the same time, we’re operating with a lot more efficiency. And we’ve rapidly been able to get to free cash flow breakeven and positive now well ahead of expectations. And nothing one-time to call out, but that is our focus going forward is sustaining high levels of growth and doing it as efficiently as possible.
Mike Chang: Our next question comes from Junaid at Truist, followed by Derek Wood at Cowen.
Junaid Siddiqui: Great. Just last week, you had the Teamster Union, ratify a new bigger contract with UPS, which included some provisions that would stop the installation of driver-facing cameras as there were increasing concerns about surveillance on workers. I was just curious your thought process and if that causes any concern from your perspective, as other companies might potentially stop installing safety devices. And how do you address these privacy concerns with respect to your business, especially in geographies like Europe, which probably are a little bit more sensitive to these privacy issues?
Sanjit Biswas: Junaid, this is Sanjit. I think that’s an important topic to highlight. First of all, we talked about large customer momentum a little bit earlier. Almost all of our large customers have some sort of relationship with labor unions, whether it’s Teamsters or others. And so, we’re very familiar with working with the unions themselves as well as alongside the employer to make sure that, again, the focus is on the safety aspects of things. I think everyone wants workplace safety to be enhanced and moving in the right direction while preserving and maintaining privacy. So, we’re very transparent around what the devices do, what the data is, how it’s preserved and who has access and visibility to it. And we really try to have a joint and cooperative process.
So, we’re, again, kind of to recap, we’re familiar with the concerns of the unions, and we tend to work in hand with them. And we’ve seen it through in many deployments now of scale where we get a significant buy-in because they are interested in improving the safety out in the field for their workers. And that same sort of motion and theme carries over to Europe. Again, every market is a little bit different, but we see a lot of those themes carrying out.
Dominic Phillips: I think just even to echo on the — in the prepared remarks, another example like, as Sanjit mentioned, DHL Supply Chain saw a 50% reduction in driver turnover. And so, once these customers get the technology installed and they realize ROI in a very quick period of time, we can have a lot of success with this technology.
Junaid Siddiqui: Great. Just one follow-up, Dom maybe for you on contract duration. Just wanted to see how that’s trended and are customers opting for maybe shorter contracts? Or has that held pretty stable over the last couple of quarters?
Dominic Phillips: It’s been very stable. We signed three- to five-year subscriptions with our customers, and we haven’t seen any change in that.
Mike Chang: Our last question today comes from Derek Wood at Cowen.
Derrick Wood: Great I wanted to touch on the momentum building in state and local. I’m just trying to — would like to get a little bit more color on what’s driving this inflection. And I’m curious, is it — is it more dedicated resources that you’ve kind of put in market? Is it a bit more kind of network effect and market recognition starting to take hold? Or are there some dynamics and in those end markets that are driving more priority for digital transformation, just was looking to get a little more color behind the drivers here.
Dominic Phillips: Yes. Derek, it’s Dominic. And you touched on two of the investments we made. One is around the go-to-market motion. We — our sales reps are horizontal across all industries, except for public sector. We have a dedicated team, sales team that is very focused on just the public sector customers. And that is an investment you started a couple of years ago and has really started to ramp up and is driving more of the productivity that we’re seeing including in Q2. And the second one is the network effect that these customers tend to talk to each other. And so when we can land and have success and then we’re able to reference those customers with other new prospects that can drive a lot of success momentum and we’re seeing both of those.
Derrick Wood: Great. And maybe I’ll ask on connected forms. I guess it’s expected to be GA sometime this year. I saw in the shareholder letter, some kind of beta users and some kind of ROI stats behind that. Just curious, any more color on when it comes out, what you think could happen in terms of initial interest and whether it could be more of a needle mover for you in terms of revenue next year or maybe something that takes longer, could take hold?
