Tomer Weingarten: Definitely not ramp deals. I mean I don’t think we have — Dave can comment too, but I don’t think we’ve done almost any of those. The other dynamic and I think flexibility is really the word that I’m looking for here. When you have so many different parts like data analytics, which is a multimillion-dollar line item for most customers out there. When you have cloud security capabilities are best-of-breed, you have a lot of freedom to come in and say I can really create cost synergies for you the customer. So when we go and really talk to the customer, for us it’s about finding these cost synergies. It’s not about giving capabilities for free. It really is about what can we do on a three-year road map to save your cost, to create more operational efficiency and how do we do that across the different elements of what our platform does.
With that said, we always treated endpoint as the center of gravity of what we do. But I do think there’s more and more gravity coming to data and data being that central hub in the enterprise that really starts leading these sales. I’ll point to one of the examples we gave earlier on the call. Major Splunk replacement with a big agency, basically taking out the entire Splunk cost base. Now that actually pays for endpoint protection pays for cloud security. It’s such a dramatic cost saver that you’re able with a very competitive data deal to actually really grow strategically in the other footprint that you have in the enterprise. So to me, it’s really more about how we adhere to what customers want, how do we take a platform that is incredibly broad and just use that flexibility to deliver a better outcome and better value.
Dave Bernhardt : And I talked about RPO earlier, which continues to grow. And in the past few quarters, we’ve talked about payment terms and how enterprises were shifting from multiyear upfront payments to more annual installments, and that is continuing to persist. But I think what’s probably equally important is our average contract duration has remained pretty static at around that 20, 21 months, but new customer contracts are averaging about 30 months. So the good news is we have customers that are looking for multiyear deals with us, and that allows our sales team to focus — to not have to renew customers as frequently and have them focus on new logos. So that’s been a prioritization of us to extend longer-term contracts to customers over the past year.
Operator: Our next question today is from the line of Hamza Fodderwala of Morgan Stanley. Please go ahead. Your line is open.
Hamza Fodderwala : Good evening. Thank you for taking my question. Dave, congrats on entering your third year as a public company CFO. Just had a question for you on guidance. I’m curious now that you’re in your third year, kind of what your guidance philosophy is? How are you approaching the forward revenue guidance perhaps differently than you have in the past? And can you remind us again how much of the revenue today is consumption-based versus subscription or usage-based rather, and whether or not you factor any of that into your forward guidance? Thank you.
Dave Bernhardt : Yes. Consumption remains — it’s a declining piece of the business, as we’re getting these consumption customers to commit to the longer-term contracts with minimum commitments. So that has been in process since Q1 of last year. That’s been a focus. Just in terms of how I think about guidance, obviously, when we’re setting guidance, I wanted to be something that we feel is prudent, that gives us the flexibility to invest and when we see great opportunities for us to invest in short and long-term gains for the company. I’m not looking for massive beat and raise quarters. I want to give guidance that’s fairly down the middle and reliable, and that’s what we’re looking to meet and achieve.
Operator: Thank you. Our next question is from the line of Adam Tindle of Raymond James. Adam, your line is open. Please go ahead.
Adam Tindle: Okay. Thanks. Good afternoon. Tomer, you talked about how the level of growth and profitability sets you apart, and I think that’s right. Just a two-parter on that. As you think about the trade-off in growth and profitability going forward, how did you land on this minus 2% to minus 6% operating margin at the right landing point? What was the different profitability levels, and what could they do to growth? How did that kind of trade-off and matrix work? And just for David, sorry, this is a little bit in the weeds, but I think one that will get passed on tomorrow on EBIT guide for fiscal 2025. If you look at the year-over-year dollar improvement, it’s about an $85 million to $90 million swing, which is similar to what you just experienced in this past year.
But I think this past year, you had the benefit of a risk. This upcoming year, you’ve got incremental acquisition expenses. So maybe just walk us through the differences that enable you to deliver a similar operating loss improvement from fiscal 2023 to 2024 and 2024 to 2025? Thank you.
Tomer Weingarten : Largely things are very elective in how we design the plan. I think we had a commitment and our main focus and anchor for this year is to inflict to free cash flow positive generation and positive operating income by the end of the year. So that to us was really the guiding factor. There is a degree of constraint on our growth that just stems from that. There’s no question that we can potentially grow even more, but we are prioritizing profitability. We are prioritizing proving the sustainability of our model. And that is I think what you’re seeing in this guide. We’re taking a prudent view to how much we can invest back in the business while staying true to our commitment and we find that to be the balance that you’re seeing with the guidance.
