Jacob Roberge: Okay, great. And then helpful commentary on just AI monetization, how that’s going to track with enterprise skew upsells and free to pay conversions. Will you start monetizing that right after ENGAGE? So could we see some incremental benefits in Q4 and maybe Q1 of next year? And then, Pete, is there anything we should keep in mind on the expense side of the house as it relates to AI?
Mark Mader: Yes. Jake, we have not yet set the time or the date for the GA of those features. It’s all about enabling customers right now. What we will — what we are giving our customers clarity on is at what plan level that will be available for them post GA. So we have not baked that into our second half numbers at this time. But again, working very hard to make sure it’s positioned well for this upcoming year.
Pete Godbole: And to the second part of your question in terms of what have we baked into the plan, there’s no dollars of revenue baked in for AI in the back half that I guided to. But what I would tell you is we’ve assumed some costs hitting us as customers in beta and other forms start to try out the product. It’s very small.
Jacob Roberge: Great. Thanks for taking my questions.
Operator: Your next question comes from the line of John DiFucci with Guggenheim Securities. Your line is open.
Tamjid Chowdhury: Hi. This is Tamjid Chowdhury on for John DiFucci. Thanks for taking the question. My first question, again, like on the billings growth, it’s good to see that you maintained the guidance there. Can you maybe talk about like what kind of visibility you have into the second half of the year? If you can maybe talk about renewals, expansion renewals, that would be super helpful.
Pete Godbole: Yes, Chowdhury. When you start to think about some of the indicators we’ve used to give us that confidence, start with how we closed Q2. We closed Q2 I thought fairly well with improved execution from our field team. That was part one of it. But what we also saw on top of that was the pipeline entering Q3 was healthy. And when you couple both those elements with the fact that our close rate on pipeline we entered the quarter with is strong and maintaining strength, that’s what gave us the confidence in the back half guide on billings.
Tamjid Chowdhury: Awesome. [Indiscernible]. And then, Mark, you mentioned about sub discovery starting off with Data Shuttle and Dynamic View. What prompted that, and sort of like what are you trying to achieve from it? And any kind of early feedback that would be super interesting.
Mark Mader: Yes, I think it’s all about putting customers in a position to be able to act quickly. One of the wonderful comments from a customer who saw a Data Shuttle through self-discovery called out her customer success manager, and she did thank you so much for releasing this new feature. Feature has been there a long time, but now it’s fully visible to that person, and she was able to start benefiting from it. So the purpose is how do you reduce friction and make your median customer available of all of your strengths that you can bring to bear. And if you gate that behind a discussion with the sales rep, it slows you down. So what you’ll see it engage in addition to these two features that we’ve put in self-discovery now is a real push to unify our experiences and to make those available to as many people as possible.
And when we think about serving all the companies we have, the customers we have in the U.S., we are very U.S. centric today. So when you’re solving and serving Asia Pacific, Japan, EMEA, the more you can put in front of somebody where it’s not dependent on human interaction, the better. So that is the whole thrust behind the self-discovery piece. And again, we are — it’s in front of thousands of companies now. It will be in front of tens of thousands of companies by end of September. And I would expect that to start driving lead growth. And again, as Pete and I plan for second half, we have not baked this into our numbers yet. So neither Gen AI nor self-discovery have been factored at this time.
Tamjid Chowdhury: Great. Thank you.
Operator: Your next question comes from the line of Pinjalim Bora with JPMorgan. Your line is open.
Pinjalim Bora: Hey, thank you very much for taking the question and congrats on the quarter. Pete, I want to go back to the billings guide a bit. Obviously, you had a good ARR quarter. It seems like, billings was healthy. You beat your guide, but you kind of kept the full year. I mean we appreciate it, I guess, given the macro and conservatism in that front. But is that it, is that just a prudent conservatism that we should read into the guide? Or was there any kind of pull forward in the first half versus the second half? Like — or is there any risk that you see in the second half for some of the renewals that you have coming?
Pete Godbole: So Pinjalim, what I would tell you is there’s no pull forward in the business that we reported for Q2. What I would tell you is at the start of the year, when Mark and I set out the guide for billings, we looked at the macro view of it. There’s a lot of things that happened within quarter. We got some feedback on that in Q1. We’ve got a different set of feedback in Q2. But looking at the puts and takes in a composite, we feel good about maintaining the guide at a 20% billings growth.
Pinjalim Bora: Okay. Got it. And Mark, obviously, you have a lot of AI features coming out, and you’ll hear more about it. But I wanted to ask you about this large base of free collaborators that you have. I’m wondering as you roll out these AI features and start monetizing them, do you see kind of a big opportunity to accelerate that free-to-pay conversion as you have kind of a second trigger point now with AI.
Mark Mader: I do. I think the more value you present to somebody, the more opportunity you have for them to convert to a paid customer. For many, many years, this notion of a paid license in Smartsheet was predicated on someone’s right to create an asset, a sheet, a dashboard report, et cetera. We are now over the next — in the coming quarters, introducing capabilities that are incremental to what you’ve been able to do that will be reserved for paid license users. So we are giving people more opportunity to have a reason to subscribe. And when I think about how these Smartsheet deployments are instantiated, you have people who create assets who share them with others, and then you have many analysts who work with that data.
