John DiFucci: Thank you. I appreciate the prudence in guidance relative to the SMB expansion deterioration, Pete. But can you comment at all on the linearity in this quarter? And just give us any kind of read into how November and the beginning of December seem to be tracking.
Pete Godbole: Yes. So the first thing is we always have seasonality in the quarter. Our first month is the smallest compared to all 3 months. So as we went through the quarter, we did see, what I call, strength in the enterprise build up. And on the other side of that token, we did see the SMB expansions continue to be impacted by expansion pressures. We saw that trend in SMB expansion pressures continue into November. And on the enterprise side of it, November was per our expectations. So that’s a little bit of the – how the quarter played out.
John DiFucci: Okay. That’s helpful. And I guess, Mark, you mentioned the example in your prepared remarks on self-discovery of Advance features. Can you give us any metrics at all on how we should be thinking about that as far as traction moving forward?
Mark Mader: I think we’ll probably provide more texture on that as we give the painted picture for the upcoming year with our Q4 results. I mean right now, we’re looking at this contributing nearly $1 million of bookings in the quarter. It’s a great green shoot. We have really positive feedback in terms of how people are seeing these things. But I would say still pretty early innings. We’re talking about hundreds of trials with conversions, again, accumulating to a little less than $1 million. But I mean, I think with another quarter under our belt, we’ll feel more confident and be able to frame that in the year ahead – for the year ahead.
John DiFucci: Great. And it’s a nice job with ARR and billings too. I don’t think a lot of people thought you guys would do this, but nice job.
Mark Mader: Thanks, John.
Operator: We will take our next question from Steve Enders with Citi.
Steve Enders: Okay. Great. Thanks for taking the question. I guess I want to ask about the international opportunity. I mean good to see the expansion into Australia for data residency. But how are you thinking about, I guess, kind of broader international initiatives? And is there going to be any kind of further go-to-market investments, marketing campaigns or partner build-out to kind of go after that opportunity?
Pete Godbole: Steve, this is Pete. So we think of – international is a huge opportunity for us. It’s 16% of our revenue and clearly, one of the areas we go after. But we think of it as a combination of all the changes we’re making on the product with PLG and making it easier to have this product found, be able to expand, all those things. On the other side, we’re investing in the go-to-market capability as well, combined with how customers that we deal with would want their data to be treated. So think of it as go-to-market with data centers. So we’ll continue to invest in the international dimension. But just like our business here, it’s going to take a while because customers with us start small and then they expand with us. So that’s the trajectory you should see.
Steve Enders: Okay. Perfect. That’s helpful context. And then on the net retention, I think a little bit of a downtick at least for how you’re thinking about for the fiscal year guide. I guess anything to call out? What’s kind of the incremental difference there? And then, I guess, secondarily, how should we be thinking about where that could potentially bottom out at?
Pete Godbole: Yes. So Steve, when we think of the net dollar retention rate, generally, things were pretty much consistent between quarters. The only difference was the incremental SMB expansion, which is what you’re seeing in the number we’ve laid out that’s included in there. Now that’s the first part. And the second part of what you asked for, what’s the direction of this, we’ve got a big Q4 to go – kind of go execute on, not just in terms of the total dollars we need to go through. But these green shoots that Mark talked about, we want to see how those play out. All of that, combined with the environment we see in Q4, will really inform what we think net dollar retention rate will look like in FY ‘25.
Steve Enders: Okay, perfect. Thanks for taking the questions.
Pete Godbole: No problem, Steve.
Operator: We will take our next question from Pinjalim Bora with JPMorgan.
Pinjalim Bora: Great. Congrats on the quarter. And thanks for taking the questions. Mark, can I ask you, based on your conversations with customers, how do you think kind of the enterprise budgets are getting set for 2024 so far? Do you think purse strings might open up a bit or not so much?
Mark Mader: I think it’s largely a function of a provider’s ability to connect to value and helping understand how they realize that value. I think – and this goes back starting, in a really pronounced way, probably 3 years ago, where the higher we got in an organization and the bigger project we were talking with them about, the greater the need was to connect it to a prioritized pursuit that they have and be able to articulate how they could, within a certain time frame, realize that benefit. So when I think of where we’re investing, not just from a product standpoint or a partner standpoint, but our articulation of how we deliver value, that is a direct tie into whether a purse string gets tighter or gets more loose. And so I think it’s – there are absolutely macro things that one needs to be aware of, but there are a whole litany of things that are within one’s control that can help adjust that.
Pinjalim Bora: Understood. Thank you. And one follow-up. How are you thinking about the sales capacity going into next year? Do you have the capacity for your plan? Do you expect to build capacity higher? And then how should we kind of think about that in context of potential margin improvement for next year?
