Steve Enders: Okay, great. Thanks for taking the question. I guess when you’re talking about trying to bake in more conservatism with new sales leadership coming in, I guess what does that mean mechanically to the model? And I guess how much kind of flexibility are you kind of building in for, incremental spend or, you know, incremental marketing initiatives that to help support that change there?
Pete Godbole: So, Steve, you know, we’ve, as a part of our plan, irrespective of a new leader arriving, we always have dollars set aside to explore opportunities where we think there are good solid returns. That’s a part of the thinking playbook we go through. That’s already built into our plan today. It’s not incremental conservatism on the margin side that’s different. So that’s what we’ve guided to. And then as far as it relates to sort of how we’ve built in conservatism for the transition in sales leadership, I say, it’s not one item has a certain value, but all the items I described have a cumulative effect that’s built into the guide we’ve provided.
Steve Enders: Okay. That’s helpful. And then I think in the prior comment about what the change means, I think there’s more focus on international and partners. And I guess, how are you thinking about potentially increasing the investment in those areas and what potentially could be built out more fully with this change?
Pete Godbole: So, as you think about the areas which Mark talked about, which are important to the company and Max brings into the picture, if you will, we’re making investments in those areas already. We’re making important investments. For example, on the international side of things, we’re launching a data center in Australia by the end of the year. We’re building out a market in Japan. So, all of those investments are progressing with sort of the same mindset. So that’s already built into the plan. What we would incrementally look at if things came out or opportunities that come from those same investments that Max would have a perspective on and the team would have a perspective on. Mark, anything to add on that one?
Mark Mader: Yes, I think the area of investment as we look at shifting some capital from a direct sales team into the partner-enabled channel, I think there’s some real return opportunity there. One of the examples I gave in terms of customer success on this call on my prepared remarks was a large global services firm. That deal would not have happened without the partner. The partner was essential based on their industry expertise, their know-how on our platform. We are going to be doubling the capacity of people who are enabling our channel. And that is a — when we think about our international markets, we have some where we team up with partners, those are the areas where we have our existing sales teams and success teams.
And then we’re also formalizing our partner first regions, where we are really bolstering the enablement capabilities, the lead allocation to those regions. And that is something which is really going to become — come online in those regions for the first time in the company’s history. Now are those going to be a massive meaningful contributor on bookings this year? I doubt it. But we’re planting a lot of seats. We have those markets identified. We have a number of partners already secured and enabled. And we will — as I look at the shifting of our people to those higher value, higher leverage positions, whether it be enterprise or partner channel, I think it’s one of the things that we’ve done pretty well as we enter this year.
Operator: We’ll go next to Brent Thill at Jefferies.
Brent Thill: Mark, the magnitude of the RAP T-cell is, I think everyone’s kind of scratching our head a bit. Why you want to show a little more margin improvement this year? And I’m curious if you could just comment why we shouldn’t see more leverage, given the growth rate is falling pretty considerably? And then I had a quick follow-up for Pete.
Mark Mader: On the margin side, what was the reference there? Sorry, I missed that part of the question.
Brent Thill: Your revenue deceleration is not offset by the increase in margin. Your margin improvement is obviously very modest. Why not give more margin improvement given the massive deceleration of growth?
Pete Godbole: I’ll answer that one. As you look at the guide we’ve provided at the start of the year, it’s always a balance. So, when you think of where we started last year, we sort of start the year with a set of things we think we can do well. And we go through the year and continue to optimize as we sort of deliver and go through the operational rigor of what we need to do. So, our initial guide is 12% to 13% op margin. It is probably a reasonable starting point for this journey. So, we’ve entered the year with a rule of 40 for FY ’24. If you look at where we started in FY ’24, we started at about 34%, 35% rate, and this through the year to where we needed to get to.
