Claire Bramley: Okay I got in there. So let me try and cover that. So to your point, we’re very pleased with the performance that we saw in Q2 and the majority of that growth did come from expansion. So as Steve mentioned, we are seeing a strong net expansion rate in the quarter. That’s the 121%, but we also see at the point of migration, so we see expansion at the point of migration, which is not factored into that net expansion rate. And that was positive in the quarter. So yes, we’re still migrating, we still see a strong performance there, but if you want to look at the contribution, most of its coming from expansion, then followed migrations and then a much smaller amount from new logos. As you look into the second half of the year you set it.
We have tougher compares in the second half of the year, especially in Q4. We are pleased with the fact that this year we’re managing to improve our linearity. So that has been a focus area for us. But as you look out to the rest of the year Q4 still will be our biggest growth quarter for both cloud ARR growth and total ARR growth. And as you look at Q3 to from Q3 to Q2 you can anticipate the cloud ARR a slight increase in dollar growth in Q3 compared to Q4, but Q4 as I mentioned, will remain at our biggest growth quarter. So that’s the kind of the story behind – ARR as you’re looking at revenue. I think if you focus on recurring revenue, that’s obviously the biggest growth driver for us. Although we did see consulting stabilize in the quarter, so we saw a low growth in the quarter from consulting this quarter, which was good.
But recurring revenue is the biggest growth driver from us, and if you look at our H1 versus H2 is probably a better way to look at it. So we’re averaging around 4% growth in recurring revenue to date in H1. And then that implies to get to the midpoint of our full year guide around a 7% growth in the second half, which is in very similar to what we saw coming out of Q2 so on track to deliver the midpoint of our full year outlook.
Ruplu Bhattacharya: Got it. Thanks for the details there. Let me ask you a follow up on gross margins. So recurring revenue, gross margins declined the 300 bps sequentially to 72%. What was the contribution of upfront recurring revenue on gross margins? And should we expect any benefit in the remaining quarters in 3Q, 4Q? So just your thoughts on gross margins for recurring revenue as you go through the second half of the year.
Claire Bramley: Yes, absolutely. So as you said Q2 gross margin and recurring revenue is a slight decline from a rate standpoint compared to Q1 that is normal seasonality and is driven by that upfront recognition seasonality. We saw this last year as well I mentioned in my prepared remarks that the upfront revenue impact in Q2 was de minimis. It’s a negative $3 million, so not a big number, whereas in Q1 you will remember that it was a positive $34 million. So the remainder of the year we’re kind of expecting less of an impact as we’ve seen in Q2 going into Q3 and Q4. So if you look at the full year, I would say the full year 2022 upfront revenue, for example, that we reported was $19 million, and we’re expecting fiscal 2023 to be lower than fiscal 2022 for the full year. So that hopefully that helps with the modeling.
Operator: Thank you. The next question will be from the line of Chad Bennett with Craig-Hallum. Your line is now open.
