Brian Miller: Yes, I’d say probably the two biggest factors, there were one that licenses declined pretty significantly. And we’ve talked about that expectation, kind of going into 2023 but Q4 had a bit of a deeper decline from the mix of new business. So licenses were relatively low number. And, again, most of that is a shift in the mix as opposed to less new business. We did as we typically have with our more license heavy products and public safety and platform technologies some slippage out of the quarter in terms of timing, but that’s pretty typical. So I’d say that the lower licenses were the big factor. And then probably the other factor is the higher R&D expense that we mentioned were some expenses that we had expected to be capitalized were actually expense because of the nature of the development efforts. And so that impacted our margins as well.
Operator: Your next question comes from the line of Matt VanVliet with BTIG. Your line is now open.
Matt VanVliet: Yes. Good morning. Thanks for taking the question. I guess looking at the margin guide for €˜23 Brian and just trying to reconcile kind of where we were previously to maybe some of the moving parts and you just mentioned the R&D coming in higher on a expense level than capital wonder if you could sort of quantify how much of that sort of changed versus what you were previously expecting and looked like around maybe 6 million flip from capitalized to expense in the fourth quarter. Curious if you have a general sense of what that level will be in €˜23. And then secondarily, just how much of the compression on the EBIT or on the operating margin side is from the declining license mix versus the bubble costs versus those R&D expenses. Thanks.
Brian Miller: Yes. So yes, for the full year, the difference in the capitalize versus expensed R&D versus our expectation was close to $9 million. We gave guidance for R&D for next year, in the range of $108 million to $110 million that’s expensed and our capitalized R&D in 2023 is expected to be in the high 30s, say around $37 million. So capitalization is a little bit higher, but R&D expense is higher in 2023. If you look at the sort of the midpoint of our guidance, it implies I’d say somewhere between 60 and 100 basis points of operating margin compression in total and we mentioned that the bubble costs are estimated to be about 130 basis points of impact on 2023 margins.
Matt VanVliet: New bubble cost?
Brian Miller: New bubble costs. So and that’s higher than the impact was in 2022. We talked about those as being a little less than 100 basis points of impact and that’s to be expected, because we continue to move more customers into the public cloud and while we still operating our two data centers and so the duplicate costs expand this year, and we’ve talked about an expectation in the first half of 2024 that will be out of the first data centers and that’ll start to mitigate.
Matt VanVliet: Okay, very helpful. And then looking at just trying to square together some of the numbers with the commentary, it sounds like the subscription side and certainly SaaS embedded within that continues to perform quite well. And you’re seeing not only new customers, but the flips, sort of at elevated rates. But definitely look at the backlog numbers on the subscription side, there was a slight decline sort of quarter-over-quarter, while maintenance continued to climb. So just curious if there were, I guess any mix of some of the renewals that maybe were anticipated the flip that maybe didn’t in the quarter or anything on that front that would sort of lead to the optics of the subscription backlog declining slightly, while the sort of looking ahead version and the qualitative commentary around strong bookings would push more to the subscription side, maybe in €˜23 than what we saw in Q4.
