Sarah Blanchard: Thanks for the question David. Our gross dollar retention has remained stable through the past six-plus quarters of macro volatility, which we are really happy to see that customers continue to see the value that we bring to them. So, it really is on the up-selling side taking longer, and we did see the net dollar retention come down two points. We expect that to continue to remain suppressed as we are working through the next quarter to the first half where we have the net new ARR being lower than in the back half. But it’s not a gross salary retention that has remained very stable for us.
David Lustberg: Got it. And maybe a follow-up, you talked about 2Q, 3Q being the low point of this year on the UB side. And I think you have kind of hinted towards more of an acceleration in ‘25 on UB. Maybe just talk about some of the signals you are seeing that give you confidence that you guys can really turn the growth rate around on UB heading into next year. Thank you so much guys. Appreciate it.
Gregory Brown: Yes, I am happy to start Sarah, feel free to jump in. There are some tailwinds that are definitely blowing in our sales right now. And one of them is that transition to a skills-based economy with respect to Generative AI as a primary driver. And as we have not only announced the capabilities we are bringing to market, but the Gen AI skills packs, we are seeing more and more organizations like the one we just mentioned earlier, focused on developing capability in the organization, such as digital learning academies around Generative AI. And as those are coming online, starting to see real quantifiable impact, i.e., 17% increase in certification and being – allowing, in this case allowing them to build at higher rates.
And our teams are doing a great job of quantifying value and impact and being able to package up these stories and use cases and bring these to the masses in terms of our go-to-market approach. So, as we are getting better at positioning, how we can help organizations transition to a skills-based org and help them up level the AI literacy across their company and functionally develop capability to leverage Generative AI to transform how they are running their business. As we get better at that, and we are getting better every day, that’s opening doors right now in the early phases that are going to continue to open at faster and faster rates as we move forward, which is why we are very confident that we are in the early innings of a massive, if you will, tailwind that’s going to blow in our direction for years to come.
Sarah…?
Sarah Blanchard: I will just talk about some internal signals that we are seeing. We have been adding to our go-to-market AE headcount over Q4 and Q1. And what we are seeing is those ramping reps are actually hitting over 100% of their quota. That’s up almost 40 basis points since last year, and that is attributable to what Greg just spoke about, our focus on sales enablement and continuing to make sure that we are able to articulate the value that we can provide to our customers. So, we have some early indicators that are really good. These things will take time, but we are very confident in our ability to hit our projections.
Operator: And our next question will come from Devin Au with KeyBanc. Please go ahead.
Devin Au: Hi. Great. Thanks for taking my questions. The first one, just in the quarter for UB for enterprise, any deals that might have shifted one or the other or got pulled in or slipped to the second quarter and second half?
Sarah Blanchard: I can answer that. I mean we always see some deals that are slipping in and out of quarters. We saw that again in the first quarter. What I will say is the team is getting better and better each quarter on managing those deals and giving us the visibility that we need. But that’s part of the business where you do tend to see deals move in and out of quarters.
Devin Au: Okay. Got it. And then second question I have is I just want to ask about the competitive landscape in enterprise. I believe a couple of months ago, Accenture acquired Udacity as they are trying to build out a learning platform to offer to the customers, any thoughts on this large global services getting into the space? Does that impact the competitive landscape in the near-term?
Gregory Brown: It’s a good question. I looked at it very much as a validator that Accenture jumped in and made the acquisition is making a big bet on where the market is going, so to speak, with respect to skills. And it’s very much in line with our point of view. And we are – and I just mentioned it, where we believe the winds are blowing. Udacity, by the way, is not a usual suspect that we see in competitive situations. But again, the fact that Accenture made that acquisition, it just, again, continues to validate the opportunity and really where organizations are headed in terms of their investment dollars from a learning and development standpoint. So, I view that very much as a positive. From a competitive perspective – yes and I will just add this, from a competitive perspective at least on the enterprise side, what we are seeing is we still see the usual suspects that we have seen.
We have seen competition with respect to price starts to ramp up a bit in the enterprise in terms of aggressive pricing. And in some respect, I am not surprised. We have armed our teams with tools and playbooks to address some of these situations and scenarios. And as I have mentioned before, we are never going to be the low-priced option in the market, and we are always going to be the high-value option. And as we have layered more and more capabilities into our platform, and we are having a broader and deeper impact on organization’s ability to up-skill and re-skill our story continues to get stronger. So, we are really focused on sales enablement and enabling our team to tell that story and substantiate the value that we are delivering to offset some of what we are seeing, which is aggressive pricing in some of the deals that we are in.
On the SMB side, down market, it continues to remain a challenging environment for small businesses. It does and I have run small businesses before. And it’s a different decision criteria – and set of criteria that have to – they use and have to monitor and then run their business by. So, again SMB, we are making investments to help our teams in that segment. But in the Enterprise segment, where the majority of our revenue comes from our teams are doing a great job competing and substantiating value and impact. And we are seeing organizations continue to allocate budget and spend those dollars to upscale and rescale.
Devin Au: Great. Appreciate the details.
Operator: This concludes our question-and-answer session. I would now like to turn the conference back over to Greg Brown for any closing remarks.
Gregory Brown: I would just like to thank you all for joining today and we look forward to connecting again for our Q2 call in August. Have a great day and evening everybody.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.
