Operator: Thank you. The next question comes from Brett Knoblauch with Cantor Fitzgerald. Please go ahead.
Brett Knoblauch: Hi guys, thanks for taking my question. I’m maybe just on the broader budgetary commentary. I think Gen-AI has been making waves for over a year now, and I think this is supposed to lead to increased rescaling and up-scaling by organizations. So I guess what’s the holdup or hesitancy on the organization’s part, and what do you think is going to be the cause for an inflection in what they’re willing to spend money on from a rescaling perspective? Thank you.
Greg Brown: Yes, good question. I’ll take that. So amidst the guidance that we provided, I think it’s important to call out that we are seeing strength in our enterprise segment, North America and around the world. And we’re seeing accelerated expansion opportunities start to come to life and get executed. And the pace of those is starting to increase. I’ll give you an example. Mercado Libre, the largest econ fintech company in Latin America, just significantly expanded the relationship with us this last quarter from initially Argentina and Brazil to all of Latin America based on our ability to help them execute their strategy with respect to upscaling and rescaling, their tech teams and beyond, including AI, which was a key component of that on an ongoing basis.
And that’s as a result of the success we had in the initial two countries. And you look at a government entity, like the County of Los Angeles, 100,000 employees, been a customer since 2021. Based on the success that they saw and over 90% of their supervisors seeing an increase in productivity and employee engagement, this is quantifiable impact, they made a decision to deploy to all 100,000. Prior to that, it was a subset. So we are seeing acceleration. We are seeing organizations spend money. We are seeing organizations leaning into the notion of we have to develop the skills necessary for us to be competitive and win in this environment where the pace of change is increasing every day. So as much as I know right now, based on the guide, it may appear that, and we are taking a conservative approach to the year, there’s no doubt about it, but it may appear that the velocity of the business is not necessarily where we would like it to be.
And the reality is, we already talked about some of the execution issues, but what we’re really excited about is the impact we’re starting to see in the enterprise. We’re starting to see dollars be spent at an accelerated pace. Consolidations continue to happen. The Marriott opportunity we talked about is a consolidation to our platform from multiple. The large multinational financial institution that we talked about, seven-figure deal, consolidation from multiple to our platform. So momentum is building in our enterprise segment, which by the way, is 80% of our revenue. But that’s hidden a little bit based on the guide and based on some of the execution issues. We did see coming out of Q4, which we absolutely are confident will be rectified.
So I know that’s probably a little bit more color than you were looking for, but I think it warrants it because the reality is this business is very healthy and on really solid footing. Don’t forget, UB is projected to exit the year at half a billion in revenue, growing over 20% year over year with a massive TAM and significant tailwind. So the opportunity is in front of us. We’ve got a very solid foundation that we’re growing from. And the economic climate, we believe, throughout the year is going to enable us to execute at the level we’ve talked about. So I’ll leave it at that.
Operator: Thank you. The next question is from Jeff Meuler with Baird. Please go ahead.
Jeffrey Meuler: Yes, thank you. Stephen Pollack on for Jeff. You mentioned that sales cycles remain elongated. Maybe just put that into context. Are you seeing incremental elongation? Is it sort of stable at higher levels? And how much longer are they than you would expect for a normal sales cycle? And then Sarah, I think you had mentioned something about higher quality leads in the pipeline. Is there any color there around what makes it characterize them that way?
Sarah Blanchard: Yes, thanks for the question. so sales cycles did not elongate further in Q4. We did see some pockets in Q3 where the sales cycle pulled in a little bit, but we are nowhere near historic levels still. Those sales cycles are pretty stable. That elongation continues but did not get worse. From a quality of leads in the pipeline, there has been a lot of work done on our funnel and ensuring that we are capturing the leads and then spending our resources on following up on the leads that are more likely to convert. So we have seen our win rates go up and that is a function of the quality of the leads that then get converted into opportunities for us are those parties that are more interested, that know more and understand more about our business because of the upfront work that we have done on the marketing and the outbound side.
Operator: Thank you. The next question comes from Jason Salina with KeyBank Capital Markets. Please go ahead.
Devin Au: Hi, Greg. Hi, Sarah. This is actually Devin on for Jason today. Thanks for taking our question. I just want to also follow up on kind of your expectation of ARL growth to pick up in the second half. Are you also assuming net retention to improve and also new customer growth to kind of accelerate in the second half? Any additional color you can provide on your confidence there? Thanks.
Sarah Blanchard: Yes, great question. from a net dollar retention, we don’t give out guidance on that. But what we expect is once that net new ARR starts to pick up in the back half, that will over time translate into an improvement in net dollar retention, which again, is still strong in this macro, 113% for our large customers and stable at 106% overall. From a logo perspective, because I heard you talking a little bit about customer count there, we did in Q4 see some of the smaller side of our SMB business not renew at year end. But that is something typical that we also saw last year where we add more logos in the third quarter than we do in the fourth quarter where that enterprise business continues to chug along and drive that growth. But you see some attrition on the low side.
