Guy Melamed : In terms of the margins, one of the things that we’ve talked a lot about — and you’ve probably heard me talk about ARR being the leading indicator for the last six quarters. We wanted to make sure that everyone understands that when we’re shifting our business from term license where we recognize approximately 80% of the deal’s value upfront to a SaaS model with kind of a fully ratable revenue. It will make our income statement metric less indicative of the health of the business than it’s been in the past. So the headwind that we’re talking about is obviously impacted the most by the way revenue is recognized between the two models. And that’s why we said that throughout the transition, ARR and free cash flow will be our north stars because they’re not impacted by the speed of the transition.
So obviously, as we announced at our Investor Day, happening on March 14, we’ll give more color, we’ll give more color not just on the headwinds, but we’ll give color on KPIs and we’ll try and be as transparent as possible to allow analysts and investors to work with us during this transition.
Operator: Thank you. Our next question comes from the line of Joshua Tilton with Wolfe Research. Please proceed with your question.
Joshua Tilton : Hey, guys. Can you hear me?
Guy Melamed : Yeah.
Joshua Tilton : Great. Just one quick one for me. I think we all walked away from the last earnings call with a message that the 4Q guidance and the initial 2023 guidance was derisked that you guys kind of only be 5%. I know there’s no real change to the growth outlook for 2023. I guess is the message still the same? Should we walk away into feeling that you guys have tended to derisk the growth outlook for 2023?
Guy Melamed : That’s hard — the line is very hard to hear, but I think I understood the question of whether we feel more confident about our guidance and have we still factored in macroeconomic uncertainties. And if that’s the question. The answer is basically yes to both. We feel more confident about where we are today versus where we were 100 days ago. The reception of the SaaS offering has been extremely positive. I thought we talked about that both from our customers and our sales force. With that said, when we look at the guidance for 2023, we did bake in additional worsening of the economic conditions across the board. We assumed softness in EMEA and North America. We assumed budgetary scrutiny, longer sales cycles, basically worsening of the economic conditions.
So we feel better about the business. But as we guide today for 2023, we wanted to account for both macroeconomic deterioration and some of the friction that might occur with the introduction of the SaaS offering, and that would ramp up time of basically six months.
Operator: And our next question comes from the line of Erik Suppiger with JMP Securities. Please proceed with your question.
Erik Suppiger : Yeah, thanks for taking the question. Can you just talk a little bit about the linearity that you saw through the quarter? It sounds like things may be eroded. So did the end of the quarter slow? And then you also talked about some turnover in the sales organization. Can you comment on what kind of turnover are you expecting in the sales organization?
