Todd McElhatton: Yeah. The other thing I’d say is, look, we’re still early on in the revenue where we are from a standpoint of penetrating there. We’ve certainly seen consistent growth over the last year or so. But there’s a lot of opportunity for us to continue to accelerate that movement. And some of the innovation that’s coming out will help even more customers join the revenue or, you know, purchase the revenue product as we go through the next year or two.
Robbie Traube: I think added to that as well, Joe is, you know, Consumption is a big focus for us and the way that we can actually use revenue on those lines is also really, really exciting for us and our customers.
Joseph Vafi: Great. That’s a great commentary. I appreciate that from all three of you. And then any commentary on the Silver Lake balance sheet infusion here. I know it was kind of expected, but, you know, how are you looking at the landscape here? I would imagine it would be M&A centric again, as it was with Zephr, but any comments there? Thanks a lot guys.
Tien Tzuo: Yeah. Joe, absolutely. You know, that was, you know, an agreed-upon deal. We took the second tranche here during the most recent quarter. We’re still very active in looking at things in M&A. We’re going to be extremely disciplined, just as we were with Zephr, making sure that we get the right product, that we can expand it, that it’s growing faster than where we are growing, and that the culture is right and it helps us, you know, on our land and expanded strategy. So we continue to look at things. I think it’s an active market, we’ve got a lot of things, and when we have something to announce, we will announce it. But, you know, I do feel that over the next couple of quarters, you’ll see us have the ability to announce something.
Joseph Vafi: That’s encouraging. Great. Thanks a lot, Todd. Thanks, Tien.
Tien Tzuo: Thanks, Joe.
Operator: [Operator Instructions] Your next question comes from the line of Brent Thill from Jefferies. Please go ahead.
Eylon Liani: Hello. This is Eylon Liani on for Brent Thill. My first question is on net new ARR. Good to see some sequential improvement here, but net new ARR was still down 10% year-over-year in the quarter. And the updated full-year guide implies sequential improvement in 4Q. Based on your pipeline and coverage, what are you seeing out there in the market, and what gives you confidence in the sequential improvement implied in the 4Q ARR guide? Thanks.
Tien Tzuo: Yeah. So thanks a lot, Eylon. We pretty much through the entire year said that here was the range we thought we would land on ARR. We’ve confirmed today that we’ll end up in the year at about 12%. That’s what we’ve said all year. Being three quarters the way through and taking a look at the pipeline, the conversion rates that we see, we’re comfortable, that’s where we end up landing. And, you know, I think it’s been pretty consistent every quarter this year, we’ve had, you know, a standard or consistent increase of quarter-over-quarter on the ARR. And so, you know, that’s what we’re seeing in the pipeline. And the pipeline and the conversion rates certainly support that. And so I’d expect it will land at that, you know, approximately 12% growth for the overall year.
Eylon Liani: Got it. Super clear. And just as a quick follow-up regarding targeting faster, smaller lands as the environment remains challenging, can you shed some color on your progress here and what you’re hearing from customers?
Robbie Traube: I think we’ve been pretty consistent throughout the whole year is that we’re really pleased that we have the ability to do smaller lands. Maybe going back a year ago, I think there’s some doubt that we can do that. But our products are very modular. We can land with revenue, we can land with billing, we can land with Zephr, or if a company chooses, we can land with the entire suite. And that flexibility has really been an important part of our growth story this year. So, you know, customers obviously appreciate that, right? Customers, when — you know, whenever you give customers choice, when you get customers flexibility, it’s something that they’re going to value, and we’ve been able to translate that benefit into our growth this year.
Eylon Liani: Thanks.
Operator: Your next question comes from the line of Jacob Stephan from Lake Street. Please go ahead.
Jacob Stephan: Yeah. Hey, guys. Thanks for taking my question. I just want to focus on the quick land deals as well. You know, when you think about kind of the ARR growth rate you alluded to in FY’25, you know, how are you thinking about these deals factoring into that growth rate?
Tien Tzuo: Yeah, that gives us optimism that we can continue this path. One of the things I alluded to on the call is, look, there’s two dominant growth strategies that we’re starting to see the best companies in the subscription economy use. You know, one of them was consumption. It’s certainly something that we’ve done in our pricing model since the beginning. The second one is what I call strategic unbundling bundling. I gave an example that was a B2C example with the New York Times. A big, big part of their growth story is the fact that you don’t have to subscribe to the entire newspaper anymore, right? You can start with games. You can start with word. You know, you can start with news. You can start with sports. It’s the same analogy applied to a B2B SaaS company setting.
