GTM - NASDAQ

Good day, and thank you for standing by. Welcome to the

Thanks, Amy. Welcome to

Thank you, Jerry, and welcome, everyone. Let me start by discussing our financial results this quarter. In Q2, we saw a level of write-offs related to prior period sales that was higher than we had previously seen or had estimated for the quarter, particularly with SMBs. As a result, we conducted a comprehensive review culminating in a charge in Q2, and we accelerated operational changes around selling to small businesses, all of which we expect to reduce the volatility around future write-offs. We have revised our estimates for the collectibility of a portion of previously recognized revenue, which has led us to take a $33 million charge in the quarter and as a result, we are revising our full year guidance. Excluding this charge, our results would have been more in line with our guidance for the second quarter. Inclusive of this charge, GAAP revenue for the second quarter was $292 million, and adjusted operating income was $82 million, a margin of 28%. Our free cash flow was not impacted by this non-cash charge. The underlying driver for the high write-off rate is that in 2022 and 2023, we extended credit to a higher mix of SMB customers and the rate of non-payment by these customers increased throughout the past 24 months. Accordingly, we have made changes to the way we sell, renew and service these clients. In April, we deployed a new business risk model to flag and require prepayment from prospects at the greatest risk of non-payment. This move mitigates the risk of future write-offs and represents an investment in the long-term health of our business, creating some new business ACV for higher-quality bookings and focusing our efforts on customers more likely to pay renew and grow with us over time. We transacted $11 million of ACV in Q2 through upfront prepayments, and with our new model in place, we turned away a meaningful amount of new business from smaller riskier organizations. I am disappointed that this charge has impacted our financial results. We believe this charge puts the long tail of beef challenges behind us and lets us focus on the operational improvements we have been seeing in the business, which, as I will describe, has positioned the company for future success. There were a number of fundamental improvements we saw this quarter. As you know, our focus over the past year has been to move up market, stabilize and improved net revenue retention and launch and monetize

Thank you, Henry. Before turning to our results, I do want to say a few words about leaving

[Operator Instructions] And our first question comes from the line of Elizabeth Porter of Morgan & Stanley. Your line is open.

Great. Thank you so much for question. After Q2, the EBITDA, we should largely be through the renewal risk, which has pressured the business for a while now. So I'm just hoping to get a better understanding of the decline for the back half of the year. Or are you assuming a second round of down-sells or has new business outlook changed materially? So if we could just get some color on kind of where the incremental pressure is coming from and the assumption on NRR in the back half of the year, that would be great. Thank you.

Sure. Thanks, Elizabeth. I think there are a variety of factors that go into the guidance as we think about it. And certainly, we've elevated our assumptions with respect to continued write-off potential in the thought that the operational improvements that we've implemented probably won't really take hold until the end of this year or more so at the beginning of next year. Additionally, the operating environment under which we're operating continues to be pretty fluid. So we've inserted incremental conservatism with respect to the guidance. And I think that if you look out in the world as we see it, there's a lot of uncertainty, both for companies, but also for the people making decisions in terms of the growth of those companies.

And I would just add here, when we when we set the guidance here, our -- what we wanted to make sure we did was to remove the volatility going forward in the business. And while we see a lot of operational improvements, I talked about growth in the 100,000 cohort, stabilization of net retention for the first time in a number of years, improvement in our enterprise and upmarket business. We're not assuming any of that trend continues in the back half of the year, and we're assuming that even with the operational improvements that we've done around taking upfront prepayment from our customers and the move up market in new business, that those trends also don't -- those don't make an impact to the write-off rates in the back half of the year as well.

Thank you.

Our next question comes from the line of Mark Murphy of JPMorgan. Your line is open.

Thank you. I'm curious if the volume of newly announced layoffs in the technology industry since June and July might have surprised you at all because Henry, I think you just said that you're not assuming that any of these improvements that you did see in Q2 are going to continue in the second half. So we had these announcements from UIPath and Intuit and OpenText Salesforce and Intel and others since then. And so I'm just curious if you -- if something is causing you to sense a second wave of layoffs that might be affecting go-to-market head count in the last say, 5 to 8 weeks a little more than you might have expected? And I have a quick follow-up.

I think the thing to remember about our business is two things. One, there is a meaningful portion of our business that's not seat-based, that is usage based. We talked about the Data-as-a-Service and Operations OS business, which now makes up 13% of our ACV, that's not a seat or usage-based business. It's also growing 23% year-over-year. And then on the seat-based part of our business, we are not fully penetrated across any of our -- really any of our enterprise or mid-market customers. And so we don't need the incremental seat from a hiring perspective to add to -- for us to grow within our customer base. The other thing that I would add there is, one of the places where we're bullish about Copilot, is that it's expanding our use case beyond just top of the funnel prospecting, to the full funnel. And so we're now seeing open opportunities where we're bringing in sets of users that were otherwise or in the past pre-Copilot were not customers of ours or we're not users of ours. And so we have a lot of opportunity, both from a usage-based perspective and from a seat-based perspective to grow despite the despite layoffs in tech or shrinking go-to-market team?

Okay. And then, Cameron, is it possible -- can you remind us on the non-collectability receivables, how often is it stemming from business failures versus something like a contract dispute or customer claiming that services were not provided? And then you did allude to some incremental write-off potential, I think going forward, is it possible to put any balance on that? And just help us understand -- have you factored something in there as an ongoing type of revenue offset in the second half, as you just saw in Q2?

Yeah. So certainly, we have factored in continued escalation in terms of write-off rates. And the write-offs that we do see do stem from a number of different factors. Certainly, one of the larger ones is companies shutting down. And I think in a more challenging environment, an environment where access to capital is harder to get to, that is driving some of that increase. There are also instances where, particularly in the small business, that when customers don't feel that they've achieved the value that they thought they were going to, that we end up in a level of dispute with them. And so I think in a world where it's harder to make sales, kind of getting that tangible value is also sometimes harder for them and that escalation. So our view is that while we are making operational changes to impact this largely requiring prepayment upfront from many of those smaller and riskier customers as well as just generally shifting the business upmarket. We feel the prudent view is to assume that the write-off situation gets worse, particularly as the -- their questions about the strength of the economy over the next few quarters.

So Mark, I'll add here, too. We did assume that the write-off rates -- the escalated write-off rates continue through the back half of the year. I think the big thing to remember here is we extended credit to SMBs that were not creditworthy, and we've changed our practices now to require upfront prepayments against our riskier customers. And in the quarter, we had $11 million of our ACV transacted through upfront prepayments. That was up from $1 million in any of our previous quarters. And so we've made a commitment both operationally and in the way that we estimate for these collectibles to get rid of this type of volatility in our business.

Understood. Thank you.

Our next question comes from the line of Brad

Great. Thanks so much for taking the question. Henry, it's no doubt a tough environment and

Yeah. I think that's actually the frustrating part about this quarter is that there's an incredible amount of operational improvement that we're seeing in the business. The 100,000 cohort growth, the first time we've seen that since Q4 of 2022. Stabilization and net retention rates, the first time we've seen that since Q4 of '21. Stabilization in our software vertical net retention rates. Our enterprise business grew 9% year-over-year. Operations OS and our DaaS business grew 23% year-over-year with 117% net retention. Copilot sold solidly above our expectations in the customer base. And we're monetizing AI now throughout our customers. When we're monetizing that, we're also seeing that happen 75% of the time in mid-market and enterprise customers, and we continue to innovate there as well. And so there's this tremendous amount of operational momentum and operational execution happening in the business, where I actually believe our product market fit is getting stronger. Our sales motion is getting better in the upmarket. We're monetizing Copilot in the base, and you're seeing that operational performance come through in the business. Now at the same time, the write-offs escalated, we have to increase that estimate and we have to take this accounting charge this quarter to put that all behind us, to move forward with a clean slate and to take away this volatility from our business.

And Brad, I think with respect to the pricing changes in Q2, we didn't proactively make any changes to pricing. And we do continue to see some downsell pressure, particularly at the lower ends of the market. But we are starting to see some really good green shoots of pricing opportunity when people are taking Copilot. So Henry mentioned the monetization of copilot. There are a number of opportunities where we're beginning to see pricing uplift from that. And if that's something that we're focused on being able to continue as we move into Q3 and Q4.

Very helpful color. Thanks so much, guys.

Our next question comes from the line of Raimo Lenschow of Barclays. Your line is open.

Thank you. Camera, like -- if you think about the ability to collect from clients, like how does this current environment kind of compare to what you've seen before? Because like we had like the -- in the COVID 2020, where it was half 2022, this seems to be either you changed how you kind of [Indiscernible] in 2023 or it's getting worse? Can you just compare and contrast like how this kind of feels compared to the time before, because it is somewhat surprising given that you've been in tough markets before. Thank you.

It's Henry. Look, I think there are two things that happened or one big thing. We did see these rates elevate against from the 2020 and 2021 rates. We saw this trend escalate and elevate in the 2022 and 2023 cohorts. They're writing off more, obviously, more than what our historical rates were. That's why we've made -- we've increased the estimates this year, and we've taken this accounting charge, we've accounted for those collectibility issues. The other thing that I would tell you is the way that you solve this moving forward is what we did with these upfront prepayments. One a risky or small SMB customer comes through, they can achieve a lot of value from

Okay, perfect. Thank you.

Our next question comes from the line of Parker Lane with Stifel. Your line is open.

Hey, thanks for taking the qn. Just to stick on the idea of the new business risk model, Henry. Are the parameters there simply about the size of the customer that you're talking about? Or is it also based on a number of seats or products they're adopting from you guys at the onset?

Yeah, it takes into -- the new business risk model takes into account a number of firmographic related data points and then a model that looks back at the collectibility of other accounts that look like those accounts. But you can think about it as size, industry, number of salespeople and then a compare against look-a-likes who paid or didn't pay us in the past. We're using a number of key data points to assess the risk of the clients who come through, size is obviously one of them.

Got. Thank you.

Our next question comes from the line of Alex

Hey. Apologize for the background noise. Sometimes it taking [indiscernible]. Maybe two quick ones. I'm trying to swear just, Henry, maybe your comments around improving retention rates in the quarter, particularly in the Southwest middle parts and also increasing charge-off rates? And maybe just comment on the linearity that you saw of these increases, because I would say the kind of non-retaining customers, or customers are going to go out and do something different. Can you just help us understand like [Indiscernible] for my second question, mechanistically, if you look at your bookings, which I think on a reported basis, CRP bookings was down to it [Indiscernible] how much of this bad debt can we kind of take out of that bookings to inform or something that can square us to that comment that Cameron made about flat, secondly, low single digit [Indiscernible] kind of once you start getting back some --

Yeah. Alex, we had a lot of -- we had a hard time hearing you. So if you could -- if we could just take a second and see how much of that we could collect in the room.

All right Alex. I think that, hopefully, I'll be able to answer most of your questions, and we'll get through this. I think, first off, in terms of the linearity, certainly, as it relates to retention, we had been seeing a stabilization of retention and that continued throughout the quarter. I think something that we were happy with. And I think -- that's particularly true in the mid-market and enterprise, where we saw improvements in retention. I think as the quarter went on, and we continue to see more pressure on SMBs. And certainly, with respect to the write-offs themselves, those did accelerate in June. And so the impact of those was really an end of quarter issue more than it was throughout the quarter. And then you had asked about the bookings. Certainly, the bookings get impacted by the write-offs because we are basically impairing some of that remaining performance obligations. So when we're writing off -- when we're writing off a contract, obviously, we're writing off the continued performance allegation of that as well as any of the existing revenue or receivable that's out there.

And Alex, I'll just add this guide does not take into -- does not assume that any of the improvement that we saw in the quarter, the stabilization of the net retention rates or the impact of the upfront prepayments, we don't -- we haven't anticipated any improvement from either of those in this guide.

Understood. Thank you, guys. And I apologize for the audio issue. [Indiscernible].

Our next question comes from the line of Kash Rangan of Goldman Sachs. Your line is open.

Hi. This is Kelly [Indiscernible] on for Kash. Thanks for all the color provided on the call. I had two quick ones for you. How has your sales cycle duration really compare this quarter versus prior periods? And second, what lessons do you take away from the large customer win and mid-market improvement? And it seems also enterprise that you saw this quarter to close remaining deals in your pipeline?

Great. Thanks for the question. Sales cycles have stayed largely the same. We segmented the customer -- the sales force in new business in the quarter. And so our enterprise deals obviously take longer than our SMB or mid-market deals, but they come in at 2, 3, 4x the value of those deals. And so nothing that we didn't expect in the new business space. And so sales cycles have stayed largely the same and across those different segments. I think the thing that we've learned across the largest deal that we closed in our history and continued improvement in mid-market and enterprise, is that segmenting the new business sales reps and then allocating resources to the upmarket is turning into results for us. We have the highest mid-market and enterprise new business quarter on record. And that came from an increased focus in segmentation of the sales rep base against those different segments. And we think that that's going to -- we believe that's going to continue throughout the year and set up a really strong foundation for us in the future as enterprise and mid-market customers grow more with us and retain at higher rates.

Our next question comes from the line of Brent Bracelin of Piper Sandler. Your line is open.

Thank you. I wanted to go just back to kind of framing how much exposure you have to SMB. I think it looks like bad debt accruals were $33 million, $34 million last year. You're at that similar mark here at the first 6 months of this year. What portion of that SMB business would you frame as still kind of being at risk versus how much you're kind of pre baking in as additional weakness? Just trying to think through at what point could we make a mark that kind of worse is behind you? I think we thought that a year ago, clearly not happening now. But maybe just frame overall, that SMB exposure, I think, would be helpful. Thanks.

So SMB continues to be around third of our business. We've seen enterprise continue to grow in terms of mix, so that's up above 40% at this point. Our focus has really been not on just not serving SMB anymore, but really taking the credit risk out of SMB and forcing those customers that are smaller or riskier to prepay upfront and ultimately do that. All of our product focus and really sales investment at this point is going up market. So that is a clear focus of us -- of ours, but we're not going to necessarily turn away smaller customers that are -- continue to get real value out of the system and continue to use the system to drive their sales motions as well.

But Brent, I also think you should think about the actions we took today with the charge and the increase in estimates as we fully intend on putting this volatility in our business behind us. And going forward, we don't anticipate after this charge and after the increased estimates toward the back half of the year that write-offs will create volatility in our guide going forward.

Helpful color. Thank you.

Our next question comes from the line of Koji Ikeda with Bank of America. Your line is open.

Yeah, guys. Thanks for taking the questions. A couple from me here. Maybe the first one for Cam. Just wanted to understand a little bit more on the write-downs headwind to the guidance for the full year. And I know you guys aren't guiding 2025, but just thinking about the write-downs and potential impacts heading into 2025. Is it a full year of impact? Does it affect 1Q '25? And does it potentially lead into the second quarter of 2025 too?

So certainly, the write-downs that we realized now were eliminating risk of non-payment on receivables that we have that we've already recognized revenue against. And then another big portion of the of the change in guidance was taking out the revenue that we would have earned from those customers that we've written down or written off as we go through the remainder of the year. Our expectations at this point are the way we've defined guidance is to assume that those write-offs continue to escalate and that they would continue to have an impact on our results. But ultimately, the operational improvements that we've put in place, requiring prepayment upfront from smaller and more risky customers as well as shifting the sales team to focus more on mid-market and enterprise customers, should eventually, and we're focused on ensuring that they eliminate a lot of the volatility related to those small businesses. And so if you think about the deals that we're selling today that we would potentially write off in 6 to 9 months. So at the end of the year, as we move into the beginning of next year, we're aiming to significantly reduce the risk of those write-offs in terms of growth.

I would add here, when we think about the rest of this year and 2025, what we'll tell you is we're going to finish this year with $1 of free cash flow per share, and we expect to meaningfully grow that in 2025. And I'm confident in that, we -- based a lot around the fact that in the quarter, we had our best net new ARR add in more than a year.

Got it Henry. Thank you. And just one follow-up, if I may here, Henry, for you. In prior quarters, you have talked about customers, I'll call them boomerang customers that left

Yeah. This quarter was our best win back quarter on record ever.

Our next question comes from the line of DJ Hynes of Canaccord Genuity. Your line is open.

Hi, guys Thanks for taking the qn. Henry, one for you. So a lot of your data today is being piped into CRM systems. The CRM vendors are also trying to build Copilots that help with activating intelligence, prompting next best action. What gives you confidence that the AI-driven functionality will live with

Yeah, I would think about the data that gets piped into CRMs as sort of contact or company data. And the data that you actually need to win from a Copilot perspective, is a tremendous amount of signal data that you use to identify which customers to reach out to today, tomorrow and the reasons why. And so you can think of that as intense signals or new hire signals or funding signals or -- or visiting your pricing page signals or visiting a competitor's review page signal. Or researching your competitor. And all of those signals, those are proprietary to

Yeah, good to hear. Thanks for the color.

Our next question comes from the line of Taylor McGinnis of UBS. Your line is open.

Yeah, hi. Thanks so much for taking my question. So if I look at the 3Q rev guide, it assumes a sequential increase, which is a reversal from some of the recent trends we've seen. Now I would imagine some of that might be due to the write-downs in softer new business changes that might be having an impact there. But Cameron, can you help us bridge that gap? I think you mentioned adjusted revenue of $307 million in the quarter. So -- can you quantify the pieces that make up the difference between that and what was reported? And as we look into 3Q and 4Q, are you able to quantify the write-down and new business impact that's embedded? Thanks.

So in the second quarter, we took a charge related to the change of estimates that we had, and those are estimates around the collectibility of receivables from customers. So with respect to revenue, that was $15 million of the charge, and that's revenue that we've effectively recognized historically, but due to the change in estimates needed to run that through Q2. So the revenue that we generated in Q2 from a GAAP perspective was $292 million, but that included $15 million of write-downs that shouldn't recur as we've really focused on identifying everything that we felt was at risk, changed our estimate around those, put it into Q2. And therefore, going forward, we want to start with a clean slate. So based on that, I think in Q3, while it will be growth compared to the $292 million, it would still be a decrease relative to the $307 million, if you were to back out that $15 million of write-down.

Thanks so much.

Our next question comes from the line of Jackson Ader with KeyBanc Capital Markets. Your line is open.

Great. Thanks for taking our questions, guys. Really, the one for me is, Henry, on the trends or the positive trends in the business that are not expected to continue, or are being kind of removed from guidance going forward. I'm just curious, are you already seeing some of the enterprise momentum slow here as we -- as we are here in early August? Or is this just true conservatism? Or is it actually happening and that's why you're taking it out of guidance? Thanks.

No, we're not seeing the momentum in the business slow down the enterprise or upmarket momentum. We feel really good about the operational improvements and the operational success that we've seen and anticipate that we're going to continue to execute against that.

Got it. Thank you.

Our next question comes from the line of Michael Turrin of Wells Fargo. Your line is open.

Hey, Michael Berg on for Michael Turrin. Thanks for taking the question. When I think about the margin impact of the write-offs, how can you think about how that flows through the rest of fiscal '24 on a margin percentage impact? And then how can I think about that rolling through into fiscal '25. Then I have a quick follow-up.

Sure. So we did have a number of discrete events. Those are laid out in the press release as well as in the 10-Q. When you look past those specific charges, the margins would have been materially higher, almost 10 points higher. And I'd expect that we won't have additional charges like that. So I think the -- if you pro forma those charges out, that would be the kind of underlying performance of the business that I'd start with from a modeling perspective.

Helpful. And a quick follow-up for Henry here. You made a point on the call to mention that you plan to be aggressively buying shares here. What would be your key things to point to as driving your confidence in scooping up more shares moving forward? Thank you.

Look, I think that the tough part about this quarter is that we had a tremendous amount of operational improvements that we saw. We saw net revenue retention stabilize for the first time since Q4 '21. We saw our DaaS business growing -- DaaS and operations business growing 23% and year-over-year. We saw growth in our 100,000 cohort for the first time since Q4 of '22. We continue to grow our $1 million cohort. We're addressing the write-off issue by taking a significant amount of our new business ACV through upfront prepayments. Copilot is solidly above our expectations from a sales perspective into the customer base. I think that we have tremendous product market fit there. And that's going to be really hard for a lot of investors to see because of this accounting charge and the way that we're thinking about guidance for the rest of the year. That being said, I have tremendous confidence in

Our next question comes from the line of Surinder Thind of Jefferies. Your line is open.

Thank you. Just, Henry, any color on breaking down the NRR between SMBs and mid-market? And then maybe when you look at the new business that you're winning. So what is that mix between the SMBs and mid and enterprise? And maybe how does that compare to your current ARR mix? Thanks.

Yeah, you can think about on the new business side. On the new business side, we had high watermarks for enterprise and mid-market new business. And so those are significantly higher as a percentage in the quarter than we've seen historically. That was driven by segmenting the sales rep base into SMB, mid-market and enterprise reps and then allocating resources properly across that group. Cameron said it in the customer base, you can think about the breakout as kind of 40% enterprise. Around -- a little under 30% mid-market and the rest in SMB. And our intention is to move the business significantly up market in the mid-market and enterprise.

Got it. And just one quick clarification question on Copilot. The ARR figure you provided, I think it was $18 million. Was that as of quarter end or is that as of a different period of time?

That was as of quarter end.

Thank you.

Our next question comes from the line of Brian Peterson of Raymond James. Your line is open.

Hi, thanks for taking the question. So Cameron, just on the $33 million in charges you mentioned this quarter, just to clarify, how much of that is embedded in the 2Q NRR figure? Or is some of that would have been impacted prior periods or future periods? I just want to make sure I understand how the charges are impacting the NRR? Thanks.

Yeah. So most of the increase in write-offs and changes that have gone through the estimates, really more of the new business that we've brought on than they do to NRR. So the NRR is really not impacted by those charges.

Our next question comes from the line of Siti Panigrahi with Mizuho. Your line is open.

Thanks for taking my question. I just want to clarify, you talked about if you look at your guidance second half, you're taking down $50 million in revenues, if I exclude that $15 million write-off. So how much of that -- the $50 million that you're taking out, how much of is a write-off versus any kind of softer new sales or downsells or any cannibalization you're going to see given that Q4 another strong renewal quarter?

So the way I think about that city is that of the entire change in guidance, so the full $60 million. Roughly half of that has to do with write-offs that we've incurred. So part of that is the charge. Another part is the revenue that we would have recognized from those customers that we wrote off over the second half of the year. The other half of that is really an increase in conservatism in terms of the market overall. Part of that conservatism is an increase in the assumptions around ongoing write-offs. So seeing those write-off rates escalate going forward as well as well as just conservatism around the sales and retention environment.

Thanks for the color.

Our next question comes from the line of Joshua Reilly with Needham. Your line is open.

Hi, guys. Thanks for taking my question. Just one quick one for me. You mentioned at the end of the month of June is when you saw increased write-offs for SMBs. I guess maybe what do you think changed in that period of time relative to what we were seeing in the first quarter? Because it seemed like the renewals weren't great for SMBs in the first quarter. Was there some period where it was a little bit better for a period of time, and then they got dramatically worse? Or what macro factor maybe came into play there or some other factor that we should be considering? Thanks guys.

So certainly, we did see an increase in the rates and an increase in the revenue associated with those write-offs. Part of that is the timing and catching up of write-offs. Write-offs don't happen immediately. We're obviously chasing payment for folks, and it does take us in a period of time before we fully get to the point where we're ready to write something off. We have also seen further stretching of small businesses in terms of their access to capital. So you see increases in companies shutting down, think that's happened more as we've gotten into the summer. And so I'd say that those two factors certainly changed as we got into June. If we look back at the trend from Q3 to Q4 to Q1, we actually saw improvements in our write-off rates and then we saw those reverse as we got through the end of the quarter.

Got it. Thanks, guys.

Our next question comes from the line of Pat Walravens of Citizens JMP. Your line is open.

Hey. This is Austin Cole on for Pat Walravens. I appreciate you taking my question. I just wanted to ask about the DaaS business, 13% of ACV. Can you just talk about what you're doing to drive success there? And how big do you think it can get?

Yeah. Thanks for the question. We -- last year, built a team of DaaS specialists who are responsible for helping our customers integrate our data within their workflows and get that behind workflows like territory planning or account scoring or new AI workflows that they're building. We anticipate this can be -- can continue to grow at the rates that it's growing -- that it's growing, and be a real meaningful part of our business going forward.

Great. Thanks.

And I am showing no further questions at this time. I would like to turn the call over to Henry for closing remarks.

Thank you, everyone, for joining us tonight. I'd just like to take a moment to reiterate what I think are the most important key takeaways from tonight's call. First, we've taken necessary and comprehensive accounting charges this quarter to address our write-off, and while they fully flow through Q2 results and negatively impact the quarter and our full year guidance, this action sets us up very well for the future. Additionally, we've made the necessary operational adjustments in the way that we extend credit to our customers, to ensure that write-offs do not continue to be a headwind in our business. Second, we delivered strong operational performance, NRR stabilized. We have the best net new ARR quarter in a year. We're growing our $100,000 and $1 million customers. Copilot sales were solidly above our expectations, and we see data as a service growth opportunities driven by AI use cases. And we are committed to driving long-term value creation through consistently growing free cash flow per share. I look forward to speaking with you and seeing you in person as we participate in a number of investor events over the coming weeks. Thank you.