Brett Knoblauch: I appreciate it. Thanks, guys.
Operator: Thank you. One moment please for our next question. Our next question comes from the line of Nick Altmann with Scotiabank.
Nick Altmann: Awesome. Thanks, guys. I think earlier you had noted that churn has improved in SMB both year-over-year and quarter-over-quarter. I was wondering if you could maybe talk about the expansion side and how that’s trended. And then just as a follow-up, were any of the changes that you had made to pricing earlier this year, has that been sort of a tailwind to NRR? And if you could quantify that, if you’re willing to disclose that, that’d be helpful. Thanks.
Tyler Sloat: Hey, Nick. This is Tyler. I’ll take that one. So yes, in churn, we’re just doing better, [indiscernible] for a while, and these are subtle improvements. And I just mentioned we made kind of a company best ever in churn this past quarter. And it goes from SMB all the way up. I mean, part of that is because we have been moving to larger customers, they’re signing annual deals. So the mix shift of our customer base is changing. Part of it, Freshservice in general, which plays in the larger markets, that is growing faster and that has great characteristics. When — on the flip side of the question you asked about expansion, expansion is — it really hasn’t changed and it’s still a pretty tough environment for expansion and specifically around agent addition.
And so, what we have been doing is looking at other ways to expand with our customer base. One of those, which you’ve alluded to is that, we did do some price changes on our Freshservice product. We did get some benefit from that so far this year. So that has helped our net dollar retention slightly. And so, even though on one side the expansion motion overall is coming down, we did get some expansion benefit from price a little bit, but also benefit from churn. So hopefully that breaks it down for you.
Nick Altmann: Awesome. Thanks, guys.
Operator: Thank you. One moment please for our next question. Our next question comes from the line of Brent Thill with Jefferies.
Brent Thill: Tyler, on NRR, you mentioned it is going to moderate more in Q4. Is Q4 going to be a bottom for that moderation in NRR? And maybe for Dennis, U.S. and EMEA held up really well, but the APAC showed a pretty big slowdown. Anything going on in the APAC that would describe what happened there. Thanks.
Tyler Sloat: Hey, Brent. I’ll take the first part of it. So, we have been calling, kind of coming out of Q1 even that we thought Q2 was going to go to 105%, 106% range. And we’ve been doing a little bit better. And part of the reason is because churn has been doing better because we’ve kind of — the expansion has kind of come through as we expect. We’re calling the kind of 105% for Q4. And based on what we see right now, we do hope that that’s kind of the floor. And we’ll obviously update that going into next year if anything changes. That kind of assumes that we’ll be able to maintain the levels of churn and the expansion is not going to get dramatically worse. And so that’s obviously the assumption going into that number.
Dennis Woodside: Yes, just on the geography question, we really didn’t see a slowdown in Asia-Pac. We had pretty consistent performance across our three big geos. So, no — I would say no appreciable trend to call out there.
Brent Thill: Great. Thanks. Operator Thank you. One moment please for our next question. Our next question comes from the line of Alex Zukin with Wolf Research.
Ethan Bruck: Hey, guys. This is Ethan Bruck on for Alex. [indiscernible] congrats on solid results. I have two quick questions. Just first, so one of your peers earlier in the month noted that there’s some growth slowdown in September. So I’m just curious, like what you’re seeing in the environment, just given the solid results and like based on early customer conversations, around budgets, like what is the discussion been like for 2024? We’ve heard a lot around like two consolidation. So just curious how you guys saw them across the front office stack helping driving some larger strategic deals.
Dennis Woodside: Hey, Ethan, I’ll take that. So in terms of — the first part of the question is around September. I already mentioned, hey, we become a little bit more back-end loaded as we’ve been dealing with larger customers, but it kind of came through as we expected. And it wasn’t — there was no real surprise there and we expect that kind of that back-end loaded nature of the quarters to continue as we are kind of doing that more of that field motion. As we look into next year and you asked about, hey, in terms of budgets, are we seeing anything different? We’re not seeing anything different. And part of our play you just mentioned, is to be a great kind of a great cost alternative. And we’re going to continue to try to flex that muscle as we go engage with customers, especially if they’re seeing budget pressures. We feel that we came out to be a great alternative to some of their big heavy software that they might have.
Ethan Bruck: Yes. And then just a quick follow-up around the AI suite. So hearing Copilot coming in 1Q is constructive. I’m just curious and based on the early traction you’re seeing in beta. And just how would you stack rank? what you guys would expect to be the most impact in the 2024 numbers if you think about impact from new spend on just the Gen AI SKUs or through uplift just improving gross retention, surely directly how you guys are thinking about this. Thank you.
Tyler Sloat: There’s a question on monetization. Yes. I mean we — it’s so early, Ethan, right? We have our — the monetization that’s just starting essentially in Freddy Self-service, which is, again, going to be reflected in Chat. We talked about Q1 being kind of rolling out GA Copilot, which we’d start selling it. I think Dennis just mentioned, we’ve got a lot of customers across the three different AI plates that we have that are in beta right now, and we’re planning to learn as we go and then start to roll the stuff out. So I think the first time we’re really going to have anything that we would talk about is probably the first half of next year.
