Rajiv Ramaswami: Yes. So look, I think first of all, accelerating digital transformation continues to be a key driver for customers. And we are seeing this across all kinds of industries here, particularly in verticals such as financial services, healthcare, state, local education. There is a clear mandate to modernize IT operations and applications, improve costs and help the business redirect non-productive legacy kind of spend. Now, in the current macro, I would say this is intensified. There is even more of a focus on cost and better TCO. So, from that perspective, modernizing legacy treated infrastructure, especially when things are up for renewal, right, up for a cycle, you are running out of €“ your hardware is getting old.
HCI is a very viable option for improving TCO, simplifying operations, making things much simpler. So, we haven’t quite seen a slowdown in that mindset with customers. I mean the other thing for us we see is that, HCI has now also become a platform for where customers can run all their workloads, including all their highest performance, most mission-critical workloads. We saw an example of that here in the call where we talked about this large Federal agency, but there are many other customers who are doing that. And then finally, I would say we are also seeing more people looking at hybrid multi-cloud and how they can operate efficiently in this cloud environment for which, again, our solution is a good option. So, can help them run in the right private cloud or public cloud based on criteria on cost, performance and governance.
So, all of that I think is continuing to play out there, even despite the macro situation.
Unidentified Analyst: Got it. And then maybe a quick one, can you help us understand like what you are seeing with expected gross retention trends in your renewals portfolio?
Rajiv Ramaswami: Yes, Rukmini?
Rukmini Sivaraman: Yes. Thank you for the question. So, our GRR or gross retention rates remain in line with sort of our stated objective of in the 90%-plus range.
Unidentified Analyst: Thank you.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of George Wang with Barclays. Your line is open.
George Wang: Hey guys. Congrats again on the strong quarter. I have two quick questions. Firstly, just it’s nice to see kind of rate for the FCF and income for this year. Definitely, you guys are seeing strong leverage. Just curious kind of going forward, are there additional operating expenses, which can be taken out of the system? Just curious kind of what area you guys can be targeting in terms of the lever to pull for further cost cuts, whether that’s in the back office, whether that’s in the state to follow. Maybe you can give more color on that?
Rajiv Ramaswami: Maybe, Rukmini, I will just give a high-level view. I would just say that we are not as much focused on cost-cutting. I mean a lot of the efficiency in the model is coming from the fact that we are seeing a growing base of renewals that can be prosecuted at a significantly lower cost than our traditionally new business. Now, we have been focused on efficiencies already over the last few years in every area. On the sales side, we are focused on increasing sales productivity. On the marketing side, we have already redirected and optimized our demand generation dollars to be mostly digital with some hybrid events. We have simplified our product portfolio. So, we have been doing the right things in terms of efficiency and so forth. So, that’s where I will leave it. And Rukmini, if you want to add anything?
