Blake Moret: Hey Brendan.
Brendan Luecke: So question, as you look through this current cycle for CapEx, how are you thinking about recurring revenues on the back of your expanded installed base?
Blake Moret: Yes. So we’ve had a big focus on adding ARR. We’ve talked much more formally about it here in the last couple of years. And while it’s still a relatively small part of our total business, I like starting each year with that recurring revenue. It gives you a reason for being constantly intimate with our customers and the whole land and expand motion is well understood to be a good source of ongoing value. We like our position in terms of having that, growing double-digits, and being able to complement it with the physical goods that we’re shipping that are still being sold on a perpetual basis, a one-time PO. But over time, we expect to add additional software and services to our annual recurring revenue streams as well as hardware where that makes sense.
One of the phenomenon is as we’re in our second year of double-digit growth, because our overall business is growing so fast, the ARR as a percentage of the total is not increasing a huge amount, but it is more than keeping pace. And so we’re happy with it. We’re retooling our internal business processes to be able to take orders with a mix of hardware, software and services to make it easier and easier for customers and channel to be able to restack and expand the content in those subscriptions and so on. So we’re happy with the progress there.
Brendan Luecke: Thank you.
Aijana Zellner: Julienne, we’ll take one more question.
Operator: Thank you. Our last question will come from Noah Kaye from Oppenheimer. Please go ahead. Your line is open.
Noah Kaye: Thanks so much. So I just want to clarify a couple of quick questions. Number one, you mentioned that after implementing the cancellation policy, it didn’t really appear to impact order patterns. So just to clarify, you’ve seen orders trending still healthy here so far in 2Q? You’ve not seen any pull forward?
Blake Moret: We see some pull forward that was in Q1 that was more a factor from the price increase. But even without that, we had orders that would have contributed to strong sequential growth. So any pull forward would not have had much to do with the cancellation policy, but there would have been some pull forward in Q1 that would have been a factor of the price increase that we introduced then. We are also seeing, as I mentioned in Q1, strong project activity with multi-site and multiyear deals, and that was significant in Q1.
Noah Kaye: Right. And then a lot of talk positively around IRA and its long-term impacts; do you get any sense that, that some of the customer base is still waiting on treasury guidance for some of these credits and the like to make some decisions around investment? Any sort of sense of what that forthcoming guidance could mean in terms of opening up orders?
Nick Gangestad: Yes, I know I think that’s a fair assumption. Like we clearly have seen some activity of what we think of increased activity as a result, but there still is some portions waiting to be clarified. And I think it’s a very fair assumption to think that some of our customers are waiting to see what that clarity is. I know, in our own case we’re doing more evaluation and waiting to what some of the provisions means to us. So I think it’s fair to assume our customers are doing the same thing.
Noah Kaye: Yes. So very helpful. All right, thanks so much.
Blake Moret: Thanks Noah.
Operator: We are out of time for questions today. I would like to turn the call back over to Ms. Zellner to close out the call.
Aijana Zellner: Thanks Julienne. That concludes today’s call. Thank you for joining us.
Operator: That concludes today’s conference call. At this time you may disconnect. Thank you.
