Operator
Our next question is from Rob Owens with Pacific Crest Securities. Your line is open
Rob Owens, Pacific Crest Securities
Great. Thanks, guys. With the discussion around apex, can you update us a little bit on the target model? I think when you went public a year ago you talked about a three to five-year time frame. Can we assume that two to four-year time frame would still hold at this point?
Richard Jenkins, Human Resources General Manager, Ruby Tuesday
Yes. I will start, maybe I will have Dave jump in, Rob. That time frame it still holds. –We have given a lot of leverage in the year all ready. Obviously, this corner we invested more. When we look at next year, we see the ability to give leverage again. It will not always be that straight linear path. There will be some variations to it. What we think we give in return is accelerated billings, where we have invested to try and grow.
The other thing we see that we like to keep pointing out and I know you are aware of this is when we do this and we get the accelerated billings — unfortunately because of the model, we incur all the cost upfront but we recognize the revenue over time, so that revenue is going to come down the road. The timing for the long-term model still holds in our minds. We will give leverage next year again. Where we do see opportunities, we are going to invest.
David Syarto, Vice President Operations, Ruby Tuesday
Yes. Just to reiterate what PJ has said, the nature of a recurring revenue model is when you incur the period costs of sales and marketing now and the revenues in the future, it actually accelerated billing this growth naturally compresses your margin. It is only that kind of steady state of billings growth does that start to catch back up. We are very fortunate that we have been able to accelerate our billings. In spite of that, we still have improved margins.
Our forecast for Q4 here as indicated implies almost 8% margin relative to about 3% last year, so almost 5% increase in margin in spite of accelerating billings. I think we see what the power of model can deliver. As PJ said, from period to period, there will be investment opportunities but we think that time frame that you laid out is a reasonable way to think about us getting where we are going to go.
Rob Owens, Pacific Crest Securities
Thanks for that color. Then second, when you talk about accelerated billings, we have also seen throughout this year accelerated net new subscribers as well. It looks like from the model that is beginning to translate into this acceleration you are seeing in subscription revenue. The 21% that you guys just put up is the fastest you have grown in about 2.5 years. We think about the fourth quarter and the composition of revenue relative to your guidance, should we assume that that subscription revenue remains north of 20% year-over-year growth?
Richard Jenkins, Human Resources General Manager, Ruby Tuesday
I think there is a couple of factors there that I will hit on Rob. The first is two of the things driving some of the subscription growth had been what I would call multi site backup and multi site NG Firewall deployments. As the product capabilities have improved – again, like I spoke about before we started to see some six-figure deals as an example this is a pure mid market company. We had a deal that just started out looking two-unit backup deal. It was a global company and then it ended up being 22 units and a six-figure backup deal.
We have those types of opportunities in front of us in same way with NG. We like that trend and that trend is driving the number of backup subscribers we have up. We view that as a good future opportunity. I would not tell you exactly where we think that is going to fall each quarter, but you can see how it has played out over the last three quarters. I think the drivers of that have been those categories. We need to continue to execute it there the way we have been and we will polish what will happen.
