Hamza Fodderwala: Got it. That’s helpful. And maybe just a follow-up for Alpana. You’ve been at SecureWorks now for a few quarters. You just gave a guidance for fiscal 2025. I’m curious just to understand your guidance philosophy here. Can you walk us through a little bit more on how you’re being conservative, particularly around the renewal assumptions new business, just to give us a sense of whether or not this guidance is more or less derisked as you continue through the last phase of this transition? Thank you.
Alpana Wegner: Yes. Thank you for the question. And you’re right. This is the first annual guide that I’m setting with the company. And Wendy and I certainly partner on it and think both about what we see as the leading indicators within the business as well as the macro and what we do have visibility and predictability into as we’ve made the transition for our business to the SaaS and a highly subscription-oriented at least from a topline perspective. We’ve got a good amount of predictability. And from the amount that we don’t have predictability into is really where we lean in and use judgment there. I do try and take a balanced approach taking — weighing in what we have high confidence in versus where is the risk in our plan.
And I would say that that’s reflected in the guidance range that we’ve given. And I do also think that we continue to see the opportunity from a balanced approach between growth and profitability. We are very much focused on making sure we’re investing appropriately from a growth perspective, both in product innovation as well as in our go-to-market strategy, but getting leverage in the business where we can, as you heard me talk about earlier, particularly around gross margins and even our operating costs, how we think about G&A, where we can get some additional opportunity there but also creating a positive EBITDA in transitioning the business to being how cash flow from operations that gives us — to fund our own business. And so that is kind of the approach that I take from overall view of the business financially as well as from a guidance perspective.
Hopefully that gives you a little bit of color without — with me being like a new within the organization.
Hamza Fodderwala: It does, thank you. And nice results.
Operator: Our next question comes from Tal Liani of Bank of America. Your line is now open. Please go ahead.
Madeline Brooks: Hi, it’s Madeline on for Tal this morning. Just one question from us. Just going back to the renewal cohort. Are you more worried around growth turn or are you more worried around discounting and pricing pressure, I guess what’s driving that conservative there, if you had to pick one of those to be more overweight than the other? Thank you.
Wendy Thomas: Sure. I can speak to kind of the broad pricing market, if that’s helpful. As I mentioned, we do have a unique pricing strategy that I think is very predictable and compelling for customers and our approach to sort of holistic coverage is creating the best security outcomes is something you see on our higher average revenue per customer than our peers, in fact, quite significantly. What we don’t see and have not done is make any changes to our discounting strategy or average discounts that we’re giving and we see our partners continuing to grow pipeline with us and have higher win rates. So clearly, our pricing with them is providing them the economics that they’re looking for. So despite there are sometimes occasional events in the market where competitors try to come in with cheaper free that never works on a sustained basis.
So I have never been one to chase that kind of pricing. The fact is most organizations take the purchase of security pretty seriously relative to its potential impact to their business, if it’s chosen poorly. So I just don’t think that that’s a winning approach and that’s not been the case. For us, we’re really just continuing to look at an environment of — but I think, as I said, a really rational fiscal assessment of all spend across all vectors for most businesses these days. And so we just want to be measured about what may happen in the macro that we’re not necessarily in control of as we look to that pool ahead.
Madeline Brooks: Sorry, Wendy, I appreciate the comments on pricing in general. But I guess I’m just looking for where the conservative in the guidance is being driven around this renewal cohort…
Wendy Thomas: Yes, I’ll let Alpana…
Madeline Brooks: Okay, great, thank you.
Alpana Wegner: Yes. Thanks, Madeline. Yes, and just piggybacking off of Wendy’s comments there. I would say that it’s not lost on us, the value of an existing customer over losing a customer. So our focus is going to be, and I would say we would prioritize retaining all of those customers that are in that renewal pool. And so for us, the risk that we thought through is more probably on the NRR side than I would say on the GRR side. And the reason I say that is we do have strong customer set. We do see that customers have positive feedback on the ROI that they’re receiving from us. And in the current environment, if there are budgetary constraints that are driving cautionary spend or any of that type of behavior that would put pressure on those renewals, we will approach it in a partnership manner with our customers and our partners and be looking for the right long-term value, economic answer.
That’s a win-win for both organizations. And that typically manifest as you point out, through the NRR as opposed to a GRR.
Madeline Brooks: Great, thank you so much. That’s it for me.
Operator: Thank you. There are no further questions at this time. So Mr. Toomey, I’ll turn the conference call back over to you.
Kevin Toomey: Great. Thank you. That wraps today’s call. A replay of this webcast will be available on our Investor Relations page at secureworks.com, along with our supplemental web deck and additional financial tables. Thank you all for joining us today.
Wendy Thomas: Thank you.
Operator: This concludes today’s conference call. You may now disconnect your lines.
