Greetings and welcome to the Guidewire Second Quarter 2022 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alex Hughes, VP of Investor Relations. Please go ahead.

Thank you, operator. Good afternoon and welcome to Guidewire Software’s earnings conference call for the second quarter of fiscal year 2022 ended on January 31. My name is Alex Hughes. I am Vice President of Investor Relations. And with me on the call is Mike Rosenbaum, Chief Executive Officer and Jeff Cooper, Chief Financial Officer. A complete disclosure of our results can be found in our press release issued today as well as in our related Form 8-K furnished to the SEC, both of which are available on our Investor Relations section of our website. Today’s call is being recorded and a replay will be available following the conclusion of the call. Statements made on this call include forward-looking ones regarding our financial results, products, customer demand, operations, the impact of COVID-19 on our business and other matters. These statements are subject to risks, uncertainties and assumptions and are based on management’s current expectations as of today and should not be relied upon as representing our views of any subsequent date. Please refer to the press release and risk factors and documents we file with the SEC, including our most recent annual report on Form 10-K and our quarterly report on Form 10-Q to be filed with the SEC for information on risks, uncertainties and assumptions that may cause actual results to differ materially from those set forth in such statements. We will also refer to non-GAAP financial measures to provide additional information to investors. A reconciliation of non-GAAP to GAAP measures is provided in our press release. Reconciliations and additional data are also posted in the supplement on our IR website. And with that, I will now turn the call over to Mike.

Thanks, Alex. Good afternoon and thanks everybody for joining us today. I want to start by briefly commenting on the war in Ukraine. Guidewire has very little financial exposure to this tragedy, but I believe that understates its actual impact on our company. We have a number of Ukrainian citizens in our company with family in Ukraine and we have a very strategic development center in Krakow, Poland, where the ties to Ukraine are very direct. To say that for them, the situation is unconscionable is an understatement. It’s just impossible for people to operate effectively when they have friends and family sleeping in bomb shelters and fighting in a war. I lived in Belgium from 1986 to ‘89. And while there, I had an opportunity to travel to Moscow, St. Petersburg, East Berlin, Prague and Budapest. While I was in the Navy, I was part of a U.S. visit to Severomorsk, where the Russian Northern fleet is based. So for me, this dramatic regression in Russian relations is startling. I hope that we can find a peaceful resolution to this conflict quickly. And we are glad to play whatever role we can and the sacrifice required to see this concluded as this is not the world we want for our teams and for their families and for our friends in Ukraine. So with that, I will turn it over to the business. Before I get into the details of the quarter, I want to briefly touch on three reasons why I am excited about Guidewire’s future. First, we have a market-leading position, providing a mission-critical service in a very resilient, large global property and casualty insurance market. Second, we have broad support to fundamentally transform and enhance our value proposition by transforming the company from a software provider to…

Thanks Mike. I will start with the summary of our second quarter results before turning to our outlook. Second quarter ARR ended at $620 million, up 19% year-over-year or 18% on a constant currency basis. As a reminder, we report ARR on a constant currency basis during the year and then update currency exchange rates at year end. This growth rate benefited from strong new sales activity and growth in ARR from cloud deals sold in prior periods. Total revenue was $204.6 million, ahead of our expectations due to stronger performance across all components of revenue. Cloud strength continues to be visible on subscription revenue which was $62.9 million, up 64% year-over-year. Subscription and support revenue was $84.3 million, up 42% year-over-year. License revenue was $69.8 million, down 10% when compared to Q2 last year. Services revenue was $50.5 million, up 19%. Turning to profitability for the second quarter, which we will discuss on a non-GAAP basis, gross profit was $108.6 million. Overall gross margin was 53% compared to 56% a year ago. The year-over-year decline was driven by the revenue mix shift towards subscription and support revenue and away from higher margin term license revenue. Subscription and support gross margin was 47% compared to 43% a year ago. We benefited from cloud infrastructure cost controls we put in place post Q1. We also benefited from a one-time $1.3 million credit from our cloud service provider that we originally expected to fall in the third quarter from an accounting perspective. Around $800,000 of this credit impacted cost of subscription and support revenue, and the remainder benefited operating expenses, primarily R&D spending. Services gross margin was 3% compared to negative 2% a year ago due to higher billable utilization. Overall, operating income was $3 million, exceeding our guidance range due to…

Thank you. [Operator Instructions] Our first question comes from the line of Matt VanVliet with BTIG. Please proceed with your question.

Thanks for taking my question, guys. Nice job on the quarter. I guess as you look at the overall macro demand environment here, are you seeing, I guess, any divergence between overall kind of desire to modernize around the technology stack here? And then what you’re actually seeing in terms of cloud migrations. So maybe asked slightly differently, is the overall market continuing to trend in the positive direction and you’re seeing cloud demand sort of equate that and seeing a lot of customers now fully entertaining the idea of migrating?

Thanks for the question. I think the simple answer is yes. We continue to see the overall market trend positively. You do see a wide range of business objectives that all fundamentally depend on IT agility. And the insurance companies that we support all sort of recognize that, that IT agility comes from the modernization of core systems or, call it, the migration of those core systems to cloud and getting those systems on the latest release of Guidewire. All of those things create more flexibility, more agility, more ability to just effectively meet the business objectives, and whether that means launching new product lines or instantiating new digital interfaces and digital channels, new paths to market through partnerships. And then there is also pretty significant efforts underway to modernize operations through analytics and data and making better decisions so that the operational efficiency, the overall company can be improved. All those things in the insurance industry sort of stemmed from or accelerated by how modern the core platform is. And so all those things, you add them together and it sort of points towards just a steady and continual improvement in the market and the overall demand. Jeff and I have been talking about this for a long time. I think that the market was a bit on pause while the major systems vendors move to the cloud, but I think that, that approach to cloud is now well understood and well accepted and gaining traction. And so that’s just overall trends positive.

Alright. Great. No, that’s very helpful. And then obviously, a lot beyond just sort of the movement of troops in Russia and Ukraine, but the cybersecurity environment, I think, has gained a little bit more in terms of the headlines as well in terms of what’s been happening, both proactively in some areas and then as sort of a, I guess, a tax basis. Is that impacting any conversations you’re having around the Cyence business? I guess maybe how has that been progressing so far this year? And has this created any additional demand?

Yes, it’s a great question. Certainly, this incredibly unfortunate situation in Ukraine has caused everybody to step up their guard, so to speak, as it relates to cyber activity. And that – if any company hasn’t done that, they need to immediately. This is pretty unprecedented, I suppose, in terms of a global event like this where it’s very clear that cyber attacks are a component of the dynamic that’s playing out militarily. And that’s extremely interesting. And it’s not just Guidewire, obviously, in our Cyence efforts, but numbers and numbers of people have commented on this. As a CEO of a company, I’ll tell you that cyber risk is on the top of my mind. It’s on the top of our Board’s mind. It’s something that we pay a significant amount of attention to. And I expect that every CEO in the world is thinking about this more and more as we proceed. That is a risk, right? And that creates the potential for an insurance market to exist and for Cyence to support that insurance market and for that insurance market growth to create growth and demand for Cyence. But it’s a little interesting. It’s like such a dynamic risk category that it’s not clear yet how exactly that will manifest in terms of who underwrites it and how it’s underwritten. But for sure, in the long run, I think that this will be a major line for insurance carriers and a big growth driver for Cyence. But it’s just so dynamic right now that I think different companies are taking different approaches to how they take advantage of the underwriting opportunity, I suppose, that exists based on that risk. But when I think about the long run just in terms of how much the value of companies are wrapped up in digital assets and data and how much risk there really is to protecting that from cyber attack, I am confident that it will drive demand for Cyence over the long run. So thanks. Yes, interesting question.

Alright. Great, thank you.

Our next question comes from the line of Jackson Ader with JPMorgan. Please proceed with your question.

Great. Good evening, guys. Thanks for taking my questions. The first is really just a follow-up on the Russia and Ukraine war. I mean, you mentioned that you have the office or the footprint in Poland. Can you just clarify how many people are there? What functions generally? And then any – yes, I mean, continuity plans in place at the moment.

Sure, sure. So it’s an R&D location with about 100 people. It’s driving an important part of our R&D organization, and we feel very, very confident and very really bullish on that market as a source of talent for us. Obviously, it’s a trying circumstance for them, and we’ve been doing everything that we can to support them, especially around humanitarian efforts and supporting people who are being evacuated from Ukraine. That’s been very, very important to that team. But I don’t think that in the long run that this has a negative impact on Guidewire. In the short run, we’ve got to do what’s necessary for our employees and for their families and for their friends and just what’s morally correct in order to where they are putting their priorities over the short period of time. We’re all obviously hopeful that this war ends as quickly as it possibly can. But that’s basically the size of the effort in Krakow actually in Poland. And we’re very actually, I would say, if they are listening, very proud of the work and the stance that they have taken to this, and we’re proud to have the opportunity to support them.

Okay. That’s great.

Does that help answer your question? I just want to make sure I answered your question.

It does. Absolutely. I was just looking for more detail. It feels a little clearer to pivot to something more towards the business. But the delayed hiring and the delaying of some internal projects, Jeff, I think you mentioned helping margin. Just curious with – the projects, obviously, that’s Guidewire’s choice, but the delayed hiring, is that because of a tight labor market or are you, I don’t know, pressing pause on some of the hiring efforts?

No, no, no. Yes, we are full steam ahead in terms of our hiring efforts. And in fact, we’ve been investing in some of our talent attraction functions in order to better support that. I think, it is – it has been a tight market, especially for the types of talent profile that we’re looking for. And so that has impacted our hiring plans a little bit. But I would say no change to our overall hiring plans. And then on the project side, those are still projects that we expect to complete for the most part, the internal projects that I referenced in the fiscal year. We just didn’t get it started on them as quickly as we originally thought.

Okay, alright. Great, thank you.

Our next question comes from Peter Heckmann with D.A. Davidson. Please proceed with your question.

Hi, good afternoon. Thanks for taking my question. Just in terms of the cloud deal, can you remind us a little bit about net new versus in-to-out migrations, kind of the mix that we’ve seen over the last four quarters and talk a little bit about the relative complexity of some of those on-premise to cloud deals, whether they are basically hitting your expectations or you’re finding them a bit more complex?

Yes, super question. So over the past four quarters, I would say, overall, 50-50, right, is in terms of net new versus cloud migrations. And then with respect to complexity, I think that – and this is nothing special about Guidewire. It all has to do with what you’re replacing. So to the extent that you’re replacing something, the new system has to map to sort of one for one the functionality, procedures, capabilities of the system you’re replacing. Those things, based on how complex the system is that you’re replacing, are complicated. When we do net new either new customer or existing customer, but a new line, those things are very straightforward. And so I would say that the complexity of a migration and a replacement of a system is complicated and equal to or slightly above what we expect. The complexity of a net new line of business or a net new instantiation of something that on Guidewire Cloud we can support is surprising all of us with how smooth and fast it goes, right? So when it’s a net new line, there is a lot of great technology here that can accelerate those types of projects. And so that’s kind of the feedback that we get is these things, like I said in the prepared remarks, these things are very, very complicated, and they have to be done very carefully, and they have to be done very completely. And sometimes they are slow and they take a little bit longer than we thought or we want. But on the net new side, which is a significant portion of the demand, things are going quite well, and we’re pleasantly surprised by how quickly we can execute on those kinds of projects. And I think somewhat – if you give me two seconds to go a little long on this answer. This is an interesting characteristic of Guidewire strategically, which is that we can be a platform for these companies to do the vast majority of their core system processing, the big lines of business that they need to support and run their companies. But also on the very same platform, provide them a mechanism to innovate and be agile and launch new product lines and integrate the existing product lines into new channels, all on that same core system. And I think that’s a unique characteristic of the value proposition we provide for our insurance customers. So hopefully, that helps. And thanks for the question.

Yes. Yes. Thanks for the insights. And then just in terms of – if I heard you correctly, of the 100 cloud deals closed, 70 were for InsuranceSuite, and I think you said 20 clients have at least one module live. What type of time frame would we – should we be expecting for all 70 of those to have at least one module live? Are we looking out maybe 2, 2.5 years?

No, I would say you should bring that in a little bit, probably stretches out at the most 1.5 years, and for the majority within a year. Things are ramping up a lot for us in our operations with our services and partners. And there is a lot coming online over the next 6 months. But you shouldn’t think about it as a 2, 2.5-year time line. It’s more 1, 1.5 year time line for the majority of that count.

Okay, that’s good to hear. Thanks.

Yes. Thank you.

Our next question comes from Ken Wong with Guggenheim Securities. Please proceed with your question.

Great. This question, I think, probably for Jeff. I believe last quarter, you guys mentioned having kind of planned for higher churn of headcount and didn’t see it. Just wondering any update there as far as that churn activity?

Yes. We’re still really pleased with our overall employee attrition rate. I think it’s trending below kind of what we see in a lot of our peer group in the Valley here. That being said, we did – we’ve modeled some higher attrition this year. We didn’t see that as we had expected in Q1. We had seen a little bit of increase in attrition and some key elements within product development and some areas of the organization. We’re talking a percentage point or 2 higher than what we saw previously. So it’s something we’re clearly watching. And I already mentioned how we’re buttressing some of our talent attraction efforts to make sure that we can fill those seats and keep hiring aggressively, but still trending positively. So more in line with how we adjusted our model post Q1.

Got it. And then just as we think about the kind of the higher confidence in the ARR run rate, I see that modest uptake as sort of an interpretation that you guys feel better about the business. Is that more just a byproduct of, hey, we’re another quarter along, so further along the kind of closer to the goalpost? Or is there actually some, I know it’s only 3 months, but incremental change in terms of either conversion or kind of conversations are further along and you have a higher likelihood of closing? Would just love a sense for kind of what else you’re seeing underneath that might be pushing some of those numbers higher.

Yes. So clearly, we’ve done a much better job this year with respect to linearity, and you see that in the first half results. So that is playing out very positively and something that was a push for us this year. As we inspect pipeline and look at the back half of the year, given where we are today, we feel very confident that pipeline coverage is there, the activity is high, the deals are all there for us. Obviously, as you know, our history, Q4 for us is always a very significant event. And so that is out there on the horizon and causes us to be a little bit cautious as we have good visibility into these deals, but Q4 is still a couple of quarters away. So I think that’s how we’re thinking about it. We did layer in some unexpected churn related to the Russian customers. Had that not been there, obviously, we would have raised our outlook a little bit more.

That’s prefect. Thanks a lot.

Our next question comes from Michael Turrin with Wells Fargo. Please proceed with your question.

Hey there. Thanks. Good afternoon. I appreciate you taking the questions. Maybe given the fiscal Q2 upside on just the headline numbers, revenue and operating income, it looks like you beat by more in Q2 than maybe the midpoint of the full year outlook would carry through. And so I know there was a comment around $3 million tied to Russia, and I appreciate the context of the Q4 commentary Jeff just made as well. But anything else we should just be mindful of as you pace towards the end of the fiscal year, given the Q2 upside was more pronounced, but maybe didn’t carry through on the full year guide just yet.

Yes. I mean look, I think we are trying to monitor a number of things going on. And so as we inspect the year, the first half has been very promising in terms of our ability to drive better linearity. But the big margin decline is always the back half of the year. And so we feel very good about all the activity that we are seeing there. And so I wouldn’t necessarily read anything into that other than that. There was this unexpected impact of $3 million of ARR that came out of the number. But absent that, we feel very good about where we are for the first half of the year, and it just gives us increasing confidence for us to hit our targets for the full year and slightly raise those targets. I wouldn’t say it’s always hard for us to touch when a deal is going to fall. Q2 was a very good outcome for us. And we often get the question is, did we pull forward deals. And we don’t really think about it like that. I mean these are long, complex arrangements. And so we were very pleased with the activity that we were able to get over the finish line in Q2. At the beginning of Q2, some of those deals, we may have thought would have closed in Q3. So, happy to see the team work and get those deals over the finish line. But we always think about the business on an annual cadence and think about activity and pipeline in that way.

That all makes sense. So, with $1.1 billion on the balance sheet, the buyback program, you mentioned, came to completion. How are you thinking about just capital allocation from here? Is this an environment where you could have some appetite for tuck-ins that help supplement some of the emerging categories of risk, given the broader pullback you are seeing in valuations, or maybe just some context around the optionality you are preserving there. Thank you.

Sure. Great question. Yes, pretty consistent with what we have said before is we are open to looking for nice acquisitions. As I mentioned, things are going very well for us so far with HazardHub. We are quite pleased with the interest that exists in the customer base and even outside the customer base for that product. So, we are very happy with that and gives us a little bit of confidence to be looking at things. As you say, we expect valuations to be a little or maybe a whole lot more reasonable. And as we build confidence in our cloud transformation and the success – our success in selling it, our success in deploying it or just feeling more and more confident that, that future is assured for us. That gives me more confidence that we could look more strategically at other things that we could add to the product portfolio at Guidewire. So, I feel great about the position and optionality it gives us and also the overall strategic position of the company and our ability to sort of execute on this one data point, at least under my watch, so far of HazardHub. So, all those things pretty positive. And hopefully, that gives you enough context to understand how I am thinking about this.

That’s helpful. Thank you.

Our next question comes from the line of Bhavan Suri with William Blair. Please proceed with your question.

Hey guys. It’s Dylan on for Bhavan. Congrats on the quarter and thanks again for taking our questions. Maybe two from a higher level for me. First, as you guys think about the value from a carrier perspective, right, from automation and straight-through processing being unlocked and enabled by better leverage in data, you have announced Data Studio, a number of partnerships with data providers and a number of wins here in the quarter, I think you highlighted earlier. But how big of a focal point is this for carriers as they are thinking about their operational efficiency and maybe how that contributes to some of their modernization initiatives as well?

It’s a great question. I would say some of the carriers that we work with, this is a top priority. Other carriers, it’s less of a priority, and they are focused on other things. I think that it’s – there is a few of our customers that are just extremely focused on this and see a very, very big potential for it. There is others that are more focused on, call it, customer engagement and growing the top line and sort of think about customer experience in a less automated way. And so their strategy is somewhat different. But I think the potential certainly exists in the overall industry. For, I would say, small percentage-based operational improvements, but when you multiply it by the size of the industry, pretty dramatic improvements in the overall – in the way that the industry works overall. And those are the things that we see from these customers, especially on the claims side, who are interested in just really honing in on the data points and the analysis and the models that they can apply to the workflows that drive the claims operations because there is potential there, I think to get a lot more efficient. So, it’s a bit of a mixture. And I would guess, and this is just pure – I don’t know if it’s a guess, maybe it’s an informed projection – that as this starts to unfold and you see more success from some carriers, you will see as that gets proven, this will get sort of pulled into the rest of the environments based on the success of these programs.

Got it. That’s really helpful and actually going to lead into my second question as well. So, looking at the other side of that equation, right, from a revenue optimization perspective. I think a key focal point at the conference last fall was around kind of enabling embedded insurance, right? So, kind of a lot of carriers talking about digital experiences, purchases becoming more digitally focused enabled. I guess how are you guys kind of thinking and positioning the cloud platform today as enabling this opportunity for carriers, whether established or kind of new providers to capitalize on embedded insurance within the point of consumption, how that’s more efficient maybe than the legacy systems available today and then how this could maybe serve as an overall incremental kind of driver of premium growth? Thanks guys.

Super question. I will give you the technical side of it and then the business side of it next. The technical side of it is Guidewire Cloud supports the ability to create products faster and adjust those products more quickly. And then the APIs necessary to embed those quote flows, so to speak, involving getting a price and actually committing yourself to ensure those products, those APIs get generated much more seamlessly and automatically so that these kinds of initiatives are much faster and easier to execute on. So, that’s like the technical side of how Guidewire Cloud helps the carrier with these kinds of things. But the fundamental, I guess business opportunity for insurance company, I think is pretty profound. There is a lot of projections around how people expect auto and motor lines to change over the next decade, just in terms of where people, where households, where drivers procure insurance, and whether or not it happens with the sale of the car, whether it happens the way it does today, at least in the U.S. market and sort of separated from that car purchase. But that same idea can apply to a whole bunches of different things. There is like vertical markets for small commercial insurance. You can think of different companies playing a more significant role in the distribution of insurance products to small businesses as they get started or as they get loans or as they – there is just this opportunity, I think with digitally – with digital agility, with the ability to embed these things technically and all these other business process flows that make the distribution of insurance a lot more efficient and a lot more effective. And so these things are very, very exciting for a lot of our customers. And like I said, these things all come down to IT agility. And I often don’t tell people like IT is great, right. But then you got to look at how expensive it is to execute that idea before you can assess whether the idea is going to work. And so if you can make the cost to just attempt that idea with an IT project, you can do a lot more experiments. You can just think about the approach that you take to your business in a very different way when you have a greater degree of IT agility. And that’s exactly what we are trying to do with Guidewire Cloud, with new things like our advanced product designer and our new digital layers that are embedded in the cloud products, all designed to make these experiments and these new ideas a lot more easy for companies to execute on. So thanks. I really appreciate that question.

Yes. Very helpful. Thanks again for taking the questions guys. Congrats on the quarter.

Thank you.

Our next question comes from Parker Lane with Stifel. Please proceed with your question.

Hi guys. It’s Max Osnowitz on for Parker. Congrats on the quarter. For starters, I just want to dig a little deeper on HazardHub. I know you mentioned there is a few, nice announcements, standalone deals in the quarter. Can you just talk a little bit more about the conversations around that and then what the kind of competitive market is for HazardHub and then additionally if there is room for up-sell into those kind of siloed lands or if they are just going to remain HazardHub customers solely?

Sure. Thanks for the question. So, with respect to property data, somewhat my perspective is the more you have it, the easier it is to access, the higher the quality, the better you are going to be – the better job you are going to be at assessing the risks and the underwriting price of a risk. And a very, very significant number of companies in the world can benefit from more fluid, more up-to-date, more accurate, more robust data as it relates to property risk. And the acquisition thesis was that this was a really good product, a really good company. And then we could plug it into a distribution team at Guidewire that had embedded relationships with a whole bunch of different insurance companies and just accelerate the sales. And so far, that’s playing out really well. The feedback from the customers – excuse me, the feedback from our sales team and then next, the feedback from the customers has so far been very positive. And it gives us a lot of confidence. As it relates to the competitive – it’s a reasonably competitive space. But this is a really interesting data asset to put together. The team at HazardHub did a really, really good job over a number of years, putting together the very – think of this as like really, really hard, nitty-gritty work associated with taking disparate data sets and putting them together and matching them and going out and finding the data sets that they need in order to predict certain risks and really just really fallen in love with that domain in such a way as they can put together something that is really, really robust and complete. The other side of it, which I think is very interesting, is this is all API-based. I talked about this a little bit before, is that the idea isn’t so much it’s a complete solution that does everything, but it’s a – it’s a point solution that you can embed anywhere you need it to be embedded. And because it’s all based on this idea of an API, the companies can use it wherever they want and however they want. And that’s also very interesting. So, those are all the, I don’t know, characteristics that I think are – give you a little bit more color about why I think we are seeing the – why we had the positive quarter and why we have the – why we expect and hope for continued success there.

Yes, that’s really helpful. Thanks. And then just as a follow-up, thinking about the partner ecosystem, it’s really grown over the last 2 years, especially over the last year and still the last two quarters. Is that something that we should continue to see growing at this pace or will it kind of kind of hamper down a little bit? And then what are the end expectations for this ecosystem, if you will?

Yes. I certainly hope we will continue to see it grow. And the reason is that fundamentally, what we are doing with Guidewire Cloud is we are making Guidewire Cloud easier to integrate to, okay. So, if you think what’s the level of effort for Guidewire and a partner to build an integration together and it’s x, okay. And if we can drop x down to a tenth of x or maybe someday even 100th of x, there are going to be thousands more partnerships that make sense for us to build and launch together. And so the expense necessary – because I will connect this back to a previous answer I gave about doing experiments, right, and how much it costs to do an experiment. When two companies launch a partnership together, there is a bit of a risk that both companies are taking, right. How much demand is there for – in Guidewire’s customer base for this partner solution, is it worth me doing an investment to build an integration to Guidewire in order to penetrate Guidewire’s customer base, I don’t know. That’s a risk. So, if the cost to do that integration is high, you got to be really confident that it’s going to pay off before you can justify building that integration. But as we bring the cost of doing that integration down and down and down and down, it makes the equation much easier for people to solve. And you say, “Well, Guidewire has a great insurance customer base. They have got this many customers on cloud. I can afford to do a lightweight integration to Guidewire Cloud to see what the demand is.” And you will see a lot more partnerships, a lot more partner applications available on our marketplace. I think this is a pattern that you see in a number of other enterprise software ecosystems. And it is certainly something I expect we will be able to emulate here. And as we mature our cloud offering and the integration expense start to – comes down and down and down, as we get more cloud customers and that installed base of endpoints that those partners can connect to goes up and up and up and up, it just creates a healthy dynamic that will cause the ecosystem to grow. So, that’s how I see it, and hopefully helps to answer your question.

Awesome. Thanks. That’s really helpful.

Yes. Thank you.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Mr. Mike Rosenbaum for closing remarks.

I just want to thank everybody for participating in the call today. We are obviously thrilled with our continued cloud momentum across new and existing customers and with Tier 1 and Tier 2 insurers. It’s a great validation of the strategy and gives us increasing confidence in the long-term opportunity here. And so we look forward to catching up further with many of you throughout the quarter. So, thanks very much. Have a great evening.

This concludes today’s conference. You may disconnect your lines at this time. Thank you all for your participation.