The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst
: Graham, very good to reconnect after a long time. I'm curious to get your thoughts on the CEO search. What are the attributes is the Board looking
for? And I also wanted to call out the tremendous cloud performance in the quarter. The 68% is a significant metric. You're guiding to 70%. And
that, I guess, becomes a question for Jason. As you project that out, 20% of your ARR in the next fiscal year is going -- actually, 50% is going to come
from cloud. What does that mean for the longer-term cash generation potential of the business? How much more confident or not are you with
respect to the longer-term cash generation of the business as a result of the cloud transition, which is playing out even more quicker than we
expected? Kudos.
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: I guess for either of you. Could you talk about new customer -- new cloud customer adoption? You guys talked about workload pricing for all the
comp. Are you seeing acceleration? Obviously, you're seeing strong results out of your cloud business, but are you seeing acceleration in new
customer additions on the cloud side?
Question: Matthew George Hedberg - RBC Capital Markets, Research Division - Analyst
: Got it. Actually, maybe a follow-up for you. As we start to think about turning the calendar to fiscal '23, is the sales force where it needs to be in
terms of both, I guess, capacity and productivity relative to your ARR guide next year?
Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst
: Graham, nice to hear your voice again. And I wanted to direct this question to Jason. We weren't expecting fiscal '23 guide on this call. So thank
you for providing that. I think that's a positive. And I just wanted to ask if you might unpack it a little bit, and in particular, the $3.9 billion in ARR.
And the extent, Jason, to which you might be embedding a measure of conservatism for a couple of things, the somewhat murky macro environment
out there, but also the fact that you're undertaking a CEO search and you probably have a desire not to leave an incoming CEO too tough a guide
to meet. So to what extent might you be embedding things like that or other factors in your outlook for year-end ARR?
Question: Karl Emil Keirstead - UBS Investment Bank, Research Division - Analyst
: Great. I think that's appreciated. And then, Jason, if I could ask a follow-up really on the revenue line. It's -- and I think you're sympathetic with all
of us, it's tough to model. Sometimes you guys beat pretty cleanly. Other times, it's a little bit lighter as the mix shifts. I guess as term duration
compresses and as Teresa or team do a good job increasing the cloud bookings mix, I can understand why that might create some pressure on
revenues. But in the third quarter, actually, your [6 65] came up pretty appreciably above your guidance. So despite these pressures, what caused
the revenue upside in the October quarter? And why would that necessarily reverse in 4Q?
|
