Greetings and welcome to the Sumo Logic second quarter fiscal 2022 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Paul Thomas. Thank you, Paul. You may begin. Thank you. Good afternoon and welcome to Sumo Logic's second quarter fiscal 2022 earnings conference call. I'm Paul Thomas, Sumo Logic's Vice President of Investor Relations and Strategic Finance. Joining me on the call today are Ramin Sayar, President and CEO, and Jennifer McCord, Vice President of Finance and Chief Accounting Officer. Our format today will include prepared remarks by Ramin, Jennifer, and myself, followed by a question and answer session. Some of our discussions and responses to your questions will contain forward-looking statements, including statements related to the expected impact of the COVID-19 pandemic, the expected performance of our business, expectations regarding our platform and solutions, expectations regarding our go-to-market efforts and investments, the expected benefits and impact of the acquisition of Sensu, future financial results and guidance, our strategy and market opportunity, and overall future prospects. These statements are subject to risks and uncertainties. Actual results may differ materially from our forward-looking statements. A discussion of the risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission, including our risk factors filed with our most recent quarterly report on Form 10-Q, and the risk factors that will be included in our Form 10-Q that will be filed subsequent to this call. Sumo Logic assumes no obligation and does not intend to update or comment on forward-looking statements made on this call except as required by law. Our discussion today will include non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, and not as a substitute for or in isolation from, our GAAP results. Information regarding our non-GAAP financial results, including a reconciliation of our historical GAAP to non-GAAP results, may be found in our earnings release, which was furnished with our Form 8-K filed today with the SEC and on our investor relations website at investor.sumologic.com. For certain forward-looking guidance, a reconciliation of the non-GAAP financial guidance to the corresponding GAAP measure is not available as discussed in detail in our earnings release posted on our investor relations website. With that, let me turn the call over to Ramin. Thanks, everyone, for joining us today on our second quarter earnings call. We are pleased with the strong results we saw this quarter. Our performance was driven by international markets, supported by our channel partners, improving customer growth, and continued adoption of security use cases. We continued to expand our observability and security suites and received significant industry recognition for our Continuous Intelligence Platform. It is exciting to see how these investments that we have been making in our platform and our go-to-market engine are delivering results. I'll go into more detail on each of these drivers and topics. First, we saw outstanding top-line performance this quarter. Total revenue of $58.8 million was up 19% year-over-year and above the high end of our guidance range. While the North America theater performed well, our revenue growth was led by our international theaters and supported by our channel partnerships. International revenue increased 29% year-over-year and represented a record high 17% of our total revenue. Second, the contribution we saw from the channel partners was excellent this quarter. Business from our partners in the EMEA and APAC theaters each more than doubled year-over-year. We are pleased to see the investments we've been making in channel and international go-to-market deliver positive results. Next, momentum in our customer base improved this quarter. Growth across $100K, $1 million, and total customers was the highest we have seen in the past five quarters. Customers who generate more than $100K in annualized recurring revenue, or ARR, increased to 410, or 24% year-over-year, and customers over $1 million in ARR grew over 30% year-over-year. Our total customer count now exceeds 2,300 customers and showed year-over-year growth acceleration. Looking at the mix of business, we continued to see strong adoption of our full-stack Observability Suite for both new and cross-sell opportunities. In addition, we saw continued momentum from security use cases with over 50% of our new business driven by our security analytics and Cloud SIEM offerings. I'd like to share a few examples of our exciting wins that drove this quarter's performance. I'll start off in EMEA with a six-figure new logo security land at a large German retailer. Their prior open source security solution was difficult to manage and proved unreliable with too many outages impacting customer experience. They chose Sumo for our highly reliable cloud-native platform that allowed them to easily aggregate all their security data across multiple sources. In addition, our differentiated credits model gave them visibility and flexibility to decide when and how to use our various platform features. Continuing in EMEA, this quarter we landed our first new SOAR, or Security Orchestration, Automation, and Response customer since closing of the acquisition of DFLabs. The six-figure land was with a large telecom provider who was challenged with overwhelming alert volumes, complex use cases, and sophisticated attacks. Our SOAR solution gave the customer the orchestration and automation capabilities they needed to scale their security operations to meet these challenges. Moving to APAC. In this theater, we had a six-figure new logo enterprise land with a large international financial services firm. The customer is building out a new cloud-based mobile banking application platform and needed both security and observability functionality. This is a common use case we have won at many financial services firms. Our cloud-native multi-tenant architecture and credit-based licensing are a perfect fit for security and observability in these situations, giving them the ultimate flexibility for value and scale as they rapidly expand their services. Pivoting to the North America theater, in the U.S., we had a similar use case win with a mid-market fintech company. The customer is also launching a modern banking application and needs a comprehensive security and observability solution to help defend against fraud, secure critical and sensitive data, and enable engineering and infrastructure teams to develop and run a reliable service. Sumo won because of our differentiated platform, fulfilled all these needs with our audit capabilities, PCI compliance, full-stack observability functionality, and our flexible credit licensing model. These last two examples were just a few of the more than 30% of our wins this quarter that were multi-use case. When we land with a single use case, we can cross-sell into others. This quarter, we cross-sold full-stack observability into a seven-figure Cloud SIEM win we landed in Q1. The customer is a large insurance provider, and they needed full-stack observability for both IT operations and compliance use cases, where they required more affordable and reliable data retention needs. In this particular case, one of their audit and compliance standards require them to retain data for three years. These types of enterprise requirements are an excellent fit for our credit-based packaging and licensing, which allows customers like them to choose tiered data analytics that easily accommodate multi-year storage requirements in addition to the various product capabilities. Moving to our channel and partner business, we also had positive momentum with our service providers. This quarter, we had two of our largest MDRs, or Managed Detection and Response customers, expand with Sumo Logic. These MDRs continue to choose Sumo because we help them grow their business and expand their service offerings with our innovative DevSecOps platform. Looking at our service providers as a whole, their Sumo Logic business more than doubled, and they now provide Sumo Logic as a service to well over 550 customers, which are not included in our total customer count. We also see opportunities begin to emerge in spaces like IoT. This quarter, we had a six-figure expansion at a customer in this growing market opportunity. We landed this customer earlier this year, and they have since grown their usage over 10x. They picked Sumo because of its ease of use and ability to rapidly scale as their needs grow. Moving from customers to an industry perspective, this quarter, we gained significant industry recognition for our Continuous Intelligence Platform. We won several awards. The most important was being named a Visionary in the Gartner 2021 Magic Quadrant for SIEM. This was the first time we've been included in the Gartner MQ, and we are extremely proud of achieving this important milestone. In addition, we won several other awards for our leading DevSecOps capabilities. It's great to see all of our hard work recognized by not only our customers, but industry analysts alike. As we continue to invest in our platform expansion, we recently announced the launch of Sumo Logic Cloud SOAR. As mentioned, these new capabilities help SOC teams navigate the evolving and sophisticated threat landscape by leveraging a best-in-class SOAR solution to orchestrate responses to security incidents through automation, thus eliminating manual tasks and reducing response time for both analysts and operations teams in order to collectively overcome critical security challenges faster. Now, turning to observability, we announced Real User Monitoring, or RUM, and Span Analytics, which are designed to help DevOps and site reliability engineers identify and resolve customer-impacting issues faster. Real User Monitoring enables enterprises to collect and monitor performance data from end-user devices to get deeper view into end-user experiences. Sumo Logic RUM data is based on OpenTelemetry standards and is seamlessly integrated with the back-end APM data, providing DevOps and site reliability engineers full end-to-end visibility into performance issues in order to improve application reliability. Additionally, Span Analytics enables powerful analytics of distributed transactions, which are key building blocks of modern distributed applications. Span Analytics empowers users to perform sophisticated analysis of transaction steps, called spans, through a guided and automated experience that empowers even the novice user to answer complex questions. Through our Span Analytics, the powerful Sumo Logic unstructured search analytics are combined with APM capabilities, dramatically improving our observability capabilities and ultimately customer outcomes. Continuing our commitment to open source and observability, we closed our acquisition of Sensu, a leader in open source monitoring. Sumo has been committed to open source since our founding in 2010, and we're doubling down on that commitment with Sensu. With this acquisition, our customers have an affordable and scalable end-to-end solution for infrastructure monitoring. It also dramatically expands the breadth of sources our customers can collect data from, as well as differentiated, powerful monitoring as code capability that enables developers to configure and manage their monitoring needs throughout the CI/CD pipeline. In addition to the multitude of platform enhancements, we continue to expand our leadership team. Today, we announce the appointment of Margaret Francis to our board of directors. I'm particularly excited because she brings a wealth of modern software development and product-led growth expertise from leading product and engineering strategy for high-growth software companies across SaaS, PaaS, data, and developer technologies. Her expertise will help guide Sumo Logic's product and engineering strategy to further serve the DevSecOps market opportunity. Before wrapping up my comments, I want to take a moment to invite you all to our fifth annual global user conference, Illuminate 2021. It will be a virtual event, so please join us on September 28th and 29th to hear from Sumo community experts about how they are leveraging Sumo to better navigate digital transformation, and specifically, how Sumo is helping them build, run, and secure their growing set of digital services. More than half of the content will be from our customers, so this is a great virtual event to hear directly from our users on the value they receive from utilizing the Sumo Continuous Intelligence Platform. You can register at sumologic.com/illuminate. In summary, it was an excellent quarter. We saw strong financial performance driven by our international markets, channel partner support, improving customer momentum in both observability and security adoption. We are in a strong market position. Our product portfolio has never been more compelling, and we have received industry recognition for it. We are expanding our reach with partners and service providers. It's good to see the investments we have been making in our Continuous Intelligence Platform and our go-to-market efforts are yielding results, and we're excited about both the near-term and long-term market opportunity in front of us. Before moving on to the CFO section of the prepared remarks, I would like to comment on the CFO transition we had just after the close of the quarter. As previously announced, we created the Office of the CFO, comprised of Jennifer McCord, VP of Finance and Chief Accounting Officer, Raymond Yue, VP of FP&A, and Paul Thomas, VP of Investor Relations and Strategic Finance. On the call with me today are Jennifer and Paul. Jennifer will take the financial results, and Paul will finish with our guidance. Jennifer, I'd like to hand the call over to you. Thanks, Ramin, thanks, everyone, for joining us on the call today. I'll start with a brief summary of the financial highlights for the quarter and then go into more detail on each topic. First, as Ramin mentioned, we saw robust performance in the quarter in our international theaters supported by our channel partners. Next, we saw strong customer activity across billings, RPO, and logo counts. Finally, we saw improving margin performance, including acquisitions and planned investments made in the quarter. Expanding on our international performance, we delivered an impressive quarter after our encouraging Q1 results. Total new ACV internationally was up over 100% year-over-year for the second straight quarter, driven by both EMEA and APAC performance. In total, approximately 30% of our new ACV came from international, which is the highest it's been in six quarters. In addition, our international results were supported by a significant contribution from our channel partners. This quarter, our channel business saw triple-digit year-over-year growth in both the APAC and EMEA theaters. While we had significant contributions from international and channel new business, we did see some volatility in our North America theater. It has been a strong, steady contributor to our growth over the last several quarters. This quarter's performance, however, was below historical rates driven by longer sales cycles. We anticipate performance will improve in the second half of this year. Moving on to our customer activity metrics, this quarter, we saw impressive gains in our customer base. Our 100k customers increased 24% year-over-year, and our $1 million customers grew over 30% year-over-year. Our total customer count increased as well to over 2,300 customers and showed year-over-year acceleration. Gross retention improved substantially quarter-over-quarter as the large M&A-driven customer churns we've seen in the last two quarters eased. However, dollar-based net retention, as we've previously discussed, did decline to a few percentage points below 110%. While we see improving strength across our total customer base, we do expect to continue to see volatility in our dollar-based net retention rate. Over the medium to long term, we expect dollar-based net retention to increase. Turning to billings, calculated billings for the trailing 12-month period totaled $249.2 million, up 30% year-over-year. Recall that we look at calculated billings over a trailing 12-month period, as this metric can fluctuate from quarter-to-quarter due to the timing of our renewals and billings duration for larger customers. Therefore, we believe a 12-month measurement period best reflects the fundamentals of our business. Moving to remaining performance obligation, or RPO, we're continuing to see our new customers make larger and long-term commitments to our platform. This quarter, RPO increased 55% year-over-year, driven by the size and duration of new and expansion contracts. Average ACV of new logos increased over 50% year-over-year, and our average land agreement is approximately two years in length. In addition, current RPO also increased 31% year-over-year. I'll review the income statement in more detail. As a reminder, unless otherwise noted, all metrics are non-GAAP. A reconciliation of GAAP to non-GAAP financial measures is included in our earnings release and posted on our website. We delivered compelling performance in the second quarter. Total revenue increased to $58.8 million, up 19% year-over-year. Second quarter revenue, excluding our largest customer, was $54.9 million, up 21% year-over-year. Recall that we break out our largest customer because of variability and seasonality that differs from the rest of our business. Moving on to gross margins, in Q2, we saw 72% gross margin compared with 75% in the prior quarter and year-ago period. The decline was driven by a faster ramp in new features and continued regional expansion of our cloud-native platform. We anticipate gross margin will improve over time as we continue to optimize our platform. Now moving on to operating expenses. Sales and marketing expense was $27 million or 46% of revenue, consistent with the year-ago period. We're continuing to invest in go-to-market capabilities, and we plan to continue investing going forward. Research and development expense was $17.5 million or 30% of revenue, compared to 27% of revenue in the year-ago period. This increase as a percent of revenue was driven primarily by our acquisitions of DFLabs and Sensu, as the majority of the employees are in R&D functions. General and administrative expense was $10.2 million or 17% of revenue, compared to 13% of revenue in the year ago period. G&A expense includes increased costs associated with operating as a public company. In total, our operating margin was - 21% or 4 percentage points above the high end of our guidance range, driven by revenue outperformance in the quarter. We are pleased with the margin outperformance after having closed multiple acquisitions, continued platform expansion, and invested in go-to-market capabilities. Net loss in the quarter was $11.5 million or $0.11 per diluted share based on approximately 107.9 million weighted average diluted shares outstanding. Now turning to our balance sheet and cash flow. We ended the period with $371.7 million in cash and cash equivalents. Free cash flow in the quarter was negative $5.6 million or negative 10% of revenue, compared to negative 35% in the year-ago period. In summary, it was a strong quarter. We saw robust financial performance driven by international theaters and channel partner support. Customer activity improved significantly with compelling growth in logo counts, billings, and RPO. In addition, we delivered margin outperformance while continuing to make investments in our platform and go-to-market engine. We continue to be excited about both the near and long-term potential of our platform. I'll now hand it over to Paul to finish with guidance. Thanks, Jennifer. Turning to guidance for the full fiscal year 2022, we are increasing our guidance as we expect to see continued momentum in our platform in the second half of this fiscal year. We expect total revenue of $236.8 million-$238.8 million, representing a growth rate of 17%-18% year-over-year. Revenue excluding our largest customer of $221.2 million-$223.2 million, representing a growth rate of 18%-19% year-over-year. non-GAAP operating loss of $55.5 million-$54.5 million, or an operating loss of 23%. non-GAAP loss per share of $0.52-$0.51 on approximately 108.3 million weighted average shares outstanding. For Q3, we expect total revenue of $60.3 million-$61.3 million, or a growth rate of 16%-18% year-over-year. Revenue excluding our largest customer of $56.1 million-$57.1 million. This represents a growth rate of 17%-19% year-over-year. Non-GAAP operating loss of $15.5 million-$15 million, or an operating loss of 26%-24%. Non-GAAP loss per share of $0.14 on approximately 110.2 million weighted average shares outstanding. In summary, as Ramin and Jennifer mentioned, we saw continued momentum this quarter. These results give us confidence that the investments we have been making are delivering results, we will continue to expand our efforts to capture the growing market opportunity in front of us. With that, Ramin, Jennifer, and I are happy to take any of your questions. Operator? Thank `. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment and maybe necessary to pick up your handset before pressing star keys. One moment please while we pull for questions. Thank you. Our first question comes from Matt Hedberg with RBC Capital Markets. Please proceed with your question. Oh, great. Thanks for taking my questions, guys. Ramin, for you, it was really good to see the overall results, I think you talked a lot about channel and international. I think a lot of that showed up in really strong RPO growth. It sounds like, though, that you did highlight some North America volatility on some longer sales cycles. I'm wondering if you can talk a bit more about that. Was it company specific? I guess I'm wondering, what are you doing to improve cycle times there in the North America theater? Hey, Matt. Good to hear your voice. Thanks for joining us. I think generally in Q2, we saw slightly elongated sales cycles, particularly with approval processes. I don't know if it was because there was pent-up demand and vacations and the like, but we saw some deals slip in the enterprise segment in particular. Good thing there is we've closed several 100k+ deals that had slipped already in the first part of August. I'm not sure how much that is kind of the seasonality of where we're at. We did see positive momentum entering the second half overall as it pertains to fully ramped reps in terms of pipeline and other signals that were giving us the continued confidence to continue to invest, though. No, that makes a ton of sense. I guess from a guidance perspective, really as a follow-up, I guess, for Paul or Jennifer, I think you grew total revenue about 19%, and you're guiding for slight deceleration, I think about 17% in Q3 and 18% in Q4. Can you talk about some of the underlying assumptions there? It looks to me like there's maybe a bit more outperformance from your larger customer than our prior assumptions. I guess I'm wondering what sort of drove that. I assume maybe the balance of the business may be caution on some sales cycles, but just kind of curious of the components of the guide. Matt, this is Paul. I think I'll start on the guidance and then I think Jennifer, you can comment on the large customer. In Q2, we saw strong performance like you highlighted, 19%, nearly 20% total top-line growth, which is a significant improvement from Q1. If we go back to the IPO story, remember that we talked about investments that we were making at that time, were going to drive growth and improve growth in the second half of this year. We feel like we're delivering on that expectation, we're going to continue to invest in the future. We're raising the full fiscal year, not just because of Q2, you are seeing some benefit of that in the second half as well. We think momentum is improving across the business, and we're in a strong position to deliver on that improved performance in the second half. Regarding the large customer, we actually did see recently that they extended and expanded their contract with us. The expansion was actually from additional use cases that they added. Over time, we've been able to get better visibility into their needs and the utilization of the platform. Our expectations for their performance is going up. That's really good to hear. Thanks for the color, guys, and best of luck. Thank you. Our next question comes from Derrick Wood with Cowen. Please proceed with your question. Oh, thanks for taking my questions. I guess first, Ramin, you guys have released a lot of new product over the last couple of quarters, SOAR, more things in observability. How are you folding these new products into the go-to-market engine? Are you doing more sales segmentation, or is it really about bringing training AEs on all the products? What's that ramp time look like, and when do you think it could start to be more meaningful to the top line? Hey, Derrick, good to hear your voice, and thanks for joining us. You're right, the innovation engine continues to be strong, both organically as well as inorganically, as you mentioned. I guess there's a multifaceted answer to that question. Some of it has to do with how we make it easier for our end users to take advantage of new features pretty seamlessly, and that has a lot to do with the credit-based licensing and the packaging that we've talked to you about before. Another part of it is out of the gates, we tend to push more than one use case to cross-sell, and we mentioned that this was another strong quarter where greater than 30% of our new business land was multi-use case. That naturally leads itself to further adoption. Third is a big effort underway to really train and enable the entire go-to-market organization to be able to go back into the install base and do the cross-sell, up-sell campaigns with all the new capabilities. The fourth thing I'll say is we do have a specialist organization on cyber, and they kind of help with the larger, more complicated deals on the security side. Less relevant on the DevOps side of our business because that's more of a direct practitioner bottom-up sale. That's what I mean by a multifaceted answer to your question, but very intuitive one. Thank you. Great, thanks. Maybe a financial question for Jennifer or Paul, and good job on the operating cash flow side. One area that's come under a bit more pressure the last couple of quarters has been gross margins, and just wanted to drill into this. Is this from acquisitions? Is this from product mix? Where do you see kind of gross margins leveling off from here? Yeah, sure. For gross margins, there can be variability in it as we release new features or if we expand into new regions. Typically, we do see some impact on gross margins. In Q2 in particular, we actually had faster adoption of some new security features, which did put pressure on margin. However, as we've mentioned before, we're continuously optimizing the platform. We've demonstrated in the past that we can deliver on that optimization. In the prior quarters, we've got really strong gross margins. We do expect those to go back up. Great. Thank you. Thank you. Our next question comes from Sanjit Singh with Morgan Stanley. Please proceed with your question. Thank you for taking the questions. Ramin, I wanted to touch on some of the comments you made in your script around the cross-sale efficiency in the quarter, particularly with respect to the security cross-sale and the observability cross-sale. From a sales execution standpoint, I want to get an understanding of how these deals are sort of enabled, meaning how much sort of extra calories or how hard is it to drive this cross-sale motion? Or is it sort of natural as security and observability start to converge from a capability standpoint, and also from an organizational standpoint. Is that just making it easier to do that cross-sell? Right. Sanjit, good to hear your voice too. I think there's a few different things that are driving this, and it kind of depends on the segment of the market, and the enterprise versus the mid-enterprise versus mid-market. There's some variances there. Generally, I would say I don't agree with the thesis or premise that these markets are consolidated or converging. They are different buying centers, they are different needs and different data types. What we do see, however, is the acceleration of workload migration, and therefore workload protection needs from a security point of view, helping the observability efforts. Secondly, a strong pickup in the migration from legacy SIEM to cloud-native SIEM. That's what's helping us land the initial deal, and then use the CISO and the security operations teams and the threat hunters and analysts to help champion this into other parts of central IT or lines of business to get them to adopt more Sumo features and capabilities. Very thoughtful answer. It makes a ton of sense. I wanted to come back to Jennifer's comment on the dollar-based expansion rate ticking below, I think it was 110% this quarter. It looks like it's been down-ticking for the last couple of quarters. I think the primary aspect here is some of the churn from the larger customers you saw last quarter. In terms of this sort of bottoming out and then hopefully heading back north of 115% again, is it just a function of these churn impacts are just going to have to come out of the number four quarters from now? Or is there incremental churn that you're sort of seeing in the business that's weighing on the dollar-based net expansion rate? Hey, Sanjit, this is Paul. I'll take that one. As you highlighted, we did see a decline as we expected and had talked about before. To your point, the good news is there's no large M&A-driven events to talk about this quarter, like we've had to address in the past. That means our gross retention is actually improving. It's actually back to near historical levels. The last piece that we're really waiting for is expansion, and I think that's the one that's difficult to predict the timing of how fast that's going to come back. If you look at our logo churn is at a multi-year low right now. New customer activity has improved, and we've got more product to sell. We do think it's just a matter of time for these customers to start expanding with us, but it's just hard to predict the timing. As you mentioned, there's the four-quarter element on top of that, of the averaging of the number. Makes a lot of sense. Thank you, Paul. Our next question comes from Rob Owens with Piper Sandler. Please proceed with your question. Good afternoon. Thanks for taking my question. Just one from me. Was wondering if you could drill down on the international strength you're seeing, and in particular, is this new channel just development of those markets? Because it's been a couple of quarters of strength. Thanks. Rob, good to hear your voice. A couple things on the international theater for us. We had strong contribution from channel in EMEA and APAC, but also through our MSP, MSSPs, and VARs helping our business there. We saw combined that be over 100% growth year-over-year. International revenue was up 29%, and bookings was up greater than 100%, and is a record quarter in terms of the mix on the booking side for international. This is exactly what we were investing in, frankly, a year plus ago, before we hit COVID and kind of pulled off a little bit, but now have been re-accelerating that investment so we can drive, obviously, APJ, Japan, EMEA theaters as part of our bookings diversification plan. Secondly, I'll say that one driver to that has been around security in international, particularly in EMEA. We saw strong contribution from multi-use case there as well. In APJ, we've seen a lot of observability opportunities, and in ANZ, a lot of security opportunities, coupled with Korea and little bit in India. Great. Thank you. Thank you. Our next question comes from Brent Thill with Jefferies. Please proceed with your question. Hey, Ramin. On the new customer adds, good number. You had to go back in the model a while to find that strength. Can you just walk through where you're seeing that new logo strength? Hey, Brent. Good to hear your voice. I think it's across the board, to be honest with you. We're seeing it across multiple theaters and more importantly, off multiple segments. Both SMB and mid-market, which was our run rate transactional business, which was really strong this past quarter, as was the productivity there in terms of ramp and contribution. Also in the enterprise segment for us generally overall as well. I think the other aspect of it is that we saw great contribution from the various marketplaces, and therefore channels associated with that, reducing some of the friction and deal timing aspects. That's a big effort that we've been investing in with AWS, now with the Red Hat IBM Marketplace announcement, and more to really reduce that time to decide to procure effectively. Just real quickly on your hiring plans, I think last year you ended at 130 in sales. Can you give a sense of what you're expecting to do this year and anything to keep in mind in terms of how you're building out your own internal and external AEs? Sure. We all know that the labor market is very tight right now, and that's globally speaking, not even just domestic. In particular, in domestic, it's pretty competitive market for enterprise reps in North America. However, in Q2, we had north of, I'm remembering off the top of my head, 25% year-over-year growth in fully ramped enterprise reps. Similarly, in the mid-market ramped productivity, I believe, correct me if I'm wrong, Paul, was back to historical levels that we haven't seen in a while. Okay. It's important to know that the ramp that's happening both in the mid-market as well as enterprise, as well as globally, is faster than our revenue growth, which is exactly why it gives us more confidence to continue to invest. Great. Thank you. Thank you. Our next question comes from Bhavan Suri with William Blair. Please proceed with your question. Hey, guys. Thanks for taking my question. Let's start off maybe with the current RPO and trailing 12-month billings. Those are really solid, like 30% growth. I guess, and maybe this is for Ramin and Paul, just help us walk through, given that growth, how that flows into revenue, and when do we start seeing that? Again, I understand it's some longer-term contracts, because we even look at the current numbers. How does that flow into revenue to drive similar sort of growth in revenue? Those two metrics certainly look really healthy. I can start with that. Sure. For billings and actually current RPO, that can be impacted by the timing of renewals, and we actually see that every quarter. I think we mentioned even last quarter we had a large one, which can impact the bumpiness as you look sequentially. We're happy that it's continuing to grow faster than revenue, and we would continue to see, if you look at it on a trailing 12 months basis, that it would, over the long duration, would align. Yeah. I guess at some point we should see that revenue growth start to head towards the, again, over a 12, 18 month period, towards that current RPO billings growth. I was just making sure at least my mental math was similar to what you guys would expect, too. Yes. Great. Okay. Ramin, for you, let's touch a little bit on the mid-market here. It's done well. You've made some investments both in sales, but sales motion to reduce friction, to make that process as frictionless, and it sounds like you made some good progress. I guess I'd love to understand if you could break apart how much of the improvements were from improving macro versus specifics of the changes you're making. What inning are we in that process of sort of removing friction, especially for that mid-market type sales motion? I'm not sure I can delineate how much is improved macro versus our enablement and focus on that. I think it's a combination, honestly, of the two. We do see some verticals and some aspects of SMB globally still volatile, to be honest with you. I don't want to take one data point in North America and apply that everywhere. Sure. I can tell you that there's a multitude of focused areas for us on that transactional business. One is really with respect to our product-led growth or PLG motion. That's a separate business unit for us, and that's a separate product focus and separate go-to-market. Second is around how we enable different types of partners to supplement and support us. That's an area where we're now leveraging some MSPs and MSSPs and MDRs in that segment that we're historically typically focused on the enterprise side, right? That help us with security, and then also we can land and expand with observability. The third is just focused sales plays and training and enablement on everywhere from the SDR to the AEs and CS folks in that segment of our business. Got you. Helpful. Thanks, guys. Appreciate you taking my questions. Good to hear your voice. Thank you. Our next question is from Mark Murphy with JP Morgan. Please proceed with your question. Hi, good afternoon. This is Matt Koss on behalf of Mark Murphy. Just a question on the slipped deals and the longer approval cycles. Was it only longer approval cycles, or was there something else that happened with these? When in the quarter did you begin to see the possibility that they wouldn't close? Are you also still seeing some of those longer approval cycles? Well, we're in the middle of Q3, and I won't comment on that since we're talking about rear-facing results. I can tell you that I think a lot of what we saw in Q2, the lumpiness, so to speak, in the back half of the quarter, was honestly some aspects of what we anticipated given people's pent-up demand and desire to get away, employees included, but most importantly in terms of our customers and prospects and partners. I can tell you that some of the slipped deals that were already in procurement and the legal and all that had come through already in the first part of Q3, like I commented before. That's kind of the gist of how we see it. I don't think it's a broader issue with Sumo or the market. I think it was just an isolated issue here in the U.S., North America enterprise. Yeah, I think you may be asking, this is Paul, underneath that about just was there any change to the competitive dynamic that contributed to that? The answer to that is no. There's no change to the win rate, no change to our late-stage performance. It was predominantly just the cycle closing, and we've since closed many of those deals. Okay. Thank you very much. Thank you. Our next question comes from Kingsley Crane with Berenberg. Please proceed with your question. Hi, thanks. Great revenue number. Also, the revenue from your large customer, I think it increased pretty significantly after declining for a few quarters in a row. I'm wondering, how have the conversations with that customer progressed? Are they adopting newer features like Kubernetes, or is it more of a data volume increase that's driving that change? Kingsley, good to hear your voice, and thank you for joining us. As Jennifer commented earlier, that large customer had extended and expanded our contract with them, and that was driven by the existing use case as well as an expansion use case from additional needs across other parts of the business. One was an organic, one was an inorganic aspect of that. Most importantly, I think we feel now that we have much better visibility into their needs and their utilization, and therefore we can have stronger confidence and expectations for their performance that's going up through the back half of this year and into next year. Okay, thanks, Ramin. That's super helpful. One more. I think we've had gross margins move down slightly over the past few quarters. We've also been investing a lot in different partnerships, Sensu, Red Hat Marketplace, as well as the MSP channel. I'm wondering, as we continue to recover in the back half of the year, how do we expect gross margins will progress relative to revenue growth? Hey, Kingsley. This is Paul. I'll comment on that. We talked about the step down this quarter being related to product mix and faster adoption of newer security features. We've got a lot of new features coming online in the back half of the year, so I think right now it'd be appropriate to think of them kind of in the same range.