Good morning. Welcome to the SolarWinds second quarter 2023 earnings call. My name is Brianna, and I will be your conference operator today. Please note that this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, please press Star followed by one on your telephone keypad. To withdraw your question, again, press Star one. I will now turn the call over to Tim Karaca, Group President of Finance. You may begin your conference. Good morning, everyone, and welcome to the SolarWinds second quarter 2023 earnings call. With me today are Sudhakar Ramakrishna, our President and CEO, and Bart Kalsu, our CFO. Following our prepared remarks, we will have a question-and-answer session. This call is being simultaneously webcast on our investor relations website at investors.solarwinds.com. You can also find our earnings press release and a summary slide deck, which is intended to supplement our prepared remarks during today's call. Please remember that certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities, our expectations regarding customer retention, our evolution to a subscription-first mentality, and the timing of the phases of such evolution, our expectations regarding our partner ecosystem, the impact of the global economic and geopolitical environment on our business, and our gross level of debt. These statements are based on currently available information and assumptions, and we undertake no duty to update this information, except as required by law. These statements are subject to a number of risks and uncertainties, including the numerous risks and uncertainties highlighted in today's earnings release and our filings with the SEC. Copies are available from the SEC on our investor relations website. We will discuss various non-GAAP financial measures on today's call. Unless otherwise specified, when we refer to financial measures, we will be referring to non-GAAP financial measures. A reconciliation of the differences between GAAP and non-GAAP financial measures, as well as the definition of other financial metrics discussed on today's call, are available in our earnings press release and summary slide deck on the investor relations page of our website. Finally, we note that financial results discussed on today's call and in our earnings release are preliminary and pending final review by us and our external auditors and will be final once we file our quarterly report on Form 10-Q. With that, I will now turn the call over to Sudhakar. Thank you, Tim. Good morning, everyone, and thank you for joining us today. As always, I'd like to thank our employees, customers, partners, and shareholders for their ongoing commitment to SolarWinds. We had another strong quarter, building off the momentum we saw at the end of 2022 and into Q1, and positioning us well as we look to the second half of the year. I attribute the results to our broad portfolio of solutions, the compelling value we deliver to customers, the resiliency of our business model, and our continued execution of our priorities. Second quarter highlights include strong subscription revenue and ARR growth, demonstrating the compounding positive effects of our subscription-first strategy. Growing contribution from our observability solutions in addition to growth in our service management and database monitoring product lines. Continued solid customer retention, demonstrating the value proposition and stickiness of our solutions, double-digit year-over-year adjusted EBITDA growth, along with increased margins, highlighting the operating leverage in our business and our commitment to expense and operating discipline. I will now touch on some of these before turning it over to Bart for more color on the quarter and our financial outlook for Q3 and the full year 2023. In Q2 2023, we delivered total revenues of $185 million, above the high end of the guidance range we provided and representing a 5% increase year-over-year. We are seeing the benefits of our subscription-first transformation and delivered second quarter subscription revenue growth of 44% and subscription ARR growth of 33%. As I've said before, our evolution to subscription is not just a business model change, but a way of delivering greater value to customers. Now that we are over a year into this transformation, we continue to see the benefits of this evolution. In Q2, our in-quarter maintenance renewal rate was 93%, and our trailing twelve-month renewal rate is now 94%. The trailing twelve-month rate continues to be the highest since Q4 of 2019, showing continued improvement and reflecting the value of our solutions. We ended the second quarter of 2023 with 933 customers who have spent more than $100,000 with us in the last twelve months, an increase of 6% over the comparable period in the previous year. We are increasingly helping customers accelerate business transformation initiatives while improving productivity. In doing so, our customers continue to grow with us. Adjusted EBITDA grew 18% year-over-year to $79.1 million, representing an adjusted EBITDA margin of 43% and about the $69.5 million-$72.5 million outlook we gave for the quarter. Turning to some business highlights this quarter, I want to focus on a topic I'm sure is on many of your minds, artificial intelligence or AI, and to highlight some recent industry recognitions, our SolarWinds Day, Secure by Design event on Capitol Hill, and our brand refresh. In prior calls, I described our AIOps capabilities. We have invested in AI-powered solutions for over two years and believe customers have been experiencing improved productivity and security by leveraging our AIOps innovations. We believe SolarWinds is uniquely positioned to enable IT Ops and DevOps teams to leverage AI-based technologies for many use cases across applications, networks, infrastructure, users, devices, and databases. AI-driven solutions will play an increasingly significant role in enabling customers' teams to accelerate the time to value and reduce the time to detect and remediate issues in their environments. We are developing new solutions designed for advanced DevOps and platform engineering teams we believe will uniquely transform how organizations respond, manage, and resolve incidents. We are integrating our observability solutions and elements of service management to deliver these benefits to customers. In May, we announced the addition of transformative artificial intelligence and machine learning capabilities to our ITSM solutions. The new AI features include a service desk AI virtual agent designed to answer user questions and troubleshooting. This is intended to reduce ticket volume by enabling users to remediate easier-to-solve issues, such that IT practitioners can focus on more complex problems requiring their expertise. In addition, SolarWinds was ranked as a strong performer in the recent Forrester Wave report for process-centric AI for IT Operations, published in June. Our AI capabilities are just one example of how we continuously evolve SolarWinds Platform for our customers as they accelerate their digital transformation, drive automation, modernize applications, and undertake cloud migration initiatives, all while reducing costs. In recent months, we have received awards for our innovations across our offerings portfolio and go-to-market enhancements. I also want to spotlight the role SolarWinds plays in addressing cybersecurity. This quarter, we held our SolarWinds Day Secure by Design event in conjunction with Congressman Darrell Issa, Congressman Raja Krishnamoorthi, and CISA's Executive Assistant Director for Cybersecurity, Eric Goldstein. During the event, we showcased the importance of public-private collaboration in securing our common infrastructure from cyber risks. I'm encouraged that the industry continues to become aware of and adopt the Secure by Design principles we established in early 2021. Our Next-Generation Build System, a key component of Secure by Design, was recognized by the 2023 BIG Innovation Awards and Cloud Security Awards. The Cloud Security Awards judge stated, "This cutting-edge technology sets a new standard for excellence in the industry." Separately, we announced that our Next-Generation Build System aligns with the National Institute of Standards and Technology, NIST, Guidance for Secure Software Development. In this regard, we are an early trendsetter, leveraging our Secure by Design principles. This includes aligning our software development processes with NIST's Secure Software Development Framework, SSDF, and CISA's Enduring Security Framework, as outlined in the National Cybersecurity Strategy. While CISA will set the formal guidance for how software vendors self-attest to the SSDF later this fall, we believe we are ready today. Lastly, we recently announced a new refreshed logo and brand to signify our ongoing evolution.... portfolio expansion, and customer empowerment. As the challenges our customers face have evolved in recent years, and as the increased use of artificial intelligence has resulted in increasingly complex hybrid and multi-cloud environments across industries, we now serve a broad customer base across IT Ops, DevOps, SecOps, and Cloud Ops teams. Our new brand reflects our brand transformation, which has made us better equipped than ever to enrich the lives of our customers with simple, powerful, and secure AI-based solutions that help improve productivity and reduce costs. Now, I'd like to remind you of the priorities we laid out for 2023, and to discuss our progress towards these priorities. We believe IT environments continue to grow in complexity while budgets remain constrained, and therefore, customers value solutions that improve productivity and lower costs. I believe our comprehensive observability, service management, and database products and services are ideally suited to address these growing challenges. It remains my belief that by establishing all our ongoing innovations on the SolarWinds Platform, we can deliver even greater simplicity to our customers while creating the ability to expand the lifetime value of our customer relationships. With that, our key near-term priorities are as follows: First, we continue to seek to drive subscription adoption across our business, which is seen in our strong subscription revenue and ARR growth results. We believe this is consistent with how our customers want to consume our products, and that an increase in our subscription base provides an even more solid foundation for our revenue and margin expansion efforts. Second, we continue to exercise expense discipline in a challenging macro environment by investing selectively while managing costs and improving our operating margins, as reflected in our 18% adjusted EBITDA year-over-year growth in Q2. Third, we remain very focused on customer retention and expansion efforts, as evidenced by our improved renewal rates. Fourth, we continue to innovate on our SolarWinds Platform organically and with our expanding ecosystem to bring even greater value to our customers. The AI capabilities and Secure by Design efforts I spoke about a moment ago are excellent examples of our progress. With that, I'll turn it over to Bart to expand on our financial performance and provide Q3 and an updated full year outlook. Bart? Thanks, Sudhakar. We embarked on our subscription-first strategy in 2021. Historically, we sold on-premises licenses and maintenance to our customers. An important phase in our subscription transformation involves converting existing maintenance relationships to our Hybrid Cloud Observability product, which offers a continuum to customers to adopt SaaS solutions as their business needs dictate. We started pushing hard on this strategy in the second half of last year and continued to build momentum on these conversions in 2023, coupled with new subscription sales. The second phase began with the launch of SolarWinds Observability, our SaaS solution. Whether we sell Hybrid Cloud Observability, which is an on-premises subscription, or SolarWinds Observability, which is the SaaS version of the product, we believe this lays the foundation for even more recurring and predictable revenue and the opportunity to expand our lifetime value with customers. We now have 92% of our total revenue as recurring revenue. Turning to the numbers, we finished the second quarter with total revenue of $185 million, which is a 5% increase compared to the prior year and above the total revenue range of outlook we provided of $177 million-$182 million. You will notice a meaningful shift in our revenue mix, which reflects our subscription transformation. We continue to have a larger percentage of our sales as subscription products. We ended the second quarter with total ARR of $657 million, up 6% year-over-year. Our subscription ARR as of June 30th, was $198 million, which is an increase of 33% year-over-year. This growth is mainly due to the execution of our subscription-first strategy and the continued conversion of a portion of our maintenance base to the Hybrid Cloud Observability solution. Digging into the revenue details, our second quarter subscription revenue was $53 million, up 44% year-over-year. Our subscription revenue growth reflects the ongoing success of our subscription-first efforts. We are also seeing the results of converting a portion of our maintenance base to the Hybrid Cloud Observability product. We continue to convert maintenance customers at a higher than 1-to-1 ratio. As a reminder, as we transition to a subscription model, subscription revenue can be impacted by the timing and term of the deals. Maintenance revenue was $116 million in the second quarter, which is an increase of 2% from the prior year. We expect maintenance revenue will continue to be impacted by the conversion of a portion of our maintenance customers to subscriptions, and by our focus on structuring new sales as subscription products. These changes are consistent with our stated strategy, which we believe will improve already robust business fundamentals. Our maintenance renewal rate is 94% on a trailing 12-month basis, and was 93% in the quarter for the 2Q. Our customer base continues to be very loyal, and we are focused and pleased with our ability to get maintenance renewal rates back to historical levels. Note that as we convert maintenance customers to subscription arrangements, we exclude those customers from our renewal rate calculation. As a result of the growth in subscription revenue and strong maintenance renewal rates, we now have 92% of our total revenue as recurring revenue. For the second quarter, license revenue was $16 million, representing a decline of approximately 38% compared to the second quarter of 2022. Remember that our subscription model transformation has been in place for over one year now. Therefore, we expect new perpetual license sales performance will continue to be negatively impacted. Our increased subscription sales more than offset the decline in license revenue in the quarter. We finished the second quarter of 2023 with 933 customers, 6% year-over-year growth, who have spent more than $100,000 with us in the last 12 months. I'm also pleased to report that we delivered another quarter of strong non-GAAP profitability. Second quarter adjusted EBITDA was $79.1 million, growing 18% year-over-year, representing an adjusted EBITDA margin of 43% and coming in well above the $69.5 million-$72.5 million outlook we gave for the quarter. This is a continuation of our commitment to higher profitability in both absolute dollars and in margins. Excluded from adjusted EBITDA in the second quarter, a one-time cost of approximately $7.8 million relating to certain non-cash restructuring charges, as well as litigation and governmental investigation costs, and other professional fees related to the SUNBURST incident, offset by expected insurance reimbursements. We expect cyber incident-related costs to continue to fluctuate in future quarters, and these cyber costs are difficult to predict. Looking ahead, we will continue to monitor their environment closely, and we plan to hire selectively and continue to manage our costs in a disciplined manner. Turning to our balance sheet, net leverage at June 30th is down to 3.5x our trailing twelve-month adjusted EBITDA, compared to 3.8x as of March 31st. Our cash and cash equivalents and short-term investments balance was $178 million at the end of the second quarter, bringing our net debt to approximately $1.1 billion. On the debt front, we made $650 million in voluntary debt prepayments in 2022. Our debt matures in February of 2027. We continue to seek to bring down the leverage further with adjusted EBITDA expansion and evaluate opportunities for additional debt payments. I will now walk you through our outlook before turning it over to Sudhakar for some final thoughts. I will start with our third quarter guidance and then discuss what it means for the full year. In formulating guidance, we are optimistic that the momentum we experienced in the first half of 2023 will continue to allow us to grow our top line in 2023, driven by our expanded product portfolio and ongoing improvements in execution, as well as our strong installed base and customer retention. We believe the diversity of our customer base across sizes and industries, and our focus on attractive growth markets, should allow us to weather challenging economic conditions. That said, although we generally continue to see healthy demand and commitment from our customers, we are mindful of the macro headwinds affecting all areas of IT spending and the potential for deterioration this year. Accordingly, our outlook carefully considers macroeconomic conditions and the impact of our subscription-first business model transition. We remain focused on our strategy and what we can control, are committed to continuing to improve our profitability profile in 2023. For the third quarter, we expect total revenue to be in the range of $182 million-$186 million, representing 3% year-over-year growth at the midpoint. Adjusted EBITDA for the third quarter is expected to be approximately $74 million-$76.5 million, representing 7.5% year-over-year growth at the midpoint. non-GAAP fully diluted earnings per share is projected to be $0.17-$0.19 per share, assuming an estimated 167.3 million fully diluted shares outstanding. Finally, our outlook for the third quarter assumes a non-GAAP tax rate of 26%, and we expect to pay approximately $9.5 million in cash taxes during the quarter. For the full year, we are raising our previously provided guidance and now expect total revenue to be in the range of $740 million-$748 million, representing 3% year-over-year growth at the midpoint. This represents an increase to the previously issued guidance of $725 million-$740 million. We are again increasing the full year adjusted EBITDA to be between $308 million-$313 million, representing an 11% year-over-year growth at the midpoint. This is compared to the previously provided guidance for the full year of $295 million-$305 million. We will continue to make selective investments consistent with our priorities and remain very committed to improving efficiency and profitability, to control what we can control and in parallel, to focus on top-line growth as we have made meaningful investments in our product portfolio and go-to-market strategy, and believe that these investments are starting to pay dividends. Non-GAAP fully diluted earnings per share $0.76-$0.79 per share, assuming an estimated 166.5 million fully diluted shares outstanding. Our full year and third year, third quarter guidance assumes a euro to dollar exchange rate of 1.08 to 1. With that, I'll turn the call back over to Sudhakar for his closing remarks. Thank you, Bart. I'm very excited about our team's progress, as evidenced by another strong quarterly performance on both revenue and adjusted EBITDA. Following the transformational changes we made across our organization and product portfolio in 2022, we believe we are emerging as a much stronger player. We are making significant progress in our initiatives to deliver compelling ongoing value to customers via our subscription-first mindset. Solutions built to deliver the best time to value, best time to detect issues, and best time to remediate issues in their multi-cloud environments via simple, powerful, and secure solutions, expanding our margins even as we deliver top-line growth and evolve to a more predictable subscription revenues. The macro environment continues to present challenges to the broader software industry. Even so, I'm confident that our strategy, portfolio, and customer success orientation will appeal to customers across all geographies and verticals. We will continue to exercise expense discipline, invest selectively, and strive to deliver revenue growth and expanding margins. We are increasing our guidance for 2023 across total revenue and adjusted EBITDA, as you heard from Bart, on the heels of a strong Q2 and first half 2023 performance. In fact, our revised low end of outlook for the year is at or above the previously indicated high end of our guidance ranges on both total revenue and adjusted EBITDA. Again, I thank our employees, partners, customers, and shareholders for their commitment to SolarWinds. Bart and I are now happy to address your questions. At this time, I would like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad. Your first question comes from Sanjit Singh with Morgan Stanley. Your line is now open. Thank you for taking the questions, and nice to see, you guys, reasserting the historical renewal rates and the guidance coming up. Definitely, definitely nice to see. Had a couple of questions on the macro environment. In, in your script, you guys are pointing to, what seems like continued challenges in the spend environment. As you compare Q2 versus Q1, did the environment sort of... Was it more and more of the same? Did things, sort of tick down, or did you see any sort of improvement with respect to new business? Sanjit, thanks for the question. Between Q1 and Q2, for the most part, I would say the macro environment has been similar. What I can say about our business is that the business and the demand, as I've indicated previously, is robust. In fact, the pipeline that we all measure continues to improve, and as I've stated previously, the only variability that we see in this broader macro environment is some of the larger deals take a little longer to close. However, the diversity and the breadth of our business is what gives us the foundation for this strong performance, because we have a large number of mid-market customers, we have the larger customers, so we participate in a broad spectrum of the customer base, resulting in the solid foundation that we are building. Understood, and that makes sense. If I take that comment on the, on, on the execution and the economic backdrop you guys are operating in. If I looked at the 100K customer cohort this quarter, that did decline, I think by about 12 quarter-on-quarter. What are the factors associated with the, with the central decline in the 100K customer cohort? Absolutely. I'll, I'll highlight a couple of factors that will be fairly straightforward to digest. One is, Sanjit, as we convert more and more customers to the subscription arrangements, what you'll notice is that the size of the subscription deals tend to be a little smaller than the perpetual deals, especially in the first year. That is one factor that is contributing to it. As you pointed out, it's a fairly small number. The other point I would highlight is while it has gone down from the previous quarter, it is still 6% up from last year. That's another way to think about that. We continue to be largely a mid-market customer as a mid, mid-market vendor, as I've highlighted, previously from a strategic standpoint. We've been going upmarket with our GSI partners and channel partners. Some of the deals tend to be lumpy, especially the larger ones, but the overall trend is very positive for us. Well, I appreciate the context. Thank you. Thank you very much. Your next question comes from Rob Oliver with Baird. Your line is now open. Hi, guys. Good morning. Thanks for taking the questions. I had two. Sudhakar, just first for you, in your prepared remarks, you talked a little bit about some of the products getting traction, subscription, the database management, and ITSM and observability. I was wondering if you could give us a little bit more color and granularity around, you know, where you're seeing the most traction among those products, the most early success, and, you know, what we might expect in terms of trajectory of adoption of those products. Then I had a quick follow-up for Bart. Thank you. Sounds good. Rob, first of all, thanks for your question. Hope you're doing well. In terms of, let's take, I'll take segment by segment at a, at a high level and provide some color. If you have a follow-on, happy to answer as well. The database portfolio, the database monitoring portfolio, has been doing well across the spectrum. When I say across the spectrum, we have some very large customers who are adopting it, as well as, the mid-market base, including, our cloud motions, with our, with our partnerships, with the cloud service providers. The second part I'd highlight on the observability piece is we outlined a Hybrid Cloud Observability solution, which we launched, in fact, almost a year ago now. That's been gaining a very fast traction, largely with customers who are looking for tools consolidation, hybrid cloud deployment options, continuum to SaaS-based solutions. Because we are unique in the sense that we can help a customer self-host the solution and convert them into SaaS over time as their business needs dictate, which becomes increasingly compelling in this macro environment. That's driving a lot of the traction. Then the service management solution is a 100% SaaS-based solution that is ideal for the mid-market, and the value prop really there is, unlike other service management solution, where the time to value takes many quarters, and in some cases, years, we are able to deliver value to customers in days. That's what's driving the stickiness of it. The most interesting and exciting thing that we are doing, Rob, is not looking at them as discrete products, which of course they are and can continue to be for a long period of time, but they all reside increasingly on the SolarWinds Platform. That gives us the ability to land and expand and provide customers more unified solutions and experiences, which then reduces their cost and increases their productivity. Rob, did we lose you? Your next question comes from Matt Hedberg with RBC Capital Markets. Your line is now open. Yeah, I'll offer my congrats again, great, great results here this quarter, and, and the guidance, moving higher is, is also great to see. I, I had a question about maintenance conversion. I, I, and, maybe Bart, you might have mentioned it's converting at a higher to 1-to-1 conversion ratio, which is great to see. I'm curious, are, are there things that you're doing specifically to maybe drive, higher maintenance conversions, or is this more customer, led at this point? Matt, I'll take that as well and give you some color. When, when Bart describes it as converting at a higher rate, what it is, is we are not converting like for like. Let me give you an example. Let's say you are a network monitoring customer of ours with $1 of maintenance coming up due. Typically, when you convert, you're converting to our Hybrid Cloud Observability solution, which not only gives you network monitoring but also, let's say, systems monitoring. Typically, when we convert, we are converting to higher value add, which is the reason why I don't look at our subscription transformation as simply a business model transformation. It is more a value model transformation. Customers get more capability, are able to consolidate more tools, are able to experience lower overall costs and improve their productivity. That's what's driving our conversion factors, and, my belief is that we will continue to show that given the large size of the maintenance base, for several years to come. Great. That's, that's great to hear. Then you, Sudhakar, you started a lot of your prepared remarks with the investments that, that you guys have been making with AI within AIOps the past two years. I'm curious, where are you on that investment spectrum? You know, I, I, I assume it's, it's sort of an ongoing initiative, but, you know, a year's time from now, you know, how, how much more do you think AI will be infused in, in the total product stack? I have to imagine it, it, particularly for your customer base, it has to be a, a huge opportunity for efficiency gains and whether it's even, even security efficacy side. So just kinda curious about where we are on that investment cycle. Absolutely. The way I would describe it is in 2021, it started at 0, and we bootstrapped it. These days and going forward, I expect it to be much more in a steady state mode. I don't think we have the need to pour a lot more money into it, but most likely we'll just maintain it at this point and continually add capabilities. The reason for being able to do that was 2021 and 2022 was a heavy lift in setting up our platform capabilities. Now it's a matter of what I'd call a flywheel motion in terms of ongoing innovations across the spectrum. Thank you. Your next question comes from Erik Suppiger with JMP Securities. Your line is now open. Yeah, thanks for, thanks for taking the question. First off, good to see the debt ratio, the net leverage ratio coming down. Do you have a target for that and any change in terms or any update in terms of timing for that? Secondly, you're talking about transitioning your, your, the breadth of products onto your SaaS platform. Where are you in terms of that, that development process? Clearly you've got the observability working, but where are you in terms of the breadth of your portfolio? Hey, Eric, thanks for the questions. I'll take the first one real quick on the leverage. You know, yes, you know, good improvement this quarter, you know, it's due to a couple things. You know, our, our continued growth and our cash balance brought our net, brought our net leverage down. Then, you know, EBITDA expansion obviously helps as well. You know, you combine those things, and 3.5x is where we ended the second quarter. We've, we've spoken publicly. You know, our goal is to get down below 3x, you know, over the, over the, you know, in the next, I think we said over the next couple of years. Obviously, if we continue to perform as we have, you know, that'll, that'll happen sooner rather than later. Erik, our strategy and main use of cash continues to be focused on debt paydown, because the organic portfolio that we have built should serve our growth objectives. Of course, we'll continue to stay open for inorganic as well, but the primary focus is debt paydown. Coming to your question about the platform, as I've indicated previously, our service management platform is a 100% SaaS platform. We've released our observability as SaaS, October 2022, and we continue to expand its capabilities, and as this year progresses, more of our solutions will reside on the SolarWinds Platform. When I say more of our solutions, that already includes today, our database observability, our application monitoring, and observability solutions, increasingly our security network and infrastructure solutions as well. The team is on a fairly rapid pace towards building all of our future capabilities on our SolarWinds Platform, and that will continue to serve as a great foundation for us to not only evolve customers but also acquire new customers as we continually have been doing. Very good. Thank you. Your next question comes from Terry Tillman with Truist Securities. Your line is now open. Great. Good morning, team. This is Connor Passarella on for Terry. Thanks for taking my questions. First one, I just wanted to come back to the AI topic. On the AI virtual agent, that's gonna be included in the service desk. I know it's early in the lifecycle, but I'm just curious on how we should think about the monetization of an opportunity in a product like this, and maybe what the initial feedback has been from your customer base since the since the announcement? I have a follow-up. Yeah. I'll, I'll step back a little bit and reinforce a couple of other points as well. While we added that to the service desk and announced it more recently as one of our AI extensions, the AI extensions are being B solution set as well. In fact, one of the very first releases of AIOps that we created was to support the alert stacking capabilities of, of our customers. All of us have heard of the term alert fatigue. Customers are getting alerts, left, right, and center and do not know how to prioritize, creating both productivity and cost headaches as well as security headaches. The first releases of them, which started, in fact, in 2022, were all focused on how do we improve alert stacking, how do we help them get to the right issues faster. How do we do a better issue resolution, improve productivity and security? Think of what we've we've just done with the digital assistant as an extension of our AI roadmap. While it's early days, the feedback from our customers has been very positive because increasingly what we're doing is that our service management solution becomes a full and integrated capability for the mid-market. The other fact I would highlight here is that we are a vendor that's uniquely combining some of the observability capabilities with our service management portfolio, where we are not only able to detect issues for customers, but also automatically remediate them. That's a unique value proposition that will resonate very strongly in the mid-market from my perspective. Got it. That's really helpful to understand. Maybe just as a follow-up, on the international side with Europe and APJ, I'm just curious on how that opportunity has continued to progress, both the opening of the new data centers we talked about last quarter, and maybe what would some continued investment look like in these regions? Thank you. Yeah. I would say we are well-staffed to capture the opportunity in EMEA and APJ, both through our own people as well as a increasing and expanding set of channel partners, through our Transform Channel Program. Many of our large GSI customers are also, as you know, based in the APJ region. What I can also highlight is that our pipeline continues to grow at an accelerated pace in EMEA. The only variability that I will refer to is what I have previously alluded to, which is because of the macro situation in EMEA, some of the deal conversion cycles have been a bit more protracted. What's helping us is the diversity of our customer base, the reach that we have now built, both with our people as well as our channel partners. Great. Thank you. Your next question comes from Kash Rangan with Goldman Sachs. Your line is now open. Hey, guys, This is Jeffrey Luo along for Kash Rangan. Thanks for taking the question. Good to see the quarter, the beat and the true raise is, is good to see. I wanted to ask about the, the approach you're taking to hiring. You've said that you've taken a little bit more of a prudent approach to investments and, and maybe adding headcount. Can you give any directional guidance around where, headcount might be specifically, like quota-carrying reps, is maybe, like, on a year-over-year or a quarter-over-quarter basis? Jeffrey, I'll give you a broader response to it. We were committed to selective investments and ongoing operational discipline. I believe we are staying true to that, at the same time, making the investments needed to capture the process, have been able to show both revenue growth and significant EBITDA expansion. That will continue to be our strategy going forward, which is selective is the operative term and discipline across the board. In terms in expanding and accelerating our product portfolio as well as the go-to-market capabilities, although increasingly we are leveraging our channel partners as well to get increased leverage. Awesome. Okay. Then another question around the, the sequential decline in, in large customers. You mentioned that there's the dynamic at play of when they convert to subscription, that deal might be smaller than $100K. Can, can you talk about how many of those 12 customers this dynamic applied to in, in, in 2Q? I don't have the exact specifics, Jeffrey. We may have to come back to you on that. Okay, understood. Thank you so much. There are no further questions at this time. I will now turn the call back over to Sudhakar Ramakrishna. Thanks again, and thank you all for joining our call, and we look forward to continuing to be in touch. This concludes today's conference call. Thank you for your participation. You may now disconnect.