Good afternoon, and welcome to Zuora's second quarter of fiscal twenty twenty-five earnings conference call. All lines have been placed on mute to prevent any background noise, and after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. And with that, I would now like to turn the call over to Luana Wolk, Head of Investor Relations, for introductory remarks. Please go ahead. Thank you. Good afternoon, and welcome to Zuora's second quarter fiscal twenty twenty-five earnings conference call. On the call, we have Tien Tzuo, Zuora's Founder and Chief Executive Officer, and Todd McElhatton, Zuora's Chief Financial Officer. Robbie Traube, our President and Chief Revenue Officer, will be joining us for the Q&A session. During today's call, we'll make statements that represent our expectations and beliefs concerning future events that may be considered forward-looking under federal securities law. These statements reflect our views only as of today and should not be relied upon as representative of our views as of any subsequent date. We disclaim any other obligation to update any forward-looking statements or outlook. These statements are subject to several risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, and finally, unless otherwise noted, all numbers except revenue mentioned today are non-GAAP. You can find a reconciliation from GAAP to non-GAAP results for both the current and the prior year periods in today's press release. A press release and a replay of today's call can be found on Zuora's Investor Relations website at investor.zuora.com. Now, I'll turn the call over to you, Tien. Thank you, Luana, and thank you everyone for joining Zuora's second quarter fiscal 2025 earnings call. Looking back on the quarter, I would say that this quarter was a solid follow-up to our Q1. We continued to execute our land and expand strategy while navigating the current macro environment. Let's start with the numbers. In Q2, subscription revenue was $104 million, up 9% year- over- year. We again exceeded our guidance for non-GAAP operating income, coming in at $25.6 million, which equates to a 22% operating margin, another quarterly record. We generated adjusted free cash flow of $12.2 million during the quarter. And finally, against the Rule of 40 framework, which combines growth and profitability, we closed the quarter at 31. This is ahead of our goal for the full fiscal year. Looking beyond the numbers, I would say that we continue to benefit from our customer base as some of the biggest and best companies in the world, and this shows in two areas. First, this is a segment where the depth and breadth of our portfolio truly matters. And second, this installed base continues to represent strong expansion opportunities for us that we can fuel through both ongoing organic innovations as well as targeted acquisitions. On the first point, let me give you an example from the quarter. I am proud to welcome Canva as a new customer. Canva is the leading online design and visual communications platform. They have over 190 million monthly users that have created over 25 billion designs. Now, Canva came to Zuora as part of preparing for their next phase of growth across both their B2C and enterprise offerings. What made the difference to Canva was our ability to combine billing and revenue to address their needs across the entire quote-to-revenue process and give them new speed and flexibility to drive their current and future pricing strategies. And Canva is not the exception. In fact, in Q2, half of our logos bought both Zuora Billing and Zuora Revenue to power quote to revenue. On the second point, once companies like Canva become customers, their growth and ever-evolving needs represent strong expansion opportunities. Here are some examples of customers who expanded with us in Q2. For instance, Zillow Group, which includes the Zillow, Trulia, and other brands that provide solutions to consumers and real estate professionals for buying, selling, financing, and renting homes. They began to use Zuora Billing a few years back, and in Q2, they added Zuora Revenue to automate their revenue recognition and additional Zuora Payments modules to provide customers with more flexible payment options. Another great example is a long-time customer, Oura, a great example of a fast-growing customer who has sold over 2.5 million smart rings that track fitness levels, sleep, and more. They renewed and grew with us as their subscriber base continues to grow. We've also been working with a world leader in transportation, e-commerce, and business services that generates over $80 billion in annual revenue. This customer is adopting usage-based billing models, showing that this is not just a trend for technology companies. And so in Q2, they added advanced consumption modules to turn their raw data into revenue with metering, rating, and billing. How big are these expansion opportunities? If you look at the two deals, over $1 million or more in ACV that we had in Q2. Both came from within our installed base. Proof that our land and expand strategy is working. Finally, of course, our enterprise customers also enhance our partnerships with leading system integrators. In fact, in Q2, more than half of our deals that were $500,000 or more in ACV were with an SI partner. Now, what's fueling our land and expand strategy is, of course, our technology and our product portfolio. Last quarter, I talked about how our vision is to build a complete monetization stack that helps our customers win with a strategy that we call Total Monetization. Now, what does Total Monetization mean? There was a time, a simpler time, when a more traditional static subscription model was enough. The times, they are changing, and so now we're seeing the best companies in the world introduce a wide range of monetization strategies, such as maybe they allow customers to consume by the drip, so-called usage or consumption models that we talked about with this transportation company. Or maybe they're unbundling and rebundling off their offerings to craft the perfect offering for each of their customers. Maybe they offer one-time transactions, such as pay-per-view or single purchases, before a customer is ready to commit to something long term. Maybe they offer prepaid models like the Starbucks card that many of us are familiar with, that I use to buy my venti coffees. Or maybe they deploy hybrid models that mix and match all of the above. Over time, we believe that companies will need to be able to monetize with any business model, and this is what we mean by Total Monetization. And we're seeing this concept really resonate. Those of you who joined us at Subscribed Live in the Bay Area in June saw these conversations are happening with our customers and prospects. Companies are coming to us and saying, "You captured the essence of what we're trying to do." And so this vision is fueling our innovation. Three quick examples from the quarter. First, our Advanced Consumption Billing vision. In Q2, Advanced Consumption Billing was one of our fastest-growing products, in part driven by the rollout and monetization of AI features that you are seeing from almost all the technology vendors. And in Q2, Advanced Consumption Billing is now totally enhanced with Togai. The acquisition we announced in Q1 and closed in Q2, giving us some of the most advanced metering and rating technology in the marketplace today. Second, in Q2, we also announced the acquisition of Sub(x) to add new AI capabilities that will strengthen our Zephr products, offering media companies an advanced AI-powered paywall solution. Through Reinforcement Learning, Sub(x) helps media companies put the right offer in front of the right customer, maximizing subscriber acquisition and conversion, all without manual testing and experimentation, and since Sub(x) is already a Zuora partner with an integrated solution, customers can immediately take advantage of these new capabilities, and in fact, we already have joint customers like the Financial Times doing this today, and third, on the organic innovation side, in Q2, we went deeper into Zuora Payments, enhancing our Smart Retry capabilities. If a company is trying to collect a payment and that payment fails, our Smart Retry in Zuora Payments analyzes over 15 transaction characteristics, such as the account monthly recurring revenue, the currency, the payment gateway, to automatically retry the failed payment at the most optimal time. We're continuing to make the AI technology that powers Smart Retry more and more advanced, and in Q2 alone, we helped our customers recover over $120 million in lost revenue with the Smart Retry capability. That's an increase of over 40% year- over- year. Finally, this Total Monetization strategy, this message, is resonating with the analyst community, too. Earlier this month, Gartner, one of the world's most respected and trusted industry analyst firms, recognized Zuora as a leader in the Magic Quadrant for Recurring Billing Applications for the Zuora Monetization Suite, placing us the furthest in completeness of vision. And that's not all. Back in June, we were named a leader by ISG, who some of you might know of formerly as Ventana Research, in all four of their subscription management buyer guides: B2B Subscription Management, B2C Subscription Management, Subscription Management Platform, and an all-around Subscription Management Offering. ISG classified Zuora as exemplary. Out of 24 software vendors, we received the highest rating in each of the four buying guides. And that's not all. Just last week, Zuora Revenue also ranked number one in product and strategy in MGI's 360 Ratings and buyer's guide in Automated Revenue Management or ARM. Now the last news from the quarter. We released this quarter our latest global impact report, showcasing the progress that we have made in our ESG goals and initiatives. We continue to be a carbon neutral company, and in this year's report, we took the next step. We committed to the Science Based Targets initiative and are working on setting both near-term and long-term greenhouse gas reduction goals, including reaching net zero. To recap the quarter, we continued to create new opportunities for our install base to land and expand with Zuora as we build out our monetization stack. This stack is helping the biggest and best companies in the world win with a total monetization strategy.... Our modular solutions, both organic innovations and strategic acquisitions over the last few years, give us what's needed to capture this opportunity, and of course, we continue to focus on delivering balanced growth and improved profitability. With that, I'll turn the call over to Todd to review the finances for the quarter. Todd? Thank you, Tien, and thank you everyone for joining our call. In Q2, we exceeded guidance, delivering solid results. We achieved the Rule of 30 two quarters ahead of plan, including absorbing the expenses associated with our recent acquisition of Togai. As a reminder, we define the Rule of 30 as a sum of year-over-year subscription revenue growth, plus non-GAAP operating margin. Subscription revenue was $104.1 million, growing 9% year over year. Subscription revenue exceeded expectations, primarily due to higher revenue share from payment processors. Professional services revenue came in at $11.3 million, representing a 10% decrease year over year. Professional services revenue was 10% of total revenue, and we continue to expect our professional services revenue mix to slightly decrease over time as we further expand our partnerships with SI. A little over a third of all booked ACV was partner influenced. Non-GAAP subscription gross margin was 82%, up over 125 basis points year over year. The improvement is driven by continued efficiency optimization with our hyperscalers. As a reminder, Q3 and Q4 of fiscal 2024, we benefited from one-time vendor credits. Non-GAAP professional services gross margin was -5%, consistent with Q2 of last year. For the remainder of the year, you can expect professional services gross margin to continue to be in the same range. Our non-GAAP blended gross margin was 73%, an increase of over 260 basis points year over year. Our non-GAAP operating income was $25.6 million, exceeding the high end of the guidance by $6.1 million, representing a record non-GAAP operating margin of 22.2%. We reached our goal to operate at a Rule of 30, two quarters earlier than planned. While we expect to exit the year at a Rule of 30 run rate, this metric can fluctuate from quarter to quarter. Our fully diluted share count at the end of the quarter was approximately 185.9 million shares, using both the Treasury Stock and If-Converted Methods. Now, let's dive into some of the key metrics for the quarter. Our dollar-based retention rate ended at 104%, flat quarter- over- quarter, and down three points year- over- year. This decrease in DBRR year- over- year was primarily driven by the impact of churn, which we called out on prior calls. As a reminder, DBRR is a trailing twelve-month metric. Total RPO ended at $577 million, growing 14% year- over- year. Non-current RPO was up 21% year- over- year to $258 million. Once again, we had a large number of multi-year renewals in the quarter as customers continue to grow on our multi-product platform. At the end of Q2, we had 445 customers with an annual contract value at or above $250,000. These customers represent approximately 85% of our ARR. This is up 1% year- over- year, but down 6% sequentially. We saw several of our customers consolidate into one contract due to M&A. It is worth noting that the total ARR associated with the $250,000 or greater cohort grew by more than 10% year- over- year. In addition, customers in the $500,000 or greater cohort grew by approximately 17%. We closed five deals with ACV of $500,000 or more, down from seven in Q2 of last year. This includes two deals over $1 million, up from one last year. While we are still facing high levels of deal scrutiny, especially in new business, we are starting to see some positive trends on multi-product deals. As Tien noted, half of our new logo deals we closed included both revenue and billing. ARR grew 7% in Q2, reaching $412.3 million. Adjusted free cash flow was $12.2 million in the quarter, up from $4 million we generated last year. As a reminder, adjusted free cash flow does not include acquisition-related costs and shareholder matters. Our adjusted free cash flow fluctuates on a quarterly basis through the timing of cash collections, vendor payments, and seasonality. As a result, we believe it's best to assess our cash flow performance on an annual basis. Turning to the balance sheet, we ended the quarter with $543 million in cash and cash equivalents, a sequential decrease of $3.7 million. As a reminder, we closed the Togai acquisition in Q2. Total CapEx for the quarter was $3.3 million. Turning to guidance, we assume the current challenging macro trends will continue into the second half with similar levels of deal scrutiny and elongated sales cycles. For Q3, we currently expect subscription revenue of $104.5-$105.5 million, professional services revenue of $10.5-$11.5 million, total revenue of $115-$117 million. Non-GAAP operating income of $20.5 million-$21.5 million. Non-GAAP net income per share of $0.11-$0.12, assuming a weighted average shares outstanding of approximately 152.5 million. For the full fiscal year 2025, we are raising both our revenue outlook and our non-GAAP operating income ranges, as well as increasing our target for adjusted free cash flow. It is worth noting that the subscription revenue includes the revenue share from payment processors that are not included in the ARR. For the operating income, I want to point out that we're also absorbing the expenses from both of our recent acquisitions within the updated guidance. We currently expect subscription revenue of $414.5 million-$416.5 million. Professional services revenue of $41 -$45 million. Total revenue of $455.5 -$461.5 million. Non-GAAP operating income of $90 -$93 million. Non-GAAP net income per share of $0.56-$0.58, assuming a weighted average shares outstanding of approximately 150.9 million. Based on current buying behavior, we believe it is prudent to adjust our outlook for the fiscal year, with DBRR to be between 103% and 104%, and ARR growth of approximately 6%. Double-clicking on ARR, we have a robust pipeline with some hefty opportunities within our installed base customers. But given the current environment, I remain prudent about how we set expectations for the second half, as the precise timing can be difficult to predict. You will continue to see us drive our bottom-line leverage and maintain our goal of exiting fiscal 2025 at a Rule of 30 run rate. Based on our solid performance in Q2, we are increasing our guidance for adjusted free cash flow to be $82 million or greater for the whole year. To close out, I speak with a lot of CFOs, and I'm convinced we have the right product to give companies the tools and agility needed to monetize the business models of today and tomorrow. Gartner, ISG, and MGI have declared our market leadership in this mission-critical category. In the current environment, we have taken the opportunity to dial in our cost structure and drive durable improvement in operating margin and free cash flow. This will give us the ability to drive more efficient growth in the future while maintaining or expanding margins. With that, Tien, Robbie and I will take your questions, and I'll turn it over to the operator. Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. Your first question comes from Adam Hotchkiss with Goldman Sachs. Please go ahead. Great. Thanks so much for taking the question. Tien, I guess on the total monetization point, you know, you noted that business model changes, particularly around consumption billing or something that you're seeing and other folks in the industry are seeing. What's the plan to take advantage of that from a monetization perspective? And when you look two or three years out, what are the impacts to financials and sort of variables that you look at that get you excited about that business? The way I look at total monetization, and I appreciate the question, Adam, is it really allows us to continue the journey we've been on. In many ways, you can think of it almost as an act two, where the first phase of the company was really offering, you know, billing to companies that were pure subscription businesses, right? Companies like Zoom, companies like the New York Times. And total monetization is to say, look, now that subscription businesses and recurring revenue models are becoming more prevalent, companies are really looking to be much more sophisticated and blend these different business models together. So it's not just about subscriptions, it's about consumption, it's about one-time fees, it's about outcome-based fees, it's about really mixing all these things and customizing the right business model and the right pricing model for the customer. And so I see this as an opportunity for us to really go beyond billing and go beyond subscription revenue. And we're seeing just that message really resonate with our customer base. And we're seeing the analyst community really say, "Hey, Total Monetization makes sense. We can see how you really need an end-to-end solution that has billing, revenue, payments, and more." And so, you know, when I look at Total Monetization, it's really a message that's resonating with our customer base and really allows us to continue our leadership position, ideally for many years to come. Okay, great. That's really helpful. And then, Todd, just on the revisions lower on ARR and NRR for the year, could you just parse that out for us a little bit? How much of that is just, you know, added conservatism around the environment versus anything in particular you saw in the quarter? You know, I guess we're just trying to understand to what extent you think sales cycles are maybe a little bit more elongated, and that's lasted a little bit longer than you previously thought, you know, versus just taking an added level of conservatism. Sure, Adam. I really want to be prudent as we put together our forecast. We take the guidance very seriously, and we want to meet it on a quarter-by-quarter basis. If you take a look at what we're seeing here in half two, as I mentioned, we have some meaty deals that are in our install base, and you know, timing can be challenging to predict. And so I really want to make sure that I give you something that we're very confident that we can absolutely achieve. And based on the current environment, I think 6% is a reasonable place for us to be. It certainly continues to be challenging. I'd also note, at the same time, we brought up our revenue. We brought up, and that's, you know, we're seeing other ways we're able to monetize our business, such as, monetizing payments from payment processors and other partners. You saw that we brought up the non-GAAP operating margin or profit by $10.5 million, and you also saw that we had RPO that grew 14%. So when the environment improves, I certainly feel that we're well positioned to accelerate growth, but for the environment that we're seeing right now, we really felt it was kind of appropriate to reset what we're seeing. Okay. Thanks so much. Your next question comes from the line of Jeff Van Rhee with Craig-Hallum. Please go ahead. Great. Thanks. Thanks for taking the questions. A couple for me. First, maybe just spend a second on Canva. I thought that was interesting. And what was the competitive landscape there, external vendors that might have been after that, as well as what was the internal environment? It was, they had a homegrown system that really made a lot of sense when they were small, and they were just really selling in the self-service environment. But look, the journey that any company goes on is the bigger you are, the more successful you are, the more complex you have. If you look at what they are today, right, they sell, they sell direct, they sell enterprise, they sell consumers, they sell to schools. And so, their homegrown system really wasn't working. And you can imagine a company like that, right, they've got big plans, they've looked at the market, they looked at every possible solution out there, and I'm pleased to say that, you know, we really had a set of differentiating technologies that they thought was really, really important. The last thing they wanna do is to, you know, two, three years from now, have to do yet another, you know, implementation of a system. And so we're pretty happy with our ability to meet their needs. Got it. Great. And then on the payment processors, it sounds like the payment processors was the source of the upside. Can you just contrast that? A little more color on what happened there and contrast it to what you had expected to happen there. Sure, Jeff. We've had agreements with many partners over time, and frankly, it's an area that we're revisiting. We've not monetized it as effectively as we could. We went back and did an audit with one particular one, and there was a catch-up that we had. In addition to that, we adjusted it going forward, and I would expect as you know, we move through future quarters, you're gonna see this be a source of increased revenue for us. As you know, we have over $50 billion for the payments that go through our system, and we certainly feel this is an opportunity for us to further monetize our business. Yeah, I mean, just to, you know, add, I mean, that wasn't the sole contributor to the upside, I just wanna make sure, you know, it was the one contributor. But what we really are trying to flag is, look, the value of our customer base and the value that we've built so far, right, really gives us the ability to monetize in many, many different ways. We talked about our land and expand strategy, that's working really well. And you're gonna see us continue to find, you know, other ways to monetize this valuable customer base we have. And this is probably the first quarter we talked about this, but it's something that certainly has been in the mix for some time. Jeff, I would expect that to be an ongoing revenue, and that is not part of our ARR. Interesting. Okay, great. Thank you. Your next question comes from the line of Joshua Reilly with Needham & Company. Please go ahead. Yeah, thanks for taking my questions. One of the things that we've heard from some of your partners is, you have a pretty strong pipeline of pre-IPO customers out there, and maybe they're a little bit hesitant to spend because they don't know the timing around when they're gonna go public. Just curious, is that what you're hearing from some of these prospective customers and consistent, just more generally in the marketplace, that an interest rate cut and a return of the IPO cycle will help some of that new customer activity? Maybe just starting off there. Yeah, I don't know that I wanna say to predict, you know, when the IPO market is gonna thaw, when interest rates are gonna get cut. But I would say, if you look at these companies, right, and Canva is a good example, but there's certainly many more, I wouldn't say they're obsessed with exactly when they go public. I would say they're at a size and scale right now, where going public at some point in the future is definitely in the cards for them. And, you know, now is a great time to prepare, right? We had a whole set of customers going back to, say, 2018, 2019, 2020, that maybe went public, you know, rushed in the marketplace and then went backwards and started putting in, you know, revenue recognitions and billing systems. We've talked about some of these companies in the past, but I'd say a better approach right there is to do it right now, where things are calm, so that when the IPO markets open, you're ready. I would say that is, you know, the primary mindset that these companies have. May I add one more thing as well, Josh, which is, if we look at it, a lot of people we close with billing and revenue, like Canva, right? They're future-proofing. I think that's one of the big things. You know, we mentioned Canva in the last piece. They've been buying both solutions to future-proof, the same way, you know, half of the new business deals that we did, were buying both billing and revenue for that. So it ties in very well for people as they think about also future IPO. But it certainly has been a headwind for us that, you know, as the IPO market has been slowed down, that, you know, it's something that has been a drag. And as things loosen up, that would certainly be something that would help us accelerate, but we're not forecasting that at this particular point. Got it. That's helpful. And then just following up on the commentary around the ARR guidance update for the year. As you look at, you know, this kinda 6% level, can you just help us understand, are you pulling back more on the expectations around new customer activity versus the cross-sell, or is it a little bit lower assumptions around both cross-sell and new customer activity? Thanks, guys. I would say it's, you know, balanced with both, and, you know, that's certainly reflected with the DBRR guidance that we gave of 103%-104%. So we certainly see headwinds in both of those areas, Josh. Got it. Thank you. Your next question comes from the line of Rob Oliver with Baird. Please go ahead. Great. Thanks, guys, for taking my questions. My first one is just on what you guys are seeing in terms of pricing in the market. Sounds like there's some, you know, really nice lands, including obviously, Canva, some other high-profile stuff in the pipe. But just would be curious to hear kind of what you're hearing on pricing. Are people a little bit more price sensitive? Are you seeing that in your lands? And then I had a quick follow-up as well. Yeah, I wouldn't say that. I would say the dominant trend there, right? Obviously, it's competitive, but we have a sticky product. A lot of times these customers, you know, that we're expanding with are already customers. There's certainly a bigger trend, given, you know, the last two years of an inflationary environment where companies have tended to increase their prices at a point of renewal. Our preference has been to say, "Hey, we have a lot of innovations," right? If a better way to increase the value of our contract is to introduce new innovations and add more value to customers, that's certainly our preferred way of doing then than just a flat-out price increase where, you know, they don't get additional capabilities. But I wouldn't say that we're facing you know, increased pricing pressure, and we're managing the ability to grow our customers in a positive way. Got it. Okay. Thanks, Dean. And then, Todd, just one for you, and there's been a bunch of questions on the ARR, and so you've answered a lot, but just, I guess, the follow-up on there. When you look at that pipeline for the back half of the year, you know, when you look at the renewal profile, are there, you know, are you handicapping some renewals that perhaps could be more challenging, you know, and perhaps a bit of a spike in churn or, you know, the last question was a good one on cross-sell, you know, versus new logo. Sounds like it's a mix of both, but if you can help us understand kind of what your thought is relative to, you know, churn there, that would also be helpful. Thanks a lot. We have a robust pipeline, Rob, for the second half, and I feel very good about that. However, we've got some pretty large deals that are in the install base. I think we have a very high confidence that we will absolutely win those deals. Timing is always a question, and with what we're seeing in the current environment, it just felt appropriate that, you know, we should adjust because if one of those or two of those drop out, it's not possible really to backfill it at the size of some of the transactions. So from our standpoint, it feels like this is a really reasonable place for us to land in, the second half. Maybe I'll add some color on top of what Todd says. Look, I'd start with the bigger picture. The bigger picture is on a multi-year basis, right, the shift to recurring revenues is still very much a trend that's in place. It's not gonna disappear. What you saw this quarter was continued recognition from you know, third parties, the analyst community, specifically, that we've got clearly the best product in the marketplace. And overall, we feel really good about some of the trends that we're seeing in our ability to create pipe, our ability to remain competitive, and our ability to close customers like Canva or expand with customers like Zillow. I think, you know, look, I'll say this for Todd. He heard from you all, you know, over the years that, hey, a little stronger ARR guide compared to maybe what happened last year would be helpful. And so we're halfway through the year. You know, you might remember at the start of the year, there was some sense that, hey, you know, after Q4, is technology spend gonna thaw? Is it gonna improve? We're now halfway through the year right now. You're seeing the results with other big SaaS companies who are saying, "Look, the picture out there is mixed." And given that the picture out there is mixed, let's apply good judgment and ultimately, you know, give you guys what you're looking for, which is just a better sense of what's gonna happen in the back half of the year. Fair enough. Okay, thank you, guys, very much. I appreciate it. Thanks, Rob. Your next question comes from the line of Jacob Stephan with Lake Street. Please go ahead. Yeah, thanks for taking my questions. Maybe just touching on kind of the media vertical. Obviously, you guys have made some investments there, acquired Sub(x). I'd just like to get kind of your comments on what you're seeing in that vertical with new customers and just pipeline overall. I'm really excited about the media vertical. You know, in many ways, if you look at B2B business models, it's the technology vendors, right, the SaaS companies, that have led the way to teach the rest of the world how these recurring revenue models work. In the B2C space, the media companies, especially the newspaper publishers, and the transformations they've gone through, I really do think the rest of the industry will follow. I mean, what we're seeing in that sector is they've been successful setting up paywall. They've been successful setting up these dynamic paywalls with these what they call propensity scores, right? How do we have a sense of, based on data, whether a subscriber is going to subscribe or not? We're seeing, you know, maybe you call these paywall 3.0 strategies that are, you know, not a surprise, AI-driven, right? That says, we don't want static scores, right? We want something that's dynamic, we want something that's changing, we want something that can look at the data. Given where AI is and technology is, there's no reason they can't do that. And so we've doubled down on our Zephr investment with Sub(x), which really gives it an AI-driven decision tree, right? Using, you know, an AI technique called reinforcement learning to figure out in real time, hey, this subscriber coming to your newspaper site, your app, what do you wanna do? Do you want to let them look at the article? Do you want to put an offer in front of them? Do you want to cross-sell them puzzles or recipes or whatnot? And so it's, and we believe, look, we're really focused on the media sector right now, but we believe that these techniques are certainly not specific to that sector. ... and every B2C company that has a recurring revenue model, ultimately will have to adopt these type of capabilities. Just adding further to that, you look at some of the customers, you know, we mentioned The Economist, New York Times. Like, we have one of the largest, most probably media streaming companies, that is absolutely growing significantly with our space, and it spreads that out even more significantly. So yeah, very excited about that particular vertical. They're taking advantage of Zuora capabilities for doing, like, pay-per-view events in addition to your ongoing, you know, monthly streaming costs. Yeah. I think that's- Great, great example of Total Monetization. Got it. That's, that's helpful. Appreciate that. And then maybe, just kinda wanted to touch on, you know, the, the new deal, new product deals, you know, being half, billing plus revenue. I guess, where are you seeing as we, you know, come through Q3 here? Is that, something similar that you're seeing? Yeah, look, on a personal basis, like you've heard us talk about fast lands, fast expands, and you look at this quarter and a lot of customers came to us and said, "No, no, no, we want both products, and we want them to start." So look, ultimately, we're gonna do where the customers take us. I like the fact that we can land with billing, we can land with just revenue, we can wait and cross-sell other products later. But you're seeing ultimately that the combination of these two really is where a lot of the magic is, right? That's what Canva found. That's what a bunch of other companies found. I can't just live with just billing. I need revenue recognition as well. And when it's appropriate, right, they're saying, "Look, we'd rather do it both at once." We're certainly gonna support that decision. Got it. Understood. Appreciate it. Your next question comes from the line of Brent Thill with Jefferies. Please go ahead. Thank you. Hi, this is Luv Sodha on for Brent Thill. Thank you, Tien, Robbie, and Todd, for taking my questions. Maybe the first one, for Tien and Robbie, I just wanted to unpack maybe the ARR weakness, I guess, this quarter. Obviously, it's a multi-year low for you guys at 7%. Just it sounds like the install base was pretty strong, so could you just unpack, I guess, what drove the weakness in ARR growth this quarter? I'd say if you compare the ARR growth this quarter with last quarter, I think the picture looks, you know, strong. And I would say, look, in this environment, you're seeing all sorts of companies saying it is harder to close a new customer. And, you know, and so we're certainly seeing that as well, and you're seeing good, solid growth in our install base. But Canva was a new logo. Canva, and we certainly continue to close new logos, and that feels, you know, good given the current environment. Got it. And one for Todd, if I may. Todd, you know, it seems like you've delivered a lot of profitability upside. You know, the possibility of this sustaining into the back half of the year and into next year, just any additional investments that you have planned, any color would be helpful? I think a couple things, Luv. Thanks for the question. We've been really consistent on the fact that if we didn't think we could get a good return on investing in top line, we would put dollars to the bottom line. The cost structure that we have right now is absolutely sustainable, and we believe there's further leverage that we'll be able to gain. We are committed. We will exit the year at Rule of 30, like we said. So we're very confident about that, so I'm not concerned about that. And I do believe there are opportunities for additional leverage as we go out into next year. So we certainly don't feel like this is a, you know, one-time deal. I think this is, you know, a baseline where we have. The question becomes, is: when do we see an acceleration in top line? And, you know, do we hold or do we expand margins further? But I would not see us backtracking on margins as we saw top line accelerate. Got it. Thank you. We have time for one more question, and that question comes from Joseph Vafi with Canaccord Genuity. Please go ahead. Hey, guys. Good afternoon. Thanks for the opportunity to ask a question here. Just, you know, we have maybe a lot of questions have been asked, just get an update on Togai, and I guess more broadly, you know, given kinda the surge in in focus on AI, do you think kinda the product set at this point can, you know, is holistic enough to capture the opportunity broadly around consumption-based pricing that's emerging with AI? And then I'll have a quick follow-up. I feel really good about what's going on with Togai. You know, we closed it this quarter, and so I think we're only two months in, to be fair, so it is early days, but look, we had a product in the marketplace, we call it Advanced Consumption Billing. That product is. We talked about it being the fastest-selling, one of the fastest-selling products in the last, you know, in Q2, and Togai is really part of that. So you can imagine the engineers are really saying, "Hey, the two products, you know, can be integrated, but there's something we can do now that it's one company, to make the integration even stronger, even more seamless, and even more out of the box." Then what we get is, you know, we have an industry-leading billing solution that, you know, you've seen top right corner and all that from all the analysts. We're adding to that, metering and rating. What does that mean? That means, look, if you're an engineering organization and you wanna do consumption-based billing, how do I take all this raw data, all these events that are going on in my application? Capturing it, ingesting it, translating that, transforming it, and ultimately applying a price to it, right? That's what we mean by metering and rating, and that's the capability that Togai really, you know, gave us a two-year head start in terms of what we can do just basically by ourselves. So, we're still selling Advanced Consumption Billing like we did before, but I think the vision of where that product is going is now, you know, significantly stronger, you know, multiple times better, and it's getting, you know, really positive traction when we talk to our customers and prospects about it. And Jack, just as a point to that, we had our Subscribed Live. We had great, great interest there, from all around the consumption area. So no, we're seeing real great interest in that from both customers and from our prospects- Yeah And also from our partners. I know, like, AI is a big driver, and we see that as well, but we try to highlight in the earnings call was that $80 billion logistics company, you know, logistics, transportation, you might not expect it, but we're seeing a lot of traction with usage-based, consumption-based models outside of the technology industry as well. Sure, that's all great color. Thanks, Tien and Robbie. And then maybe just finally, you know, on kind of rev share coming from transaction processors, it's kind of something that, you know, we haven't heard you guys talk about that much at this point, so appreciate that color. Just kind of getting a feel for, you know, is there, you know, I guess we could call it your take rate or something off payment volume here. Is there, you know, is there opportunity broadly to continue to increase, I guess, what you might call a take rate here off, you know, the gross dollar volumes that are, you know, are running through your billing systems? Just any, you know, how you're looking at this over time. Thanks. Yeah, Joseph, I know you know you've got deep experience in the payment space, and it's certainly something that you've talked to us about. But if I were to lift it up a level, right, we're at a size and scale now where we represent a significant business. Over $100 billion flows through our system every single year. You know, close to $300 billion, if you include revenue recognition. We've got some of the best brands and best companies in the world that many other companies would die to have a chance to work with. And the question right now is you know how can we translate that into a durable growth engine? Not that different than, say, you know, Apple has done, obviously, the much, much larger scale, right, with the App Store or, you know, with Salesforce. I was very involved in the early days of the AppExchange. I'd say it's early days for us, but certainly we're at a size and scale now where we can find other ways to monetize our customers through the building of an ecosystem. And this is an area, Joe, we're putting a lot more attention on, and to your point, it's early days, but we do believe there's opportunity for us to get incremental revenue here. And this was something that is not part of our ARR, but it does hit the subscription line. Right, and it does feel like this would be kind of super high profit revenue, right? That is a way to look at it. Yeah. Okay. All right. Thanks a lot, guys. That concludes our question and answer session, and I will now turn the conference over to Tien Tzuo, Chief Executive Officer, for closing remarks. I appreciate everyone for joining us in Q2, and look forward to seeing you, hopefully, at Subscribed Live in Europe in the coming months and/or to talk to you next quarter. Thank you very much. This concludes today's conference call. Thank you for your participation, and you may now disconnect.