“We expect to see our overall gross margins remain at approximately these levels, or slightly higher going forward.”

In context

“rcentage points since last year. It is important to point out, we do expect some slight fluctuations from quarter-to-quarter. As we saw this quarter, our net retention rate was down 1 percentage point from Q2 2021. Overall, the NRR trend is where we expect and we anticipate continued improvement in Q4 as we refine our processes and invest in our customer success, technologies, and Team. Now let's review the Income statement in more detail. Gross profit in the quarter was $41 million, representing a gross margin of 76 % compared to 75 % in the year-ago period. This margin improvement is due to the continued shift in mix of our revenue towards subscription and a way from maintenance and services. Subscription revenue gross margin improved to 87 % in Q3, up from 86 % in the year-ago period. We expect to see our overall gross margins remain at approximately these levels, or slightly higher going forward. As service revenue, our lowest margin business is shifted to our partner channel, and becomes a smaller percentage of our total revenue. Sales and marketing expenses were $23 million or 43 % of revenue compared to 35 % of revenue a year ago. This represents an increase of $9.1 million year-over-year or 65 %. This increase was driven by an increase in headcount and personnel-related expenses as we expanded our sales and customer success organizations, as well as an additional marketing spend as we invested in both our direct sales and channel strategies. We've grown our sales and marketing headcount by over 50 % during the past year and have increased our marketing spend by 113 % year-over-year. We intend to continue to invest in sales and marketing as we further drive awareness in the ma”