“At the same time, we expect service revenue as a percentage of overall revenue to decline by transitioning more services revenue to our channel partners, resulting in overall margin improvement.”

In context

“retention rate for the quarter was 108%, a slight decrease year-over-year. This was primarily due to the realigning of our sales force which caused upsell and cross-sell numbers to be lower than expected. As a reminder, we are in the process of realigning our sales force to implement the hunter and farmer sales motions. Moving forward, we expect to see improvements in our NRR. Now, let's review the income statement in more detail. Gross profit in the quarter was $36.2 million, representing a gross margin of 72.1% compared to 72.5% in the year ago period. The slight margin decline is the result of year-over-year increase in service revenue, our lowest margin business. Going forward, we are continuing to drive our sales efforts toward our fastest-growing revenue stream, our SaaS solutions. At the same time, we expect service revenue as a percentage of overall revenue to decline by transitioning more services revenue to our channel partners, resulting in overall margin improvement. Sales and marketing expenses were $24.6 million or 49% of revenue compared to 47% of revenue a year ago. This represents an increase of $6.4 million year-over-year or 35%. This was driven by an increase in head count and personnel-related expenses as we expanded our sales and customer success organizations as well as additional marketing spend as we invested in both our media and event strategies. We have grown our sales and marketing head count by 13% year-over-year, with hires evenly distributed across our sales functions as well as marketing and customer success, functions. The increase in head count has resulted in a $3.2 million increase in total compensation, primarily driven by salary and benefits. Programmatic spend in marketing is up $2.2 million year-over-year primarily driven b”