“What we expect will tighten substantially overtime is the delta between recurring revenue growth and ARR growth, which we saw in Q1 with recurring revenues growing 20% and ARR growing 26%.”

In context

“as well as our services revenue, which are not recurring and are excluded when we calculate ARR. At approximately 16% of our q1 revenues, services is still a meaningful component of our business. But it is 9% growth rate in Q1 is much slower than the 20% growth from our recurring revenue business. The slower growth of services, which we are purposefully deprioritizing from our sales mix, serves as a drag on our total revenue growth, but does not impact ARR growth, hence the delta you see today. As we look ahead, our long-term expectation is that services will continue to decline and represent approximately 10% of our revenue. So as services becomes less a percentage of total revenues, the delta between total revenue growth and ARR growth will narrow, but it will never completely go away. What we expect will tighten substantially overtime is the delta between recurring revenue growth and ARR growth, which we saw in Q1 with recurring revenues growing 20% and ARR growing 26%. Taken together this dynamic in our financials is why we believe that ARR growth is the best measure of our underlying performance. The third point I would like to make is around our three product suites, where it Investor Day we disclose the ARR contribution from each for the last few years. While much of the questions centered around the fact that our resilience suite has consistently represented nearly 60% of our ARR, I want to point out that our teams have done a fantastic job in driving the growth of all three suites. Specifically from 2019 to 2022 our control suite has grown approximately 33% per year, our modernization suite has grown approximately 40% per year, and our resilience suite has grown approximately 48% per year. So even with our backup products, serving as the largest co”