“In the short term, and even in our guidance for not only Q2, but Q3, we've kind of assumed that this new paradigm for at least what we saw in Q1 would be fairly consistent for the rest of the year.”

In context

“ing to do revenue recognition as a term license. What that means in the short term is that you're recognizing less revenue upfront. If you remember in that term license scenario, you have a larger percentage recognized immediately and then a smaller percentage recognized ratably over the rest of the contract. Obviously, in the SaaS environment, it's ratable over the whole term. When that happens, when we see more of a shift or in our case, even from a budgeting point of view, we have to make an assumption as to what that split is going to be on new business. We were assuming a higher percentage of term, which would have resulted in more revenue in the short term. Now this is a good thing long term for us. We want to see more ratable revenue, makes it easier to predict, easier to forecast. In the short term, and even in our guidance for not only Q2, but Q3, we've kind of assumed that this new paradigm for at least what we saw in Q1 would be fairly consistent for the rest of the year. As a result, the revenue is not going to be what we expected it to be, which is why you see me not raising guidance. I would have liked to have been in a position to raise guidance for revenue, matching what we did with ARR. Because of this mix, I'm actually going to see less of that revenue anticipated growth. We've kind of left guidance the same because we're actually seeing, as TJ mentioned, some additional services revenue, which is nice, and it's above what we had budgeted. That's a little bit of an offset, but this mix shift definitely will result in less revenue coming from the products in the short term. Then obviously, long term, it all evens out. Operator: The next question comes from Kirk Materne with Evercore. Vinod Srinivasaraghavan: This is Vinod Srinivasaraghavan on for Kir”