“We expect these longer deal cycles to continue along with budgetary scrutiny and our updated guidance already takes this and more into consideration.”

In context

“in. At the same time, this causes an initial headwind to reported revenue and operating margin. However, despite the headwinds to our traditional income statement metrics, we believe this is a huge positive and should be viewed as such. In the second quarter, ARR grew 17% year-over-year to $497 million. Year-to-date we generated $40 million of free cash flow, which was up from $3.9 million over the same period last year, reflecting the inherent leverage in our model as well as our commitment to balancing topline growth with improving cash flow generation. In Q2 we continued to see a macro environment that was similar to Q1. We are still seeing deal scrutiny and longer sales cycles across the board, which is impacting customer purchasing patterns and is holding back our near-term results. We expect these longer deal cycles to continue along with budgetary scrutiny and our updated guidance already takes this and more into consideration. Turning now to our second quarter results in more detail. Before I get into the numbers, let me remind you of what we’ve said for a while now, ARR, free cash flow and ARR contribution margin are the leading indicators for this transition. Q2 total revenues were $115.4 million, up 4% year-over-year. During the quarter as compared to the same quarter last year, we had approximately a 15% headwind to our year-over-year revenue growth rate as a result of having increased SaaS sales in our bookings mix, which are recognized ratably versus the upfront recognition of our on-prem subscription products. Subscription revenues were $91.1 million and maintenance and services revenues were $24.3 million as our renewal rates were again over 90%. Moving down the income statement, I’ll be discussing no”