“As we look to our revenue guidance for the fourth quarter, we're now assuming that approximately $12 million of existing customers' renewals will convert to SaaS in Q4, which is up from $10 million previously.”

In context

“es realized in Q3 continue to provide us with confidence in the 25% to 30% pricing uplift and margin structure that we previously provided. In the third quarter, a significant amount of SaaS deals were sold to new customers. So, we again saw an increase in existing customers converting to our SaaS offering. In the third quarter, we had approximately $10 million in conversions of existing customer, impacting our Q3 revenue. To be clear, this is the renewal amount that was previously booked as an on-prem subscription that is now SaaS, which causes a headwind to our reported revenue and operating margin, but does not impact ARR or free cash flow. The $10 million from this quarter does not include the uplift that we realize from these conversions, which is accretive to ARR and free cash flow. As we look to our revenue guidance for the fourth quarter, we're now assuming that approximately $12 million of existing customers' renewals will convert to SaaS in Q4, which is up from $10 million previously. In the third quarter, ARR grew 16% year-over-year to $517.5 million. Year-to-date, we generated $46 million of free cash flow, which was up from $0.8 million over the same period last year, reflecting the inherent leverage in our model, as well as our commitment to balancing top-line growth with improving cash flow generation. In Q3, we continue to see a macro environment that was similar to the first-half of the year. We're still seeing deal scrutiny and longer sales cycles across the board, which is impacting customer purchasing patterns and is constraining our near-term results. We expect these longer deal cycles to continue, along with the associated budgetary scrutiny, and our updated guidance takes this into consideration. Turning now to our third quarter results in more detail, bef”