“We expect this to improve in fiscal 2024 compared to fiscal 2023, providing us with favorable conditions and predictability in our model.”

In context

“Gary Merrill (CFO): Yes, certainly. This quarter, we introduced a couple of metrics that highlight the strength of our land, expand, renew strategy. One of these is the net dollar retention for subscriptions, which stands at 107%. We’re also very pleased with the Metallic net dollar retention of 125%, indicating a strong renewal process. Most of our shareholders and analysts know that we have a growing base for subscription renewals under our term-based license model. We expect this to improve in fiscal 2024 compared to fiscal 2023, providing us with favorable conditions and predictability in our model. Historically, the average duration of these deals has been two to three years, typically rounding up to three years. However, given the current environment, we are experiencing some compression in term length, which may impact the period P&L. Despite this, there is no effect on ARR, and it actually contributes to stronger velocity. Currently, our average term length is likely closer to two years than three, and we are concentrating on scaling that. This will offer us good predictability heading into fiscal 2024 and enhances our confidence in our guidance.”