“We estimate that to be about 200 basis points to 300 basis points for next fiscal year.”

In context

“Brian Carolan (CFO): Okay. Hi, Keith, it's Brian here. So I'll take those. Those are two separate questions. Let's try to get through this fairly quickly. So the customer penetration, again, we focus on our target account list. We have about 15,000 accounts that are identified there. These are the larger accounts. They typically have identities of 5,000 and up. They're multibillion dollars of revenue. It's the more complex environment. So that’s kind of our sweet spot. We're only about 14% penetrated in that segment of our target account list. So again, lots of headroom there. We are landing larger and larger. We lead with SaaS now, we lead with our SaaS suites that we talk about, particularly business and business plus in terms of addressing those more complex environments. So again, this is early days for us, we think, and we're under-penetrated and there's a lot to headroom because there's a lot of customers in that space that are just primed for a more modern SaaS platform-based solution. More to come on that. With respect to our operating margins, so just to step back, we’ve had 17 points of expansion over the last two years. So I think that we’ve really demonstrated the ability to grow at scale with ARR of close to 30% while delivering efficiencies and decent operating margins. As we re-enter the public markets for the next year, again, public company costs should be about 50 basis points of a headwind to expansion on that. But more importantly, as we continue to transition to more and more SaaS, and again, we’re modeling about 90% of our net new ARR coming from SaaS next year, that’s going to create an interim period revenue headwind for us and also an operating margin headwind. We estimate that to be about 200 basis points to 300 basis points for next fiscal year. We’ve made a lot of progress. There’s more to go longer term for sure. We’re focused on a balance of both growth and profitability. We’re not expecting that right out of the gate, but we do have a lot of levers to pull, especially within sales and marketing, a little bit within R&D, and some G&A. So, again, we’ve accomplished a lot, but we do have more efficiency measures to come in the future.”