Josh Nichols: Got it. It’s just those two items and I would assume that those would kind of be alleviated as you move through the calendar year, right?
Kevin Kraus: They do, they dissipate throughout the year. However, historically what we’ve done as a company – is in our fiscal Q2, is when we have the annual pay increases and so forth. So there’s a few things that move up and down throughout the quarter, throughout the year, rather.
Josh Nichols: Got it, thanks.
Kevin Kraus: No problem.
Operator: Please stand by for our next question. Our next question comes from the line of Peter Levine with Evercore. Your line is open.
Peter Levine: Great, thanks guys for taking my question, squeezing me in here. Maybe just to piggyback off on the last one is, you’ve talked about obviously repaying, the convert, cleaning up the balance sheet, but if you think about, your strategy of innovation led growth. How do you manage, cash in the balance sheet versus innovation, versus what your competitors are doing, in the CCaaS market, given it is a lot more competitive today than it was 12 months ago, how do you balance that all?
Samuel Wilson: That’s a great question. So, I think I’m going to take you back to Q1 when we talked about what our sort of our fiscal plan for the next three years was. We talked about increasing cash flow and delevering the balance sheet. So step one would be, generating enough cash to paydown the debt, delever the balance sheet and put all this garbage behind us from the past, would be step one. Step two, is be an innovation led company. So we want to spend, between 10% and 15% in a given quarter on R&D that further continues, to then drive an efficient sales and marketing motion. We’re a software company and we should be judged by our software first and foremost. And so, that would be second. And then third, which is more of a swing factor, is how much do we spend in sales and marketing and those kinds of things.
And – we need to get that sales and marketing engine a lot more efficient. Now there’s a lot of overlap between R&D and sales and marketing. If you build a product that everybody wants, it’s easier to sell. And if you build a product that has PLG built in, product led growth built in, they can be more efficient to sell. And so, that’s a little bit of the innovation, we’re going through. What I’ve said in the past, and as you think forward, at the levels we’re at, the cash flow levels we’re at, we’re – we should pretty easily make our $250 million number that we promised to return to investors. And so after that, we’re more focused on spending for re-acceleration of growth, for resumption of growth.
Peter Levine: You haven’t talked about Lisa. I know she’s been on Board now for a couple of months, but maybe talk about how she’s thinking, or how you guys are thinking about go-to-market, channel versus direct, obviously the announcements you made today, but curious if, what she’s made and what she’s changing and kind of what you have in the pipeline with her, if you can share with us?
Samuel Wilson: So, if there was ever a softball, I mean, I’m absolutely amazed watching Lisa in action. It is phenomenal to watch a world-class sales executive, who really knows what she’s doing, execute her plan. And I think she has a fantastic vision. Her vision is about a balanced go-to-market strategy with, and not balanced in every region. So for example, in Australia and New Zealand, we’re focused mainly on value-added resellers, those kinds of things. But a more balanced strategy in the U.S. and more appropriate strategy in the U.S. other things. Number two is she’s very focused on the sales process, and solution selling and running a correct sales process and focusing on business outcomes versus, do you need dial tone, or are you making the move from on-prem to cloud, those kinds of things.
And then lastly, she’s tough. She has a high level of accountability, and I’m sure there’s already been some notes written, but she has a high level of accountability and high expectations that, she expects in the – GTM engine, and she asserts that accountability across the board. And so, it’s just absolutely phenomenal watching her in action.
Kevin Kraus: And I think also that, with Bruno’s on board, he’s even newer than Lisa, and we see, as our new CMO, and they work hand in glove, better than any of the previous combination CRO, CMOs I’ve seen at 8×8, so it’s a fantastic thing to see, and they’re completely aligned on a whole variety of topics in terms of the quality of lead gen, the conversion rates, all these operational things that are going on. They’re just trying to improve everything from soup to nuts. So it’s great to see.
Peter Levine: If I could squeeze one more, Sam, I don’t want to paint you in a corner or hold you accountable for this metric, but you did say 250 contact center seats up, I think 50%. We do hear a lot from your competitors that are starting on the lower end of the market, scaling up, investing a ton to kind of build-up that functionality, but can you maybe just give us an idea of how many customers that represents, or percentage of your base of contact center customers that are 250 north of that?
Samuel Wilson: I actually don’t know the exact number off the top of my head. It is not an insignificant amount of number. It’s not a vanity metric. And to be clear, our product, we’ve got customers that are in excess, thousands of seats of contact center running concurrently. The reason the marketing team pulled together the metric for me was, because we have this reputation of, oh my gosh, it’s 8×8 it only works on 12 contact center agents or eight contact center agents. It’s just BS, it’s marketing fud. It’s what competitors like to do all the time, is run around and make up stories instead of delivering value added to the customers. And so, we’ve seen a significant growth in larger contact center deals that we’re participating in, and we see it in the pipeline every day. And so, I’m sorry, I can’t give you a number. I’ll see if I can scrounge it up by next call.
Peter Levine: Thanks guys, I appreciate it.
Samuel Wilson: Thank you.
Operator: Please stand by for our next question. Our next question comes from the line of Catharine Trebnick with Rosenblatt. Your line is open.
Catharine Trebnick: Oh, thanks for taking my question. Hi, Sam, let’s go back to your press release today. You talk about these non-agents that you’re targeting. Do you have a toll addressable market for that and a growth projection? And then the follow-on question is, it seems like this is a very different sale than you currently have. So what type of sales motions are you going to put into play to make this happen? Thank you.
Samuel Wilson: Okay, so I’m going to take these in reverse order. So you talked about sales motions first. I don’t think they’re different from the new sales motions we’re developing. Yes, it’d be different from the old sales motions that we had. But I think in the new sales motions where we’re solution selling and a rep and a GTM team shows up and really dives into what the customer’s needs are. We’re going to find service workers or healthcare workers, or billing people or accounts people or inside sales reps, or any of those kinds of things in every company and get them the right solutions for that capability. That’s a great question on TAM. Let me dig, I know Gartner’s done some work on this such as Metergy and some of the others.
I mean, I’m presuming it’s a multi-billion dollar TAM, because they talk a lot about the quote in informal contact center. I really despise that term, because it implies that it’s like an informal agent. But a lot, the most use cases we see are where the worker needs contact center-like functionality, but in fact is not an agent. It’s not their day-to-day job to sit at a terminal waiting for the next case to be delivered, or to make outbound phone calls, but instead they have some other job, nurse, plumber, whatever the case may be, but they’re on call, they need to deal with emergency situations, those kinds of things. And so it’s a specific use case.
