Catharine Trebnick: But I get that, I understand the non-agent part. I mean, would this also fall in with the light contact center that everybody’s bouncing around with a new name, calling them light also?
Samuel Wilson: Yes, yes. But I mean, like what is that? What’s a light contact center? It’s like, the problem is like informal contact center, light contact center are to me terrible names, because it’s like light beer. Is it a beer or is it water? I mean, it’s like neither. And so it’s, I don’t know, I really think, and that’s why we put up the press release today, to start the dialogue of what really the category should be as we go into these products. And it’s, you know, look, I know some of our competitors have some products in this area and I think this product is more analogous to them. They call their – products contact center, 99% of the time I laugh. They’re not contact center products.
Catharine Trebnick: Yes. And then what do you have for like you said it was in beta. So at what point do you think it will go GA and then what percent of revenue do you think you’ll be able to drive in the next 12 to 15 months from this because this actually could be one year better gross shoot.
Samuel Wilson: Yes, exactly, right? It’s like I said. So it’s a great question. Look, if you look at Supervisor Workspace, I think we kept in a beta for nine months. And if you look at intelligent customer assistant digital, I think it was in beta for less than three months. I suspect this one may be in beta a little longer. So I would lead maybe towards that nine-month number, but it’s purely a guess on my part. And I’d like to see this as 10% of revenue as quickly as possible. I think it is absolutely a new product line extension for us as a company.
Catharine Trebnick: All right. Thank you.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of Will Power with Baird. Your line is open.
Unidentified Analyst: This is [indiscernible] on for Will Power. Thanks for taking the question. So it’s clear that operating cash flow has been a focus and it’s grown nicely over the past few years. But looking forward, you talked about more muted revenue growth. Can you talk about some of the other levers that you still can pull to help reach that 20% annual growth target? Is it more on the margin side, maybe more working capital improvements? Can you just help unpack that a little bit?
Kevin Kraus: So yes, on the three-year CAGR that we gave, right, we’re starting from just to reset starting from the end of ’23, we’re expecting – we just grew cash flow from ops 55% on a trailing 12-month basis. And as I mentioned in my prepared remarks, we would expect a bit more muted in 2025 fiscal and then going up there in 2026. In terms of levers, look, our product mix, we’ve had – we’ve sustained – or we’ve been able to sustain really very good underlying service margins right now. We’ve got a lower margin business in Southeast Asia. But as that market expands into other parts of the world, maybe we can see an uptick in that part of the usage business that we have. But we’re always looking at cost of goods sold, getting better rates on our telephony, for example.
So we’re able to maintain a pretty healthy gross margins in the face of whatever price pressures may exist at the low end of the market, for example. So we’re always looking at that. Sam mentioned earlier about sales and marketing and getting efficiencies out of the group. It’s not we want to get more with the same as an example there. So I think with the go-to-market retooling that we have going on in the company, we can get more from the same. That’s what we really need to better operational efficiency out of sales and marketing. So those are the kinds of things that we’re really focused on to maintain a decent level of profitability and cash flow.
Samuel Wilson: And look, I mean I think we’re generating enough cash flow, more than of cash flow right now. So for me, it’s all about scale now. It’s about resuming growth and getting back on that growth curve. So that’s where the focus of the company is, et cetera. Could we pull levers that we need to share. But really, the focus on the company from here is getting that growth rate higher.
Unidentified Analyst: Got it. Thanks for taking the questions.
Samuel Wilson: Thank you.
Operator: Please standby for our next question. Our next question comes from the line of Ryan Koontz with Needham & Company. Your line is open.
Ryan Koontz: Thanks for question. Thanks for squeezing me in. A quick housekeeping item on RPO and any puts or takes there in that metric? All right. And then state in the slide deck.
Kevin Kraus: Yes. No. So $765 million RPO is where we have at the end of the third quarter. I wouldn’t say any necessarily big commentary on puts and takes there. It’s up on a year-over-year basis. I know that slightly down sequentially, but up on a year-over-year basis.
Ryan Koontz: Okay. That’s fair. And Sam, as you think about your seat count and maybe this is kind of the old way of looking at it, but I’m an old guy is as you think about growth coming from CC and CPaaS and pressure on UCaaS, and you’ve obviously got some down selling going on with Fuze, churn, pricing probably pressuring UC. If you look at the pressure on the UC market is what I’m saying, the seats. How would you kind of allocate down selling pricing and kind of general customer churn as pressuring your UC seats? Thank you.
Samuel Wilson: So in general, customer churn will be the bottom, and down-selling and price pressure, it’s sometimes hard for me to tell the difference. I mean I can sort calculated out. I would say probably, and this is pure guessing on my part is that down-selling, number one, and price pressure on the low end, number two and then the last one. And then we’ve got some new things coming out open in the near future to really start to address the pricing environment. As you know, we do a lot of work around teams. And so I think we’ve got some really interesting things for maybe that could get us more traction in that lower end market really efficiently.
Ryan Koontz: Okay. Great. Good to hear about that. Look forward again. Thanks for questions.
Samuel Wilson: Thank you.
Operator: Thank you. I’m showing no further questions in the queue. I would now like to turn the call back over to Kate Patterson for closing remarks.
Kate Patterson: Thank you all. Thanks for staying on the line. I know we ran a little bit over, so I’ll look forward to talking with you this afternoon or later tomorrow or during the following week. Thanks a lot.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
