Steve Barnes: Yeah, I’d just add, as today we’re seeing that uptake that Raj spoke about on the enterprise side and that growth rate is very high, [well more than 20] (ph) off of a smaller base that’s growing as we roll out to new customers and the higher utilization rates within that base and then there’s the consumer business capability or channel continuing to grow as well. The other thing I’d point to, Stan, is the reason for people calling in or requesting an engagement with their primary care doc is across a multitude of channels or reasons. Certainly GLP-1s are contributors. This time of the year, flu seasons or respiratory is a contributor. We’re seeing good balance across all those reasons. And ultimately, the reason people come to Accolade Care or PlushCare is because they’re getting an outstanding experience with a primary care doc and we’re in a unique position as Raj noted, with an employer customer in particular, to help fill that physician gap, get someone to a primary care doc very quickly and then become their longitudinal primary care doc as needed or supplement their brick and mortar on the ground up.
Operator: Thank you. One moment for our next question. Our next question will come from Jessica Tassan from Piper Sandler. Your line is open.
Jessica Tassan: Hi, guys. Thanks for taking the question and congrats on the quarter. So, I had two quick ones. Just first off, is there any part of the early PG recognition in the third quarter or in the first three quarters of the year that relate to your conservative assumptions heading into the year? Or is that all just really a matter of timing? And then just secondarily, I was hoping you might be able to give us some color on the shape of the primary care revenue growth in FY ’25 should it step up kind of meaningfully in F 1Q as you have new enterprise contracts launched, or should we see sequential growth in each quarter of FY ‘25? Thanks again.
Steve Barnes: Great. Thanks for the question, Jess. It’s Steve. First of all, on the PG revenue recognition, yeah, I think with a conservative, we start the year assuming we’ll need the full year to earn those performance guarantees and then we oftentimes do earn them sooner than that. So yeah, I think you could think of it as the $2 million we pointed out this year we expected to earn for the year and we expected — we assumed at the beginning of the year it happened in Q4, and then we oftentimes go after it. And I mentioned $5 million of cumulative revenue earned sooner than that Q4. Obviously we’re really happy to see that. Whenever we can drive that, it adds visibility to Q4, both on the top line and on the bottom line because of the profitability of TGs. And with respect to the care business and launch, certainly we expect to launch new customers on January 1.
But when we come back in April with our Q4 results and a more formal guide around fiscal ‘25, we’ll get some more color around the different offerings and shape of that that you would expect for your own modeling.
Operator: Thank you. One moment for our next question. Our next question will come from line of Richard Close from Canaccord Genuity. Your line is open.
Richard Close: Great. Thanks for the questions. Congratulations. Steve, I was curious if you could go over the, I guess, revised long-term target on the margins in terms of the annual. You guys must have pretty good confidence to go ahead and do that. Can you break out a little bit in terms of thoughts on the cost savings contribution or the reorganization that you did and then maybe the bundled offerings component? Just a little bit more clarity there would be helpful.
Steve Barnes: Yeah, absolutely. Richard, great to talk to you and appreciate the question. Yeah, absolutely important item in today’s announcement is talk about the increase in our guide for that out year, that fiscal five year out to 15% to 20% revenues, profitability. As we’re two or three quarters into the year since Capital Markets Day, when we talk about 10% to 15%, a few things have happened. One, we’ve demonstrated to ourselves that the cost actions that we took in realignment have yielded great results and in fact in some ways, by doing that, we’re able to go faster and be more efficient and certainly realize cost savings all at the same time. That’s one. Secondly, Raj spoke in his remarks in a few different ways about the way we’re leveraging technology innovation, which is something that we’ve been doing at Accolade for several years.
But on top of that, AI-driven capabilities that are making our frontline care teams more efficient, enable to getting members from one place to another or directly to another offering, all of that nets out to further confidence in gross margin expansion that’s assumed in our models as we get out into the next several years. So that’s a contributor. And then certainly on the operating leverage side of the business, on the OpEx side of things, we’re seeing that — opportunities for that in a few places. One, we’ve made significant investments in product and technology. I think it’s a very important differentiator for Accolade in terms of the platform that we’ve built. We’ll continue to invest there at a growth rate that will be important and we think it outsizes other investments by other companies in our industry.
Well, we are starting to see leverage there where we can really capitalize on the investments that have been made. So that’ll net out to a lower growth rate on that number relative to our revenue margin expansion. And then otherwise, across the P&L, we see other opportunities. But that’s one in particular that we see contributing towards that bump up in the long-term guide.
