Bob Shepardson: Yeah, let me clarify, Eric. So, the Converge-related spending, so assume — pretend there’s no work for the government this year. We saw year-over-year high 20%s decline in ’23 versus ’22. I would expect that, that would have continued in the area of down 30% in ’24. The spending, the investing that we’re doing for operations in the government ecosystem will mitigate that decline to more like mid-teens as opposed to 30%. Is that clear?
Eric Percher: Okay. That’s helpful.
Bob Shepardson: Yeah. Overall, declines are going to be more like mid-teens. If you segment that, it would have been down 30%. But the spending — the investing on the government side takes it back up to mid-teens. And then, from — going forward from ’24, we get back on track for those declines. And by ’26, we’re envisioning a kind of run rate that’s in that zip code of, call it, 25% to 33% of software revenues.
Eric Percher: Got it. And at that point, you’re getting the dividend from sunsetting anything beyond Converge?
Bob Shepardson: Yes.
Eric Percher: Perfect. Thank you.
Bob Shepardson: Thank you.
Operator: Your next question comes from Jessica Tassan with Piper Sandler. Please go ahead.
Jessica Tassan: Hi guys, thanks for taking my question, and appreciate the updates just on ACV by customer type. I guess just maybe can you help us understand whether the 4Q subscription revenue level includes kind of the CVS and Elevance or all of these large customer payer migrations that you spoke about. And then just kind of as those transitions or the migrations to Converge have occurred there? Is there any shift in the way you expect to recognize revenue from these big payer customers, like a shift maybe from subscription to visit that would have occurred alongside the migration? Thanks.
Bob Shepardson: No. Short answer is no, Jess. There is no — I think fourth quarter includes all the revenues from the customers that you mentioned. We’re not charging for migrations. And just migrating clients alone won’t change the type of revenue that they’re doing with us or how we recognize it. What it does do, it puts us in a fantastic position to upsell those customers now that they’re on Converge. And so, the revenue potential from them is much enhanced relative to them remaining on the legacy platform. So there’s that. And then doing — yeah, so I think that’s really, I think, where you’ll see the upside associated with the current base is we expect to be able to see increase at same store sales and expanding with those customers over time.
Ido Schoenberg: Maybe I’ll just — hi, Jess. Maybe I’ll give you one example. So, the thing is public information. The go-live of Elevance, which was the largest migration we did in our history, included everything we’ve done before on Converge fully integrated with [Sydney] (ph). But in addition to everything we’ve done before and the different programs to enable, we enable a lot of things for Elevance, we also, in Elevance, who was public about it, begin to do virtual primary care. And we are currently very cautious in the way that we think about how to model this, but that interaction has enormous potential of same store growth and enormous value for Elevance. There are similar examples with other customers, some are public and some are not.
So, the biggest opportunity with migration is increased stickiness with the customer, increased level of satisfaction, and an opportunity for selling additional solutions, and we’re seeing a much significant ramp-up in volume because the experience is just dramatically different for the different participants for both providers and the members or patients.
Operator: Your next question comes from Stan Berenshteyn with Wells Fargo Securities. Please go ahead.
Stan Berenshteyn: Hi, thanks for taking my questions. Bob, I want to crystallize a comment you made earlier. It seems you expect DHA to be a steady contributor to revenue beyond 2025. Is that correct?
Bob Shepardson: No question. That is our expectation.
Stan Berenshteyn: Okay. And I guess if that’s the case, where do you expect to pick up incremental growth…
Bob Shepardson: I mean, Stan, it’s no different than any other customer that we would sign. We expect that they’ll be with us for a long time. I don’t know why we would think about this one any differently, especially given the level of investment that we’re making, right?
Stan Berenshteyn: Of course. Just parlaying that into a question about 2026, if we’re thinking about incremental growth in 2026, if it’s not coming from DHA, where is it coming from? And what’s your visibility there? Thanks so much.
Bob Shepardson: It’s a big wonderful world out there of customers and we expect to do a lot of business with all of them. We’re signing new logos and we are expanding with our existing customers. So, yes, Stan, I mean, we’re presuming success across our lines of business. But if you look at what the guide is for 2025 and then breakeven in ’26, there’s a probably about a — the improvement there from a cash flow perspective is probably somewhere at 25%, 30% driven by costs, the balance driven by revenue and gross profit.
Stan Berenshteyn: Got it. Super helpful. Thank you.
Bob Shepardson: Sure.
Operator: Your next question comes from Ryan MacDonald with Needham & Company. Please go ahead.
Matt Shea: Hey, this is Matt Shea on for Ryan. Thanks for taking the questions. I wanted to circle back on an earlier question about the referenceable base of customers. You have this nice base now, but also commented over the last couple quarters on how the sales team has been seeding opportunities with new health systems and payers. Just curious if that referenceable base is starting to make Converge less of an evangelical sale and more of a must-have best-of-breed solution? Or just ultimately curious how the wind down of Converge development in the new sales force design is increasing the velocity of those net new customer conversations?
