Operator: Our next question comes from the line of Eric Martinuzzi with Lake Street.
Eric Martinuzzi: I wanted to go layer deeper on the guidance for Q3. If I’m looking at — and I know you characterized the expectation for ERTC as modest, but I’m trying to put a finer point on that. If I take the growth rate that you just had in Q2 on the recurring rev side and I apply that to Q3, I kind of — I’m backing into sort of a $2.3 million number for non-recurring, and I want to know if that’s in the ballpark?
John Pence: Yes, I think what we’ve been saying consistently is that’s our typical range is in that — if you try to put the non-recurring back to a norm without the last couple of quarters where we’ve had the incremental success, I think that’s what we’ve been kind of contemplating in the guidance. So we’ve tried to put the non-recurring as if we weren’t having the extraordinary sales in ERTC, so that’s kind of implicit in the guidance.
Eric Martinuzzi: And then the retention trends in the core HCM, just curious to know if we’ve seen an improvement there. It feels like small business is doing better. But just wondering if you’re — what you’re seeing in the retention trends…
John Pence: My perspective, they’re trending up from where we have been. So yes.
Pat Goepel: I would say, Eric, just we’ve been 1%, 2% up over the past year and it’s been pretty consistent. I think we’ve had good accountability, good product rollout, good solution set, good upsell capabilities. So if you think about, we were probably at a low point around COVID, we’ve achieved the improvement about 1% or 2% per year since COVID and feel like we have a good momentum there. I would say, small business formation looks pretty strong. Small business, I would say, access to capital is probably their number one need. But as far as continuation and growth, we feel really good about where we are.
Operator: Our next question comes from the line of Richard Baldry with Roth Capital Partners LLC.
Richard Baldry: If you look back a couple of quarters, it looks like the sales and marketing line’s up 50% in pretty big hurry. Can you talk about how much of that is headcount, resource expansion versus just commissions on faster sell throughs? And then you talked a little bit about that line continuing to grow and investing in that. Is there any way to sort of scale how much numerically or even qualitatively you expect to keep adding to that organization? Obviously, you are seeing some efficiencies but that could argue that there is more to go after as well because of their successes.
Pat Goepel: Just in general, we add headcount to our sales organization and we are somewhere around a 100, I think you play the tape forward, we will be about 120. So we are going to continue to grow headcount. As far as, costs going up, some of it’s account commission, productivity has been very strong and so naturally commission is up. There is some referral dollars that are also up. And then as far as efficiency, we have a field sales organization and we have a inside sales organization. We spent some more money on marketing leads and those leads have paid off very well. We spent some money on internal tools to really automate inside sales, and so that’s an expenditure. We are really happy with the productivity in sales organization.
In general, we will continue to invest in sales. And if you think about our plan over the last couple of years, it’s been to be more efficient operationally to automate, invest in some technology and then grow the feet on street or the sales organization, and it’s really starting to pay off. John, I don’t know if you have color.
