There is all kinds of complexity. And then some of it too is just if you think about minimum wage. 10 years ago, we had one minimum wage and it was at the federal level. Well, now there is places in California you have four levels of minimum wage, whether it’s a city to county, to state or federal government. And the small business owner is throwing up its hands and saying, hey, help me. So we have been able to automate in such a way where there is a lot of leverage to that model. We have pretty good pricing power and we set it up a way where we are very pleased with the results top and bottom line.
Jeff Van Rhee: One last one, just on the competitive landscape, the [pays] have talked a lot about coming down market. Are you seeing more of that group or any changes in particular of who you are seeing?
Pat Goepel: We see Gusto, Paychex, ADP and occasionally we’ll see the [pays], but I don’t see those companies on a regular basis.
Operator: Our next question comes from the line of Vincent Colicchio with Barrington Research.
Vincent Colicchio: Curious about the bookings growth breakdown between new and existing clients?
Pat Goepel: We’re pretty strong on new, we’re probably about — historically about 60/40, we were right in line with 60 new, 40 existing. So we’ve had some really good growth in new logos. We also had very strong growth in additional products and services, especially the introduction of some of the products I mentioned around whether it’s tax or marketplace or HR compliance.
Vincent Colicchio: How is the tax product revenue versus your plan? And when do you expect to make the improvements you’re currently working on, when do you expect to complete that?
John Pence: I don’t think we had a ton built in up to this stage. I think that you’ll start to see it become more meaningful second — I mean, probably fourth quarter ‘24. But again, we weren’t playing a ton into this year but trying to build the foundation. So I think it really starts to kick in as we talk about next year.
Pat Goepel: To John’s point, Vince, a lot of — I think you’ll see very strong bookings in tax. But because of the nature, whether it’s workday or some of the books of business attacks, the install times are a little bit longer than a 10 employee payroll. So you’ll see that play in in a meaningful way on revenue in ‘24, but we’re real excited about marketing and the booking potential.
Vincent Colicchio: And then I was trying to — what I was trying to ask is the current improvements you’re making to the tax product, when will those be complete and do you expect that to significantly improve traction?
John Pence: I don’t think it’s ever completed, right, especially if you’re going up market to some of these enterprise accounts, you’re always going to have to be investing in it. So I don’t think it’s a — it is not a big bang, there’s not like this one day that this thing’s going to be completed. So it’s just — it’s an ongoing process from my perspective.
Vincent Colicchio: And then lastly on acquisitions, is this something that we should see happen in the next six months or so?
John Pence: I think so. I mean, look, we’ve been pretty consistent on this one since the beginning of the year that we were going to take a hiatus, try to focus on the core business. But it’s clearly part of our model. I mean, it’s something that we think makes a lot of sense in terms of being very accretive from a cash generation perspective. So it’s something that we think we’ve perfected. But I think we’ll opportunistically look and see if we can find some stuff back after this year and going into ‘24. But there’s nothing imminent, we don’t have anything under a letter of intent at this point.
