Bryan Bergin: All right. Very good. Thank you.
Patrick Goepel: Thanks, Bryan.
Operator: Thank you. And our next question comes from Joshua Reilly from Needham & Company. Your line is now open.
Joshua Reilly: All right. Thanks guys. Nice job on the strong results here in the quarter are pretty impressive. If you — yes, if you look at the Pro services revenue in Q4, it was quite above — a bit above what we were modeling. How should we think about that mix in 2023? And is there anything there to call out in terms of one-time projects or anything there in Q4 that drove that higher than normal?
Patrick Goepel: Hey, Josh. Thanks for the question. On Pro Services, some of the quarters were probably $1 million and change. In the fourth quarter, we had signed up some partners around ERTC and some tax related products. And if you think about some of those partners because we can get it done a lot faster from a processing perspective because the calculation engine is already built, and then we had some streamlined processes that make it easier we were able to work off some onetime for them. They had some backlog. We were able to help them push that backlog through. I would anticipate that we’ll have some project revenue or ERTC revenue in 2023. We haven’t modeled a ton of it in because we do believe we are working off backlog at a big rate in Q4 and then it will normalize in 2023, but there could be upside to the plan, but we’re not going to forecast that as we go.
Joshua Reilly: Okay. So if we’re looking at the Q1 revenue guidance, there’s going to be some reversion in the mix, I assume in fact…
Patrick Goepel: Yeah. I think what you’ll find, Josh, is seasonally, we’re very strong in W-2 revenue, et cetera., in the first quarter, some of the onetime revenue in the fourth quarter may not come back, but it gives us confidence on 29% to 30%. Now, as we do see some project revenue with ERTC, we may be guiding conservatively, but we don’t want to kind of declare it before we revenue it. So that will be some conservative to the plant.
Joshua Reilly: Got it. That’s helpful. And then if you look at the gross margin improvement year-over-year, obviously, very impressive. Can you just give us a sense of how much of that is due to the higher interest income versus the business mix with the marketplace revenue. It sounds like that’s starting to ramp or is there anything else there to call out on gross margin in Q4?
John Pence: I think some of that is also in the processing that Pat was referring to. I mean because of the technology that the teams put in place, it’s pretty high margin business when it’s all said and done. So I think the combination of the HR compliance that Pat mentioned, the float, the tax processing, I think that’s all combined are pretty high margin and obviously, the marketplace, too. So I think it’s pretty exciting for us. Look, we’re not going to necessarily have that same combination every quarter, but it kind of shows you what the business plan and what the business model can look like at that scale. So I don’t think, if we can continue to add those revenue streams at this high margin, this is what the business can produce longer term.
Joshua Reilly: Got it. Thanks, guys.
Patrick Goepel: Thank you, Josh.
Operator: And thank you. And our next question comes from Richard Baldry from ROTH Capital.
Richard Baldry: Thanks. Congrats on the quarter. It looks like the partner revenue structures, I’d be curious if you could dig into a little bit. It looks like some of them come on sort of the step function because they’re sort of very recurring oriented what the services you’re dealing with them. Others would be a bit more seasonal and take some time to ramp into their customer bases. So how do you think about those in terms of how you layer those on to your 2023 outlook, there’s any seasonality that we should be thinking about? Thanks.
