Brian Peterson: Appreciate the color. Thanks Mike.
Michael Gianoni: You are welcome.
Operator: Our next question is from Rob Oliver with Baird. Please proceed with your question.
Robert Oliver: Great, hey, good morning. Thanks guys. I had two, Mike, one for you and then Tony, a follow-up for you. So Mike, just on these, obviously, a nice job you guys are executing well on these price increases and on the contract discussions. I imagine these can always be easy discussions in this economy. I’m just curious how you guys are thinking about it, I mean switching people from one to three years. Is this an opportunity to get more product into people’s hands as well to really showcase some of the other capabilities for Blackbaud as we sometimes see when price increases happen with software companies, it’s an opportunity to maybe negotiate around some additional use cases, just help us understand how you’re thinking about that?
Michael Gianoni: Yes, sure. So the good thing on this move to three-year contracts and new pricing is our retention numbers have helped, which is great. And we just had thousands of customers in Denver for bbcon, and I spoke to many customers. No one’s excited about getting higher pricing, but customers are excited about all the innovation coming. And so I feel like the stream of innovation is us just earning the right to have higher pricing and maintaining our retention rates. And customers are seeing that. Our platforms are very sticky. There are systems of record. They’re nondiscretionary and customers are loyal and excited about what’s coming from an innovation standpoint. So it’s been positive. Yes, some of the conversations aren’t great, but customers are not leaving because of pricing.
They’re staying because of the impact our products have on their business and they see a stream of innovation coming. So it’s been really positive. And I have very good insight into the future related to this program because if you recall, when we started to talk about this program, we notified customers five months ahead. So we’re into next year with this program now. It’s not like it happens next week, right. So we have very good insight into the future of the revenue improvements that this program drives. And a lot of the innovation is to continue to earn the right to serve our customers. And so they expect that. So it’s a very good program for us, Rob. It’s gone extremely well and the customers are super excited with what they’ve seen at bbcon and the other events, we had a bunch of other events I mentioned in my prepared remarks.
So it’s going really well.
Robert Oliver: Great. Okay. That’s really helpful. Thanks for all that Mike. And then, Tony, just as a follow-up question, Mike mentioned we have some visibility here given the notice, the five-month notice. How should we think about I think about half of the contracts, a very high mix of contracts up for renewal next year. So how should we think about that linearity, is it going to be more back-end loaded, is it going to be more even throughout the year, any help there would be great?
Anthony Boor: Yes, Rob. So we had the biggest cohort this year from a renewals perspective. We’ve got a slide in the investor materials that you can look at. I think next year is about 30%. The contractual recurring base will be up for renewal, and we’ll be working on the new pricing and the shift to three-year contracts. We’ve got the seasonality to keep in mind as typical on those contracts. So a lot of those in the quarters, certainly in the Q2 and early part of Q3 with the school years and just typically in the years when we sold those and then some also late in the year as well. So we’ll have some lumpiness around end of Q2, start of Q3. That’s not unusual. That’s typical for us. So you’d expect that. And then the pricing in that uplift turns on very quickly on most of those contracts, and that’s a straight line method over the three-year contract term.
