Mike Gianoni: Yes, Park, it’s Mike. JustGiving has been really strong, which is another part of our transaction mix. And a bigger drag really in Q4 was our onetime services and FX much more than transactions.
Parker Lane: Got it. And then, Tony, when I think about the fact you guys closed four data centers last year, it sounds like you renegotiated some contracts with the public cloud providers. How should I think about the impact of gross margins in ’23 on that step function in EBITDA? Like what does the share look like of gross margin versus OpEx? Thanks.
Tony Boor: Yeah. We’ll have some other puts and takes in there, Parker. It’s very positive. We got four colo data centers closed. Those renegotiations are going to help because we’re obviously moving more volume to those third-party cloud providers. So that’s all positive. We’ve been capitalizing a lot of R&D because we’ve been spending a lot on innovation and security enhancements. So you’re going to see a little more amortization of those software costs up in COGS. We’ve been making enhanced investments in just overall cyber, which a lot of those costs also fall up in there. So I’d say you’re going to have puts and takes. It is a good start, though to this longer term improvement in gross margins that we’ll see over the next several years.
We still have several more data centers to close and networks to shut down. So I would kind of spread that over the next 2 to 3 years that we’ll continue to see improvements in the gross margin line. Some offsets just because of those other items I spoke to.
Parker Lane: Got it. Thanks a lot. Appreciate the time. Thanks.
Tony Boor: Thanks, Park.
Operator: Thank you. Next question is coming from Rob Oliver from Baird. Your line is now live.
Rob Oliver: Great. Hey, guys. Good morning. Can you hear me, okay?
Mike Gianoni: Yes.
Tony Boor: Hey, Rob.
Rob Oliver: Okay, great. Hi, Mike. Hi, Tony. Two questions for me. One, just a follow-up to Brian’s question earlier on the pricing side. Clearly, you guys have made a ton of progress on the cost side yourselves and part of that is renegotiating contracts and pressuring vendors, and it’s something we’re hearing a lot about throughout our coverage in the software industry. So I just wanted to get a better sense of what gives you guys the confidence around these renewals summer and year-end that €“ that pricing will stick for you guys, how you think about that? And then I had a quick follow-up.
Mike Gianoni: Sure. So I’ll answer that. So the pricing initiatives have actually gone well since we started those last fall, but it ramps up. And we’re very focused on multiyear contracts as well, including moving some of the historic one year contracts to multiyear contracts. So, so far, it’s gone well. It started last fall. It’s ramping up between now and, call it, June, July. And then we think it will do quite well in the fall. Also, the big deal for us too is we’ll get some – first of all, you get a nice fall through, right, with pricing increases, it impacts on a Rule of 40 top and bottom line. And the bigger deal for us is it’s going to build pretty significantly in the back half of this year. And then next year, we’ll get a full year effect of those. And also next year, we’ll get a full year effect of some of the cost actions that we’ve implemented as well. So we’ll see some of that this year, mostly billing in the second half for the next year as well.
