Githesh Ramamurthy: Yes, what we have now started testing our subrogation solution with number of customers, where we’ve taken customers closed files. And we’re seeing really two primary benefits with customers. First and foremost, the AI that is underneath our subrogation platform is able to scan and go through a ton of pages, documents, photos, and then really zero in on what customers, which files should be subrogated, how people should adjust the inputs based on what the AI is seeing. So we’re seeing a tremendous applicability in terms of the speed it is providing onto the subrogation side. And then what we’re also seeing for customers who are testing it is that the lift that they’re seeing versus manual methods in terms of the return on the ROI, specifically that they see, is significant.
So we are very encouraged with the fact that we have both an inbound and an outbound subrogation solution, and the results that our customers are seeing are also very promising.
Alexei Gogolev: Thank you, Githesh. I appreciate it.
Githesh Ramamurthy: Thanks, Alexei.
Operator: Thank you. One moment, please. Our next question comes from the line of Shlomo Rosenbaum at Stifel. Your line is open.
Shlomo Rosenbaum: Hi, thank you for taking my questions. There’s been a lot of questions about Estimate-STP. I want to ask a little bit about some of the other ones that are out there, like is there any movement in terms of traction on the payment product, and how is that going out in the marketplace now?
Githesh Ramamurthy: Yes, payments has we continue to see opportunity in payments. In fact, there are more use cases that we are seeing every day, both from not just insurers paying repairers, repairers paying parts providers. So every day we keep seeing more use cases and opportunities. With that said, we’ll have — we are still, I would say, in the earlier stages of rolling that out. And it is compared to a solution like, say, subrogation payments will be a slower adopter than a solution like subrogation or Estimate-STP.
Brian Herb: Yes, I would just add that it is generating revenue today, but as Githesh said, it’s in the early innings and we expect it to scale over the next several years.
Shlomo Rosenbaum: Okay, great, thank you. And if I could just squeeze in another one, you talked a little bit about the catch up on a subscription contract for like, $2 million. Maybe you could just give us a little more detail of exactly what that was?
Brian Herb: Yes, happy to. So we highlighted it because it drove about one point in the quarter. And it’s also going to play into the sequential Q3 moving to Q4. And so that’s why we called it out. There were some specifics to the dynamic of the deal. We were not recognizing revenue consistently over the period for this subscription contract. We caught it up in Q3, and then going forward, it’s going to be spread more evenly. So it’s just the dynamic of the catch up that we wanted to call out because there’s a bit of lumpiness in the quarter.
Shlomo Rosenbaum: Okay, thank you.
Operator: Thank you. One moment, please. Our next question comes from the line of Dylan Becker of William Blair. Your line is open.
Dylan Becker: Hey, guys, can you hear me all right this time?
Githesh Ramamurthy: Yes, we can, Dylan, how are you?
Dylan Becker: Perfect. All right, awesome. Hey, congrats, guys. Nice job here. Githesh, I think you mentioned in your prepared remarks about, again, the development capacity, the data scale over the years, how this has kind of fueled new innovation and value for customers. I wonder how you’re thinking about how that evolution has trended over the past kind of several years? And how you think about the opportunity set to potentially accelerate that cadence if it shapes up that way as you think about, again, that innovation funnel going forward and the opportunity to capitalize on this digital investment capacity?
Githesh Ramamurthy: Thanks, Dylan. When you look at it at a macro level, what we are seeing in all our conversations with our customers, in fact, we just finished our trade show at SEMA last week and we had over 600 customers one night for our event. What you hear consistently across the board with customers is a need to move faster and to roll out more solutions and we see this as a once in a lifetime opportunity to really leverage this. And we started to see this actually a couple of years ago. So if you recall, in 2022 we added substantial development capacity. So we added to the tune of 20% development capacity in 2022. And right now we’re still adding development capacity, but not at that same rate. So we feel very good about our development capacity.
The engines and what I talked about and what Brian and I just covered in the call today is a number of new solutions that are now coming out that are a direct result of this enhanced and increased development capacity that we put in. The other thing we’ve done to get ready to really capitalize on the opportunity and frankly, what our customers need is that the transition we made to the public cloud has also enabled a substantial capability, strategic capability, in our ability to deploy software releases, speed to market reliability, scale, a number of things. So we feel good about the tech stack that we have, the infrastructure we have, on which the tech stack is running. So we do think we prepared ourselves and put ourselves in a place where we can work closely with customers and hence, you’re seeing in the call a broadening of not just a number of solutions, new solutions that we’re coming out with.
Dylan Becker: Got it. Yes, that makes a ton of sense. Super helpful. Brian, maybe on your end too, I know you called out the 17% spend a little bit of a step up on the part side of the equation, but as we reconcile that back to kind of the 70% to 80% of claims volume, you guys seeing it across the network, how should we expect those two metrics to converge? Obviously a benefit of the scale and growth in the ecosystem across partners. But any reason why we wouldn’t see similar adoption rates, understanding that it’s going to take time to get there?
Brian Herb: Yes, no, we feel really good on the parts opportunity. I mean, there’s two ways that we’re going to continue to grow. I mean, one is we are adding new rooftops each month and so the footprint continues to expand and then we’re just seeing additional adoption of online and moving to electronic parts ordering. So just that natural volume of people moving from offline ordering to online ordering gives us strength and momentum. And so as we build out the footprint, we do see 17% expecting to grow parts is growing faster than the rest of the business and will be a growth contributor going forward. So, yes, we feel really good about the opportunity in front of us. And just add to throw one more data point in, which is in 2020, that number was 10%. Right. So you can see it went from 10% to 15% in 2022 and is now continuing to grow past that.
