David Ossip: Yes. So, look, as Steve had mentioned, we are doubling down in terms of add-on sales next year in terms of the actual sales force. So, we do believe that there is a great opportunity for us to widen the use of the actual product with our customers. Part of our pricing strategy is actually focusing on the right modules for the customer at the time of an initial purchase so that they can get that very strong ROI and the quickness of ROI, which allows us to go back to them after the fact with the next set of, if you like, products. Again, it allows us to price optimize quite nicely from that regard. In terms of the use of generative AI with inside our internal operations and as well across our customers, it’s very similar in terms of thinking.
When we look at the customer support side, we believe that we should be able to drive 10% efficiencies through the use of generative AI. We have spoken about the tool that we have actually built at INSIGHTS. We actually showed through the intelligence search and the Co-Pilots, we are now able for administration of users to ask questions, how do I do this, or what does this mean with inside the system. And the Co-Pilot is able to actually help the user through the administration of the actual product. That’s a form of self-service, which allows them to get quicker responses, but also reduce the inbound calls to our support team, driving that efficiency. Steve, anything you would add on that?
Steve Holdridge: No, I guess and in fact, I think we are ahead of the industry in terms of that. We are seeing real results on that. And to David’s point, we are seeing the benefit of both reduced inbound, but we are also seeing a better customer experience and an increase in our EPS based on that because customers can get to their answers quicker. And you will see us as we lean into that turning that into a more proactive outreach is not only helping customers respond, but proactively providing customers guidance to things before they ask a question.
Dan Jester: Great. Thank you.
Matt Wells: Our next question comes from Kevin Kumar with Goldman Sachs.
Kevin Kumar: Hi. Thanks for taking the question. It’s great to see the progress in EBITDA margin, which has grown nicely this year. But curious on cash flow margin, which has expanded a bit slower, so can you give a bit of color on how you think about the levers that can help drive better EBITDA conversion into cash flow over time?
Noemie Heuland: Yes. And we have talked about the drivers for enhanced profitability, which I think is one of the primary driver going forward. You will see us also continuing to shift the revenue from lower margin into recurring and within recurring into cloud recurring. So, as we migrate the customers over from legacy platforms into Dayforce, you will see corresponding expansion of profitability that will translate into cash flow generation as well. Specifically for Q3, we had a little bit of favorability in AR, which is driven by billings, very much back-end loaded in the second half of September. We have collected those billings, but that’s primarily the difference between the 50% that we have guided on average and the number that you see for Q3, but we remain committed for the conversions we have outlined for the remainder of the year.
Kevin Kumar: Thanks. That’s helpful. And then maybe just one on Dayforce Wallet, I wanted to ask about the traction in the European market. I think it’s been out for over a year now. And so just kind of curious on overall reception with clients in international markets relative to the U.S. Thank you.
David Ossip: Sure. So, international markets, I am assuming that you view Canada as part of North America, so I will talk about the UK. The UK, we have a slightly different model. It’s a cabin model because there isn’t the interchange in the UK market. We have seen good adoption across the customers in terms of the actual – in terms of the wallet there are no the real surprises or, I would say, differentiating patterns with North America.
Kevin Kumar: Thank you.
Matt Wells: Our next question comes from Alex Zukin with Wolfe.
Alex Zukin: Hey guys. Thanks for taking the question. Congrats on another solid quarter. I guess I wanted to ask to my first one is around how well it seems like you have been executing and performing actually in the mid-market. Our checks suggested that you are seeing some pretty interesting tick-ups in win rates. So, maybe just any changes to the competitive landscape there? Any plays that you are doing that are working, or anything that’s changed there head-to-head versus the competitors?
David Ossip: Yes. Look, the mid-market for us, remember, is probably enterprise for almost every other player outside there. We find that in what we call the major market and the Enterprise segment, we are seeing more full suite deals. And the work that I think Joe has been doing over the last 3 years in terms of really lifting up the user experience, working on the actual data and the AI side and really broadening in deeply in the talent offerings that we have. Some of the experiences that Joe and I was in the product are just absolutely beautiful. And so when we actually go out, can we show the actual demonstrations, it just shows very well. And then on the other side of it, we have so many case studies now of very strong returns of investments across our customer base.
And the last factor would be the system integrators that we discussed earlier on we have really taken an approach that SI Prime first to market. And obviously, we can do that because the product is robust and third-parties can administer the product as well as our own internal services, which I think is also just a very, very good factor. But yes, we have noticed that as well.
Alex Zukin: Perfect. And then, David, I guess, to the construct of some of these very large logos that you have been announcing even as late last year and even this last couple of quarters, if you look at your press releases, there are multiple logos that have tens of thousands and sometimes even hundreds thousand plus employees. But un are not landing all of those employees right away, and you are not landing the entire suite in those logos right away. So, I guess the question I wanted to get a better idea for is, as I look at the opportunity for Ceridian’s expansion notion within those larger customers, specifically, like if you look at the construction of your growth for maybe next year or 2025, how much is going to come from net new versus expand within existing customers?
