Being able to bring in industry certificates via a credit recommendation system with an existing entity like an ACP, ACE or an ECTS, or we’re working in Saudi Arabia, we’re working UAE, we’re working in India, country after country after country is working on this pattern. And I think it’s going to be in India, for example, if something called the National Skills Qualification Framework, which under the new education policy, the NEP, NASCOM is the designated body that actually does it, the IT accreditation to see if it is the standard of the National Skills Qualification Framework. And then the Indian policy has something called ABC, which is the Academic Bank of Credit, to make college credits mobile for a doubling, what they expect to be a doubling of the number of people in college in India from 35 million to 70 million.
So this is something that’s happening well beyond New York, well beyond states in America. I believe this is going to be a global phenomenon.
Jeff Silber: Okay, that’s really helpful. And my second question, I guess it has to do with the change in definition [indiscernible]. You talked about, and I’m just reading from your remarks, in certain arrangements, we will help fund the production of courses and credentials in exchange for more attractive economics, as well as exclusivity on your platform. How common is it, what segments are this in, and should we expect gross margins to potentially go up as you move towards more of these arrangements?
Ken Hahn: Hi, Jeff. This is Ken Hahn, as you know. So, yes, we are starting to see a more opportunity there with some of our partners. A lot of it has been on the tech side, and it’s highly attractive content. It’s content that’s our bread and butter. And so we do seek to do more of those as our partners, certain partners, appreciate doing the relationship. If those continue to increase as a percentage total, obviously they’ll drive the margin higher. And, in some instances, these are 70% or 80% , and some of them, it’s pure margin. It depends on the individual relationship and how much we’re funding and the proprietary. I wouldn’t bake anything in from an increased standpoint, but we are seeing more interest. And again, back to the free cash flow comment, that’s exactly what that is, is us setting aside funds.
So we’re excited to do as many of those as our partners want to. We don’t need to. If we do, it’ll have a salutary effect on the gross margins. And again, we’ll do those deals all day long.
Jeff Maggioncalda: And I would add, I mentioned in the script the platform certification from ACE. We see this fundamental pattern around these pathway degrees happening, state by state, around countries. And we know that working with institutions is a big part of that. We are trying to institutionalize the know-how. The know-how of what does the professional certificate look like? Which ones do you want? Who do you want to get them from? What’s the basic structure of these things? How do you build them? I am seeing, we are seeing now, the ability to use Generative AI tools to produce these certificates at the same quality level, much more quickly and less expensively. But there’s a lot of know-how that’s required to do that.
There’s know-how in the people, the process of the tools, and also the underlying platform, which ACE has done a review and said, look, this platform has capabilities to protect academic integrity and ensure certain levels of rigor. So institutionalizing that know-how, I think, will give us certain advantages in terms of competitive advantages, as well as scale advantages that Ken’s talking about that will cause us to want to lean into this more and more.
Jeff Silber: Okay, really helpful. Thanks so much.
Jeff Maggioncalda: Sure.
Operator: Thank you. Your next question comes from the line of Rishi Jaluria with RBC Capital Markets. Rishi, your line is now open.
Rishi Jaluria: Wonderful. Thanks so much for taking my question. It’s nice to see continued strength in the business and the crossover to precast for positives. I want to maybe go back to thinking about the enterprise side, because we’re now starting to see the first signs of job disruption or maybe even potential job losses as a result of AI. It still feels like enterprises are not taking reskilling and upskilling as seriously as they need to. Maybe asking the kind of same question in a different way. What do you have in your power to kind of make that message resonate deeper within actual enterprises that there is a sense of urgency around this, given it’s going to start with jobs, but it’s probably going to be entire industries that will get disrupted as a result of this? And then I’ve got a quick follow-up.
Jeff Maggioncalda: Yes, so Rishi, I think you’re on to it. I think there is urgency. I mean, I think you look out there, everyone’s talking about it. Everyone is doing something. I think there’s not clarity. The executives don’t really know what to do. On this question of impact on labor market, over a long period of time, we have tried to position ourselves in terms of our business model structure. We want to make sure that we can serve institutions who need to reskill and upscale their employees, but we also want to upskill and reskill individuals. There’s this question of separation that you’re sort of identifying, which is some companies are going to say, we don’t need 1,000, 2,000, 5,000 employees that are currently with us today.
