We thank our global division leaders for finding a way to do that in a tough exciting market.
Gregory Burns: Okay. And what is the share count now? I guess where do you expect the share count to be in the fourth quarter?
Hai Tran: In the fourth quarter – let me get back to you on that, Greg. I will get you a very specific number.
Gregory Burns: Okay, great. Thanks.
Brian Shepherd: What we have said now, just as Hai is pulling that up, what we said on the share buyback is, first after the big Q3 where we bought back $107 million worth of stock, you’d see us do a little – it is the third leg of our capital allocation stool. First is hands off class on dividend. Secondly, focus on strategic value creating acquisitions. And then third, have buybacks at a minimum offset share dilution. I think you will see, at least at this stage, share buybacks focused more on a steady approach. It is more along the lines of offsetting dilution after the big Q3 and the big prior year we did on buybacks.
Hai Tran: And Greg, you could have seen some modest – about [indiscernible].
Operator: Your next question comes from Shlomo Rosenbaum with Stifel.
Shlomo Rosenbaum: First question, just a little bit of just kind of the sequential gyrations. This big step up in telecom revenue, and I know that is an area of focus for you, Brian. Maybe you could talk about that and then compare that with the two large clients had a little bit of a step down. And are they just like projects that are rolling in and off on that? Maybe just a little bit more color on that. And then I have a follow-up.
Brian Shepherd: That is great, Shlomo, thanks so much for the questions. Yes. On telecom, I mean I guess what I would say is, we have been talking a while about the giant wins we have had in Global Telecom, and we are gaining a lot of traction in that business. When we deploy a big win in telecom, there is both recurring revenue, maintenance, recurring license, other fees that we get. And then there is also implementation that would come on. The big deployments in the middle, in Saudi with Mobily, the second largest. We have got big global customers in South Africa, in South Pacific, in Australia. And then we talked about the big win in the Caribbean. That is just part of the growth and the momentum building that is going on in Global Telecom.
And then you will see that evolve some, including with the implementation revenue that gets recognized in a given quarter. Just a lot of traction in that part of the business. In our big two, you have actually seen quite strong growth prior to this quarter, strong growth over the last couple of years in the combined big two. And as this quarter it was more flattish, and I would say we get an evolution of some of its services. The majority of it is recurring revenue. You will just get some fluctuations around that in a given quarter. But kind of our overall message, like we commented on a couple of the earlier questions, we absolutely do believe that our big cable customers can grow consistently in the 2% to 6% range. And in some quarters can be at the midpoint or higher, and you will see some deviation on that quarter in-quarter out.
Shlomo Rosenbaum: Okay. Great. Thank you. And then just a point to the lower end of the free cash flow guidance range, are you seeing your customers kind of extending the payment I don’t know if I would call it terms, but maybe just paying late in the current environment or is that really just kind of a timing of milestones for various implementations and things like that?
Hai Tran: Yes, it is primarily timing of milestones. I think that our customers have still been fairly good about making their payments. Our AR hasn’t aged or looked materially different than it has in the past. It is more about the unbilled balance growing. We view that as a timing issue, particularly around some of the larger transformative global telco projects going on.
Operator: The final question will come from Brett Knoblauch with Cantor Fitzgerald.
Brett Knoblauch: Congrats on the quarter. Maybe just one on gross margin. I think it is kind of stepped down a couple of hundred basis points year-over-year, all this year kind of sequentially declined. What is driving that? And what should we expect on the gross margin on the go-forward range or go-forward basis?
Hai Tran: The majority of any movement on gross margin will be around mix today. And in our business, we have obviously a combination of services revenues and license revenues, SaaS revenue, all of which have a very different profile. The mix of business will drive some of that. With that said, in particular if we look at our non-telco business, our SaaS business on payments and CX, they are totally SaaS. As those ramp up, that is going to improve the mix. As we drive greater efficiencies across the board in our other lines of business, that is going to drive opportunities for margin expansion on the gross margin side as well. Our expectation, as Brian said, I love the phrase, a turn of the wrench. Because that will continue to kind of have a steady march towards margin improvement mix aside.
Brett Knoblauch: Perfect. Understood. And then just on the AI front, you talked about a lot of using it internally to make your employees more productive. Do you think this could be a potential driver for you guys to reduce headcount as this becomes more intertwined in the organization?
Brian Shepherd: I think that there is a lot of things that I think a lot of companies are looking at. To be more efficient? Absolutely. And the question is though, as you continue – if we can continue, like we expect to do, to continually accelerate our organic revenue growth, that means it is going to potentially lead to the growth in headcount over time. What you may see is more of a headcount avoidance as opposed to a specific headcount cut because of the amount of growth we are having overall. Do we expect it to drive improved customer service, more efficient customer service, more efficient sales and G&A and more efficiency in our R&D capabilities? Absolutely, across the board, and we are already seeing that with some of the just innovation that our teams are unleashing in all parts of the business.
Will it lead specifically the headcount cuts? I would say more headcount avoidance at this stage, but that is something that we could watch and update on in future quarters.
Operator: And the next question comes from Nehal Chokshi with Northland Capital Markets.
Nehal Chokshi : Yes, thank you, and nice strong quarter here. Given that it was a nice strong quarter, why not raise calendar 2023 guidance?
Brian Shepherd: Nehal, I hope you are doing well. Yes. No, it is a good question. Like we said, we talked about the guidance. We love the performance, the momentum that we are building in the business, and we decided to keep the guidance the same and focus on just seeing how we can perform to get to the top end or above in Q4. We do fully expect to have – I think when we shared some maybe color at the end of Q1, we said this was going to be a little different shaped year. We said Q1 with the giant would look – Q4 would look a lot like Q1. We said Q3 would look a lot like Q2. What you saw just announced was Q3 actually came in $1 million ahead of Q2. We delivered a giant Q4 last year and Q1. Now what we have got to do is rinse and repeat and have Q4 beat both last Q4, and materially, and the strong Q1 we had.
