Craig Clay: Yes. So thank you, Craig again. Venue growth was obviously very strong in the quarter, 26% despite a sluggish M&A market, so up 9% sequentially from Q3, record revenue quarter for us. So Venue continued to perform in a much more predictable manner than its primary use case, which is M&A. So obviously, we all suffered through the market last year. M&A was down 18% in Q4. So what we’re seeing is increased room activity, higher activity on existing rooms and higher pricing in Q4. So these rooms are staying open longer, again, reinforcing the stability of Venue. And the underlying demand that we’re seeing is less volatile than M&A. So it’s reoccurring in nature. So we’re generating a more stable revenue stream with what has been an event-driven transactional product.
And we’re certainly encouraged by the resilience underneath that. We’re hearing from our deal makers that after years of decline, they’re finding opportunities despite value adjustments. So the demand for high-quality assets is high. And our pipeline is good. And to your point, it’s our belief that we’re taking share and executing in our primary markets, most notably in New York. And we’re also continuing to grow Venue outside of M&A. In the recurring use cases, such as our subscription business, again stable recurring Venue growth. And we’re seeing adoption in franchise and technology and energy and health care. So we’re executing on our plan to take share in any market. And I think our unique position on the deal team from our traditional CM-CCM [ph] business means that we’ll continue to drive software revenue through our Venue virtual data room.
So an ecosystem that’s certainly working for us. So thank you for the question.
Raj Sharma: Yes, great. Thank you. So just lastly, the total – the Tailored Shareholder Reports, the revenue and the accretive dilutive guide, does that include the Pay versus Performance as well? Are all the new regulatory report requirement sort of product lines included in that guidance?
Craig Clay: And so I’ll start, and then turn it to the team. Pay for Performance was a 1934 [ph] Act regulatory requirement that we completed in 2023 for the first year. So that was included in the proxy statement. So from there, I’ll turn it to the TSR team for comment.
Dan Leib: Yes, thanks. Yes, the commentary around TSR was specific to TSR, and just to elaborate a bit on that. So the regulation goes into effect in July. So we expect – of 2024, we expect the half year of impact in 2024. Certainly, it was dilutive to 2023 as we had investment to build the offering. And similarly, we’ll have a full year of investment in 2024 to build – finish the build of the offering and then get a half year of revenue, et cetera. And so moving to 2025, we get the like-for-like, and to Dave’s comment, of a full year of impact is a really attractive financial return just in 2023 and 2024 as the investment phase.
Raj Sharma: Got it. Thank you for answering my questions and take it offline.
Dan Leib: Great. Thank you.
Raj Sharma: Thank you.
Operator: We’ll go next to Kyle Peterson at Needham.
Kyle Peterson: Hey, good morning guys. Thanks for taking the questions. I wanted to start out on software growth. Obviously, the 2028 targets with the kind of mid-teens growth is great to see. But given that’s a pretty big step-up kind of from where we are now on an organic basis, how should we think about the path to get kind of where we are now in that mid- to high-single-digit range up to the mid-teens range and both in timing and kind of how scaled the ramp is?
Dan Leib: Yes, go ahead, Dave.
Dave Gardella: Thanks for the question. So I think when you look at the overall software growth at mid-teens, there’s a portion of it based on the existing products, et cetera, that when you look relative to our historical performance on that growth is very much in line. I think when you look at total software sales growth from 2019 through 2023 was about 11.5%. And that’s just on the core existing products. My comments earlier, I think it was Charlie’s question around the incremental growth, comes from what we’re expecting a shift out of some of the traditional services into more of a hybrid model, right? So leveraging the software products, but also leveraging a lot of the traditional services. And that is what we think – kind of the delta between the projections relative to our historical performance, which was about 11.5%.
Dan Leib: Yes. And just to add to that, we’ve seen that over time in terms of the shift and to Dave’s comments in the prepared remarks, the shift is generally less or slightly less revenue, a similar amount of profitability. So a much improved margin profile when that shift occurs. Calling the timing exactly of that shift is a little tougher, but we found good ability to be able to transition clients and take them – support them in the way in which they want to work as they move from the traditional side over to the software side.
Dave Gardella: And I would just add, sorry, the last thing there. The Tailored Shareholder Reports is probably a great example, where it’s kind of the initial hypothesis was that it was going to be much more heavily weighted towards software. Then we get to – you see the details of the regulation and how the market wants to be served. And it’s really through a combination of software, services and in the case of TSR print. And so one of the advantages we have in the competitive landscape is being able to serve clients on all three of those fronts. And so again, we’re going to combine our offerings the way the market wants to work and how best to serve our clients.
