Parker Lane: Yes. Hi guys. Thanks for taking the question, and congrats on the quarter. Mike, I noticed that the Insights product was part of your prepared remarks around two new deals and one of the go-lives during the quarter. Can you just talk a little bit about why that product in particular is resonating right now? And then more broadly, if you look at the base, what do the attach rates look like on that today? Is that something that you feel pretty optimistic about going into 2023 here that you can permeate more within that existing customer base? Thanks.
Mike Jackowski: Yes. Parker, Insights is a very important product for us and for our customers. What Insights really is you think about an enterprise-wide data warehouse for an insurance carrier where they can see all of the data, how they’re performing, the amounts of products that they’re selling, their loss ratios, even distribution and how their agency channel is performing. And so anytime a carrier buys a core system from us, Policy, Billing or Claims, typically, they’re also asking the questions of how can they have better views of their data and how can they look at that data more holistically across the organization. So, Insights doesn’t just source the data from Duck Creek. Carriers quite often land data from other systems, even legacy systems into our Insights platform and it really just gives them more of a 360 view from a data perspective of their overall business.
And then quite often, it serves as a conduit the way carriers will integrate with downstream systems. And there’s a lot of complexity in how they have to do it in terms of sending the financials down to their back office systems and general ledger and those types of things, and it serves as a conduit for that as well. And that’s why the attach rate of it is quite high. I don’t have the specific number in front of me, but I would suspect it’s over 70% of our core solutions that bring Insights along in terms of the demand that we’re seeing out there when we sell a new deal.
Parker Lane: Got it. Understood. And then, Kevin, quickly, at the end of your prepared remarks, I believe you referenced a modest workforce reduction done at the end of November. Can you maybe talk about what sort of roles were eliminated there? Who was most affected within the organization and if any of that was on the go-to-market front? Thanks.
Kevin Rhodes: Yes, sure. So no, it was not on the go-to-market front, I would say. As we think about our business and we think about as we look across the organization and make sure that we are — making sure that we’ve got the right investments in the right places and we have the right prioritization across the board, we were realizing that we had some misalignment across the board in certain areas. Some of it was related to COGS, so we had a little bit of a benefit in the staff ops side. And then the rest of it was non-go-to-market. I want to be very clear, even really non-innovation non-go-to-market. And so — but it was very small. I would say it was relatively small but will give us some growth in the back half of the year.
And I would note that some of our benefit that we get with EBITDA, right, so we’ve got Imburse kind of taking $3 million out of EBITDA this year, but yet we raised by $1 million, and so we’ve got a $4 million improvement in EBITDA this year. And that’s a clear indication that we’re taking that reduction in force to the bottom line throughout the year, which I think is the right thing for us to do in this environment.
Operator: Our next question comes from the line of Alex Zukin of Wolfe Research.
Strecker Backe: Hey. This is Strecker on for Alex. Thank you for taking our question. Can you break down how much of your ARR base is core versus noncore as well as the net new ARR this quarter? And then, can you also help us parse out how much came from Ephesoft this quarter? Thank you.
Kevin Rhodes: Yes. So, a little bit of granularity you’re asking for there between the core and the non-core. We actually don’t break down our ARR that way. And the reason why I’ll say is that oftentimes we bundle our products together, so it’d be one price to the customer for a number of different bundled packages together. So, it would be very hard to unbundle that and come up with a separate standalone price for each one of those. So for that reason, but I would say, broadly speaking, the large majority of our ARR would be just based on the pricing and how large the products would be, would be hundreds of our ARR would come from core products. And in terms of Ephesoft, we had a small contribution as expected in the quarter.
But I guess like we said last quarter, it’s a smaller company. And we — I think they had $5 million of ARR contribute last quarter, and it will continue to be a good solid steady improver of our ARR, but it’s one of many different products that we have. But we’re not breaking that out going forward.
Strecker Backe: Okay. Thank you. And then just one quick follow-up. With the new ARR calculation, should we expect any different seasonality throughout the rest of three quarters of the year compared to what we’ve seen in the past? Thank you.
Kevin Rhodes: Sure. No, I do not think so. I mean, just to be clear, what we are doing here is, in the past, we used to — basically the second half of the final month of any given quarter, we found that those particular deals that we had in the second half, because we had kind of a half month convention of how we were thinking about ARR coming in, that we would not be recognizing revenue on that — on those deals that came into the second half. Some of it’s provisioning, et cetera. And so, at the end of the day, what we are doing now with changing our ARR definition is any active contracts that we have signed by the end of the quarter will enable us to actually take ARR credit. So, it’s more transparent to you in terms of the deals that we will have in a particular quarter. And we feel like it’s a better meaningful representation of what our future revenue will be.
Operator: Thank you. Our next question comes from the line of Peter Heckmann of D.A. Davidson. Please go ahead.
Peter Heckmann: Just to clarify, Kevin, on Imburse. You said several hundred thousand dollars in revenue, and the time period you’re speaking about was the remainder of this year?
Kevin Rhodes: Correct, Peter. That’s right. It’s small and it’s just getting started, and they, quite frankly, had built out all the technology, but not built out all the go-to-market. But we love the technology and we think it’s going to snap in really well to the company and snap into all of our core products. And then we can really use our go-to-market engine to drive this company in the future. And we’re just super excited. We’re really, really happy with the technology purchase there.
Mike Jackowski: So Peter, just to be clear, it’s Mike, the revenue contribution and the EBITDA impact for the fiscal year is the time that we noted.
Kevin Rhodes: That’s right.
