Ashwin Shirvaikar: Hi. Bob, good morning. Hi, Cassandra, good morning.
Cassandra Hudson: Good morning.
Ashwin Shirvaikar: Good results. Good results here. Congratulations on that.
Cassandra Hudson: Thank you.
Ashwin Shirvaikar: I was looking for some sort of granular help in terms of kind of the build out of the model looking at the SMB side, when we consider sort of the number of locations that are being added per quarter, and then the next part of that is the number of professionals per location. Why do you don’t explicitly have has larger pricing like last year in explicit terms, but you sort of have implicit because more people are moving to group, right? So if you could provide any kind of color with regards to how someone like me outside looking in can build out that model, that’d be great?
Cassandra Hudson: Sure. Thanks. Thanks for the question. In terms of gross customer ads, we see pretty consistent trends that as €“ consistent with what we saw in 2022 or 2023, really driven by the high demand for mental health treatment and care. So that trend remains strong and we think that will still fuel pretty consistent gross customer ads. We are kind of expecting a slight increase in churn as we work through some of the pricing changes that, that we have planned for this year. So I would say, again very small but largely consistent trends overall with 2022. Again on the gross customer ad side. And then just in terms of group practices, which I know you asked about, I mean, that has been growing pretty consistently and we expect that trend to continue for 2023.
Ashwin Shirvaikar: Understood. But is there any other granular detail that you can provide with regards to the penetration of group practices in the base or anything like that that would be helpful?
Cassandra Hudson: I mean, overall we have again, I think, just north of 1.6 practitioners per practice, and that’s been up over the past several years from 1.4. So we’re focused on kind of that next segment up, if you will, in group practices, think still in the 10 to 20 practitioners, that’s where we’ve been having some good success today, and I think that will be contributing to the growth that we see in 2023, especially as we roll out more features and functionality specific to them, which we expect later this year.
Ashwin Shirvaikar: Understood. And one last cadence question as we think of Rev. growth for 2022 and think of it in terms of segments, obviously the 20% on Enterprise, I took your comments to imply it would be sub-20% at least in 1Q and then be higher than that later on. And with regards to SMB maybe it goes the other direction north of 30% to start and gets a bit lower than that afterwards. Is that kind of a fair comment? Any other things to watch out for in terms of compares or anything like that?
Cassandra Hudson: No, I mean, honestly, the impact in Q1 in terms of the seasonality that we see in Enterprise is very small. So, it’s not going to be a huge step down here. And I don’t think it’s going to swing the growth rate too much. And then on SMB we do start laughing those compares in Q1. So, it will start impacting the growth rate here in the quarter for sure.
Ashwin Shirvaikar: Got it. Thank you. Keep up the good work.
Cassandra Hudson: Thanks Ashwin.
Bob Bennett: Thank you.
Operator: Thank you. Our next question comes from Jason Kupferberg with Bank of America.
Jason Kupferberg: Thanks guys. I wanted to ask about ARPU, you continue to see some healthy growth there. What sub-segments would you say are primarily driving that? And does ARPU become a bigger part of the overall revenue growth equation in 2023, 2024 versus what you’ve seen the last couple of years relative to customer growth?
Cassandra Hudson: Yes, I mean, I think, what we still expect to see really strong contribution from ARPU expansion in 2023. I think 2022 was certainly an outsized year in terms of the ARPU expansion we drove, which really was associated with the pricing and packaging changes we made. So, the expansion will clearly be less than what we saw in 2022, but still a huge contributor for us. And the underlying drivers there are really around our expansion into practices, we have a seat model, so we charge for additional licenses as practitioners join the customers that we have and an element of pricing and payments processing. So more and more payments being processed on our platform.
Jason Kupferberg: Right. Right, okay. And then maybe just a follow-up on margins looks like you’ll come in this year around 18% in adjusted EBITDA. You reiterated the longer term target of 30%. Would you expect just sort of a relatively steady cadence over time, or are there points in time where just because of scale you start to get more of a pointed inflection, let’s say, in terms of your G&A leverage?
Cassandra Hudson: The next few years it will be steady progression and that will largely be fueled by expansion in G&A as we get efficiencies there and small incremental improvements in gross margin. Over the long-term, I do think we’ll start to see real leverage come from sales and marketing. But that is still, I would say, a few years out here as we’re really investing to drive growth and capture share.
Jason Kupferberg: Yes. Still chasing a ton of TAM. Yes. Okay, great. Thank you.
Cassandra Hudson: No worries.
Operator: Thank you. Our next question comes from Scott Berg of Needham. Good morning Scott, your line is open.
