It’s funded by performance versus our expectations for the full year. With the change in expectations for the full year, we did adjust the expected expense related to variable compensation. That shows up as some benefit in Q2 and we will have lesser, but some benefit in the remainder of the year. And then, again, we were just sort of toppish from a revenue standpoint with the $1.170 billion in Q2. From a profitability standpoint, generally, Q3 is a good quarter for us with more bill days. I don’t — I think you are still going to see somewhat lower utilization in Q3 and so probably not expecting much improvement or probably maybe even a little bit of decline if you went to the midpoint of the range, the 15.5% to 16.5% that we have guided to for the Q3.
I think gross margins could end up in a 32% to 33% range in Q3 with lower bill days in Q4, may be somewhat lower and I would definitely expect to see a decline in profitability between Q3 and Q4, due to a lower number of bill days, vacations and all of that, which generally impacts profitability in the last quarter of the year.
Tyler DuPont: Okay. Great. I appreciate that, Jason. Thanks. And then for my follow-up, I just wanted to sort of double click on the demand story here as we look towards the back half of the year, specifically your expectations on the evolution of the demand environment across your total client base, the balance between if you are assuming macro stability or any sort of additional softness in any of the verticals or geographies you are operating in? I know Bryan sort of alluded to the sequential declines and the last question in regard to 3Q and potentially 4Q. So just sort of any clarity there helping us frame the demand environment would be appreciated?
Jason Peterson: So just — I am going to give you the numbers, what we are currently seeing from a forecast standpoint for Q3 and then I will let Ark comment and maybe provide more color. From a sequential standpoint, I think, with some of the budget reductions that you have seen in major customers, you are likely to continue to see sequential decline across a fairly large number of our verticals. I think you could see sequential growth in the emerging, which has got a significant energy manufacturing footprint. I think you could continue to see — are likely to see a sequential growth in the healthcare and life sciences, where we are making good traction here in fiscal year 2023. So that’s kind of what I am seeing from that standpoint.
I think you still have a little bit of impact from customer decisions to reduce spend in Q2. And I think as Ark has indicated, that we are more hopeful that clients are beginning to sort of stabilize their spend and could even see some increase later in the year, but.
Arkadiy Dobkin: Yeah. I think that’s right with what I shared at the beginning of the first question. It’s still soft. It’s still unpredictable. It’s still slightly going down. At the same time, we see different conversations starting to happen. There are more activities with new logos and that’s what we shared during our thought at the beginning. But also existing clients, different sort of conversations that we saw a couple of months, a couple of quarters ago. Again, it’s still difficult to predict, we reacted and we forecasted based on what we really kind of see right now.
Tyler DuPont: Great. Thank you, both.
Arkadiy Dobkin: Thank you.
Operator: Thank you. One moment please for our next question. The next question will come from David Grossman of Stifel. Your line is open.
David Grossman: Thank you. Good morning. I wonder if I could just — a couple of quick follow-ups to some of the questions that have been asked. I mean, the first is just getting back to the customer dynamics and their own desire to kind of diversify risk geographically. If things stabilize from here, when would the sequential revenue headwinds begin to diminish if things just stabilized from here going forward?
Jason Peterson: Yeah. Yes. So, clearly, we would expect a sequential decline in Q2 to Q3, so when would the sequential stabilize. And then, David, I think, you are aware of this Q3 to Q4 is just you have got to bill day impact and so you have to have an improvement in demand to stay flat Q3 to Q4. And so we think that, that’s possible as we talked about in the guidance or maybe you could see a little bit of growth Q3 to Q4. But you do have — you are walking uphill Q3 to Q4 with the lower bill days.
David Grossman: Right. So excluding…
Arkadiy Dobkin: Yeah, David. Yeah. Go ahead.
