Dan Burkland: Yes. I’m glad you brought that up, and I’ll start it and Mike, you can continue. If you look at the attach rate, yes, 80%, a big number. If you look at the revenue contribution, small number, a very small number. And the reason being is we’re at the very beginnings of really implementing AI and automation in the right use cases. Today, you have a very simplistic straightforward question that gets asked repeatedly within the contact center; well, if you automate that, you can let the customer self-serve for, and that’s great. So a lot of customers are looking at deflecting 3% to 5% of their calls over. And if you think about the pricing that we’ve dictated, well if you — so if you put in 6% to 10% of the revenue contribution from that customer because they’re deflecting that many calls over, yes, we make more on those automated calls than we do non-automated costs, but it’s still a small percentage.
So in three to five years, boy, I’m optimistic that, yes, the crystal ball says more and more use cases will become prevalent. Consumers will get more used to and comfortable talking to a machine versus a human. But for the consultations and the sales calls and all the other things that you need to really speak human to human, that’s where we implement automation to help that human-to-human conversation. And we assist making it more powerful and more efficient in delivering data to that agent more quickly and effect — and more accurately. So there’s automation we can apply to help a contact center be more efficient and effective. But across the board, where I’m going here is, it’s really hard. We have some customers that go all in and put multiple applications in, and it’s a much higher percentage and others where they’re just barely scratching the surface.
The beauty here is, over time, we know it’s going to increase. We know it’s going to be more prevalent. We know some is going to be based, as Mike said earlier, on a per port or capacity based. We’re going to have others that are transactional or per minute or on a usage basis. And in all those scenarios, it’s Five9 software being delivered to help enterprises deliver a great customer experience. And so our revenue per customer without a doubt will continue to increase and do so handsomely.
Matt VanVliet: All right. Great. Thank you.
Operator: Siti Panigrahi with Mizuho has the next question.
Siti Panigrahi: Hey, thanks for taking my question. I want to ask about the margin. Look, you guys have like 100-plus — 100 bps plus margin — gross margin expense and also operating margin. Should you expect this trend to continue? Or how should we think about your investment, especially with this AI opportunity? And also, could you talk about the Aceyus, how is that going to impact your margin?
Barry Zwarenstein: So, let’s break it into the two components: growth and operating expenses. In terms of gross margin, if you look at over the longer term, it is very clear that that’s going to go up. Why do I say that? It’s simple — there are a number of factors, but the biggest single one is the leverage between fixed and semi-fixed costs. And sometimes to understand what’s going to happen in the future, you need to look at what’s happened in the past. And if you look at the past 10 years, nine out of those 10 years, the gross margin on our subscription business expanded. The only exception was we will be doing some heavy investments in the cloud and in international. And the rough numbers, software already accounts for approximately 75% of the total revenue.
