I think what’s supporting that point is what we’ve seen here in Q4 and then in Q1 is this growing invoice subscription amounts I talked to a few minutes ago that we’re seeing that pick back up after Q2 and Q3 were a bit flattish. Again, on top of big comps the year before, but even Q4 and Q1 — Q4 of this last year and Q1 of this year are also on top of pretty good comps as well, and we’ve seen nice growth in that invoice subscription business. So, we feel good about the general environment and what we’re seeing out here and what we’re hearing from our clients.
Jeff Martin: Great. And then just one, something that I discussed with your team earlier in December, was penetration into lower areas of an organization and how that might affect future subscription services-related services attach rates. And maybe you could just give us your view there. It seems like you are seeing demand there from clients at levels lower in the organization.
Paul Walker: Yeah, it’s a great question. So, we — a couple of thoughts I would just say. One, we do talk about the attach rate as a percentage. I think that percentage could go up or down a little bit over time. And what might cause — but the dollars themselves will continue to go up, right? The percentage could go down if we — as we expand to larger and larger populations and they choose to, at the front line, deploy some of our solutions in asynchronous modality ways. At the same time, the percentage could go up as we do a better job of addressing the leader populations. Again, we’ve talked before about our penetration rates inside the average customer. We’re still 10%, 15%, 20% of the way penetrated even within the leadership population inside the organizations that we face.
And so, I think the attach rate will continue to be strong. I think whether the attach rate, the percentage goes up or not, the dollars will continue to go up because I suspect we’ll continue to attach at about the same rate. And I think the rate will be higher in the back half of this year, but that rate will be on an increasing base of subscription. And we are excited about some of these solutions that we’re bringing to market that are built to scale even more broadly across organizations. Again, we’re the collective action company trying to create common language, introduce common ways of thinking and behaving and leaders need that. They need to drive that down through the organization. And so, as we develop these solutions, we want to make sure that we have solutions that are built to do that.
But I think services will continue to be an important part and the dollars will continue to increase. I imagine the rates probably stay about where it has been, but that could go up too. I continue to be pleasantly surprised at the way multi-year contracts, and that rate continues to increase year after year.
Jeff Martin: Great. Appreciate the insights.
Paul Walker: Thanks, Jeff.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of Alex Paris with Barrington Research. Your line is open.
Alex Paris: Hi, guys. Can you hear me?
Paul Walker: Yeah. Hi, Alex. How are you doing?
Alex Paris: Good. I’m doing well. Thanks for asking. Congrats on the strong quarter. I’ll be quick, we’re late in the call here, and I just have a few cats and dogs to follow up on. First of all, in your prepared comments, you didn’t speak to China and Japan. That’s been a topic of conversation. It’s roughly 50%, as I recall, of international sales. There’ve been an improving trend in China coming out of COVID for the third time, I suppose. I just wondered for a little update there.
Paul Walker: Yeah. Great question. So, in [indiscernible] things continue to improve there. In Japan, Japan had a relatively nice quarter. As you — first of all, stepping back, as you know both these areas as they come back out of COVID, we’re putting a big focus on making sure that what they’re selling is subscription. So these are kind of the last two parts of the world to convert their businesses from the legacy model to the subscription model. And so — and that’s going well in both of those countries. As that occurs, of course, that depresses reported revenues slightly as more of that revenue goes out on the balance sheet in the form of subscription. But we are intently working on that with them as they return. Japan almost got back last year to its pre-pandemic high, and we expect that it will get back above that this year.
So that’s been a long time coming. China has been up and down when they’ve been in and out of COVID, and that business is coming back as well. I think we feel relatively generally good about what’s happening in both those countries.
Alex Paris: Great. Thanks. And then looking back at Q2 of 2023, deep snow, renewals were not quite — well, I guess the renewal rate was good. The retention rate was consistent with prior quarters. But you did not sign a couple of large clients. I’m wondering about those large clients that didn’t renew on a timely basis. And I know it’s your expectation that they come back at some point. Have they come back yet? And what are you doing to increase the odds that they will come back?
Paul Walker: Good question, good memory. Yeah. So, we have — to that point, one of them has, one of them hasn’t come back. And there were a handful. I don’t know if I can give you an exact answer on the hand — the full handful. We do have — we have a category of clients we call win backs. And so, when a client doesn’t renew on time, they go into a category of win backs. We have a special effort that we put in place on those clients. And so, we’re — fortunately, we don’t have a lot of those, but when we do, we have a process we run because our mantra around here, we throw around is clients for life. We don’t ever want to lose the clients. And so, we take the approach that, well, if we lost them, it’s a temporary thing. We’re going to get them back. And so, we’re doing that on those clients from Q2, and we’ll continue to do so.
