Vincent Pilette: Definitely. In partner, we have multiple channels, right? So, employee benefit is one of them. We have the telcos, we have some of the retail, we have strategic partners as well, and they all behave slightly differently. They also have a different relationship between your bookings and your revenue compared to the normal DTC business, which is 90% of our business as you know. In term of the employee benefit channel, we continue to grow the pipeline. We’ve been growing double digits, maybe we’re a bit overoptimistic in term of closing certain of these deals that would then carry immediate impact here during sign-up times, and those will be delayed and carry going into fiscal ’25, they’re not lost deals, but it takes time to deploy.
We’re also deploying into those installed base higher value proposition, which may be started initially as basic identity protection, adding all the way to the full membership structure with ReputationDefender, a new product, and those taking a little bit more time. Each channel may have different ARPU of their employee base is very close to LifeLock, maybe 20%, 25% lower than the average, but very close to it.
Peter Levine: Great. Thank you for the color.
Operator: Thank you for your question. The next question comes from the line of Matt Hedberg with RBC. Your line is now open.
Matt Hedberg: Hi, guys.
Vincent Pilette: Hey, Matt.
Matt Hedberg: Hey, guys. Hope you guys are well. Thanks for the time. Maybe just — my questions are kind of similar to the first couple of ones that have been asked, but I guess specifically on the ARPU piece, you’ve answered the question a couple of times. I guess, specifically, you guys don’t guide to net adds and ARPU, but sort of embedded in your Q4 guide, is it sort of continued mix pressure? Is that something that we should kind of expect in kind of the shorter term? Obviously, there’s a long-term, probably, upward bias to ARPU, but just sort of wondering if you could give us a little bit more clarity on some of the Q4 assumptions.
Natalie Derse: Yeah. I think from — like you heard Vincent talk about, when we — now we see two quarters of the momentum that we see, and look, we like what we see. I don’t want that to be lost in the overarching metric with ARPU sequentially down and now two quarters of sequential customer adds. I think it’s important to understand as much as we can and explain to you guys what’s happening at the cohort level. So, let’s just talk about ARPU for a second first. If you break that down and we really see the core online business, we see expansion in ARPU, and we’ve seen that for many, many, many quarters in a row, especially as we continue to drive in a successful manner more and more adoption of cross-sell, that has been a growth driver and lever for us in the recent quarters.
And as you heard in back in November, it will continue to be one of our main levers as we drive forward, not only with the different cohorts that come in as we expand internationally, but as we, again, have a robust product portfolio and continue to bring new products to market. And then, when you look at the economics of the other cohorts, they’re very healthy. We’ve said and we’ve been very explicit that we will continue to invest in marketing to drive growth and drive expansion and diversify, but we don’t burn money in the parking lot. So, even as the cohorts mix together, and at the top-level metric, on a blended basis, it looks down quarter-over-quarter — it is down quarter-over quarter, within the cohorts, they’re very healthy. And so, as we look forward in that metric, or we look forward as to where the customer acquisition is going to come, and we achieved compared to as they come through the funnel what products and solutions are they choosing at which time, it’s definitely all about diversification, and it’s all about growth, and we don’t pick and choose or prioritize one channel, market, et cetera, over the other.
What we’re looking for is sustainable and profitable growth. And as we look at the performance of the performance marketing dollars, we put the fuel behind the most fruitful opportunities that we can in a balanced approach. Now, how that all that math comes together quarter in, quarter out, I think that’s going to look different, and it’s going to flex as we make those decisions. And what we’ve got to make sure that we lay out for you guys is that it is a balanced and disciplined approach, and that the diversity that we are driving is a healthy one for Gen.
Matt Hedberg: Got it. Super helpful. Thanks, Natalie. And then, there was an earlier question too on the employee benefit revenue. We often thought that’s a huge opportunity for you all. It sounds to me like — I just want to clarify, you said the revenue that slipped out of 3Q, we shouldn’t expect that in 4Q, that’s more of a fiscal ’25 timing issue. Is that kind of the right way to think about the deals that didn’t close this quarter?
Vincent Pilette: Yeah, definitely a few key deals slipped into fiscal year ’25, and we did not put them into our Q4 forecast.
Natalie Derse: That’s another one where I want to make sure that we…
Matt Hedberg: [indiscernible].
