Dan Burton: Yes. Thank you for the question, Jenny. I will make a few comments and Bryan, please feel free to share additional thoughts. So, in this particular year thus far in 2023, I think due to some of the meaningful financial pressures that we just referenced a few minutes ago, we have seen more interest in the modular DOS offering relative to prior years. And that hasn’t been a surprise to us. And so we do expect for 2023 that we will see a higher proportion of our total net new DOS subscription clients to be more in that modular category than we have seen in prior years. However, we are seeing commensurate with some of the improved financial situation that we referenced also as operating margins are improving a little bit.
We are seeing a little more interest on the new client side inclusive of more interest in a more broad enterprise DOS subscription offering. Now, that will take time to play out through our bookings pipeline and then some more time to play out through our P&L and revenue performance as a company. But we are already seeing some of that increased interest that we think will play into 2024 in some of that overall reacceleration that that we expect we are not providing specific guidance during today’s earnings call. But we are seeing some of those green shoots that are that are encouraging.
Bryan Hunt: Just to add, you asked Jenny about some of the kind of differences between the enterprise DOS and more of our modular DOS or lighter components from a pricing standpoint. So, an average kind of price point for enterprise DOS of both technology and services historically has been around $1.5 million of annual recurring revenue for a typical new client. For our more modular or DOS light offerings, it’s around 40% of that value in terms of the technology and services starting point and can be a little lower than that even in certain cases where clients are purchasing some of our DOS modules which include Healthcare.AI. Pop Analyzer, those are horizontal DOS components that enable data to be spread through the masses of an organization.
And then we can also deploy those in concert with a vertical application use case like our financial applications for example. So, those are the types of offerings and the differences in the price points and what that means for us this year, given the mix that Dan mentioned is average, our average selling price for those new clients is lower than what we have seen historically. And we will provide kind of more color on that for 2024 at the beginning of the year as we assess the mix between those two items within our pipeline.
Unidentified Analyst: Great. Thank you.
Operator: Our next question comes from Scott Schoenhaus with KeyBanc. Your line is open.
Scott Schoenhaus: Hi team. Thanks for taking my question. You talked about a lot about technology investments that you put the release on the new acquisition to sort of bolster your tech-enabled solution and then you also mentioned the headcount reduction. Is there – is all meaning that structurally these gross margin profiles on year one don’t now start at zero and in fact there is some EBITDA – or sorry gross margin contribution coming from these contracts that ramps up more quickly than you had previously outlined for professional services or tech-enabled service offering.
Dan Burton: Yes. Thanks for the question, Scott. So, we are encouraged to see – and we do anticipate continued efficiency gains through the use of technology in these tech-enabled better services contracts. And we are excited about the efficiency possibilities that we believe will realize through this recent acquisition of ERS. Very similar to what we have seen in terms of the benefits with the ARMUS acquisition from a year ago. We do have some variation from contract-to-contract and client-to-client in terms of exactly where we start. From the gross margin perspective, as we have shared in the past, that gross margin starting point could be around 0%. Sometimes it’s a little higher. Sometimes a little bit lower. But we are encouraged to see a continued consistent progress as we begin those relationships and as those relationships mature that we are able to achieve meaningful efficiencies while also maintaining really meaningful timeliness and quality as well.
And we are certainly encouraged by that. We are constantly looking for ways to be more efficient and yet also do that in ways that don’t disrupt the quality or the timeliness of the solution.
