Bryan Hunt: Yes, that’s right, Dan. Yes. And Scott, what I would share is the unit economics for the TEMS relationships on the services side, we think is pretty similar to what we have heard in the past. As Dan mentioned, where those typically start at essentially neutral to up to 10% services gross margin and then ramp over time to that 25% services gross margin level. And we have shared some proof points for clients that are more mature that have ramped to that level. What excites us more about the small tuck-in acquisition that we did, ERS, is a little bit less related to the upfront gross margin profile and more related to the over a few years or longer term gross margin profile where there could be some just given the additional efficiency provided by that technology, some additional upside in terms of the longer term gross margin profile.
Obviously, are early in the acquisitions. We want to be careful around seeing a lot of proof points of that. But that’s part of the rationale there. I think just related to your question as well. Some of the reduction from a cost standpoint that we are doing is that it’s mostly related to that consulting services, professional services arm where we are trying to increase utilization rates there to the appropriate level and a little bit less related to our tech-enabled offerings.
Dan Burton: And one of the things, Scott, that I would add to that is that we do continue to be encouraged from an OpEx perspective to continue to see really meaningful operating expense leverage as we enter into these tech-enabled managed services contracts that they are very efficient as it relates to any need for incremental OpEx. So, that is also encouraging from EBITDA perspective.
Operator: Thank you. Our next question will come from Stan Berenshteyn with Wells Fargo. Your line is open.
Stan Berenshteyn: Hi. Thanks for taking my questions. Dan, maybe one for you, you have obviously been on the road all year meeting with clients. Clearly, clients want hard dollar savings. But if you think back to the conversations you have had with clients a year ago and compared them to the conversations you are having now, has anything changed? Is the sales funnel different in any way? Thanks.
Dan Burton: Yes. Great question, Stan. So, the conversations are a little different in two ways. First, at the level of financial pressure from a year ago, 16 months ago, relative today has generally improved. And so it allows our clients to think a little bit more broadly about what they can do or have a little bit more time and space to think through how to improve their cost structure, how to improve the quality of the delivery of healthcare. So, that’s one way in which things are gradually improving. It’s incremental, but it is incrementally positive. The second element is related to the first and that is 16 months ago, the openness of prospective clients to really seriously consider Health Catalyst, particularly on more enterprise wide basis from their enterprise DOS subscription perspective was very, very limited.
There was so much financial pressure that was just very hard for prospective clients to think about incremental investments. As I mentioned a few minutes ago, that is a second observation that we are having was, if there is more of an openness now and I think it is directly tied to the operating environment, improving a little bit. And so I am starting to spend a little bit more time. Our team is starting to spend a little bit more time discussing meeting face-to-face with prospective clients. And I think there is more of an opportunity to explore. And I think seeing meaningful pipeline movement moving forward in the new client space. That will take time to play out. We are just starting to see some more of those opportunities emerging. But we are encouraged to see that and that will impact the way that we think about the proportion of a time that we spend with existing clients.
We will still spend lots of time with existing clients. But we are starting to spend a little bit more time proportionately in the new client space.
Operator: [Operator Instructions] Our next question comes from Sarah James with Cantor Fitzgerald. Your line is open.
