Jon Kessler: Fire away.
James Lucania: Sure. I can take that. So no, you should definitely not assume that the tech and dev spend is going to be flat. I think what we’ve talked about in the past and Jon has talked about before my time here is that we were reaching the peak last fiscal year of the spending as a percentage of revenue. So we’re a little above 22%, kind of 22%-ish now. So we should start seeing more efficiency. But no, we’re going to continue to invest in the business. So the idea is efficiency at the margin level, not trying to flatten the raw dollars of tech and dev spend.
Jon Kessler: MJ, do we have another question?
James Lucania: Maybe we lost MJ. Did that happen? Without MJ, we got nothing.
Jon Kessler: Yes. I can’t bring up the questions. MJ has to do that.
James Lucania: Something funny is going on. This call is very adventurous so far, everybody. There’s a lot of someone’s transcribing me saying this right now, aren’t they?
Jon Kessler: Yes.
James Lucania: Or maybe not.
Operator: The next question comes from Stephanie Davis with Barclays.
Stephanie Davis : Maybe MJ didn’t put me on because she knows how sick you guys are of answering all my questions. I think, I talked to you every week.
James Lucania: You got us you got us to Miami, my hometown. Stephanie got us to within, like, literally my hometown of well, I guess, in my case, Miami Beach, which is where we were. So that was we were 50 blocks or something from where I was born. Can’t do better than that.
Stephanie Davis : Well, congrats on the quarter. But Florida man, Jon Kessler, I have a question. When I think about your recent investor day versus the last investor day you’ve had. There was way less CDB talk. And I’m looking at your CDB line, and we’re actually seeing account growth again this year. So I love a little bit of a look back on how that industrial logic of marrying HSAs and CDBs played out. And we think about the future, do you think we get to the same level of accounts we saw during the wage transaction, or where does this where does that line go?
James Lucania: I really appreciate that question, actually. I mean, I can’t get them all, but this one yes. I do. Because you noticed something that as we kind of looked at investor day and things like sometimes things just happen as you go through it and you don’t quite notice them, and this is one of them. And, so here’s my thought. First, the core logic was not we are going to like, we have leg 1, and now we’re going to have leg 2. That sort of thing. It was that acquiring the CDB business at scale gave us the opportunity to grow our HSA business in 2 ways. One, by playing on more fields and two, by, that we weren’t able to play on before and two, of course, by giving us clients to cross sell to. And all evidence is that that happened.
And the easiest way to see that is that when you look at HSA at either gross HSA openings or net adds, whatever you want to look at, right, when you look at our sales numbers. Notwithstanding the fact that the HSA market is still growing by the same amount year-over-year instead of capturing roughly 20% of that growth as we were pre-wage. Right now we’re capturing, and we’ll see. I noticed that Devenir put out there. We’re going to have our market announcement, like, 5 minutes before this earnings call. So, I’m guessing maybe they listen to the earnings call and they use some of this information and then in a couple of weeks, they have their thing. But they’re wonderful people, and I shouldn’t tease them that way. But let’s say, from an account perspective, we’re capturing a third of the market and maybe in the aggregate 30%.
And so it works. That having been said, I think, what I would have did say at the time of transaction having at least some amount of expertise in that business was that the CDB business itself was extraordinarily steady. And it turned out it wasn’t. And it wasn’t primarily as a result of and I don’t want to be cheeky about it. I mean, it’s primarily as a result of I don’t want to adopt responsibility, but it’s primarily as a result of pandemic. And even at the outset of the pandemic, as you’ll recall, we didn’t anticipate the level of unsteadiness of that business. And so, obviously, there’s a commuter component that people talk about. But in addition to that, there’s the fact that the dependent care, which is part of the FSA piece, when you know, kind of disappeared for a while and is still well below its prior levels.
And then, thanks to, some of the recovery legislation, we got this sort of brief, blip in COBRA that then went away. And then in addition to that, we’ve got the fact that the ACA marketplaces are subsidized and that subsidy appears like it’s going to continue. And so actual COBRA uptake relative to which is a portion of COBRA revenues kind of came down. And so like that’s a lot of movement that we were not anticipating having to deal with. And so as we look at it going forward, what we want to be doing, as I said in earlier answers, we want to be growing the CDB business. We want to be taking market share. And since the business as a whole is, I’m going to put commuter aside, whatever. Let’s assume it’s kind of where it is. But broadly speaking, it’s only going to grow at the rate of workforce, which is like what percent.
