Kyle Peterson: Hey, good morning. Thanks, guys. Sorry for the technical difficulties earlier. Wanted to touch on capital allocation. You guys have really done a great job attacking the buyback here; good to see the debt get refinanced. How are you guys thinking about use of cash between buybacks or potential additional M&A throughout the rest of the year and into 2024?
Tom Spaeth: Yes. Thanks, Kyle. Appreciate it. What I would say is we’ve been — we’re in our third tranche of our share repurchase program now, and we’ve made a pretty significant dent obviously and been pretty successful on that program. I think you get to a point, though, where you get to a point of diminishing returns. And one of the things that the feedback we get from investors to is being mindful of the liquidity in the share. So, I think we’re very close to that level. So, I don’t anticipate an extension of the program further. But obviously, it’s something we’ll discuss with the Board on a quarterly basis. From an M&A perspective, we were a little bit more active this year than we have historically been. We’ll continue to be very prudent in the way we look at deals.
I can tell you there’s a couple that were in the market over the last quarter or so that we passed on just because of excessive valuations that we didn’t think was a prudent use of capital. And then, clearly, we feel really good about our ability to continue to generate cash. You can see the cash flow that we generated this quarter was pretty significant. And as we continue to do that into 2024, we’ll consider addressing the debt levels as well as we go through. So, we’ll continue a balanced approach like we’ve done for the last three years or four years. But I would say that if we had to weigh things towards continued equity investment versus addressing the debt, we’re probably getting to the point where we’re starting to swing more towards the debt.
Kyle Peterson: Got it. That’s really helpful. And maybe just a follow-up on the SMB space through backgroundchecks.com offering. You mentioned it dipped a little bit this quarter. Is your sense was that more macro driven? Has there been more competition in the space? Is it just kind of clients hiring less? I just want to see if you have any more color that you could offer us on that.
Tom Spaeth: Yes. We believe it’s more macro driven. We haven’t seen any substantial losses. We still track order volumes in that space. Down 2% relative to last year is actually pretty decent for small, medium businesses, but it’s not due to losses to competitors. It’s lower order volume from that sector. The other side of it, Kyle, to be honest with you, it’s 30,000 customers, right? So it’s not easy for us. We can look at order trends, and that’s sort of how we look at it as a bulk and then we do segment it into other pieces. But with 30,000 clients that are relatively small in size, it’s not always easy to identify what is exactly going on, but what we can see is it just looks like order volume softening.
Operator: Thank you. The next question is coming from Manav Patnaik of Barclays. Please go ahead.
Ronan Kennedy: Hi, good morning. This is Ronan Kennedy on for Manav. Thank you for taking my questions. Can I just — if you guys can help us with how to think about the opportunity in Brazil and I guess, Latin America as a whole off the back of the launch of the Brazilian entity. I think it was the Inquiro Vitae acquisition in Argentina. Just in terms of — if you’re able to give a percentage of revenue or the growth rate margin profile and kind of the competitive environment in Brazil and Latin America.
Guy Abramo: Yes. Sure. I can comment a little bit more broadly than that because we don’t get into those levels of specifics. But Latin America is an important growth market for us. I mean the reason why we established an entity in Brazil did the Inquiro Vitae acquisition was mainly because we were expanding our presence with existing global clients, right? It’s sort of been our playbook in the past as we launch into new geographies on the backs of a large global client. We establish a presence in that market and then build a sales engine; a go-to-market engine that then goes out and secures additional volumes. So, we see good growth in Latin America, again, through our existing clients, and we see good opportunities for the team on the ground.
We’re starting to get some wins that we see from local competitors. Markets like Latin America and some parts of Asia are fairly fragmented, meaning they can be served by a lot of different companies. So it’s important to us to establish a presence with our enterprise clients first and then go on the ground and improve our mettle, so to speak. So that’s why we made those moves and made the announcement.
Ronan Kennedy: Got it. Thank you. That’s helpful. And then can I just — I know, obviously, it was discussed in your prepared remarks, but can I reconfirm the run rate savings from restructuring and the lift to margins? And then, also, could you just give us an update on the large back-office automation initiative with regards to modules rolled out, yet to be rolled out and then also the lift to margin and timing of impacts there?
Tom Spaeth: Yes. They’re somewhat related, right? So, our overall restructuring program includes some of the lift we’re getting from our technology automation projects as well. So what we’ve said publicly is that the target is $50 million of total run rate savings by the end of 2024 from the restructuring activity. But that does include the lift on some of our back office automation. So that is part of the overall program. Continue to feel good about the actions we’ve taken and the track we’re tracking to. Do you want to address the automation?
Guy Abramo: Yes. I mean we’re on track. I mean, you can see it in the — you see it in the results. I mean we’ve got lots of programs that are still underweight implemented. I mean the big change that we made is we took over the project ourselves, and we’re no longer — we had brought in a third-party to help us build out the platform. That side of it was completed, and now it’s sort of become a normal part of our technology stack, and we continue to rollout modules and functionality almost on a biweekly basis.
Tom Spaeth: Yes. I would say it’s become more part of normal course of business than a special program at this point.
Guy Abramo: Good way to describe it.
Operator: Thank you. The next question is coming from Scott Wurtzel of Wolfe Research. Please go ahead.
Scott Wurtzel: Hey, good morning, guys, and thanks for taking my question. Just wanted to go back to a couple of questions on density and enterprise wins. I mean, just looking relative to last quarter, it looks like the enterprise wins kind of dipped a little bit, but the ACV actually looks like it rose relative to the wins you had last quarter. So just kind of wondering if clients are one sort of asking for maybe more during your conversations with them? And two, is that maybe leading to a little bit of change in sort of decision-making pace and sales cycles?
