Tom Spaeth: Yes. Well, just to be clear, that what Guy quoted in his prepared remarks, the five wins totaling $11 million that was just a subset of our total wins that we’re highlighting. We certainly had more than five enterprise wins during the quarter. We’re just highlighting some of the largest wins that we had during the quarter. So, we have not seen any material drop off. In fact, it’s the opposite. We’re seeing momentum on the new business side. So maybe we just didn’t phrase it exactly clearly. But yes, the five wins totaling $11 million of ACV is just a subset of what we did in the quarter.
Guy Abramo: Yes. I mean we — literally, there were hundreds of client wins in the quarter. We wanted to highlight five that happened to amount because they were larger enterprise deals, but there were way more enterprise wins than just those five. We’re also, as you know, Scott, we don’t disclose that level of detail, but we do like to highlight that at a particular point there is we see good momentum on new business. We don’t see the sales cycle slowing. If anything, it been picking up. Our pipeline continues — if opportunities continues to grow and we continue to feel very, very good. The two partnership deals that I talked about with Oracle and UKG, UKG is just launching, like that isn’t even begun to produce deals yet, but we’re starting to see deal flow from the Oracle partnership as companies find the Oracle solution to be a good fit for their businesses.
Oracle’s recommending HireRight as the background screening provider of choice. Regardless of the platform, the Oracle platform that the client is using. So, we feel really good about deal flow.
Scott Wurtzel: Got it. Got it. That’s helpful. And then just as a quick follow-up kind of going back to geography. I mean, I understand that Europe was sort of — saw some headwinds related to some banking customers. But maybe just wondering if maybe ex the sort of financial services sector, could you speak to some of the demand and growth trends that you saw in Europe during the quarter?
Tom Spaeth: I think consistent with the rest of the verticals in the U.S., we’ve got a pretty significant presence with some of the European pharma companies in our healthcare group. And so I would say that, that pharma business has been consistent with what we saw in the rest of our healthcare group in the U.S. The next biggest industry in Europe after financial service and pharma would be tech. Obviously — and tech is following the same trends in Europe as they are in the U.S. Those are the top probably three verticals in Europe. They are, yes.
Operator: Thank you. The next question is coming from Stephanie Moore of Jefferies. Please go ahead.
Stephanie Moore: Hi, good morning. Thank you. I was wondering if you could maybe provide a little bit of color of how trends for your existing customers panned out throughout the quarter and kind of what you were seeing early in 4Q, if there was any kind of sequential changes just from that existing base. Thanks.
Tom Spaeth: Yes. So as you can see in our prepared remarks, we did break out the existing base trend being down 16% year-over-year in the quarter. I would say that the trend in the quarter probably showed a little bit more softness in September than in the summer months. Our guidance reaffirmation is really indicative of what we’re currently seeing. You have to remember, we’re in our seasonally slow quarter now anyway. So, we always expect Q4 volumes really beginning in October to drop from September levels and then obviously get into the November and December months that are very holiday impacted, particularly for the types of customers we have because we don’t have a lot of seasonal hiring customers in our customer base. So, we don’t expect to see an uptick there.
So, I would say the guidance that we’ve given and reaffirmed is consistent with what we’re seeing up until today and up until what we saw through October. As Guy mentioned in his remarks, people are cautiously optimistic as they start to look into 2024. I do expect people to be kind of waiting and see as the calendar turns before we see a material change in the direction. So, I expect normal seasonal patterns for the rest of the year.
Stephanie Moore: Great. That’s very helpful. And then, you’ll continue to see really nice new customer wins. Kind of any color that you can give on who you’re winning some of these business from? Is it from smaller players in the space, larger competitors? Any color there would be helpful. Thank you.
Guy Abramo: Yes. Sure, Stephanie. I mean, I highlighted that two of the five that I think based on Mark Marcon’s question, two of the five were from one of the major competitors of ours. And we’re still seeing most of the wins coming from other players. Third tier players who just can’t service, especially in the enterprise space who just cannot service clients like we can. I mean, one of the comments I think we’ve made before is we spend more on technology annually than a lot of these competitors have in revenue, right? So it’s getting increasingly difficult. I mean the Oracle deal, the UKG deal, again, deals like that would never happen with a smaller player because we could never make the investments and don’t have the scale and scope that we have. So, I would say it’s still as it’s always been. Occasionally, we will take business from a major competitor. I would tell you most of the deals we win come from the other tier — other tier players.
Tom Spaeth: Yes. And I think the one thing that’s just really just being hammered lately from our customers is just our global capabilities, right? And a lot of our upsells are being driven by those global capabilities as well. So, a lot of our expansion with existing customers is expanding into new regions into Latin America, into APAC, into Europe and so forth and so on. So that’s just another example of — and frankly, even the big three. Of the big three, we have the best global capabilities.
Guy Abramo: I mean, I just visited an example I use. I just visited two of the largest technology companies in the world who are clients of ours that were under RFP, and we retain the business. And their comments to us have been consistent. No one can handle a global program better than HireRight because of our single global platform. So that sort of advantage is difficult to compete against when you’ve got large enterprises wanting to do more consolidated screening programs throughout the different regions of the world, which is why I think we continue to grow share on global deals more than anybody. But again, a lot of deal flow is still coming from the smaller tier players.
Operator: Thank you. The next question is coming from George Tong of Goldman Sachs. Please go ahead.
George Tong: Hi, thanks. Good morning. You mentioned SMB performance fell slightly year-over-year in the quarter. Can you elaborate a little bit more on SMB trends and where you’re seeing pockets of strength and weakness?
Tom Spaeth: Yes. Let me make a clarification on that. And I was going to jump in later and do it, but I’ll do it now since you asked the question, George. So when we talk about the growth algorithm, and that’s probably a nuance that we haven’t historically done, broken out that SMB, George, our growth algorithm. And I think it’s relevant because we look at those top 1,800 enterprise accounts, 75% of our revenue and we have account management team dedicated to that team. And then you’ve got 30,000 accounts that, to be honest, they’re managed through more an e-commerce type channel and have less customer interaction, get less feedback from our customers directly on those. And as it relates to year-over-year growth algorithm, their contribution to the overall 10% decline we saw quarter-over-quarter was 2%.
