Ryan Potter: Got it. Thanks, again.
Bob Dechant: Great. Thanks, Ryan.
Operator: Thank you. [Operator Instructions] Our next question comes from Matthew Roswell with RBC. You may proceed.
Matthew Roswell: Yes, thank you. Good afternoon. Just a quick question on the FY ’24 margin guidance. It looks like you’re calling for about 30 basis points of increase. Could you kind of bridge that? I would — in terms of — I would expect the shift to offshore should have more of a benefit, but I think the ERP implementation costs are pulling it down. So, could you just kind of bridge us to that 30% — that 30 basis point increase in margin? Thank you.
Bob Dechant: Yeah, Matthew, let me start out, and then I’ll bring Taylor in on this, who’s obviously drinking by the fire hose, but he’s got his arms around this real fast. But — so I think your instincts are exactly right. We have a good, what I’ll call, tailwind on the business on the continued move of business to the offshore and the growth in those markets. That’s great for our business from a margin standpoint. Now, what we have chosen is to invest in on the ERP and HCM solutions, so you have workdays. So there’s a — that’s a fairly sizable investment. We also have the investments that we’re putting into, think of it as the ibex tech, right? This — the initiatives that we have going on around AI, that’s another big theme on kind of investments into our business.
And then, candidly, the last piece is the sales and marketing engine. And we continue to see our ability to win on a big stage. And so, we’re investing into that because we like our chances to win and our close rates and those percentages, so we keep feeding the beast, if you will, there. So, when you kind of do the pluses and minuses, we kind of look at that as roughly a 30 basis point improvement.
Taylor Greenwald: And we’re going to manage that carefully, right. As we go forward, we want to make sure we continue our margin progression. So, if we think we’re getting a little bit ahead of ourselves on investments, we’ll pull back to make sure that we see the margin progression we want to see.
Matthew Roswell: Okay. So, I guess you’re not treating the ERP implementation as sort of a one-time expense you’re flowing it through?
Taylor Greenwald: We are.
Matthew Roswell: Okay. Thank you very much.
Bob Dechant: Yeah, thanks, Matt.
Operator: Thank you. One moment for questions. Our next question comes from Robert Bamberger with Baird. You may proceed.
Robert Bamberger: Yeah, thanks for taking my question. Maybe could you talk about the sequential revenue growth pattern throughout the year? Should we assume sort of that Q1 sequential step-up and then step-up in Q2, followed by declines in Q3 and Q4, kind of like typical sequential growth cadence?
Bob Dechant: Yeah, Robbie, thanks for joining the call and your questions. And so, sequentially, we expect fairly sizable increase as we move into Q2. And as we get a quarter now, we can talk about where Q2 is trending. But historically, we have a lot of e-commerce business that drives that — our Q2, the December quarter, sequential growth. Now, this last year and historically, Q3, Q4 soften. And it’s kind of driven a little bit by the end of the retail peak for the holiday season, et cetera. What I feel this year, we’re going to be a little flatter, in other words, kind of have a strong back half of the year, I think driven by this pipeline work that we have. These deals typically would have been two quarters ago, would have been decisions made and ramps starting.
And the pipeline and decisions delayed for those two quarters. So what we’re finding is those decisions are being made this summer and into September, October. And we think that by the time you get those ramped, you’ll be bringing sizable revenue gains from those in the January, February month that should smooth that curve and make it look a little bit stronger in the back half of the year than our historicals have been.
Robert Bamberger: Okay. Yeah, that makes sense. And then, maybe just talking about the move from IFRS to GAAP, can you maybe just specifically talk about anything happening on the revenue side there? I don’t imagine anything on revenues, but just exactly what’s happening on the margin side, moving from IFRS to GAAP and how we should think about that maybe historically and then going forward?
Taylor Greenwald: Yeah, no. I think you’re right, on the revenue side, it was not material. I think in the fourth quarter, it was virtually nil, and for the full year of ’23, we maybe had a $200, 000 headwind on revenue, so not material. On the adjusted EBITDA side is where you see the real impact, and that’s because of the change in lease accounting. Previously, most of the lease expense was showing up as depreciation and interest expense, and now it’s showing up as rent expense. And so, the results you’ve seen in ’23 and you’ve also seen restated for the full year in ’22 and ’21 in K will continue going forward. On an adjusted net income, it’s not that material. The GAAP net income was material, because, on the warrants, before, we were accounting for that on a mark-to-market basis, and so there’s a lot of volatility, if you remember, we pulled that out of adjust earnings.
Now we’re accounting for the warrants on an equity basis, which smooth that out. So, the GAAP net income will be smoother going forward.
