Michael Connors: So good question. So from our standpoint, our pipeline we are focused on everything around the digital arena or recurring revenues. That’s kind of where we are focusing our M&A, efforts. We have a terrific track record of being able to bring assets into the firm and scale them using the channels that we have. So look I think the overall market is a little more I’ll call it, realistic to balance between buyer and seller in terms of values. But like all of our deals most of ours are sole sourced. So ours are relationship driven. And when you have relationship-driven assets they take a bit longer to go from beginning to end. But our appetite still remains the same in those areas to complement our overall business. So we think that’s in pretty good shape. I think the second part of your question, I think was around the demand environment. Was that the second question, Marc?
Marc Riddick: Right. Right.
Michael Connors: So on the demand environment, I think there’s, two things here very interesting for us. Our pipeline is as strong today as it was in January, it’s very strong. And it’s strong around optimization and digital work. The difference we see right now is the timing and the pace that clients are willing to move. So what might have taken us three or four months to complete, clients are stretching those things out to six or seven months. Sometimes when clients would say let’s get started on November 1. They say you know what we’re going to wait. We’ll start in January. So there’s a little bit of a pace that has slowed down and I think it has to deal with everybody kind of weighing how this economy is going to impact their particular business. So the appetite on transformation remains. The pace in which to execute is a bit slower. That’s how we would describe it. And I would describe it that way globally.
Marc Riddick: Okay. That’s very helpful. And then the last thing for me, I was wondering are you seeing much in the way of a differentiated behaviour by client industry verticals? Or is it pretty much across the board? Thanks.
Michael Connors: Yeah. No. Good question on the different industry segments. We do see it a bit differently. Some are a little more distressed or planning for a little more distress. Some I would call it in the mid-market to lower market consumer type spending. Luxury side seems to still be moving at a pretty good clip. And so when you look at kind of the different — we kind of do a quadrant study of the industries each quarter for ourselves. And it kind of varies between what certain industry segments need to do to specialize. So using the retail side kind of mid-market and under, they are looking to rip out cost quickly. And then you have kind of the other side on the banking financial institutions are still in transformational stage and so they are looking to do a lot of that work.
We’re also seeing a slowdown a little bit on the Health Sciences area. And because of that the cost optimization becomes a bit more important for them. Manufacturing has picked up. I mean it grew for us 9% in that vertical during the quarter. So they are picking it up on the transformation side. But I would say the consumer side of things and energy for that matter are both in the optimization stage. So it varies a little bit by industry.
Marc Riddick: Very helpful. Thank you, Michael. Congratulations.
Michael Connors: Yeah. Thanks Marc.
Operator: We’ll go next to Michael Mathison at Singular Research.
Michael Mathison: Good morning. Hey, guys, congratulations on the quarter especially in light of this macro environment.
Michael Connors: Thanks Michael.
Bert Alfonso: Thanks.
Michael Mathison: Good. I noted that you dropped 47% professionals versus the prior quarter. I wonder if you could fill us in on your utilization rate for your consultants in Q3 and how Q4 looks.
Michael Connors: Yeah. Michael, do you want to take that one?
Michael Sherrick: Yeah. I’ll take that. So our utilization as I think we highlighted in Q3, it was 72.5%. So we were up about 80bps year-on-year. As we look at the fourth quarter, I wouldn’t expect to see a big change there even with some of the seasonality. We’re looking to hold at those levels. And I think again we have room for upside as we head into 2024, assuming we start to see some of the macro rebound as we get into the first part of the year.
Michael Mathison: Terrific. Thank you for that. My second question and then I’ll leave it at two is a little bit more theoretical and forward-looking just around your dividend policy going forward. You’re paying a much higher dividend than the rest of the market. And now cash is much more expensive. Your cost of financing went up about 300 bps. Going forward, have you thought of slowing down the dividend increases and paying down some of the debt?
Michael Connors: So, look, Michael good question. I think, I would not look at the yield with today’s stock price too much if I were you, because clearly our stock is down as a lot of small caps are. But we will be back to you in the second quarter on our views of what the next dividend will be. But it likely is not going to be at the same percentage rate, because it’s small numbers. But our intention is to grow our dividend each year. But we’ll be back to you in the second quarter on that Michael.
Michael Mathison: Okay, great. Well, thank you again.
Michael Connors: Thank you.
Operator: We’ll take our next question from Vincent Colicchio at Barrington Research.
Vincent Colicchio: Good one, Mike.
Michael Connors: Good morning, Vincent.
Vincent Colicchio: So curious what gives you confidence that sales cycles will improve going into 2024
Michael Connors: Based on our discussions with our clients and the pipeline that we have, we put the two together and we feel like this is simply for us anyway this is a pacing of our clients primarily around the digital and the digital transformation side. The cost optimization continues at a good clip, but the transformation is being paced at a longer period than normal. But based on our discussions, I think they’re wanting to get through the year. They want to see how the turn of the year is. But all indications for us is that as we get into the new year whether that’s in month one or month three, it will look a little bit different based on what we can see in our pipeline.
Vincent Colicchio: And the Ventana acquisition, what has been their historical growth? Has it been fairly healthy?
