George Kurosawa: That makes sense. And then Instructure clearly has some credentialing capabilities in the platform today. Maybe you could just help us understand where kind of the real level ups in terms of features and functionality that Parchment brings. Thanks
Steve Daly: Yes. There’s a couple of areas where I see some level up to use your words, right? So first of all, when it comes to the — that transition that students are making, what we’re seeing more and more particularly since the pandemic is that learners are much more mobile and they’re much more willing to kind of mix and match, if you will, their educational experiences. And they’re looking for to do that in a way that’s most convenient for their lifestyle, whether they’re working or they’re willing to go full time to school. And so, there’s a number of technologies that Parchment have around the ability to dual enroll students, whether when they’re in high school, be able to get college credit while they’re completing their high school diploma.
There’s technology around allowing institutions in a system to be able to share courses so that a student can decide when they’re living at home, they can go to local community college, but maybe they’re going to the state university during the fall and the winter. And that ability to kind of transfer those — the credits to share those courses is an area where we think we can get an acceleration in both our road map as well as our footprint within a customer and that ability to transfer those credits in that process. The other piece that we’re early in our development is around the comprehensive learner record and being able to provide rich data of a record and portfolio for students, where they’ve got a lot of work done that we feel we can leverage to go much faster on a road map in that area.
So a few really exciting areas that we think is going to drive long-term for us is going to drive our road map and drive ultimately long-term growth.
George Kurosawa: Awesome. Thank for taking the questions.
Steve Daly: Thanks, George.
Operator: Thank you. We go next now to Joe Vruwink at Baird.
Joe Vruwink: Hi, everyone. Just starting out best wishes to Dale and it kind of makes me want to be back in whatever grade that was going to be teaching just to get that substitute teaching experience. But maybe just to go to the one comment you made about slowness and deal closings and higher ed. I guess my question is, what’s your take on why this is happening now? And then in the past, you’ve kind of talked about the RFP activity in higher ed should be elevated in 2023 and 2024. Is it still elevated and this is just a delay in closing? Or are you starting to maybe recalibrate on the RFP environment into next year as well?
Steve Daly: Yes. Thank you for that question, Joe. It’s — so I’ll just start with the overall market. We — I’ve never felt better about our competitive position. The breadth of our portfolio is really and the momentum in our business, we continue to gain share in the market per the Edutechnica data shows that Canvas LMS is the only one gaining share in North American higher ed. So from that perspective, I feel really good. What we’re seeing is, it’s interesting because we are seeing — our activity is good. In fact — and again, don’t over-index on RFP because it’s about 30% to 40% of our business. But in the RFP space, I think we had the highest RFP activity in the last six years in North American higher ed. But across the world, we’re seeing that the pace of deals have slowed and they’re deferring some of these projects.
And when we ask our customers about it, what they’re really telling us is, look, I mean it’s not a surprise, right? I mean we’ve been talking about all of the macro trends in higher education, right, declining enrollments, budget challenges, the removal in the U.S. of federal stimulus funding where we feel it a little more acutely in North America. But we feel across higher ed around the world is still dealing with some of these bigger challenges. And so, what they’re telling us is, look, we’ve got to work through, and they’re being very thoughtful about this. We’re trying to work through our — what is our strategy and what is our digital transformation strategy. How do we go gain new revenue streams? How do we go address that nontraditional student?
And so, as that mix starts to shift, they’re hitting the pause button on projects until they get their strategies figured out. Now from our perspective, we’re — I feel really good about that, because we’re very well positioned to address it, whether it’s a traditional or nontraditional student. As our portfolio of products we have today through both organic and M&A has really grown to be able to address those over the last several years. And the fact that we’re at the table having these conversations with them, we are that trusted adviser. It bodes well for us long term. And I believe we’re going to continue to be able to drive long-term growth in this space. It is a temporary slowdown that we’re seeing, again, not in the activity because again, that’s been really active.
It’s more in the pace that we’re seeing of the deals closed.
Joe Vruwink: That’s great. And then just a related follow-up on this. Is there any kind of guidance or assistance you can give just in terms of the financial implication of this particular comment? Because I think see if you’re alluding to this, if you just look at your RPO development or kind of what the implied bookings are, that seems really good. And so, is it the case that Instructure because you’re taking share and you’re not totally led to higher ed like you’re ultimately delivering on your growth with maybe a more difficult backdrop? I guess I’m trying to get to maybe an expectation for how this could manifest in 2024 numbers.
Steve Daly: Yes. And we — Joe, we’re not guiding to 2024, but you are really good at those kind of questions, right, try to get me to guide 2024. What I will tell you Joe is, it is, like I said, right, we’re seeing a slowdown, a lengthening of those deals. We do feel like we’re very well positioned, but we do think this will be a temporary slowdown in the near term for the business. And again, the long-term growth prospects are really good, particularly as these institutions start to work through their strategic long-range plans.
