Scott Schneeberger: It does.
Operator: Your next question will come from the line of Alex Zukin with Wolfe Research. Please go ahead.
Allan Verkhovski: This is Allan Verkhovski on for Alex Zukin. I think more people are warming up to your ability in hitting your SMB guide for the year despite the challenging macro. But I want to dig further into what you’re seeing in the SMB segment today. Can you talk about what you saw around ARPC growth in the quarter, excluding the benefit you observed from the pricing increases that went into effect? It’d be helpful to get how much of a tailwind the pricing increase was in the quarter for QBO accounting and better understand the quarter how your growth levers, such as customer growth, upselling and cross-selling, were impacted from the macro, if at all?
Sasan Goodarzi: Yes. Sure. Absolutely. The majority of our guide for the year and what we also saw in Q1 actually came from customer growth and mix, and mix includes things like QuickBooks Advanced. And you saw from our online services growth of 28%, we’re seeing really sort of good growth from Payroll, Payments, Time Tracking. And that, of course, excludes Mailchimp, and we talk about Mailchimp separately. So I think the short answer to your question is we are seeing the type of balance that we would want, which is our growth coming from customer growth and mix and price will play an element — a smaller element, but it plays an important element as we look at not only what we saw in Q1, but what we expect for the remainder of the year.
Allan Verkhovski: Got it. And just as a quick follow-up, if I may. On the Mailchimp front, I want to follow up to Keith’s earlier point around Mailchimp revenues being sequentially relatively flat. Could you share maybe something more about maybe conversion rates? Or just a follow-up on the acceleration comment you made through the full year, just anything that could give us more color for how we think about potential revenue growth of Mailchimp for the full year?
Sasan Goodarzi: Yes. Yes. Absolutely. I mean if you go back to when we closed the deal almost a year ago, one of the things that we were very clear about, in addition to our excitement around the asset and the fact that now combined with QuickBooks, we can have one growth platform that can be the source of truth for — and the source of growth for a small business, one of the things that we reiterated was that this was really a business that was run for profitability and it was run for cash flow. And even particularly in COVID times, where you saw a lot of front-office company accelerates, Mailchimp really didn’t because, again, it was more run for cash flow and profitability. And so we worked very hard in the last year to put a playbook in place in context of the priorities that we’ve shared to accelerate growth.
And those priorities, they always take time to shift the business from being run for profitability and cash flow to be run for a growth business typically takes a couple of years. And we’re actually starting to see a trajectory change within the first year. And we’re quite demanding of ourselves in terms of the velocity that we would like to see. So really, what’s happened there last year is we were taking a business that was, again, run for profitability, cash flow to revamping the website coming up with a new campaign, revamping the product. And when I say revamp, it’s not done. We’ve not reached the destination. It’s just the beginning of what’s possible to really focus on high-value customers to position ourselves to go after mid-market to start ramping up what we can do internationally.
All of these things, we’re starting to now see indicators where in the quarter, although it was sequentially flat from a revenue perspective, we’re seeing conversion from free to pay is up. We’re seeing customer growth tick up. We’re actually seeing expansion revenue, which means our customers are growing and they’re upgrading what SKU they use. We’re starting to see these, and these things really become future indicators of growth. And that’s why the comment that I made earlier and Michelle made earlier around, we expect that the growth in Mailchimp to accelerate in the coming quarters because we’re seeing the KPIs around customer growth, expansion retention, these things are starting to improve. So hopefully, that helps to answer your question.
