Joe Bergera: Yes, so that’s an interesting partnership. We’re obviously super excited about it. So in the initial phase, what we’re doing is we’re getting access to certain data sets that the Allstate company has. We use that to enhance our analytics, supplement our own existing data sets. And actually, some of that data is critical to the probe-based SPM product. That’s a product release that I mentioned is going to be available this quarter, actually, we’re introducing to the market, and so that the Allstate relationship was essential to being able to launch that on time. Additionally, this relationship and the underlying data sets we think is going to provide access to other markets beyond the public sector. And as we’ve mentioned previously, some of those markets include the insurance sector.
And we do believe that the combination of these various data sets, including the Allstate or Arity data, in combination with some of our data science expertise and other domain knowledge, will allow us to be able to package some of this data and produce insights that we think will have value, again, to various markets beyond the public sector, including the insurance market.
Ryan Sigdahl: Great. Thanks, guys. Good luck.
Joe Bergera: Thanks.
Operator: Thank you. The next question is coming from Tim Moore from EF Hutton. Tim, your line is live.
Tim Moore: Thanks. And half my prepared question is already answered. But I really kind of want to just delve in a little bit more to what you’re maybe noticing with customer conversion timing and their behavior and implementation. I’m just wondering, do you think of the slower start to this calendar year? Or do you think its maybe because some of the agencies are taking longer because you’re cross-selling them a larger ticket order value than a few years ago?
Joe Bergera: Those are great questions. I do think and we’ve tried to kind of make this point maybe not very well. But as we do pursue more and more of these large transactions, by definition, they’re more complex. And to your point, Tim, you’re right. Being more complex, the evaluation process gets extended. And so that is a phenomenon that’s occurring and it is impacting the business. So I think that that point is correct.
Tim Moore: Good. That’s helpful. And I know Kerry started addressing some of my next question earlier. And I know, Joe, you mentioned the traffic engineer’s shortage. But something I’ve always kind of watched you in just having been on the buy side, knowing that outsourced labor and subcontractors are usually a margin drag. But you guys have been making great progress on that with the consulting labor capacity. I know it was a drag last winter, then even the spring this year on your gross margin. But anyway, to just ballpark or give us a rough estimate of maybe what inning you’re in or percentage wise, maybe getting fulfilled with the internal consultants, you know, talented element they’ve been working on, you know, you’re always going to have some contractor work every quarter, but just maybe are you like two thirds of the way there to be pretty happy and fulfilled on that?
Or you think it’s another quarter or two to kind of nail that down and not need to be as reliant on the subcontractors?
Joe Bergera: Yes, so I’ll start and then Kerry maybe you can talk about it. And I guess the two points that I want to make. One is that, we expect our consulting business to continue to grow. And as a result, we not only need to solve for the current labor capacity requirements, but for future labor capacity requirements, right, as the business continues to scale. So, therefore, this effort is going to continue for probably at least the next two to four quarters until I think we do get to a point where hopefully there’ll be some broader loosening in the labor market. And it will get a little bit easier. So, just to sort of manage expectations, I think we’ll continue to talk about this for at least the next four quarters. But the other bigger point that I want to make is when you look at our services gross margin, the bigger opportunity for material improvement is actually going to be as our software as a service and our data as a service revenue increases, because the fixed costs for those services are fixed.
And we expect to see significant cost leverage as we add every sort of incremental million dollars in SaaS and DaaS revenue. And so that’s what’s going to really drive a change in our services gross margins. Kerry I don’t know if you want to add anything additional.
Kerry Shiba: I don’t think so. I think your comment that you just offered on the SaaS business is probably the most important one with regard to future trajectory of margin growth on the services business. The labor capacity, internal labor capacity, I would agree with Joe, this is going to be an ongoing effort. And I think it’s going to be an effort that continues throughout probably at least the next four quarters before we could say we’ve reached a point where we’re more satisfied with the staffing level. There’s going to be some investment in these people up front also, Tim, so they’re not going to hit the ground with as much productivity as they will be after they’ve had a little bit of time under their belt with us. But nonetheless, is that even at the beginning as you’re displacing subcontractor labor, that’s still going to be some urgent upside force there.
Tim Moore: Thanks for that timing update on the talent development. That’s really good. I know I’ve asked about that a couple quarters ago, but this is a really helpful update. And it’s a great reminder on the incremental staff margin mix. I mean, because it’s such a step up incremental margin, almost a hockey stick as you get to the operating scale and revenues there. So my last question is really around the acquisitions update and the funnel update and just related to the international growth comments kind of gave earlier today in the Philippines. Do you think that the targets for doing the acquisitions are still going to be solely in the United States near term?
